Chapter I: Preface

_The Economic Consequences of the Peace_, which I published in December 1919, has been reprinted from time to time without revision or correction. So much has come to our knowledge since then, that a revised edition of that book would be out of place. I have thought it better, therefore, to leave it unaltered, and to collect together in this _Sequel_ the corrections and additions which the flow of events makes necessary, together with my reflections on the present facts.

But this book is strictly what it represents itself to be—a _Sequel_; I might almost have said an Appendix. I have nothing very new to say on the fundamental issues. Some of the Remedies which I proposed two years ago are now everybody’s commonplaces, and I have nothing startling to add to them. My object is a strictly limited one, namely to provide facts and materials for an intelligent review of the Reparation Problem as it now is.

“The great thing about this wood,” said M. Clemenceau of his pine forest in La Vendée, “is that, here, there is not the slightest chance of meeting Lloyd George or President Wilson. Nothing here but the squirrels.” I wish that I could claim the same advantages for this book.

J. M. KEYNES.

KING’S COLLEGE, CAMBRIDGE,
_December_ 1921.

CONTENTS

CHAPTER I

PAGE

THE STATE OF OPINION 3

CHAPTER II

FROM THE RATIFICATION OF THE TREATY OF VERSAILLES TO
THE SECOND ULTIMATUM OF LONDON 11

EXCURSUS I.—COAL 44

EXCURSUS II.—THE LEGALITY OF OCCUPYING GERMANY
EAST OF THE RHINE 57

CHAPTER III

THE BURDEN OF THE LONDON SETTLEMENT 64

EXCURSUS III.—THE WIESBADEN AGREEMENT 92

EXCURSUS IV.—THE MARK EXCHANGE 100

CHAPTER IV

THE REPARATION BILL 106

EXCURSUS V.—RECEIPTS AND EXPENSES PRIOR TO
MAY 1, 1921 131

EXCURSUS VI.—THE DIVISION OF RECEIPTS BETWEEN
THE ALLIES 138

CHAPTER V

THE LEGALITY OF THE CLAIM FOR PENSIONS 144

CHAPTER VI

REPARATION, INTER–ALLY DEBT, AND INTERNATIONAL TRADE 163

CHAPTER VII

THE REVISION OF THE TREATY AND THE SETTLEMENT OF
EUROPE 179