John Maynard Keynes: The Economic Consequences of the Peace

“The war has ended with every one owing everyone else immense sums of money.
Germany owes a large sum to the Allies, the Allies owe a large sum to Great Britain, and
Great Britain owes a large sum to the United States. The holders of war loan in every
country are owed a large sum by the States, and the States in its turn is owed a large
sum by these and other taxpayers. The whole position is in the highest degree artificial,
misleading, and vexatious. We shall never be able to move again, unless we can free our
limbs from these paper shackles.”

“The German economic system as it existed before the war depended on three main
factors: I. Overseas commerce as represented by her mercantile marine, her colonies,
her foreign investments, her exports, and the overseas connections of her merchants;
II. The exploitation of her coal and iron and the industries built upon them; III. Her
transport and tariff system. Of these the first, while not the least important, was
certainly the most vulnerable. The Treaty aims at the systematic destruction of all three,
but principally of the first two. I (1) Germany has ceded to the Allies all the vessels of her
mercantile marine exceeding 1600 tons gross, half the vessels between 1000 tons and
1600 tons, and one quarter of her trawlers and other fishing boats.[9] The cession is
comprehensive, including not only vessels flying the German flag, but also all vessels
owned by Germans but flying other flags, and all vessels under construction as well as
those afloat.[10] Further, Germany undertakes, if required, to build for the Allies such
types of ships as they may specify up to 200,000 tons[11] annually for five years, the
value of these ships being credited to Germany against what is due from her for
Reparation.[12]”

“The policy of reducing Germany to servitude for a generation, of degrading the lives of
millions of human beings, and of depriving a whole nation of happiness should be
abhorrent and detestable, - abhorrent and detestable, even if it were possible, even if it
enriched ourselves, even if it did not sow the decay of the whole civilized life of Europe.
Some preach it in the name of Justice. In the great events of man's history, in the
unwinding of the complex fates of nations Justice is not so simple. And if it were, nations
are not authorized, by religion or by natural morals, to visit on the children of their
enemies the misdoings of parents of rulers.”