On the side of imports, rather more is possible.  By lowering the standard of life, an appreciable reduction of expenditure on imported commodities may be possible.  But, as we have already seen, many large items are incapable of reduction without reacting on the volume of exports.

Let us put our guess as high as we can without being foolish, and suppose that after a time Germany will be able, in spite of the reduction of her resources, her facilities, her markets, and her productive power, to increase her exports and diminish her imports so as to improve her trade balance altogether by $500,000,000 annually, measured in pre-war prices.  This adjustment is first required to liquidate the adverse trade balance, which in the five years before the war averaged $370,000,000; but we will assume that after allowing for this, she is left with a favorable trade balance of $250,000,000 a year.  Doubling this to allow for the rise in pre-war prices, we have a figure of $500,000,000.  Having regard to the political, social, and human factors, as well as to the purely economic, I doubt if Germany could be made to pay this sum annually over a period of 30 years; but it would not be foolish to assert or to hope that she could.

Such a figure, allowing 5 per cent for interest, and 1 per cent for repayment of capital, represents a capital sum having a present value of about $8,500,000,000.[130]

I reach, therefore, the final conclusion that, including all methods of payment—­immediately transferable wealth, ceded property, and an annual tribute—­$10,000,000,000 is a safe maximum figure of Germany’s capacity to pay.  In all the actual circumstances, I do not believe that she can pay as much.  Let those who consider this a very low figure, bear in mind the following remarkable comparison.  The wealth of France in 1871 was estimated at a little less than half that of Germany in 1913.  Apart from changes in the value of money, an indemnity from Germany of $2,500,000,000 would, therefore, be about comparable to the sum paid by France in 1871; and as the real burden of an indemnity increases more than in proportion to its amount, the payment of $10,000,000,000 by Germany would have far severer consequences than the $1,000,000,000 paid by France in 1871.

There is only one head under which I see a possibility of adding to the figure reached on the line of argument adopted above; that is, if German labor is actually transported to the devastated areas and there engaged in the work of reconstruction.  I have heard that a limited scheme of this kind is actually in view.  The additional contribution thus obtainable depends on the number of laborers which the German Government could contrive to maintain in this way and also on the number which, over a period of years, the Belgian and French inhabitants would tolerate in their midst.  In any case, it would seem very difficult to employ on the actual work of reconstruction, even over a number of years, imported labor having a net present value exceeding (say) $1,250,000,000; and even this would not prove in practice a net addition to the annual contributions obtainable in other ways.