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               -5-
 
THE ECONOMIC PROBLEM
 
 
5. Thus far political questions have alone been 
 
considered but the post-war settlement must be equally 
 
concerned with the economic position of victors, van-
 
quished and neutrals. On the political  side Group A 
 
proposes to secure a prostrate and divided Germany. Such
 
a policy would immediately create economic difficulties of
 
such dimensions as to require profound modification of
 
Group A ideas at least on the economic side.
 
     It must be as sumed that both those who desire a
 
punitive peace and those who believe in co-operative
 
efforts will be agreed in desiring prosperity for the
 
Allied countries and indeed for the world.
 
     The experience of the last twenty years has
 
demonstrated how interdependent the world economic system
 
has become and how poverty and instability in one country
 
undermines the economic position of others.
 
     The world needs Germany both as a market and 
 
as a source of supplies. The following table shows the 
 
position held by Germany in world trade in 1913 and in
 
1929:
                                   WORLD TRADE
                              Imports                              Exports
                           1913        1929                                 1913         1929
                           %           %                                      %             %
United Kingdom        15.2         15.4                                13.1            10.8 
Germany                        12.2         9.1                                  12.4            9.8
U.S.A.                            8.4          12.3                                 12.5           15.8          
 
 
 
 
 
               In 1913 Germany was second only to the United 
 
Kingdom as a factor in international trade and in 1929 
 
still held third place.
 
     In industrial production Germany was second 
 
only to U.S.A. It is true that for the last six years 
 
German industries have been progressively oriented for 
 
war but with the return of peace German equipment, German
 
                                                       skill
 
 
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