ies, which could
not be met otherwise than in gold. The failure of the Reichsbank to meet
its liabilities would have caused a depreciation of the exchange so
injurious to Germany's credit as to react on the future prospects of
Reparation. In some cases, therefore, permission to export gold was
accorded to the Reichsbank by the Supreme Economic Council of the
Allies.

The net result of these various measures was to reduce the gold reserve
of the Reichsbank by more than half, the figures falling from
$575,000,000 to $275,000,000 in September, 1919.

It would be _possible_ under the Treaty to take the whole of this latter
sum for Reparation purposes. It amounts, however, as it is, to less
than 4 per cent of the Reichsbank's Note Issue, and the psychological
effect of its total confiscation might be expected (having regard to the
very large volume of mark notes held abroad) to destroy the exchange
value of the mark almost entirely. A sum of $25,000,000, $50,000,000, or
even $100,000,000 might be taken for a special purpose. But we may
assume that the Reparation Commission will judge it imprudent, having
regard to the reaction on their future prospects of securing payment, to
ruin the German currency system altogether, more particularly because
the French and Belgian Governments, being holders of a very large volume
of mark notes formerly circulating in the occupied or ceded territory,
have a great interest in maintaining some exchange value for the mark,
quite apart from Reparation prospects.

It follows, therefore, that no sum worth speaking of can be expected in
the form of gold or silver towards the initial payment of $5,000,000,000
due by 1921.

(_b_) _Shipping_.--Germany has engaged, as we have seen above, to
surrender to the Allies virtually the whole of her merchant shipping. A
considerable part of it, indeed, was already in the hands of the Allies
prior to the conclusion of Peace, either by detention in their ports or
by the provisional transfer of tonnage under the Brussels Agreement in
connection with the supply of foodstuffs.[119] Estimating the tonnage of
German shipping to be taken over under the Treaty at 4,000,000 gross
tons, and the average value per ton at $150 per ton, the total money
value involved is $600,000,000.[120]

(_c_) _Foreign Securities_.--Prior to the census of foreign securities
carried out by the German Government in September, 1916,[121] of which
the exact results have not been made pu