he difference between the value of the
manufactured exports and of the imported raw material. As regards the
other three categories, namely, machinery, iron goods, and coal,
Germany's capacity to increase her exports will have been taken from her
by the cessions of territory in Poland, Upper Silesia, and
Alsace-Lorraine. As has been pointed out already, these districts
accounted for nearly one-third of Germany's production of coal. But they
also supplied no less than three-quarters of her iron-ore production, 38
per cent of her blast furnaces, and 9.5 per cent of her iron and steel
foundries. Unless, therefore, Alsace-Lorraine and Upper Silesia send
their iron ore to Germany proper, to be worked up, which will involve an
increase in the imports for which she will have to find payment, so far
from any increase in export trade being possible, a decrease is
inevitable.[127]

Next on the list come cereals, leather goods, sugar, paper, furs,
electrical goods, silk goods, and dyes. Cereals are not a net export and
are far more than balanced by imports of the same commodities. As
regards sugar, nearly 90 per cent of Germany's pre-war exports came to
the United Kingdom.[128] An increase in this trade might be stimulated
by a grant of a preference in this country to German sugar or by an
arrangement by which sugar was taken in part payment for the indemnity
on the same lines as has been proposed for coal, dyes, etc. Paper
exports also might be capable of some increase. Leather goods, furs, and
silks depend upon corresponding imports on the other side of the
account. Silk goods are largely in competition with the trade of France
and Italy. The remaining items are individually very small. I have heard
it suggested that the indemnity might be paid to a great extent in
potash and the like. But potash before the war represented 0.6 per cent
of Germany's export trade, and about $15,000,000 in aggregate value.
Besides, France, having secured a potash field in the territory which
has been restored to her, will not welcome a great stimulation of the
German exports of this material.

An examination of the import list shows that 63.6 per cent are raw
materials and food. The chief items of the former class, namely, cotton,
wool, copper, hides, iron-ore, furs, silk, rubber, and tin, could not be
much reduced without reacting on the export trade, and might have to be
increased if the export trade was to be increased. Imports of food,
namely