264 INTERNATIONAL TRADE
different movements of domestic and international prices over
considerable periods, might yield instructive results. But no such
study has been undertaken, and indeed the necessary statistical
material is not readily available, perhaps not available at all. In
general, the experience of France offers nothing of special note for
the purposes of the present investigations.
To this general statement there is one outstanding exception.
The Franco-German indemnity of 1871 does have a spectacular
character, presents interesting questions, suggests something novel
for the problems of verification and interpretation. The main
features of the episode have been frequently and fully described ;
yet there are certain points, especially as regards the consequences
of the indemnity for Germany, which remain obscure. The fol-
lowing pages give an outline of the essential features of the famous
transaction, such as will enable the reader to follow the observa-
tions which I shall have occasion to make on the bearings of the case
on some other and wider problems.!
The total sum which France was required to pay Germany under
the Treaty of Frankfurt was 5.301 milliards of francs: 5 milliards
indemnity, plus 301 millions interest on the postponed payments.
Against the total was an allowance of 325 millions for the railroads
of Alsace-Lorraine, which were taken over by the German Empire
and whose owners were reimbursed by France. Thus there
remained to be remitted to Germany the sum of 4,976 millions,
almost exactly 5 milliards, the amount of the indemnity proper.
The indemnity was stated in the form of a lump sum, the
5 milliards. True, there was an arrangement for spreading the
payment over time. But the time was so short that the obligation
1 The literature on the indemnity is large. All accounts of it make free use of
Léon Say’s remarkable report, made as chairman of the Committee in charge, and
printed in his collected works, Vol. I. Among accounts in English, the most com-
plete is by A. E. Monroe in the Review of Economic Statistics, 1919; another,
also complete, is in Moulton & Maguire’s book on Germany's Capacity to Pay
(1923). See also H. H. O'Farrell, The Franco-German War Indemnity and Its
Results: N. Angell, The Great Illusion, Part 1, Ch. 6; Soetbeer, Die Fiinf Milliar-
den, in Deutsche Zeit- und Streitfragen, 1874 ; papers by A. Soetbeer and E. Nasse
in Annalen des Deutschen Reiches, 1875; Bamberger, Die Funf Milliarden, Preus-
sische Jahrbiicher, 1875: Gutmann, Das Franzosische Geldwesen im Kriege.
Most of these publications lay stress on other aspects of the case than are considered
in the present chapter.
