Category Archives: Treaty of Versailles

THE ECONOMIC CONSEQUENCES OF THE PEACE by JOHN MAYNARD KEYNES, C.B. Fellow of King’s College, Cambridge – Introduction. 

A warning for our times. 

The writer of this book was temporarily attached to the British Treasury during the Great War and was their official representative at the Paris Peace Conference up to June 7, 1919; he also sat as deputy for the Chancellor of the Exchequer on the Supreme Economic Council.




J.M. Keynes. King’s College, Cambridge, November, 1919.




Perhaps it is only in England and America that it is possible to be so unconscious.

In this lies the destructive significance of the Peace of Paris.



1919 – Keynes predicts economic chaos


In January 1919, John Maynard Keynes traveled to the Paris Peace Conference as the chief representative of the British Treasury. The brilliant 35-year-old economist had previously won acclaim for his work with the Indian currency and his management of British finances during the war. In Paris, he sat on an economic council and advised British Prime Minister David Lloyd George, but the important peacemaking decisions were out of his hands, and President Wilson, Prime Minister Lloyd George, and French Prime Minister Georges Clemenceau wielded the real authority. Germany had no role in the negotiations deciding its fate, and lesser Allied powers had little responsibility in the drafting of the final treaty.


Keynes, horrified by the terms of the emerging treaty, presented a plan to the Allied leaders in which the German government be given a substantial loan, thus allowing it to buy food and materials while beginning reparations payments immediately. Lloyd George approved the “Keynes Plan,” but President Wilson turned it down because he feared it would not receive congressional approval. In a private letter to a friend, Keynes called the idealistic American president “the greatest fraud on earth.” On June 5, 1919, Keynes wrote a note to Lloyd George informing the prime minister that he was resigning his post in protest of the impending “devastation of Europe.”

“If we aim at the impoverishment of Central Europe, vengeance, I dare say, will not limp. Nothing can then delay for very long the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the later German war will fade into nothing, and which will destroy, whoever is victor, the civilisation and the progress of our generation.”

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