the country receiving the indemnity; and even if they
were, the latter trade might be of a different character. In any case,
countries not parties to the indemnity will be affected by it in some way
or other; war indemnities, like wars, do not pass by neutral countries and
leave them untouched.

[Footnote 1: See Norman Angell, _The Great Illusion_, Part I. chap. vi.]

It is important to remember that, though modern warfare is much more costly
and more exhausting than in the past, there is another side to the matter.
Society has also gained remarkably in its powers of recuperation. The
blight of war is not as terrible as might be expected. The accumulated
knowledge, the vastly increased productivity of industry, and the high
organising ability, which have made the modern industrial and commercial
world, will not be obliterated by the war. And though there will be
difficulties in the way of their full operation when peace returns, they
will aid powerfully in shortening the period of recovery. The forces which
have transformed mediaeval into modern cities in a few short years will
still exist. Though they can hardly be expected to overcome all the many
factors likely to restrain economic activity, they may be relied on to
stimulate the revival of normal economic life. Indeed, the knowledge of
science and the faculty of organisation are likely to be applied more
extensively than in the past to productive processes.

After the war, when the States of Europe begin to tread the paths of peace
again, one of the first things to be done will be to repair as far as
possible the damage done by the war. Take Belgium as an extreme example;
leaving aside the irreparable destruction of historic buildings and
priceless treasures, there are many million pounds' worth of houses and
farm buildings, shops, warehouses, factories, public buildings, ships,
railway stations, and bridges to be replaced. This work will take
precedence over other kinds of production. Sugar, motor cars, glass, etc.,
will still be manufactured, but chiefly in order to buy the requisite raw
materials and finished goods for the replacement of the wealth destroyed by
the ravages of the war. Speaking generally, Belgium will probably consume
less food than ordinarily, wear less clothes, and consume less luxuries.
Savings, which would normally have been devoted to new industrial
developments, will be needed to make good the losses in existing industrial
establishments.