The fighting in World War I can be described as a composite military, political, and economic effort on all sides. Superior Allied strength from mid-1917 on and final victory resulted in large part from the successful blockade of Germany. Inter-Allied economic cooperation in the control of shipping and raw materials sustained this combined economic campaign. German economic warfare consisted of the submarine counterblockade, the destruction of industries in German-occupied areas, and the transfer of vital food supplies from those areas to Germany. This, combined with the Bolshevik revolution, brought economic havoc to some of the main grainproducing areas in eastern Europe. As a result, 160 million people in Europe were threatened at the end of the war by starvation on a scale unknown since the early nineteenth century. Even for those not directly facing deprivation of necessary foodstuffs, the impending economic crisis - owing to the termination of war production, the ending of price guarantees, and the threat of postwar inflation - meant an existential threat.

In short, the winding up of the economic war proved to be an arduous task. A new economic and political balance of power in Europe seemed to be the precondition for an enduring peace. The peacemakers in Paris faced a double task: to conclude a viable economic peace and at the same time to deal with the most pressing economic problems caused by the end of the war. Those combined problems of economic peacemaking form the subject of this chapter. In the end, the economic clauses of the Versailles treaty emanated from compromises between the different, if not divergent, economic and political goals of the United States and the European Allies.