small hurts. This is exactly what the Allies did with the armistice and the Treaty of Versailles. The German people were humiliated, and their faith in democracy – which was fragile to begin with – was almost totally destroyed. However, they were not annihilated. ... The Allies should have either totally destroyed and dismembered Germany or else have made a sincere effort to make a fair and just peace with her and bring her into the family of nations as a full partner. But doing neither, they set the stage for Adolf Hitler and the Second World War. In my view, it is not going too far to state that the Nazi dictator should have worn a stamp on the seat of his pants with three words on it: "Made at Versailles." German influence on Keynes While at Versailles, Keynes had a series of meetings with Carl Melchior of Max Warburg's bank in Hamburg. Melchior was a lawyer and one of the German representatives at the peace conference. Through Melchior, Keynes received a dire picture of the social and economic state of Germany at the time, which he portrayed as being ripe for a Communist revolution. Keynes accepted this representation, and parts of the text of The Economic Consequences roughly parallel the language of the German counter-proposals to the draft Allied proposal of terms. According to historian Niall Ferguson: To say that Keynes's argument in the book was the same as that put forward by German financial experts at the conference would be to exaggerate. But the resemblances are very close; nor did Keynes deny their influence on him. Like them, he blamed the French for the 'Carthaginian' economic provisions of the Treaty and denounced the Reparations Commission as 'an instrument of oppression and rapine'. Like them, he insisted that Germany 'had not surrendered unconditionally, but on agreed terms as to the general character of the peace' {the Fourteen Points and subsequent American notes}. And like them, he stressed that the loss of Germany's merchant marine, her overseas assets, her coal-rich territories and her sovereignty in matters of trade policy severely limited her capacity to pay reparations. ... Nor did Keynes omit the apocalyptic warnings he had heard from Melchior at Versailles, predicting a Malthusian crisis in Germany, and the destruction of capitalism in Central Europe... Keynes himself characterized the German counter-proposals as "somewhat obscure, and also rather disingenuous." [The