Peaceless Europe Part 15

Lloyd George was dragged along by the necessity of not drawing away the ma.s.s of the electors from the candidates of his party. Thus he was obliged on December 11, in his final manifesto, to announce not only the Kaiser's trial and that of all those responsible for atrocities, but to promise the most extensive kind of indemnity from Germany and the compensation of all who had suffered by the War. Speaking the same evening at Bristol, he promised to uphold the principle of the indemnity, and a.s.serted the absolute right to demand from Germany payment for the costs of the War.

In England, where the illusion soon pa.s.sed away, in France, where it has not yet been dissipated, the public has been allowed to believe that Germany can pay the greater part, if not the entire cost, of the War, or at least make compensation for the damage.

For many years I have studied the figures in relation to private wealth and the wealth of nations, and I have written at length on the subject. I know how difficult it is to obtain by means of even approximate statistics results more or less near to the reality.

Nothing pained me more than to hear the facility with which politicians of repute spoke of obtaining an indemnity of hundreds of milliards. When Germany expressed her desire to pay an indemnity in one agreed lump sum (_a forfait_) of one hundred milliards of gold marks (an indemnity she could never pay, so enormous is it), I saw statesmen, whom I imagined not deprived of intelligence, smile at the paltriness of the offer. An indemnity of fifty milliards of gold marks, such as that proposed by Keynes, appeared absurd in its smallness.

When the Peace Conference rea.s.sembled in Paris the situation concerning the indemnity was as follows. The Entente had never during the War spoken of indemnity as a condition of peace. Wilson, in his proposals, had spoken only of reconstruction of invaded territories.

The request for _reparation des dommages_ had been included in the terms of the armistice merely to afford a moral satisfaction to France. But the campaign waged in France and during the elections in England had exaggerated the demands so as to include not only reparation for damage but reimburs.e.m.e.nt of the cost of the War.

Only the United States maintained that the indemnity should be limited to the reparation of the damages: a reparation which in later phases included not only reconstruction of destroyed territories and damage done to private property, but even pensions to the families of those dead in the War and the sums in grant paid during it.

When Prussia beat France in 1870 she asked for an indemnity of five milliards. The Entente could have demanded from the vanquished an indemnity and then have rea.s.sumed relations with them provided it were an indemnity which they could pay in a brief period of time.

Instead, it being impossible to demand an enormous sum of 300 or 400 milliards, a difficult figure to fix definitely, recourse was had to another expedient.

From the moment that the phrase _reparation des dommages_ was included in the armistice treaty as a claim that could be urged, it became impossible to ask for a fixed sum. What was to be asked for was neither more nor less than the amount of the damages. Hence a special commission was required, and the Reparations Commission appears on the scene to decide the sum to demand from Germany and to control its payment. Also even after Germany was disarmed a portion of her territory must remain in the Allies' hands as a guarantee for the execution of the treaty.

The reason why France has always been opposed to a rapid conclusion of the indemnity question is that she may continue to have the right, in view of the question remaining still open, to occupy the left bank of the Rhine and to keep the bridgeheads indicated in the treaty.

The thesis supported by Clemenceau at the Conference was a simple one: Germany must recognize the total amount of her debt; it is not enough to say that we recognize it.

I demand in the name of the French Government, and after having consulted my colleagues, that the Peace Treaty fixes Germany's debt to us and indicates the nature of the damages for which reparation is due. We will fix a period of thirty years if you so wish it, and we will give to the Commission, after it has reduced the debt to figures, the mandate to make Germany pay within these thirty years all she owes us. If the whole debt cannot be paid in thirty years the Commission will have the right to extend the time for payment.

This scheme was agreed. And the thesis of the compensation of damages, instead of that for the payment of the cost of the War, prevailed for a very simple reason. If they proposed to demand for all integral reparations, and therefore the reimburs.e.m.e.nt of the cost of the War, the figures would have been enormous. It became necessary to reduce all the credits proportionally, as in the case of a bankruptcy. Now, since in the matter of the indemnities France occupied the first place (to begin with, she asked sixty-five per cent. of all sums paid by Germany), she took the greater part of the indemnities, while on the sums paid for reimburs.e.m.e.nt of cost of war, she would only have got less than twenty per cent.

Germany has therefore been put under control for all the time she will be paying the indemnities--that is, for an indefinite time.

The valuation of the expenses for the reconstruction of the ruined territories had to be carried out according to the regulations of the treaty, and, the prices having increased, the French Government presented in July, 1920, a first approximate valuation: damages, 152 milliards; pensions, 58 milliards; in all, 210 milliards. In November, 1920, the damages had increased to 218 milliards.

Even these figures represent something less absurd than the first demands and figures.

On September 5, 1919, the French Minister of Finance, speaking in the French Chamber, calculated the total of the German indemnities arising from the treaty at 375 milliards, whose interest would acc.u.mulate until 1921, after which date Germany would begin to pay her debt in thirty-four annual rates of about 25 milliards each, and 13,750 milliards a year would go to France.

Again, in November, 1920, Ogier, Minister of the liberated regions, put before the Reparations Commission in the name of France a detailed memorial which made the value of the territories to be reconstructed only for the cases of private individuals come to 140 milliards, not including the pensions, damage to railways and mercantile marine, which totalled 218 milliards, of which 77 milliards were for pensions and 141 milliards for damages.

Of late the sense of reality has begun to diffuse itself. The Minister Loucheur himself has laughed at the earlier figures, and has stated that the damages do not exceed eighty milliards.

But the French public has been accustomed for some time to take the figures of Klotz seriously, and to discuss indemnities of 150, 200 and 250 milliards. The public, however, is not yet aware of the real position, and will not be able to arrive at a just realization of it without pa.s.sing through a serious moral crisis which will be the first secure element of the real peace.

Setting aside all questions of indemnities from Austria-Hungary, Turkey and Bulgaria (they have nothing to give, can give nothing; on the contrary, they ask and merit a.s.sistance), it is clear that all the indemnities must be paid by Germany.

The French totals of the material damage claims in the invaded districts have been absolutely fantastic and more exaggerated than in the case of Belgium, whose indemnity claims would lead one to suppose the total destruction of at least the third part of her territory, almost as if she had undergone the submersion of, say, ten thousand square metres of her small territory.

This problem of the indemnities, limited to the reparation of damages, and in accordance with the costs contemplated in the Treaty of Versailles, has never been seriously tackled. One may even say it has not been seriously examined. And it is deplorable that there has been created among the public, or among a large part of it, the conviction that Germany will repair the damage of the War by her own effort. This idea, however, finds no acceptance in England among serious persons, and in Italy no one believes in it. But in France and Belgium the idea is widely diffused, and the wish to spread the belief is lively in several sections of opinion, not because intelligent people believe in the possibility of effective payment, but with the idea of putting Germany in the light of not maintaining the clauses of the peace, thus extending the right to prolong the military occupation and even to aggravate it. Germany, thereby, is kept out of the League of Nations and her dissolution facilitated.

John Maynard Keynes, ever since the end of 1919, has shown in his admirable book the absurdity of asking for vast indemnities, Germany's impossibility of paying them, and the risk for all Europe of following a road leading to ruin, thus at the same time accentuating the work of disintegration started by the treaty. That book had awakened a wide-sounding echo, but it ought to have had a still wider one, and would have done but for the fact that, unfortunately, the Press in free countries is anything but free.

The great industrial syndicates, especially in the steel-making industry, which control so large a part of the Press among the majority of the States of Europe, and even beyond Europe, find easy allies in the inadequate preparation of the major part of the journalists to discuss the most important problems, and the indisposition on the part of the public to examine those questions which present difficulties, and are so rendered less convenient for discussion.

I knew Keynes during the War, when he was attached to the British Treasury and chief of the department charged to look after the foreign exchanges and the financial relations between Great Britain and her allies. A serious writer, a teacher of economics of considerable value, he brought to his difficult task a scrupulousness and an exactness that bordered on mistrust. Being at that time Chancellor of the Exchequer in Italy, in the bitterest and most decisive period of the War, I had frequent contact with Mr. Keynes, and I always admired his exactness and his precision. I could not always find it in myself to praise his friendly spirit. But he had an almost mystic force of severity, and those enormous squanderings of wealth, that facile a.s.sumption of liabilities that characterized this period of the War, must have doubtless produced in him a sense of infinite disgust. This state of mind often made him very exigent, and sometimes unjustifiably suspicious. His word had a decisive effect on the actions of the English Treasury.

When the War was finished, he took part as first delegate of the English Treasury at the Peace Conference of Paris, and was subst.i.tuted by the Chancellor of the Exchequer in the Supreme Economic Council.

He quitted his office when he had come to the conclusion that it was hopeless to look for any fundamental change of the peace treaties.

His book is not only a doc.u.ment of political uprightness but the first appeal to a sense of reality which, after an orgy of mistakes, menaces a succession of catastrophes. In my opinion it merits a serious reconsideration as the expression of a new conscience, as well as an expression of the truth, which is only disguised by the existing state of exasperation and violence.

After two years we must recognize that all the forecasts of Keynes have been borne out by the facts: that the exchange question has grown worse in all the countries who have been in the War, that the absurd indemnities imposed on the enemies cannot be paid, that the depressed condition of the vanquished is harmful to the victors almost in equal measure with the vanquished themselves, that it menaces their very existence, that, in fine, the sense of dissolution is more widespread than ever.

The moment has come to make an objective examination of the indemnity question, and to discuss it without any hesitation.

Let us lay aside all sentiment and forget the undertakings of the peace treaties. Let us suppose that the Entente's declarations and Wilson's proposals never happened. Let us imagine that we are examining a simple commercial proposition stripped of all sentiment and moral ideas.

After a great war it is useless to invoke moral sentiments: men, while they are blinded by hatred, recognize nothing save their pa.s.sion. It is the nature of war not only to kill or ruin a great number of men, not only to cause considerable material damage, but also, necessarily, to bring about states of mind full of hate which cannot be ended at once and which are even refractory to the language of reason.

For a long time I myself have looked upon the Germans with the profoundest hatred. When I think of all the persons of my race dead in the War, when I look back upon the fifteen months of anguish when my first-born son was a prisoner of war in Germany, I am quite able to understand the state of mind of those who made the peace and the mental condition in which it was made. What determined the atmosphere of the peace treaties was the fact that there was a conference presided over by Clemenceau, who remembered the Prussians in the streets of Paris after the war of 1870, who desired but one thing: the extermination of the Germans. What created this atmosphere, or helped to create it, was the action of Marshal Foch, who had lost in the War the two persons dearest to him in life, the persons who attached him to existence.

But now we must examine the question not in the light of our sentiments or even of our hatreds. We must see quite calmly if the treaties are possible of application without causing the ruin of the vanquished. Then we must ask ourselves if the ruin of the vanquished does not bring in its train the ruin of the victors. Putting aside, then, all moral considerations, let us examine and value the economic facts.

There is no question that the reparation problem exists solely in the case of Germany, who has still a powerful statal framework which allows her to maintain great efforts, capable not only of providing her with the means of subsistence, but also of paying a large indemnity to the victors. The other vanquished States are more in need of succour than anything else.

What are the reparations?

Let us follow the _precis_ of them which a representative of France made at the signing of the Treaty of Versailles. They are as follows:

1. Germany is responsible for the total of the losses and damages sustained by her victors inasmuch as she caused them.

2. Germany, in consideration of the permanent diminution of her resources, resulting from the Peace Treaty, is only obliged (but is obliged without rest.i.tutions or reserves) to reimburse the direct damages and the pensions as precised in Schedule I of Clause viii of the treaty.

3. Germany must pay before May 1, 1921, not less than twenty milliards of gold marks or make equivalent payment in kind.

4. On May 1 the Reparations Commission will fix the total amount of the German debt.

5. This debt must be liquidated by annual payments whose totals are to be fixed by the Commission.

6. The payments will continue for a period of thirty years, or longer if by that time the debt is not extinguished.

7. Germany will issue one hundred milliards of gold marks of bearer bonds, and afterwards all such issues as the Reparations Commission shall demand, until the amount of the debt be reached in order to permit the stabilization of credit.

8. The payments will be made in money and in kind. The payments in kind will be made in coal, live stock, chemical products, ships, machines, furniture, etc. The payments _in specie_ consist of metal money, of Germany's credits, public and private, abroad, and of a first charge on all the effects and resources of the Empire and the German States.

9. The Reparations Commission, charged with seeing to the execution of this clause, shall have powers of control and decision. It will be a commission for Germany's debt with wider powers. Called upon to decide, according to equity, justice and good faith, without being bound by any codex or special legislation, it has obtained from Germany an irrevocable recognition of its authority. Its duty is to supervise until the extinction of the debt Germany's situation, her financial operations, her effects, her capacity for production, her provisioning, her production. This commission must decide what Germany can pay each year, and must see that her payments, added to the budget, fall upon her taxpayers at least to the extent of the allied country most heavily taxed. Its decisions shall be carried out immediately and receive immediate application, without any other formality. The commission can effect all the changes deemed necessary in the German laws and regulations, as well as all the sanctions, whether of a financial, economic or military nature arising from established violations of the clauses put under its control. And Germany is obliged not to consider these "sanctions" as hostile acts.

In order to guarantee the payments an inter-allied army--in reality a Franco-Belgian army--occupies the left bank of the Rhine, and is stationed at the bridgeheads. Germany is completely helpless, and has lost all the features of a sovereign State inasmuch as she is subject to "controls" in a way that Turkey never was. In modern history we can find no parallel for this state of things. These are conditions which alter the very bases of civilization and the relations between peoples. Such procedure has been unknown in Europe for centuries.

The public has become accustomed in certain countries to consider responsible for the War not the government that wished it or the German people, but the future generations. Thus the indemnities are to be paid--were such conditions possible--in thirty years and for at least twenty years afterwards by people still unborn at the time of the War. This cursing of the guilty people has no parallel in modern history. We must go back to the early ages of humanity to find anything of the kind.

But even the most inhuman policies, such as Germany has never adopted in her victories, although she has been accused of every cruelty, can find at least some justification if they had a useful effect on the country which has wished and accepts responsibility for them. The conqueror has his rights. Julius Caesar killed millions of Germans and r.e.t.a.r.ded perhaps for some centuries the invasion of Rome. But the practices established by the Treaty of Versailles are in effect equally harmful to victors and vanquished, though maybe in unequal measure, and in any case prepare the dissolution of Europe.

I had my share in arranging at San Remo the Spa Conference, in the hope and with the desire of discussing frankly with the Germans what sum they could pay by way of indemnity without upsetting their economy and damaging severely that of the Allies. But the ministerial crisis which took place in June, 1920, prevented me from partic.i.p.ating at the Spa Conference; and the profitable action which Great Britain had agreed to initiate in the common interest, ours as well as France's, could not be proceeded with. The old mistakes continued to be repeated, though many attenuations have come about and the truth begins to appear even for those most responsible for past errors.