THE REVISION OF THE TREATY AND THE SETTLEMENT OF EUROPE
The deeper and the fouler the bogs into which Mr. Lloyd George leads
us, the more credit is his for getting us out. He leads us in to
satisfy our desires; he leads us out to save our souls. He hands us
down the primrose path and puts out the bonfire just in time. Who, ever
before, enjoyed the best of heaven and hell as we do?
In England, opinion has nearly completed its swing, and the Prime
Minister is making ready to win a General Election on Forbidding
Germany to Pay, Employment for Every one, and a Happier Europe for
All. Why not, indeed? But this Faustus of ours shakes too quickly his
kaleidoscope of halos and hell–fire, for me to depict the hues as they
melt into one another. I shall do better to construct an independent
solution, which is _possible_ in the sense that nothing but a change in
the popular will is necessary to achieve it, hoping to influence this
will a little, but leaving it to those, whose business it is, to gage
the moment at which it will be safe to embroider such patterns on a
political banner.
If I look back two years and read again what I wrote then, I see that
perils which were ahead are now passed safely. The patience of the
common people of Europe and the stability of its institutions have
survived the worst shocks they will receive. Two years ago the Treaty,
which outraged Justice, Mercy, and Wisdom, represented the momentary
will of the victorious countries. Would the victims be patient? Or
would they be driven by despair and privation to shake Society’s
foundations? We have the answer now. They have been patient. Nothing
very much has happened, except pain and injury to individuals. The
communities of Europe are settling down to a new equilibrium. We are
almost ready to turn our minds from the avoidance of calamity to the
renewal of health.
There have been other influences besides that patience of the common
people which often before has helped Europe through worse evils. The
actions of those in power have been wiser than their words. It is
only a slight exaggeration to say that no parts of the Peace Treaties
have been carried out, except those relating to frontiers and to
disarmament. Many of the misfortunes which I predicted as attendant
on the execution of the Reparation Chapter have not occurred, because
no serious attempt has been made to execute it. And, whilst no one
can predict with what particular sauce the makers of the Treaty will
eat their words, there can no longer be any question of the actual
enforcement of this Chapter. And there has been a third factor, not
quite in accordance with expectations, paradoxical at first sight, but
natural, nevertheless, and concordant with past experience,—the fact
that it is in times of growing profits and not in times of growing
distress that the working classes stir themselves and threaten their
masters. When times are bad and poverty presses on them they sink back
again into a weary acquiescence. Great Britain and all Europe have
learned this in 1921. Was not the French Revolution rather due perhaps
to the growing wealth of eighteenth–century France—for at that time
France was the richest country in the world—than to the pressure of
taxation or the exactions of the old régime? It is the profiteer, not
privation, that makes man shake his chains.
In spite, therefore, of trade depression and disordered exchanges,
Europe, under the surface, is much stabler and much healthier than
two years ago. The disturbance of minds is less. The organization,
destroyed by war, has been partly restored; transport, except in
Eastern Europe, is largely repaired; there has been a good harvest,
everywhere but in Russia, and raw materials are abundant. Great Britain
and the United States and their markets overseas have suffered a
cyclical fluctuation of trade prosperity of a greater amplitude than
ever before; but there are indications that the worst point is passed.
Two obstacles remain. The Treaty, though unexecuted, is not revised.
And that part of organization, which consists in currency regulation,
public finance, and the foreign exchanges, remains nearly as bad as
it ever was. In most European countries there is still no proper
balance between the expenditure of the State and its income, so that
inflation continues and the international values of their currencies
are fluctuating and uncertain. The suggestions which follow are mainly
directed towards these problems.
* * * * *
Some contemporary plans for the reconstruction of Europe err in
being too paternal or too complicated; also, sometimes, in being too
pessimistic. The patients need neither drugs nor surgery, but healthy
and natural surroundings in which they can exert their own recuperative
powers. Therefore a good plan must be in the main _negative_; it must
consist in getting rid of shackles, in simplifying the situation, in
canceling futile but injurious entanglements. At present every one is
faced by obligations which they cannot meet. Until the problem set to
the Finance Ministers of Europe is a _possible_ one, there can be
little incentive to energy or to the exercise of skill. But if the
situation was made such that an insolvent country could have only
itself to blame, then the highest integrity and the most accomplished
financial technique would, in each separate country, have its chance. I
seek by the proposals of this chapter, not to prescribe a solution, but
to create a situation in which a solution is possible.
In their main substance, therefore, my suggestions are not novel. The
now familiar project of the cancelation, in part or in their entirety,
of the Reparation and Inter–allied Debts, is a large and unavoidable
feature of them. But those who are not prepared for these measures must
not pretend to a serious interest in the Reconstruction of Europe.
In so far as such cancelation or abatement involves concessions by
Great Britain, an Englishman can write without embarrassment and with
some knowledge of the tendency of popular opinion in his own country.
But where concessions by the United States are concerned he is in more
difficulty. The attitude of a section of the American press furnishes
an almost irresistible temptation to deal out the sort of humbug (or
discrete half–truths) which are believed to promote cordiality between
nations; it is easy and terribly respectable; and what is much worse,
it may even do good where frankness would do harm. I pursue the
opposite course, with a doubting and uneasy conscience, yet supported
(not only in this chapter but throughout my book) by the hope, possibly
superstitious, that openness does good in the long run, even when it
makes trouble at first.
So far, Reparation on a large scale has not been collected from
Germany. So far, the Allies have not paid interest to the United States
on what they owe. Our present troubles, when they are not attributable
to the after–effects of war and the cyclical depression of trade, are
due, therefore, not to the enforcement of these claims, but to the
uncertainties of their possible enforcement. It follows, therefore,
that merely to put off the problem will do us no good. That is what we
have been doing for two years already. Even to reduce our Reparation
demands to Germany’s maximum actual capacity and really force her
to pay them, might make matters worse than they are. To write down
inter–ally debts by half and then try to collect them, would be an
aggravation, not a cure, of the existing difficulties. The solution,
therefore, must not be one which tries to extract the last theoretical
penny from everybody; its main object must be to set the Finance
Ministers of _every_ country a problem not incapable of wise solution
over the next five years.
I. _The Revision of the Treaty_
The Reparation Commission have assessed the Treaty claims at 138
milliard gold marks, of which 132 milliards are for pensions and
damage and 6 milliards for Belgian debt. They have not stated in what
proportions the 132 milliards are divided between pensions and damages.
My own assessment of the Treaty claims (p. 131 above) is 110 milliards,
of which 74 milliards are for pensions and allowances, 30 milliards for
damage and 6 milliards for Belgian debt.
The arguments of Chapter VI make it incumbent on those who are
convinced by them to abandon as dishonorable the claims to pensions and
allowances. This reduces the claims to 36 milliards, a sum which it may
not be in our interest to exact in full, but which is probably within
Germany’s theoretical capacity to pay.
Apart from clearing out of the way various clauses which are no longer
operative or useful, and from terminating the occupation on conditions
set forth below, I should limit my Revision of the Treaty to this
simple stroke of the pen. Let the present assessment of 138 milliard
gold marks be replaced by 36 milliard gold marks.
We are strictly entitled under the Armistice Terms to these 36
milliards; and if prudence recommends an abatement below that figure,
such abatement can properly be made, on terms, by those and those only
who are entitled to the claims. I estimate with some confidence that
this sum of 36 milliards is divisible between the Allies about in the
proportions shown in the table below.
The payment by Germany of 5 per cent interest and 1 per cent sinking
fund on this total sum is not, in my judgment, theoretically
impossible. But it could only be done by stimulating her export
industries in a manner injurious and irritating to Great Britain, and
by imposing on her Treasury a financial problem of such difficulty that
it would tend to unsound finance and to weak, unstable Governments.
Even though this payment is theoretically possible, I do not think that
it is practically obtainable over a period of thirty years.
────────────────┬───────┬─────────────┬──────
│Damage.│Belgian Debt.│Total.
────────────────┼───────┼─────────────┼──────
British Empire │ 9 │ 2 │ 11
France │ 16 │ 2 │ 18
Belgium │ 3 │ .. │ 3
Italy │ 1 │ .. │ 1
United States │ .. │ 2 │ 2
Others │ 1 │ .. │ 1
├───────┼─────────────┼──────
│ 30 │ 6 │ 36
────────────────┴───────┴─────────────┴──────
I recommend, therefore, that, as a separate arrangement from the
Revision of the Treaty as above, the British Empire should waive the
whole of their claims, with the exception of 1 milliard gold marks
reserved for a special purpose explained below, and should undertake
to square the claims of Italy and the minor claimants by cancelation
of debt owing from them; thus leaving Germany to pay 18 milliards to
France and 3 milliards to Belgium (on the assumption that the United
States also would forego the trifle due to her). This sum should be
discharged by an annual payment of 6 per cent of the sum due (being
5 per cent interest and 1 per cent sinking fund) over a period of
thirty years. With the assistance of minor measures to ease the opening
period, it is reasonable to suppose that this amount could be paid
without serious injury to any one.
In so far as it proves convenient to discharge this liability in goods,
and not in cash, so much the better. But I see no advantage in laying
stress on this. It would be wiser to leave Germany to find the money as
best she can, any payment in goods being by mutual agreement, as in the
Wiesbaden plan.
It may lead, however, to great anomalies to fix the annual payments
in terms of _gold_ over so long a period as thirty years. If gold
prices fall, the burden may become intolerable. If gold prices rise,
the claimants may be cheated of their expectations. The annual payment
should be adjusted, therefore, by some impartial authority, with
reference to an index number of the commodity–value of gold.
The other Treaty change relates to the Occupation. It would promote
peaceable relations in Europe if, as a part of the new settlement, the
Allied troops were withdrawn altogether from German territory, and all
rights of invasion for whatever purpose waived, except by leave of a
majority vote of the League of Nations. But in return, the British
Empire and the United States should guarantee to France and Belgium
all reasonable assistance, short of warfare, in securing satisfaction
for their reduced claims; whilst Germany should guarantee the complete
de–militarization of her territory west of the Rhine.
II. _The Satisfaction of the Allies_
_France._—Is it in the interest of France to accept this settlement?
If it is combined with further concessions from Great Britain and
the United States by the cancelation of her debts to them, it is
overwhelmingly in her interest.
What is her present balance–sheet of claims and liabilities? She
is entitled to 52 per cent of what Germany pays. On p. 75 I have
calculated what this will be under the London Settlement, (_a_) on
the basis of German exports at the rate of 6 milliards, namely 3.56
milliard gold marks; and (_b_) on the basis of exports at the rate
of 10 milliards, namely 4.60 milliard gold marks. France’s share,
therefore, is 1.85 milliards per annum on assumption (_a_), and 2.39
milliards on assumption (_b_). On the other hand, she owes the United
States $3634 million and the United Kingdom £557 million. If these sums
be converted into gold marks at par, and the annual charge on them is
calculated at 5 per cent for interest and 1 per cent for sinking fund,
her liability is 1.48 milliards per annum. That is to say, if Germany
pays in full and if the more favorable assumption (_b_) is adopted
as to the growth of her exports, the most for which France can hope
under existing arrangements is a net sum of .91 milliard gold marks
(£45,500,000 gold) per annum. Whereas under the revised scheme she will
not only be entitled to a greater sum, namely 1.08 milliard gold marks
(£54,000,000 gold) per annum; but, inasmuch as she will be accorded a
priority on Germany’s available resources, and as the total charge is
within Germany’s capacity, she may reasonably expect to be paid.
My proposal provides for the complete restoration of the devastated
provinces at a fair valuation of the actual damage done, and it
abandons other rival claims which stand in the way of the priority of
this paramount claim. But apart from this, about which opinions will
differ, and apart from the increased likelihood which it affords of
really getting payment, France will actually receive a larger sum than
if the letter of the existing agreements is adhered to all round.
_Belgium_ is entitled at present to 8 per cent of the receipts, which
under the London Settlement would amount to 280 million gold marks per
annum on assumption (_a_) and 368 million on assumption (_b_). Under
the new proposal she will receive 180 million gold marks per annum
and will gain in certainty what she loses in possible receipts. The
satisfaction of her existing priority should be adjusted by mutual
agreement between herself and France.
_Italy_ would gain immensely. She is entitled to 10 per cent of the
receipts under the London Settlement (together with some claims on
problematical receipts from Austria and Bulgaria); that is to say, 326
million gold marks per annum on assumption (_a_) and 460 million on
assumption (_b_). But these sums are far below the annual charge of her
obligations towards the United Kingdom and the United States, which,
converted into gold marks on the same basis as that employed above in
the case of France, amounts to 1000 million gold marks per annum.
III. _The Assistance of New States_
I have reserved above, out of the claims of Great Britain, a sum of
one milliard gold marks, with the object, not that she should retain
this sum for herself, but that she should use it to ease the financial
problems of two states for which she has a certain responsibility,
namely Austria and Poland.
_Austria’s_ problems are well known and attract a general sympathy. The
Viennese were not made for tragedy; the world feels that, and there
is none so bitter as to wish ill to the city of Mozart. Vienna has
been the capital of degenerate greatness, but, released from imperial
temptations, she is now free to fulfil her true rôle of providing for
a quarter–part of Europe the capital of commerce and the arts. Somehow
she has laughed and cried her way through the last two years; and
now, I think, though on the surface her plight is more desperate than
before, a very little help will be enough. She has no army, and by
virtue of the depreciation of her money a trifling internal debt. Too
much help may make of her a lifelong beggar; but a little will raise
her from despondency and render her financial problem no longer beyond
solution.
My proposal, then, is to cancel the debts she owes to foreign
governments, including empty claims to Reparation, and to give her a
comparatively small sum out of the milliard gold marks reserved from
British claims on Germany. Credits placed at her disposal in Berlin,
equivalent in value to 300 million gold marks, to be available, as
required, over a period of five years, might be enough.
For the other new States, the cancelation of debt owing, and, in the
case of Hungary, of Reparation claims, should be enough, except for
Poland.
_Poland_, too, must be given a possible problem, but it is not easy
to be practical with so impracticable a subject. Her main problem can
be solved only by time, and the recovery of her neighbors. I deal
here only with the urgent question of making just possible for her a
reorganization of currency, and of facilitating a peaceable intercourse
between herself and Germany. For this purpose I would assign to her the
balance of the reserved milliard, namely, 700 million gold marks, of
which the annual interest should be available to her unconditionally,
but of which the capital should be employed only for a currency
reorganization, under conditions to be approved by the United States
and Great Britain.
In its essentials this scheme is very simple. I think that it satisfies
my criterion of leaving every Finance Minister in Europe with a
possible problem. The rest must come gradually, and I will not burden
the argument of this book by considering along what lines the detailed
solutions should be sought.
Who are the losers? Even on paper—far more in reality—every
continental country gains an advantage. But on paper the United States
and the United Kingdom are losers. What is each of them giving up?
Under the London Settlement Great Britain is entitled to 22 per cent
of the receipts, which is from 780 to 1010 million gold marks per
annum (£39,000,000 to £50,500,000 gold) according to which assumption
is adopted as to the volume of German exports. She is owed by various
European governments (including Russia, see Appendix No. IX.)
£1,800,000,000, which at 6 per cent for interest and sinking fund is
£108,000,000 per annum. On paper she would forego these sums, say
£150,000,000 per annum, altogether. In actual fact, her prospects of
securing more than a fraction of this amount are remote. Great Britain
lives by commerce, and most Englishmen now need but little persuading
that she will gain more in honor, prestige, and wealth by employing
a prudent generosity to preserve the equilibrium of commerce and
the well–being of Europe, than by attempting to exact a hateful and
crushing tribute, whether from her victorious Allies or her defeated
enemy.
The United States would forego on paper a capital sum of about 6500
million dollars, which, at 6 per cent, represents an annual charge
of $390,000,000 (£78,000,000 gold). But in my opinion the chance of
her being actually paid any considerable amount of this, if she tries
to exact it, is decidedly remote.[111] Is there any likelihood of
the United States joining in such a scheme _soon enough_ (for I feel
confident she will cancel these debts in the end) to be useful?
Most Americans, with whom I have discussed this question, express
themselves as personally favorable to the cancelation of the European
debts, but add that so great a majority of their countrymen think
otherwise that such a proposal is at present outside practical
politics. They think, therefore, that it is premature to discuss it;
for the present, America must pretend she is going to demand the money
and Europe must pretend she is going to pay it. Indeed, the position is
much the same as that of German Reparation in England in the middle
of 1921. Doubtless my informants are right about this public opinion,
the mysterious entity which is the same thing perhaps as Rousseau’s
General Will. Yet, all the same, I do not attach, to what they tell me,
too much importance. Public opinion held that Hans Andersen’s Emperor
wore a fine suit; and in the United States especially, public opinion
changes sometimes, as it were, _en bloc_.
If, indeed, public opinion were an unalterable thing, it would be a
waste of time to discuss public affairs. And though it may be the
chief business of newsmen and politicians to ascertain its momentary
features, a writer ought to be concerned, rather, with what public
opinion should be. I record these platitudes because many Americans
give their advice, as though it were actually immoral to make
suggestions which public opinion does not now approve. In America,
I gather, an act of this kind is considered so reckless, that some
improper motive is at once suspected, and criticism takes the form of
an inquiry into the culprit’s personal character and antecedents.
Let us inquire, however, a little more deeply into the sentiments and
emotions which underlie the American attitude to the European debts.
They want to be generous to Europe, both out of good feeling and
because many of them now suspect that any other course would upset
their own economic equilibrium. But they don’t want to be “done.” They
do not want it to be said that once again the old cynics in Europe have
been one too many for them. Times, too, have been bad and taxation
oppressive; and many parts of America do not feel rich enough at the
moment to favor a light abandonment of a possible asset. Moreover,
these arrangements, between nations warring together, they liken much
more closely than we do to ordinary business transactions between
individuals. It is, they say, as though a bank having made an unsecured
advance to a client, in whom they believe, at a difficult time when
he would have gone under without it, this client were then to cry
off paying. To permit such a thing would be to do an injury to the
elementary principles of business honor.
The average American, I fancy, would like to see the European nations
approaching him with a pathetic light in their eyes and the cash in
their hands, saying, “America, we owe to you our liberty and our
life; here we bring what we can in grateful thanks, money not wrung
by grievous taxation from the widow and orphan, but saved, the best
fruits of victory, out of the abolition of armaments, militarism,
Empire, and internal strife, made possible by the help you freely gave
us.” And then the average American would reply: “I honor you for your
integrity. It is what I expected. But I did not enter the war for
profit or to invest my money well. I have had my reward in the words
you have just uttered. The loans are forgiven. Return to your homes and
use the resources I release to uplift the poor and the unfortunate.”
And it would be an essential part of the little scene that his reply
should come as a complete and overwhelming surprise.
Alas for the wickedness of the world! It is not in international
affairs that we can secure the sentimental satisfactions which we all
love. For only individuals are good, and all nations are dishonorable,
cruel, and designing. In deciding whether Italy (for example) must pay
what she owes, America must consider the consequences of trying to make
her pay,—so far as self–interest is concerned, in terms of economic
equilibrium between America and Italy, and, so far as generosity is
concerned, in terms of Italian peasants and their lives. And whilst the
various Prime Ministers will telegraph something suitable, drafted by
their private secretaries, to the effect that America’s action makes
the moment of writing the most important in the history of the world
and proves that Americans are the noblest creatures living, America
must not expect adequate or appropriate thanks.
Nevertheless, since time presses, we cannot rely on American
assistance, and we must do without it if necessary. If America
does not feel ready to participate in a Conference of Revision and
Reconstruction, Great Britain should be prepared to do her part in the
cancelation of paper claims, irrespective of similar action by the
United States.
The simplicity of my plan may be emphasized by summarizing it. (1)
Great Britain, and if possible America too, to cancel all the debts
owing them from the Governments of Europe and to waive their claims to
any share of German Reparation; (2) Germany to pay 1260 million gold
marks (£63,000,000 gold) per annum for 30 years, and to hold available
a lump sum of 1000 million gold marks for assistance to Poland and
Austria; (3) this annual payment to be assigned in the shares 1080
million gold marks to France and 180 million to Belgium.
This would be a just, sensible, and permanent settlement. If France
were to refuse it, she would indeed be sacrificing the substance to
the shadow. In spite of superficial appearances to the contrary, it
is also in the self–interest of Great Britain. Perhaps British public
opinion, profoundly altered though it now is, may not yet be reconciled
to obtaining nothing. But this is a case where a wise nation will do
best by acting in a large way. I have not neglected to consider with
care the various possible devices by which Great Britain might get, or
appear to get, something for herself from the settlement. She might
take, for instance, in satisfaction of her claims some of the C Bonds
under the London Settlement, which, having a third priority after
provision for the A and B Bonds, can be given a nominal value but are
really worth nothing. She might, in lieu of receiving a share of the
proceeds of the German customs, stipulate that her goods should be
admitted into Germany free of duty. She might seek a partial control
over German industries, or obtain the services of German organization
for the future exploitation of Russia. Plans of this sort attract an
ingenious mind and are not to be discarded too hastily. Yet I prefer
the simple plan, and I believe that all these devices are contrary to
true wisdom.
There is a disposition in some quarters to insist that any concessions
to France by Great Britain and the United States, affecting Reparation
and Inter–Ally Debt, should be conditional on France’s acceptance of a
more pacific policy towards the rest of the world than that to which
she herself appears to be inclined. I hope that France will abandon her
opposition to proposals for reduced military and naval establishments.
What a handicap her youth will suffer if she maintains conscription
whilst her neighbors, voluntarily or involuntarily, have abandoned
it! Does she realize the impossibility of friendship between Great
Britain and _any_ neighboring Power which embarks on a large program
of submarines? I hope, too, that France will forget her dangerous
ambitions in Central Europe and will limit strictly those in the Near
East; for both are based on rubbishy foundations and will bring her no
good. That she has anything to fear from Germany in the future which
we can foresee, except what she may herself provoke, is a delusion.
When Germany has recovered her strength and pride, as in due time she
will, many years must pass before she again casts her eyes Westward.
Germany’s future now lies to the East, and in that direction her hopes
and ambitions, when they revive, will certainly turn.
France has an opportunity now of consolidating her national position
into one of the stablest, safest, richest on the face of the earth;
self–contained; well– but not over–populated; the heir of a peculiar
and splendid civilization. Neither whining about devastated districts,
which are easily repaired, nor boasting of military hegemonies, which
can quickly ruin her, let her lift up her head as the leader and
mistress of Europe in the peaceful practices of the mind.
Nevertheless, these objects are not to be gained by bargaining and
cannot be imposed from without. Therefore they must not be dragged
into the Reparation Settlement. This Settlement must be offered France
on one condition only,—that she accepts it. But if, like Shylock, she
claims her pound of flesh, then let the Law prevail. Let her have her
bond, and let us have our bonds too. Let her get what she can from
Germany and pay what she owes to the United States and England.
The chief question for dispute is, perhaps, whether an annual payment
by Germany of £63,000,000 (gold) is enough. I admit that the payment
of a somewhat larger sum may prove to be within her capacity. But I
recommend this figure because on the one hand it is sufficient to
restore the destruction done in France, yet on the other is not so
crushing that, to make Germany pay it, we need be in a position to
invade her every spring and autumn. We must fix the payment at an
amount which Germany herself will recognize as not unjust, and which is
sufficiently within her maximum capacity to leave her some incentive to
work and pay it off.
Suppose that we knew the theoretical maximum of Germany’s capacity
to produce and sell abroad a surplus of goods, or could hit on some
sliding scale which would automatically absorb year by year whatever
surplus there was; should we be wise to demand it? The project of
extracting at the point of the bayonet—for that is what it would
mean—a payment so heavy that it would never be paid voluntarily,
and to go on doing this until all the makers of the Peace Treaty of
Versailles have been long dead and buried in their local Valhallas, is
neither good nor sensible.
My own proposals, moderate though they may seem in comparison with
others, throw on Germany a very great burden. They procure for France
an enormous benefit. Frenchmen, having fed to satiety on imaginary
figures, are nearly ready, I think, to find a surprising flavor and
piquancy in real ones. Let them consider what a tremendous financial
strength my scheme would give them. Freed from external debt, they
would receive in real values each year for thirty years a payment
equivalent in gold to nearly half the gold reserve now held by the Bank
of France; and at the end of the set period Germany would have paid
back ten times what she took after 1870.
Is it for Englishmen to complain? Are they really losers? One cannot
cast up a balance–sheet between incommensurables. But peace and amity
might be won for Europe. And England is only asked (as I fancy she
knows pretty well, by now, in her bones) to give up something which she
will never get anyhow. The alternative is that we and the United States
will be jockeyed out of our claims amidst a general international
disgust.
FOOTNOTE:
[111] This scheme is in no way concerned with the debt of Great Britain
to the United States, which is excluded from the above figures. The
question of the right treatment of this debt (which differs from the
others chiefly because the interest on it is capable of being actually
collected in cash) raises other issues with which I am not dealing
here. The above proposals for cancelation relate solely to the debts
owing by the Governments of Continental Europe to the Governments of
Great Britain and the United States.
APPENDIX OF DOCUMENTS
I. THE SPA AGREEMENT, JULY 1920
(_A_) _Summary[112] of the Agreement upon Reparations between the
Allies, signed by the British Empire, France, Italy, Japan, Belgium,
and Portugal._
ARTICLE 1 provides that in pursuance of the Treaty of Versailles the
sums received from Germany for reparations shall be divided in the
following proportions:
France 52 per cent.
British Empire 22 ”
Italy 10 ”
Belgium 8 ”
Japan and Portugal ¾ of 1 per cent each.
The remaining 6½ per cent is reserved for the Serbo–Croat–Slovene
State and for Greece, Rumania, and other Powers not signatories of the
Agreement.
ARTICLE 2 provides that the aggregate amount received for reparation
from Austria–Hungary and Bulgaria, together with amounts that may be
received in respect of the liberation of territories belonging to the
former Austro–Hungarian Monarchy, shall be divided:
(_a_) As to half in the proportions mentioned in Article 1.
(_b_) As to the other half, Italy shall receive 40 per cent, while 60
per cent is reserved for Greece, Rumania, and the Serbo–Croat–Slovene
State and other Powers entitled to reparations but not signatories of
the Agreement.
ARTICLE 3 provides that the Allied Governments shall adopt measures to
facilitate if necessary the issue by Germany of loans destined for the
internal requirements of that country and to the prompt discharge of
the German debt to the Allies.
ARTICLE 4 deals in detail with the keeping of accounts by the
Reparation Commission.
ARTICLE 5 secures to Belgium her priority of £100,000,000 gold and
enumerates the securities affected by such priority.[113]
ARTICLE 6 deals with the valuation of ships surrendered under the
various Peace Treaties, and provides for the allocation of sums
received for the hire of such ships. It deals also with questions
outstanding as to the decisions taken by the Belgian Prize Courts.
Belgium receives compensation out of the shares of other Allied Powers.
ARTICLE 7 refers to the Allied cruisers, floating docks, and material
handed over under the Protocol of January 10, 1920, as compensation for
the German warships which were sunk.
ARTICLE 8 declares that the same Protocol shall apply to the proceeds
of the sale of ships and war material surrendered under the naval
clauses of the Treaty, virtually including the proceeds of naval war
material sold by the Reparation Commission.
ARTICLE 9 gives Italy an absolutely prior claim to certain specified
sums as a set–off to amounts due to her by Austria–Hungary and Bulgaria.
ARTICLE 10 reserves the rights of Poland and declares that this
Agreement shall not apply to her.
ARTICLE 11 maintains the rights of countries who lent money to Belgium
before November 11, 1918, and makes provision for repayment immediately
after satisfaction of the Belgian claim to priority in respect of
£100,000,000.
ARTICLE 12 maintains the rights of the Allied Powers to the repayment
of credits granted to ex–enemy Powers for the purposes of relief.
ARTICLE 13 reserves the question of fixing the cost of the armies of
occupation in Germany on a uniform basis for discussion with the United
States of America.
(_B_) _The Allied Note to Germany on the Subject of Coal Deliveries_
1. The German Government undertakes to place at the disposal of the
Allies, from August 1, 1920, for the ensuing six months, 2,000,000 tons
of coal per month, this figure having been approved by the Reparation
Commission.
2. The Allied Governments will credit the Reparation accounts with
the value of this coal, as far as it is delivered by rail or inland
navigation, and it will be valued at the German internal price in
accordance with Paragraph 6 (A), Annex V., Part VIII., of the Treaty of
Versailles. In addition, in consideration of the admission of the right
of the Allies to have coal of specified kind and quality delivered to
them, a premium of five gold marks, payable in cash by the party taking
delivery, shall be applied to the acquisition of foodstuffs for the
German miners.
3. During the period of the coal deliveries provided for above, the
stipulations of Paragraphs 2, 3, and 4 of the draft Control Protocol of
July 11, 1920, shall be put in force at once in the modified form of
the Annex hereto. (See below.)
4. An agreement shall be made forthwith between the Allies for
distribution of the Upper Silesian coal output by a Commission on which
Germany will be represented. This agreement shall be submitted for the
approval of the Reparation Commission.
5. The Commission, on which the Germans shall be represented, shall
meet forthwith at Essen. Its purpose shall be to seek means by which
the conditions of life among the miners with regard to food and
clothing can be improved, with a view to the better working of the
mines.
6. The Allied Governments declare their readiness to make advances
to Germany equal in amount to the difference between the price paid
under Paragraph 2 above, and the export price of German coal, f.o.b.
in German ports, or the English export price, f.o.b. in English ports,
whichever may be the lowest, as laid down in Paragraph VI. (B) of
Annex V., Part VIII., of the Treaty of Versailles. These advances
shall be made in accordance with Articles 235 and 251 of the Treaty of
Versailles. They shall enjoy an absolute priority over all other Allied
claims on Germany. The advances shall be made at the end of each month,
in accordance with the number of tons delivered and the average f.o.b.
price of coal during the period. Advances on account shall be made by
the Allies at the end of the first month, without waiting for exact
figures.
7. If by November 15, 1920, it is ascertained that the total deliveries
for August, September, and October 1920 have not reached 6,000,000
tons, the Allies will proceed to the occupation of a further portion of
German territory, either the region of the Ruhr or some other.
_Annex_
1. A permanent delegation of the Reparation Commission will be set up
at Berlin, whose mission will be to satisfy itself by the following
means that the deliveries of coal to the Allies provided for under the
Agreement of July 15, 1920, shall be carried out: The programmes for
the general distribution of output, with details of origin and kind,
on the one hand, and the orders given to ensure deliveries to the
Allied Powers on the other hand, shall be drawn up by the responsible
German authorities and submitted by them for the approval of the said
delegation a reasonable time before their despatch to the executive
bodies responsible for their execution.
2. No modification in the said programme which may involve a reduction
in the amount of the deliveries to the Allies shall be put into effect
without prior approval of the Delegation of the Reparation Commission
in Berlin.
3. The Reparation Commission, to which the German Government must
periodically report the execution by the competent bodies of the orders
for deliveries to the Allies, will notify to the interested Powers any
infraction of the principles adopted herein.
II. THE PARIS DECISIONS,[114] JANUARY 29, 1921
1. In satisfaction of the obligations laid on her by Articles 231 and
232 of the Treaty of Versailles, Germany shall pay, apart from the
restitutions which she must effect in conformity with Article 238 and
all obligations under the Treaty:
(1) Fixed annuities, payable in equal instalments at the end of each
six months, as follows:
milliard gold marks
(_a_) Two annuities of 2 (May 1, 1921–May 1, 1923)
(_b_) Three ” 3 (May 1, 1923–May 1, 1926)
(_c_) Three ” 4 (May 1, 1926–May 1, 1929)
(_d_) Three ” 5 (May 1, 1929–May 1, 1932)
(_e_) Thirty–one ” 6 (May 1, 1932–May 1, 1963)
(2) Forty–two annuities, reckoning from May 1, 1921, equivalent to 12
per cent of the value of Germany’s exports, levied on the receipts
from them and payable in gold two months after the conclusion of each
six–monthly period.
To ensure that (2) above shall be completely carried out, Germany will
accord to the Reparation Commission every facility for verifying the
amount of the exports and for establishing the necessary supervision.
2. The German Government shall deliver forthwith to the Reparation
Commission Bearer Bonds payable at the due dates laid down in Article
1 (1) of the present scheme, and of an amount equal to each of the
six–monthly instalments payable thereunder. Instructions will be given
with the object of facilitating, on the part of such Powers as may
require it, the mobilisation of the portion accruing to them under the
Agreements which they have established amongst themselves.
3. Germany shall be entitled at any time to anticipate the fixed
portion of her obligation.
Payments made by her in anticipation shall be applied in reduction of
the fixed annuities prescribed in Article 1 (1), discounted at a rate
of 8 per cent up to May 1, 1923, 6 per cent from May 1, 1923, to May 1,
1925, and 5 per cent after May 1, 1925.
4. Germany shall not embark on any credit operation abroad, directly
or indirectly, without the approval of the Reparation Commission.
This restriction applies to the Government of the German Empire, the
Government of the German States, German provincial and municipal
authorities, and also to companies and enterprises controlled by these
Governments and authorities.
5. In pursuance of Article 248 of the Treaty of Versailles all the
assets and revenues of the German Empire and its constituent States
are held in guarantee of the complete execution by Germany of the
provisions of this scheme.
The receipts of the German Customs, by land and sea, in particular the
receipts of all import and export duties and all supplementary taxes,
constitute a special pledge for the execution of the present Agreement.
No modification shall be introduced, liable to diminish the yield of
the Customs, without the Reparation Commission approving the Customs
Legislation and Regulations of Germany.
The whole of the receipts of the German Customs shall be credited to
the account of the German Government, by a Receiver–General of the
German Customs, nominated by the German Government with the assent of
the Reparation Commission.
In the event of Germany failing to meet one of the payments laid down
in the present scheme:
(1) The whole or part of the receipts of the German Customs shall be
taken over from the Receiver–General of the German Customs by the
Reparation Commission and applied by it to the obligations in which
Germany has defaulted. In this event the Reparation Commissions shall,
if it deems necessary, itself assume the administration and collection
of the Customs receipts.
(2) The Reparation Commission shall be entitled, in addition, to
require the German Government to impose such higher tariffs or to
take such other measures to increase its resources as it may deem
indispensable.
(3) If this injunction is without effect, the Commission shall be
entitled to declare the German Government in default and to notify this
state of affairs to the Governments of the Allied and Associated Powers
who shall take such measures as they think justified.
(Signed) HENRI JASPAR.
D. LLOYD GEORGE.
ARISTIDE BRIAND.
C. SFORZA.
K. ISHII.
PARIS, _January 29, 1921_.
III. CLAIMS SUBMITTED TO THE REPARATION COMMISSION BY THE VARIOUS
ALLIED NATIONS, AS PUBLISHED BY THE COMMISSION,[115] FEBRUARY 23, 1921
FRANCE
I.—_Damage to Property (Reconstitution Values)_
Frs. (Paper)
Industrial damages 38,882,521,479
Damage to buildings (_propriété bâtie_) 36,892,500,000
Damage to furniture and fittings (_dommages
mobiliers_) 25,119,500,000
Damage to land (_propriété non bâtie_) 21,671,546,225
Damage to State property 1,958,217,193
Damage to public works 2,583,299,425
Other damages 2,359,865,000
Shipping losses 5,009,618,722
Damages suffered in Algeria and colonies 10,710,000
Do. abroad 2,094,825,000
Interest at 5 per cent on the principal
(33,000,000,000 francs, in round figures,
between November 11, 1918, and May 1, 1921,
or 30 months), say, in round figures 4,125,000,000
II.—_Injuries to Persons_
Frs. (Paper)
Military pensions 60,045,696,000
Allowances to families of mobilised men 12,936,956,824
Pensions accorded to civilian victims of
the war and their dependants 514,465,000
Ill–treatment inflicted on civilians and
prisoners of war 1,869,230,000
Assistance given to prisoners of war 976,906,000
Insufficiency of salaries and wages 223,123,313
Exactions by Germany to the detriment
of the civilian population 1,267,615,939
───────────────
Total of the French claims 218,541,596,120
═══════════════
GREAT BRITAIN
£ Frs.
Damage to property 7,936,456
Shipping losses 763,000,000
Losses abroad 24,940,559
Damage to river and canal
shipping 4,000,000
Military pensions 1,706,800,000
Allowances to families of
mobilised men 7,597,832,086
Pensions for civilian victims 35,915,579
Ill–treatment inflicted on
civilians and prisoners 95,746
Assistance to prisoners of war 12,663
Insufficiency of salaries and
wages 6,372
────────────── ──────────────────
£2,542,070,375 Frs. 7,597,832,086
══════════════ ══════════════════
ITALY
Damage to property Lire 20,933,547,500
Shipping losses £128,000,000
Military pensions Francs 31,041,000,000
Allowances to families of mobilised men Francs 6,885,130,395
Civilian victims of the war and prisoners Lire 12,153,289,000
─────────────────────
Total Lire 33,086,836,000
” Francs 37,926,130,395
” £128,000,000
═════════════════════
BELGIUM
Damage to property (present value) Belgian Frcs. 29,773,939,099
Shipping losses (present value) Belgian Frcs. 180,708,250
Military pensions French Frcs. 1,637,285,512
Allowances to families of mobilised
men French Frcs. 737,930,484
Civilian victims and prisoners of war Belgian Frcs. 4,295,998,454
──────────────
Total Belgian Frcs. 34,254,645,893
” French Frcs. 2,375,215,996
══════════════
The other claims may be summarised as follows:
Japan 297,593,000 yen (shipping losses).
” 454,063,000 yen (allowances to families of mobilised
─────────── men).
832,774,000 yen.
Jugo–Slavia 8,496,091,000 dinars (damage to property).
” 19,219,700,112 francs (injuries to persons).
Rumania 9,734,015,287 gold francs (property losses).
” 9,296,663,076 gold francs (military pensions).
” 11,652,009,978 gold francs (civilians and prisoners of
war).
──────────────
31,099,400,188 gold francs.
Portugal 1,944,261 contos (1,574,907 contos for property loss).
Greece 4,992,788,739 gold francs (1,883,181,542 francs for
property loss).
Brazil £1,216,714 (shipping £1,189,144), plus 598,405 francs.
Czecho–Slovakia 6,944,228,296 francs and 5,614,947,990 kroner
(war–losses).
618,204,007 francs and 1,448,169,845 kroner (Bolshevist
invasion).
───────────── ─────────────
7,612,432,103 francs and 7,063,117,135 kroner.
Siam 9,179,298 marks, gold, plus 1,169,821 francs.
Bolivia £16,000.
Peru £56,236, plus 107,389 francs.
Haiti $80,000, plus 532,593 francs.
Cuba $801,135.
Liberia $3,977,135.
Poland 21,913,269,740 francs gold, plus 500,000,000 marks gold.
European }
Danube } 1,834,800 francs gold, 15,048 francs French, and
Commission } 488,051 lei.
IV. THE FIRST ULTIMATUM OF LONDON, MARCH 3, 1921
The following declaration was delivered to Dr. Simons by Mr. Lloyd
George, speaking on behalf of the British and Allied Governments, by
word of mouth:
“The Allies have been conferring upon the whole position and I am now
authorised to make this declaration on their behalf:
“The Treaty of Versailles was signed less than two years ago. The
German Government have already defaulted in respect of some of its most
important provisions: the delivery for trial of the criminals, who have
offended against the laws of war, disarmament, the payment in cash or
in kind of 20,000,000,000 of gold marks (£1,000,000,000). These are
some of the provisions. The Allies have displayed no harsh insistence
upon the letter of their bond. They have extended time, they have even
modified the character of their demands; but each time the German
Government failed them.
“In spite of the Treaty and of the honourable undertaking given at Spa,
the criminals have not yet been tried, let alone punished, although the
evidence has been in the hands of the German Government for months.
Military organisations, some of them open, some clandestine, have been
allowed to spring up all over the country, equipped with arms that
ought to have been surrendered. If the German Government had shown in
respect of reparations a sincere desire to help the Allies to repair
the terrible losses inflicted upon them by the act of aggression of
which the German Imperialist Government was guilty, we should still
have been ready as before to make all allowances for the legitimate
difficulties of Germany. But the proposals put forward have reluctantly
convinced the Allies either that the German Government does not intend
to carry out its Treaty obligations, or that it has not the strength to
insist, in the face of selfish and short–sighted opposition, upon the
necessary sacrifices being made.
“If that is due to the fact that German opinion will not permit it,
that makes the situation still more serious, and renders it all the
more necessary that the Allies should bring the leaders of public
opinion once more face to face with facts. The first essential fact for
them to realise is this—that the Allies, whilst prepared to listen to
every reasonable plea arising out of Germany’s difficulties, cannot
allow any further paltering with the Treaty.
_The Ultimatum_
“We have therefore decided—having regard to the infractions already
committed, to the determination indicated in these proposals that
Germany means still further to defy and explain away the Treaty, and
to the challenge issued not merely in these proposals but in official
statements made in Germany by the German Government—that we must
act upon the assumption that the German Government are not merely in
default, but deliberately in default; and unless we hear by Monday that
Germany is either prepared to accept the Paris decisions or to submit
proposals which will in other ways be an equally satisfactory discharge
of her obligations under the Treaty of Versailles (subject to the
concessions made in the Paris proposals), we shall, as from that date,
take the following course under the Treaty of Versailles.
“The Allies are agreed:
(1) To occupy the towns of Duisburg, Ruhrort, and Düsseldorf, on the
right bank of the Rhine.
(2) To obtain powers from their respective Parliaments requiring their
nationals to pay a certain proportion of all payments due to Germany
on German goods to their several Governments, such proportion to be
retained on account of reparations. (This is in respect of goods
purchased either in this country or in any other Allied country from
Germany.)
(3) (_a_) The amount of the duties collected by the German Customs
houses on the external frontiers of the occupied territories to be
paid to the Reparation Commission.
(_b_) These duties to continue to be levied in accordance with the
German tariff.
(_c_) A line of Customs houses to be temporarily established on the
Rhine and at the boundary of the _têtes des ponts_ occupied by the
Allied troops; the tariff to be levied on this line, both on the
entry and export of goods, to be determined by the Allied High
Commission of the Rhine territory in conformity with the instructions
of the Allied Governments”.
V. THE GERMAN COUNTER–PROPOSAL, AS TRANSMITTED TO THE UNITED STATES
GOVERNMENT, APRIL 24, 1921
The United States Government have, by their Note of April 22, opened
the possibility, in a way which is thankfully acknowledged, of solving
the reparations problem once more by negotiations ere a solution is
effected by coercive measures. The German Government appreciates this
step in its full importance. They have in the following proposals
endeavoured to offer that which according to their convictions
represents the utmost limit which Germany’s economic resources can
bear, even with the most favourable developments:
1. Germany expresses her readiness to acknowledge for reparation
purposes a total liability of 50 milliard gold marks (present value).
Germany is also prepared to pay the equivalent of this sum in
annuities, adapted to her economic capacity up to an aggregate of 200
milliard gold marks. Germany proposes to mobilise her liability in the
following way:
2. Germany to raise at once an international loan, of which amount,
rate of interest, and amortisation quota are to be agreed on. Germany
will participate in this loan, and its terms, in order to secure the
greatest possible success, will contain special concessions, and
generally be made as favourable as possible. Proceeds of this loan to
be placed at the disposal of the Allies.
3. On the amount of her liability not covered by the international
loan Germany is prepared to pay interest and amortisation quota in
accordance with her economic capacity. In present circumstances she
considers the rate of 4 per cent the highest possible.
4. Germany is prepared to let the Powers concerned have the benefit
of improvements in her economic and financial situation. For this
purpose the amortisation quota should be made variable. In case an
improvement should take place, the quota would rise, whilst it would
correspondingly fall if developments should be in the other direction.
To regulate such variations an index scheme would have to be prepared.
5. To accelerate the redemption of the balance, Germany is ready to
assist with all her resources in the reconstruction of the devastated
territories. She considers reconstruction the most pressing part of
reparation, because it is the most effective way to combat the hatred
and misery caused by the war. She is prepared to undertake, herself,
the rebuilding of townships, villages, and hamlets, or to assist in
the reconstruction with labour, material, and her other resources, in
any way the Allies may desire. The cost of such labour and material
she would pay herself. (Full details about this matter have been
communicated to the Reparation Commission.)
6. Apart from any reconstruction work Germany is prepared to supply
for the same purpose, to States concerned, any other materials, and
to render them any other services as far as possible on a purely
commercial basis.
7. To prove the sincerity of her intention to make reparation at once,
and in an unmistakable way, Germany is prepared to place immediately at
the disposal of the Reparation Commission the amount of one milliard
gold marks in the following manner: First, 150,000,000 gold marks in
gold, silver, and foreign bills; secondly, 850,000,000 gold marks in
Treasury bills, to be redeemed within a period not exceeding three
months by foreign bills and other foreign values.
8. Germany is further prepared, if the United States and the Allies
should so desire, to assume part of the indebtedness of the Allies to
the United States as far as her economic capacity will allow her.
9. In respect of the method by which the German expenditures for
reparation purposes should be credited against her total liability,
Germany proposes that prices and values should be fixed by a commission
of experts.
10. Germany is prepared to secure subscribers for the loan in every
possible way by assigning to them public properties or public income
in a way to be arranged for.
11. By the acceptance of these proposals all other German liabilities
on reparation account are cancelled, and German private property abroad
released.
12. Germany considers that her proposals can only be realised if the
system of sanctions is done away with at once; if the present basis of
German production is not further diminished; and if the German nation
is again admitted to the world’s commerce and freed of all unproductive
expenditure.
These proposals testify to the German firm will to make good damage
caused by the war up to the limit of her economic capacity. The amounts
offered, as well as mode of payment, depend on this capacity. As far as
differences of opinion as to this capacity exist, the German Government
recommend that they be examined by a commission of recognised experts
acceptable to all the interested Governments. She declares herself
ready in advance to accept as binding any decision come to by it.
Should the United States Government consider negotiations could be
facilitated by giving the proposals another form, the German Government
would be thankful if their attention were drawn to points in which the
United States Government consider an alteration desirable. The German
Government would also readily receive any other proposals the United
States Government might feel inclined to make.
The German Government is too firmly convinced that the peace and
welfare of the world depend on a prompt, just, and fair solution of
the reparation problem not to do everything in their power to put the
United States in a position which enables them to bring the matter to
the attention of the Allied Governments.—_Berlin, April 24, 1921._
VI. THE ASSESSMENT ANNOUNCED BY THE REPARATION COMMISSION, APRIL 30,
1921
The Reparation Commission, in discharge of the provisions of Article
233 of the Treaty of Versailles, has reached a unanimous decision to
fix at 132 milliard gold marks the total of the damages for which
reparation is due by Germany under Article 232 (2) and Part VIII.,
Annex I. of the said Treaty.
In fixing this figure the Commission have made the necessary deductions
from the total of damages to cover restitutions effected or to be
effected in discharge of Article 238, so that no credit will be due to
Germany from the fact of these restitutions.
The Commission have not included in the above figure the sum
corresponding to the obligation, which falls on Germany as an addition
in virtue of Article 232 (3), “to make reimbursement of all sums which
Belgium has borrowed from the Allied and Associated Governments up to
November 11, 1918, together with interest at the rate of 5 per cent per
annum on such sums.”
VII. THE SECOND ULTIMATUM OF LONDON, MAY 5, 1921
The Allied Powers, taking note of the fact that, in spite of the
successive concessions made by the Allies since the signature of the
Treaty of Versailles, and in spite of the warnings and sanctions agreed
upon at Spa and at Paris, as well as of the sanctions announced in
London and since applied, the German Government is still in default
in the fulfilment of the obligations incumbent upon it under the
terms of the Treaty of Versailles as regards (1) disarmament; (2) the
payment due on May 1, 1921, under Article 235 of the Treaty, which
the Reparation Commission has already called upon it to make at this
date; (3) the trial of the war criminals as further provided for by
the Allied Notes of February 13 and May 7, 1920; and (4) certain other
important respects, notably those which arise under Articles 264 to
267, 269, 273, 321, 322, and 327 of the Treaty, decide:—
(_a_) To proceed forthwith with such preliminary measures as may be
required for the occupation of the Ruhr Valley by the Allied Forces on
the Rhine in the contingency provided for in Paragraph (_d_) of this
Note.
(_b_) In accordance with Article 233 of the Treaty to invite the
Reparation Commission to prescribe to the German Government without
delay the time and manner for securing and discharging the entire
obligation incumbent upon that Government, and to announce their
decision on this point to the German Government at latest on May 6.
(_c_) To call upon the German Government categorically to declare
within a period of six days from the receipt of the above decision its
resolve (1) to carry out without reserve or condition their obligations
as defined by the Reparation Commission; (2) to accept without reserve
or condition the guarantees in respect of those obligations prescribed
by the Reparation Commission; (3) to carry out without reserve or delay
the measures of military, naval, and aerial disarmament notified to the
German Government by the Allied Powers in their Note of January 29,
1921, those overdue being completed at once, and the remainder by the
prescribed dates; (4) to carry out without reserve or delay the trial
of the war criminals and the other unfulfilled portions of the Treaty
referred to in the first paragraph of this Note.
(_d_) Failing fulfilment by the German Government of the above
conditions by May 12, to proceed to the occupation of the Valley of
the Ruhr and to take all other military and naval measures that may be
required. Such occupation will continue so long as Germany fails to
comply with the conditions summarised in Paragraph (_c_).
(Signed) HENRI JASPAR.
A. BRIAND.
D. LLOYD GEORGE.
C. SFORZA.
HAYASHI.
_Schedule of Payments Prescribing the Time and Manner for Securing
and Discharging the Entire Obligation of Germany for Reparation under
Articles 231, 232, and 233 of the Treaty of Versailles._
The Reparation Commission has, in accordance with Article 233 of the
Treaty of Versailles, fixed the time and manner for securing and
discharging the entire obligation of Germany for Reparation under
Articles 231, 232, and 233 of the Treaty as follows:—
This determination is without prejudice to the duty of Germany to make
restitution under Article 238, or to other obligations under the Treaty.
1. Germany will perform in the manner laid down in this Schedule her
obligations to pay the total fixed in accordance with Articles 231,
232, and 233 of the Treaty of Versailles by the Commission—viz.
132 milliards of gold marks (£6,600,000,000) less (_a_) the amount
already paid on account of Reparation; (_b_) sums which may from time
to time be credited to Germany in respect of State properties in
ceded territory, etc.; and (_c_) any sums received from other enemy
or ex–enemy Powers in respect of which the Commission may decide that
credits should be given to Germany, _plus_ the amount of the Belgian
debt to the Allies, the amounts of these deductions and additions to be
determined later by the Commission.
2. Germany shall create and deliver to the Commission in substitution
for bonds already delivered or deliverable under Paragraph 12 (_c_)
of Annex 2 of Part VIII. (Reparation) of the Treaty of Versailles the
bonds hereinafter described.
(_A_) Bonds for an amount of 12 milliard gold marks (£600,000,000).
These bonds shall be created and delivered at latest on July 1, 1921.
There shall be an annual payment from funds to be provided by Germany
as prescribed in this agreement, in each year from May 1, 1921, equal
in amount to 6 per cent of the nominal value of the issued bonds, out
of which there shall be paid interest at 5 per cent per annum, payable
half–yearly on the bonds outstanding at any time, and the balance to
sinking fund for the redemption of the bonds by annual drawings at par.
These bonds are hereinafter referred to as bonds of Series (_A_).
(_B_) Bonds for a further amount of 38 milliard gold marks
(£1,900,000,000). These bonds shall be created and delivered at the
latest on November 1, 1921. There shall be an annual payment from funds
to be provided by Germany as prescribed in this agreement in each year
from November 1, 1921, equal in amount to 6 per cent of the nominal
value of the issued bonds, out of which there shall be paid interest
at 5 per cent per annum, payable half–yearly on the bonds outstanding
at any time and the balance to sinking fund for the redemption of the
bonds by annual drawings at par. These bonds are hereinafter referred
to as bonds of Series (_B_).
(_C_) Bonds for 82 milliards of gold marks (£4,100,000,000), subject
to such subsequent adjustment by creation or cancellation of bonds as
may be required under Paragraph (1). These bonds shall be created and
delivered to the Reparation Commission, without coupons attached, at
latest on November 1, 1921; they shall be issued by the Commission as
and when it is satisfied that the payments which Germany undertakes to
make in pursuance of this agreement are sufficient to provide for the
payment of interest and sinking fund on such bonds. There shall be an
annual payment from funds to be provided by Germany as prescribed in
this agreement in each year from the date of issue by the Reparation
Commission equal in amount to 6 per cent of the nominal value of the
issued bonds, out of which shall be paid interest at 5 per cent per
annum, payable half–yearly on the bonds outstanding at any time, and
the balance to sinking fund for the redemption of the bonds by annual
drawings at par. The German Government shall supply to the Commission
coupons for such bonds as and when issued by the Commission. These
bonds are hereinafter referred to as bonds of Series (_C_).
3. The bonds provided for in Article 2 shall be signed German
Government bearer bonds, in such form and in such denominations as the
Reparation Commission shall prescribe for the purpose of making them
marketable, and shall be free of all German taxes and charges of every
description present or future.
Subject to the provisions of Articles 248 and 251 of the Treaty of
Versailles these bonds shall be secured on the whole of the assets and
revenues of the German Empire and the German States, and in particular
on the specific assets and revenues specified in Article 7 of the
agreement. The service of the bonds of Series (_A_), (_B_), and (_C_)
shall be a first, second, and third charge respectively on the said
assets and revenues and shall be met by the payments to be made by
Germany under this Schedule.
4. Germany shall pay in each year until the redemption of the bonds
provided for in Article 2 by means of the sinking funds attached
thereto—
(1) A sum of two milliard gold marks (£100,000,000).
(2) (_a_) A sum equivalent to 25 per cent of the value of her exports
in each period of 12 months starting from May 1, 1921, as determined
by the Commission; or
(_b_) Alternatively an equivalent amount as fixed in accordance with
any other index proposed by Germany and accepted by the Commission.
(3) A further sum equivalent to 1 per cent of the value of her exports
as above defined, or alternatively an equivalent amount fixed as
provided in (_b_) above.
Provided always that when Germany shall have discharged all her
obligations under this Schedule, other than her liability in respect
of outstanding bonds, the amount to be paid in each year under this
paragraph shall be reduced to the amount required in that year to meet
the interest and sinking fund on the bonds then outstanding.
Subject to the provisions of Article 5, the payments to be made in
respect of Paragraph (1) above shall be made quarterly before the end
of each quarter, _i.e._ before January 15, April 15, July 15, and
October 15 each year, and the payments in respect of Paragraphs (2)
and (3) above shall be made quarterly, November 15, February 15, May
15, August 15, and calculated on the basis of the exports in the last
quarter but one preceding that quarter, the first payment to be made
November 15, 1921.
5. Germany will pay within 25 days from this notification one milliard
gold marks (£50,000,000) in gold or approved foreign bills or in drafts
at three months on the German Treasury, endorsed by approved German
banks and payable in London, Paris, New York, or any other place
designated by the Reparation Commission. These payments will be treated
as the first two quarterly instalments of the payments provided for in
compliance with Article 4 (1).
6. The Commission will within 25 days from this notification, in
accordance with Paragraph 12 (_d_), Annex II. of the Treaty as amended,
establish the special Sub–Commission, to be called the Committee of
Guarantees. The Committee of Guarantees will consist of representatives
of the Allied Powers now represented on the Reparation Commission,
including a representative of the United States of America, in the
event of that Government desiring to make the appointment.
The Committee shall co–opt not more than three representatives of
nationals of other Powers whenever it shall appear to the Commission
that a sufficient portion of the bonds to be issued under this
agreement is held by nationals of such Powers to justify their
representation on the Committee of Guarantees.
7. The Committee of Guarantees is charged with the duty of securing
the application of Articles 241 and 248 of the Treaty of Versailles.
It shall supervise the application to the service of the bonds provided
for in Article 2 of the funds assigned as security for the payments to
be made by Germany under Paragraph 4. The funds to be so assigned shall
be—
(_a_) The proceeds of all German maritime and land customs and duties,
and in particular the proceeds of all import and export duties.
(_b_) The proceeds of the levy of 25 per cent on the value of all
exports from Germany, except those exports upon which a levy of not
less than 25 per cent is applied under the legislation referred to in
Article 9.
(_c_) The proceeds of such direct or indirect taxes or any other
funds as may be proposed by the German Government and accepted by the
Committee of Guarantees in addition to or in substitution for the funds
specified in (_a_) or (_b_) above.
The assigned funds shall be paid to accounts to be opened in the name
of the Committee and supervised by it, in gold or in foreign currency
approved by the Committee. The equivalent of the 25 per cent levy
referred to in Paragraph (_b_) shall be paid in German currency by the
German Government to the exporter.
The German Government shall notify to the Committee of Guarantees any
proposed action which may tend to diminish the proceeds of any of the
assigned funds, and shall, if the Committee demand it, substitute some
other approved funds.
The Committee of Guarantees shall be charged further with the duty
of conducting on behalf of the Commission the examination provided
for in Paragraph 12 (_b_) of Annex 2 to Part VIII. of the Treaty of
Versailles, and of verifying on behalf of the said Commission, and if
necessary of correcting, the amount declared by the German Government
as the value of German exports for the purpose of the calculation of
the sum payable in each year under Article 4 (2) and the amounts of
the funds assigned under this Article to the service of the bonds.
The Committee shall be entitled to take such measures as it may deem
necessary for the proper discharge of its duties.
The Committee of Guarantees is not authorised to interfere in German
administration.
8. Germany shall on demand, subject to the prior approval of the
Commission, provide such material and labour as any of the Allied
Powers may require towards the restoration of the devastated areas
of that Power, or to enable any Allied Power to proceed with the
restoration or development of its industrial or economic life. The
value of such material and labour shall be determined by a valuer
appointed by Germany and a valuer appointed by the Power concerned,
and, in default of agreement, by a referee nominated by the Commission.
This provision as to valuation does not apply to deliveries under
Annexes III., IV., V., and VI. to Part VIII. of the Treaty.
9. Germany shall take every necessary measure of legislative and
administrative action to facilitate the operation of the German
Reparation (Recovery) Act, 1921, in force in the United Kingdom, and
of any similar legislation enacted by any Allied Power, so long as
such legislation remains in force. Payments effected by the operation
of such legislation shall be credited to Germany on account of the
payment to be made by her under Article 4 (2). The equivalent in German
currency shall be paid by the German Government to the exporter.
10. Payment for all services rendered, all deliveries in kind, and all
receipts under Article 9 shall be made to the Reparation Commission by
the Allied Power receiving the same in cash or current coupons within
one month of the receipt thereof, and shall be credited to Germany on
account of the payments to be made by her under Article 4.
11. The sum payable under Article 4 (3) and the surplus receipts by the
Commission under Article 4 (1) and (2) in each year, not required for
the payment of interest and sinking fund on bonds outstanding in that
year, shall be accumulated and applied so far as they will extend, at
such times as the Commission may think fit, by the Commission in paying
simple interest not exceeding 2½ per cent per annum from May 1,
1921, to May 1, 1926, and thereafter at a rate not exceeding 5 per cent
on the balance of the debt not covered by the bonds then issued. No
interest thereon shall be payable otherwise.
12. The present Schedule does not modify the provisions securing the
execution of the Treaty of Versailles, which are applicable to the
stipulations of the present Schedule.
VIII. THE WIESBADEN AGREEMENT, OCTOBER 6, 1921
This Agreement, signed by M. Loucheur and Herr Rathenau at Wiesbaden
on October 6, 1921, is a lengthy document, consisting of a Protocol,
Memorandum, and Annex. The effective clauses are to be found mainly
in the Annex. The full text has been published in a British White
Paper [Cmd. 1547]. This White Paper also contains (1) an explanatory
Memorandum, (2) the Decision of the Reparation Commission, and (3) a
Report from Sir John Bradbury to the British Treasury. Extracts from
these three documents are given below.
1. _Explanatory Memorandum_
In order to understand the arrangements proposed by the Wiesbaden
Agreement, it is necessary to bear in mind certain provisions of the
Treaty of Versailles, the application of which is affected by it.
The Treaty itself provides in the Reparation Chapter, Part VIII.,
and in some of its Annexes, for the partial liquidation of Germany’s
reparation indebtedness by deliveries in kind. The important passages
in this connection are Paragraph 19 of Annex II. and Annex IV.,
which together make extensive provision for the delivery, through
the Reparation Commission, to the Allied and Associated Powers of
machinery, equipment, tools, reconstruction material, and, in general,
all such material and labour as is necessary to enable any Allied Power
to proceed with the restoration or development of its industrial or
economic life.
Germany’s obligation being stated in terms of gold and not in terms
of commodities, provision has necessarily been made in all cases
for crediting Germany, from time to time, with the fair value, as
assessed by the Reparation Commission, of such deliveries. Moreover,
since the proportions received by the respective Powers in kind need
not necessarily correspond exactly with their respective shares
in Germany’s reparation payments, as determined by Inter–Allied
agreement, provision is further necessarily made in the Treaty
to render each Power accountable not only to Germany, but to the
Reparation Commission, for the value of these deliveries. Thus, on
the one hand, the Treaty stipulates as between the Allies and Germany
that the value of services under the Annexes shall be credited towards
the liquidation of Germany’s general obligation, and the Schedule
of Payments assigns the value of Annex deliveries to the service of
the bonds handed over by Germany as security for her debt. On the
other hand, the Treaty provides that for the purpose of equitable
distribution as between the Allies, the value of Annex deliveries
shall be reckoned in the same manner as cash payments effected in the
year, and the Schedule of Payments stipulates that the value of the
deliveries received by each Power shall, within one month of the date
of delivery, be paid over to the Reparation Commission, either in cash
or in current coupons.
Further, the Treaty imposes upon the Reparation Commission not only the
duty of fixing prices, but also of determining the capacity of Germany
to deliver goods demanded by any of the Allies, and, by implication,
of deciding between the competing demands which are made upon that
capacity by the Allies themselves.
The Wiesbaden Agreement provides for the delivery by a German
company[116] to French “sinistrés” of “all plant and materials
compatible with the productive capacity of Germany, her supply of
raw materials and her domestic requirements,” that is to say, of the
articles and materials which can be demanded under Annex IV. and
Paragraph 19 of Annex II., which are, by the terms of the Agreement,
in so far as France is concerned, virtually suspended, the obligations
of Germany to deliver to France under the other Annexes remaining
unaffected.
Any question as to the capacity of Germany to satisfy the requirement
of France, and all questions of price, are to be settled by a
Commission of three members, one French and one German, and a third
selected by common agreement or nominated by the Swiss President.
The aggregate value of the deliveries to be made under the Agreement,
and of the deliveries to be made under Annexes III., V. and VI.
(hereafter, for the sake of brevity, called the “Annex deliveries”) in
the period expiring on the 1st May 1926, is fixed at a maximum of 7
milliard gold marks.
In regard to the Annex deliveries the Agreement in no way modifies
the Treaty provisions under which Germany is credited and France
debited forthwith with the value, but special provisions, which are
financially the essential part of the Agreement, are made for bringing
to reparation account the value of the Agreement deliveries. These
special provisions are designed to secure that Germany shall only be
credited on reparation account at the time of delivery with a certain
proportion of them, and that deliveries not thus accounted for, which
may be called “excess deliveries,” shall be liquidated over a period
of years beginning at the earliest on 1st May 1926. The provisions
themselves are somewhat intricate, comprising, as they do, a series of
interacting limitations, and they require some elucidation.
(1) In no case is credit to be given to Germany in any one year for
Annex and Agreement deliveries together to an amount exceeding one
milliard gold marks.
(2) In no case is credit to be given to Germany in any one year for
more than 45 per cent of the value of the Agreement deliveries or for
more than 35 per cent if the value of the Agreement deliveries exceeds
one milliard gold marks.
The effect of the above is to prescribe that 55 per cent (or, if the
Agreement operates successfully, 65 per cent) of the value of the
Agreement deliveries _as a minimum_ will be the object of deferred
payment by instalments. If the Agreement deliveries reached really high
figures, the operation of the milliard limitation would make the carry
forward much more than 65 per cent.
The excess deliveries are to be liquidated with interest at 5 per cent
per annum in 10 equal annual instalments as from 1st May 1926, subject
to certain conditions:—
(1) France shall in no case be debited in one year for Agreement
deliveries with an amount which, when added to the value of her Annex
deliveries in that year, would make her responsible for more than her
share (52 per cent) of the total reparation payments made by Germany in
that year.
(2) Agreement deliveries continue after 1st May 1926, with the same
provisions for deferred payment. If in any year between May 1926 and
May 1936 the amount (not exceeding 35 or 45 per cent) of the value of
that year’s Agreement deliveries to be credited to Germany, together
with the annual instalment to repay the debt incurred in respect of the
period ending 1st May 1926, exceeds one milliard, the excess is to be
carried forward from year to year until a year is reached in which no
such excess is created by the payment. But in no case shall the amount
credited, even if it is less than one milliard gold marks, exceed the
limit laid down by the preceding condition.
(3) Any balance with which Germany has not been credited on 1st May
1936 is to be credited to her with compound interest at 5 per cent in
four half–yearly payments on 30th June and 31st December 1936 and 30th
June and 31st December 1937. But, again, these half–yearly payments
shall not be made if the effect of making them would be to exceed the
limit laid down in Condition 1 above.
(4) Agreement deliveries continue indefinitely after 1st May 1936, with
power, however, to Germany to arrest them whenever the execution of
them would result in France owing more than 52 per cent of Germany’s
annual reparation payment in respect of Annex deliveries, deferred
payments already matured, and the 35 or 45 per cent of current
deliveries.
From the above it is to be noted that, while there is a limitation for
the first five years of the amount of Agreement deliveries which can be
demanded, there is—
(1) No point at which the right of France to demand these special
deliveries automatically terminates.
(2) No final limitation upon the value of the deliveries which can be
demanded by France during the lifetime of the Agreement.
(3) No definitely prescribed period within which France’s debt to
Germany and to the other partners in reparation shall be liquidated.
* * * * *
It remains necessary to draw attention to one subsidiary point of a
financial character under the Schedule of Payments. Part of Germany’s
annual reparation liability consists of the payment of 26 per cent of
the value of German exports in each period of twelve months, and part
of the security for the payment consists of the proceeds of a levy of
25 per cent on the value of all German exports. The French Government
has undertaken to support a request, to be submitted by the German
Government to the Reparation Commission, for the inclusion in the
exports which form the basis of these calculations of that part only of
the value of the deliveries made under the Agreement which is credited
to Germany and debited to France during any particular year.
If it can be assumed that any part of the special deliveries to be made
under the Agreement would, in the absence of the Agreement, have been
diverted to Germany’s ordinary external trade, then the concession
desired will have the effect of diminishing the annual payments made by
Germany for the benefit of the Allies as a whole.
2. _Decision of the Reparation Commission on October 20, 1921, after
considering the Franco–German Agreement of October 6, 1921_
The French Government, having submitted to the Reparation Commission
in accordance with Paragraph 3 of the Memorandum thereto attached
the Agreement between the representatives of the French and German
Governments signed at Wiesbaden on the 6th instant, the Commission has
come to the following decision:—
(1) It entirely approves the general principles underlying the
Agreement whereby special arrangements are proposed for enabling
Germany to liquidate the largest possible proportion of her reparation
obligations in the form of goods and services, more especially with a
view to the speedier restoration of the Devastated Regions.
(2) At the same time, it considers that the Agreement involves
certain departures from the provisions of Part VIII. of the Treaty of
Versailles, notably Article 237, Paragraphs 12 and 19 of Annex II. and
Paragraph 5 of Annex IV.
(3) As the Commission has no power to authorise such departures, it
decides to refer the question to the Governments represented on the
Commission, with a copy of the Memorandum and its Annex, recommending a
favourable examination of them.
(4) The Commission recommends that reasonable facilities for deferred
payment in respect of the exceptional volume which, if the arrangements
are successful, the deliveries in kind to France are likely to assume
during the next few years, should be accorded to France, subject to
any safeguards which the Allied Governments may regard as necessary to
protect their respective interests.
3. _Concluding Recommendations of Sir John Bradbury’s Report to the
British Government (October 26, 1921)_
The safeguards which are envisaged as necessary by my Italian and
Belgian colleagues on the Reparation Commission and myself, and for
which we presume that our respective Governments will desire to
stipulate are—
(1) That a limit of time should be laid down after the expiration of
which no new deferment of debit should be permitted and the liquidation
of the existing deferred debits should commence to be made by regular
annual instalments.
The precise length of this period should be determined upon an estimate
of the time necessary to carry out the main work of reconstruction,
regard being had to the time required by Germany to effect the
necessary supplies. In view of the delays which are inevitable in
regard to operations of the magnitude of those contemplated, the
prescribed period might be reasonably somewhat longer than the four and
a half years’ initial period under the agreement, but it should not
exceed seven years.
(2) That in no circumstances should the aggregate amount for which
debit against France for the time being stands deferred be allowed to
exceed a prescribed amount, say, 4 milliard gold marks.
(3) That a provision should be inserted for the payment by France to
the general reparation account from time to time (within the limits
of the deferred debits for the time being outstanding) of any amounts
which may be necessary to secure that the other Allies shall receive
their proper proportions of the amounts due from Germany under the
Schedule of Payments.
Subject to the introduction of these safeguards, to which it would
not appear that legitimate exception could be taken, the arrangements
contemplated by the agreement may be expected to accelerate the
solution of the Reparation problem on practical lines in a manner
advantageous to France without prejudicing the interests of other
Powers, and it is upon this ground that the Reparation Commission has
unanimously recommended them for favourable examination by the Allied
Governments.
If the Allied Governments approve the general scheme, subject to
whatever safeguards they may decide to be necessary, there will
remain certain subsidiary points for the Reparation Commission to
consider—amongst other:—
(1) The proposed omission of the excess deliveries from the index
figure determining the annual liability under the Schedule of Payments,
until such time as these deliveries are finally brought to account for
reparation purposes.
(2) The special arrangements for substitution in respect of articles
of which France is entitled to restitution by identity, involving in
certain cases money payments; and
(3) The special arrangements in regard to the delivery of coal and the
prices to be credited and debited, which in several particulars affect
the interest of other Powers.
IX. TABLES OF INTER–GOVERNMENTAL INDEBTEDNESS
(_A_) _Advances by the United States Government to other Governments
(as in July 1921)_
───────────────┬─────────────────┬───────────────┬──────────────┐
│ Credits granted │ │ │
│ under Liberty │ Surplus War │ Food Relief. │
│ Loan Acts.[117] │Materials Sale.│ │
│ │ │ │
───────────────┼─────────────────┼───────────────┼──────────────┤
Armenia │ │ │ $8,028,412.15│
Austria │ │ │ │
Belgium │ $347,691,566.23│ $27,588,581.14│ │
Cuba │ 9,025,500.00│ │ │
Czecho–Slovakia│ 61,256,206.74│ 20,621,994.54│ 6,428,089.19│
Esthonia │ │ 12,213,377.88│ 1,785,767.72│
Finland │ │ │ 8,281,926.17│
France │ 2,950,762,938.19│ 400,000,000.00│ │
Great Britain │ 4,166,318,358.44│ │ │
Greece │ 15,000,000.00│ │ │
Hungary │ │ │ │
Italy │ 1,648,034,050.90│ │ │
Latvia │ │ 2,521,869.32│ 2,610,417.82│
Liberia │ 26,000.00│ │ │
Lithuania │ │ 4,159,491.96│ 822,136.07│
Poland │ │ 59,636,320.25│ 51,671,749.36│
Rumania │ 23,205,819.52│ 12,922,675.42│ │
Russia │ 187,729,750.00│ 406,082.30│ 4,465,465.07│
Serbia │ 26,175,139.22│ 24,978,020.99│ │
├─────────────────┼───────────────┼──────────────┤
Totals │$9,435,225,329.24│$565,048,413.80│$84,093,963.55│
───────────────┴─────────────────┴───────────────┴──────────────┘
───────────────┬──────────────┬─────────────┬──────────────────
│ │ Interest │
│ Grain │ accrued and │ Total[118]
│ Corporation │unpaid up to │ Obligations.
│ │ July 1921. │
───────────────┼──────────────┼─────────────┼──────────────────
Armenia │ $3,931,505.34│ │ $11,959,917.49
Austria │ 24,055,708.92│ │ 24,055,708.92
Belgium │ │ $34,000,000 │ 409,280,147.37
Cuba │ │ │ 9,025,500.00
Czecho–Slovakia│ 2,873,238.25│ 6,000,000 │ 97,179,528.72
Esthonia │ │ │ 13,999,145.60
Finland │ │ │ 8,281,926.17
France │ │ 284,000,000 │ 3,634,762,938.19
Great Britain │ │ 407,000,000 │ 4,573,318,358.44
Greece │ │ │ 15,000,000.00
Hungary │ 1,685,835.61│ │ 1,685,835.61
Italy │ │ 161,000,000 │ 1,809,034,050.90
Latvia │ │ │ 5,132,287.14
Liberia │ │ │ 26,000.00
Lithuania │ │ │ 4,981,628.03
Poland │ 24,353,590.97│ │ 135,661,660.58
Rumania │ │ 2,500,000 │ 38,628,494.94
Russia │ │ 19,000,000 │ 211,601,297.37
Serbia │ │ 3,500,000 │ 54,653,160.21
├──────────────┼─────────────┼──────────────────
Totals │$56,899,879.09│$943,500,000 │$11,084,767,585.68
───────────────┴──────────────┴─────────────┴──────────────────
(_B_) _Advances by the British Government to Other Governments (as on
March 31, 1921)_
_Allied Governments[119]_—
France £557,039,507 6 8
Russia 561,402,234 18 5
Italy 476,850,000 0 0
Belgium 103,421,192 8 9
Serbia 22,247,376 12 5
Montenegro 204,755 19 9
Rumania 21,393,662 2 8
Portugal 18,575,000 0 0
Greece 22,577,978 9 7
Belgian Congo 3,550,300 0 0
───────────────────────£1,787,262,007 18 3
Loans for Relief—
Austria £8,605,134 9 9
Rumania 1,294,726 0 8
Serb–Croat–Slovene
Kingdom 1,839,167 3 7
Poland 4,137,040 10 1
Czecho–Slovakia 417,392 3 3
Esthonia 241,681 14 2
Lithuania 16,811 12 4
Latvia 20,169 1 10
Hungary 79,997 15 10
Armenia 77,613 17 2
Inter–Allied Commission
on the Danube 6,868 17 6
─────────────────── 16,736,603 6 2
Other Loans (Stores, etc.)—
Czecho–Slovakia £2,000,000 0 0
Armenia 829,634 9 3
──────────────────── 2,829,634 9 3
────────────────────
Total £1,806,828,245 13 8
────────────────────
FOOTNOTES:
[112] The following is the official summary issued at the time. The
complete text of the Agreement has not been published.
[113] Of which the most tangible were 400,000,000 Danish kroner payable
in respect of Sleswig, certain sums were from Luxemburg for coal,
any balance available in respect of German ships seized as prizes in
Brazilian ports, and any balance available towards reparation out of
German assets in the United States.
[114] So far as I am aware, no complete official text of these
decisions has been published in English. The above is translated from
the French text.
[115] The Commission published at the same time a warning that it had
not adopted these claims, but was about to examine them.
[116] The arrangement under which a German private company is to be
created to deal directly with the orders without the intervention of
the French and German Governments is intended to obviate the delays
which experience has shown to be inseparable from the employment of the
present machinery. It does not appear to have any important bearing on
the general financial situation, since the deliveries will clearly have
to be financed by the German Government and will ultimately be paid for
by means of a reparation credit in account with the German Government.
[117] This is a net figure and allows for repayments made up to
July 1921, of which the chief items are $78,000,000 by France, and
$111,000,000 by Great Britain.
[118] The totals at the foot of these two columns include miscellaneous
items for interest not entered in the particulars given in the columns
themselves. A further sum of about $250,000,000 will have accrued for
interest by February 1922.
[119] These accounts include interest, except in the case of Belgium
and Serbia, from whom interest has not been charged, and in the case of
Russia, where no interest has been entered up since January 1918.
INDEX
Allied debts, 170 f., 183, 193 f., 238
Armistice negotiations, 145, 148 f.
Army of Occupation, expenses of, 84_n._, 133 f., 140, 191
Austria, 130, 190, 191
Balfour, A. J., 148_n._
Baruch, 72_n._, 106_n._, 153, 155, 156, 159, 160_n._
Belgian priority, 135–6, 139–40, 190, 204
Reparation claims, 123–4, 197
Boulogne Conference, 19
Boyden, 112, 130
Bradbury, Sir John, 93, 95, 128_n._, 129, 216
Brenier, 109, 110, 118_n._
Briand, 24, 25, 27, 41, 69, 114
British Reparation Claims, 124, 211
Brockdorff–Rantzau, 29
Brussels Conference (Experts), 22–3
Brussels Conference (League of Nations), 86
Brussels Conference (Premiers), 19
Bulgaria, 130, 190
Clemenceau, 84_n._, 108, 149, 150
Coal, 44 f., 75, 98
Cunliffe, Lord, 72, 156
Curzon, Lord, 57_n._
D’Ahernon, Lord, 31
Decisions of London, 95
Disarmament of Germany, 16–19
Dominion Prime Ministers’ Conference, 139
Doumer, 111, 141
Dubois, 110, 115_n._, 128_n._
Dulles, John Foster, 156–7
East Prussia (plebiscite), 11
_Economic Consequences of the Peace_, 5, 39, 45, 51, 55_n._, 71, 72,
74_n._, 107, 108, 114, 119, 124, 126_n._, 127_n._, 144, 146_n._,
166, 173
Elsas, Dr. Moritz, 88–9, 92_n._
Exports, German, 79 f., 99, 165 f.
Financial Agreement of Paris (Aug. 1921), 135, 141 f.
Foch, Marshal, 31, 33, 57, 148_n._
Forgeot, 70_n._
Fournier–Sarlovèze, 116_n._
Frankfurt, Occupation of, 15, 57
French Reparation Claim, 107 f., 117 f., 210
George, Lloyd, 1, 17, 18, 21, 27, 30, 33, 41, 84_n._, 121, 138_n._, 139,
150, 155, 179, 198
German Budget, 81 f.
German Counter–proposal (March 1921), 28–30
German Counter–proposal (April 1921), 36 f., 215 f.
German individual income, 86 f.
German property in United States, 77, 143
Gladstone, 6
Guarantees, Committee of, 68 f., 225 f.
Haig, Sir Douglas, 148_n_.
Harding, President, 171
Heichen, Dr. Arthur, 87
Helfferich, 88, 90
_History of the Peace Conference of Paris_, 147_n._, 152_n._, 160_n._
House, Col., 148_n._
Hughes, W. M., 156
Hungary, 192
Hymans, 150
Hythe Conference, 18
Invasion of Germany, 31, 32, 36
Italian Reparation Claims, 127, 211
Italy, 190
Kaiser, trial of, 14
Kapp, “Putsch,” 15
Klotz, 24, 72, 109, 111, 147, 151 f.
Lamont, J. W., 106_n._, 161, 162_n._
Lansburgh, Dr. Albert, 87
Law, Bonar, 150
League of Nations, 12, 61, 188
Leipzig trials, 15
Lévy, Raphaël–Georges, 118_n._
Leygues, 21, 24
Lignite, 55
London Conference I., 28, 34
London Conference II., 40
London Settlement, 64 f., 72, 73, 81, 84_n._, 130, 188 f., 221
London Ultimatum I., 30, 35, 213
London Ultimatum II., 16, 19, 31_n._, 42, 44, 57, 219 f.
Loucheur, 31, 92, 95, 109, 110, 112_n._, 117, 120
Loucheur–Rathenau Agreement; _vide_ Wiesbaden Agreement
Mark Exchange, 81, 100 f.
Mercantile Marine of Germany, 16, 137
“Mermeix,” 148_n._, 149_n._
Millerand, 18, 20
Newspaper opinion, 7
Nitti, 18
Occupation, Army of, 84_n._, 133, 140
Occupation of Germany, 188, 214, 219
Occupation of Germany, legality of, 32, 41, 57 f.
Orlando, 150
Paris decisions, 18, 26, 32, 34, 39, 40, 57, 207
Payment in kind, 97 f., 168
Pensions, 125, 146 f., 185
Poincaré, 24, 108, 128, 129
Poland, 192 f.
Poland’s coal, 52
Private opinion, 7, 8
Rathenau, 92, 95
Reparation Claims, 126 f., 210 f.
Reparation and International Trade, 163 f.
Reparation Bill, 39, 106 f., 185
Reparation Bonds, 58 f., 101, 207, 221
Reparation Commission, 21, 32, 35, 45, 47, 59, 61, 66_n._, 67, 68, 73,
93, 106, 110, 118, 126, 156, 221 f., 235
Reparation Commission, Assessment of, 27, 127 f., 219
Reparation, Estimates of, 39, 72
Reparation Receipts, division of, 138 f., 203
Restitution, 16, 149, 150
Revision of Treaty, 185 f.
Ruhr, Occupation of, 36, 41, 58, 204
Ruhr riots, 15
San Remo Conference, 15, 18
Sanctions, 32, 36, 57_n._
Schlesvig (plebiscite), 11
Simons, 28, 29, 32, 38_n._, 213
Smuts, General, 160
Sonino, 150
Spa Coal Agreement, 45 f., 102, 133, 136, 205
Spa Conference, 18, 19, 45, 138, 203
Sumner, Lord, 156
Tardieu, 24, 27, 60, 72, 106_n._, 107_n._, 108_n._, 114_n._, 117,
120_n._, 121_n._, 138, 147, 148_n._, 149_n._, 150_n._, 151, 153
_The Times_, 18, 20, 22, 27, 32, 55_n._, 100, 110, 117_n._
United States, 36, 38, 78_n._, 143
United States and Inter–Allied Debts, 170, 183, 194 f., 238
United States, Treaty rights of, towards Germany, 77, 78, 130, 140, 142
Upper Silesia, 11, 30, 32, 39, 52, 54
Westphalian riots, 15
Wierzlicki, 53
Wiesbaden Agreement, 76, 92 f., 187, 211 f.
Wilson, President, 146 f., 151 f., 157, 160, 161–162
Young, Allyn, 5_n._
BY THE SAME AUTHOR
THE ECONOMIC CONSEQUENCES OF THE PEACE
_First published in London, December, 1919, and in New York, January,
1920. Afterwards reprinted in French, German, Italian, Spanish, Dutch,
Flemish, Danish, Swedish, Rumanian, Russian, and Chinese, these
editions, of which the chief are mentioned below, amounting in all to
140,000 copies._
1. THE ECONOMIC CONSEQUENCES OF THE PEACE.
London: Macmillan and Co., 1919.
2. THE ECONOMIC CONSEQUENCES OF THE PEACE.
London: Labour Research Department, 1920.
[Out of print.]
3. THE ECONOMIC CONSEQUENCES OF THE PEACE.
New York: Harcourt, Brace and Co. 1920. $2.50.
4. LES CONSÉQUENCES ÉCONOMIQUES DE LA PAIX. Traduit de l’Anglais par
PAUL FRANCK.
Paris: Editions de la Nouvelle Revue Française. 1920.
5. DIE WIRTHSCHAFTLICHEN FOLGEN DES FRIEDENSVERTRAGENS. Übersetzt von
M. J. BONN und C. BRINKMANN.
München: Duncker und Humblot. 1920.
6. DE ECONOMISCHE GEVOLGEN VAN DEN VREDE. Met een Inleiding van Mr. G.
VISSERIG.
Amsterdam: Uitgevers–Maatschappij Elsevier. 1920.
7. LE CONSEGUENZE ECONOMICHE DELLA PACE. Traduzione di VINCENZO TASCO.
Prefazione di VINCENZO GIUFFRIDA.
Milano: Fratelli Treves. 1920.
8. FREDENS EKONOMISKA FOLJDER. Översättning av EVERT BERGGRÉN.
Stockholm: Albert Bonnier. 1920.
9. LAS CONSECUENCIAS ECONÓMICAS DE LA PAZ. Traducción por JUAN UÑA.
Madrid: Calpe. 1920.
10. DE ECONOMISCHE GEVOLGEN VAN DEN VREDE. Vlaamsche Uitgave vertaing
van G. W.
Brussel: Uitgeverij _Ons Vaderland_. 1920.
11. URTMARILE ECONOMICE A LE PĂCH.
Bucaresti: Editura _Viata Romineasca_. 1920.
12. EKONOMITJESKIJA POSLEDSTVIJA MIRA.
Stockholm: W. Tullbergs Boktryckeri. 1921.
PRESS NOTICES
_British_
_THE NATION_, Dec. 13, 1919.—“This is the first heavy shot that has
been fired in the war which the intellectuals opened on the statesmen
the moment they realized what a piece of work the Treaty was.”
_WESTMINSTER GAZETTE_, Dec. 20, 1919.—“Mr. Keynes has produced a
smashing and unanswerable indictment of the economic settlement.... It
is too much to hope that the arbiters of our destinies will read it and
perhaps learn wisdom, but it should do much good in informing a wide
section of that public which will in its turn become the arbiters of
theirs.”
_SUNDAY CHRONICLE_, Dec. 21, 1919.—“No criticism of the Peace which
omits, as Mr. Keynes seems to me by implication to omit, the aspect of
it not as a treaty, but as a sentence, has any right to be heard by the
European Allied peoples.”
_THE SPECTATOR_, Dec. 20, 1919.—“The world is not governed by
economical forces alone, and we do not blame the statesmen at Paris for
declining to be guided by Mr. Keynes if he gave them such political
advice as he sets forth in his book.”
_THE TIMES_, Jan. 5, 1920.—“Mr. Keynes has written an extremely
‘clever’ book on the Peace Conference and its economic consequences....
As a whole, his cry against the Peace seems to us the cry of an
academic mind, accustomed to deal with the abstractions of that
largely metaphysical exercise known as ‘political economy,’ in revolt
against the facts and forces of actual political existence....
Indeed, one of the most striking features of Mr. Keynes’s book is the
political inexperience, not to say ingenuousness, which it reveals....
He believes it would have been wise and just to demand from Germany
payment of £2,000,000,000 ‘in final settlement of all claims without
further examination of particulars.’”
_THE ATHENÆUM_, Jan. 23, 1920.—“This book is a perfectly well–equipped
arsenal of facts and arguments, to which every one will resort for
years to come who wishes to strike a blow against the forces of
prejudice, delusion, and stupidity. It is not easy to make large
numbers of men reasonable by a book, yet there are no limits to which,
without undue extravagance, we may not hope that the influence of
this book may not extend. Never was the case for reasonableness more
powerfully put. It is enforced with extraordinary art. What might
easily have been a difficult treatise, semi–official or academic,
proves to be as fascinating as a good novel.”
_FORTNIGHTLY REVIEW_, March 1, 1920.—“Mr. Keynes’s book has now been
published three months, and no sort of official reply to it has been
issued. Nothing but the angry cries of bureaucrats have been heard. No
such crushing indictment of a great act of international policy, no
such revelation of the futility of diplomats has even been made.”
_TIMES LITERARY SUPPLEMENT_, April 29, 1920.—“Mr. Keynes ... has
violently attacked the whole work of those who made the Treaty in a
book which exhibits every kind of ability except the political kind....
Mr. Keynes knows everything except the elements of politics, which
is the science of discovering, and the art of accomplishing, the
practicable in public affairs.”
_TIMES_ (“Annual Financial and Commercial Review”), Jan. 28,
1921.—“The almost unhealthy greed with which Mr. Keynes’s book on _The
Economic Consequences of the Peace_ was devoured in a dozen countries
was but a symptom of the new desire to appreciate, and, if possible, to
cope with, the economic consequences not only of the peace but of the
war.”
_LIVERPOOL COURIER_, Feb. 2, 1921.—“In the eyes of the world—at
least, of the world that is not pro–German—the reparation costs are
wholly inadequate. It is true that in the eyes of Mr. J. M. Keynes
it is wicked to charge Germany with the cost of war pensions, but we
imagine that the average man with a simple sense of simple justice does
not agree with Mr. Keynes.”
“REALIST” in the _ENGLISH REVIEW_, March 1921.—“The operation of
indemnity–payment must be followed through to its remorseless end....
The cry ‘Germany must pay’ has still a good healthy sound about it.”
_ENGLISH REVIEW_, June 1921.—“What Mr. Maynard Keynes predicted in his
remarkable book is coming only too true. All over Europe the nations
are standing to arms, thinking boundaries, while trade languishes,
production stagnates, and credit lapses into the relativities.”
_American_
JOSEPH P. COTTON in the _EVENING POST_, New York, Jan. 30, 1920.—“Mr.
Keynes’s book is the first good book on peace and the reconstruction
of Europe. The writing is simple and sincere and true ... a great book
with a real message.”
PAUL D. CRAVATH in the _SUN AND NEW YORK HERALD_, Feb. 2, 1920.—“No
English novel during or since the war has had such a success as this
book. It should be read by every thoughtful American. It is the first
serious discussion of the Peace Treaty by a man who knows the facts and
is capable of discussing them with intelligence and authority.”
HAROLD J. LASKI in the _NATION_, New York, Feb. 7, 1920.—“This is
a very great book. If any answer can be made to the overwhelming
indictment of the Treaty that it contains, that answer has yet to
be published. Mr. Keynes writes with a fullness of knowledge, an
incisiveness of judgment, and a penetration into the ultimate causes
of economic events that perhaps only half–a–dozen living economists
might hope to rival. Nor is the manner of his book less remarkable than
its substance. The style is like finely–hammered steel. It is full of
unforgettable phrases and of vivid portraits etched in the biting acid
of a passionate moral indignation.”
F. W. TAUSSIG, Harvard University, in the _QUARTERLY JOURNAL OF
ECONOMICS_, Feb. 1920.—“Mr. Keynes needs no introduction to
economists. The high quality of his work is known. This book shows the
sure touch, the wide interests, the independent judgment, which we
expect. It shows, also, fine spirit and literary skill.... Coming to
the economic provisions of the Treaty, I find myself in general accord
with what Mr. Keynes says. He makes out an estimate of what Germany can
do in the way of reparation.... The maximum cannot, in his judgment,
exceed ten billions of dollars. Some such figure, it is not improper
to say, was reached independently by Professor A. A. Young in his
estimates for the American financial advisers.”
_FINANCIAL WORLD_, New York City, Feb. 16, 1920.—“There is a thousand
dollars of information in it for the average business man.”
FRANK A. VANDERLIP in _CHICAGO NEWS_, March 3, 1920.—“I regard it
as the most important volume published since the Armistice. It is
certain to have a profound effect on world thought. It is a deep
analysis of the economic structure of Europe at the outbreak of the
war, a brilliant characterisation of the Peace Conference, a revealing
analysis of the shortcomings of the Treaty, a dissection of the
reparation claims, done with the scientific spirit and steadiness of
hand of a great surgeon, a vision of Europe after the Treaty, which is
the most illuminating picture that has yet been made of the immediate
situation on the Continent, and, finally, constructive remedial
proposals. Every chapter bears the imprint of a master hand, of a mind
trained to translate economic data, and of absolutely unfaltering
courage to tell the truth.”
ALVIN JOHNSON in the _NEW REPUBLIC_, April 14, 1920.—“There has been
no failure anywhere to recognise that Keynes’s _Economic Consequences
of the Peace_ requires an ‘answer.’ Too many complacencies have been
assailed by it.... What progress are his critics making in their
attack on it?... There is surprisingly little effort made by American
reviewers to refute the charge that the Treaty is in many respects
in direct violation of the preliminary engagements, nor is anywhere
a serious attempt made to show that those engagements were not
morally binding.... The critics have not seriously shaken Keynes’s
characterization of the Treaty. They have not been able to get far away
from agreement with him as to what the Treaty should have been. They
admit the desirability of revision.”
_DETROIT FREE PRESS_, Nov. 21, 1921.—“Only once have I seen Viviani
go into action gradually. It was after his last trip to the United
States. He was talking in a subdued conversational tone when suddenly
he thought of John Maynard Keynes’s book, _The Economic Consequences
of the Peace_. His face, hitherto motionless, twitched a little. His
words accelerated slowly. The current of his emotion spread curiously
through the muscles of his whole body, until the figure which had been
relaxed from head to foot became tense in every fibre. In a moment he
was denouncing, with the sonorous blast of his anger, the book which
he said he had encountered in every country in the New World, as ‘a
monument of iniquity,’ a monster which confronted him everywhere in
South or North America, and which for some (to him) incredible reason
everyone seemed to believe as the gospel truth about the pact of
Versailles.”
TRANSCRIBER’S NOTE
-Plain print and punctuation errors fixed.
-Table at page 238 has been splitted into two tables, because of its large
dimension.
End of Project Gutenberg's A Revision of the Treaty, by John Maynard Keynes