For the iron to become wealth at all, for France to become the actual

centre of European industry, there must be a European industry: the

railroads and factories and steamship lines as consumers of the iron

must once more operate. To do that they in their turn must have _their_

market in the shape of active consumption on the part of the millions of

Europe. In other words the Continent must be economically restored. But

that it cannot be while Germany is economically paralysed. Germany's

industry is the very keystone of the European industry and

agriculture--whether in Russia, Poland, the Balkans, or the Near

East--which is the indispensable market of the French iron.[133] Even if

we could imagine such a thing as a reconstruction of Europe on lines

that would in some wonderful way put seventy or eighty million Germans

into a secondary place--involving as it would vast redistributions of

population--the process obviously would take years or generations.

Meantime Europe goes to pieces. 'Men will not always die quietly' as Mr

Keynes puts it. What is to become of French credit while France is

suppressing Bolshevik upheavals in Poland or Hungary caused by the

starvation of cities through the new economic readjustments? Europe

famishes now for want of credit. But credit implies a certain dependence

upon the steady course of future events, some assurance, for instance,

that this particular railway line to which advances are made will not

find itself, in a year or two's time, deprived of its traffic in the

interest of economic rearrangements resulting from an attempt to re-draw

the economic map of Europe. Nor can such re-drawing disregard the

present. It is no good telling peasants who have not ploughs or reapers

or who cannot get fertilisers because their railroad has no locomotives,

that a new line running on their side of the new frontier will be built

ten or fifteen years hence. You cannot stop the patients breathing 'for

just a few hours' while experiments are made with vital organs. The

operation must adapt itself to the fact that all the time he must

breathe. And to the degree to which we attempt violently to re-direct

the economic currents, does the security upon which our credit depends

decline.[134]

There are other considerations. A French journalist asks plaintively:

'If we want the coal why don't we go in and take it'--by the occupation

of the Ruhr. The implication is that France could get the coal for

nothing. Well, France has taken over the Saar Valley. By no means does

she get the coal for nothing. The miners have to be paid. France tried

paying them at an especially low rate. The production fell off; the

miners were discontented and underfed. They had to be paid more. Even so

the Saar has been 'very restless' under French control, and the last

word, as we know, will rest with the men. Miners who feel they are

working for the enemy of their fatherland are not going to give a high

production. It is a long exploded illusion that slave labour--labour

under physical compulsion--is a productive form of labour. Its output

invariably is small. So assuredly France does not get this coal for

nothing. And from the difference between the price which it costs her as

owner of the mines and administrator of their workers, and that which

she would pay if she had to buy the coal from the original owners and

administrators (if there is a difference on the credit side at all) has

to be deducted the ultimate cost of defence and of the political

complications that that has involved. Precise figures are obviously not

available; but it is equally obvious that the profit of seizure is

microscopic.

Always does the fundamental dilemma remain. France will need above all,

if she is to profit by these raw materials of European industry,

markets, and again markets. But markets mean that the iron which has

been captured must be returned to the nation from which it was taken, on

conditions economically advantageous to that nation. A central Europe

that is consuming large quantities of metallurgical products is a

Central Europe growing in wealth and power and potentially dangerous

unless reconciled. And reconciliation will include economic justice,

access to the very 'property' that has been seized.

The foregoing is not now, as it was when the present author wrote in

similar terms a decade since, mere speculation or hypothesis. Our

present difficulties with reference to the indemnity or reparations, the

fall in the exchanges, or the supply of coal, are precisely of the order

just indicated. The conqueror is caught in the grip of just those

difficulties in turning conquest to economic account upon which _The

Great Illusion_ so repeatedly insisted.

The part played by credit--as the sensory nerve of the economic

organism--has, despite the appearances to the contrary in the early part

of the War, confirmed those propositions that dealt with it. Credit--as

the extension of the use of money--is society's bookkeeping. The

debauchery of the currencies means of course juggling with the promises

to pay. The general relation of credit to a certain dependability upon

the future has already been dealt with.[135] The object here is to call

attention to the present admissions that the maintenance or re-creation

of credit is in very truth an indispensable element in the recovery of

Europe. Those admissions consist in the steps that are being taken

internationally, the emphasis which the governments themselves are

laying upon this factor. Yet ten years ago the 'diplomatic expert'

positively resented the introduction of such a subject into the

discussion of foreign affairs at all. Serious consideration of the

subject was generally dismissed by the orthodox authority on

international politics with some contemptuous reference to 'cosmopolitan

usury.'

Even now we seize every opportunity of disguising the truth to

ourselves. In the midst of the chaos we may sometimes see flamboyant

statements that England at any rate is greater and richer than before.

(It is a statement, indeed, very apt to come from our European

co-belligerents, worse off than ourselves.) It is true, of course, that

we have extended our Empire; that we have to-day the same materials of

wealth as--or more than--we had before the War; that we have improved

technical knowledge. But we are learning that to turn all this to

account there must be not only at home, but abroad, a widespread

capacity for orderly co-operation; the diffusion throughout the world of

a certain moral quality. And the war, for the time being, at least, has

very greatly diminished that quality. Because Welsh miners have absorbed

certain ideas and developed a certain temperament, the wealth of many

millions who are not miners declines. The idea of a self-sufficing

Empire that can disregard the chaos of the outside world recedes

steadily into the background when we see the infection of certain ideas

beginning the work of disintegration within the Empire. Our control over

Egypt has almost vanished; that over India is endangered; our relations

with Ireland affect those with America and even with some of our white

colonies. Our Empire, too, depends upon the prevalence of certain

ideas.

CHAPTER VII

COULD THE WAR HAVE BEEN PREVENTED?

'But the real irrelevance of all this discussion,' it will be said, 'is

that however complete our recognition of these truths might have been,

that recognition would not have affected Germany's action. We did not

want territory, or colonies, or mines, or oil-wells, or phosphate

islands, or railway concessions. We fought simply to resist aggression.

The alternatives for us were sheer submission to aggression, or war, a

war of self-defence.'

Let us see. Our danger came from Germany's aggressiveness. What made her

more aggressive than other nations, than those who later became our

Allies--Russia, Rumania, Italy, Japan, France? Sheer original sin, apart

from political or economic circumstance?

Now it was an extraordinary thing that those who were most clamant about

the danger were for the most part quite ready to admit--even to urge and

emphasise as part of their case--that Germany's aggression was _not_ due

to inherent wickedness, but that any nation placed in her position would

behave in just about the same way. That, indeed, was the view of very

many pre-eminent before the War in their warnings of the German peril,

of among others, Lord Roberts, Admiral Mahan, Mr Frederic Harrison, Mr

Blatchford, Professor Wilkinson.

Let us recall, for instance, Mr Harrison's case for German

aggression--Germany's 'poor access to the sea and its expanding

population':--

'A mighty nation of 65,000,000, with such superb resources both for

peace and war, and such overweening pride in its own superiority

and might, finds itself closed up in a ring-fence too narrow for

its fecundity as for its pretensions, constructed more by history,

geography, and circumstances than by design--a fence maintained by

the fears rather than the hostility of its weaker neighbours. That

is the rumbling subterranean volcano on which the European State

system rests.

'It is inevitable but that a nation with the magnificent resources

of the German, hemmed in a territory so inadequate to their needs

and pretensions, and dominated by a soldier, bureaucratic, and

literary caste, all deeply imbued with the Bismarckian doctrine,

should thirst to extend their dominions, and their power at any

sacrifice--of life, of wealth, and of justice. One must take facts

as they are, and it is idle to be blind to facts, or to rail

against them. It is as silly to gloss over manifest perils as it is

to preach moralities about them.... England, Europe, civilisation,

is in imminent peril from German expansion.'[136]

Very well. We are to drop preaching moralities and look at the facts.

Would successful war by us remove the economic and political causes

which were part at least of the explanation of German aggression? Would

her need for expansion become less? The preceding pages answer that

question. Successful war by us would not dispose of the pressure of

German population.

If the German menace was due in part at least to such causes as 'poor

access to the sea,' the absence of any assurance as to future provision

for an expanding population, what measures were proposed for the removal

of those causes?

None whatever. Not only so, but any effort towards a frank facing of the

economic difficulty was resisted by the very people who had previously

urged the economic factors of the conflict, as a 'sordid' interpretation

of that conflict. We have seen what happened, for instance, in the case

of Admiral Mahan. He urged that the competition for undeveloped

territory and raw materials lay behind the political struggle. So be it;

replies some one; let us see whether we cannot remove that economic

cause of conflict, whether indeed there is any real economic conflict at

all. And the Admiral then retorts that economics have nothing to do with

it. To Mr Frederic Harrison '_The Great Illusion_ policy is childish and

mischievous rubbish.' What was that policy? To deny the existence of the

German or other aggressiveness? The whole policy was prompted by the

very fact of that danger. Did the policy suggest that we should simply

yield to German political pretensions? Again, as we have seen, such a

course was rejected with every possible emphasis. The one outstanding

implication of the policy was that while arming we must find a basis of

co-operation by which both peoples could live.

In any serious effort to that end, one overpowering question had to be

answered by Englishmen who felt some responsibility for the welfare of

their people. Would that co-operation, giving security to others, demand

the sacrifice of the interest or welfare of their own people? _The Great

Illusion_ replied, No, and set forth the reasons for that reply. And the

setting-forth of those reasons made the book an 'appeal to avarice

against patriotism,' an attempt 'to restore the blessed hour of money

getting.' Eminent Nonconformist divines and patriotic stockbrokers

joined hands in condemning the appalling sordidness of the demonstration

which might have led to a removal of the economic causes of

international quarrel.

It is not true to say that in the decade preceding Armageddon the

alternatives to fighting Germany were exhausted, and that nothing was

left but war or submission. We simply had not tried the remedy of

removing the economic excuse for aggression. The fact that Germany did

face these difficulties and much future uncertainty was indeed urged by

those of the school of Mr Harrison and Lord Roberts as a conclusive

argument against the possibility of peace or any form of agreement with

her. The idea that agreement should reach to such fundamental things as

the means of subsistence seemed to involve such an invasion of

sovereignty as not even to be imaginable.

To show that such an agreement would not ask a sacrifice of vital

national interest, that indeed the economic advantages which could be

exacted by military preponderance were exceedingly small or

non-existent, seemed the first indispensable step towards bringing some

international code of economic right within the area of practical

politics, of giving it any chance of acceptance by public opinion. Yet

the effort towards that was disparaged and derided as 'materialistic.'

One hoped at least that this disparagement of material interest as a

motive in international politics might give us a peace settlement which

would be free from it. But economic interest which is 'sordid' when

appealed to as a means of preserving the peace, becomes a sacred egoism

when invoked on behalf of a policy which makes war almost inevitable.

Why did it create such bitter resentment before the War to suggest that

we should discuss the economic grounds of international conflict--why

before the War were many writers who now demand that discussion so angry

at it being suggested? Among the very hostile critics of _The Great

Illusion_--hostile mainly on the ground that it misread the motive

forces in international politics--was Mr J. L. Garvin. Yet his own first

post-war book is entitled: _The Economic Foundations of Peace_, and its

first Chapter Summary begins thus:--

'A primary war, largely about food and raw materials: inseparable

connection of the politics and economics of the peace.'

And his first paragraph contains the following:--

'The war with many names was in one main aspect a war about food

supply and raw materials. To this extent it was Germany's fight to

escape from the economic position of interdependence without

security into which she had insensibly fallen--to obtain for

herself independent control of an ample share in the world's

supplies of primary resources. The war meant much else, but it

meant this as well and this was a vital factor in its causes.'

His second chapter is thus summarised:--

'Former international conditions transformed by the revolution in

transport and telegraphic intelligence; great nations lose their

former self-sufficient basis: growth of interdependence between

peoples and continents.... Germany without sea power follows

Britain's economic example; interdependence without security:

national necessities and cosmopolitan speculation: an Armageddon

unavoidable.'

Lord Grey has said that if there had existed in 1914 a League of Nations

as tentative even as that embodied in the Covenant, Armageddon could in

any case have been delayed, and delay might well have meant prevention.

We know now that if war had been delayed the mere march of events would

have altered the situation. It is unlikely that a Russian revolution of

one kind or another could have been prevented even if there had been no

war; and a change in the character of the Russian government might well

have terminated on the one side the Serbian agitation against Austria,

and on the other the genuine fear of German democrats concerning

Russia's imperialist ambitions. The death of the old Austrian emperor

was another factor that might have made for peace.[137]

Assume, in addition to such factors, that Britain had been prepared to

recognise Germany's economic needs and difficulties, as Mr Garvin now

urges we should recognise them. Whether even this would have prevented

war, no man can say. But we can say--and it is implicit in the economic

case now so commonly urged as to the need of Germany for economic

security--that since we did not give her that security we did not do all

that we might have done to remove the causes of war. 'Here in the

struggle for primary raw materials' says Mr Garvin in effect over the

six hundred pages more or less of his book, 'are causes of war that must

be dealt with if we are to have peace.' If then, in the years that

preceded Armageddon, the world had wanted to avoid that orgy, and had

had the necessary wisdom, these are things with which it would have

occupied itself.

Yet when the attempt was made to draw the attention of the world to just

those factors, publicists even as sincere and able as Mr Garvin

disparaged it; and very many misrepresented it by silly distortion. It

is easy now to see where that pre-war attempt to work towards some

solution was most defective: if greater emphasis had been given to some

definite scheme for assuring Germany's necessary access to resources,

the real issue might have been made plainer. A fair implication of _The

Great Illusion_ was that as Britain had no real interest in thwarting

German expansion, the best hope for the future lay in an increasingly

clear demonstration of the fact of community of interest. The more valid

conclusion would have been that the absence of conflict in vital

interests should have been seized upon as affording an opportunity for

concluding definite conventions and obligations which would assuage

fears on both sides. But criticism, instead of bringing out this defect,

directed itself, for the most part, to an attempt to show that the

economic fears or facts had nothing to do with the conflict. Had

criticism consisted in taking up the problem where _The Great Illusion_

left it, much more might have been done--perhaps sufficient--to make

Armageddon unnecessary.[138]

The importance of the phenomenon we have just touched upon--the

disparagement before war of truths we are compelled to face after

war--lies in its revelation of subconscious or unconscious motive. There

grows up after some years of peace in every nation possessing military

and naval traditions and a habit of dominion, a real desire for

domination, perhaps even for war itself; the opportunity that it affords

for the assertion of collective power; the mysterious dramatic impulse

to 'stop the cackle with a blow; strike, and strike home.'

* * * * *

For the moment we are at the ebb of that feeling and another is

beginning perhaps to flow. The results are showing in our policy. We

find in what would have been ten years ago very strange places for such

things, attacks upon the government for its policy of 'reckless

militarism' in Mesopotamia or Persia. Although public opinion did not

manage to impose a policy of peace with Russia, it did at least make

open and declared war impossible, and all the efforts of the Northcliffe

Press to inflame passion by stories of Bolshevist atrocities fell

completely flat. For thirty years it has been a crime of _lèse patrie_

to mention the fact that we have given solemn and repeated pledges for

the evacuation of Egypt. And indeed to secure a free hand in Egypt we

were ready to acquiesce in the French evasion of international

obligations in Morocco, a policy which played no small part in widening

the gulf between ourselves and Germany. Yet the political position on

behalf of which ten years ago these risks were taken is to-day

surrendered with barely a protest. A policy of almost unqualified

'scuttle' which no Cabinet could have faced a decade since, to-day

causes scarcely a ripple. And as to the Treaty, certain clauses therein,

around which centred less than two years ago a true dementia--the trial

of the Kaiser in London, the trial of war prisoners--we have simply

forgotten all about.

It is certain that sheer exhaustion of the emotions associated with war

explains a good deal. But Turks, Poles, Arabs, Russians, who have

suffered war much longer, still fight. The policy of the loan to

Germany, the independence of Egypt, the evacuation of Mesopotamia, the

refusal to attempt the removal of the Bolshevist 'menace to freedom and

civilisation' by military means, are explained in part at least by a

growing recognition of both the political and the economic futility of

the military means, and the absolute need of replacing or supplementing

the military method by an increasing measure of agreement and

co-operation. The order of events has been such as to induce an

interpretation, bring home a conviction, which has influenced policy.

But the strength and permanence of the conviction will depend upon the

degree of intelligence with which the interpretation is made. Discussion

is indispensable and that justifies this re-examination of the

suggestions made in _The Great Illusion_.

In so far as it is mere emotional exhaustion which we are now feeling,

and not the beginning of a new tradition and new attitude in which

intelligence, however dimly, has its part, it has in it little hope. For

inertia has its dangers as grave as those of unseeing passion. In the

one case the ship is driven helplessly by a gale on to the rocks, in the

other it drifts just as helplessly into the whirlpool. A consciousness

of direction, a desire at least to be master of our fate and to make the

effort of thought to that end, is the indispensable condition of

freedom, salvation. That is the first and last justification for the

discussion we have just summarised.

FOOTNOTES:

[1] But British policy can hardly be called less contradictory. A year

after the enactment of a Treaty which quite avowedly was framed for the

purpose of checking the development of German trade, we find the

unemployment crisis producing on the part of the _New Statesman_ the

following comment:--

'It must be admitted, however, that the present wave of depression and

unemployment is far more an international than a national problem. The

abolition of "casual labour" and the adoption of a system of "industrial

maintenance" would appreciably affect it. The international aspect of

the question has always been important, but never so overwhelmingly

important as it is to-day.

'The present great depression, however, is not normal. It is due in the

main to the breakdown of credit and the demoralisation of the

"exchanges" throughout Europe. France cannot buy locomotives in England

if she has to pay 60 francs to the pound sterling. Germany, with an

exchange of 260 (instead of the pre-war 20) marks to the pound, can buy

scarcely anything. Russia, for other reasons cannot buy at all. And even

neutral countries like Sweden and Denmark, which made much money out of

the war and whose "exchanges" are fairly normal, are financially almost

_hors de combat_, owing presumably to the ruin of Germany. There appears

to be no remedy for this position save the economic rehabilitation of

Central Europe.

'As long as German workmen are unable to exercise their full productive

capacity, English workmen will be unemployed. That, at present, is the

root of the problem. For the last two years we, as an industrial nation,

have been cutting off our nose to spite our face. In so far as we ruin

Germany we are ruining ourselves; and in so far as we refuse to trade

with revolutionary Russia we are increasing the likelihood of violent

upheavals in Great Britain. Sooner or later we shall have to scrap every

Treaty that has been signed and begin again the creation of the New

Europe on the basis of universal co-operation and mutual aid. Where we

have demanded indemnities we must offer loans.

'A system of international credit--founded necessarily on British

credit--is as great a necessity for ourselves as it is for Central

Europe. We must finance our customers or lose them and share their ruin,

sinking deeper every month into the morass of doles and relief works.

That is the main lesson of the present crisis.'--(Jan. 1st, 1921.)

[2] Out of a population of 45,000,000 our home-grown wheat suffices for

only about 12,500,000, on the basis of the 1919-20 crop. Sir Henry Rew,

_Food Supplies in Peace and War_, says: 'On the basis of our present

population ... we should still need to import 78 per cent. of our

requirements.' (p. 165). Before the War, according to the same

authority, home produce supplied 48 per cent. in food value of the total

consumption, but the table on which this figure is based does not

include sugar, tea, coffee, or cocoa.

[3] The growing power of the food-producing area and its determination

to be independent as far as possible of the industrial centre, is a fact

too often neglected in considering the revolutionary movements of

Europe. The war of the classes almost everywhere is crossed by another

war, that between cities and country. The land-owning countryman,

whether peasant or noble, tends to become conservative, clerical,

anti-socialist (and anti-social) in his politics and outlook.

[4] 'The Economic Consequences of the Peace,' pp. 275-277.

[5] _Manchester Guardian_, Weekly Edition, February 6th., 1920.

[6] _Daily News_, June 28th., 1920.

[7] Sir William Goode, British Director of Relief, has said, (_Times_

Dec. 6th., 1919):--

'I have myself recently returned from Vienna. I feel as if I had spent

ten days in the cell of a condemned murderer who has given up all hope

of reprieve. I stayed at the best hotel, but I saw no milk and no eggs

the whole time I was there. In the bitter, cold hall of the hotel, once

the gayest rendezvous in Europe, the visitors huddled together in the

gloom of one light where there used to be forty. They were more like

shadows of the Embankment than representatives of the rich. Vienna's

world-famous Opera House is packed every afternoon. Why? Women and men

go there in order to keep themselves warm, and because they have no work

to do.'

He went on:--

'First aid was to hasten peace. Political difficulties combined with

decreased production, demoralisation of railway traffic, to say nothing

of actual shortages of coal, food, and finance, had practically

paralysed industrial and commercial activity. The bold liberation or

creation of areas, without simultaneous steps to reorganise economic

life, had so far proved to be a dangerous experiment. Professor Masaryk,

the able President of Czecho-Slovakia, put the case in a nutshell when

he said: "It is a question of the export of merchandise or of

population."'

[8] The figures for 1913 are:--

Imports. From British Possessions £192,000,000.

From Foreign Countries £577,000,000.

Exports. To British Possessions £195,000,000.

To Foreign Countries £330,000,000.

Re-exports. To British Possessions £14,000,000.

To Foreign Countries £96,000,000.

[9] The question is dealt with more fully in the last chapter of the

'Addendum' to this book. The chapter of 'The Great Illusion' dealing

with the indemnity says: 'The difficulty in the case of a large

indemnity is not so much the payment by the vanquished as the receiving

by the victor.' (p. 76, 1910 Edition.) Mr Lloyd George (Jan. 28th.,

1921) says: 'The real difficulty is in securing payment outside the

limits of Germany.... The only way Germany can pay is by exports--the

difference between German imports and exports.... If she exports too

much for the Allies it means the ruin of their industry.'

Thus the main problem of an indemnity is to secure wealth in exportable

form which will not disorganise the victor's trade. Yet so obscured does

the plainest fact become in the murky atmosphere of war time that in

many of the elaborate studies emanating from Westminster and Paris, as

to 'What Germany can pay' this phase of the problem is not even touched

upon. We get calculations as to Germany's total wealth in railroads,

public buildings, houses, as though these things could be picked up and

transported to France or Belgium. We are told that the Allies should

collect the revenues of the railroads; the _Daily Mail_ wants us to

'take' the income of Herr Stinnes, all without a word as to the form in

which this wealth is to _leave Germany_. Are we prepared to take the

things made in the factories of Herr Stinnes or other Germans? If not,

what do we propose that Germany shall give? Paper marks increased in

quantity until they reach just the value of the paper they are printed

on? Even to secure coal, we must, as we have seen, give in return food.

If the crux of the situation were really understood by the memorialists

who want Germany's pockets searched, their studies would be devoted

_not_ to showing what Germany might produce under favourable

circumstances, which her past has shown to be very great indeed, but

what degree of competitive German production Allied industrialists will

themselves be ready to face.

"Big business" in England is already strongly averse to the payment of

an indemnity, as any conversation in the City or with industrialists

readily reveals. Yet it was the suggestion of what has actually taken

place which excited the derision of critics a few years ago. Obviously

the feasibility of an indemnity is much more a matter of our will than

of Germany's, for it depends on what shall be the size of Germany's

foreign trade. Clearly we can expand that if we want to. We might give

her a preference!

[10] 'What Happened to Europe.'

[11] _Times_, July 3rd., 1920.

[12] The proposal respecting Austria was a loan of 50 millions in

instalments of five years.

[13] Mr Hoover seems to suggest that their repayment should never take

place. To a meeting of Bankers he says:--

'Even if we extend these credits and if upon Europe's recovery we then

attempt to exact the payment of these sums by import of commodities, we

shall have introduced a competition with our own industries that cannot

be turned back by any tariff wall.... I believe that we have to-day an

equipment and a skill in production that yield us a surplus of

commodities for export beyond any compensation we can usefully take by

way of imported commodities.... Gold and remittances and services cannot

cover this gulf in our trade balance.... To me there is only one remedy,

and that is by the systematic permanent investment of our surplus

production in reproductive works abroad. We thus reduce the return we

must receive to a return of interest and profit.'

A writer in the _New Republic_ (Dec. 29th., 1920.) who quotes this says

pertinently enough:--

'Mr Hoover disposes of the principal of our foreign loans. The debtors

cannot return it and we cannot afford to receive it back. But the

interest and profit which he says we may receive--that will have to be

paid in commodities, as the principal would be if it were paid at all.

What shall we do when the volume of foreign commodities received in

payment of interest and profit becomes very large and our industries cry

for protection?'

[14] The present writer declines to join in the condemnation of British

miners for reduced output. In an ultimate sense (which is no part of the

present discussion) the decline in effort of the miner is perhaps

justified. But the facts are none the less striking as showing how great

the difference of output can be. Figures given by Sir John Cadman,

President of the Institute of Mining Engineers a short time ago (and

quoted in the _Fortnightly Review_ for Oct. 1920.), show that in 1916

the coal production per person employed in the United Kingdom was 263

tons, as against 731 tons in the United States. In 1918 the former

amounted to 236 tons, and during 1919 it sank to 197½ tons. In 1913 the

coal produced per man per day in this country was 0.98 tons, and in

America it was 3.91 tons for bituminous coal and 2.19 tons for

anthracite. In 1918 the British output figure was 0.80 tons, and the

American 3.77 tons for bituminous coal and 2.27 for anthracite. Measured

by their daily output, a single American miner does just as much work as

do five Englishmen.

The inferiority in production is, of course, 'to some considerable

extent' due to the fact that the most easily workable deposits in

England are becoming exhausted, while the United States can most easily

draw on their most prolific and most easily workable sites....

It is the fact that in our new and favourable coalfields, such as the

South Yorkshire area, the men working under the most favourable modern

conditions and in new mines where the face is near the shaft, do not

obtain as much coal per man employed, as that got by the miners in the

country generally under the conditions appertaining forty and fifty

years ago.

[15] Mr J. M. Keynes, 'The Economic Consequences of the Peace,' p. 211,

says:--'It is an extraordinary fact that the fundamental economic

problem of a Europe starving and disintegrating before their eyes, was

the one question in which it was impossible to arouse the interest of

the Four.'

[16] Incidentally we see nations not yet brought under capitalist

organisation (e.g. the peasant nations of the Balkans) equally subject

to the hostilities we are discussing.

Bertrand Russell writes (_New Republic_, September 15th., 1920):--'No

doubt commercial rivalry between England and Germany had a great deal to

do with causing the war, but rivalry is a different thing from

profit-seeking. Probably by combination, English and German capitalists

could have made more than they did out of rivalry, but the rivalry was

instinctive, and its economic form was accidental. The capitalists were

in the grip of nationalist instinct as much as their proletarian

'dupes.' In both classes some have gained by the war, but the universal

will to war was not produced by the hope of gain. It was produced by a

different set of instincts, one which Marxian psychology fails to

recognise adequately....

Men desire power, they desire satisfaction for their pride and their

self-respect. They desire victory over their rivals so profoundly that

they will invent a rivalry for the unconscious purpose of making a

victory possible. All these motives cut across the pure economic motive

in ways that are practically important.

There is need of a treatment of political motives by the methods of

psycho-analysis. In politics, as in private life, men invent myths to

rationalise their conduct. If a man thinks that the only reasonable

motive in politics is economic self-advancement, he will persuade

himself that the things he wishes to do will make him rich. When he

wants to fight the Germans, he tells himself that their competition is

ruining his trade. If, on the other hand, he is an 'idealist,' who holds

that his politics should aim at the advancement of the human race, he

will tell himself that the crimes of the Germans demand their

humiliation. The Marxian sees through this latter camouflage, but not

through the former.

[17] 'If the Englishman sells goods in Turkey or Argentina, he is taking

trade from the German, and if the German sells goods in either of these

countries--or any other country, come to that--he is taking trade from

the Englishman; and the well-being of every inhabitant of the great

manufacturing towns, such as London, Paris, or Berlin, is bound up in

the power of the capitalist to sell his wares; and the production of

manufactured articles has outstripped the natural increase of demand by

67 per cent., therefore new markets must be found for these wares or the

existing ones be "forced"; hence the rush for colonies and feverish

trade competition between the great manufacturing countries. And the

production of manufactured goods is still increasing, and the great

cities must sell their wares or starve. Now we understand what trade

rivalry really is. It resolves itself, in fact, into the struggle for

bread.' (A Rifleman: '_Struggle for Bread._' p. 54.)

[18] Mr J. M. Keynes, _The Economic Consequences of the Peace_, says: 'I

do not put the money value of the actual _physical_ loss to Belgian

property by destruction and loot above £150,000,000 as a _maximum_, and

while I hesitate to put yet lower an estimate which differs so widely

from those generally current, I shall be surprised if it proves possible

to substantiate claims even to this amount.... While the French claims

are immensely greater, here too, there has been excessive exaggeration,

as responsible French statisticians have themselves pointed out. Not

above 10 per cent. of the area of France was effectively occupied by the

enemy, and not above 4 per cent. lay within the area of substantial

devastation.... In short, it will be difficult to establish a bill

exceeding £500,000,000 for _physical and material_ damage in the

occupied and devastated areas of Northern France.' (pp. 114-117.)

[19] _The Foundations of International Policy_ pp. xxiii-xxiv.

It is true, of course, that Governments were for their armies and navies

and public departments considerable purchasers in the international

market. But the general truth of the distinction here made is

unaffected. The difference in degree, in this respect, between the

pre-war and post-war state in so great as to make a difference of kind.

The dominant motive for State action has been changed.

[20] See Addendum and also the authors' _War and the Workers_. (National

Labour Press). pp. 29-50.

[21] Note of May 22, 1919.

[22] Speech of September 5, 1919. From report in Philadelphia Public

Ledger, Sept 6.

[23] In German East Africa we have a case in which practically the whole

of the property in land was confiscated. The whole European population

were evicted from the farms and plantations--many, of course,

representing the labour of a lifetime--and deported. A visitor to the

colony describes it as an empty shell, its productivity enormously

reduced. In contradistinction, however, one welcomes General Smuts's

statement in the Union House of Assembly in regard to the Government's

intentions as to German property. He declared that the balance of nine

millions in the hands of the Custodian after claims for damages had been

recovered, would not be paid to the Reparations Commission, as this

would practically mean confiscation. The Government would take the nine

millions, plus interest, as a loan to South Africa for thirty years at

four per cent. While under the Peace Treaty they had the right to

confiscate all private property in South-West Africa, they did not

intend to avail themselves of those rights. They would leave private

property alone. As to the concessions, if the titles to these were

proved, they would also be left untouched. The statement of the South

African Government's intentions, which are the most generous of any

country in the world, was received with repeated cheers from all

sections of the House.

[24] Since the above lines were written the following important

announcement has appeared (according to _The Times_ of October 26th.,

1920.) in the _Board of Trade Journal_ of October 21st.:--

'H. M. Government have informed the German Government that they do not

intend to exercise their rights under paragraph 18 of Annex II to Part

VIII of the Treaty of Versailles, to seize the property of German

nationals in this country in case of voluntary default by Germany. This

applies to German property in the United Kingdom or under United Kingdom

control, whether in the form of bank balances, or in that of goods in

British bottoms, or of goods sent to this country for sale.

'It has already been announced that German property, rights, and

interests acquired since the publication of the General Licence

permitting the resumption of trade with Germany (i.e. since July 12th.,

1919), are not liable to retention under Art. 297 of the Peace Treaty,

which gives the Allied and Associated Powers the right to liquidate all

German property, rights, and interests within their territories at the

date of the coming into force of the Treaty.'

This announcement has called forth strong protests from France and from

some quarters in this country, to which the British Government has

rejoined by a semi-official statement that the concession has been made

solely on account of British commercial interests. The incident

illustrates the difficulty of waiving even permissive powers under the

Treaty, although the exercise of those powers would obviously injure

British traders. Moreover, the Reparations (Recovery) Act, passed in

March 1921, appears to be inconsistent with the above announcement.

[25] A point that seems to have been overlooked is the effect of this

Treaty on the arrangements which may follow changes in the political

status of, say, Egypt or India or Ireland. If some George Washington of

the future were to apply the principles of the Treaty to British

property, the effects might be far-reaching.

A _Quarterly Review_ critic (April 1920) says of these clauses of the

Treaty (particularly Article 297b.):--

'We are justified in regarding this policy with the utmost apprehension,

not only because of its injustice, but also because it is likely to form

precedents of a most mischievous character in the future. If, it will be

said, the Allied Governments ended their great war for justice and right

by confiscating private property and ruining those unfortunate

individuals who happened to have investments outside their own country,

how can private wealth at home complain if a Labour Government proposes

to confiscate private property in any business which it thinks suitable

for "nationalisation"? Under another provision the Reparations

Commission is actually allowed to demand the surrender of German

properties and German enterprises in _neutral_ countries. This will be

found in Article 235, which "introduces a quite novel principle in the

collection of indemnities."'

[26] See quotations in Addendum.

[27] Cmd. 280 (1919), p. 15.

[28] The dilemma is not, of course, as absolute, as this query would

suggest. What I am trying to make perfectly clear here is the _kind_ of

problem that faces us rather than the precise degree of its difficulty.

My own view is that after much suffering especially to the children, and

the reduction during a generation or two, perhaps, of the physical

standard of the race, the German population will find a way round the

sustenance difficulty. For one thing, France needs German coke quite as

badly as Germany needs French ore, and this common need may be made the

basis of a bargain. But though Germany may be able to surmount the

difficulties created for her by her victors, it is those difficulties

which will constitute her grievance, and will present precisely the

kind, if not the degree, of injustice here indicated.

[29] One very commonly sees the statement that France had no adequate

resources in iron ore before the War. This is an entire mistake, as the

Report of the Commission appointed by the Minister of Munitions to visit

Lorraine (issued July, 1919), points out (p. 11.):--'Before the War the

resources of Germany of iron ore were 3,600,000,000 tons and those of

France 3,300,000,000.' What gave Germany the advantage was the

possession not of greater ore resources than France, but of coal

suitable for furnace coke, and this superiority in coal will still

remain even after the Treaty, although the paralysis of transport and

other indispensable factors may render the superiority valueless. The

report just quoted says:--'It is true that Germany will want iron ore

from Lorraine (in 1913 she took 14,000,000 tons from Briey and

18,500,000 tons from Lorraine), but she will not be so entirely

dependent upon this one source of supply as the Lorraine works will be

upon Germany for coke, unless some means are provided to enable Lorraine

to obtain coke from elsewhere, or to produce her own needs from Saar

coal and imported coking coal.' The whole report seems to indicate that

the _mise en valeur_ of France's new 'property' depends upon supplies of

German coal--to say nothing of the needs of a German market and the

markets depending on that market. As it is, the Lorraine steel works are

producing nothing like their full output because of the inability of

Germany to supply furnace coke, owing largely to the Westphalian labour

troubles and transport disorganisation. Whether political passion will

so far subside as to enable the two countries to come to a bargain in

the matter of exchange of ore or basic pig-iron for furnace coke,

remains to be seen. In any case one may say that the ore-fields of

Lorraine will only be of value to France provided that much of their

product is returned to Germany and used for the purpose of giving value

to German coal.

[30] From the summary of a series of lectures on the _Biology of Death_,

as reported in the _Boston Herald_ of December 19th., 1920.

[31] A recent book on the subject, summing up the various

recommendations made in France up to 1918 for increasing the birth-rate

is _La Natalité: ses Lois Economiques et Psychologiques_, by Gaston

Rageot.

The present writer remembers being present ten years before the War at a

Conference at the Sorbonne on this subject. One of the lecturers

summarised all the various plans that had been tried to increase the

birth-rate. 'They have all failed,' he concluded, 'and I doubt if

anything remains to be done.' And one of the savants present added:

'Except to applaud.'

[32] Mr William Harbutt Dawson gives the figures as follows:--

'The decline in the birth-rate was found to have become a settled factor

in the population question.... The birth-rate for the whole Empire

reached the maximum figure in 1876, when it stood at 41.0 per 1000 of

the population.... Since 1876 the movement has been steadily downward,

with the slightest possible break at the beginning of the 'nineties....

Since 1900 the rate has decreased as follows:--

1900 35.6 per 1000.

1901 35.7 per "

1902 35.1 per "

1903 33.9 per "

1904 34.1 per 1000.

1905 33.0 per "

1906 33.1 per "

(_The Evolution of Modern Germany._ p. 309)

[33] Conversely it may be said that the economic position of the border

States becomes impossible unless the greater States are orderly. In

regard to Poland, Mr Keynes remarks: 'Unless her great neighbours are

prosperous and orderly, Poland is an economic impossibility, with no

industry but Jew-baiting.'

Sir William Goode (the British Director of Relief) states that he found

'everywhere never-ending vicious circles of political paradox and

economic complication, with consequent paralysis of national life and

industry. The new States of repartitioned Europe seem not only incapable

of maintaining their own economic life, but also either unable or

unwilling to help their neighbours.' (Cmd. 521 (1920), p. 6.)

[34] From a manifesto signed by a large number of American

intellectuals, business men, and Labour Leaders ('League of Free Nations

Association') on the eve of President Wilson's departure for Paris.

[35] Interview published by _Pearson's Magazine_, March, 1915.

[36] _Times_, March 8, 1915. 'Our honour and interest must have

compelled us to join France and Russia even if Germany had scrupulously

respected the rights of her small neighbours and had sought to hack her

way through the Eastern fortresses. The German Chancellor has insisted

more than once upon this truth. He has fancied apparently that he was

making an argumentative point against us by establishing it. That, like

so much more, only shows his complete misunderstanding of our attitude

and our character.... We reverted to our historical policy of the

Balance of Power.'

The _Times_ maintains the same position five years later (July 31st,

1920): 'It needed more than two years of actual warfare to render the

British people wholly conscious that they were fighting not a quixotic

fight for Belgium and France, but a desperate battle for their own

existence.'

[37] _How the War Came_, p. 238.

[38] Lord Loreburn adds:--

'But Sir Edward Grey in 1914 did not and could not offer similar

Treaties to France and Germany because our relations with France and the

conduct of Germany were such, that for us to join Germany in any event

was unthinkable. And he did not proclaim our neutrality because our

relations with France, as described in his own speech, were such that he

could not in honour refuse to join France in the war. Therefore the

example of 1870 could not be followed in 1914, and Belgium was not saved

but destroyed.'

[39] See the Documents published by the Russian Government in November,

1917.

[40] It is not clear whether the undertaking to Russia was actually

given. Lord R. Cecil in the House of Commons on July 24th, 1917, said:

'It will be for this country to back up the French in what they desire.

I will not go through all the others of our Allies--there are a good

many of them--but the principle (to stand by our Allies) will be equally

there in the case of all and particularly in the case of Serbia.'

[41] Since these lines were written, there has been a change of

government and of policy in Italy. An agreement has been reached with

Yugo-Slavia, which appears to satisfy the moderate elements in both

countries.

[42] Lord Curzon (May 17th, 1920) wrote that he did not see how we could

invoke the League to restrain Poland. The Poles, he added, must choose

war or peace on their own responsibility. Mr Lloyd George (June 19th,

1920) declared that 'the League of Nations could not intervene in

Poland.'

[43] _The War that will End War_, p. 14.

[44] _Ibid._, p. 19.

[45] _The Issue_, p. 37-39.

[46] _Land and Water_, February 21st, 1918.

[47] Even as late as January 13th, 1920, Mr H. W. Wilson of the _Daily

Mail_ writes that if the disarmament of Germany is carried out 'the real

cause of swollen armaments in Europe will vanish.'

On May 18th, 1920, Field-Marshal Sir Henry Wilson (_Morning Post_, May

19th) declares himself thus:--

'We were told that after this last war we were to have peace. We have

not; there are something between twenty and thirty bloody wars going on

at the present moment. We were told that the great war was to end war.

It did not; it could not. We have a very difficult time ahead, whether

on the sea, in the air, or on the land.' He wanted them to take away the

warning from a fellow soldier that their country and their Empire both

wanted them to-day as much as ever they had, and if they were as proud

of belonging to the British Empire as he was they would do their best,

in whatever capacity they served, to qualify themselves for the times

that were coming.

[48] July 31st, 1920.

[49] April 19th, 1919.

[50] A Reuter Despatch dated August 31st, 1920, says:--

'Speaking to-day at Charleston (West Virginia) Mr Daniels, U. S. Naval

Secretary, said: "We are building enormous docks and are constructing 18

dreadnoughts and battle cruisers, with a dozen other powerful ships

which in effective fighting power will give our navy world primacy."'

[51] We are once more back to the Carlylean 'deep, patient ... virtuous

... Germany.'

[52] Sir Henry Wilson, Chief of the Imperial General Staff, in a

memorandum dated December 1st, 1919, which appears in a Blue Book on

'the Evacuation of North Russia, 1919,' says:--'There is one great

lesson to be learned from the history of the campaign.... It is that

once a military force is involved in operations on land it is almost

impossible to limit the magnitude of its commitments.'

[53] And Russo-German co-operation is of course precisely what French

policy must create. Says an American critic:--

'France certainly carries a big stick, but she does not speak softly;

she takes her own part, but she seems to fear neither God nor the

revulsion of man. Yet she has reason to fear. Suppose she succeeds for a

while in reducing Germany to servitude and Russia to a dictatorship of

the Right, in securing her own dominion on the Continent as overlord by

the petty States of Europe. What then? What can be the consequence of a

common hostility of the Teutonic and Slavonic peoples, except in the end

common action on their part to throw off an intolerable yoke? The

nightmare of a militant Russo-German alliance becomes daily a more

sinister prophecy, as France teaches the people of Europe that force

alone is the solvent. France has only to convince all of Germany that

the Treaty of Versailles will be enforced in all its rigour, which means

occupation of the Ruhr and the loss of Silesia, to destroy the final

resistance of those Germans who look to the West rather than to the East

for salvation. Let it be known that the barrier of the Rhine is all

bayonet and threat, and western-minded Germany must go down before the

easterners, Communist or Junker. It will not matter greatly which.'

(_New Republic_, Sept. 15th, 1920).

[54] December 23rd, 1919.

[55] _The Times_ of September 4th, 1920 reproduces an article from the

Matin, on M. Millerand's policy with regard to small States. M.

Millerand's aim was that economic aid should go hand in hand with French

military protection. With this policy in view, a number of large

businesses recently passed under French control, including the Skoda

factory in Czecho-Slovakia, big works at Kattowitz in Upper Silesia, the

firm of Huta-Bankowa in Poland, railway factories in Rumania, and

certain river systems and ports in Yugo-Slavia. In return for assistance

to Admiral Horthy, an agreement was signed whereby France obtained

control of the Hungarian State Railways, of the Credit Bank, the

Hungarian river system and the port of Buda-pest. Other reports state

that France has secured 85 per cent. of the oil-fields of Poland, in

return for her help at the time of the threat to Warsaw. As the majority

of shares in the Polish Oil Company 'Galicia,' which have been in

British hands until recently, have been bought up by a French Company,

the 'Franco-Polonaise,' France now holds an important weapon of

international policy.

[56] The present writer would like to enter a warning here that nothing

in this chapter implies that we should disregard France's very

legitimate fears of a revived militarist Germany. The implication is

that she is going the right way about to create the very dangers that

terrify her. If this were the place to discuss alternative policies, I

should certainly go on to urge that England--and America--should make it

plain to France that they are prepared to pledge their power to her

defence. More than that, both countries should offer to forgo the debts

owing to them by France on condition of French adhesion to more workable

European arrangements. The last thing to be desired is a rupture, or a

mere change of rôles: France to become once more the 'enemy' and Germany

once more the 'Ally.' That outcome would merely duplicate the weary

story of the past.

[57] _The Expansion of England_, p. 202.

[58] The assumption marks even post-war rhetoric. M. Millerand's message

to the Senate and Chamber upon his election as President of the Republic

says: 'True to the Alliances for ever cemented by blood shed in common,'

France will strictly enforce the Treaty of Versailles, 'a new charter of

Europe and the World.' (_Times_, Sept. 27th, 1920). The passage is

typical of the moral fact dealt with in this chapter. M. Millerand

knows, his hearers know, that the war Alliance 'for ever cemented by

blood shed in common,' has already ceased to exist. But the admission of

this patent fact would be fatal to the 'blood' heroics.

[59] Dr L. P. Jacks, Editor of _The Hibbert Journal_, tells us that

before the War the English nation, regarded from the moral point of

view, was a scene of 'indescribable confusion; a moral chaos.' But there

has come to it 'the peace of mind that comes to every man who, after

tossing about among uncertainties, finds at last a mission, a cause to

which he can devote himself.' For this reason, he says, the War has

actually made the English people happier than they were before:

'brighter, more cheerful. The Englishman worries less about himself....

The tone and substance of conversation are better.... There is more

health in our souls and perhaps in our bodies.' And he tells how the War

cured a friend of insomnia. (_The Peacefulness of Being at War_, _New

Republic_, September 11, 1915).

[60] The facts of both the Russian and the Italian bargains are dealt

with in more detail in Chap. III.

[61] Quoted by Mr T. L. Stoddard in an article on Italian Nationalism,

in the _Forum_, Sept. 1915. One may hope that the outcome of the War has

modified the tendencies in Italy of which he treats. But the quotations

he makes from Italian Nationalist writers put Treitschke and Bernhardi

in the shade. Here are some. Corradini says: 'Italy must become once

more the first nation in the world.' Rocco: 'It is said that all the

other territories are occupied. But strong nations, or nations on the

path of progress, conquer.... territories occupied by nations in

decadence.' Luigi Villari rejoices that the cobwebs of mean-spirited

Pacifism have been swept away. Italians are beginning to feel, in

whatever part of the world they may happen to be, something of the pride

of Roman citizens.' Scipione Sighele writes: 'War must be loved for

itself.... To say "War is the most horrible of evils," to talk of war as

"an unhappy necessity," to declare that we should "never attack but

always know how to defend ourselves," to say these things is as

dangerous as to make out-and-out Pacifist and anti-militarist speeches.

It is creating for the future a conflict of duties: duties towards

humanity, duties towards the Fatherland.' Corradini explains the

programme of the Nationalists: 'All our efforts will tend towards making

the Italians a warlike race. We will give it a new will; we will instil

into it the appetite for power, the need of mighty hopes. We will create

a religion--the religion of the Fatherland victorious over the other

nations.'

I am indebted to Mr Stoddard for the translations; but they read quite

'true to type.'

[62] It is true that the Labour Party, alone of all the parties, did

take action, happily effective, against the Russian adventure--after it

had gone on in intermittent form for two years. But the above paragraphs

refer particularly to the period which immediately succeeded the War,

and to a general temper which was unfortunately a fact despite Labour

action.

[63] Mr Hartley Manners, the playwright, who produced during the War a

book entitled _Hate with a Will to Victory_, writes thus:--

'And in voicing our doctrine of Hate let us not forget that the German

people were, and are still, solidly behind him (the Kaiser) in

everything he does.' ...

'The German people are actively and passively with their Government to

the last man and the last mark. No people receive their faith and their

rules of conduct more fatuously from their rulers than do the German

people. Fronting the world they stand as one with their beloved Kaiser.

He who builds on a revolution in Germany as a possible ending of the

war, knows not what he says. They will follow through any degradation of

the body, through any torture of spirit, the tyrants they have been

taught from infancy to regard as their Supreme Masters of body and

soul.' ...

And here is his picture of 'the German':--

... 'a slave from birth, with no rights as a free man, owing allegiance

to a militaristic Government to whom he looks for his very life; crushed

by taxation to keep up the military machine; ill-nourished, ignorant,

prone to crime in greater measure than the peasants of any other

country--as the German statistics of crime show--a degraded peasant, a

wretched future, and a loathesome past--these are the inheritances to

which the German peasant is born. What type of nature can develop in

such conditions? But one--the _brute_. And the four years' commerce of

this War has shown the German from prince to peasant as offspring of the

one family--the _brute_ family.' ...

[64] The following--which appeared in _The Times_ of April 17, 1915--is

merely a type of at least thirty or forty similar reports published by

the German Army Headquarters: 'In yesterday's clear weather the airmen

were very active. Enemy airmen bombarded places behind our positions.

Freiburg was again visited, and several civilians, the majority being

children, were killed and wounded.' A few days later the Paris _Temps_

(April 22, 1915) reproduced the German accounts of French air-raids

where bombs were dropped on Kandern, Loerrach, Mulheim, Habsheim,

Wiesenthal, Tüblingen, Mannheim. These raids were carried out by squads

of airmen, and the bombs were thrown particularly at railway stations

and factories. Previous to this, British and French airmen had been

particularly active in Belgium, dropping bombs on Zeebrugge, Bruges,

Middlekirke, and other towns. One German official report tells how a

bomb fell on to a loaded street car, killing many women and children.

Another (dated September 7, 1915) contains the following: 'In the course

of an enemy aeroplane attack on Lichtervelde, north of Roulers in

Flanders, seven Belgian inhabitants were killed and two injured.' A

despatch from Zürich, dated Sept. 24, 1915, says: 'At yesterday's

meeting of the Stuttgart City Council, the Mayor and Councillors

protested vigorously against the recent French raid upon an undefended

city. Burgomaster Lautenschlager asserted that an enemy that attacked

harmless civilians was fighting a lost cause.'

[65] March 27th, 1919.

[66] In Drinkwater's play, _Abraham Lincoln_, the fire-eating wife of

the war-profiteer, who had been violently abusing an old Quaker lady, is

thus addressed by Lincoln:--

'I don't agree with her, but I honour her. She's wrong, but she is

noble. You've told me what you think. I don't agree with you, and I'm

ashamed of you and your like. You, who have sacrificed nothing babble

about destroying the South while other people conquer it. I accepted

this war with a sick heart, and I've a heart that's near to breaking

every day. I accepted it in the name of humanity, and just and merciful

dealing, and the hope of love and charity on earth. And you come to me,

talking of revenge and destruction, and malice, and enduring hate. These

gentle people are mistaken, but they are mistaken cleanly, and in a

great name. It is you that dishonour the cause for which we stand--it is

you who would make it a mean and little thing....'

[67] The official record of the Meeting of the Council of Ten on January

16, 1919, as furnished to the Foreign Relations Committee of the

American Senate, reports Mr Lloyd George as saying:--

'The mere idea of crushing Bolshevism by military force is pure

madness....

'The Russian blockade would be a "death cordon," condemning women and

children to starvation, a policy which, as humane people, those present

could not consider.'

[68] While attempting in this chapter to reveal the essential difference

of the two methods open to us, it is hardly necessary to say that in the

complexities and cross-currents of human society practical policy can

rarely be guided by a single absolute principle. Reference has been made

to the putting of the pooled force of the nations behind a principle or

law as the alternative of each attempting to use his own for enforcing

his own view. The writer does not suppose for an instant that it is

possible immediately to draw up a complete Federal Code of Law for

Europe, to create a well-defined European constitution and then raise a

European army to defend it, or body of police to enforce it. He is

probably the last person in the world likely to believe the political

ideas of the European capable of such an agile adaptation.

[69] Delivered at Portland, Maine, on March 28th, 1918; reported in _New

York Times_, March 29th.

[70] Bertrand Russell: _Principles of Social Reconstruction._

Mr. Trotter in _Instincts of the Herd in War and Peace_, says:--

'We see one instinct producing manifestations directly hostile to each

other--prompting to ever-advancing developments of altruism while it

necessarily leads to any new product of advance being attacked. It

shows, moreover ... that a gregarious species rapidly developing a

complex society can be saved from inextricable confusion only by the

appearance of reason and the application of it to life. (p. 46.)

... 'The conscious direction of man's destiny is plainly indicated by

Nature as the only mechanism by which the social life of so complex an

animal can be guaranteed against disaster and brought to yield its full

possibilities, (p. 162.)

... 'Such a directing intelligence or group of intelligences would take

into account before all things the biological character of man.... It

would discover when natural inclinations in man must be indulged, and

would make them respectable, what inclinations in him must be controlled

for the advantage of the species, and make them insignificant.' (p.

162-3.)

[71] The opening sentence of a five volume _History of the Peace

Conference of Paris_, edited by H. W. V. Temperley, and published under

the auspices of the Institute of International Affairs, is as follows:--

'The war was a conflict between the principles of freedom and of

autocracy, between the principles of moral influence and of material

force, of government by consent and of government by compulsion.'

[72] Foremost as examples stand out the claims of German Austria to

federate with Germany; the German population of the Southern Tyrol with

Austria; the Bohemian Germans with Austria; the Transylvanian Magyars

with Hungary; the Bulgarians of Macedonia, the Bulgarians of the

Dobrudja, and the Bulgarians of Western Thrace with Bulgaria; the Serbs

of the Serbian Banat with Yugo-Slavia; the Lithuanians and Ukrainians

for freedom from Polish dominion.

[73] We know now (see the interview with M. Paderewski in the _New York

World_) that we compelled Poland to remain at war when she wanted to

make peace. It has never been fully explained why the Prinkipo peace

policy urged by Mr Lloyd George as early as December 1918 was defeated,

and why instead we furnished munitions, tanks, aeroplanes, poison gas,

military missions and subsidies in turn to Koltchak, Denikin, Yudenitch,

Wrangel, and Poland. We prolonged the blockade--which in the early

phases forbade Germany that was starving to catch fish in the Baltic,

and stopped medicine and hospital supplies to the Russians--for fear,

apparently, of the very thing which might have helped to save Europe,

the economic co-operation of Russia and Central Europe.

[74] 'We have no quarrel with the German people. We have no feeling

towards them but one of sympathy and friendship. It was not upon their

impulse that their government acted in entering this war.' ... 'We are

glad ... to fight thus for the ultimate peace of the world, and for the

liberation of its peoples, the German peoples included: for the rights

of nations great and small ... to choose their way of life.' (President

Wilson, Address to Congress, April 2nd, 1917).

[75] _The Economic Consequences of the Peace_, p. 211.

[76] See quotations from Sir A. Conan Doyle, later in this Chapter.

[77] See, e.g., the facts as to the repression of Socialism in America,

Chapter V.

[78] _The Atlantic Monthly_, November 1920.

[79] _Realities of War_, pp. 426-7, 441.

[80] Is it necessary to say that the present writer does not accept it?

[81] The argument is not invalidated in the least by sporadic instances

of liberal activity here--an isolated article or two. For iteration is

the essence of propaganda as an opinion forming factor.

[82] In an article in the _North American Review_, just before America's

entrance into the War, I attempted to indicate the danger by making one

character in an imaginary symposium say: 'One talks of "Wilson's

programme," "Wilson's policy." There will be only one programme and one

policy possible as soon as the first American soldier sets foot on

European soil: Victory. Bottomley and Maxse will be milk and water to

what we shall see America producing. We shall have a settlement so

monstrous that Germany will offer any price to Russia and Japan for

their future help.... America's part in the War will absorb about all

the attention and interest that busy people can give to public affairs.

They will forget about these international arrangements concerning the

sea, the League of Peace--the things for which the country entered the

War. In fact if Wilson so much as tries to remind them of the objects of

the War he will be accused of pro-Germanism, and you will have their

ginger Press demanding that the "old gang" be "combed out."'

[83] 'If we take the extremist possibility, and suppose a revolution in

Germany or in South Germany, and the replacement of the Hohenzollerns in

all or part of Germany by a Republic, then I am convinced that for

republican Germany there would be not simply forgiveness, but a warm

welcome back to the comity of nations. The French, British, Belgians,

and Italians, and every civilised force in Russia would tumble over one

another in their eager greeting of this return to sanity.' (_What is

coming?_ p. 198).

[84] See the memoranda published in _The Secrets of Crewe House_.

[85] Mr Keynes is not alone in declaring that the Treaty makes of our

armistice engagements a 'scrap of paper.' _The Round Table_, in an

article which aims at justifying the Treaty as a whole, says: 'Opinions

may differ as to the actual letter of the engagements which we made at

the Armistice, but the spirit of them is undoubtedly strained in some of

the detailed provisions of the peace. There is some honest ground for

the feeling manifested in Germany that the terms on which she laid down

her arms have not been observed in all respects.'

A very unwilling witness to our obligations is Mr Leo Maxse, who writes

(_National Review_, February, 1921):--

'Thanks to the American revelations we are in a better position to

appreciate the trickery and treachery of the pre-Armistice negotiations,

as well as the hideous imposture of the Paris Peace Conference, which,

we now learn for the first time, was governed by the self-denying

ordinance of the previous November, when, unbeknown to the countries

betrayed, the Fourteen Points had been inextricably woven into the

Armistice. Thus was John Bull effectively 'dished' of every farthing of

his war costs.'

As a fact, of course, the self-denying ordinance was not 'unbeknown to

the countries betrayed.' The Fourteen Points commitment was quite open;

the European Allies could have repudiated them, as, on one point,

Britain did.

[86] A quite considerable school, who presumably intend to be taken

seriously, would have us believe that the French Revolution, the Russian

Revolution, the English Trade Union Movement are all the work of a small

secret Jewish Club or Junta--their work, that is, in the sense that but

for them the Revolutions or Revolutionary movements would not have taken

place. These arguments are usually brought by 'intense nationalists' who

also believe that sentiments like nationalism are so deeply rooted that

mere ideas or theories can never alter them.

[87] An American playwright has indicated amusingly with what ingenuity

we can create a 'collectivity.' One of the characters in the play

applies for a chauffeur's job. A few questions reveal the fact that he

does not know anything about it. 'Why does he want to be a chauffeur?'

'Well, I'll tell you, boss. Last year I got knocked down by an

automobile and badly hurt. And I made up my mind that when I came out of

the hospital I'd get a bit of my own back. Get even by knocking over a

few guys, see?' A policy of 'reprisals,' in fact.

[88] December 26th, 1917.

[89] A thing which happens about once a week in the United States.

[90] October 16th, 1917.

[91] The amazing rapidity with which we can change sides and causes, and

the enemy become the Ally, and the Ally the enemy, in the course of a

few weeks, approaches the burlesque.

At the head of the Polish armies is Marshal Pilsudski, who fought under

Austro-German command, against Russia. His ally is the Ukrainian

adventurer, General Petlura, who first made a separate peace at

Brest-Litovsk, and contracted there to let the German armies into the

Ukraine, and to deliver up to them its stores of grain. These in May

1920 were the friends of the Allies. The Polish Finance Minister at the

time we were aiding Poland was Baron Bilinski, a gentleman who filled

the same post in the Austrian Cabinet which let loose the world war,

insisted hotly on the ultimatum to Serbia, helped to ruin the finances

of the Hapsburg dominions by war, and then after the collapse repeated

the same operation in Poland. On the other side the command has passed,

it is said, to the dashing General Brusiloff, who again and again saved

the Eastern front from Austrian and German offensives. He is now the

'enemy' and his opponents our 'Allies.' They are fighting to tear the

Ukraine, which means all South Russia, away from the Russian State. The

preceding year we spent millions to achieve the opposite result. The

French sent their troops to Odessa, and we gave our tanks to Denikin, in

order to enable him to recover this region for Imperial Russia.

[92] The Russian case is less evident. But only the moral inertia

following on a long war could have made our Russian record possible.

[93] He complained that I had 'publicly reproved him' for supporting

severity in warfare. He was mistaken. As he really did believe in the

effectiveness of terrorism, he did a very real service by standing

publicly for his conviction.

[94] Here is what the _Times_ of December 10th, 1870, has to say about

France and Germany respectively, and on the Alsace-Lorraine question:--

'We must say with all frankness that France has never shown herself so

senseless, so pitiful, so worthy of contempt and reprobation, as at the

present moment, when she obstinately declines to look facts in the face,

and refuses to accept the misfortune her own conduct has brought upon

her. A France broken up in utter anarchy, Ministers who have no

recognised chief, who rise from the dust in their air balloons, and who

carry with them for ballast shameful and manifest lies and proclamations

of victories that exist only in their imagination, a Government which is

sustained by lies and imposture, and chooses rather to continue and

increase the waste of lives than to resign its own dictatorship and its

wonderful Utopia of a republic; that is the spectacle which France

presents to-day. It is hard to say whether any nation ever before

burdened itself with such a load of shame. The quantity of lies which

France officially and unofficially has been manufacturing for us in the

full knowledge that they are lies, is something frightful and absolutely

unprecedented. Perhaps it is not much after all in comparison with the

immeasurable heaps of delusions and unconscious lies which have so long

been in circulation among the French. Their men of genius who are

recognised as such in all departments of literature are apparently of

opinion that France outshines other nations in a superhuman wisdom, that

she is the new Zion of the whole world, and that the literary

productions of the French, for the last fifty years, however insipid,

unhealthy, and often indeed devilish, contain a real gospel, rich in

blessing for all the children of men.

We believe that Bismarck will take as much of Alsace-Lorraine, too, as

he chooses, and that it will be the better for him, the better for us,

the better for all the world but France, and the better in the long run

for France herself. Through large and quiet measures, Count von Bismarck

is aiming with eminent ability at a single object; the well-being of

Germany and of the world, of the large-hearted, peace-loving,

enlightened, and honest people of Germany growing into one nation; and

if Germany becomes mistress of the Continent in place of France, which

is light-hearted, ambitious, quarrelsome, and over-excitable, it will be

the most momentous event of the present day, and all the world must hope

that it will soon come about.'

[95] We realise without difficulty that no society could be formed by

individuals each of whom had been taught to base his conduct on adages

such as these: 'Myself alone'; 'myself before anybody else'; 'my ego is

sacred'; 'myself over all'; 'myself right or wrong.' Yet those are the

slogans of Patriotism the world over and are regarded as noble and

inspiring, shouted with a moral and approving thrill.

[96] However mischievous some of the manifestations of Nationalism may

prove, the worst possible method of dealing with it is by the forcible

repression of any of its claims which can be granted with due regard to

the general interest. To give Nationalism full play, as far as possible,

is the best means of attenuating its worst features and preventing its

worst developments. This, after all, is the line of conduct which we

adopt to certain religious beliefs which we may regard as dangerous

superstitions. Although the belief may have dangers, the social dangers

involved in forcible repression would be greater still.

[97] _The Great Illusion_, p. 326

[98] 'The Pacifists lie when they tell us that the danger of war is

over.' General Leonard Wood.

[99] _The Science of Power_, p. 14.

[100] Ibid, p. 144.

[101] See quotations, Part I, Chapters I and III.

[102] The validity of this assumption still holds even though we take

the view that the defence of war as an inevitable struggle for bread is

merely a rationalisation (using that word in the technical sense of the

psychologists) of impulse or instinct, merely, that is, an attempt to

find a 'reason' for conduct the real explanation of which is the

subconscious promptings of pugnacities or hostilities, the craving of

our nature for certain kinds of action. If we could not justify our

behaviour in terms of self-preservation, it would stand so plainly

condemned ethically and socially that discipline of instinct--as in the

case of sex instinct--would obviously be called for and enforced. In

either case, the road to better behaviour is by a clearer revelation of

the social mischief of the predominant policy.

[103] Rear-Admiral A. T. Mahan: _Force in International Relations_.

[104] _The Interest of America in International Conditions_, by

Rear-Admiral A. T. Mahan, pp. 47-87.

[105] _Government and the War_, p. 62.

[106] _State Morality and a League of Nations_, pp 83-85.

[107] _North American Review_, March 1912.

[108] Admiral Mahan himself makes precisely this appeal:--

'That extension of national authority over alien communities, which is

the dominant note in the world politics of to-day, dignifies and

enlarges each State and each citizen that enters its fold.... Sentiment,

imagination, aspiration, the satisfaction of the rational and moral

faculties in some object better than bread alone, all must find a part

in a worthy motive. Like individuals, nations and empires have souls as

well as bodies. Great and beneficent achievement ministers to worthier

contentment than the filling of the pocket.'

[109] It is not necessary to enter exhaustively into the difficult

problem of 'natural right.' It suffices for the purpose of this argument

that the claim of others to life will certainly be made and that we can

only refuse it at a cost which diminishes our own chances of survival.

[110] See Mr Churchill's declaration, quoted Part I Chapter V.

[111] Mr J. L. Garvin, who was among those who bitterly criticised this

thesis on account of its 'sordidness,' now writes: 'Armageddon might

become almost as frequent as General Elections if belligerency were not

restrained by sheer dread of the consequences in an age of economic

interdependence when even victory has ceased to pay.'

(Quoted in _Westminster Gazette_, Jan. 24, 1921.)

[112] The introductory synopsis reads:--

What are the fundamental motives that explain the present rivalry of

armaments in Europe, notably the Anglo-German? Each nation pleads the

need for defence; but this implies that some one is likely to attack,

and has therefore a presumed interest in so doing. What are the motives

which each State thus fears its neighbours may obey?

They are based on the universal assumption that a nation, in order to

find outlets for expanding population and increasing industry, or simply

to ensure the best conditions possible for its people, is necessarily

pushed to territorial expansion and the exercise of political force

against others (German naval competition is assumed to be the expression

of the growing need of an expanding population for a larger place in the

world, a need which will find a realisation in the conquest of English

Colonies or trade, unless these were defended); it is assumed,

therefore, that a nation's relative prosperity is broadly determined by

its political power; that nations being competing units, advantage, in

the last resort, goes to the possessor of preponderant military force,

the weaker going to the wall, as in the other forms of the struggle for

life.

The author challenges this whole doctrine.

[113] See chapters _The Psychological Case for Peace_, _Unchanging Human

Nature_, and _Is the Political Reformation Possible?_

'Not the facts, but men's opinions about the facts, is what matters.

Men's conduct is determined, not necessarily by the right conclusion

from facts, but the conclusion they believe to be right.'

In another pre-war book of the present writer (_The Foundations of

International Polity_) the same view is developed, particularly in the

passage which has been reproduced in Chapter VI of this book, 'The

Alternative Risks of Status and Contract.'

[114] The cessation of religious war indicates the greatest outstanding

fact in the history of civilised mankind during the last thousand years,

which is this: that all civilised Governments have abandoned their claim

to dictate the belief of their subjects. For very long that was a right

tenaciously held, and it was held on grounds for which there is an

immense deal to be said. It was held that as belief is an integral part

of conduct, that as conduct springs from belief, and the purpose of the

State is to ensure such conduct as will enable us to go about our

business in safety, it was obviously the duty of the State to protect

those beliefs, the abandonment of which seemed to undermine the

foundations of conduct. I do not believe that this case has ever been

completely answered.... Men of profound thought and profound learning

to-day defend it, and personally I have found it very difficult to make

a clear and simple case for the defence of the principle on which every

civilised Government in the world is to-day founded. How do you account

for this--that a principle which I do not believe one man in a million

could defend from all objections has become the dominating rule of

civilised government throughout the world?

'Well, that once universal policy has been abandoned, not because every

argument, or even perhaps most of the arguments, which led to it, have

been answered, but because the fundamental one has. The conception on

which it rested has been shown to be, not in every detail, but in the

essentials at least, an illusion, a _mis_conception.

'The world of religious wars and of the Inquisition was a world which

had a quite definite conception of the relation of authority to

religious belief and to truth--as that authority was the source of

truth; that truth could be, and should be, protected by force; that

Catholics who did not resent an insult offered to their faith (like the

failure of a Huguenot to salute a passing religious procession) were

renegade.

'Now, what broke down this conception was a growing realisation that

authority, force, was irrelevant to the issues of truth (a party of

heretics triumphed by virtue of some physical accident, as that they

occupied a mountain region); that it was ineffective, and that the

essence of truth was something outside the scope of physical conflict.

As the realisation of this grew, the conflicts declined.'--_Foundations

of International Polity_, p. 214.

[115] An attempt is made, in _The Great Illusion_, to sketch the process

which lies behind the progressive substitution of bargain for coercion

(The Economic Interpretation of the History of Development 'From Status

to Contract') on pages 187-192, and further developed in a chapter 'the

Diminishing Factor of Physical Force' (p. 257).

[116] 'When we learn that London, instead of using its police for the

running in of burglars and "drunks," is using them to lead an attack on

Birmingham for the purpose of capturing that city as part of a policy of

"municipal expansion," or "Civic Imperialism," or "Pan-Londonism," or

what not; or is using its force to repel an attack by the Birmingham

police acting as the result of a similar policy on the part of the

Birmingham patriots--when that happens you can safely approximate a

police force to a European army. But until it does, it is quite evident

that the two--the army and the police force--have in reality

diametrically opposed roles. The police exist as an instrument of social

co-operation; the armies as the natural outcome of the quaint illusion

that though one city could never enrich itself by "capturing" or

"subjugating" another, in some wonderful (and unexplained) way one

country can enrich itself by capturing or subjugating another....

'France has benefited by the conquest of Algeria, England by that of

India, because in each case the arms were employed not, properly

speaking, for conquest, but for police purposes, for the establishment

and maintenance of order; and, so far as they filled that role, their

role was a useful one....

'Germany has no need to maintain order in England, nor England in

Germany, and the latent struggle, therefore, between these two countries

is futile....

'It is one of the humours of the whole Anglo-German conflict that so

much has the British public been concerned with the myths and bogeys of

the matter, that it seems calmly to have ignored the realities. While

even the wildest Pan-German does not cast his eyes in the direction of

Canada, he does cast them in the direction of Asia Minor; and the

political activities of Germany may centre on that area for precisely

the reasons which result from the distinction between policing and

conquest which I have drawn. German industry is coming to have a

dominating situation in the Near East, and as those interests--her

markets and investments--increase, the necessity for better order in,

and the better organisation of, such territories, increases in

corresponding degree. Germany may need to police Asia Minor.' (_The

Great Illusion_, pp. 131-2-3.)

[117] 'If a great country benefits every time it annexes a province, and

her people are the richer for the widened territory, the small nations

ought to be immeasurably poorer than the great; instead of which, by

every test which you like to apply--public credit, amounts in savings

banks, standard of living, social progress, general well-being--citizens

of small States are, other things being equal, as well off as, or better

off than, the citizens of great. The citizens of countries like Holland,

Belgium, Denmark, Sweden, Norway, are, by every possible test, just as

well off as the citizens of countries like Germany, Austria, or Russia.

These are the facts which are so much more potent than any theory. If it

were true that a country benefited by the acquisition of territory, and

widened territory meant general well-being, why do the facts so

eternally deny it? There is something wrong with the theory.' (_The

Great Illusion_, p. 44).

[118] See Chapters of _The Great Illusion_, _The State as a Person_, and

_A False Analogy and its Consequences_.

[119] In the synopsis of the book the point is put thus: 'If credit and

commercial contract are tampered with an attempt at confiscation, the

credit-dependent wealth is undermined, and its collapse involves that of

the conqueror; so that if conquest is not to be self-injurious it must

respect the enemy's property, in which case it becomes economically

futile.'

[120] 'We need markets. What is a market? "A place where things are

sold." That is only half the truth. It is a place where things are

bought and sold, and one operation is impossible without the other, and

the notion that one nation can sell for ever and never buy is simply the

theory of perpetual motion applied to economics; and international trade

can no more be based upon perpetual motion than can engineering. As

between economically highly-organised nations a customer must also be a

competitor, a fact which bayonets cannot alter. To the extent to which

they destroy him as a competitor, they destroy him, speaking generally

and largely, as a customer.... This is the paradox, the futility of

conquest--the great illusion which the history of our own empire so well

illustrates. We "own" our empire by allowing its component parts to

develop themselves in their own way, and in view of their own ends, and

all the empires which have pursued any other policy have only ended by

impoverishing their own populations and falling to pieces.' (p. 75).

[121] See Part I, Chapter II.

[122] _Government and the War_, pp. 52-59.

[123] _The Political Theory of Mr Norman Angell_, by Professor A. D.

Lindsay, _The Political Quarterly_, December 1914.

[124] In order that the reader may grasp more clearly Mr Lindsay's

point, here are some longer passages in which he elaborates it:--

'If all nations really recognised the truth of Mr Angell's arguments,

that they all had common interests which war destroyed, and that

therefore war was an evil for victors as well as for vanquished, the

European situation would be less dangerous, but were every one in the

world as wisely concerned with their own interests as Mr Angell would

have men to be, if they were nevertheless bound by no political ties,

the situation would be infinitely more dangerous than it is. For

unchecked competition, as Hobbes showed long ago, leads straight to war

however rational men are. The only escape from its dangers is by

submitting it to some political control. And for that reason the growth

of economic relations at the expense of political, which Mr Angell

heralds with such enthusiasm, is the greatest peril of modern times.

'If men are to avoid the danger that, in competing with one another in

the small but immediate matters where their interests diverge, they may

overreach themselves and bring about their mutual ruin, two things are

essential, one moral or emotional, the other practical. It is not enough

that men should recognise that what they do affects other men, and vice

versa. They must care for how their actions affect other men, not only

for how they may react on themselves. They must, that is, love their

neighbours. They must further agree with one another in caring for

certain ways of action quite irrespective of how such ways of action

affect their personal interests. They must, that is, be not only

economic but moral men. Secondly, recognising that the range of their

personal sympathies with other men is more restricted than their

interdependence, and that in the excitement of competition all else is

apt to be neglected, they must depute certain persons to stand out of

the competitive struggle and look after just those vital common

interests and greater issues which the contending parties are apt to

neglect. These men will represent the common interests of all, their

common ideals and their mutual sympathies; they will give to men's

concern for these common ends a focus which will enable them to resist

the pull of divergent interests and round their actions will gather the

authority which these common ends inspire....

' ... Such propositions are of course elementary. It is, however,

important to observe that economic relations are in this most

distinguished from political relations, that men can enter into economic

relations without having any real purpose in common. For the money which

they gain by their co-operation may represent power to carry out the

most diverse and conflicting purposes....

' ... Politics implies mutual confidence and respect and a certain

measure of agreement in ideals. The consequence is that co-operation for

economic is infinitely easier than for political purposes and spreads

much more rapidly. Hence it easily overruns any political boundaries,

and by doing so has produced the modern situation which Mr Angell has

described.'

[125] I have in mind, of course, the writings of Cole, Laski, Figgis,

and Webb. In _A Constitution for the Socialist Commonwealth of Great

Britain_, Mr Webb writes:--

'Whilst metaphysical philosophers had been debating what was the nature

of the State--by which they always meant the sovereign Political

State--the sovereignty, and even the moral authority of the State

itself, in the sense of the political government, were being silently

and almost unwittingly undermined by the growth of new forms of

Democracy.' (p. xv.)

In _Social Theory_, Mr Cole, speaking of the necessary co-ordination of

the new forms of association, writes:--

'To entrust the State with the function of co-ordination would be to

entrust it in many cases with the task of arbitrating between itself and

some other functional association, say a church or a trade union.' There

must be a co-ordinating body, but it 'must be not any single

association, but a combination of associations, a federal body in which

some or all of the various functional associations are linked together.'

(pp. 101 and 134.) A reviewer summarises Mr Cole as saying: 'I do not

want any single supreme authority. It is the sovereignty of the State

that I object to, as fatal to liberty. For single sovereignty I

substitute a federal union of functions, and I see the guarantee of

personal freedom in the severalty which prevents any one of them from

undue encroachments.'

[126] The British Treasury has issued statements showing that the French

people at the end of last year were paying £2. 7s., and the British

people £15. 3s. per head in direct taxation. The French tax is

calculated at 3.5. per cent. on large incomes, whereas similar incomes

in Great Britain would pay at least 25 per cent. This does not mean that

the burden of taxes on the poor in France is small. Both the working and

middle classes have been very hard hit by indirect taxes and by the rise

in prices, which is greater in France than in England.

The point is that in France the taxation is mainly indirect, this

falling most heavily upon the poor; while in England it is much more

largely direct.

The French consumers are much more heavily taxed than the British, but

the protective taxes of France bring in comparatively little revenue,

while they raise the price of living and force the French Government and

the French local authorities to spend larger and larger amounts on

salaries and wages.

The Budget for the year 1920 is made the occasion for an illuminating

review of France's financial position by the reporter of the Finance

Commission, M. Paul Doumar.

The expenditure due to the War until the present date amounts roughly to

233,000 million francs (equivalent, at the normal rate of exchange, to

£9,320,000,000) whereof the sum of 43,000 million francs has been met

out of revenue, leaving a deficit of 190 billions.

This huge sum has been borrowed in various ways--26 billions from the

Bank of France, 35 billions from abroad, 46 billions in Treasury notes,

and 72 billions in regular loans. The total public debt on July 1 is put

at 233,729 millions, reckoning foreign loans on the basis of exchange at

par.

M. Doumer declares that so long as this debt weighs on the State, the

financial situation must remain precarious and its credit mediocre.

[127] January, 1921.

[128] An authorised interview published by the daily papers of January

28th, 1921.

M. Briand, the French Premier, in explaining what he and Mr Lloyd George

arranged at Paris to the Chamber and Senate on February 3rd, remarked:--

'We must not lose sight of the fact that in order to pay us Germany must

every year create wealth abroad for herself by developing her exports

and reducing her imports to strictly necessary things. She can only do

that to the detriment of the commerce and industry of the Allies. That

is a strange and regrettable consequence of facts. The placing of an

annuity on her exports, payable in foreign values, will, however,

correct as much as possible this paradoxical situation.'

[129] Version appearing in the _Times_ of January 28th, 1921.

[130] _The Manchester Guardian_, Jan 31st, 1921.

[131] Mr John Foster Dulles, who was a member of the American delegation

at the Peace Conference, has, in an article in _The New Republic_ for

March 30th, 1921, outlined the facts concerning the problem of payment

more completely than I have yet seen it done. The facts he reveals

constitute a complete and overwhelming vindication of the case as stated

in the first edition of _The Great Illusion_.

[132] As the Lorraine ores are of a kind that demand much less than

their own weight of coal for smelting, it is more economic to bring the

coal to the ore than vice versa. It was for political and military

reasons that the German State encouraged the placing of some of the

great furnaces on the right instead of the left bank of the Rhine.

[133] It is worth while to recall here a passage from _The Economic

Consequences of the Peace_, by Mr J. M. Keynes, quoted in Chapter I. of

this book.

[134] There is one aspect of the possible success of France which is

certainly worth consideration. France has now in her possession the

greatest iron ore fields in Europe. Assume that she is so far successful

in her policy of military coercion that she succeeds in securing vast

quantities of coal and coke for nothing. French industry then secures a

very marked advantage--and an artificial and 'uneconomic' one--over

British industry, in the conversion of raw materials into finished

products. The present export by France of coal which she gets for

nothing to Dutch and other markets heretofore supplied by Britain might

be followed by the 'dumping' of steel and iron products on terms which

British industry could not meet. This, of course, is on the hypothesis

of success in obtaining 'coal for nothing,' which the present writer

regards as extremely unlikely for the reasons here given. But it should

be noted that the failure of French effort in this matter will be from

causes just as disastrous for British prosperity as French success would

be.

[135] See Part I, Chapter I.

[136] _English Review_, January 1913.

Lord Roberts, in his 'Message to the Nation,' declared that Germany's

refusal to accept the world's _status quo_ was 'as statesmanlike as it

is unanswerable.' He said further:--

'How was this Empire of Britain founded? War founded this Empire--war

and conquest! When we, therefore, masters by war of one-third of the

habitable globe, when _we_ propose to Germany to disarm, to curtail her

navy or diminish her army, Germany naturally refuses; and pointing, not

without justice, to the road by which England, sword in hand, has

climbed to her unmatched eminence, declares openly, or in the veiled

language of diplomacy, that by the same path, if by no other, Germany is

determined also to ascend! Who amongst us, knowing the past of this

nation, and the past of all nations and cities that have ever added the

lustre of their name to human annals, can accuse Germany or regard the

utterance of one of her greatest a year and a half ago, (or of General

Bernhardi three months ago) with any feelings except those of respect?'

(pp. 8-9.)

[137] Lord Loreburn says: 'The whole train of causes which brought about

the tragedy of August 1914 would have been dissolved by a Russian

revolution.... We could have come to terms with Germany as regards Asia

Minor: Nor could the Alsace-Lorraine difficulty have produced trouble.

No one will pretend that France would have been aggressive when deprived

of Russian support considering that she was devoted to peace even when

she had that support. Had the Russian revolution come, war would not

have come.' (_How the War Came_, p. 278.)

[138] Mr Walter Lippmann did tackle the problem in much the way I have

in mind in _The Stakes of Diplomacy_. That book is critical of my own

point of view. But if books like that had been directed at _The Great

Illusion_, we might have made headway. As it is, of course, Mr

Lippmann's book has been useful in suggesting most that is good in the

mandate system of the League of Nations.

* * * * *

Typographical errors corrected by the etext transcriber:

wth Great Britain=> with Great Britain {pg xvii}

his colleages=> his colleagues {pg 38}

retore devastated districts=> restore devastated districts {pg 39}

aquiescence=> acquiescence {pg 45}

indispensible=> indispensable {pg 46}

the Lorrarine work=> the Lorraine work {pg 86}

rcently passed=> recently passed {pg 135}

Allied aerodomes on the Rhine=> Allied aerodromes on the Rhine {pg 163}

the sublest=> the subtlest {pg 239}

the enemy's propetry=> the enemy's property {pg 294}

a monoply=> a monopoly {pg 299}

goverments=> governments {pg 299}

econmic=> economic {pg 303}