payments to be demanded of Germany on the double basis of liability
and capacity. The withdrawal of the only country which had no direct
interest in reparations from the treaty left the commission a lop-sided
and highly prejudiced tribunal. The reparations commission no longer
carries out the treaty idea. Its character has completely changed.
It is essential in order to adhere to the Treaty of Versailles that
America should have a representative on the tribunal that fixes the
payments to be exacted from Germany. The German government now offer
to submit the fate of their country to the unaltered clauses of the
treaty which was signed in the Galerie des Glaces in June, 1919.
France and Belgium have no right in honour to demand submission to any
other. Because they insist on enforcing something which is entirely
different from the contract entered into by them with Germany in
1919, Europe is disquieted and international relations are saturated
with the inflammable spirit of resentment, hatred, and revenge. No
wonder Marshal Foch is touring Central Europe to put the Allied armies
in order! He seems to me to be the one man in France who has an
understanding of what all this is leading up to.
_London, May 14th, 1923._
XVII
THE SECOND GERMAN NOTE
The Germans have tried another note. Inasmuch as all the Allied press
without exception are agreed in describing it as a great improvement
over the first, it is hardly worth while taking up time and space
to demonstrate how the essentials of this more favoured document
were contained in its reprobated predecessor. Psychologically it is
a decided advance on the first note. It is crisp and condensed, and
does not indulge in the irritating processes of an argument. You
should never attempt to argue with an angry man who is brandishing a
bludgeon--unless you are at a safe distance from him. Germany is in
this case at his feet. The second German note therefore is wise in
avoiding the provocation of an appeal to reason. It makes its offer
simply and uncontentiously.
It also suggests a number of substantial guarantees for the payment of
interest on the loans to be raised for reparations purposes. I cannot
pretend to assess the value that would be attached to these _gages_ by
prospective borrowers. I have no doubt they would add materially to the
security of the investment. But this array of securities standing alone
will not entice the investor to risk his money on a German reparations
loan. He will look at Germany as a whole, and not in parts. He will
want to know what is likely to happen to that great country during
the coming years, and to its industry, its finance, its politics, and
its people. A railway which collects its rates and fares in a corrupt
currency is of no use as a security for any loan--a customs revenue
collected in a fugitive coin is equally worthless. The only reliable
basis for a loan is a stable Germany. You can have no stable Germany
until you settle reparations. That is, therefore, the first essential
preliminary to all discussions on _gages_ be they _productifs_ or
otherwise.
Hence the propositions that really matter in the German note are not
those which give a schedule of guarantees, but those which bear on
the fixation of the amount which Germany is to be called upon to pay.
On this question the note does not increase the sum which the first
note estimated as the limit of German capacity. But it reaffirms the
readiness of the German government to submit the consideration of the
capacity of Germany to pay to an impartial tribunal. It offers to place
at the disposal of this body all the material which is necessary to
enable it to arrive at a just conclusion. It proceeds to suggest that
all further discussion on the subjects at issue between the parties
should take place at a conference rather than by interchange of notes.
How can any unprejudiced person refuse to recognise the essential
reasonableness of this part of the offer? It is common ground that
the annuities imposed upon Germany in May, 1921, demand modification.
Even M. Poincaré proceeds on that assumption. There is, therefore, a
most important and highly difficult figure to be ascertained. What
annuity can Germany pay? And when will she be in a position to pay?
Is it unreasonable to propose that this question which involves a
most searching examination into German assets should be referred to
a tribunal which would be capable of giving it calm and judicial
consideration? And what objection can there be to discussing the
matter at a conference where Germany as well as all the Allies would
be represented? If this were a business or a trade dispute these two
proposals would be regarded as eminently sensible and fair, and the
party that rejected them would be condemned by public opinion.
What are the objections to acceptance formulated by the French press?
Up to the date of writing this article the French government have not
officially expressed their views on the German note. But one may safely
assume from past experience that Parisian journalists consulted the
Quai d'Orsay before writing their critical articles.
The first is that the French government will discuss no proposals
emanating from Germany until the latter withdraw its passive resistance
to French and Belgian exploitation of the Ruhr. What does this exactly
mean? If it imports--as a preliminary condition to conference or
consideration of terms--an acquiescence by Germany in the occupation
and exploitation by France and Belgium of the Ruhr valley until
reparations be fully paid, then the position is hopeless. A German
government may submit to such an occupation because it has no force
at its command to offer resistance. But no German government can
give assent to such an invasion of its territories. A peace signed
on such terms would inevitably be repudiated at the first favourable
opportunity. Meanwhile there would be constant friction and trouble in
the Ruhr. I can hardly believe that this is what the French government
mean to insist upon, in spite of an article in the _Temps_ which bears
that interpretation. But they may only ask that whilst terms are being
discussed an armistice shall be concluded, the first condition of which
will be that all obstacles now interposed in the way of supplying
France, Belgium, and Italy with reparation coal and coke shall be
withdrawn. An armistice on those terms ought not to be difficult to
arrange, especially if the French and Belgian authorities withdraw the
ban they have placed on the export of Ruhr products to the unoccupied
parts of Germany. Unless the terms are mutually accommodating, I
surmise that the German government will experience an insurmountable
difficulty in persuading the stubborn miners and railway operatives
of the Ruhr to assist in furnishing to France the products of their
labour which are denied to their own fellow-countrymen. It is too
readily taken for granted that the Ruhr workmen will obey any behest
that comes from Berlin. Governments in Germany have ceased to receive
that kind of obedience. It is one of the indirect consequences of the
great disaster that the decrees of Wilhelmstrasse no longer command
the respect which attached to them in pre-war days. Still, a conference
at which all the interests concerned were represented would experience
no difficulty in fixing up stipulations which would make it possible
for France to enter a conference on reparations without any suspicion
being attached to her ministers that they had lowered the national flag
on entering the room. I trust that good sense will prevail over temper
and exaggerated pride--on both sides.
Should this preliminary point of honour be disposed of, then what
remains? The fixation of the annuities and the guarantees for their
payment. What are the objections to accepting the method put forward in
the German note for these two points? It is not the German method--it
is the American method adopted by the German government. A conference
with an impartial tribunal if conference fails. I know of no other way
except a resort to blind force.
It is objected that the Treaty of Versailles has already provided such
a tribunal in the reparations commission for the specific purpose of
adjudicating upon Germany's liability and Germany's capacity, and that
to set up another for exactly the same purpose would be to supersede
that treaty. There are two answers to this contention. The first is
that the reparations commission as at present constituted is not the
body to which Germany agreed to refer these questions so vital to
her existence. It is not the body which Britain and the other Allies
contemplated. The withdrawal of America from the commission--after
Germany had already signed the treaty--has completely changed the
balance and therefore the character of this tribunal. No man in his
senses can pretend that in its mutilated form it is either impartial
in its composition or judicial in its methods. M. Poincaré does not
conceal the fact that the French government issues orders to its
representative on that "judicial" body. The chairman is an eminent
French deputy who has played and still plays a conspicuous and
influential part in French politics, and is looking forward to pursuing
his career as a politician whithersoever it may lead. Ever since he has
been chairman he has delivered speeches in public denouncing the party
of whose case he is supposed to be the chief judge. All his colleagues
represent powers who have a direct pecuniary interest in the result of
their decisions. The only disinterested power has retired from the
commission. The American proposal is very moderate. It implies the
restoration of the treaty by reintroducing America to the body that
settles reparations. If France objects to the appointment of a separate
commission why should it not be agreed between the Allies that their
representatives on the body of experts to be set up shall be the men
who now constitute the reparations commission? To these the American
government could add their nominee. Germany has a right under the
treaty to present her case. The whole question of capacity could then
be gone into in the light of the experience acquired during the last
four years, and a settlement could thus be effected on a sound basis.
Such settlement would have a much better chance of being workable, and
therefore more durable than terms imposed by force on a people who only
accept under duress.
But whatever the French view may be of the suggested annuities or
guarantees, or of the impartial commission, it is inconceivable
that they should reject the conference. It is the surest road to
reparations. At Spa the method of pelting the bewildered Reich with
demand notes was for a time abandoned, and that of conference at the
same table was substituted. The results were admirable. The process of
disarmament made immediate strides towards satisfactory completion,
and the coal deliveries became fuller and steadier. At Cannes last
year the Allies once more started to confer with German ministers. All
those who were present at those discussions--without exception--admit
that satisfactory progress was being made towards a comprehensive
settlement when the conferees were scattered by a bomb. It is too
early yet to estimate the loss which inured to Europe through that
explosion. But all idea of discussion between the parties has since
been loftily and petulantly dismissed as an exhibition of pernicious
weakness. What has been substituted for it? For twelve months we had
rather a ridiculous display of feather-rustling about the farmyard to
inspire terror. Threatening speeches full of ominous hints of impending
action were delivered at intervals in different parts of France. These
produced nothing but increased confusion and incapacity to pay. Every
speech cost France milliards in postponed reparations. French opinion
not unnaturally insisted on some action being taken. Hence this rash
invasion. At Cannes a two-year moratorium would have been accepted as a
settlement. Already a year and a half of that period would by now have
elapsed. German finances would, under the strict Allied supervision
which was conceded, by now have been restored to soundness--the mark
would have been stabilised, and a loan could have been negotiated which
would have provided the Allies with substantial sums towards lightening
the burdens they are all bearing. Confidence would have been restored
in Europe, and for the first time there would have been real peace.
One can see what the alternative has produced. Whatever the final
terms may be, Germany is not in a financial position to pay what she
was able to offer then. These eighteen months have been devoted to
reducing assiduously German capacity to pay Allied debts, and the value
of the German security for such payment. At Cannes the mark stood at
770 to the pound sterling. It now stands at 500,000. Germany will need
an extended moratorium to recover from the clumsy mishandling of the
past year and a half. The mark has to be picked up out of the abyss
into which it has been thrown by those whose interest it was to lift
it out of the depression wherein it lay. A debtor on whose restored
health and nerve payment entirely depends has been violently pushed
down several flights of stairs. It will take him a long time to recover
from the bruises, the shake, and the loss of blood. What an achievement
in scientific debt collecting! If reparations are ever to be paid the
Allies must retrace their steps and get back to conference. Once the
parties--all the parties--sit round the table I feel assured that the
common sense of most will in the end prevail. We shall never get back
what has been lost during 1922-23, but we shall get something that will
help. It will take some time to set up the tackle for hoisting the mark
out of the crevass and some to do the winding. But the sooner a start
is made the less winding there will be to do. So for everybody's sake
it is high time to stop the strutting and get back to business.
XVIII
THE NAPOLEONIC DREAM
What a muddle it all is! France and Germany are both anxious to settle
in the Ruhr, but are too proud to admit it. The struggle, therefore,
goes on, and will continue to the detriment of both. Belgium is sorry
she ever entered the Ruhr, but cannot get out of it. Every time she
tries to get away France pulls her back roughly by the tail of her
coat, so she has to do sentry-go at Essen whilst her franc is leading
a wild life at home. Italy has forgotten that she ever sanctioned
the occupation, and her moral indignation is mounting rapidly,
although it has not yet risen to a height which is visible across
the Alps. Great Britain is growling futile notes of dissatisfaction
with everybody--France and Germany alike. The confusion of tongues is
deafening and paralysing, and no one is quite happy except the spirit
of mischief who is holding his sides with ghoulish laughter. He never
had such a time--not since the Tower of Babel. And this time it may
end in a second deluge.
The horror of the Great War seems to have unhinged the European mind.
Nations do not think normally. The blood pressure is still very high.
The excitement over the Ruhr does not tend to improve it. When some
of the articles written and speeches delivered to-day come to be read
by the diligent historian a generation hence, he will recognise there
the ravings of a continent whose mental equilibrium has been upset
by a great shock. The real issue involved in all this struggle is a
comparatively simple one. How much can Germany pay and in what way
can she pay? America, Britain, Italy and Germany are all agreed that
the only way to settle that question is to appoint competent experts
to investigate and report upon it. The Pope also has blessed this
reasonable suggestion. France, on the contrary, says it is a question
to be determined by guns and generals--both equally well fitted for
that task. Germany must present her accounts to the mitrailleuse and
argue her case before the soixante-quinze. It is a mad world.
Every one is interested in one question--or perhaps two. How will
it all end and how soon is that end coming? Although I have nothing
to fear from recalling the predictions of my early articles on this
subject, I hesitate to hazard a fresh forecast. But one may review the
possibilities and note the drift of the whirling currents. In assessing
the chances, you must begin with some knowledge of the man who will
decide the event. M. Poincaré is possessed of undoubted ability and
patriotism, but he is also a man who lives in a world of prejudices so
dense that they obscure facts. You have but to turn to one statement
in his last note where he says the conferences and ultimatums of the
past four years secured nothing from Germany. What are the facts?
During the three and a half years that preceded the Ruhr invasion,
Germany paid to the Allies in cash and in kind over ten milliards of
gold marks,--£500,000,000 in sterling, 2,000,000,000 in dollars--a
considerable effort for a country which had but lately emerged out of
the most exhausting of wars and whose foreign trade was down sixty to
seventy per cent. You might imagine that a man who had taken the grave
step of ordering armies to invade a neighbour's territories would also
have taken the trouble to ascertain the elementary facts of his case.
Part of this gigantic sum went to pay for Armies of Occupation; part
for Reparations, but it all came out of German assets. Will the next
three and a half years bring anything approximating that figure to the
Allied coffers?
It is a safe statement to make that no one in charge of the French
movements anticipated a resistance approaching in its stubbornness to
that which they have encountered. The friendly Press, both in France
and in England, foretold a speedy collapse of the German opposition,
and on this assumption all the French plans were based. During the
first days of the occupation an Englishman asked a French officer
how long he thought it would take. The answer is indicative of the
spirit in which the venture started: "Optimists think it will take
a fortnight," he said; "pessimists think it may take three weeks."
A reference to the January telegrams from Paris and Düsseldorf will
show that this officer accurately expressed the general sentiment of
those who were responsible for the Ruhr invasion. Soldiers estimate
the chances of resistance in terms of material and trained men, and
statesmen too often build their hopes on the same shallow foundation.
They never allow for the indomitable reserves of the human heart,
which do not figure in Army Lists or Statesmen's Annuals. The
resistance of Paris in 1870 was as confounding to Bismarck as the
stubbornness of the Ruhr miners is to Poincaré to-day. The last regular
army had been destroyed, all docketed food stores exhausted, and still
the struggle of the devoted citizens went on for months. There were
few men in England who thought the Boer peasants could continue their
resistance for more than three months after our armies reached South
Africa. The three months ran into three years and only then capitulated
on honourable terms. The Northern States of America never contemplated
the possibility of a five years' struggle with a blockaded, starved
and overwhelmed Confederacy. The War of 1914-18 is littered with
miscalculations attributable to the blind refusal of rulers and their
advisers to recognise the moral element as a factor in the reckoning.
The Ruhr tragedy is not the first, nor indeed may it be the last, to
be initiated by facile memoranda framed by General Staffs and civilian
functionaries, drawing their inspiration from pigeonholes.
Whatever may transpire in the Ruhr it is already clear that the
estimates of military men, of transport officials, of intelligence
departments, and of presiding Ministers, have been hopelessly
falsified. Many more soldiers have been sent into the Ruhr than had
been thought necessary: a great deal less coal has come out of the
Ruhr than had been confidently expected. There are already as many
Frenchmen in the Ruhr as Napoleon commanded at Waterloo; and they
have succeeded in sending across the frontier in six months only as
much coal as the Germans delivered in one month during the period of
"default" which provoked the invasion. Desperate efforts have been
made at great cost to increase the yield with a view to satisfying
French and foreign opinion that resistance is gradually breaking down.
Rubbish is shovelled into wagons in order anyhow to swell the quota.
Coal is seized anywhere, even in the streets. And Monsieur Trocquer,
the bluff and genial Breton in charge of the transport arrangements,
breezily challenges all the critics to look at the mounting pyramids of
his dustcart collection and rejoice with him in the triumph of French
organisation under his control. Alas, the Celtic fire of Monsieur
Trocquer, even when fed by the sweepings of the Ruhr, cannot keep
going the blast furnaces of Lorraine! So we find disappointment and
discontent amongst the forge-masters of France.
But there is a limit to human endurance. Either France or Germany must
give way in the end. Which will it be, and when will it come--and how?
In answering these questions one must remember that for France the
honour of her flag is involved in success. Failure would irretrievably
damage her prestige. Every Frenchman knows that. That is why French
statesmen who disapprove of the invasion support the Government in
all their proposals for bringing it to a successful end. And here
France has a legitimate complaint against her Allies. It is useless
for Italy now to counsel wisdom. Signor Mussolini was present at the
"hush Conference" which sanctioned the invasion. He fixed the price of
assent in coal tonnage. That price has been regularly paid. Belgium
is now becoming scared at the swelling magnitude of the venture. But
she committed her own honour as well as that of France to carrying it
through. I regret to think that Britain is not free from responsibility
in the matter. It is true that her representatives disapproved of the
enterprise, but not on grounds of right or justice. On the contrary,
whilst expressing grave doubt as to the ultimate success of the
invasion they wished the French Government well in the undertaking on
which they were about to embark. Not one of the Allies is in a position
with a clean conscience to urge France to haul down her flag. There is
only one course which could be urged on the French Government as being
consistent with French honour, and that is the reference of the dispute
to the League of Nations. Such a reference would be an enforcement of
the Treaty of Versailles. That suggestion the British Government have
refused to press on France. The struggle must, therefore, proceed to
its destined end.
It may be assumed that the British Government will not intervene
effectively. How about the ministerial declarations? Surely these
strong words must be followed by strong action! Those who rely on that
inference know nothing of the men who use the words or of the forces
upon which they depend for their ministerial existence. It is true
that some weeks ago Mr. Snodgrass took off his coat and proclaimed
cryptically, but fearlessly, that unless peace was restored on his
terms something would happen. The French Government, unperturbed,
replied that they meant to persist in their course. So last week Mr.
Snodgrass takes off his waistcoat. But do not be alarmed: there will
be no blows: his friends will hold him back. Meanwhile, Mr. Winkle
has left for Paris in order to lunch with one of the combatants. Next
week he will be followed by Mr. Pickwick, who will call on another,
and the week after Mr. Tupman proposes to pay another propitiatory
visit. It will be an incalculable advantage to M. Poincaré that they
each represent a different and conflicting point of view. The French
have accurately taken the measure of the mind and muscle of those
who indulge in these spectacular exhibitions of ball punching in
Westminster with cakes and ale at Rambouillet. We may therefore assume
that whatever conversations take place at these general gatherings or
ensue from them, the French will not be talked out of the Ruhr.