Government it is gathered that France will insist at all costs on
enforcing her will. She has put forward two demands. The first is that
Germany shall abandon passive resistance as an essential preliminary to
negotiation. The second is that her forces should remain in the Ruhr
until the last payment is made. Will the German Government accept
these conditions? A settlement on these terms is only possible on two
assumptions. The first is that a German Government can be found strong
enough to accept them and to survive their acceptance. The second
is that there is a French Government wise enough to give a liberal
interpretation to these demands. The first depends to a large extent on
the second.
The events of the past few months have added immeasurably to the
difficulties of negotiation. Incidents inseparable from a foreign
occupation in any land have exasperated German opinion and reached
depths of hatred which had never been stirred even by the Great
War--the deportation of 75,000 Germans from their homes in the Ruhr
area, the repression, the shooting, the starving, the holding up
of food trains until essential supplies rot. The myriad insolences
of unchallengeable force, the passions which make French policy so
intractable are entirely attributable to the German occupation of
France. Frenchmen are now sowing the same seeds of anger in the German
breast. Hatreds are bad negotiators. That is why I despair of a real
settlement.
But Germany may collapse. She might even break up, temporarily. The
authority of the Central Government has already largely disappeared.
There is practically no collection of taxes. The mark has gone down
in a little over a week from 1,000,000 to the £ to 27,000,000.[3] How
can any Government collect taxes in such a fugitive and attenuated
currency? You might as well try to collect land taxes on the tail of
a comet. The state of the currency is but a symptom of the general
disintegration. Berlin has ceased to wield any influence in Bavaria,
and the Monarchy might be restored in that Province at no distant
date. There is a movement in the Rhineland to set up a Republic freed
from the dominion of Prussia. This movement is fostered by French
agencies and financed by French subventions. If it is declared Prussia
will not be allowed to suppress it. We may, therefore, soon witness
a Rhineland Republic whose glorious freedom and independence will be
jealously guarded against internal as well as external foes by the
coloured warriors of Senegal and Cochin-China. Saxony might be captured
by Communists and Prussia be torn between Monarchist and Communist.
These are not unlikely happenings. Is it too much to say they are
not altogether out of the computation of French statesmanship? If
Germany dissolves, then the Rhineland and the Ruhr would remain under
the dominion of France. France would not secure reparations, but she
would enjoy security, and she would, so it is conjectured, enormously
enhance her power in the world. An old French dream would be realised.
The work of Bismarck would be undone and the achievement of Napoleon
would be restored and perpetuated. There is an old Welsh adage which
says that it is easy to kindle a fire on an old hearthstone. This
idea of a Rhineland under French domination is the old hearthstone
of Charlemagne. Mazarin sought to relight its flames. Napoleon the
First kindled on it a blaze that scorched Europe. Napoleon the Third
had hopes of warming his chilling fortunes at the glow of its embers,
and now the great victory of 1918 has set French ambitions once more
reviving the fires on the old hearthstone of a Rhineland ruled by the
Frank.
Altogether it is a bad look-out for Europe.
_London, August 6th, 1923._
FOOTNOTE:
[3] Since this was written the mark has fallen far beyond.
XIX
IS IT PEACE?
The Charleville speech[4] and M. Poincaré's reply to Lord Curzon's
despatch[5] leave things exactly where they were. Rumour said the reply
would be long and logical. For once rumour hath not lied. M. Poincaré
regards this exchange of bolstered notes as a pillow fight which he
is quite prepared to prolong in order to gain time whilst the real
struggle is developing to its destined end. The prominence given in the
press to the fact that this rigid reply is "courteous" is significant
of the pitiable condition to which the Entente has been brought by
these maladroit negotiations.
What will Mr. Stanley Baldwin and Lord Curzon do next? Much depends
for Europe on that next step, and something for them also hangs upon
their action or inaction. One is reminded of the answer given by Émile
Ollivier to the question addressed to him as to his opinion of one of
Napoleon the Third's experiments in constitutional government: "Si
c'est une fin, vous êtes perdu; si c'est un commencement, vous êtes
fondé." That sage comment is equally applicable to the Curzon note.
We can only "wait and see," first for the French official reply, and
second for the decision of the British Government upon that note.
The only new factor in the situation that may have a determining
influence on events is the accession of Herr Stresemann to the German
Chancellorship.[6] I know nothing of him beyond newspaper report,
but he is generally supposed to be a man of energy, courage and
resource. If that be true, his appointment to the official leadership
of the German people may be an event of the first magnitude. We shall
soon know what he is made of. Germany has suffered more from weak
or misguided leadership in recent years than any great country in
the world. It blundered her into the War, it blundered through the
War, it blundered into the armistice, it blundered during the peace
negotiations, and it has blundered her affairs badly after the peace.
But no one can predict what Germany is capable of with a wise and
strong leadership. Herr Stresemann has a responsibility cast upon him
and an opportunity afforded him such as have not been given to any
statesman since the days of Stein and his coadjutors for regenerating
his country and lifting her out of the slough of despond in which she
has been sinking deeper and deeper. Those who ignore the effect which
powerful and magnetic personalities may have upon the fortunes of
nations in despair must have forgotten their history books. The fall of
Dr. Cuno and the rise of Herr Stresemann may well turn out to be a more
decisive event than the despatch or the publication of the Curzon note.
But if he lacks those rare qualities which alone can inspire a people
in an emergency to heroic action and endurance, then there is nothing
but chaos ahead of Germany. For the moment it is more important to keep
a discerning eye on Herr Stresemann than to watch this endless fencing
between Downing Street and the Quai d'Orsay.
It is not often I find myself in agreement with M. Poincaré, but
when he states that British unemployment is not attributable to the
occupation of the Ruhr I am substantially in accord with him. In
July last[7] I called the attention of the House of Commons to world
conditions which injuriously affected our export trade and made
unemployment on a large scale inevitable in the British labour market
for some time to come. We are more dependent on our overseas trade,
export, entrepôt, shipping and incidental business than any country in
the world. Almost half our industrial and commercial activities are
associated with outside trade in all its forms. That is not a full
statement of the case, for if this important section of our business
were to languish, the home trade would also necessarily suffer by the
consequential diminution in the purchasing capacity of our people.
Before the French ever entered the Ruhr our overseas trade was down
to 75 per cent. of its pre-war level. Our population has increased
by two millions since 1913; our taxation has increased fourfold; our
national debt tenfold; but our business is down 25 per cent. To what
is this fall in our outside sales and services attributable? It is
the direct consequence of the War. Our customers throughout Europe
are impoverished. What is just as bad, our customers' customers are
impoverished. So that neither can buy at our stalls the quantities or
the qualities which they could be relied upon to purchase before the
War. Until Europe can buy, Australia, Canada, India and China cannot
pay, as the Prime Minister pointed out in his last speech in the House
of Commons. Germany, before the War, bought Australian wool, Canadian
grain, Indian jute and tea, and the proceeds as often as not went to
pay for goods bought by those countries in British markets. The same
observation applies to Russia, Austria, and the Levantine countries.
The purchasing capacity of Europe must, therefore, be replenished,
a process which will, at best, take years of patient industry. The
mischief of the Ruhr lies not in the creation of bad trade, but in
retarding the process of recovery. It has undoubtedly had that effect.
Before the French entered the Ruhr trade was gradually if slowly
improving all round. The prices of 1922 were lower than those of 1921;
therefore, the contrast in sterling was not as apparent as it became
on the examination of weights and measures. The export figures,
notably in manufactured goods, show a decided increase on those of
the preceding year. This advance is reflected in the statistics of
unemployment. During the first ten months of 1922 there was a reduction
of over 500,000 in the numbers of the registered unemployed. The
succeeding ten months give only a slight improvement. Something has
happened to arrest the rate of progress towards better times. This
is where the Ruhr comes in. Even if it is not, to quote the Prime
Minister, a penknife stuck in the watch and stopping the works, it is
certainly more than a grain of dust which has perceptibly slowed the
action of the sensitive machinery of trade.
The effect of the Ruhr disturbance would continue for some time if the
penknife were removed now. For the moment M. Poincaré is wedging it in
more deeply and firmly. Even if he withdrew it now, the works would not
recover their normal steadiness for a long while. During these last
disturbing months Germany has become appreciably poorer. Her wealth
production has been depressed throughout most of her industrial areas.
To a certain extent Lorraine and Belgium have also been affected
adversely. The reservoir of wealth upon which industry draws has not
been filling up as it ought if the world is ever to recover.
These things are hidden from France. She is a more self-contained
country than Britain--perhaps also a more self-centred country. Even
after the Napoleonic wars, which drained her best manhood and exhausted
her fine nervous virility, she suffered from no interval of economic
depression. Her great and victorious rival across the Channel lumbered
painfully through fifteen years of misery, poverty and distress. Her
own population, basking in the sunshine of prosperity, regarded across
the narrow waters, with a natural contentment, the dark fogs that
enveloped and drenched their old enemies. Commiseration or sympathy
from them at that time was not to be expected. We had fought them for
twenty years with an inveterate pertinacity and at last beaten them
to the ground and occupied their capital. To-day we suffer because we
helped to save their capital from foreign occupation and their country
from being humbled to the dust by a foreign foe. Neither in French
speeches, notes, nor articles is there any appreciation shown of that
cardinal fact in the situation.
All that is clear at the moment is the stubbornness of the French
attitude. M. Poincaré has not so far receded one millimetre from his
original position. Threats and cajoleries alike are answered by a
repetition of the same formulæ, with the slight variations in word or
phrase which one would expect from a practised writer. But the theme
is always the same and the application is identical to the point
of monotony. He is not winning much coal out of his discourses and
literary exercises, but to do him justice he is getting something for
his country. Last year Lord Balfour, in the note he sent to the Allies
on behalf of the British Government, offered to forego all claims
for debts and reparations if Britain were secured against payment of
the American debt. That meant a surrender of claims aggregating over
£3,000,000,000 in return for an assured £1,000,000,000. A very handsome
and generous offer. The Curzon note proposes to surrender all our
claims for a precarious return of £710,000,000. The Ruhr occupation
has already brought down the British claim against the Allies by
£290,000,000. M. Poincaré may not be able to extract reparations out of
Germany, but in seven months he has succeeded in forcing £290,000,000
out of Great Britain. He will certainly ask for more--and probably
receive it.
Mr. Bonar Law was right when he said that under certain conditions
Great Britain would be the only country to pay a war indemnity. Those
conditions have arisen under his successors.
_Criccieth, August 20th, 1923._
FOOTNOTES:
[4] M. Poincaré's speech at Charleville on August 19th, on the subject
of French policy in the Ruhr.
[5] The British note was sent to France, August 13th, 1923, and M.
Poincaré's reply was received on August 23rd.
[6] The German Government fell on August 13th, 1923, and Herr
Stresemann succeeded Dr. Cuno as Chancellor.
[7] House of Commons, July 16th, 1923.
XX
WHAT NEXT?[8]
The pen-and-ink joust is suspended for a fortnight, whilst the figures
of British unemployment are leaping upwards. When the exhausted British
knights have been reinvigorated by French waters they will once more
charge full tilt at the French champion--at least, they will have made
up their minds by then whether they will shiver another fountain-pen
against his blotting-pad.
This is the advice ponderously and pompously tendered them in inspired
articles. So far, the French nation is jubilant that M. Poincaré has
scored heavily on points. He is a defter penman, and, moreover, he
does not delegate his draughtsmanship to a Committee of Ministers, all
holding irreconcilable views as to how to proceed, when to proceed, and
whither to proceed, and amongst whom there is no agreement except on
one point--that no one quite knows what action to propose.
Up to this last reply they cherished the vain delusion that the
French could be shelled out of the Ruhr by reproaches which were both
querulous and apologetic. That is not the way to shift continental
statesmanship from its purpose. The French Foreign Office is better
informed as to Cabinet divisions in this country than are the British
public. It knows that the Prime Minister and Foreign Secretary dare not
take measures which will hamper French action in the Ruhr.
When the Tory Diehards placed co-operation with France in the forefront
of their programme they honestly meant it. For them it was not a mere
manoeuvre to unhorse the Coalition. They cannot, therefore, support an
attitude of resistance to French pressure on Germany. A refusal to join
France in squeezing Germany is to them a continuation of the evil of
the Coalition they overthrew with the help of Mr. Stanley Baldwin and
Lord Curzon. They will not tolerate it.
That explains the impotence of British diplomacy in a situation which
is so critical to our existence as a great commercial people. The
Cabinet can agree on wordy notes; they are hopelessly divided as to
action. They have, therefore, dispersed far and wide to search for
fortuitous guidance hither and thither--some in the tranquillity of
their English country houses; some in the healing springs of France;
some in the mists of Scottish moorlands. Mayhap one of them will bring
home a policy acceptable to his colleagues. It is all very humiliating
to the Empire that raised ten millions of men and spent £10,000,000,000
of its treasure to win the War. The net result of the voluminous
correspondence on which our rulers have concentrated months of anxious
wisdom and unwearying hesitancy is that the Allies whom we saved from
destruction refuse to move one inch out of their road to secure our
friendly companionship. They are marching resolutely in one direction,
whilst we are shambling along in another.
We have travelled long distances from each other since January last,
and we are now altogether out of sight of the position we held in
common when we met the Germans at Cannes early last year.[9] The
Entente has never been more cordial than it was then--it has never
shown more promise of hopeful partnership for the peace of the world.
We were on the point of securing an amicable and businesslike
arrangement with Germany for the payment of reparations and of
concluding an agreement for protecting the frontiers of France and
Belgium against the possibility of future invasion.
From these starting-points it was proposed that Britain, France,
Italy, and Belgium should advance together to a general settlement of
European problems in East and West--political, financial, economic and
transport. This we had agreed to do and, with the unity and goodwill
which then prevailed, could have accomplished.
But M. Poincaré had no use for the dove of peace. He wanted to fly
his falcon. He had trained and bred it in the French farmyard, and
there it had brought down many a domestic bird successfully. When his
chance came he flew it at the wounded German eagle. It is poor sport,
and somewhat cruel, but it evidently gives great joy to Frenchmen of
a sort. The best are ashamed of it, but their voices are drowned in
the clamour of the unthinking. If the helpless bird is torn to pieces,
there is nothing in that for French or Belgian larders.
Quite unintentionally the hawk has brought down the Entente also.
It may not be dead, but it has made its last flight. Henceforth
international arrangements will be on a less exclusive basis. France
is irrevocably committed to the exploitation of the Ruhr by force.
That is what "pay or stay" means. To that policy the majority in this
country are definitely opposed. If the Diehards in the Cabinet were by
any chance to win, and either Mr. Baldwin surrendered or resigned in
favour of a Poincarist administration in this country, neither he nor
any possible successors could carry the country along into the Ruhr
venture.
Some of them around the Prime Minister who have so suddenly assumed
pro-French sentiments as the shortest cut to higher altitudes than
those to which they have yet succeeded in climbing, know full well
that, although they may use the Diehards for their own ends, if they
succeeded in their somewhat sinister purpose they could not carry out
the Diehard policy.
They are, therefore, endeavouring to provide for contingencies by
negotiating on their own a fresh understanding with France. But British
Premiers are not appointed at Rambouillet nor do they draw their
authority from the Quai d'Orsay. Whatever may be thought of Mr. Bonar
Law or of Mr. Stanley Baldwin by political partisans, no one suggests
that they derived their promotion from other than purely British
sources.
But for a fortnight nothing is to happen--except the spread of
unemployment in Britain and of despair in Germany. At the end of the
fortnight will there be a surrejoinder to M. Poincaré's rejoinder? Or
will there be another conference?
Both M. Poincaré and the present Parliamentary régime in Britain came
into power on the cry of "Enough of these eternal conferences; let
us return to the good old diplomatic methods that prevailed before
the War"--and, they might add, "which helped to make it possible."
Nevertheless, Mr. Bonar Law's administration during its short tenure of
six months participated in four European conferences, and M. Poincaré,
during his eighteen months' official career, has found it necessary to
take part, directly, in five conferences, and directly and indirectly
in eight. The French Press are urging him on to add another to a record
which already beats that of M. Briand in the matter of "joy-riding"--to
quote the contemptuous Diehard name for international conferences
during Coalition days.
It is a suspicious circumstance that those who were once resentful
and scornful of conferences should now be clamouring for one both here
and in France. The reason is scarcely concealed by ardent advocates of
the resumption of "picnic diplomacy." At the old conferences, so it is
contended, France was invariably forced to give way. Now she can and
will command the situation.
There is a new note of confidence ringing through French despatches and
echoed in the French Press. France must get what she wants; Britain
must take what she is given. The French share of reparations must
first be assured--debts due to Britain can come out of what is left.
It is rather greedy, but characteristic, of the British that they
should expect to be paid what is owing to them! With their smug and
hypocritical Puritan temperament and outlook they insist that contracts
should be respected! France, for the sake of the Entente, will make
a concession even to British cupidity and pharisaism. It will permit
the British Empire to collect--not the whole of what is due to her,
but a much-reduced claim out of Germany once the French demand for
reparations is cashed or as good as cashed!
To me this is a new France. During my years of discussion with French
statesmen I never heard this voice. I had three or four talks with M.
Poincaré, and I never heard him speak in these supercilious tones.
Impunity has developed them since to their present pitch of stridency.
Belgium is to suggest a meeting of the Premiers. When it comes the
French minimum terms are to be rigid and unequivocal. Here they are:--
1. France must be paid her irreducible minimum of £1,300,000,000
in respect of reparations, whatever happens to any one else.
2. Belgium is also to have her priority of £100,000,000.
3. As Germany cannot raise these huge sums immediately, France
and Belgium are to hold the Ruhr until they are paid. Hints have
been thrown out by the more conciliatory French journals that the
French Government might consider an early retirement from the
Ruhr if the payment of reparations were made the subject of an
international guarantee. That implies Britain and America becoming
sureties for payment of the German indemnity!
4. As to the rest, France and Belgium have no objection, subject
to the above conditions, to Great Britain collecting £700,000,000,
_i.e._, about 23 per cent., of her international claims (debts and
reparations) from Germany. But this munificent concession is to
be made on the distinct understanding that she forgoes entirely
the remaining 77 per cent. of her bonds. The Allies and Germany
between them owe Great Britain £3,000,000,000. The French and
Belgian governments are willing that Great Britain should collect
£700,000,000 of that amount from Germany, provided the remaining
£2,300,000,000 is for ever cancelled--and always provided that the
£1,400,000,000 due to France and Belgium has been satisfactorily
guaranteed.
5. These handsome terms can only be propounded if Germany first
of all withdraws all passive resistance in the Ruhr. That is an
essential preliminary.
The French government have stated these terms with such precision and
such emphasis, and repeated them with such undeviating insistence,
that any departure from them on the French side seems impossible. The
hope of a conference rests entirely on the confidence in a British
surrender. There is a dismal "joy-ride" in prospect for the British
Prime Minister and his Foreign Secretary. Is it conceivable they
can contemplate such a capitulation? I do not see how the present
Government, after all it has said and written, can so far submit to
French dictation as to make it likely that further discussions would
lead to agreement.
What is the alternative? Herr Stresemann can alone answer that
question. It is not yet clear what he means to do. Perhaps he is
feeling his way to a decision.
_London, August 27th, 1923._
FOOTNOTES:
[8] London, August 27th, 1923.
[9] The Cannes Conference, January, 1922.
XXI
THE BRITISH DEBT TO AMERICA