The financial advisers of the German Government used the method of inflation to keep the German people working on cheap money to avoid a revolution which they feared would happen if unemployment prevailed, to wipe out their internal debt, and to dupe the world. At first, no doubt, they believed that they could control this system of postponing the evil day of reckoning, but, once having started the ball rolling, it increased with frightful velocity down hill. Every time the mark fell in value more marks had to be printed. When its purchasing power fell so far below the real value of wages that the workers clamoured for increased pay, the printing presses had to be turned again to provide the additional money which again fell in the foreign exchange while more slowly prices rose in Germany. The German financiers never checked this wheel in its mad revolutions. They protested that they were unable to check it. Tosome extent it was a gamble with loaded dice. They were bound to win—up to a point. As long as foreign money was paid for worthless paper—whatever the figure of exchange—they would be taking good money for bad, which is excellent business. As long as by increasing the quantities of paper they could enable their industrialists to employ cheap labour, it was good business. As long as the paper itself and the labour of printing were not more costly than the purchase value represented by fantastic numbers on the note, they could carry on the economic life of the country and at the same time abolish all their internal debts. People who had invested all their savings in war loans found that their income had withered away. Industrial companies who had borrowed real capital could pay it back in false notes. And private individuals who were ruined by this means could at least recoup themselves a little at the expense of the foreigner by selling German paper for pounds, dollars, or francs, and gambling on the exchange. It was a great game, which absorbed the interest of large numbers of the German people. Waiters in hotels, clerks in offices, vendors of newspapers, middle-class housewives, did their little bit of daily speculation, and secreted foreign money for rainy days. The great industrialists and professional financiers speculated on a large scale and made enormous profits, while the game lasted. But it was a game bound to fail in the long run. It was bound to fail when no other country would buy German marks at any rate ofexchange, and when those who possessed real things, such as potatoes, meat, milk, or manufactured articles, refused to part with them for any number of German notes. That time came during the occupation of the Ruhr, when, to subsidise the passive resistance of the workers, the German Government poured out a vast tide of paper money, and when the German nation was cut off from its chief source of real wealth in that great industrial region.
I saw from time to time the progress along the road to ruin. Although it enabled a minority to get rich quick, it caused intense suffering among the mass of the German people. The wages of the workers never kept pace with the fall in the purchasing power of their wages, although they were raised week by week on an ascending scale. What five marks would buy in 1913 a million marks would not buy in 1923. It made trade impossible, because no sooner were prices adjusted to the new note issues than a fresh burst of inflation made them less than the cost price of the goods a week before. It was futile to save when thrift was mocked by this depreciation and disappearance of money values. German people had to spend quickly in food or drink or foolish things, because what they had to-day would be worthless to-morrow. The German housewife despaired. She could not keep pace with these rising prices. Some of them went crazy over millions of marks that had no meaning. Germany, apart from its profiteers, stinted, scraped, and toiled, without decentreward for its labour, and with certain ruin ahead.
Looking back on that amazing adventure of inflation, one must ask oneself the question what would have happened in Germany if its Government had endeavoured to stabilise its finances by not issuing money beyond its real backing, and trying to balance its Budget according to sound methods. It is my opinion that the illusion of German prosperity would have been more rapidly dispelled and that their default in the payment of reparations would have happened earlier. Foreign speculators would not have been “bitten in the ear,” German speculators would not have made profits over exchange gambles; but the Allies would not have received more payments, and there would have been widespread unemployment and revolt among the German people. They were between the devil and the deep sea, and though they chose the devil of inflation, it postponed the plunge into the deep sea for a year or two more.
In fairness to Germany, it must be remembered that she did make very heavy payments in money and kind, amounting all told to more than £400,000,000 sterling—that is to say, nearly half the amount of the British debt to the United States of America, which the British people, richer than Germany at the present time, find an almost intolerable burden, although they are paying only £30,000,000 a year to reduce it. In Germany’s post-War state it was a drain upon her dwindling capital which she could not sustain at anything like that rate, and with or without inflation it crippled her. The DawesReport was an acknowledgment of that fact, although it took into account the immense sums of money secreted abroad. Previous default had caused the French occupation of Düsseldorf, Duisburg, and Frankfurt, arousing a flame of hostility in German minds. But when France marched into the Ruhr against the will of the British, and without their co-operation, the whole of the German people, without difference of class or political opinion, denounced it as a violation of the Peace Treaty, and as a sentence of ruin, not only to Germany herself, but to the whole of Europe.
It was this occupation of the Ruhr—the threat of its happening, the entry of the French troops, and the results of it—which poisoned the relations between England and France, flung Germany back into the arms of her Nationalists, and thwarted all efforts of international good will in the spirit of the League of Nations. It kept the wounds of war open and salted in Central Europe. It checked the economic recovery of all nations dependent upon Germany as buyers and sellers. France failed to get her reparations, and instead of building up security the policy of Poincaré made a future war between the two nations almost inevitable by stirring a cauldron of boiling pitch. It turned the justice of the War into an injustice of peace, with the Germans as the victims ofinjustice. For how could they pay reparations if their industrial heart was strangled? And how could they submit to a military tyranny over their great working population from an enemy which had professed to fight the war for liberty and democracy? How could any peace be justified which enabled a foreign army, after war, to hold up the chief industries of a great country, to destroy the machinery of its life, to coerce its workers at the point of the bayonet, to expel them when they refused to work under their military command, to take their money, to fling out their furniture, to imprison their working chiefs, to cut off their food supplies, to prevent their intercourse with their own folk, to deal with the passive resistance of proud and hungry men as though it were a crime against France, to use their whips in German theatres, to terrorise the inhabitants of a great district, to break their spirit by a thousand tyrannies, insults, humiliations and brutalities? That was how the Germans argued, and the argument stands in the soul of Germany as a memory that must one day be wiped out in blood. I think France under Poincaré was unwise in giving to Germany that sense of injustice and that cause of vengeance. I think France under Herriot thinks so too, although it cannot forget, as none of us can forget, the abominable acts of German officers and men during time of war in France and Belgium.
The argument on the French side was logical enough, to a certain point, where its logic brokeabruptly. France, as its mind was expressed by Poincaré, said: “These people have not paid us. They are not trying to pay us. They are in wilful and flagrant default.”
They paid no attention to the German reply that they had paid all they could—enormous sums—and could pay no more without utter ruin. In any case, they did not yet know the fixed sum of their debt, and the figures France demanded were beyond the capacity of any nation on earth.
“Very well,” said the French, “we will take pledges for future payment. We will send the bailiff into the house; we will hold the Ruhr until Germany realises the inevitable and makes better arrangements to pay. Meanwhile, whether she pays or not, we shall weaken her power of recovery, postpone the time when she is able to challenge us again, and hold her by the throat for the security of France. Excellent plan, both ways! Perfectly justified in law and equity.”
Where France failed in logic was in the combination of two ideas which were mutually destructive. She might gain military security (for a time) by weakening Germany and keeping a grip on her jugular vein, but she could not gain reparations at the same time and by the same method. Above all, her logic on the point of security would fail at some future date—twenty years, forty years, sixty years, when the German people would be strong enough to fight for the liberty of their life, by the mere weight of increasing population inspired by passion and armed with new weapons.France would have done better to seek the security of world opinion in support of her just claims instead of risking this lonely adventure against the judgment of her friends. That, I think, was the verdict of the Dawes Report. It was certainly the verdict of British opinion among moderate-minded folk, long before the Ruhr episode had ended in the financial downfall of Germany and explosive passion.
What further excited the bitter hatred of the Germans was the effort of French generals and political agents to detach the loyalty of the Rhineland from the German Empire by encouraging bodies of “Separatists,” who proclaimed a Rhineland Republic. Led by a very doubtful but plausible gentleman named Dr. Dorten, whom I met in the early days of the British occupation, these “Separatists” were mostly youths of the disorderly class and men of criminal type supported by a few sincere fanatics. Many of them were in the pay of the French. Their movement was regarded as black treachery by patriotic Germans, and when the French troops stood by the Separatists while they seized public buildings and murdered German police, previously disarmed by French orders, fury was unrestrained among the German people. French policy, in this matter at least, was a blunder, because from the first theSeparatist movement had no basis of reality nor any chance of success. It was an illusion of French politicians who let their wish be father to their thoughts.
Another cause of hatred in Germany, amounting to a mad rage which made them see red, was the use of coloured troops in the French zone of occupation. Under the name of “The Black Horror,” German propaganda exaggerated and falsified the hideous aspects of this last humiliation to their pride. It was asserted that masses of African negroes had been let loose in the Rhineland to assault white women and brutalise white men. The French denied that they were using any black troops, and this was perhaps technically true, although I saw with my own eyes Seneghalese negroes on the banks of the Rhine. But they were not fighting troops. They were transport men, lorry drivers, and ambulance drivers, in the blue uniform and steel hat of the Frenchpoilu. I saw the inhabitants of Bonn shudder and sicken at the sight of them. But it was true that the French did employ large numbers of Moroccan soldiers in German towns. They were not black, they were not even “nearly black,” and in race they belonged to the same Mediterranean peoples from which the French themselves have sprung. But that made no difference in German psychology,and I sympathise with their detestation of being controlled and put under the menace of Moroccan troops who, whatever shade their colour and historical ancestry, do not belong to our European type of civilisation, such as it is, and should not be put in military power over European populations. The British use of Indian troops in the white man’s war, and the American use of black battalions, were, in my judgment, similar errors which may cost us dear. But it was more than an error to use Moroccans in time of peace among German citizens who resented their presence as a shameful insult. These things are beyond argument. They belong to the realm of instinct. It was handing the Germans another cause of hatred.
Most people in England watched all these things with disapproval and dismay. Gradually, as time went on, they drew further away from the French policy in Europe. It seemed to them bad business and bad morality. From a business point of view a great number of hard-headed people in Great Britain could see no sense in demanding payments from Germany beyond her power to pay, and in holding her by the throat so tightly that in any case she could not pay. Unemployment and bad trade in Great Britain were seen to be directly caused by this situation in Germany, which at onetime had been England’s second best customer. It was not only the direct trade between Germany and England that had declined, but it was the indirect effect of Germany’s economic downfall all round the world. If Germany bought less wool from Australia and less grain from Canada, then Australia and Canada bought less manufactured goods from Great Britain. If Germany were not trading profitably with Holland, Denmark, and Sweden, then those countries could not buy the same quantity of British goods. Germany was the axle-tree of the great wheel of European trade which had broken its spokes and lay in the ditch. Until the old waggon was on the road again England would not recover her commerce. The French cried: “What about our devastated regions? Who will pay for reconstruction if the Germans are not forced to do so?” The English shrugged their shoulders and said: “What about our devastated trade in Liverpool, Manchester, Glasgow, London, and a hundred other cities where men are out of work?”
Less than ten years after the beginning of that struggle in which the youth of these two countries had fought side by side for the same purpose, and with the same ideals, there was a friction between England and France which obliterated the memory of that common sacrifice in many minds and created suspicion, dislike and political hostility.
The French Press and people abused the British for their materialism. “That nation of shopkeepers!”they cried. “They can think of nothing but their trade interests. They would sell their soul or their best comrade for a mess of pottage!” They forgot that they also were out for financial interests, that their policy was dictated by the desire to get reparations out of Germany. And although England advanced commercial reasons for relieving the pressure on Germany, she had other reasons which to the French seemed sheer hypocrisy, the most sickening cant. The English people and their sister nations do not like kicking an enemy when he is down, nor treading on his face when he lies prostrate. The old traditions of sport, strong even in the Cockney mind, bid them shake hands with the other fellow when he has been counted out after a knock-out blow. They do not believe in “hugging hate.” They have an instinctive sense of fair play. It is not too much to say that these were the overwhelming reasons in the minds of the average Englishman which made him dislike the entry into the Ruhr and the Poincaré policy of “keeping the Germans down.”
There was another reason, deep in many minds of humble folk and great statesmen. They looked back to the War with loathing and horror. They desired to support some better way of argument in international disputes, so that there need be no “next war,” worse than the last, between thesame combination of Powers. They believed in the spirit of the League of Nations as the only way by which that next war might be avoided. They were hostile to any Power which seemed to thwart the progress of that spirit. They believed that the policy of Poincaré was contrary to the establishment of good will among nations. They believed that it was hurtful to future peace and leading inevitably to a war of revenge. For that reason millions of people in Great Britain looked upon Poincaré and for all he stood as the greatest menace in the world.
Lloyd George was one of them. After the signing of the Peace Treaty and a jingo election in which his followers appealed to the lowest passions of the people, that extraordinary man, with his nimble mind, his rapid vision, his instinctive Liberalism, his sincere belief in righteousness (overlaid by the cunning and craft of political necessities), led him into a crusade on behalf of a world settlement by conciliation and compromise.
In conference after conference, with splendid courage, with untiring zeal, with broad and liberal views, with an honest desire to bring Europe back to health by fair play all round and business methods, he endeavoured to settle the differences between France and England over this question of Germany, to scale down the German payments so that they were possible and not impossible, to give France security, to bring Russia back into the family of nations, to make some reasonable arrangement for inter-allied debts, and to adopt a schemeof general demobilisation in Europe which would relieve its peoples from crushing burdens and prepare the way of peace. However one may criticise the character and quality of Lloyd George, history will, I think, give him enormous credit for that great endeavour to secure the peace of the world. At every conference he was thwarted by France, whose difficulties and dangers could not be reconciled by any of these plans, who regarded them all as treachery to her people.
Briand concluded an agreement by which he released Germany of certain obligations in return for a limited guarantee of French security by British alliance in the case of a new aggressive war from Germany. And with that document in his pocket Briand lost his job in France. Poincaré succeeded him as the representative of French nationalism, the military point of view, the unrelenting will of the majority of French people to exact their full pound of flesh from Germany at all costs. From that time onwards until the downfall of Lloyd George himself the situation between France and England was controlled by the diplomatic intercourse between Lloyd George and Poincaré which developed into a personal duel of hostile views. In every case Poincaré had the best of the argument on lines of pure logic and abstract justice. It was right that Germany should pay for all the damage she had done. Was France to pay?... In every conference Poincaré stone-walled Lloyd George’s attempt at compromise, by which logic should give way a little to general interest andthe military safety of France to a world pact of peace.
Then Lloyd George fell. By a frightful paradox his fall was partly due to a call for war. The man who was passionate for the peace of the world, who had given his health and risked his political career in the cause of the pacification of Europe, raised a fiery torch to the people—which fell like a damp squib in a cold sea. It was after the tragedy of Greece.
For some reasons not yet fully known to history, Lloyd George had fallen under the spell of Venizelos and his friends. Greece had been given a new Empire in Asia Minor and Thrace at the expense of the Turk, who had been utterly crushed by British armies. He turned a deaf ear to all critics who prophesied that the character of the Greeks would not be equal to these new responsibilities.
Meanwhile in Constantinople, where I happened to be, our Military Mission was getting anxious. A new leader had arisen among the Turks named Mustapha Kemal Pasha. Established at Angora, with a Committee of Turkish Nationalists, he defied the terms of peace imposed upon his people, refused to acknowledge the decree of a Sultan in the hands of the inter-allied force, rallied to his standard every Turkish patriot, raised a new army,filled Constantinople with his spies and agents, and proclaimed a “Holy War” of Islam. He vowed to recapture Smyrna, to liberate Constantinople, and to take possession of Thrace.
The Greek troops before Smyrna were confident, as I saw them, of holding their lines against the Turk. The Greek Commander-in-Chief, whom I interviewed, was ready to break the Turkish lines “as though on parade.” Lloyd George gave them the moral support of emotional words, and they were very grateful to him, and believed that England was behind him. The world knows what happened. Its conscience must still burn at times as it hears the cries of terror and anguish on that quayside at Smyrna when the Turkish irregulars set fire to the Christian quarters and massacred men, women and children, while British and American warships stood by, with their officers and men staring through that pall of smoke and its rending fire, listening to the shrieks beyond.
The Turks advanced to the Ismid Peninsula overlooking the Dardanelles. They advanced to the very lines which the British troops—young boys mostly—held at Chanak. Beyond that they could not go without a war with Great Britain, which hung by a thread day after day and week after week. The French, whose politicians and public opinion were sympathetic to the Turks, and who were incredibly jealous of British influence in Egypt, Palestine and Mesopotamia—an old source of enmity stirred up again in military minds—withdrew their own troops from Chanak,and left the British troops isolated. They made it perfectly clear, very courteously, but very firmly, that they would not engage in war against Turkey. It is certain that the French people after all their loss of blood and years of strife would have refused to support such a war. In any case, they preferred the Turks to the Greeks, and were glad of the Greek defeat.
To Lloyd George, in England, these Turkish victories were heavy blows. His honour was engaged to Greece. He believed that British honour was engaged, though certainly his pro-Greek policy had never gained the support and enthusiasm of public opinion. He hated the thought of seeing the Turk in power again at Constantinople. He had incited the Greek Army to attack. The horror at Smyrna made his blood run cold. It was Winston Churchill, without waiting for Parliamentary sanction, who raised the fiery cross and sent an emotional appeal for help to all the Dominions. It was received at first in stony silence, and then with deadly hostility. Neither Canada nor Australia would send a man to fight in a new war. They had done enough; they were not interested. At home in England and Scotland there was no support for a new war. There was a fierce outcry in the Press. The nation refused to envisage war, for any reason. They were sick of war. They could not afford it in men or money after years of colossal sacrifice.
The war did not happen, thanks a good deal to General Sir Charles Harington, commanding inConstantinople. Cool as ice in the face of extreme provocation, determined to keep the peace by every method of statesmanship, unless his men were actually attacked, it was his fine chivalry, his diplomatic wisdom with the Turkish Generals and statesmen, which resulted in an Armistice hanging on a hair-trigger. Lord Curzon patched up a peace which gave to the Turks most of what they claimed and more than they ought to have had in humanity and justice. The expulsion of the Christian communities from Asia Minor was one of the most infernal tragedies of history, hushed up in the British and European Press because it hurt the conscience of too many of us. The flight of the Greek refugees still calls to God for pity....
What a world—ten years after!
When I went about Europe I was dismayed by the denial of all mental progress towards a state of peace. Physically there was a slow recovery from war. Morally there was a reaction in many countries to black passion, militarism, and ideas of Force. Austria-Hungary and Germany were swinging right back to the old traditions of nationalism. They saw no way of freedom except by future war. They desired vengeance—against the French. They were talking of calling back their Emperors. In Germany the Crown Prince came home as a “private citizen” ready for acall to the throne at some not distant date. The war which was to make the world safe for democracy had been followed by a peace in which democracy was repudiated by many leaders and by public opinion in many countries. “I do not believe in democracy,” Herr Streseman told me in Berlin. The Italian Fascists under Mussolini did not believe in democracy, nor in Parliamentary institutions, nor in free speech. They bludgeoned men who disagreed with their ideas and methods or poured castor oil down their throats. They saved Italy from anarchy, which was a good deed, but Mussolini, the autocrat, was quite willing to play the anarchist against international laws, and did so when he flouted the League of Nations and bombarded Corfu. Students of world affairs, thoughtful observers like Sir Edward Grey and General Smuts, men not given to exaggerated speech and morbid fears, expressed their alarm at the state of Europe ten years after the outbreak of the world war, and confessed that it seemed to be slipping downhill towards general catastrophe.
Since then something has happened to change the outlook of Europe and renew the hopes of peace. It is the London Agreement by which Germany, France, Great Britain, Belgium, and Italy agreed on Saturday, August 16—ten years and fourteen days after the beginning of the world war—toaccept the chief provisions of the Dawes Report for the restoration of German credit by international loans and to establish a business settlement of the reparations problem with German consent. As Ramsay MacDonald, Labour Prime Minister, said at the conclusion of the London Conference, this agreement was “the first Peace Treaty” since the end of the world conflict, “because we sign it with a feeling that we have turned our backs on the terrible years of war and war mentality.”
Three great events in the political world led up to this new hope of peace and progress. The first was the friendly co-operation of the United States in the endeavour to find a business solution on the subject of German reparations. The second was the advent of a Labour Government in England. The third was the downfall of Poincaré, owing to a change of view in France which put Herriot into power as an opponent of the Poincaré school of thought.
In the United States of America there had been a great searching of soul, turmoil, and even anguish of thought since the downfall and death of President Wilson. Although mass opinion had hardened against any European “entanglement” and any place in the League of Nations by which they would have to assume definite responsibilities, there was always an intellectual and combatant minoritywhich protested against extreme “isolation” and a complete denial of co-operation with European nations for the sake of World Peace. In three separate lecture-tours in America, the last one from coast to coast, I saw something of the tug-of-war in the mind of the American people between the desire to escape from Europe and the wish to take a full share, even the world’s leadership, in the reconstruction of civilisation and its progress towards the brotherhood of nations. On my second visit I saw a rising tide of idealism in favour of international service. On my third visit it was beating up still higher against walls of national selfishness, indifference and hostility. A great deal of the idealism was vague, verbose, unpractical, and without any definite goal. It was spread by the women’s clubs, increasing in political activity and importance. It was expressed by many writers and lecturers, including those who had seen most of the war. It was discussed, heatedly, at every dinner table and at every “party” where well-read men and women gathered for conversation. Many financiers and business men, looking at foreign affairs with cold science, backed up the arguments of the idealists by saying that the United States ought to help to “straighten out Europe” for the sake of world trade and world peace. Many Generals and United States officers denounced war as an accursed thing, and prophesied the destruction of civilisation if another world war happened. Kinship with England, sympathy with France, made some Americans of the old stock sickat the thought of their national “selfishness”; though still, I think, the mass of the people were indifferent and bored and tired with regard to Europe and its troubles. But the idealists, the women, the pacifists, the internationalists, the financiers, prodded up the indifference and brought pressure to bear on their Government. No “entanglements” certainly, but some policy of association with efforts for world peace. The Harding Administration, elected to keep America out of Europe, was timid and hesitating, but had goodwill, and heard these voices at the door.
It was President Harding, with Charles Hughes as his Foreign Secretary, who summoned the Conference on Naval Disarmament, and carried it through with triumphant success, due not a little to the hearty co-operation of the British Government through its representative, Lord Balfour. That limitation of naval armaments was really the first step towards world peace, though many steps must follow before peace is secure. It did at least one enormous thing in history. It stopped the possibility of a competition in naval strength between Great Britain and the United States which, if it had happened, would not only have been a crushing burden to the taxpayers but would have led inevitably to suspicion and hostility between our two nations. The agreement of Japan wasalso a check to a rivalry in naval power which would have produced explosive forces and passions. The agreement did not stop the possibility of naval warfare, but it killed its inevitability.
The conclusion of that conference re-inspired the idealists. It encouraged them to further efforts to stimulate public opinion. Mr. Charles Hughes suggested an economic conference in Europe which resulted eighteen months later in the acceptance of the Dawes Report. The women’s clubs, the peace associations, many of the leaders of American thought, became more and more distressed at the state of things in Europe, more and more convinced that only by American participation, at least in moral and economic spheres, could Europe solve its problems on lines of reasonable compromise.
The majority of Americans undoubtedly were in favour of the occupation of the Ruhr. They regarded Germany as a fraudulent debtor. They believed in the “strong hand.” They had no patience, or very little, with the British view, which seemed weak and sentimental. Only the German-Americans, the Pacifists and the Socialists, with here and there bankers and business men and “intellectuals,” believed that France was not giving Germany a fair chance, was thrusting Europe back into the mud and was violating the spirit of theLeague of Nations. This view changed a little, though imperceptibly, when France had entered the Ruhr and had failed to extract anything solid from that nation. Even the warmest sympathisers with the French point of view became a little tired of Poincaré’s “No, no,” to all arguments on behalf of compromise, and of his nationalistic utterances. American opinion, still hostile to Germany in the mass—more intolerant of German character, and more convinced of her exclusive war guilt than the British people who had suffered so hideously—swung away from the Poincaré policy, at least to the point of belief that the occupation of the Ruhr was no solution of the problem but only a method of enforcing a solution that had still to be found; and time was short. Germany’s policy of inflation, that colossal fraud, had collapsed. Her money was waste paper, her credit gone, her capacity to pay indemnities extinguished—for a time. Some international scheme, divorced from politics, conducted on strict business lines, must get at the real facts and impose a settlement, or Europe as well as Germany would go down in chaos, not without repercussion in the United States.
It was with the will of the people and an earnest desire to co-operate in this enquiry and report, that the American Government appointed General Dawes to the international committee whichinvestigated the state of German finance and recommended a plan of action. It was another step towards American co-operation in the arrangement of world peace, and the beginning at least of a settlement in Europe based on business methods and common sense.
The Dawes Report cut like a clean wind through all sophistries, fantasies, illusions, and passions. It stated the realities, to France as well as to Germany.... Germany was a bankrupt State with great assets and immense potential energy. France and other countries could get heavy payments in course of time—if Germany were given industrial liberty and a loan to stabilise her monetary system, in securities which were good. Otherwise, they would get nothing. Take it or leave it. There were the facts.
The acceptance and working of the Report which disillusioned both France and Germany, and excited bitter opposition in both countries, was dependent on one incalculable element—goodwill on all sides. The German nationalists denounced it as an outrage, French nationalists as a surrender; Poincaré was prepared to discuss it subject to many reservations, including the occupation of the Ruhr and the military control of the Rhineland Railways. Not in that political atmosphere between the two nations was there a ghost of a chance for the Dawes Report.
But then two other events happened in the political world which by a kind of miracle changed the mental atmosphere of Europe, at least sufficientlyto secure the adoption of the new scheme. They were the advent of the Labour Government in Great Britain and the downfall of Poincaré.
The Conservative Government under Baldwin, which succeeded the breaking-up of the Coalition under Lloyd George, deliberately committed suicide by appealing to the country for a mandate on Protection. Great Britain would have nothing of it at a time of unemployment, heavy costs of living, and diminishing trade. But the results of the election were unforeseen. The Conservatives lost their great majority, the Liberals were reduced to a minority, and Labour became the strongest single party in the new Parliament and received its call to office.
It was the greatest social revolution that has happened in England in modern history. The highest offices of state and of the very Court itself were occupied by men who had begun life in factories, mines and workshops, or who had gained political notoriety by attack upon the privileges, traditions, social castes, and property rights of the most conservative country in Europe outside Spain. They were the leaders of that spirit of revolt which had surged below the surface of English life among ex-soldiers who had not received reward for service, unemployed men who were living on poor doles, and of all those inarticulate millionswho rallied to the Labour cause because it stood solidly and squarely for anti-militarism and world peace, for democratic liberties, and for ideals of a world state in which the common folk should have security, more pay for less work, more joy in life, and social equality levelled up to high standards of education and home comfort. Those I am sure were the instincts and hopes—not yet to be fulfilled!—which brought Labour into office.
They were there only on sufferance, and with guarantees of good behaviour. A combined vote of the Liberals and Conservatives could turn them out at any moment. But they played their cards cleverly, for a time, not adventuring on any revolutionary policy, not trampling on any old traditions, wearing Court uniform as though to the manner born, pleased with their prestige and power, being very polite to everybody, and keeping their hot-heads quiet by promises of future reward when their majority would be substantial.
They were certainly lucky in having Ramsay MacDonald as their leader and Prime Minister. A man of high education, though humble birth, with a fine dignity and grace of manner, sincere in his ideals, believing in evolution and not revolution, and with an intimate knowledge of both foreign affairs and Parliamentary rules, he came as no shock to the House of Commons, and inspired admiration even among his political opponents. Unable to do much to remedy the state of economic life in Great Britain—even to fulfil his promises regarding a remedy for unemployment—he concentratedall his efforts, wisely as well as tactfully, on the endeavour to solve the European problem between France and Germany. He saw at once that it would never be solved as long as hostility and suspicion embittered the relations of France and England. The man whom all England had accused as Pro-German wrote the most charming and conciliatory letters to Poincaré, full of sympathy and understanding for France. Time worked on his side. Poincaré was defeated when he went to the country for re-election, and contrary to nearly all the prophets, his policy was rejected and Herriot, corresponding to Ramsay MacDonald as a leader of the Left, became Premier of France.
I was one of the few who had some inkling of the change of view in France and foretold the peril of Poincaré. In conversation with French people, and especially the ordinary working folk, I gathered that Poincaré no longer held their confidence. They had backed him when he ordered the occupation of the Ruhr, but only because they believed that he would “deliver the goods.” Now they saw that the “goods” were not forthcoming, and that, instead of receiving large reparations from Germany, the franc was dropping, abruptly and perilously. They believed that M. Poincaré was a little too “rigid,” too much of a lawyer, and too little of a business man. They wereaware of all the hate that was being built up against them in Germany. They said—many of them—“We are afraid of the future.”
It was above all that fear of the future, the terrifying spectre of a new war, when not the great Black Army of Africa, nor all their submarines, nor all their aeroplanes, would save France from another struggle in which the last of her youth would perish, which overthrew Poincaré and his “rigid” methods. France, by a majority, desired peace, if that could be gained by some new policy, not surrendering security, not weak, but more in accord with the spirit of Liberalism.
There is no doubt in my mind that the result of the elections in Great Britain and the rise of Labour in that country had a powerful influence on the French election. It was a call back to democratic ideals in Europe, against the militarists and Imperialists.
Anyhow it gave Ramsay MacDonald a wonderful, an amazing chance. With Herriot, ex-Mayor of Lyons, advanced Liberal, leader of Labour in France, he could speak on equal terms. They understood each other’s ideas. They knew each other’s difficulties. Herriot, who speaks German well and has studied their system of civic organisation, had an honest desire to be fair and just to Germany while not betraying French interests. He did not call the German people “Sales Boches.” He did not want to kill their babies or starve them to death. He acknowledged that they had a right to live. He wanted to deal with them on businessterms and, if possible—if possible!—get their good will and free consent to a plan by which French and Germans may live in the same world without periodical spasms of slaughter. With Herriot and Ramsay MacDonald in cordial agreement on the ideals of peace in the London Conference in August, ten years after the beginning of war, the peace of Europe had a greater chance than any other statesmen of England and France would have made conceivable. Luck, or Fate, was on the side of success.
Those meetings of the statesmen in No. 10 Downing Street will make a dramatic chapter in history when they come to be written. Behind the representatives of each nation stood the forces of reaction: sullen, menacing, obstructive. Herriot knew that if he yielded too much he would be destroyed by the Conservatives of France, by that formidable power still held by Poincaré and all he stands for in French opinion. Marx and Streseman knew that if they surrendered too much they would be overwhelmed by a Nationalist outburst in their own country. Ramsay MacDonald knew that if he asked either side to ignore their own public opinion the Conference would fail and calamity would follow. The American Ambassador, Kellogg, knew that his people would refuse to guarantee a loan to Germany unlessFrance withdrew demands which deprived it of all security. Time and time again the Conference was on the point of breaking down. The international bankers sat behind the scenes refusing to sanction French plans for further penalties against Germany if she defaulted in future payments. There was anguish among the Germans when Herriot told them that his hands were tied regarding the evacuation of the Ruhr and that no withdrawal could be made until a year more had run. They saw his difficulty as he saw theirs. The French would unseat him if he conceded an earlier withdrawal. He pleaded with them to agree to this condition—utterly opposed to the spirit of the Dawes Report—for the sake of the loan of forty million pounds sterling, future liberty, world peace. The wires were hot with messages to and from Berlin and Paris, where the Governments insisted on national demands. The fate of Europe trembled in the balance, until at last the German representatives yielded to that year in the Ruhr, under protest, with misgivings and forebodings, but with a hope that the enormous disappointment to the German people would be outweighed by the saving of their economic life, the future liberation from hostile occupation, a postponement, at least, of ruin. So the Dawes Report was accepted and signed, and the London Agreement began a new chapter of history in which there is a promise—another chance—of peace at last, and a spirit of conciliation between the nations.