FOOTNOTES:

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 theNew Statesmanthe 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 almosthors 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, (TimesDec. 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; theDaily Mailwants us to ‘take’ the income of Herr Stinnes, all without a word as to the form in which this wealth is toleave 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 devotednotto 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 theNew 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 theFortnightly Reviewfor 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 actualphysicalloss to Belgian property by destruction and loot above £150,000,000 as amaximum, 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 forphysical and materialdamage in the occupied and devastated areas of Northern France.’ (pp. 114-117.)[19]The Foundations of International Policypp. 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 toThe Timesof October 26th., 1920.) in theBoard of Trade Journalof 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.AQuarterly Reviewcritic (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 inneutralcountries. 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 thekindof 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 themise en valeurof 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 theBiology of Death, as reported in theBoston Heraldof 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 isLa 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:—190035.6 per1000.190135.7 per“190235.1 per“190333.9 per“190434.1 per1000.190533.0 per“190633.1 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 byPearson’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.’TheTimesmaintains 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 theDaily Mailwrites 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 Timesof 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 ofThe 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 theForum, 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.’

[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 theNew Statesmanthe 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 almosthors 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.)

‘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 almosthors 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, (TimesDec. 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.”’

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

[8]The figures for 1913 are:—

[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; theDaily Mailwants us to ‘take’ the income of Herr Stinnes, all without a word as to the form in which this wealth is toleave 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 devotednotto 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!

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; theDaily Mailwants us to ‘take’ the income of Herr Stinnes, all without a word as to the form in which this wealth is toleave 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 devotednotto 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 theNew 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?’

[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 theNew 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 theFortnightly Reviewfor 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.

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.

[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 actualphysicalloss to Belgian property by destruction and loot above £150,000,000 as amaximum, 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 forphysical and materialdamage in the occupied and devastated areas of Northern France.’ (pp. 114-117.)

[19]The Foundations of International Policypp. 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.

[19]The Foundations of International Policypp. 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 toThe Timesof October 26th., 1920.) in theBoard of Trade Journalof 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.

[24]Since the above lines were written the following important announcement has appeared (according toThe Timesof October 26th., 1920.) in theBoard of Trade Journalof 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.AQuarterly Reviewcritic (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 inneutralcountries. This will be found in Article 235, which “introduces a quite novel principle in the collection of indemnities.”’

AQuarterly Reviewcritic (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 inneutralcountries. 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 thekindof 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 themise en valeurof 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 theBiology of Death, as reported in theBoston Heraldof 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 isLa 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.’

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:—190035.6 per1000.190135.7 per“190235.1 per“190333.9 per“190434.1 per1000.190533.0 per“190633.1 per“(The Evolution of Modern Germany.p. 309)

[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:—

(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.)

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 byPearson’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.’TheTimesmaintains 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.’

TheTimesmaintains 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.’

[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 theDaily Mailwrites 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.

[47]Even as late as January 13th, 1920, Mr H. W. Wilson of theDaily Mailwrites 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.”’

[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).

[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 Timesof 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 ofThe 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 theForum, 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.’

I am indebted to Mr Stoddard for the translations; but they read quite ‘true to type.’

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