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The Economic Consequences of the Peace
by John Maynard Keynes
1919
Chapter 1
Introductory
The power to become habituated to his surroundings is a
marked characteristic of mankind. Very few of us realise with
conviction the intensely unusual, unstable, complicated,
unreliable, temporary nature of the economic organisation by
which Western Europe has lived for the last half century. We
assume some of the most peculiar and temporary of our late
advantages as natural, permanent, and to be depended on, and we
lay our plans accordingly. On this sandy and false foundation we
scheme for social improvement and dress our political platforms,
pursue our animosities and particular ambitions, and feel
ourselves with enough margin in hand to foster, not assuage,
civil conflict in the European family. Moved by insane delusion
and reckless self-regard, the German people overturned the
foundations on which we all lived and built. But the spokesmen of
the French and British peoples have run the risk of completing
the ruin which Germany began, by a peace which, if it is carried
into effect, must impair yet further, when it might have
restored, the delicate, complicated organisation, already shaken
and broken by war, through which alone the European peoples can
employ themselves and live.
In England the outward aspect of life does not yet teach us
to feel or realise in the least that an age is over. We are busy
picking up the threads of our life where we dropped them, with
this difference only, that many of us seem a good deal richer
than we were before. Where we spent millions before the war, we
have now learnt that we can spend hundreds of millions and
apparently not suffer for it. Evidently we did not exploit to the
utmost the possibilities of our economic life. We look,
therefore, not only to a return to the comforts of 1914, but to
an immense broadening and intensification of them. All classes
alike thus build their plans, the rich to spend more and save
less, the poor to spend more and work less.
But perhaps it is only in England (and America) that it is
possible to be so unconscious. In continental Europe the earth
heaves and no one but is aware of the rumblings. There it is not
just a matter of extravagance or 'labour troubles'; but of life
and death, of starvation and existence, and of the fearful
convulsions of a dying civilisation.
For one who spent in Paris the greater part of the six months
which succeeded the armistice an occasional visit to London was a
strange experience. England still stands outside Europe. Europe's
voiceless tremors do not reach her. Europe is apart and England
is not of her flesh and body. But Europe is solid with herself.
France, Germany, Italy, Austria, and Holland, Russia and Roumania
and Poland, throb together, and their structure and civilisation
are essentially one. They flourished together, they have rocked
together in a war which we, in spite of our enormous
contributions and sacrifices (like though in a less degree than
America), economically stood outside, and they may fall together.
In this lies the destructive significance of the Peace of Paris.
If the European civil war is to end with France and Italy abusing
their momentary victorious power to destroy Germany and
Austria-Hungary now prostrate, they invite their own destruction
also, being so deeply and inextricably intertwined with their
victims by hidden psychic and economic bonds. At any rate an
Englishman who took part in the Conference of Paris and was
during those months a member of the Supreme Economic Council of
the Allied Powers, was bound to become -- for him a new
experience -- a European in his cares and outlook. There, at the
nerve centre of the European system, his British preoccupations
must largely fall away and he must be haunted by other and more
dreadful spectres. Paris was a nightmare, and everyone there was
morbid. A sense of impending catastrophe overhung the frivolous
scene; the futility and smallness of man before the great events
confronting him; the mingled significance and unreality of the
decisions; levity, blindness, insolence, confused cries from
without-all the elements of ancient tragedy were there. Seated
indeed amid the theatrical trappings of the French saloons of
state, one could wonder if the extraordinary visages of Wilson
and of Clemenceau, with their fixed hue and unchanging
characterisation, were really faces at all and not the
tragic-comic masks of some strange drama or puppet-show.
The proceedings of Paris all had this air of extraordinary
importance and unimportance at the same time. The decisions
seemed charged with consequences to the future of human society;
yet the air whispered that the word was not flesh, that it was
futile, insignificant, of no effect, dissociated from events; and
one felt most strongly the impression, described by Tolstoy in
War and Peace or by Hardy in The Dynasts, of events marching on
to their fated conclusion uninfluenced and unaffected by the
cerebrations of statesmen in council:
Spirit of the Years
Observe that all wide sight and self-command
Deserts these throngs now driven to demonry
By the Immanent Unrecking. Nought remains
But vindictiveness here amid the strong,
And there amid the weak an impotent rage.
Spirit of the Pities
Why prompts the Will so senseless-shaped a doing?
Spirit of the Years
I have told thee that It works unwittingly,
As one possessed not judging.
In Paris, where those connected with the Supreme Economic
Council received almost hourly the reports of the misery,
disorder, and decaying organisation of all Central and Eastern
Europe, Allied and enemy alike, and learnt from the lips of the
financial representatives of Germany and Austria unanswerable
evidence of the terrible exhaustion of their countries, an
occasional visit to the hot, dry room in the President's house,
where the Four fulfilled their destinies in empty and arid
intrigue, only added to the sense of nightmare. Yet there in
Paris the problems of Europe were terrible and clamant, and an
occasional return to the vast unconcern of London a little
disconcerting. For in London these questions were very far away,
and our own lesser problems alone troubling. London believed that
Paris was making a great confusion of its business, but remained
uninterested. In this spirit the British people received the
treaty without reading it. But it is under the influence of
Paris, not London, that this book has been written by one who,
though an Englishman, feels himself a European also, and, because
of too vivid recent experience, cannot disinterest himself from
the further unfolding of the great historic drama of these days
which will destroy great institutions, but may also create a new
world.
Chapter 2
Europe Before the War
Before 1870 different parts of the small continent of Europe
had specialised in their own products; but, taken as a whole, it
was substantially self-subsistent. And its population was
adjusted to this state of affairs.
After 1870 there was developed on a large scale an
unprecedented situation, and the economic condition of Europe
became during the next fifty years unstable and peculiar. The
pressure of population on food, which had already been balanced
by the accessibility of supplies from America, became for the
first time in recorded history definitely reversed. As numbers
increased, food was actually easier to secure. Larger
proportional returns from an increasing scale of production
became true of agriculture as well as industry. With the growth
of the European population there were more emigrants on the one
hand to till the soil of the new countries and, on the other,
more workmen were available in Europe to prepare the industrial
products and capital goods which were to maintain the emigrant
populations in their new homes, and to build the railways and
ships which were to make accessible to Europe food and raw
products from distant sources. Up to about 1900 a unit of labour
applied to industry yielded year by year a purchasing power over
an increasing quantity of food. It is possible that about the
year 1900 this process began to be reversed, and a diminishing
yield of nature to man's effort was beginning to reassert itself.
But the tendency of cereals to rise in real cost was balanced by
other improvements; and -- one of many novelties -- the resources
of tropical Africa then for the first time came into large
employ, and a great traffic in oilseeds began to bring to the
table of Europe in a new and cheaper form one of the essential
foodstuffs of mankind. In this economic Eldorado, in this
economic Utopia, as the earlier economists would have deemed it,
most of us were brought up.
That happy age lost sight of a view of the world which filled
with deep-seated melancholy the founders of our political
economy. Before the eighteenth century mankind entertained no
false hopes. To lay the illusions which grew popular at that
age's latter end, Malthus disclosed a devil. For half a century
all serious economical writings held that devil in clear
prospect. For the next half century he was chained up and out of
sight. Now perhaps we have loosed him again.
What an extraordinary episode in the economic progress of man
that age was which came to an end in August 1914! The greater
part of the population, it is true, worked hard and lived at a
low standard of comfort, yet were, to all appearances, reasonably
contented with this lot. But escape was possible, for any man of
capacity or character at all exceeding the average, into the
middle and upper classes, for whom life offered, at a low cost
and with the least trouble, conveniences, comforts, and amenities
beyond the compass of the richest and most powerful monarchs of
other ages. The inhabitant of London could order by telephone,
sipping his morning tea in bed, the various products of the whole
earth, in such quantity as he might see fit, and reasonably
expect their early delivery upon his doorstep; he could at the
same moment and by the same means adventure his wealth in the
natural resources and new enterprises of any quarter of the
world, and share, without exertion or even trouble, in their
prospective fruits and advantages; or he could decide to couple
the security of his fortunes with the good faith of the
townspeople of any substantial municipality in any continent that
fancy or information might recommend. He could secure forthwith,
if he wished it, cheap and comfortable means of transit to any
country or climate without passport or other formality, could
despatch his servant to the neighbouring office of a bank for
such supply of the precious metals as might seem convenient, and
could then proceed abroad to foreign quarters, without knowledge
of their religion, language, or customs, bearing coined wealth
upon his person, and would consider himself greatly aggrieved and
much surprised at the least interference. But, most important of
all, he regarded this state of affairs as normal, certain, and
permanent, except in the direction of further improvement, and
any deviation from it as aberrant, scandalous, and avoidable. The
projects and politics of militarism and imperialism, of racial
and cultural rivalries, of monopolies, restrictions, and
exclusion, which were to play the serpent to this paradise, were
little more than the amusements of his daily newspaper, and
appeared to exercise almost no influence at all on the ordinary
course of social and economic life, the internationalisation of
which was nearly complete in practice.
It will assist us to appreciate the character and
consequences of the peace which we have imposed on our enemies,
if I elucidate a little further some of the chief unstable
elements, already present when war broke out, in the economic
life of Europe.
I. Population
In 1870, Germany had a population of about 40 million. By
1892 this figure had risen to 50 million, and by 30 June 1914 to
about 68 million. In the years immediately preceding the war the
annual increase was about 850,000, of whom an insignificant
proportion emigrated.(1*) This great increase was only rendered
possible by a far-reaching transformation of the economic
structure of the country. From being agricultural and mainly
self-supporting, Germany transformed herself into a vast and
complicated industrial machine dependent for its working on the
equipoise of many factors outside Germany as well as within. Only
by operating this machine, continuously and at full blast, could
she find occupation at home for her increasing population and the
means of purchasing their subsistence from abroad. The German
machine was like a top which to maintain its equilibrium must
progress ever faster and faster.
In the Austro-Hungarian empire, which grew from about 40
million in 1890 to at least 50 million at the outbreak of war,
the same tendency was present in a less degree, the annual excess
of births over deaths being about half a million, out of which,
however, there was an annual emigration of some quarter of a
million persons.
To understand the present situation, we must apprehend with
vividness what an extraordinary centre of population the
development of the Germanic system had enabled Central Europe to
become. Before the war the population of Germany and
Austria-Hungary together not only substantially exceeded that of
the United States, but was about equal to that of the whole of
North America. In these numbers, situated within a compact
territory, lay the military strength of the Central Powers. But
these same numbers -- for even the war has not appreciably
diminished them(2*) -- if deprived of the means of life, remain a
hardly less danger to European order.
European Russia increased her population in a degree even
greater than Germany -- from less than 100 million in 1890 to
about 150 million at the outbreak of war;(3*) and in the years
immediately preceding 1914 the excess of births over deaths in
Russia as a whole was at the prodigious rate of two million per
annum. This inordinate growth in the population of Russia, which
has not been widely noticed in England, has been nevertheless one
of the most significant facts of recent years.
The great events of history are often due to secular changes
in the growth of population and other fundamental economic
causes, which, escaping by their gradual character the notice of
contemporary observers, are attributed to the follies of
statesmen or the fanaticism of atheists. Thus the extraordinary
occurrences of the past two years in Russia, that vast upheaval
of society, which has overturned what seemed most stable --
religion, the basis of property, the ownership of land, as well
as forms of government and the hierarchy of classes -- may owe
more to the deep influences of expanding numbers than to Lenin or
to Nicholas; and the disruptive powers of excessive national
fecundity may have played a greater part in bursting the bonds of
convention than either the power of ideas or the errors of
autocracy.
II. Organization
The delicate organisation by which these peoples lived
depended partly on factors internal to the system.
The interference of frontiers and of tariffs was reduced to a
minimum, and not far short of three hundred millions of people
lived within the three empires of Russia, Germany, and
Austria-Hungary. The various currencies, which were all
maintained on a stable basis in relation to gold and to one
another, facilitated the easy flow of capital and of trade to an
extent the full value of which we only realise now, when we are
deprived of its advantages. Over this great area there was an
almost absolute security of property and of person.
These factors of order, security, and uniformity, which
Europe had never before enjoyed over so wide and populous a
territory or for so long a period, prepared the way for the
organisation of that vast mechanism of transport, coal
distribution, and foreign trade which made possible an industrial
order of life in the dense urban centres of new population. This
is too well known to require detailed substantiation with
figures. But it may be illustrated by the figures for coal, which
has been the key to the industrial growth of Central Europe
hardly less than of England; the output of German coal grew from
30 million tons in 1871 to 70 million tons in 1890, 110 million
tons in 1900, and 190 million tons in 1913.
Round Germany as a central support the rest of the European
economic system grouped itself, and on the prosperity and
enterprise of Germany the prosperity of the rest of the continent
mainly depended. The increasing pace of Germany gave her
neighbours an outlet for their products, in exchange for which
the enterprise of the German merchant supplied them with their
chief requirements at a low price.
The statistics of the economic interdependence of Germany and
her neighbours are overwhelming. Germany was the best customer of
Russia, Norway, Holland, Belgium, Switzerland, Italy, and
Austria-Hungary. she was the second-best customer of Great
Britain, Sweden, 'and Denmark; and the third-best customer of
France. She was the largest source of supply to Russia, Norway,
Sweden, Denmark, Holland, Switzerland, Italy, Austria-Hungary,
Roumania, and Bulgaria; and the second largest source of supply
to Great Britain, Belgium, and France.
In our own case we sent more exports to Germany than to any
other country in the world except India, and we bought more from
her than from any other country in the world except the United
States.
There was no European country except those west of Germany
which did not do more than a quarter of their total trade with
her; and in the case of Russia, Austria-Hungary, and Holland the
proportion was far greater.
Germany not only furnished these countries with trade but, in
the case of some of them, supplied a great part of the capital
needed for their own development. Of Germany's pre-war foreign
investments, amounting in all to about £1,250 million, not far
short of £500 million was invested in Russia, Austria-Hungary,
Bulgaria, Roumania, and Turkey. And by the system of 'peaceful
penetration' she gave these countries not only capital but, what
they needed hardly less, organisation. The whole of Europe east
of the Rhine thus fell into the German industrial orbit, and its
economic life was adjusted accordingly.
But these internal factors would not have been sufficient to
enable the population to support itself without the co-operation
of external factors also and of certain general dispositions
common to the whole of Europe. Many of the circumstances already
treated were true of Europe as a whole, and were not peculiar to
the central empires. But all of what follows was common to the
whole European system.
III The Psychology of Society
Europe was so organised socially and economically as to
secure the maximum accumulation of capital. While there was some
continuous improvement in the daily conditions of life of the
mass of the population, society was so framed as to throw a great
part of the increased income into the control of the class least
likely to consume it. The new rich of the nineteenth century were
not brought up to large expenditures, and preferred the power
which investment gave them to the pleasures of immediate
consumption. In fact, it was precisely the inequality of the
distribution of wealth which made possible those vast
accumulations of fixed wealth and of capital improvements which
distinguished that age from all others. Herein lay, in fact, the
main justification of the capitalist system. If the rich had
spent their new wealth on their own enjoyments, the world would
long ago have found such a régime intolerable. But like bees they
saved and accumulated, not less to the advantage of the whole
community because they themselves held narrower ends in prospect.
The immense accumulations of fixed capital which, to the
great benefit of mankind, were built up during the half century
before the war, could never have come about in a society where
wealth was divided equitably. The railways of the world, which
that age built as a monument to posterity, were, not less than
the pyramids of Egypt, the work of labour which was not free to
consume in immediate enjoyment the full equivalent of its
efforts.
Thus this remarkable system depended for its growth on a
double bluff or deception. On the one hand the labouring classes
accepted from ignorance or powerlessness, or were compelled,
persuaded, or cajoled by custom, convention, authority, and the
well-established order of society into accepting, a situation in
which they could call their own very little of the cake that they
and nature and the capitalists were co-operating to produce. And
on the other hand the capitalist classes were allowed to call the
best part of the cake theirs and were theoretically free to
consume it, on the tacit underlying condition that they consumed
very little of it in practice. The duty of 'saving' became
nine-tenths of virtue and the growth of the cake the object of
true religion. There grew round the non-consumption of the cake
all those instincts of puritanism which in other ages has
withdrawn itself from the world and has neglected the arts of
production as well as those of enjoyment. And so the cake
increased; but to what end was not clearly contemplated.
Individuals would be exhorted not so much to abstain as to defer,
and to cultivate the pleasures of security and anticipation.
Saving was for old age or for your children; but this was only in
theory -- the virtue of the cake was that it was never to be
consumed, neither by you nor by your children after you.
In writing thus I do not necessarily disparage the practices
of that generation. In the unconscious recesses of its being
society knew what it was about. The cake was really very small in
proportion to the appetites of consumption, and no one, if it
were shared all round, would be much the better off by the
cutting of it. Society was working not for the small pleasures of
today but for the future security and improvement of the race --
in fact for 'progress'. If only the cake were not cut but was
allowed to grow in the geometrical proportion predicted by
Malthus of population, but not less true of compound interest,
perhaps a day might come when there would at last be enough to go
round, and when posterity could enter into the enjoyment of our
labours. In that day overwork, overcrowding, and underfeeding
would come to an end, and men, secure of the comforts and
necessities of the body, could proceed to the nobler exercises of
their faculties. One geometrical ratio might cancel another, and
the nineteenth century was able to forget the fertility of the
species in a contemplation of the dizzy virtues of compound
interest.
There were two pitfalls in this prospect: lest, population
still outstripping accumulation, our self-denials promote not
happiness but numbers; and lest the cake be after all consumed,
prematurely, in war, the consumer of all such hopes.
But these thoughts lead too far from my present purpose. I
seek only to point out that the principle of accumulation based
in on equality was a vital part of the pre-war order of society
and of progress as we then understood it, and to emphasise that
this principle depended on unstable psychological conditions,
which it may be impossible to re-create. It was not natural for a
population, of whom so few enjoyed the comforts of life, to
accumulate so hugely. The war has disclosed the possibility of
consumption to all and the vanity of abstinence to many. Thus the
bluff is discovered; the labouring classes may be no longer
willing to forgo so largely, and the capitalist classes, no
longer confident of the future, may seek to enjoy more fully
their liberties of consumption so long as they last, and thus
precipitate the hour of their confiscation.
IV. The Relation of the Old World to the New
The accumulative habits of Europe before the war were the
necessary condition of the greatest of the external factors which
maintained the European equipoise.
Of the surplus capital goods accumulated by Europe a
substantial part was exported abroad, where its investment made
possible the development of the new resources of food, materials,
and transport, and at the same time enabled the Old World to
stake out a claim in the natural wealth and virgin potentialities
of the New. This last factor came to be of the vastest
importance. The Old World employed with an immense prudence the
annual tribute it was thus entitled to draw. The benefit of cheap
and abundant supplies, resulting from the new developments which
its surplus capital had made possible was, it is true, enjoyed
and not postponed. But the greater part of the money interest
accruing on these foreign investments was reinvested and allowed
to accumulate, as a reserve (it was then hoped) against the less
happy day when the industrial labour of Europe could no longer
purchase on such easy terms the produce of other continents, and
when the due balance would be threatened between its historical
civilisations and the multiplying races of other climates and
environments. Thus the whole of the European races tended to
benefit alike from the development of new resources whether they
pursued their culture at home or adventured it abroad.
Even before the war, however, the equilibrium thus
established between old civilisations and new resources was being
threatened. The prosperity of Europe was based on the facts that,
owing to the large exportable surplus of foodstuffs in America,
she was able to purchase food at a cheap rate measured in terms
of the labour required to produce her own exports, and that, as a
result of her previous investments of capital, she was entitled
to a substantial amount annually without any payment in return at
all. The second of these factors then seemed out of danger but,
as a result of the growth of population overseas, chiefly in the
United States, the first was not so secure.
When first the virgin soils of America came into bearing, the
proportions of the population of those continents themselves, and
consequently of their own local requirements, to those of Europe
were very small. As lately as 1890 Europe had a population three
times that of North and South America added together. But by 1914
the domestic requirements of the United states for wheat were
approaching their production, and the date was evidently near
when there would be an exportable surplus only in years of
exceptionally favourable harvest. Indeed, the present domestic
requirements of the United States are estimated at more than
ninety per cent of the average yield of the five years
1909-13.(4*) At that time, however, the tendency towards
stringency was showing itself, not so much in a lack of abundance
as in a steady increase of real cost. That is to say, taking the
world as a whole, there was no deficiency of wheat, but in order
to call forth an adequate supply it was necessary to offer a
higher real price. The most favourable factor in the situation
was to be found in the extent to which Central and Western Europe
was being fed from the exportable surplus of Russia and Roumania.
In short, Europe's claim on the resources of the New World
was becoming precarious; the law of diminishing returns was at
last reasserting itself, and was making it necessary year by year
for Europe to offer a greater quantity of other commodities to
obtain the same amount of bread; and Europe, therefore, could by
no means afford the disorganisation of any of her principal
sources of supply.
Much else might be said in an attempt to portray the economic
peculiarities of the Europe of 1914. I have selected for emphasis
the three or four greatest factors of instability -- the
instability of an excessive population dependent for its
livelihood on a complicated and artificial organisation, the
psychological instability of the labouring and capitalist
classes, and the instability of Europe's claim, coupled with the
completeness of her dependence, on the food supplies of the New
World.þÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿçÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ÿ ÿ ðÿ ÿ ðÿ ÿÿ
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themselves did not take very seriously, and for which the
eleventh-hour decision to allow no discussion with the Germans
removed the opportunity of remedy.
But, apart from tactics, the French had a policy. Although
Clemenceau might curtly abandon the claims of a Klotz or a
Loucheur, or close his eyes with an air of fatigue when French
interests were no longer involved in the discussion, he knew
which points were vital, and these he abated little. In so far as
the main economic lines of the treaty represent an intellectual
idea, it is the idea of France and of Clemenceau.
Clemenceau was by far the most eminent member of the Council
of Four, and he had taken the measure of his colleagues. He alone
both had an idea and had considered it in all its consequences.
His age, his character, his wit, and his appearance joined to
give him objectivity and a defined outline in an environment of
confusion. One could not despise Clemenceau or dislike him, but
only take a different view as to the nature of civilised man, or
indulge, at least, a different hope.
The figure and bearing of Clemenceau are universally
familiar. At the Council of Four he wore a square-tailed coat of
a very good, thick black broadcloth, and on his hands, which were
never uncovered, grey suede gloves; his boots were of thick black
leather, very good, but of a country style, and sometimes
fastened in front, curiously, by a buckle instead of laces. His
seat in the room in the President's house, where the regular
meetings of the Council of Four were held (as distinguished from
their private and unattended conferences in a smaller chamber
below), was on a square brocaded chair in the middle of the
semicircle facing the fire-place, with Signor Orlando on his
left, the President next by the fire-place, and the Prime
Minister opposite on the other side of the fire-place on his
right. He carried no papers and no portfolio, and was unattended
by any personal secretary, though several French ministers and
officials appropriate to the particular matter in hand would be
present round him. His walk, his hand, and his voice were not
lacking in vigour, but he bore nevertheless, especially after the
attempt upon him, the aspect of a very old man conserving his
strength for important occasions. He spoke seldom, leaving the
initial statement of the French case to his ministers or
officials; he closed his eyes often and sat back in his chair
with an impassive face of parchment, his grey-gloved hands
clasped in front of him. A short sentence, decisive or cynical,
was generally sufficient, a question, an unqualified abandonment
of his ministers, whose face would not be saved, or a display of
obstinacy reinforced by a few words in a piquantly delivered
English.(1*) But speech and passion were not lacking when they
were wanted, and the sudden outburst of words, often followed by
a fit of deep coughing from the chest, produced their impression
rather by force and surprise than by persuasion.
Not infrequently Mr Lloyd George, after delivering a speech
in English, would, during the period of its interpretation into
French, cross the hearth-rug to the President to reinforce his
case by some ad hominem argument in private conversation, or to
sound the ground for a compromise -- and this would sometimes be
the signal for a general upheaval and disorder. The President's
advisers would press round him, a moment later the British
experts would dribble across to learn the result or see that all
was well, and next the French would be there, a little suspicious
lest the others were arranging something behind them, until all
the room were on their feet and conversation was general in both
languages. My last and most vivid impression is of such a scene
-- the President and the Prime Minister as the centre of a
surging mob and a babel of sound, a welter of eager, impromptu
compromises and counter-compromises, all sound and fury
signifying nothing, on what was an unreal question anyhow, the
great issues of the morning's meeting forgotten and neglected;
and Clemenceau, silent and aloof on the outskirts -- for nothing
which touched the security of France was forward -- throned, in
his grey gloves, on the brocade chair, dry in soul and empty of
hope, very old and tired, but surveying the scene with a cynical
and almost impish air; and when at last silence was restored and
the company had returned to their places, it was to discover that
he had disappeared.
He felt about France what Pericles felt of Athens -- unique
value in her, nothing else mattering; but his theory of politics
was Bismarck's. He had one illusion -- France; and one
disillusion -- mankind, including Frenchmen, and his colleagues
not least. His principles for the peace can be expressed simply.
In the first place, he was a foremost believer in the view of
German psychology that the German understands and can understand
nothing but intimidation, that he is without generosity or
remorse in negotiation, that there is no advantage he will not
take of you, and no extent to which he will not demean himself
for profit, that he is without honour, pride, or mercy. Therefore
you must never negotiate with a German or conciliate him; you
must dictate to him. On no other terms will he respect you, or
will you prevent him from cheating you. But it is doubtful how
far he thought these characteristics peculiar to Germany, or
whether his candid view of some other nations was fundamentally
different. His philosophy had, therefore, no place for
'sentimentality' in international relations. Nations are real
things, of whom you love one and feel for the rest indifference
-- or hatred. The glory of the nation you love is a desirable end
-- but generally to be obtained at your neighbour's expense. The
politics of power are inevitable, and there is nothing very new
to learn about this war or the end it was fought for; England had
destroyed, as in each preceding century, a trade rival; a mighty
chapter had been closed in the secular struggle between the
glories of Germany and of France. Prudence required some measure
of lip service to the 'ideals' of foolish Americans and
hypocritical Englishmen; but it would be stupid to believe that
there is much room in the world, as it really is, for such
affairs as the League of Nations, or any sense in the principle
of self-determination except as an ingenious formula for
rearranging the balance of power in one's own interests.
These, however, are generalities. In tracing the practical
details of the peace which he thought necessary for the power and
the security of France, we must go back to the historical causes
which had operated during his lifetime. Before the Franco-German
war the populations of France and Germany were approximately
equal; but the coal and iron and shipping of Germany were in
their infancy, and the wealth of France was greatly superior.
Even after the loss of Alsace-Lorraine there was no great
discrepancy between the real resources of the two countries. But
in the intervening period the relative position had changed
completely. By 1914 the population of Germany was nearly seventy
per cent in excess of that of France; she had become one of the
first manufacturing and trading nations of the world; her
technical skill and her means for the production of future wealth
were unequalled. France on the other hand had a stationary or
declining population, and, relatively to others, had fallen
seriously behind in wealth and in the power to produce it.
In spite, therefore, of France's victorious issue from the
present struggle (with the aid, this time, of England and
America), her future position remained precarious in the eyes of
one who took the view that European civil war is to be regarded
as a normal, or at least a recurrent, state of affairs for the
future, and that the sort of conflicts between organised Great
Powers which have occupied the past hundred years will also
engage the next. According to this vision of the future, European
history is to be a perpetual prize-fight, of which France has won
this round, but of which this round is certainly not the last.
From the belief that essentially the old order does not change,
being based on human nature which is always the same, and from a
consequent scepticism of all that class of doctrine which the
League of Nations stands for, the policy of France and of
Clemenceau followed logically. For a peace of magnanimity or of
fair and equal treatment, based on such 'ideology' as the
Fourteen Points of the President, could only have the effect of
shortening the interval of Germany's recovery and hastening the
day when she will once again hurl at France her greater numbers
and her superior resources and technical skill. Hence the
necessity of 'guarantees'; and each guarantee that was taken, by
increasing irritation and thus the probability of a subsequent
revanche by Germany, made necessary yet further provisions to
crush. Thus, as soon as this view of the world is adopted and the
other discarded, a demand for a Carthaginian peace is inevitable,
to the full extent of the momentary power to impose it. For
Clemenceau made no pretence of considering himself bound by the
Fourteen Points and left chiefly to others such concoctions as
were necessary from time to time to save the scruples or the face
of the President.
So far as possible, therefore, it was the policy of France to
set the clock back and to undo what, since 1870, the progress of
Germany had accomplished. By loss of territory and other measures
her population was to be curtailed; but chiefly the economic
system, upon which she depended for her new strength, the vast
fabric built upon iron, coal, and transport, must be destroyed.
If France could seize, even in part, what Germany was compelled
to drop, the inequality of strength between the two rivals for
European hegemony might be remedied for many generations.
Hence sprang those cumulative provisions for the destruction
of highly organised economic life which we shall examine in the
next chapter.
This is the policy of an old man, whose most vivid
impressions and most lively imagination are of the past and not
of the future. He sees the issue in terms of France and Germany,
not of humanity and of European civilisation struggling forwards
to a new order. The war has bitten into his consciousness
somewhat differently from ours, and he neither expects nor hopes
that we are at the threshold of a new age.
It happens, however, that it is not only an ideal question
that is at issue. My purpose in this book is to show that the
Carthaginian peace is not practically right or possible. Although
the school of thought from which it springs is aware of the
economic factor, it overlooks, nevertheless, the deeper economic
tendencies which are to govern the future. The clock cannot be
set back. You cannot restore Central Europe to 1870 without
setting up such strains in the European structure and letting
loose such human and spiritual forces as, pushing beyond
frontiers and races, will overwhelm not only you and your
'guarantees', but your institutions, and the existing order of
your society.
By what legerdemain was this policy substituted for the
Fourteen Points, and how did the President come to accept it? The
answer to these questions is difficult and depends on elements of
character and psychology and on the subtle influence of
surroundings, which are hard to detect and harder still to
describe. But, if ever the action of a single individual matters,
the collapse of the President has been one of the decisive moral
events of history; and I must make an attempt to explain it. What
a place the President held in the hearts and hopes of the world
when he sailed to us in the George Washington! What a great man
came to Europe in those early days of our victory!
In November 1918 the armies of Foch and the words of Wilson
had brought us sudden escape from what was swallowing up all we
cared for. The conditions seemed favourable beyond any
expectation. The victory was so complete that fear need play no
part in the settlement. The enemy had laid down his arms in
reliance on a solemn compact as to the general character of the
peace, the terms of which seemed to assure a settlement of
justice and magnanimity and a fair hope for a restoration of the
broken current of life. To make assurance certain the President
was coming himself to set the seal on his work.
When President Wilson left Washington he enjoyed a prestige
and a moral influence throughout the world unequalled in history.
His bold and measured words carried to the peoples of Europe
above and beyond the voices of their own politicians. The enemy
peoples trusted him to carry out the compact he had made with
them; and the Allied peoples acknowledged him not as a victor
only but almost as a prophet. In addition to this moral influence
the realities of power were in his hands. The American armies
were at the height of their numbers, discipline, and equipment.
Europe was in complete dependence on the food supplies of the
United States; and financially she was even more absolutely at
their mercy. Europe not only already owed the United States more
than she could pay; but only a large measure of further
assistance could save her from starvation and bankruptcy. Never
had a philosopher held such weapons wherewith to bind the princes
of this world. How the crowds of the European capitals pressed
about the carriage of the President! With what curiosity,
anxiety, and hope we sought a glimpse of the features and bearing
of the man of destiny who, coming from the West, was to bring
healing to the wounds of the ancient parent of his civilisation
and lay for us the foundations of the future.
The disillusion was so complete, that some of those who had
trusted most hardly dared speak of it. Could it be true? they
asked of those who returned from Paris. Was the treaty really as
bad as it seemed? What had happened to the President? What
weakness or what misfortune had led to so extraordinary, so
unlooked-for a betrayal?
Yet the causes were very ordinary and human. The President
was not a hero or a prophet; he was not even a philosopher; but a
generously intentioned man, with many of the weaknesses of other
human beings, and lacking that dominating intellectual equipment
which would have been necessary to cope with the subtle and
dangerous spellbinders whom a tremendous clash of forces and
personalities had brought to the top as triumphant masters in the
swift game of give and take, face to face in council -- a game of
which he had no experience at all.
We had indeed quite a wrong idea of the President. We knew
him to be solitary and aloof, and believed him very strong-willed
and obstinate. We did not figure him as a man of detail, but the
clearness with which he had taken hold of certain main ideas
would, we thought, in combination with his tenacity, enable him
to sweep through cobwebs. Besides these qualities he would have
the objectivity, the cultivation, and the wide knowledge of the
student. The great distinction of language which had marked his
famous Notes seemed to indicate a man of lofty and powerful
imagination. His portraits indicated a fine presence and a
commanding delivery. With all this he had attained and held with
increasing authority the first position in a country where the
arts of the politician are not neglected. All of which, without
expecting the impossible, seemed a fine combination of qualities
for the matter in hand.
The first impression of Mr Wilson at close quarters was to
impair some but not all of these illusions. His head and features
were finely cut and exactly like his photographs, and the muscles
of his neck and the carriage of his head were distinguished. But,
like Odysseus, the President looked wiser when he was seated; and
his hands, though capable and fairly strong, were wanting in
sensitiveness and finesse. The first glance at the President
suggested not only that, whatever else he might be, his
temperament was not primarily that of the student or the scholar,
but that he had not much even of that culture of the world which
marks M. Clemenceau and Mr Balfour as exquisitely cultivated
gentlemen of their class and generation. But more serious than
this, he was not only insensitive to his surroundings in the
external sense, he was not sensitive to his environment at all.
What chance could such a man have against Mr Lloyd George's
unerring, almost medium-like, sensibility to everyone immediately
round him? To see the British Prime Minister watching the
company, with six or seven senses not available to ordinary men,
judging character, motive, and subconscious impulse, perceiving
what each was thinking and even what each was going to say next,
and compounding with telepathic instinct the argument or appeal
best suited to the vanity, weakness, or self-interest of his
immediate auditor, was to realise that the poor President would
be playing blind man's buff in that party. Never could a man have
stepped into the parlour a more perfect and predestined victim to
the finished accomplishments of the Prime the Minister. The Old
World was tough in wickedness anyhow; the Old World's heart of
stone might blunt the sharpest blade of the bravest
knight-errant. But this blind and deaf Don Quixote was entering a
cavern where the swift and glittering blade was in the hands of
the adversary.
But if the President was not the philosopher-king, what was
he? After all he was a man who had spent much of his life at a
university. He was by no means a business man or an ordinary
party politician, but a man of force, personality, and
importance. What, then, was his temperament?
The clue once found was illuminating. The President was like
a nonconformist minister, perhaps a Presbyterian. His thought and
his temperament were essentially theological not intellectual,
with all the strength and the weakness of that manner of thought,
feeling, and expression. It is a type of which there are not now
in England and Scotland such magnificent specimens as formerly;
but this description, nevertheless, will give the ordinary
Englishman the distinctest impression of the President.
With this picture of him in mind, we can return to the actual
course of events. The President's programme for the world, as set
forth in his speeches and his Notes, had displayed a spirit and a
purpose so admirable that the last desire of his sympathisers was
to criticise details-the details, they felt, were quite rightly
not filled in at present, but would be in due course. It was
commonly believed at the commencement of the Paris conference
that the President had thought out, with the aid of a large body
of advisers, a comprehensive scheme not only for the League of
Nations, but for the embodiment of the Fourteen Points in an
actual treaty of peace. But in fact the President had thought out
nothing; when it came to practice his ideas were nebulous and
incomplete. He had no plan, no scheme, no constructive ideas
whatever for clothing with the flesh of life the commandments
which he had thundered from the White House. He could have
preached a sermon on any of them or have addressed a stately
prayer to the Almighty for their fulfilment; but he could not
frame their concrete application to the actual state of Europe.
He not only had no proposals in detail, but he was in many
respects, perhaps inevitably, ill-informed as to European
conditions. And not only was he ill-informed -- that was true of
Mr Lloyd George also -- but his mind was slow and unadaptable.
The President's slowness amongst the Europeans was noteworthy. He
could not, all in a minute, take in what the rest were saying,
size up the situation with a glance, frame a reply, and meet the
case by a slight change of ground; and he was liable, therefore,
to defeat by the mere swiftness, apprehension, and agility of a
Lloyd George. There can seldom have been a statesman of the first
rank more incompetent than the President in the agilities of the
council chamber. A moment often arrives when substantial victory
is yours if by some slight appearance of a concession you can
save the face of the opposition or conciliate them by a
restatement of your proposal helpful to them and not injurious to
anything essential to yourself. The President was not equipped
with this simple and usual artfulness. His mind was too slow and
unresourceful to be ready with any alternatives. The President
was capable of digging his toes in and refusing to budge, as he
did over Fiume. But he had no other mode of defence, and it
needed as a rule but little manoeuvring by his opponents to
prevent matters from coming to such a head until it was too late.
By pleasantness and an appearance of conciliation, the President
would be manoeuvred off his ground, would miss the moment for
digging his toes in and, before he knew where he had been got to,
it was too late. Besides, it is impossible month after month, in
intimate and ostensibly friendly converse between close
associates, to be digging the toes in all the time. Victory would
only have been possible to one who had always a sufficiently
lively apprehension of the position as a whole to reserve his
fire and know for certain the rare exact moments for decisive
action. And for that the President was far too slow-minded and
bewildered.
He did not remedy these defects by seeking aid from the
collective wisdom of his lieutenants. He had gathered round him
for the economic chapters of the treaty a very able group of
businessmen; but they were inexperienced in public affairs, and
knew (with one or two exceptions) as little of Europe as he did,
and they were only called in irregularly as he might need them
for a particular purpose. Thus the aloofness which had been found
effective in Washington was maintained, and the abnormal reserve
of his nature did not allow near him anyone who aspired to moral
equality or the continuous exercise of influence. His
fellow-plenipotentiaries were dummies; and even the trusted
Colonel House, with vastly more knowledge of men and of Europe
than the President, from whose sensitiveness the President's
dullness had gained so much, fell into the background as time
went on. All this was encouraged by his colleagues on the Council
of Four, who, by the break-up of the Council of Ten, completed
the isolation which the President's own temperament had
initiated. Thus day after day and week after week he allowed
himself to be closeted, unsupported, unadvised, and alone, with
men much sharper than himself, in situations of supreme
difficulty, where he needed for success every description of
resource, fertility, and knowledge. He allowed himself to be
drugged by their atmosphere, to discuss on the basis of their
plans and of their data, and to be led along their paths.
These and other various causes combined to produce the
following situation. The reader must remember that the processes
which are here compressed into a few pages took place slowly,
gradually, insidiously, over a period of about five months.
As the President had thought nothing out, the Council was
generally working on the basis of a French or British draft. He
had to take up, therefore, a persistent attitude of obstruction,
criticism, and negation, if the draft was to become at all in
line with his own ideas and purpose. If he was met on some points
with apparent generosity (for there was always a safe margin of
quite preposterous suggestions which no one took seriously), it
was difficult for him not to yield on others. Compromise was
inevitable, and never to compromise on the essential, very
difficult. Besides, he was soon made to appear to be taking the
German part, and laid himself open to the suggestion (to which he
was foolishly and unfortunately sensitive) of being 'pro-German'.
After a display of much principle and dignity in the early
days of the Council of Ten, he discovered that there were certain
very important points in the programme of his French, British or
Italian colleague, as the case might be, of which he was
incapable of securing the surrender by the methods of secret
diplomacy. What then was he to do in the last resort? He could
let the conference drag on an endless length by the exercise of
sheer obstinacy. He could break it up and return to America in a
rage with nothing settled. Or he could attempt an appeal to the
world over the heads of the conference. These were wretched
alternatives, against each of which a great deal could be said.
They were also very risky, especially for a politician. The
President's mistaken policy over the congressional election had
weakened his personal position in his own country, and it was by
no means certain that the American public would support him in a
position of intransigency. It would mean a campaign in which the
issues would be clouded by every sort of personal and party
consideration, and who could say if right would triumph in a
struggle which would certainly not be decided on its merits.
Besides, any open rupture with his colleagues would certainly
bring upon his head the blind passions of 'anti-German'
resentment with which the public of all Allied countries were
still inspired. They would not listen to his arguments. They
would not be cool enough to treat the issue as one of
international morality or of the right governance of Europe. The
cry would simply be that for various sinister and selfish reasons
the President wished 'to let the Hun off'. The almost unanimous
voice of the French and British Press could be anticipated. Thus,
if he threw down the gage publicly he might be defeated. And if
he were defeated, would not the final peace be far worse than if
he were to retain his prestige and endeavour to make it as good
as the limiting conditions of European politics would allow him?
But above all, if he were defeated, would he not lose the League
of Nations? And was not this, after all, by far the most
important issue for the future happiness of the world? The treaty
would be altered and softened by time. Much in it which now
seemed so vital would become trifling, and much which was
impracticable would for that very reason never happen. But the
League, even in an imperfect form, was permanent; it was the
first commencement of a new principle in the government of the
world; truth and justice in international relations could not be
established in a few months -- they must be born in due course by
the slow gestation of the League. Clemenceau had been clever
enough to let it be seen that he would swallow the League at a
price.
At the crisis of his fortunes the President was a lonely man.
Caught up in the toils of the Old World, he stood in great need
of sympathy, of moral support, of the enthusiasm of masses. But
buried in the conference, stifled in the hot and poisoned
atmosphere of Paris, no echo reached him from the outer world,
and no throb of passion, sympathy, or encouragement from his
silent constituents in all countries. He felt that the blaze of
popularity which had greeted his arrival in Europe was already
dimmed; the Paris Press jeered at him openly; his political
opponents at home were taking advantage of his absence to create
an atmosphere against him; England was cold, critical, and
unresponsive. He had so formed his entourage that he did not
receive through private channels the current of faith and
enthusiasm of which the public sources seemed dammed up. He
needed, but lacked, the added strength of collective faith. The
German terror still overhung us, and even the sympathetic public
was very cautious; the enemy must not be encouraged, our friends
must be supported, this was not the time for discord or
agitations, the President must be trusted to do his best. And in
this drought the flower of the President's faith withered and
dried up.
Thus it came to pass that the President countermanded the
George Washington, which, in a moment of well-founded rage, he
had ordered to be in readiness to carry him from the treacherous
halls of Paris back to the seat of his authority, where he could
have felt himself again. But as soon, alas, as he had taken the
road of compromise, the defects, already indicated, of his
temperament and of his equipment, were fatally apparent. He could
take the high line; he could practise obstinacy; he could write
Notes from Sinai or Olympus; he could remain unapproachable in
the White House or even in the Council of Ten and be safe. But if
he once stepped down to the intimate equality of the Four, the
game was evidently up.
Now it was that what I have called his theological or
Presbyterian temperament became dangerous. Having decided that
some concessions were unavoidable, he might have sought by
firmness and address and the use of the financial power of the
United States to secure as much as he could of the substance,
even at some sacrifice of the letter. But the President was not
capable of so clear an understanding with himself as this
implied. He was too conscientious. Although compromises were now
necessary, he remained a man of principle and the Fourteen Points
a contract absolutely binding upon him. He would do nothing that
was not honourable; he would do nothing that was not just and
right; he would do nothing that was contrary to his great
profession of faith. Thus, without any abatement of the verbal
inspiration of the Fourteen Points, they became a document for
gloss and interpretation and for all the intellectual apparatus
of self-deception by which, I daresay, the President's
forefathers had persuaded themselves that the course they thought
it necessary to take was consistent with every syllable of the
Pentateuch.
The President's attitude to his colleagues had now become: I
want to meet you so far as I can; I see your difficulties and I
should like to be able to agree to what you propose; but I can do
nothing that is not just and right, and you must first of all
show me that what you want does really fall within the words of
the pronouncements which are binding on me. Then began the
weaving of that web of sophistry and Jesuitical exegesis that was
finally to clothe with insincerity the language and substance of
the whole treaty. The word was issued to the witches of all
Paris:
Fair is foul, and foul is fair,
Hover through the fog and filthy air.
The subtlest sophisters and most hypocritical draftsmen were
set to work, and produced many ingenious exercises which might
have deceived for more than an hour a cleverer man than the
President.
Thus instead of saying that German Austria is prohibited from
uniting with Germany except by leave of France (which would be
inconsistent with the principle of self-determination), the
treaty, with delicate draftsmanship, states that 'Germany
acknowledges and will respect strictly the independence of
Austria, within the frontiers which may be fixed in a treaty
between that state and the principal Allied and Associated
Powers; she agrees that this independence shall be inalienable,
except with the consent of the council of the League of Nations',
which sounds, but is not, quite different. And who knows but that
the President forgot that another part of the treaty provides
that for this purpose the council of the League must be
unanimous.
Instead of giving Danzig to Poland, the treaty establishes
Danzig as a 'free' city, but includes this 'free' city within the
Polish customs frontier, entrusts to Poland the control of the
river and railway system, and provides that 'the Polish
government shall undertake the conduct of the foreign relations
of the free city of Danzig as well as the diplomatic protection
of citizens of that city when abroad.'
In placing the river system of Germany under foreign control,
the treaty speaks of declaring international those 'river systems
which naturally provide more than one state with access to the
sea, with or without transhipment from one vessel to another'.
Such instances could be multiplied. The honest and
intelligible purpose of French policy, to limit the population of
Germany and weaken her economic system, is clothed, for the
President's sake, in the august language of freedom and
international equality.
But perhaps the most decisive moment in the disintegration of
the President's moral position and the clouding of his mind was
when at last, to the dismay of his advisers, he allowed himself
to be persuaded that the expenditure of the Allied governments on
pensions and separation allowances could be fairly regarded as
'damage done to the civilian population of the Allied and
Associated Powers by German aggression by land, by sea, and from
the air', in a sense in which the other expenses of the war could
not be so regarded. It was a long theological struggle in which,
after the rejection of many different arguments, the President
finally capitulated before a masterpiece of the sophist's art.
At last the work was finished; and the President's conscience
was still intact. In spite of everything, I believe that his
temperament allowed him to leave Paris a really sincere man; and
it is probable that to this day he is genuinely convinced that
the treaty contains practically nothing inconsistent with his
former professions.
But the work was too complete, and to this was due the last
tragic episode of the drama. The reply of Brockdorff-Rantzau
inevitably took the line that Germany had laid down her arms on
the basis of certain assurances, and that the treaty in many
particulars was not consistent with these assurances. But this
was exactly what the President could not admit; in the sweat of
solitary contemplation and with prayers to God he had done
nothing that was not just and right; for the President to admit
that the German reply had force in it was to destroy his
self-respect and to disrupt the inner equipoise of his soul; and
every instinct of his stubborn nature rose in self-protection. In
the language of medical psychology, to suggest to the President
that the treaty was an abandonment of his professions was to
touch on the raw a Freudian complex. It was a subject intolerable
to discuss, and every subconscious instinct plotted to defeat its
further exploration.
Thus it was that Clemenceau brought to success what had
seemed to be, a few months before, the extraordinary and
impossible proposal that the Germans should not be heard. If only
the President had not been so conscientious, if only he had not
concealed from himself what he had been doing, even at the last
moment he was in a position to have recovered lost ground and to
have achieved some very considerable successes. But the President
was set. His arms and legs had been spliced by the surgeons to a
certain posture, and they must be broken again before they could
be altered. To his horror, Mr Lloyd George, desiring at the last
moment all the moderation he dared, discovered that he could not
in five days persuade the President of error in what it had taken
five months to prove to him to be just and right. After all, it
was harder to de-bamboozle this old Presbyterian than it had been
to bamboozle him; for the former involved his belief in and
respect for himself.
Thus in the last act the President stood for stubbornness and
a refusal of conciliations.
NOTES:
1. He alone amongst the Four could speak and understand both
languages, Orlando knowing only French and the Prime Minister and
President only English; and it is of historical importance that
Orlando and the President had no direct means of communication.
Chapter 4
The Treaty
The thoughts which I have expressed in the second chapter
were not present to the mind of Paris. The future life of Europe
was not their concern; its means of livelihood was not their
anxiety. Their preoccupations, good and bad alike, related to
frontiers and nationalities, to the balance of power, to imperial
aggrandisements, to the future enfeeblement of a strong and
dangerous enemy, to revenge, and to the shifting by the victors
of their unbearable financial burdens on to the shoulders of the
defeated.
Two rival schemes for the future polity of the world took the
field -- the Fourteen Points of the President, and the
Carthaginian peace of M. Clemenceau. Yet only one of these was
entitled to take the field; for the enemy had not surrendered
unconditionally, but on agreed terms as to the general character
of the peace.
This aspect of what happened cannot, unfortunately, be passed
over with a word, for in the minds of many Englishmen at least it
has been a subject of very great misapprehension. Many persons
believe that the armistice terms constituted the first contract
concluded between the Allied and Associated Powers and the German
government, and that we entered the conference with our hands
free, except so far as these armistice terms might bind us. This
was not the case. To make the position plain, it is necessary
briefly to review the history of the negotiations which began
with the German Note of 5 October 1918, and concluded with
President Wilson's Note of 5 November 1918.
On 5 October 1918 the German government addressed a brief
Note to the President accepting the Fourteen Points and asking
for peace negotiations. The President's reply of 8 October asked
if he was to understand definitely that the German government
accepted 'the terms laid down' in the Fourteen Points and in his
subsequent addresses and 'that its object in entering into
discussion would be only to agree upon the practical details of
their application.' He added that the evacuation of invaded
territory must be a prior condition of an armistice. On 12
October the German government returned an unconditional
affirmative to these questions; 'its object in entering into
discussions would be only to agree upon practical details of the
application of these terms'. On 14 October, having received this
affirmative answer, the President made a further communication to
make clear the points: (1) that the details of the armistice
would have to be left to the military advisers of the United
States and the Allies, and must provide absolutely against the
possibility of Germany's resuming hostilities; (2) that submarine
warfare must cease if these conversations were to continue; and
(3) that he required further guarantees of the representative
character of the government with which he was dealing. On 20
October Germany accepted points (1) and (2), and pointed out, as
regards (3), that she now had a constitution and a government
dependent for its authority on the Reichstag. On 23 October the
President announced that, 'having received the solemn and
explicit assurance of the German government that it unreservedly
accepts the terms of peace laid down in his address to the
Congress of the United States on 8 January 1918 (the Fourteen
Points), and the principles of settlement enunciated in his
subsequent addresses, particularly the address of 27 September,
and that it is ready to discuss the details of their
application', he has communicated the above correspondence to the
governments of the Allied Powers 'with the suggestion that, if
these governments are disposed to effect peace upon the terms and
principles indicated,' they will ask their military advisers to
draw up armistice terms of such a character as to 'ensure to the
associated governments the unrestricted power to safeguard and
enforce the details of the peace to which the German government
has agreed'. At the end of this Note the President hinted more
openly than in that of 14 October at the abdication of the
Kaiser. This completes the preliminary negotiations to which the
President alone was a party, acting without the governments of
the Allied Powers.
On 5 November 1918 the President transmitted to Germany the
reply he had received from the governments associated with him,
and added that Marshal Foch had been authorised to communicate
the terms of an armistice to properly accredited representatives.
In this reply the allied governments, 'subject to the
qualifications which follow, declare their willingness to make
peace with the government of Germany on the terms of peace laid
down in the President's address to Congress of 8 January 1918,
and the principles of settlement enunciated in his subsequent
addresses'. The qualifications in question were two in number.
The first related to the freedom of the seas, as to which they
'reserved to themselves complete freedom'. The second related to
reparation and ran as follows: 'Further, in the conditions of
peace laid down in his address to Congress on 8 January 1918, the
President declared that invaded territories must be restored as
well as evacuated and made free. The allied governments feel that
no doubt ought to be allowed to exist as to what this provision
implies. By it they understand that compensation will be made by
Germany for all damage done to the civilian population of the
Allies and to their property by the aggression of Germany by
land, by sea, and from the air.'(1*)
The nature of the contract between Germany and the Allies
resulting from this exchange of documents is plain and
unequivocal. The terms of the peace are to be in accordance with
the addresses of the President, and the purpose of the peace
conference is 'to discuss the details of their application.' The
circumstances of the contract were of an unusually solemn and
binding character; for one of the conditions of it was that
Germany should agree to armistice terms which were to be such as
would leave her helpless. Germany having rendered herself
helpless in reliance on the contract, the honour of the Allies
was peculiarly involved in fulfilling their part and, if there
were ambiguities, in not using their position to take advantage
of them.
What, then, was the substance of this contract to which the
Allies had bound themselves? An examination of the documents
shows that, although a large part of the addresses is concerned
with spirit, purpose, and intention, and not with concrete
solutions, and that many questions requiring a settlement in the
peace treaty are not touched on, nevertheless there are certain
questions which they settle definitely. It is true that within
somewhat wide limits the Allies still had a free hand. Further,
it is difficult to apply on a contractual basis those passages
which deal with spirit, purpose, and intention; every man must
judge for himself whether, in view of them, deception or
hypocrisy has been practised. But there remain, as will be seen
below, certain important issues on which the contract is
unequivocal.
In addition to the Fourteen Points of 8 January 1918, the
addresses of the President which form part of the material of the
contract are four in number -- before the Congress of 11
February; at Baltimore on 6 April; at Mount Vernon on 4 July; and
at New York on 27 September, the last of these being specially
referred to in the contract. I venture to select from these
addresses those engagements of substance, avoiding repetitions,
which are most relevant to the German treaty. The parts I omit
add to, rather than detract from, those I quote; but they chiefly
relate to intention, and are perhaps too vague and general to be
interpreted contractually.(2*)
The Fourteen Points -- (3) 'The removal. so far as possible,
of all economic barriers and the establishment of an equality of
trade conditions among all the nations consenting to the peace
and associating themselves for its maintenance.' (4) 'Adequate
guarantees given and taken that national armaments will be
reduced to the lowest point consistent with domestic safety.' (5)
'A free, open-minded, and absolutely impartial adjustment of all
colonial claims', regard being had to the interests of the
populations concerned. (6), (7), (8), and (11) The evacuation and
'restoration' of all invaded territory, especially of Belgium. To
this must be added the rider of the Allies, claiming compensation
for all damage done to civilians and their property by land, by
sea, and from the air (quoted in full above). (8) The righting of
'the wrong done to France by Prussia in 1871 in the matter of
Alsace-Lorraine'. (13) An independent Poland, including 'the
territories inhabited by indisputably Polish populations' and
'assured a free and secure access to the sea'. (14) The League of
Nations.
Before the Congress, 11 February -- 'There shall be no
annexations, no contributions, no punitive damages...
Self-determination is not a mere phrase. It is an imperative
principle of action which statesmen will henceforth ignore at
their peril... Every territorial settlement involved in this war
must be made in the interest and for the benefit of the
populations concerned, and not as a part of any mere adjustment
or compromise of claims amongst rival States.'
New York, 27 September -- (1) 'The impartial justice meted
out must involve no discrimination between those to whom we wish
to be just and those to whom we do not wish to be just.' (2) 'No
special or separate interest of any single nation or any group of
nations can be made the basis of any part of the settlement which
is not consistent with the common interest of all.' (3) 'There
can be no leagues or alliances or special covenants and
understandings within the general and common family of the League
of Nations.' (4) 'There can be no special selfish economic
combinations within the League and no employment of any form of
economic boycott or exclusion, except as the power of economic
penalty by exclusion from the markets of the world may be vested
in the League of Nations itself as a means of discipline and
control.' (5) 'All international agreements and treaties of every
kind must be made known in their entirety to the rest of the
world.'
This wise and magnanimous programme for the world had passed,
on 5 November 1918, beyond the region of idealism and aspiration,
and had become part of a solemn contract to which all the Great
Powers of the world had put their signature. But it was lost,
nevertheless, in the morass of Paris -- the spirit of it
altogether, the letter in parts ignored and in other parts
distorted.
The German observations on the draft treaty of peace were
largely a comparison between the terms of this understanding, on
the basis of which the German nation had agreed to lay down its
arms, and the actual provisions of the document offered them for
signature thereafter. The German commentators had little
difficulty in showing that the draft treaty constituted a breach
of engagements and of international morality comparable with
their own offence in the invasion of Belgium. Nevertheless, the
German reply was not in all its parts a document fully worthy of
the occasion, because in spite of the justice and importance of
much of its contents, a truly broad treatment and high dignity of
outlook were a little wanting, and the general effect lacks the
simple treatment, with the dispassionate objectivity of despair,
which the deep passions of the occasion might have evoked. The
Allied governments gave it, in any case, no serious
consideration, and I doubt if anything which the German
delegation could have said at that stage of the proceedings would
have much influenced the result.
The commonest virtues of the individual are often lacking in
the spokesmen of nations; a statesman representing not himself
but his country may prove, without incurring excessive blame --
as history often records -- vindictive, perfidious, and
egotistic. These qualities are familiar in treaties imposed by
victors. But the German delegation did not succeed in exposing in
burning and prophetic words the quality which chiefly
distinguishes this transaction from all its historical
predecessors -- its insincerity.
This theme, however, must be for another pen than mine. I am
mainly concerned in what follows not with the justice of the
treaty -- neither with the demand for penal justice against the
enemy, nor with the obligation of contractual justice on the
victor -- but with its wisdom and with its consequences.
I propose, therefore, in this chapter to set forth baldly the
principal economic provisions of the treaty, reserving, however,
for the next my comments on the reparation chapter and on
Germany's capacity to meet the payments there demanded from her.
The German economic system as it existed before the war
depended on three main factors: I. Overseas commerce as
represented by her mercantile marine, her colonies, her foreign
investments, her exports, and the overseas connections of her
merchants. II. The exploitation of her coal and iron and the
industries built upon them. III. Her transport and tariff system.
Of these the first, while not the least important, was certainly
the most vulnerable. The treaty aims at the systematic
destruction of all three, but principally of the first two.
I
(1) Germany has ceded to the Allies all the vessels of her
mercantile marine exceeding 1,600 tons gross, half the vessels
between 1,000 tons and 1,600 tons, and one-quarter of her
trawlers and other fishing boats.(3*) The cession is
comprehensive, including not only vessels flying the German flag,
but also all vessels owned by Germans but flying other flags, and
all vessels under construction as well as those afloat.(4*)
Further, Germany undertakes, if required, to build for the Allies
such types of ships as they may specify up to 200,000 tons(5*)
annually for five years, the value of these ships being credited
to Germany against what is due from her for reparation.(6*)
Thus the German mercantile marine is swept from the seas and
cannot be restored for many years to come on a scale adequate to
meet the requirements of her own commerce. For the present, no
lines will run from Hamburg, except such as foreign nations may
find it worth while to establish out of their surplus tonnage.
Germany will have to pay to foreigners for the carriage of her
trade such charges as they may be able to exact, and will receive
only such conveniences as it may suit them to give her. The
prosperity of German ports and commerce can only revive, it would
seem, in proportion as she succeeds in bringing under her
effective influence the merchant marines of Scandinavia and of
Holland.
(2) Germany has ceded to the Allies 'all her rights and
titles over her overseas possessions.'(7*)
This cession not only applies to sovereignty but extends on
unfavourable terms to government property, all of which,
including railways, must be surrendered without payment, while,
on the other hand, the German government remains liable for any
debt which may have been incurred for the purchase or
construction of this property, or for the development of the
colonies generally.(8*)
In distinction from the practice ruling in the case of most
similar cessions in recent history, the property and persons of
private German nationals, as distinct from their government, are
also injuriously affected. The Allied government exercising
authority in any former German colony 'may make such provisions
as it thinks fit with reference to the repatriation from them of
German nationals and to the conditions upon which German subjects
of European origin shall, or shall not, be allowed to reside,
hold property, trade or exercise a profession in them'.(9*) All
contracts and agreements in favour of German nationals for the
construction or exploitation of public works lapse to the Allied
governments as part of the payment due for reparation.
But these terms are unimportant compared with the more
comprehensive provision by which 'the Allied and Associated
Powers reserve the right to retain and liquidate all property,
rights, and interests belonging at the date of the coming into
force of the present treaty to German nationals, or companies
controlled by them', within the former German colonies.(10*) This
wholesale expropriation of private property is to take place
without the Allies affording any compensation to the individuals
expropriated, and the proceeds will be employed, first, to meet
private debts due to Allied nationals from any German nationals,
and second, to meet claims due from Austrian, Hungarian,
Bulgarian, or Turkish nationals. Any balance may either be
returned by the liquidating Power direct to Germany, or retained
by them. If retained, the proceeds must be transferred to the
reparation commission for Germany's credit in the reparation
account.(11*)
In short, not only are German sovereignty and German
influence extirpated from the whole of her former overseas
possessions, but the persons and property of her nationals
resident or owning property in those parts are deprived of legal
status and legal security.
(3) The provisions just outlined in regard to the private
property of Germans in the ex-German colonies apply equally to
private German property in Alsace-Lorraine, except in so far as
the French government may choose to grant exceptions.(12*) This
is of much greater practical importance than the similar
expropriation overseas because of the far higher value of the
property involved and the closer interconnection, resulting from
the great development of the mineral wealth of these provinces
since 1871, of German economic interests there with those in
Germany itself. Alsace-Lorraine has been part of the German
empire for nearly fifty years -- a considerable majority of its
population is German-speaking -- and it has been the scene of
some of Germany's most important economic enterprises.
Nevertheless, the property of those Germans who reside there, or
who have invested in its industries, is now entirely at the
disposal of the French government without compensation, except in
so far as the German government itself may choose to afford it.
The French government is entitled to expropriate without
compensation the personal property of private German citizens and
German companies resident or situated within Alsace-Lorraine, the
proceeds being credited in part satisfaction of various French
claims. The severity of this provision is only mitigated to the
extent that the French government may expressly permit German
nationals to continue to reside, in which case the above
provision is not applicable. Government, state, and municipal
property, on the other hand, is to be ceded to France without any
credit being given for it. This includes the railway system of
the two provinces, together with its rolling-stock.(13*) But
while the property is taken over, liabilities contracted in
respect of it in the form of public debts of any kind remain the
liability of Germany.(14*) The provinces also return to French
sovereignty free and quit of their share of German war or pre-war
dead-weight debt; nor does Germany receive a credit on this
account in respect of reparation.
(4) The expropriation of German private property is not
limited, however, to the ex-German colonies and Alsace-Lorraine.
The treatment of such property forms, indeed, a very significant
and material section of the treaty, which has not received as
much attention as it merits, although it was the subject of
exceptionally violent objection on the part of the German
delegates at Versailles. So far as I know, there is no precedent
in any peace treaty of recent history for the treatment of
private property set forth below, and the German representatives
urged that the precedent now established strikes a dangerous and
immoral blow at the security of private property everywhere. This
is an exaggeration, and the sharp distinction, approved by custom
and convention during the past two centuries, between the
property and rights of a state and the property and rights of its
nationals is an artificial one, which is being rapidly put out of
date by many other influences than the peace treaty, and is
inappropriate to modern socialistic conceptions of the relations
between the state and its citizens. It is true, however, that the
treaty strikes a destructive blow at a conception which lies at
the root of much of so-called international law, as this has been
expounded hitherto.
The principal provisions relating to the expropriation of
German private property situated outside the frontiers of
Germany, as these are now determined, are overlapping in their
incidence, and the more drastic would seem in some cases to
render the others unnecessary. Generally speaking, however, the
more drastic and extensive provisions are not so precisely framed
as those of more particular and limited application. They are as
follows:
(a) The Allies 'reserve the right to retain and liquidate all
property, rights and interests belonging at the date of the
coming into force of the present treaty to German nationals, or
companies controlled by them, within their territories, colonies,
possessions and protectorates, including territories ceded to
them by the present treaty.'(15*)
This is the extended version of the provision which has been
discussed already in the case of the colonies and of
Alsace-Lorraine. The value of the property so expropriated will
be applied, in the first instance, to the satisfaction of private
debts due from Germany to the nationals of the Allied government
within whose jurisdiction the liquidation takes place, and,
second, to the satisfaction of claims arising out of the acts of
Germany's former allies. Any balance, if the liquidating
government elects to retain it, must be credited in the
reparation account.(16*) It is, however, a point of considerable
importance that the liquidating government is not compelled to
transfer the balance to the reparation commission, but can, if it
so decides, return the proceeds direct to Germany. For this will
enable the United States, if they so wish, to utilise the very
large balances in the hands of their enemy-property custodian to
pay for the provisioning of Germany, without regard to the views
of the reparation commission.
These provisions had their origin in the scheme for the
mutual settlement of enemy debts by means of a clearing house.
Under this proposal it was hoped to avoid much trouble and
litigation by making each of the governments lately at war
responsible for the collection of private debts due from its
nationals to the nationals of any of the other governments (the
normal process of collection having been suspended by reason of
the war), and for the distribution of the funds so collected to
those of its nationals who had claims against the nationals of
the other governments, any final balance either way being settled
in cash. Such a scheme could have been completely bilateral and
reciprocal. And so in part it is, the scheme being mainly
reciprocal as regards the collection of commercial debts. But the
completeness of their victory permitted the Allied governments to
introduce in their own favour many divergencies from reciprocity,
of which the following are the chief: Whereas the property of
Allied nationals within German jurisdiction reverts under the
treaty to Allied ownership on the conclusion of peace, the
property of Germans within Allied jurisdiction is to be retained
and liquidated as described above, with the result that the whole
of German property over a large part of the world can be
expropriated, and the large properties now within the custody of
public trustees and similar officials in the Allied countries may
be retained permanently. In the second place, such German assets
are chargeable, not only with the liabilities of Germans, but
also, if they run to it, with 'payment of the amounts due in
respect of claims by the nationals of such Allied or Associated
Power with regard to their property, rights, and interests in the
territory of other enemy Powers,' as, for example, Turkey,
Bulgaria, and Austria.(17*) This is a remarkable provision, which
is naturally non-reciprocal. In the third place, any final
balance due to Germany on private account need not be paid over,
but can be held against the various liabilities of the German
government.(18*) The effective operation of these articles is
guaranteed by the delivery of deeds, titles, and
information.(19*) In the fourth place, pre-war contracts between
Allied and German nationals may be cancelled or revived at the
option of the former, so that all such contracts which are in
Germany's favour will be cancelled, while, on the other hand, she
will be compelled to fulfil those which are to her disadvantage.
(b) So far we have been concerned with German property within
Allied jurisdiction. The next provision is aimed at the
elimination of German interests in the territory of her
neighbours and former allies, and of certain other countries.
Under article 260 of the financial clauses it is provided that
the reparation commission may, within one year of the coming into
force of the treaty, demand that the German government
expropriate its nationals and deliver to the reparation
commission 'any rights and interests of German nationals in any
public utility undertaking or in any concession(20*) operating in
Russia, China, Turkey, Austria, Hungary, and Bulgaria, or in the
possessions or dependencies of these states, or in any territory
formerly belonging to Germany or her allies, to be ceded by
Germany or her allies to any Power or to be administered by a
mandatory under the present treaty.' This is a comprehensive
description, overlapping in part the provisions dealt with under
(a) above, but including, it should be noted, the new states and
territories carved out of the former Russian, Austro-Hungarian,
and Turkish empires. Thus Germany's influence is eliminated and
her capital confiscated in all those neighbouring countries to
which she might naturally look for her future livelihood, and for
an outlet for her energy, enterprise, and technical skill.
The execution of this programme in detail will throw on the
reparation commission a peculiar task, as it will become
possessor of a great number of rights and interests over a vast
territory owing dubious obedience, disordered by war, disruption,
and Bolshevism. The division of the spoils between the victors
will also provide employment for a powerful office, whose
doorsteps the greedy adventurers and jealous concession-hunters
of twenty or thirty nations will crowd and defile.
Lest the reparation commission fail by ignorance to exercise
its rights to the full, it is further provided that the German
government shall communicate to it within six months of the
treaty's coming into force a list of all the rights and interests
in question, 'whether already granted, contingent or not yet
exercised', and any which are not so communicated within this
period will automatically lapse in favour of the Allied
governments.(21*) How far an edict of this character can be made
binding on a German national, whose person and property lie
outside the jurisdiction of his own government, is an unsettled
question; but all the countries specified in the above list are
open to pressure by the Allied authorities, whether by the
imposition of an appropriate treaty clause or otherwise.
(c) There remains a third provision more sweeping than either
of the above, neither of which affects German interests in
neutral countries. The reparation commission is empowered up to 1
May 1921 to demand payment up to £1,000 million in such manner as
they may fix, 'whether in gold, commodities, ships, securities or
otherwise'.(22*) This provision has the effect of entrusting to
the reparation commission for the period in question dictatorial
powers over all German property of every description whatever.
They can, under this article, point to any specific business,
enterprise, or property, whether within or outside Germany, and
demand its surrender; and their authority would appear to extend
not only to property existing at the date of the peace, but also
to any which may be created or acquired at any time in the course
of the next eighteen months. For example, they could pick out --
as presumably they will as soon as they are established-the fine
and powerful German enterprise in South America known as the
Deutsche Ueberseeische Elektrizitätsgesellschaft (the D.U.E.G.),
and dispose of it to Allied interests. The clause is unequivocal
and all-embracing. It is worth while to note in passing that it
introduces a quite novel principle in the collection of
indemnities. Hitherto, a sum has been fixed, and the nation
mulcted has been left free to devise and select for itself the
means of payment. But in this case the payees can (for a certain
period) not only demand a certain sum but specify the particular
kind of property in which payment is to be effected. Thus the
powers of the reparation commission, with which I deal more
particularly in the next chapter, can be employed to destroy
Germany's commercial and economic organisation as well as to
exact payment.
The cumulative effect of (a), (b), and (c) (as well as of
certain other minor provisions on which I have not thought it
necessary to enlarge) is to deprive Germany (or rather to empower
the Allies so to deprive her at their will -- it is not yet
accomplished) of everything she possesses outside her own
frontiers as laid down in the treaty. Not only are her overseas
investments taken and her connections destroyed, but the same
process of extirpation is applied in the territories of her
former allies and of her immediate neighbours by land.
(5) Lest by some oversight the above provisions should
overlook any possible contingencies, certain other articles
appear in the treaty, which probably do not add very much in
practical effect to those already described, but which deserve
brief mention as showing the spirit of completeness in which the
victorious Powers entered upon the economic subjection of their
defeated enemy.
First of all there is a general clause of barrer and
renunciation: 'In territory outside her European frontiers as
fixed by the present treaty, Germany renounces all rights, titles
and privileges whatever in or over territory which belonged to
her or to her allies, and all rights, titles and privileges
whatever their origin which she held as against the Allied and
Associated Powers...'(23*)
There follow certain more particular provisions. Germany
renounces all rights and privileges she may have acquired in
China.(24*) There are similar provisions for Siam,(25*) for
Liberia,(26*) for Morocco,(27*) and for Egypt.(28*) In the case
of Egypt not only are special privileges renounced, but by
article 150 ordinary liberties are withdrawn, the Egyptian
government being accorded 'complete liberty of action in
regulating the status of German nationals and the conditions
under which they may establish themselves in Egypt.'
By article 258 Germany renounces her right to any
participation in any financial or economic organisations of an
international character 'operating in any of the Allied or
Associated States, or in Austria, Hungary, Bulgaria or Turkey, or
in the dependencies of these states, or in the former Russian
empire'.
Generally speaking, only those pre-war treaties and
conventions are revived which it suits the Allied governments to
revive, and those in Germany's favour may be allowed to
lapse.(29*)
It is evident, however, that none of these provisions are of
any real importance, as compared with those described previously.
They represent the logical completion of Germany's outlawry and
economic subjection to the convenience of the Allies; but they do
not add substantially to her effective disabilities.
II
The provisions relating to coal and iron are more important
in respect of their ultimate consequences on Germany's internal
industrial economy than for the money value immediately involved.
The German empire has been built more truly on coal and iron than
on blood and iron. The skilled exploitation of the great
coalfields of the Ruhr, Upper Silesia, and the Saar, alone made
possible the development of the steel, chemical, and electrical
industries which established her as the first industrial nation
of continental Europe. One-third of Germany's population lives in
towns of more than 20,000 inhabitants, an industrial
concentration which is only possible on a foundation of coal and
iron. In striking, therefore, at her coal supply, the French
politicians were not mistaking their target. It is only the
extreme immoderation, and indeed technical impossibility, of the
treaty's demands which may save the situation in the long run.
(1) The treaty strikes at Germany's coal supply in four ways:
(i) 'As compensation for the destruction of the coal-mines in
the north of France, and as part payment towards the total
reparation due from Germany for the damage resulting from the
war, Germany cedes to France in full and absolute possession,
with exclusive rights of exploitation, unencumbered, and free
from all debts and charges of any kind, the coal-mines situated
in the Saar Basin.'(30*) While the administration of this
district is vested for fifteen years in the League of Nations, it
is to be observed that the mines are ceded to France absolutely.
Fifteen years hence the population of the district will be called
upon to indicate by plebiscite their desires as to the future
sovereignty of the territory; and, in the event of their electing
for union with Germany, Germany is to be entitled to repurchase
the mines at a price payable in gold.(31*)
The judgment of the world has already recognised the
transaction of the Saar as an act of spoliation and insincerity.
So far as compensation for the destruction of French coal-mines
is concerned, this is provided for, as we shall see in a moment,
elsewhere in the treaty. 'There is no industrial region in
Germany', the German representatives have said without
contradiction, 'the population of which is so permanent, so
homogeneous, and so little complex as that of the Saar district.
Among more than 650,000 inhabitants, there were in 1918 less than
100 French. The Saar district has been German for more than 1,000
years. Temporary occupation as a result of warlike operations on
the part of the French always terminated in a short time in the
restoration of the country upon the conclusion of peace. During a
period of 1,048 years France has possessed the country for not
quite 68 years in all. When, on the occasion of the first Treaty
of Paris in 1814, a small portion of the territory now coveted
was retained for France, the population raised the most energetic
opposition and demanded "reunion with their German fatherland,"
to which they were "related by language, customs, and religion".
After an occupation of one year and a quarter, this desire was
taken into account in the second Treaty of Paris in 1815. Since
then the country has remained uninterruptedly attached to
Germany, and owes its economic development to that connection.'
The French wanted the coal for the purpose of working the
ironfields of Lorraine, and in the spirit of Bismarck they have
taken it. Not precedent, but the verbal professions of the
Allies, have rendered it indefensible.(32*)
(ii) Upper Silesia, a district without large towns, in which,
however, lies one of the major coalfields of Germany with a
production of about 23% of the total German output of hard coal,
is, subject to a plebiscite,(33*) to be ceded to Poland. Upper
Silesia was never part of historic Poland; but its population is
mixed Polish, German, and Czechoslovakian, the precise
proportions of which are disputed.(34*) Economically it is
intensely German; the industries of eastern Germany depend upon
it for their coal; and its loss would be a destructive blow at
the economic structure of the German state.(35*)
With the loss of the fields of Upper Silesia and the Saar,
the coal supplies of Germany are diminished by not far short of
one-third.
(iii) Out of the coal that remains to her, Germany is obliged
to make good year by year the estimated loss which France has
incurred by the destruction and damage of war in the coalfields
of her northern provinces. In paragraph 2 of annex V to the
reparation chapter, 'Germany undertakes to deliver to France
annually, for a period not exceeding ten years, an amount of coal
equal to the difference between the annual production before the
war of the coal-mines of the Nord and Pas de Calais, destroyed as
a result of the war, and the production of the mines of the same
area during the year in question: such delivery not to exceed 20
million tons in any one year of the first five years, and 8
million tons in any one year of the succeeding five years'.
This is a reasonable provision if it stood by itself, and one
which Germany should be able to fulfil if she were left her other
resources to do it with.
(iv) The final provision relating to coal is part of the
general scheme of the reparation chapter by which the sums due
for reparation are to be partly paid in kind instead of in cash.
As a part of the payment due for reparation, Germany is to make
the following deliveries of coal or its equivalent in coke (the
deliveries to France being wholly additional to the amounts
available by the cession of the Saar or in compensation for
destruction in Northern France):
(a) to France 7 million tons annually for ten years;(36*)
(b) to Belgium 8 million tons annually for ten years;
(c) to Italy an annual quantity, rising by annual increments
from 4.5 million tons in 1919-20 to 8.5 million tons in each of
the six years 1923-4 to 1928-9;
(d) to Luxemburg, if required, a quantity of coal equal to
the pre-war annual consumption of German coal in Luxemburg.
This amounts in all to an annual average of about 25 million
tons.
These figures have to be examined in relation to Germany's
probable output. The maximum pre-war figure was reached in 1913
with a total of 191.5 million tons. Of this, 19 million tons were
consumed at the mines, and on balance (i.e. exports less imports)
33.5 million tons were exported, leaving 139 million tons for
domestic consumption. It is estimated that this total was
employed as follows:
Million tons
Railways 18.0
Gas, water, and electricity 12.5
Bunkers 6.5
House-fuel, small industry
and agriculture 24.0
Industry 78.0
139.0
The diminution of production due to loss of territory is:
Million tons
Alsace-Lorraine 3.8
Saar Basin 13.2
Upper Silesia 43.8
60.8
There would remain, therefore, on the basis of the 1913
output, 130.7 million tons or, deducting consumption at the mines
themselves, (say) 118 million tons. For some years there must be
sent out of this supply upwards of 20 million tons to France as
compensation for damage done to French mines, and 25 million tons
to France, Belgium, Italy, and Luxemburg;(37*) as the former
figure is a maximum, and the latter figure is to be slightly less
in the earliest years, we may take the total export to Allied
countries which Germany has undertaken to provide as 40 million
tons, leaving, on the above basis, 78 million tons for her own
use as against a pre-war consumption of 139 million tons.
This comparison, however, requires substantial modification
to make it accurate. On the one hand, it is certain that the
figures of pre-war output cannot be relied on as a basis of
present output. During 1918 the production was 161.5 million tons
as compared with 191.5 million tons in 1913; and during the first
half of 1919 it was less than 50 million tons, exclusive of
Alsace-Lorraine and the Saar but including Upper Silesia,
corresponding to an annual production of about 100 million
tons.(38*) The causes of so low an output were in part temporary
and exceptional, but the German authorities agree, and have not
been confuted, that some of them are bound to persist for some
time to come. In part they are the same as elsewhere; the daily
shift has been shortened from 8 1/2 to 7 hours, and it is
improbable that the powers of the central government will be
adequate to restore them to their former figure. But in addition,
the mining plant is in bad condition (due to the lack of certain
essential materials during the blockade), the physical efficiency
of the men is greatly impaired by malnutrition (which cannot be
cured if a tithe of the reparation demands are to be satisfied --
the standard of life will have rather to be lowered), and the
casualties of the war have diminished the numbers of efficient
miners. The analogy of English conditions is sufficient by itself
to tell us that a pre-war level of output cannot be expected in
Germany. German authorities put the loss of output at somewhat
above thirty per cent, divided about equally between the
shortening of the shift and the other economic influences. This
figure appears on general grounds to be plausible, but I have not
the knowledge to endorse or to criticise it.
The pre-war figure of 118 million tons net (i.e. after
allowing for loss of territory and consumption at the mines) is
likely to fall, therefore, at least as low as to 100 million(39*)
tons, having regard to the above factors. If 40 million tons of
this are to be exported to the Allies, there remain 60 million
tons for Germany herself to meet her own domestic consumption.
Demand as well as supply will be diminished by loss of territory,
but at the most extravagant estimate this could not be put above
29 million tons.(40*) Our hypothetical calculations, therefore,
leave us with post-war German domestic requirements, on the basis
of a prewar efficiency of railways and industry, of 110 million
tons against an output not exceeding 100 million tons, of which
40 million tons are mortgaged to the Allies.
The importance of the subject has led me into a somewhat
lengthy statistical analysis. It is evident that too much
significance must not be attached to the precise figures arrived
at, which are hypothetical and dubious.(41*) But the general
character of the facts presents itself irresistibly. Allowing for
the loss of territory and the loss of efficiency, Germany cannot
export coal in the near future (and will even be dependent on her
treaty rights to purchase in Upper Silesia), if she is to
continue as an industrial nation. Every million tons she is
forced to export must be at the expense of closing down an
industry. With results to be considered later this within certain
limits is possible. But it is evident that Germany cannot and
will not furnish the Allies with a contribution of 40 million
tons annually. Those Allied ministers who have told their peoples
that she can have certainly deceived them for the sake of
allaying for the moment the misgivings of the European peoples as
to the path along which they are being led.
The presence of these illusory provisions (amongst others) in
the clauses of the treaty of peace is especially charged with
danger for the future. The more extravagant expectations as to
reparation receipts, by which finance ministers have deceived
their publics, will be heard of no more when they have served
their immediate purpose of postponing the hour of taxation and
retrenchment. But the coal clauses will not be lost sight of so
easily -- for the reason that it will be absolutely vital in the
interests of France and Italy that these countries should do
everything in their power to exact their bond. As a result of the
diminished output due to German destruction in France, of the
diminished output of mines in the United Kingdom and elsewhere,
and of many secondary causes, such as the breakdown of transport
and of organisation and the inefficiency of new governments, the
coal position of all Europe is nearly desperate;(42*) and France
and Italy, entering the scramble with certain treaty rights, will
not lightly surrender them.
As is generally the case in real dilemmas, the French and
Italian case will possess great force, indeed unanswerable force
from a certain point of view. The position will be truly
represented as a question between German industry on the one hand
and French and Italian industry on the other. It may be admitted
that the surrender of the coal will destroy German industry; but
it may be equally true that its non-surrender will jeopardise
French and Italian industry. In such a case must not the victors
with their treaty rights prevail, especially when much of the
damage has been ultimately due to the wicked acts of those who
are now defeated? Yet if these feelings and these rights are
allowed to prevail beyond what wisdom would recommend, the
reactions on the social and economic life of Central Europe will
be far too strong to be confined within their original limits.
But this is not yet the whole problem. If France and Italy
are to make good their own deficiencies in coal from the output
of Germany, then northern Europe, Switzerland, and Austria, which
previously drew their coal in large part from Germany's
exportable surplus, must be starved of their supplies. Before the
war 13.4 million tons of Germany's coal exports went to
Austria-Hungary. Inasmuch as nearly all the coalfields of the
former empire lie outside what is now German Austria, the
industrial ruin of this latter state, if she cannot obtain coal
from Germany, will be complete. The case of Germany's neutral
neighbours, who were formerly supplied in part from Great Britain
but in large part from Germany, will be hardly less serious. They
will go to great lengths in the direction of making their own
supplies to Germany of materials which are essential to her,
conditional on these being paid for in coal. Indeed they are
already doing so.(43*) With the breakdown of money economy the
practice of international barter is becoming prevalent. Nowadays
money in Central and south-eastern Europe is seldom a true
measure of value in exchange, and will not necessarily buy
anything, with the consequence that one country, possessing a
commodity essential to the needs of another, sells it not for
cash but only against a reciprocal engagement on the part of the
latter country to furnish in return some article not less
necessary to the former. This is an extraordinary complication as
compared with the former almost perfect simplicity of
international trade. But in the no less extraordinary conditions
of today's industry it is not without advantages as a means of
stimulating production. The butter-shifts of the Ruhr(44*) show
how far modern Europe has retrograded in the direction of barter,
and afford a picturesque illustration of the low economic
organisation to which the breakdown of currency and free exchange
between individuals and nations is quickly leading us. But they
may produce the coal where other devices would fail.(45*)
Yet if Germany can find coal for the neighbouring neutrals,
France and Italy may loudly claim that in this case she can and
must keep her treaty obligations. In this there will be a great
show of justice, and it will be difficult to weigh against such
claims the possible facts that, while German miners will work for
butter, there is no available means of compelling them to get
coal the sale of which will bring in nothing, and that if Germany
has no coal to send to her neighbours she may fail to secure
imports essential to her economic existence.
If the distribution of the European coal supplies is to be a
scramble in which France is satisfied first, Italy next, and
everyone else takes their chance, the industrial future of Europe
is black and the prospects of revolution very good. It is a case
where particular interests and particular claims, however well
founded in sentiment or in justice, must yield to sovereign
expediency. If there is any approximate truth in Mr Hoover's
calculation that the coal output of Europe has fallen by
one-third, a situation confronts us where distribution must be
effected with evenhanded impartiality in accordance with need,
and no incentive can be neglected towards increased production
and economical methods of transport. The establishment by the
Supreme Council of the Allies in August 1919 of a European coal
commission, consisting of delegates from Great Britain, France,
Italy, Belgium, Poland, and Czechoslovakia, was a wise measure
which, properly employed and extended, may prove of great
assistance. But I reserve constructive proposals for chapter 7.
Here I am only concerned with tracing the consequences, per
impossibile, of carrying out the treaty au pied de la
lettre.(46*)
(2) The provisions relating to iron ore require less detailed
attention, though their effects are destructive. They require
less attention, because they are in large measure inevitable.
Almost exactly 75% of the iron ore raised in Germany in 1913 came
from Alsace-Lorraine.(47*) In this the chief importance of the
stolen provinces lay.
There is no question but that Germany must lose these
orefields. The only question is how far she is to be allowed
facilities for purchasing their produce. The German delegation
made strong efforts to secure the inclusion of a provision by
which coal and coke to be furnished by them to France should be
given in exchange for minette from Lorraine. But they secured no
such stipulation, and the matter remains at France's option.
The motives which will govern France's eventual policy are
not entirely concordant. While Lorraine comprised 75% of
Germany's iron ore, only 25 % of the blast furnaces lay within
Lorraine and the Saar basin together, a large proportion of the
ore being carried into Germany proper. Approximately the same
proportion of Germany's iron and steel foundries, namely 25 per
cent, were situated in Alsace-Lorraine. For the moment,
therefore, the most economical and profitable course would
certainly be to export to Germany, as hitherto, a considerable
part of the output of the mines.
On the other hand, France, having recovered the deposits of
Lorraine, may be expected to aim at replacing as far as possible
the industries which Germany had based on them by industries
situated within her own frontiers. Much time must elapse before
the plant and the skilled labour could be developed within
France, and even so she could hardly deal with the ore unless she
could rely on receiving the coal from Germany. The uncertainty,
too, as to the ultimate fate of the Saar will be disturbing to
the calculations of capitalists who contemplate the establishment
of new industries in France.
In fact, here, as elsewhere, political considerations cut
disastrously across economic. In a régime of free trade and free
economic intercourse it would be of little consequence that iron
lay on one side of a political frontier, and labour, coal, and
blast furnaces on the other. But as it is, men have devised ways
to impoverish themselves and one another; and prefer collective
animosities to individual happiness. It seems certain,
calculating on the present passions and impulses of European
capitalistic society, that the effective iron output of Europe
will be diminished by a new political frontier (which sentiment
and historic justice require), because nationalism and private
interest are thus allowed to impose a new economic frontier along
the same lines. These latter considerations are allowed, in the
present governance of Europe, to prevail over the intense need of
the continent for the most sustained and efficient production to
repair the destructions of war, and to satisfy the insistence of
labour for a larger reward.(48*)
The same influences are likely to be seen, though on a lesser
scale, in the event of the transference of Upper Silesia to
Poland. While Upper Silesia contains but little iron, the
presence of coal has led to the establishment of numerous blast
furnaces. What is to be the fate of these? If Germany is cut off
from her supplies of ore on the west, will she export beyond her
frontiers on the east any part of the little which remains to
her? The efficiency and output of the industry seem certain to
diminish.
Thus the treaty strikes at organisation, and by the
destruction of organisation impairs yet further the reduced
wealth of the whole community. The economic frontiers which are
to be established between the coal and the iron upon which modern
industrialism is founded will not only diminish the production of
useful commodities, but may possibly occupy an immense quantity
of human labour in dragging iron or coal, as the case may be,
over many useless miles to satisfy the dictates of a political
treaty or because obstructions have been established to the
proper localisation of industry.
III
There remain those treaty provisions which relate to the
transport and the tariff systems of Germany. These parts of the
treaty have not nearly the importance and the significance of
those discussed hitherto. They are pinpricks, interferences and
vexations, not so much objectionable for their solid
consequences, as dishonourable to the Allies in the light of
their professions. Let the reader consider what follows in the
light of the assurances already quoted, in reliance on which
Germany laid down her arms.
(1) The miscellaneous economic clauses commence with a number
of provisions which would be in accordance with the spirit of the
third of the Fourteen Points -- if they were reciprocal. Both for
imports and exports, and as regards tariffs, regulations, and
prohibitions, Germany binds herself for five years to accord
most-favoured-nation treatment to the Allied and Associated
states.(49*) But she is not entitled herself to receive such
treatment.
For five years Alsace-Lorraine shall be free to export into
Germany, without payment of customs duty, up to the average
amount sent annually into Germany from 1911 to 1913.(50*) But
there is no similar provision for German exports into
Alsace-Lorraine.
For three years Polish exports to Germany, and for five years
Luxemburg's exports to Germany, are to have a similar
privilege,(51*) but not German exports to Poland or to Luxemburg.
Luxemburg also, which for many years has enjoyed the benefits of
inclusion within the German customs union, is permanently
excluded from it henceforward.(52*)
For six months after the treaty has come into force Germany
may not impose duties on imports from the Allied and Associated
states higher than the most favourable duties prevalent before
the war; and for a further two years and a half (making three
years in all) this prohibition continues to apply to certain
commodities, notably to some of those as to which special
agreements existed before the war, and also to wine, to vegetable
oils, to artificial silk, and to washed or scoured wool.(53*)
This is a ridiculous and injurious provision, by which Germany is
prevented from taking those steps necessary to conserve her
limited resources for the purchase of necessaries and the
discharge of reparation. As a result of the existing distribution
of wealth in Germany, and of financial wantonness amongst
individuals, the offspring of uncertainty, Germany is threatened
with a deluge of luxuries and semi-luxuries from abroad, of which
she has been starved for years, which would exhaust or diminish
her small supplies of foreign exchange. These provisions strike
at the authority of the German government to ensure economy in
such consumption, or to raise taxation during a critical period.
What an example of senseless greed overreaching itself, to
introduce, after taking from Germany what liquid wealth she has
and demanding impossible payments for the future, a special and
particularised injunction that she must allow as readily as in
the days of her prosperity the import of champagne and of silk!
One other article affects the customs régime of Germany
which, if it was applied, would be serious and extensive in its
consequences. The Allies have reserved the right to apply a
special customs régime to the occupied area on the left bank of
the Rhine, 'in the event of such a measure being necessary in
their opinion in order to safeguard the economic interests of the
population of these territories'.(54*) This provision was
probably introduced as a possibly useful adjunct to the French
policy of somehow detaching the left-bank provinces from Germany
during the years of their occupation. The project of establishing
an independent republic under French clerical auspices, which
would act as a buffer state and realise the French ambition of
driving Germany proper beyond the Rhine, has not yet been
abandoned. Some believe that much may be accomplished by a régime
of threats, bribes, and cajolery extended over a period of
fifteen years or longer.(55*) If this article is acted upon, and
the economic system of the left bank of the Rhine is effectively
severed from the rest of Germany, the effect would be
far-reaching. But the dreams of designing diplomats do not always
prosper, and we must trust the future.
(2) The clauses relating to railways, as originally presented
to Germany, were substantially modified in the final treaty, and
are now limited to a provision by which goods coming from Allied
territory to Germany, or in transit through Germany, shall
receive the most favoured treatment as regards rail freight,
rates, etc., applied to goods of the same kind carried on any
German lines 'under similar conditions of transport, for example,
as regards length of route'.(56*) As a non-reciprocal provision
this is an act of interference in internal arrangements which it
is difficult to justify, but the practical effect of this,(57*)
and of an analogous provision relating to passenger traffic,(58*)
will much depend on the interpretation of the phrase, 'similar
conditions of transport'.(59*)
For the time being Germany's transport system will be much
more seriously disordered by the provisions relating to the
cession of rolling-stock. Under paragraph 7 of the armistice
conditions Germany was called on to surrender 5,000 locomotives
and 150,000 waggons, 'in good working order, with all necessary
spare parts and fittings'. Under the treaty Germany is required
to confirm this surrender and to recognise the title of the
Allies to the material.(60*) She is further required, in the case
of railway systems in ceded territory, to hand over these systems
complete with their full complement of rolling-stock 'in a normal
state of upkeep' as shown in the last inventory before 11
November 1918.(61*) That is to say, ceded railway systems are not
to bear any share in the general depletion and deterioration of
the German rolling-stock as a whole.
This is a loss which in course of time can doubtless be made
good. But lack of lubricating oils and the prodigious wear and
tear of the war, not compensated by normal repairs, had already
reduced the German railway system to a low state of efficiency.
The further heavy losses under the treaty will confirm this state
of affairs for some time to come, and are a substantial
aggravation of the difficulties of the coal problem and of export
industry generally.
(3) There remain the clauses relating to the river system of
Germany. These are largely unnecessary and are so little related
to the supposed aims of the Allies that their purport is
generally unknown. Yet they constitute an unprecedented
interference with a country's domestic arrangements, and are
capable of being so operated as to take from Germany all
effective control over her own transport system. In their present
form they are incapable of justification; but some simple changes
might transform them into a reasonable instrument.
Most of the principal rivers of Germany have their source or
their outlet in non-German territory. The Rhine, rising in
Switzerland, is now a frontier river for a part of its course,
and finds the sea in Holland; the Danube rises in Germany but
flows over its greater length elsewhere; the Elbe rises in the
mountains of Bohemia, now called Czechoslovakia; the Oder
traverses Lower Silesia; and the Niemen now bounds the frontier
of East Prussia and has its source in Russia. Of these, the Rhine
and the Niemen are frontier rivers, the Elbe is primarily German
but in its upper reaches has much importance for Bohemia, the
Danube in its German parts appears to have little concern for any
country but Germany, and the Oder is an almost purely German
river unless the result of the plebiscite is to detach all Upper
Silesia.
Rivers which, in the words of the treaty, 'naturally provide
more than one state with access to the sea', properly require
some measure of international regulation and adequate guarantees
against discrimination. This principle has long been recognised
in the international commissions which regulate the Rhine and the
Danube. But on such commissions the states concerned should be
represented more or less in proportion to their interests. The
treaty, however, has made the international character of these
rivers a pretext for taking the river system of Germany out of
German control.
After certain articles which provide suitably against
discrimination and interference with freedom of transit,(62*) the
treaty proceeds to hand over the administration of the Elbe, the
Oder, the Danube, and the Rhine to international
commissions.(63*) The ultimate powers of these commissions are to
be determined by 'a general convention drawn up by the Allied and
Associated Powers, and approved by the League of Nations'.(64*)
In the meantime the comm