Part 13

When I talk of debts the Allies owe to us, I want to emphasise the fact that these debts are not paper myths nor tricks of accountancy. They are onerous facts representing a real burden borne at this hour by the bent and panting taxpayer of Britain. If these loans had never been made the weight on his shoulders to-day would have been lighter by over two shillings in the pound. He is every year paying to the actual lenders--some British, some American--that proportion of his income. It is a weight he undertook to carry for his Allies during the war on the sacred pledge of those Allies that they would take it over after the war. The American government borrowed from their public to make advances to Great Britain, and have called upon the British taxpayer to redeem his pledge. We make no complaint, for the demand is a mitigation of the strict letter of the bond. But that amount is in substance part of the debt owing by the Allies to Britain. And the British taxpayer naturally feels it is hard on him to have to bear not only his own legitimate burdens but that he should in addition have to carry the debts of his less heavily taxed brethren in continental countries. He naturally inferred that if equal pressure had been administered on all debtors alike it would have forced an all-around consultation which would have terminated in an all-round settlement.

That was the real purport of the Balfour note. The true significance of that great document has been entirely misunderstood--sometimes carelessly, sometimes purposely, sometimes insolently. I guarantee that not one per cent. of its critics if confronted suddenly with an examination on its contents would secure one mark out of a hundred. It has suffered the same fate as the treaty of Versailles. Opinion is sharply divided as to both between those who rend without reading and those who read without rending. Most men have received their impressions of the Balfour note from denunciatory phrases penned by writers who received their ideas about it from men who gave instructions to condemn it without ever reading it. The men who really understood both the Versailles treaty and the Balfour note have been too busy to find time to inform, to interpret, and to explain.

But the time has come when the public attention should be once more drawn to the remarkable and far-reaching proposals of the Balfour note. They constitute an offer on the part of Britain to measure the amount of her claims against her Allies by the extent of her obligations to the United States of America. The British government even offered to include the claim of their country against Germany in this generous concession. What does that mean in reference to present conditions? That if the Allies and Germany between them found the £30,000,000 a year which Britain has undertaken to pay America, she would forgo her claim to the £3,300,000,000 due to her under contract and treaty. It was a great offer and if accepted would have produced results beneficent beyond computation. Britain, which would have been the heaviest direct loser, would have profited indirectly through the world recovery that would have ensued.

How was it received? Some criticised it because it asked too little--some because it demanded too much. Many criticised because they were determined to approve nothing that emanated from such a government, but most of its censors condemned it because they never took the trouble to understand it, and the shrillest among the street cries happened to denounce it. The government that propounded it soon after left the seat of authority, and the administration that succeeded put forward a new scheme which attracted even less acceptance. So this great project which would have settled for ever the question which above all others is vexing peace and unsettling minds in Europe was pigeon-holed where it was not already basketed.

But surely this is not the end of all endeavours to reach a settlement of the question of inter-Allied debts. We cannot rest satisfied with an arrangement which effectively binds us to pay without prospect of the slightest contribution from our debtors. What America cannot indulge in we cannot afford. The gold of Europe now lies in its coffers. Who are we--plunged in the mire of debt up to our nostrils--to give ourselves airs of generosity superior to the only golden land left in this war-stripped earth?

If there is to be a general jubilee in which all alike participate in order to give the world a new start, then I feel sure Britain will play her part bravely and nobly. But a jerry-mandered jubilee which frees France, Italy and Belgium from all their debts whilst leaving Britain sweating to pay off debts incurred for her Allies on the strength of their bond--that we cannot bear.

I trust the government will insist on an arrangement with our Allies which, even if it is not a replica of our contract with the American government, will at any rate ensure us a contribution that will safeguard us against loss under that contract. It is I fear hopeless to expect that we should be recouped the 2_s._ in the pound which interest on Allied debts costs our taxpayers, but at any rate we might be guaranteed against the 6_d._ in the pound which the American instalments involve. I feel the effort is beset with difficulties and that the outlook is not hopeful. There have of late been a few discouraging symptoms. One is the reception accorded at the recent Paris conference to the British prime minister's liberal offer regarding inter-Allied debts. It was a tactical error to open the conference with such a scheme and the effect was singularly unfortunate.

Had I been disposed to press my criticisms on the conduct of the recent negotiations in Paris it would have been that they were so managed that for the first time since the war Britain has been completely isolated at a European conference. That is a misfortune, for it encouraged the French government to rash action. Up to the last conference Britain and Italy had remained in substantial accord even when France and Belgium took a different view, and Belgium had never before quitted any of the gatherings in complete disagreement with Great Britain. So France, always tempted as she was to occupy the Ruhr, hesitated to do so in the face of so formidable an Allied resistance. What is relevant, however, to the subject of this article is the cause of our unwonted isolation on the occasion of the last conference. The British premier started the negotiations by tabling proposals which promised forgiveness of most of the indebtedness of these countries to Britain, but which implied immediate arrangements for beginning repayment of the rest. This suggestion of repayment instantly consolidated opposition to the whole of the British plan. It became clear that existing governments on the continent had no intention, unless firmly pressed, of paying the smallest percentage of the debt they incurred on the faith of a solemn engagement to repay the loan when that was possible, and to pay interest meanwhile. If we point to the fact as we did in the Balfour note, that we have undertaken to repay the United States of America the heavy debt incurred by us on behalf of the Allies, they simply shrug their shoulders and say in effect: "That is your affair. We repay neither Britain nor America, and there is an end of it."

The other unpleasant incident is a speech delivered by M. Poincaré in the French Chamber in the course of which he dealt casually with the subject of inter-Allied indebtedness. The French prime minister then announced categorically that France had no intention of paying her debts until she has first received her share of reparations from Germany. What does that mean in effect? That the France represented by M. Poincaré has no intention of ever paying her debts. When the colossal figure of German reparations is taken into account thirty years is a moderate estimate of the period required for its liquidation. Is the French debt to lie dormant carrying no interest meanwhile? If it is, then the debt is practically wiped out, for the present value of £500,000,000 debt payable thirty years hence is insignificant. The present government of France have therefore declared they do not mean to pay what France owes. Surely the time to dictate the conditions of your repayment of a loan--when you propose to pay, how much you propose to pay, or whether you mean to pay at all--is when you are borrowing and not after you have spent the money.

And yet in the same speech in which M. Poincaré serves up hot platitudes for senatorial palates about the sanctity of national obligations, he dismisses France's faithful ally with the cold comfort that France is too busy collecting the accounts due to her to attend to the debts she owes. I believe in my heart that there is a France of which he is not the spokesman--a great France which will not treat shabbily a faithful friend who stood by her in the hour of despair and who is now staggering under unparalleled burdens incurred in the discharge of the obligations of friendship.

All this makes it more necessary that the situation should be cleared up without undue delay. Having just completed negotiations for liquidating our own war indebtedness to America we are in a position to insist on a settlement with those on whose behalf we incurred that indebtedness. If nothing is done the conditions will harden against us. We shall be assumed to have accepted the Poincaré repudiation. I do not know what conditions the government have made with the United States government as to the marketability of the securities to be created in funding our debt. If they are to be placed on the market the chance of any future deal is destroyed. Ere that be done we must know where we are in reference to our own claims. I trust the government will act promptly. Delay was justifiable so long as we were in the same position in reference to what we owed as what we claimed. The Baldwin settlement has altered all that. If we do not insist on an arrangement now the British taxpayer will have the fate of Issachar--that of the poor beast between two burdens--his own and that of the Allies.

XXIII

THE BRITISH ELECTIONS

It is the duty of every patriotic citizen, in view of the difficulties with which the country is confronted, to assist the government of the day by every means at his disposal. Factious criticism disturbs judgment and tends to unnerve. Governments to-day require full command of mind and nerve to enable them to arrive at sound decisions and to persevere in them. Faction is, therefore, treason to the country.

That does not, however, preclude a calm survey of the elections and their meaning. Quite the contrary, for we must think of the future and prepare for it.

The result of the elections has fully justified those who maintained that no party standing alone could hope to secure the measure of public support which will guarantee stable government. It is true that the Conservatives have succeeded in obtaining the return of a majority of members to the new Parliament. But the most notable feature of the elections is the return of a decisive majority of members by a very definite minority of the electors.

I observe that the prime minister, in returning thanks to the nation, claims that he has received a vote of confidence from the people of this country. Out of a total poll of fifteen millions his candidates secured less than six million votes. Making full allowance for uncontested seats, this figure cannot be stretched out to a height much above six millions.

That means that only two-fifths of the electorate voted confidence in the administration, whilst three-fifths voted confidence in other leaders or groups. A party which has a majority of three millions recorded against it on a national referendum can hardly claim to have received a national vote of confidence.

It might be argued that when the question of confidence or no confidence comes to be stated, the National Liberals having promised co-operation, the votes recorded by them ought not to be placed on the debit side of the confidence account. The basis of the appeal made by the National Liberal candidates for support is practically that stated by me in my Manchester speech:

"The supreme task of statesmanship at this hour is the pacification of the nations, so that the people shall have leisure to devote themselves to the peaceful avocations of life, to fill up the depleted reservoirs from which we all draw.

"My course is a clear one. I will support with all my might any government that devotes itself and lends its energy to that task with single-mindedness, fearlessness, and with resolution--provided it does not embark upon measures which inflict permanent injury upon the country, whether these measures be reactionary or revolutionary. That does not mean that I pledge myself to support inefficiency, vacillation, or infirmity in any government or in any party. But any government that does not pursue that course I will resist with all my might. That is my policy."

I have perused the addresses of many National Liberal candidates and I have addressed many meetings in their constituencies, and I find that their attitude towards the government is defined in these terms, with purely verbal variations. The address of Mr. J. D. Gilbert, who won Central Southwark, is a very fair sample taken out of the bulk:

"If you honour me again with your confidence I will support any progressive measures brought forward by the present government or any other government. I shall not offer factious opposition or nagging criticism while our country is in difficulties at home or abroad."

There may be one or two who went further, but none expressed confidence.

I have made some inquiries as to the number of Conservative votes polled by National Liberal candidates. I am informed that on an average it represents less than one-third of the total. At the last election 167 National Liberal candidates were put up. They polled an aggregate of 1,652,823 votes, that is, an average of 9,897 per candidate. What proportion of this vote was Conservative? There is a good practical method of testing this question. In sixty-two seats National Liberals were fought by Conservative as well as by other candidates. In these cases the average vote polled by National Liberals was 6,820. That means that where the Conservatives supported National Liberal candidates their votes would represent about 30 per cent. of the poll for these candidates. On the other hand, the number of Liberal votes polled by Conservatives, where a compact existed, at least balances this account, for although the total in each constituency does not equal the figures of the Conservative support in National Liberal constituencies, still, that support was spread over many more constituencies.

The prime minister and his chief electioneering manager both emphatically repudiated the suggestion that there was any pact between Conservatives and National Liberals, and urged that there were only local arrangements made between the candidates of the two parties for their mutual convenience.

As the head of the National Liberal group I expressed grave doubts as to the composition of the ministry, and much apprehension as to the language in which its policy was defined. That represents the general attitude of the National Liberals toward the government. Their support, therefore, cannot be claimed in totalling the votes recorded for the government.

The fact, therefore, remains that those who voted confidence in the government represent only forty per cent. of those who went to the poll and twenty-five per cent. of the total electorate.

I place this fact in the forefront, because it is bound to have a profound effect upon the course of events during--maybe beyond--the lifetime of this parliament. It is the first time, certainly since the Reform Act, that a pronounced minority of the electorate has succeeded in securing the control of parliament and the government of the country.

It would be idle to pretend that in a democratic country like ours, thoroughly imbued with the spirit of representative government, this does not weaken the moral authority of the government of the day. Therefore, if the government is wise it will bear that fact in mind and will not commit itself to policies which challenge the nine millions who between them represent a majority of the people of this country.

It is not a very good beginning to claim these striking figures as a vote of confidence. I sincerely trust it does not indicate a resolve to ignore, if not to defy, what is an obvious and ought to be a governing factor in the policy of the government.

A corollary to this curious working of our electoral system is to be found in the under-representation of the other parties in the present parliament, and unless representative government is to be discredited altogether, the present parliament ought at once to devote its mind and direct its energies to the discovery of some method and machinery which will avert the danger which clearly arises from the working of the present system.

The parliament of 1918 undoubtedly gave a larger majority to the government than the figures warranted. But the majority of votes cast for government candidates was so overwhelming that under any system of voting there would have been a larger working majority for the government than that which the present government can command. So when trouble arose it was not open to any section of the community to object that the government had no authority because it did not represent the electorate of this country.

We are faced with a new danger to constitutional government. What has happened at this election may be repeated at the next--but not necessarily in favour of the same party.

If we are to be governed by a succession of administrations who rule in spite of the protest of a majority of the people, the authority of government will be weakened beyond repair.

The luck of the electoral table has this time favoured the Conservatives. Next time it may turn in favour of the Labour Party. They have at this election secured 55 seats out of a total of 141 by a minority of votes.

The conditions were, in many respects, against them. Their funds were exhausted by the prolonged period of heavy unemployment. The trade union movement was passing through an ebb tide in its prosperity, both in funds and in members. There was a good deal of discontent with the trade union leaders. Many workmen felt they had been let down badly by some of their activities in industrial disputes.

Moreover, Labour has been committed by visionaries to a rash experiment which handicapped it severely in the election. Next time may be the spring tide of Labour. They have learnt their lesson at the polls, and are not likely to repeat the blunder of November, 1922.

This time the votes cast for them have attained the gigantic aggregate of four millions and a quarter. Supposing under those conditions they add another two millions to their poll. Although the other groups may secure between them nine millions of votes, Labour may have the same luck as the Conservatives at the last election and be placed in power by a decisive majority of members elected by a minority of votes.

I am not going to speculate as to what may happen under those conditions; the kind of legislation that may be proposed; the action of the House of Lords in reference to it, provoking, as it undoubtedly will, a fierce class conflict; or the turn given to administration in the various departments of government.

Of one thing I am, however, certain. That is, that as a minority administration in 1922 and onwards will help to discredit government with certain classes of the community, a minority Labour administration would weaken the respect of other classes for representative government, and between them an atmosphere will be created inimical to the moral authority of all government in this country.

I have many a time warned the public that, in spite of appearances, this country is in many respects very top-heavy. It is over-industrialised. Its means of livelihood are in some ways precarious, and depend on conditions over which we have very little control, and once something happens which may have the effect of causing a lean-over either in one direction or in the other, it will be more difficult to recover than in lands where the population depends in the main for its livelihood upon the cultivation of the soil and the development of the natural resources of the country.

I therefore earnestly trust that in the interests of stability and good government, which must be based on the goodwill and co-operation of the community as a whole, this parliament will apply its mind seriously to finding some means of preventing a repetition either in one direction or another of this freak of representative government.

Another feature of the election is the heavy vote polled by Liberal candidates in spite of untoward circumstances.

Whatever the difficulties of the Labour Party might be in this election they were not comparable to those under which Liberalism fought the campaign. It was divided by bitter internecine conflicts. The leaders of one section seemed to be more intent on keeping representatives of the other section out of parliament than on fighting for the common cause. The bulk of their speeches was devoted to attacks on the leaders of the other Liberal group, and there was not much room left for a statement of the Liberal case.

What happened in Manchester is typical. Here the rank and file took the matter in hand and enforced agreement. Lord Grey was brought down to bless it. But the whole of his benedictory speech consisted of a thin and dreary drip of querulous comment on the leaders of the other group, with a distinct hint that the return of a Conservative government would be by no means a bad thing in the interests of the country.

The speech was hailed by a Tory journal with the heading "Lord Grey Supports Mr. Bonar Law." He then went straight to support Mr. McKinnon Wood as candidate with a repetition of the same speech. Thence he rushed off to reiterate the same performance at Bedford in support of Lady Lawson, and he finished off by reciting it for two days at meetings in support of Mr. Walter Runciman.

No wonder that he succeeded in damping Liberal enthusiasm to such an extent that his unfortunate protégés surprised even their opponents in the poverty of the support given them at the polls.

As soon as the coalition broke up the leaders of this Liberal section met to consider the situation. The one positive result of their deliberations was not the issue of a ringing appeal for unity on the basis of Liberal principles, but a peevish intimation through the press that efforts at unity were to be discouraged at the election. It was clearly ordained that the Coalition Liberals should be crushed out. The Conservatives spurned them, and the Independent Liberals gave notice that they had no use for them. They were destined for extinction. Lord Crewe's speech proceeded on the same lines. May I say how sincerely I rejoice in the tribute to the "amateur diplomatist" which is implied in the conferring by a Conservative government of the blue ribbon of diplomacy upon the leader of the Independent Liberals in the House of Lords?