Part 8

"'The alternative of forcible measures to obtain reparations is not an attractive one. No one can foretell the extent of the serious consequences which might ensue from such a course. Apart from political results, I believe that the opinion of experts is that such measures will not produce reparation payments, but might tend to destroy the basis of those payments, which must be found in economic recuperation. If, however, statesmen cannot agree, and such an alternative is faced, what can be done? Is there not another way out? The fundamental condition is that in this critical moment the merits of the question as an economic one must alone be regarded. Sentiment, however natural, must be disregarded; mutual recriminations are of no avail; reviews of the past, whether accurate or inaccurate, promise nothing; assertions of blame on the one hand and excuses on the other come to naught.

"'There ought to be a way for statesmen to agree upon what Germany can pay, for no matter what claims may be made against her that is the limit of satisfaction. There ought to be a way to determine that limit and to provide a financial plan by which immediate results can be obtained and European nations can feel that the foundations have been laid for their mutual and earnest endeavours to bring about the utmost prosperity to which the industry of their people entitles them.

"'If statesmen cannot agree and the exigencies of public opinion make their course difficult, then there should be called to their aid those who can point the way to a solution.

"'Why should they not invite men of the highest authority in finance in their respective countries--men of such prestige, experience, and honour that their agreement upon the amount to be paid and upon the financial plan for working out payments would be accepted throughout the world as the most authoritative expression obtainable? The governments need not bind themselves in advance to accept the recommendations, but they can at least make possible such an inquiry with their approval and free the men who may represent their country in such a commission from any responsibility to foreign offices and from any duty to obey political instructions.

"'In other words, they may invite an answer to this difficult question from men of such standing and in such circumstances of freedom as will ensure a reply prompted only by knowledge and conscience. I have no doubt that distinguished Americans would be willing to serve on such a commission. If the governments saw fit to reject the recommendation upon which such a body agreed they would be free to do so, but they would have the advantage of impartial advice and of an enlightened public opinion. The peoples would be informed that the question would be rescued from assertion and counter-assertion and the problem put upon its way to solution.

"'I do not believe that any general conference would answer the purpose better, much less that any political conference would accomplish a result which prime ministers find it impossible to reach. But I do believe that a small group, given proper freedom of action, would be able soon to devise a proper plan. It would be time enough to consider forcible measures after such opportunity had been exhausted.'

"Mr. Hughes's closing words were:

"'There lies the open broad avenue of opportunity, if those whose voluntary action is indispensable are willing to take advantage of it. And once this is done, the avenues of American helpfulness cannot fail to open hopefully.'"

The argument developed by Mr. Hughes in this speech is identical with that upon which I based my appeal in the previous chapter for an impartial investigation into Germany's capacity, and he concludes with a proposal which is in effect identical with mine. He does not state categorically that the American government would be prepared to be officially represented on the commission. But when he says, "I have no doubt that distinguished Americans would be willing to serve on such a commission," it means that the government would be indirectly represented. The Allied governments would certainly have consulted the government of the U.S.A. as to the American representative nominated to sit on the commission, and no American expert would be appointed without full assurance that he was acceptable to the government of his country.

It is a misfortune that such important proposals should have been put forward so timorously that those who wished to ignore them could easily pretend they had never heard them made. Speeches delivered even by Secretaries of State at an academic function in a small provincial town might very well be overlooked in foreign chancelleries, whose postbags bulge with weighty despatches from many lands, without any suggestion of studied neglect. It was clear from Mr. Bonar Law's subsequent attitude in the course of the debate in the House of Commons on the Ruhr invasion that he at any rate had not seen Mr. Hughes's New Haven deliverance. Timid diplomatic flutterings make no impression in a great situation, and so lead to nothing. This is an excellent example of how not to speak if you wish to be heard, and of how to speak if you have no desire to be heeded.

_London, July 4th, 1923._

XII

THE FRENCH INVASION OF THE RUHR

France has once more jumped on the prostrate form of Germany, and the sabots have come down with a thud that will sicken the hearts of multitudes on both sides of the Atlantic whose friendship for France stood the losses and griefs of a four years' war.

Germany having been overthrown and disarmed after a prodigious effort, involving a strain upon the combined strength of America, Italy, and the whole British Empire, as well as France, and her arms bound with the thongs of a stern treaty, the process of dancing upon her while she is down can at any time now be performed with complete impunity by any one of these powers alone.

The spectacle every time it is repeated, provides much satisfaction to those who indulge in the barren delights of revenging the memory of past wrongs. There is no doubt some joy for the unsportsmanlike mind in kicking a helpless giant who once maltreated you and who, but for the assistance of powerful neighbours, would have done so a second time.

But what good will it bring devastated France or her overtaxed Allies? The additional coal and timber that will be wrung out of Germany will barely cover the direct cost of collection. Although Germany bears the extra cost, the expense of these punitive measures must all in the end diminish the means of reparation, and therefore fall on the victor.

How many students of the problem of reparations have ever taken the trouble to ascertain the extent to which the maintenance of Allied armies of occupation has already drained the resources of Germany? Between direct cash payments, the cost of supplies, and outlay in labour and material for building huge barracks, these armies have already cost Germany 6,000,000,000 gold marks--roughly 1,200,000,000 dollars, or over £300,000,000.

How much better it would have been if most of this money had gone towards rebuilding the devastated area!

It is not without significance, now that war is being waged against Germany for what the American representative in Paris termed her technical default, to recollect that, between the expense of the army of occupation and contributions already made towards reparations, Germany has already paid to the Allies over three times the amount of the total indemnity exacted by Bismarck in 1871.

This is without making any allowance for the vast and highly developed colonies which she surrendered. Let, therefore, no one approach this problem as if he were dealing with a recalcitrant country that is deliberately refusing to acknowledge any of her obligations under a treaty which she has signed.

The costs of the last war are acknowledged to be irrecoverable. It is difficult enough to find the means for payment of damages. Who will pay the growing cost of this new war?

So far I have referred only to the direct outlay upon these aggressive measures. The indirect cost to victor and vanquished alike will be crushing.

It is already accumulating. The mere threat has depreciated the value of the franc, and thus reduced its purchasing capacity abroad. This loss must be borne by the French consumer. There may be a rally; but I shall be surprised if the improvement is more than temporary.

All that is obvious for the moment to the untrained eye is the way in which the mark is dragging the French and Belgian franc slowly along its own downward course.

As the distance between them lengthens and the invisible cord which ties them together becomes more and more attenuated, it may ultimately snap and the franc be released from this dangerous association. That I doubt, for a bankrupt Germany means a country to which even the most hopeful cannot look as a means of redeeming French deficits.

Once that is clear to the French peasant he will not so readily part with his savings, and the real difficulties of French finance will begin at that stage. A policy, therefore, which demoralises the German currency is one which is also fatal to the solvency of French finance.

Let us follow the probable sequence of events. The terrified German mark is rushing headlong to the bottom of the pit where the Austrian krone is already lost beyond rescue.

As long as reparation coal is dug out by bayonets, and reparation timber is cut down by swords, it is idle to talk of restoring the mark by putting German finance in order.

No tariff, however nimble, can keep pace with the runaway mark. It would baffle the most resourceful finance minister to adapt his budget to a currency which disappears beyond the horizon while he is sitting at his desk to pen his proposals.

If the mere threat of force has produced such a panic, what will be the effect of the actual measures? It is safe to predict that the advance of French troops into Germany will not restore the composure of the frightened mark and arrest its flight.

What, then, becomes of the hope of renewed payments of the annuity? At best Germany could only be expected to pay when her foreign trade was so improved that she could provide a margin out of her exports with which to pay her annuities. Her foreign trade is largely dependent upon her foreign exchanges. These are now destroyed beyond prospect of recovery for years.

Britain proposed a voluntary moratorium for a short term of years in order to place Germany in a position where she could at the end of that term pay a reasonable annuity. The French government have in effect substituted a compulsory moratorium for an indefinite period with no prospect of payment in sight.

The only chance of securing an early instalment of reparation payments was by pressing Germany to put her finances in order and giving her fair time in which to do so. The only chance of negotiating a loan on German security to assist France to pay for the repair of her devastated provinces, and to enable her to put her own finances in order, was by restoring the stability of German currency.

French statesmen have deliberately thrown both these chances away. The effect on the value of their own currency must be grave, and Frenchmen will have to pay in increased cost of living for a venture dictated by short-sighted and short-tempered statesmanship.

When one thinks of the consequences one is driven to ask whether French politicians are really seeking reparations or are pursuing another purpose quite incompatible with the recovery of money payments under the treaty.

This is the wrong road to reparations. It leads in exactly the opposite direction.

Whither, then, does it lead? There is no doubt that its effect will be ruinous as far as German industry is concerned. I have already dealt with its disastrous influence upon German currency, and with the indirect effect of a rapidly depreciating currency upon German foreign trade. The seizure of the Ruhr mines will have another serious effect.

Even now the result of the compulsory alienation of so much of Germany's coal supply in the Ruhr, in Silesia, and the Saar, from German industry, has diminished German productiveness. The fuel deficiency thereby created inside Germany has been partially supplied by purchases of coal from outside sources. The necessity for providing gold to pay for foreign coal has added considerably to Germany's financial difficulties.

A still larger foreign purchase will be the inevitable result of the forcible diversion of large quantities of Ruhr coal to France and Italy, with further financial embarrassments as a consequence.

That is bad enough. But I fear worse. Will the German miner work with the same regularity and efficiency for a foreign master as he does for a German employer? Is there the least possibility of the production being maintained at its present level?

The influence of this added muddle on world trade is incalculable. Nobody gains; everybody is a loser by the move. How is a Germany whose embarrassed finances are made still more involved--how is a Germany whose industry becomes more and more difficult--how is a Germany reduced to despair to be of the slightest use to France, Belgium, Italy, or anybody else?

The feather-headed scribes who have advocated this rash policy assume that France will be helped because Germany will thus be reduced to impotence. For how long?

The disintegration of Germany is not an unlikely consequence of this move. I know that is the expectation. Frenchmen still hanker after the days when Saxons and Bavarians and Wurtembergers were allies, and almost vassals, of France against Prussia. It was the lure that led the Third Napoleon to his ruin. It is the attraction which is now drawing France once more to a sure doom. The policy will bring no security to France in the future. It deprives her of all hope of reparations in the immediate present. There will no longer be a Germany to pay. It would be too hopeless a task to attempt recovery from each of the severed states.

But what of increased security? Nothing can keep Germans permanently apart. They will, at the suitable moment reunite under more favourable conditions, freed from external as well as internal debt. France will have lost her reparations and only retained the hatred of an implacable foe become more redoubtable than ever.

How would Europe have fared in the interval whilst France was learning from events what every other country can see now? There is no knowing what will happen when a brave people of 60,000,000 find themselves faced with utter ruin. Whether they turn to the left or to the right will depend on questions of personal leadership, which are not yet determined. All we can be sure of is that they can hardly go on as they are, maintaining an honest struggle for ordered freedom and democratic self-government. The French proclamation, with its threat of "severest measures in case of recalcitrancy," is ominous of much that may happen. No people accustomed to national independence have ever been able long to tolerate a foreign yoke.

Chancellor Cuno's action is the first manifestation of the spirit of revolt. It will certainly grow in intensity. The lash will then fall, sooner or later, and Germany will be inevitably driven to desperate courses. A Communist Germany would infect Europe. European vitality is so lowered by exhaustion that it is in no condition to resist the plague. Would a reactionary Germany be much better--brooding and scheming vengeance?

Russia, with her incalculable resources of men and material, is at hand, needing all that Germany can best give and best spare. The Bolshevik leaders only require what Germany is so well fitted to supply in order to reorganise their country and convert it into the most formidable state in Europe or Asia.

Nations hard pressed on the East have in the past moved forward irresistibly to the West. In obedience to the same law a people hard pressed on the West will look to the East.

When the French troops marched on Essen they began a movement the most far-reaching, and probably the most sinister in its consequences, that has been witnessed for many centuries in Europe. And these are the people who, after fifty years of patient and laborious waiting, have demonstrated to the world in 1918 the stupidity of abusing victory in 1871.

If the teacher so soon forgets his own special lesson the pupil is not likely to remember when fury overcomes terror.

_Algeciras, January 15th, 1923._

XIII

LOST OPPORTUNITIES

The French government, having conspicuously failed to win its anticipated coup, is doubling the stakes each time it loses. When will it end? And where will it end? It is ill gambling with human passions. They are all engaged in this wild venture--on both sides of the table. Pride, greed, vanity, obstinacy, temper, combativeness, racial antagonisms, but also patriotism, love of justice, hatred of wrong and high courage. Each side draws from the same arsenal of fiery human emotions. Unless some one steps in to induce a halt I fear the result will be devastating.

France has now abandoned all hope of being able to run the mines, railways, and workshops of the Ruhr by military agencies. In these days you cannot shoot every worker who fails to excavate so many hundredweights of coal per diem, or who refuses to fill a wagon or drive a locomotive when and by whomsoever he is told to do so. France cannot provide the necessary complement of miners and railwaymen from outside to fill vacancies created by sulky workers. And even if she could it would take many months ere they become sufficiently accustomed to their new conditions to work without peril to themselves. So a new policy has been improvised. It is nothing less than the siege of Germany. Sixty millions of Germans are to be starved into surrender. That is a long business, as every one knows who has been engaged on the difficult operations of strike breaking. We have often witnessed workers with little support or sympathy from the rest of the community hold out for weeks after their funds have been exhausted. In Germany all classes are united in resistance. The national pride fortifies endurance and incites to sacrifice. And the ports are still open. Meanwhile incidents may happen, developments may occur which will create a situation that will baffle all the resources the invaders can command.

It is very little use looking backward. But there are many who are disposed to say that the invasion of the Ruhr was bound to come and the sooner the safer. The Ruhr coal mines were the wild oats of reparation. Get it over quickly. The headache will bring repentance and France will then settle down to a quiet life. That is the argument. I must enter an emphatic protest against this view. If this ill-judged enterprise had been put off for a few more months I do not believe any French government would have embarked upon it. There is no French statesman of any standing who, in his heart, believes in its wisdom. Now that the credit of France is involved in its success they will all support it. But French opinion, as a whole, was moving with startling rapidity from this policy. The Parisian pulse was still feverish, but the provinces had completely calmed down. Vacancies occurring in the Senate, the Chamber of Deputies and the provincial assemblies during several months have afforded an opportunity of testing real French opinion and the results have been sensational. At election after election, fought in typical constituencies all over France, the champions of Ruhrism have been beaten by emphatic majorities. Masses of French workmen have always opposed this policy. The peasant in every land always moves slowly. But there can be no doubt that the French peasant has had enough of military adventures. His sons were never numbered amongst the "exempts," and the losses in the peasant homes of France were appalling. Driving through the villages in agricultural France you find yourself asking, "Where are the young men?" The answer invariably comes, "This village suffered severely in the war." You will receive the same answer in the next village, and the next. We cannot wonder, therefore, that by-elections in rural as well as in urban France display an unmistakable weariness of plans which involve the marching of armed Frenchmen into hostile territory. The sorrowing people of France have good reason to shrink from any course of action that leads to further shedding of blood.

For these reasons I have steadily favoured every scheme that had the effect of postponing decision as to the Ruhr. Delay meant ultimate defeat for the Chauvinists. That is why they strove so hard to rush their government into this precipitate action. The abrupt termination of the Paris conference was their opportunity and they seized it with tingling fingers. Until then there had never been a clean break on which violence could be founded. The friends of moderation both here and on the continent had seen to that. There had been reference of questions for the scrutiny of experts and calming adjournments to await their report. When it arrived there were endless suggestions and counter-suggestions to meet difficulties. In the end Europe was saved from the catastrophe of once more handing over its destinies to the guidance of blind force. Unhappily, weariness or impatience induced the Paris negotiators in a few hours to drop the reins which had for at least four years held the furies from dashing along their career of destruction. There were many alternative plans that might have been discussed. There was the proposal to refer the whole question to the League of Nations. It is true that when I suggested it in August last M. Poincaré summarily rejected it. But the Allies also rejected M. Poincaré's proposals by a majority of four to one at that conference. That did not prevent his repeating them in January--and this time he succeeded in winning over the majority to his view. A little more persistence and less pessimism might have persuaded Belgium, Italy and Japan to aid our appeals to France to trust rather to the League of Nations than to the uncertainties of war.

What is still more inexplicable is the failure of the conference to take any note of Mr. Secretary Hughes's New Haven speech. Neglected opportunities litter the path of this troublesome question. There were the Cannes conversations, broken off just as they were reaching fruition. Had they been continued another week they would have ended in a helpful settlement which would have brought reparations to France, confidence to Germany, and peace to Europe. They struck on one of the many sunken reefs which bestrew the French political seas, and it will not surprise me to find that the whole cargo of reparations disappeared then beyond salvage into the deep with these shipwrecked negotiations.

Again, Germany threw away a great opportunity at Genoa when all the nations of Europe came together for the first time to discuss their troubles in the spirit of equality and amity. It is true that reparations were excluded at the instance of France from the programme of the conference. But the spirit engendered by a friendly settlement of all other outstanding questions would have rendered a reasonable and temperate consideration of reparations inevitable. Germany, by its foolish staging of its Russian agreement, made all that impossible. Resentment and suspicion were once more equipped with a scourge and they used it relentlessly to drive out all goodwill for Germany from the purlieus of that great congress. Another lost opportunity.