Part 9

Then there was the bankers' committee, appointed to consider the question of raising an international loan to help France to finance the repair of her devastated area and also to assist Germany to restore her demoralised currency. I remember how eager poor Rathenau was to float that loan and how sanguine he was that it would succeed. He was confident that the German nationals who have invested their gold in other lands could be induced to subscribe heavily to the loan. The bankers concerned--all were of the highest reputation in the financial world--were confident that if German reparations were fixed at a reasonable sum investors throughout the world would gladly put their money into a great international loan which would help to restore Europe. The French government testily declined to consider the essential conditions indicated by the bankers. Another lost opportunity, and Europe once more lumbered along its dreary way to seek another.

It came with Mr. Hughes's famous speech. It was clearly the result of prolonged consideration. For weeks there had been rumours of much consultation in Washington on the state of Europe, and we were encouraged to hope that America meant business. The result was Mr. Secretary Hughes's offer. It was made four days before the Paris conference and was obviously intended to be discussed by the Allies there. An endeavour has been made to minimise the importance of this American approach to Europe, but it is incomprehensible to me how so momentous a pronouncement has been treated as if it were merely the casual utterance of a politician who had to find some topic of more or less interest with which to illuminate a discourse. Another opportunity lost--perhaps the greatest--perhaps the last. Never has luck striven so hard to save stupidity. But luck loses its temper easily and then it is apt to hit hard.

_London, February 15th, 1923._

XIV

FRENCH SCHEMES

"French troops occupying fresh German territory." "Further advance into Germany." "Reinforcements." "French cut off the British bridgehead on the Rhine." "Proposals for new coinage in the Ruhr." What is it all leading to? Is it really reparations? Signor Nitti, who has made a thorough study of all the documents bearing on French designs against Germany, has come definitely to the conclusion that these measures have no reference to the recovery of damages for the devastated area, but that they are all taken in the execution of a vast project for securing French control over all the coal and iron of continental Europe. He supplies chapter and verse for his theory. Something has undoubtedly roused the suspicions of Signor Mussolini. They come rather late in the day to be effective. He naturally does not relish the idea of an Italy whose coal and steel supplies are placed at the mercy of a gigantic trust directed from Paris. Italy has no coal and iron of her own. Her interest is, therefore, in a free market. Hence Signor Mussolini's alarm. Is there any ground for it? Let those who imagine that Italian statesmen are unnecessarily disturbed read the discussions in the French press leading up to the speeches recently delivered by M. Millerand, M. Barthou, and M. Poincaré.

With regard to M. Barthou's intervention, I feel I must, as one of the founders of the Reparations Commission, say a word. There were important questions of amount, method, and time which could not be determined before the signature of the peace treaty and could not be settled at all without giving Germany a full opportunity of being heard. Hence the appointment of the Reparations Commission. It was called into existence to settle these questions after hearing evidence and deliberating on its effect. Of this commission M. Barthou is now chairman. He, therefore, presides over a body which has committed to its charge judicial functions of a momentous character. He has to adjudicate from time to time on the case presented by Germany under a multitude of different heads. Inflammatory speeches on the very subjects upon which he has to preserve judicial calm are quite incompatible with his position. When he occupied the same post M. Poincaré ultimately recognised that he could not continue to write controversial articles on questions which might come before him for decision as a judge. He, therefore, very properly resigned his commissionership.

But to revert to the speeches delivered by these eminent statesmen. If they mean what the actual words convey, then France means to stick to the Ruhr. Not by way of annexation. Oh, no. That, according to M. Barthou, is a "foolish, mendacious and stupid" lie. But France means to hang on to the _gages_ until reparation is paid. What are the _gages_? The industries of the Ruhr. If the French government is to control the industries which represent the life of this prosperous area for thirty years it assumes greater authority over the district than it exercises over the mining area of the Pas de Calais. In its own mining districts no government takes upon itself--except during a war--to give directions as to the destination and distribution of the coal produced. But there are indications that the control over the Ruhr industries is to be of a much more far-reaching character than this. And this is where the hints--broad hints--thrown out by the French press come in. France, in order to secure the payment of the reparation instalments in future, is to be given shares in these great mines and industries. What proportion of shares? Amongst the _gages_ demanded by M. Poincaré in August of last year were sixty per cent. of the shares in certain pivotal German industries in the Rhine area. Now the Ruhr industries are clearly to be included within the scope of the demand. France has the iron ore of Lorraine and the coal of the Saar valley. Her financiers have been engaged in buying up coal mines in Silesia. If she can secure the controlling interest in the Ruhr mines and Belgium and Poland can be persuaded to join in the deal, then the continent of Europe will be at the mercy of this immense coal and iron combine.

I said in the previous chapter that the ports were still open. As long as they are, Central Europe can protect itself to a certain extent against this gigantic trust, for the products of Britain and America will be available. But that possibility is to be provided against. Nothing is to be left to chance. One of the _gages_ is to be control over German customs. How can Germany balance her budget without a revenue? How can she raise a revenue without a tariff? What more productive tariff than a duty on foreign coal and metal manufactures? And thus all competitive products will be excluded from the German markets. The combine will be supreme.

It is true that if this cynical scheme comes off there is an end of reparations--for the independence of German industry is strangled and its life will soon languish. But there are signs that French enterprise has abandoned all idea of recovering reparations and that it is now brooding upon loot--on an immense scale. For the discussions in the French press contemplate even wider and more far-reaching developments than those involved in the control of German industries. Italy, Poland, and even Russia are to be brought in. The high line taken for years by the Parisian papers about "no traffic with murder" is being given up. Instead we have much sentimental twaddle about restoring the old friendly relations between France and Russia--of course, for a consideration. Russia is to buy; Germany is to manufacture; France is to profit.

These proposals, which have for some time been in the air, are now actually in type. Now the type is ordinary black--later on it may be red. Twenty lives have already been lost over the preliminaries of execution. I fear there will be many more as the difficulties become more apparent.

It is not without significance that the terms which Germany is to be called upon to accept in the event of her submission have never been formulated. No ultimatum was issued before invasion. If Germany were to-morrow to throw up her hands what conditions would she have to comply with? Who can tell? Germany clearly does not know. The British government does not know. They were never discussed at the Paris conference. M. Poincaré has only asserted with emphasis that he "will not accept promises." If the Ruhr is to be evacuated promises must be accepted at some stage, for Germany cannot deliver ten years' coal instalments in advance, and she cannot pay fifty milliards of gold marks over the counter. So, if M. Poincaré's statement means anything, then the control of Ruhr industries must be vested in France until the whole of the mortgage has been redeemed. Hence the vast plan for the exploitation of Germany, and through Germany of Europe.

A pretty scheme, but--like most plans which make no allowance for human nature--bound to fail. How long would Italy and Russia consent to be exploited for the enrichment of French capitalists? Italy has already made it clear that she has no intention of walking into the trap. Russia may or may not have been approached. It is not improbable that there have been informal soundings. It is not easy to reckon what the Bolshevists may or may not do in any circumstances. But one can be fairly assured that they will not place their heads in the jaws of a rapacious capitalistic crocodile of this character. Brigands are not made of that simple stuff.

Will German statesmen consent to sell their country into political and economic bondage for an indefinite period? It is incredible. No doubt there had been feelers between French and German capitalists for some time before the Ruhr invasion. M. Loucheur and Herr Stinnes are credited with having had conversations on the subject of amalgamating the interests of Lorraine iron ore and Ruhr coal. But the Ruhr invasion has awakened the patriotism of Germany from its stupor. A potent new element has therefore been introduced into the calculation. This element does not mix well with international finance. It may be depended upon to resist to the last any effort to put German industry under foreign control, and without control the _gage_ is worthless.

Then there is the German workman who must be taken into account. The miner and the engineer in all countries are proverbially independent. They take no orders even from their own governments. During the war they had to be reasoned with before they could be persuaded to take a course urged upon them by the government of the day in the interests of their own country. They will view the commands of a syndicate controlled by foreign governments with suspicion and repugnance. Should disputes arise--and they are more likely than ever to arise constantly under these conditions--who will be responsible for the protection of life, liberty, and property? Will foreign troops operate? Or will the German army and police act practically under orders given from Paris? The popular sympathy will be with the strikers.

It is a fantastic idea born of failure and, therefore, bound itself to be a failure.

_London, March 1st, 1923._

XV

THE QUICKSAND

When you have walked some distance into a quicksand, and are sinking deeper and deeper with every step you take, it is always difficult to decide whether you are more likely to reach firm ground by pressing forward or by going backward. You must do one or other. You cannot just stand fast, for that is inevitable destruction. The French government clearly are of opinion that safety lies in marching further into the quagmire. So three more German cities have been occupied, more burgomasters and officials expelled, more men and boys shot in the streets, more black troops imported, more regulations and more decrees issued; there are more depressions of French, Belgian and Italian exchanges, more confusion in everybody's business in Central Europe--in a sentence, everywhere there is more quaking sand and less solid coal. The total shortage in deliveries as compared with the promises of Spa was only eight per cent. Had it not been for this fatuous invasion, France during the past six or seven weeks would have already received from the Ruhr nearly 3,000,000 tons in coal and in coke. France has actually received 50,000 tons during this period. A swarm of engineers, railwaymen, bargemen, officials of all kinds, and hotel waiters, supported by a formidable army have in six weeks produced this ridiculous output. No doubt the amount will later on be increased by further pressure and by pouring in more railwaymen, but it will be a long time ere France receives her Spa quota minus eight per cent., and then there will be some months' arrears to make up.

No wonder that M. Loucheur stated flatly in the French Chamber that he did not approve of the Ruhr enterprise. He has one distinct advantage over the Ruhr plungers--he does know something about business. He can boast also of another gift, the possession of which is not without significance when you consider his present attitude. He is an admirable judge of to-morrow's weather. That is a rare endowment amongst politicians. Any simpleton can tell you which way the wind is blowing to-day, but it requires a man of special insight and experience in these matters to forecast the direction of the wind to-morrow. M. Loucheur is one of those exceptionally well-equipped weather prophets. So he satisfies the opinion of to-day by giving his support to M. Poincaré, and he safeguards his position against the morrow's change by stating clearly that he does not approve the policy he supports. I have read no declaration from any French statesman of eminence--with the doubtful exception of M. Barthou--indicating a belief in the wisdom of the venture. And yet French courage, French pride, French loyalty, French patriotism--and maybe French blood and treasure--are committed irretrievably to a reckless gamble which most of the responsible statesmen who led France by their wisdom through her great troubles regard with doubt, anxiety and apprehension.

Will the French government try to extricate themselves from the difficulties into which they have precipitated their country and Europe? I fear not. Heedlessness rushes a man into danger; it needs courage to get out. And when getting out involves an admission of blame there are few men who possess that exalted type of courage. There are other reasons why the present government of France will flounder further into the quicksand. When governments make mistakes in England, the threat of a Parliamentary defeat or a couple of adverse by-elections pulls them out roughly but safely, and the governments start on a new course amid the general satisfaction of friend and foe. The Willesden, Mitcham, and Liverpool elections rescued the government from one of the most hopeless muddles into which any administration has ever contrived to get its affairs. In similar circumstances in France a change of government is negotiated with amazing dexterity and celerity. But you cannot arrange the preliminary overthrow of an existing government unless there is some one in the background ready and willing to form the next. There are generally two or three outstanding men of high repute prepared to serve their country in any emergency. The trouble to-day in France is that every alternative leader disapproves of this enterprise and believes it must ultimately fail. On the other hand, there is no prominent figure in French politics prepared to take upon himself the odium of sounding the retreat. It would always be said that success was in sight, and that had it not been for the new minister's cowardice and perfidy France would have emerged triumphantly out of all her financial worries. The _drapeau_ would have been lowered and betrayed. No French statesmen dare face that deadly accusation. So the present French government is tied to the saddle of its charger and is forced to go on.

Another explanation of the difficulty of withdrawing is to be found in the increasing fury of the original fomenters of this rashness. The more fruitless the enterprise the greater the energy they display in spurring the government further into its follies. In the previous article I gave a summary of the ambitious plans they had conceived for syndicating European resources under French control. The industries of Europe controlled from Paris--that is their magnificent dream. Now they propound a new treaty which is to supersede the treaty of Versailles. Boundaries are to be revised, rich provinces and towns practically annexed, the Ruhr coal is to be harnessed to Lorraine coal, and Germany, having been further mutilated and bound, is to be reduced to a state of complete economic subjection. There has been nothing comparable to these ideas since the Norman conquest, when the Saxons, having first of all been disarmed, were reduced to a condition of economic thraldom for the enrichment and glorification of their new masters. Needless to say Britain and America are not to be invited to attend this new peace conference. They are to be graciously informed of the conditions of the new peace when finally established by French arms. The British Empire, which raised millions of men to liberate French soil from the German invaders and which lost hundreds of thousands of its best young lives in the effort, is not even to be consulted as to the settlement which its losses alone make possible. America, who came to the rescue with millions of its bravest, is barely worth a sentence in these ravings of brains intoxicated with an unwholesome mixture of hatred, greed and military arrogance. The French government are not committed by any overt declarations to these schemes; but it is ominous that they issue from the pens whose insistent prodding has driven this government on to its present action. Up to the present no repudiation has come from the head of the government or from any of his subordinates. The very vagueness of his published aims would leave him free to adopt any plans. Pledges for reparation and security will cover a multitude of aggressions.

The British government have just issued as a Parliamentary paper a full report of the proceedings of the Paris conference. It is an amazing document. As far as I can see no real endeavour was made by any of its members to prevent a break-up. At the first failure to secure agreement the delegates threw up their hands in despair and sought no alternatives. They agreed about nothing except that it was not worth while spending another day in trying to agree. Even M. Theunis, the resourceful Belgian premier, had nothing to suggest. A blight of sterility seems to have swept over the conference. On this aspect of the fateful and fatal conference of Paris I do not now propose to dwell. I wish to call attention to it for another purpose. I have perused the Blue Book with great care. I was anxious to find out exactly what M. Poincaré proposed to demand of Germany as a condition of submission to the French will. What was Germany to do if she was anxious to avert the fall of the axe? I have read his speeches and annexes in vain for any exposition of these terms. It is true he was never asked the question. That sounds incomprehensible. But every one engaged was in such a hurry to break up the conference and thus put an end to disagreeable disagreements that it never seems to have occurred to them to ask this essential question. And the party principally concerned was not represented. The result is that no one knows the terms upon which the French army is prepared to evacuate the Ruhr. Mr. Bonar Law could not explain when questioned in the House of Commons. I am not surprised, for no one has ever told him and he never asked. I am sure that by this time M. Poincaré has quite forgotten why he ever went into the Ruhr. For that, amongst other reasons, he will remain there until something happens that will provide us with an answer.

Most human tragedy is fortuitous.

_London, March 10th, 1923._

XVI

THE FIRST GERMAN OFFER

The French and Belgian governments have slapped another opportunity in the face. To make that slap resound as well as sting, they have accompanied their rejection of the German offer by a savage sentence of fifteen years' imprisonment on the head of the greatest industrial concern in the Ruhr, if not in Europe. What for? Because he ordered the works' syren to sound "cease work" for one day when the French troops occupied the place. There is a swagger of brutality about that sentence which betokens recklessness. It came at a moment when the German government had just made an offer of peace, and when that ally of France who had made the deepest sacrifices in the war to save her and Belgium from ruin was urging the French government to regard that offer at least as a starting-point for discussion. The answer was to treat the German note as an offence, to promulgate that penal sentence which outrages every sense of decency throughout the world, and to refuse to permit an ally, who had been so faithful in the time of trouble for France and Belgium, even the courtesy of a discussion on the tenor of the reply to be given to a note that so vitally concerned the interest of all the Allies without exception. Prussian arrogance in its crudest days can furnish no such example of clumsy and short-sighted ineptitude. It gives point to Lord Robert Cecil's observation in the House of Commons that it is very difficult to reconcile the French attitude with a conception that the French government, with the opinion behind it, desires a settlement.

What is the German offer? It proposes to limit the total obligations of Germany in cash and in kind to thirty milliards of gold marks (£1,500,000,000) to be raised by loans on the international money markets at normal conditions in instalments of:--

20 milliards up to July 1, 1927. 5 milliards up to July 1, 1929. 5 milliards up to July 1, 1931.

There are provisions for payment of interest from July, 1923, onward, and the agreements entered into for delivery of payments in kind on account of reparations are to be carried out in accordance with the arrangements already made. Then comes this important provision. After a paragraph in which it is argued that the above figures would strain the resources of Germany to the utmost it adds:--

"Should others not share this opinion, the German government propose to submit the whole reparations problem to an international commission uninfluenced by political considerations, as suggested by State Secretary Hughes."

They further state that the German government are prepared to devise suitable measures in order that the whole German national resources should participate "in guaranteeing the service of the loan." Guarantees are also offered for deliveries in kind. In order to ensure a permanent peace between France and Germany they propose an agreement that all contentious questions arising between them in future should be referred to arbitration. The note finally stipulates that the evacuation of the Ruhr "within the shortest space of time" and the restoration of treaty conditions in the Rhineland constitute "an essential leading up to negotiations on basis of above ideas." The above represents the substance of the German proposals.