The Charleville speech[4] and M. PoincarÉ's reply to Lord Curzon's despatch[5] leave things exactly where they were. Rumour said the reply would be long and logical. For once rumour hath not lied. M. PoincarÉ regards this exchange of bolstered notes as a pillow fight which he is quite prepared to prolong in order to gain time whilst the real struggle is developing to its destined end. The prominence given in the press to the fact that this rigid reply is "courteous" is significant of the pitiable condition to which the Entente has been brought by these maladroit negotiations.

What will Mr. Stanley Baldwin and Lord Curzon do next? Much depends for Europe on that next step, and something for them also hangs upon their action or inaction. One is reminded of the answer given by Émile Ollivier to the question addressed to him as to his opinion of one of Napoleon the Third's experiments in constitutional government: "Si c'est une fin, vous Êtes perdu; si c'est un commencement, vous Êtes fondÉ." That sage comment is equally applicable to the Curzon note.

We can only "wait and see," first for the French official reply, and second for the decision of the British Government upon that note. The only new factor in the situation that may have a determining influence on events is the accession of Herr Stresemann to the German Chancellorship.[6] I know nothing of him beyond newspaper report, but he is generally supposed to be a man of energy, courage and resource. If that be true, his appointment to the official leadership of the German people may be an event of the first magnitude. We shall soon know what he is made of. Germany has suffered more from weak or misguided leadership in recent years than any great country in the world. It blundered her into the War, it blundered through the War, it blundered into the armistice, it blundered during the peace negotiations, and it has blundered her affairs badly after the peace. But no one can predict what Germany is capable of with a wise and strong leadership. Herr Stresemann has a responsibility cast upon him and an opportunity afforded him such as have not been given to any statesman since the days of Stein and his coadjutors for regenerating his country and lifting her out of the slough of despond in which she has been sinking deeper and deeper. Those who ignore the effect which powerful and magnetic personalities may have upon the fortunes of nations in despair must have forgotten their history books. The fall of Dr. Cuno and the rise of Herr Stresemann may well turn out to be a more decisive event than the despatch or the publication of the Curzon note. But if he lacks those rare qualities which alone can inspire a people in an emergency to heroic action and endurance, then there is nothing but chaos ahead of Germany. For the moment it is more important to keep a discerning eye on Herr Stresemann than to watch this endless fencing between Downing Street and the Quai d'Orsay.

It is not often I find myself in agreement with M. PoincarÉ, but when he states that British unemployment is not attributable to the occupation of the Ruhr I am substantially in accord with him. In July last[7] I called the attention of the House of Commons to world conditions which injuriously affected our export trade and made unemployment on a large scale inevitable in the British labour market for some time to come. We are more dependent on our overseas trade, export, entrepÔt, shipping and incidental business than any country in the world. Almost half our industrial and commercial activities are associated with outside trade in all its forms. That is not a full statement of the case, for if this important section of our business were to languish, the home trade would also necessarily suffer by the consequential diminution in the purchasing capacity of our people. Before the French ever entered the Ruhr our overseas trade was down to 75 per cent. of its pre-war level. Our population has increased by two millions since 1913; our taxation has increased fourfold; our national debt tenfold; but our business is down 25 per cent. To what is this fall in our outside sales and services attributable? It is the direct consequence of the War. Our customers throughout Europe are impoverished. What is just as bad, our customers' customers are impoverished. So that neither can buy at our stalls the quantities or the qualities which they could be relied upon to purchase before the War. Until Europe can buy, Australia, Canada, India and China cannot pay, as the Prime Minister pointed out in his last speech in the House of Commons. Germany, before the War, bought Australian wool, Canadian grain, Indian jute and tea, and the proceeds as often as not went to pay for goods bought by those countries in British markets. The same observation applies to Russia, Austria, and the Levantine countries. The purchasing capacity of Europe must, therefore, be replenished, a process which will, at best, take years of patient industry. The mischief of the Ruhr lies not in the creation of bad trade, but in retarding the process of recovery. It has undoubtedly had that effect.

Before the French entered the Ruhr trade was gradually if slowly improving all round. The prices of 1922 were lower than those of 1921; therefore, the contrast in sterling was not as apparent as it became on the examination of weights and measures. The export figures, notably in manufactured goods, show a decided increase on those of the preceding year. This advance is reflected in the statistics of unemployment. During the first ten months of 1922 there was a reduction of over 500,000 in the numbers of the registered unemployed. The succeeding ten months give only a slight improvement. Something has happened to arrest the rate of progress towards better times. This is where the Ruhr comes in. Even if it is not, to quote the Prime Minister, a penknife stuck in the watch and stopping the works, it is certainly more than a grain of dust which has perceptibly slowed the action of the sensitive machinery of trade.

The effect of the Ruhr disturbance would continue for some time if the penknife were removed now. For the moment M. PoincarÉ is wedging it in more deeply and firmly. Even if he withdrew it now, the works would not recover their normal steadiness for a long while. During these last disturbing months Germany has become appreciably poorer. Her wealth production has been depressed throughout most of her industrial areas. To a certain extent Lorraine and Belgium have also been affected adversely. The reservoir of wealth upon which industry draws has not been filling up as it ought if the world is ever to recover.

These things are hidden from France. She is a more self-contained country than Britain—perhaps also a more self-centred country. Even after the Napoleonic wars, which drained her best manhood and exhausted her fine nervous virility, she suffered from no interval of economic depression. Her great and victorious rival across the Channel lumbered painfully through fifteen years of misery, poverty and distress. Her own population, basking in the sunshine of prosperity, regarded across the narrow waters, with a natural contentment, the dark fogs that enveloped and drenched their old enemies. Commiseration or sympathy from them at that time was not to be expected. We had fought them for twenty years with an inveterate pertinacity and at last beaten them to the ground and occupied their capital. To-day we suffer because we helped to save their capital from foreign occupation and their country from being humbled to the dust by a foreign foe. Neither in French speeches, notes, nor articles is there any appreciation shown of that cardinal fact in the situation.

All that is clear at the moment is the stubbornness of the French attitude. M. PoincarÉ has not so far receded one millimetre from his original position. Threats and cajoleries alike are answered by a repetition of the same formulÆ, with the slight variations in word or phrase which one would expect from a practised writer. But the theme is always the same and the application is identical to the point of monotony. He is not winning much coal out of his discourses and literary exercises, but to do him justice he is getting something for his country. Last year Lord Balfour, in the note he sent to the Allies on behalf of the British Government, offered to forego all claims for debts and reparations if Britain were secured against payment of the American debt. That meant a surrender of claims aggregating over £3,000,000,000 in return for an assured £1,000,000,000. A very handsome and generous offer. The Curzon note proposes to surrender all our claims for a precarious return of £710,000,000. The Ruhr occupation has already brought down the British claim against the Allies by £290,000,000. M. PoincarÉ may not be able to extract reparations out of Germany, but in seven months he has succeeded in forcing £290,000,000 out of Great Britain. He will certainly ask for more—and probably receive it.

Mr. Bonar Law was right when he said that under certain conditions Great Britain would be the only country to pay a war indemnity. Those conditions have arisen under his successors.

Criccieth, August 20th, 1923.