From the Ratification of the Treaty Of Versailles to the Second Ultimatum Of London

I. The Execution of the Treaty and the Plebiscites

The Treaty of Versailles was ratified on January 10, 1920, and except in the plebiscite areas its territorial provisions came into force on that date. The Slesvig plebiscite (February and March, 1920) awarded the north to Denmark and the south to Germany, in each case by a decisive majority. The East Prussian plebiscite (July, 1920) showed an overwhelming vote for Germany. The Upper Silesian plebiscite (March, 1921) yielded a majority of nearly two to one in favor of Germany for the province as a whole,[2] but a majority for Poland in certain areas of the south and east. On the basis of this vote, and having regard to the industrial unity of certain disputed areas, the principal Allies, with the exception of France, were of opinion that, apart from the southeastern districts of Pless and Rybnik which, although they contain undeveloped coalfields of great importance, are at present agricultural in character, nearly the whole of the province should be assigned to Germany. Owing to the inability of France to accept this solution, the whole problem was referred to the League of Nations for final arbitration. This body bisected the industrial area in the interests of racial or nationalistic justice; and introduced at the same time, in the endeavor to avoid the consequences of this bisection, complicated economic provisions of doubtful efficiency in the interests of material prosperity. They limited these provisions to fifteen years, trusting perhaps that something will have occurred to revise their decision before the end of that time. Broadly speaking, the frontier has been drawn, entirely irrespective of economic considerations, so as to include as large as possible a proportion of German voters on one side of it and Polish voters on the other (although to achieve this result it has been thought necessary to assign two almost purely German towns, Kattowitz and KÖnigshÜtte to Poland). From this limited point of view the work may have been done fairly. But the Treaty had directed that economic and geographical considerations should be taken into account also.

I do not intend to examine in detail the wisdom of this decision. It is believed in Germany that subterranean influence brought to bear by France contributed to the result. I doubt if this was a material factor, except that the officials of the League were naturally anxious, in the interests of the League itself, to produce a solution which would not be a fiasco through the members of the Council of the League failing to agree about it amongst themselves; which inevitably imported a certain bias in favor of a solution acceptable to France. The decision raises, I think, much more fundamental doubts about this method of settling international affairs.

Difficulties do not arise in simple cases. The League of Nations will be called in where there is a conflict between opposed and incommensurable claims. A good decision can only result by impartial, disinterested, very well–informed and authoritative persons taking everything into account. Since International Justice is dealing with vast organic units and not with a multitude of small units of which the individual particularities are best ignored and left to average themselves out, it cannot be the same thing as the cut–and–dried lawyer's justice of the municipal court. It will be a dangerous practice, therefore, to entrust the settlement of the ancient conflicts now inherent in the tangled structure of Europe, to elderly gentlemen from South America and the far Asiatic East, who will deem it their duty to extract a strict legal interpretation from the available signed documents,—who will, that is to say, take account of as few things as possible, in an excusable search for a simplicity which is not there. That would only give us more judgments of Solomon with the ass's ears, a Solomon with the bandaged eyes of law, who, when he says “Divide ye the living child in twain,” means it.

The Wilsonian dogma, which exalts and dignifies the divisions of race and nationality above the bonds of trade and culture, and guarantees frontiers but not happiness, is deeply embedded in the conception of the League of Nations as at present constituted. It yields us the paradox that the first experiment in international government should exert its influence in the direction of intensifying nationalism.

These parenthetic reflections have arisen from the fact that from a certain limited point of view the Council of the League may be able to advance a good case in favor of its decision. My criticism strikes more deeply than would a mere allegation of partiality.

With the conclusion of the plebiscites the frontiers of Germany were complete.

In January 1920 Holland was called on to surrender the Kaiser; and, to the scarcely concealed relief of the Governments concerned, she duly refused (January 23, 1920). In the same month the surrender of some thousands of “war criminals” was claimed, but, in the face of a passionate protest from Germany, was not insisted on. It was arranged instead that, in the first instance at least, only a limited number of cases should be pursued, not before Allied Courts, as provided by the Treaty, but before the High Court of Leipzig. Some such cases have been tried; and now, by tacit consent, we hear no more about it.

On March 13, 1920, an outbreak by the reactionaries in Berlin (the Kapp “Putsch”) resulted in their holding the capital for five days and in the flight of the Ebert Government to Dresden. The defeat of this outbreak, largely by means of the weapon of the general strike (the first success of which was, it is curious to note, in defense of established order), was followed by Communist disturbances in Westphalia and the Ruhr. In dealing with this second outbreak, the German Government despatched more troops into the district than was permissible under the Treaty, with the result that France seized the opportunity, without the concurrence of her Allies, of occupying Frankfurt (April 6, 1920) and Darmstadt, this being the immediate occasion of the first of the series of Allied Conferences recorded below—the Conference of San Remo.

These events, and also doubts as to the capacity of the Central German Government to enforce its authority in Bavaria, led to successive postponements of the completion of disarmament, due under the Treaty for March 31, 1920, until its final enforcement by the London Ultimatum of May 5, 1921.

There remains Reparation, the chief subject of the chronicle which follows. In the course of 1920 Germany carried out certain specific deliveries and restitutions prescribed by the Treaty. A vast quantity of identifiable property, removed from France and Belgium, was duly restored to its owners.[3] The Mercantile Marine was surrendered. Some dyestuffs were delivered, and a certain quantity of coal. But Germany paid no cash, and the real problem of Reparation was still postponed.[4]

With the Conferences of the spring and summer of 1920 there began the long series of attempts to modify the impossibilities of the Treaty and to mold it into workable form.

II. The Conferences of San Remo (April 19–26, 1920), Hythe (May 15 and June 19, 1920), Boulogne (June 21, 22, 1920), Brussels (July 2–3, 1920), and Spa (July 5–16, 1920)

It is difficult to keep distinct the series of a dozen discussions between the Premiers of the Allied Powers which occupied the year from April 1920 to April 1921. The result of each Conference was generally abortive, but the total effect was cumulative; and by gradual stages the project of revising the Treaty gained ground in every quarter. The Conferences furnish an extraordinary example of Mr. Lloyd George's methods. At each of them he pushed the French as far as he could, but not as far as he wanted; and then came home to acclaim the settlement provisionally reached (and destined to be changed a month later) as an expression of complete accord between himself and his French colleague, as a nearly perfect embodiment of wisdom, and as a settlement which Germany would be well advised to accept as final, adding about every third time that, if she did not, he would support the invasion of her territory. As time went on, his reputation with the French was not improved; yet he steadily gained his object,—though this may be ascribed not to the superiority of the method as such, but to facts being implacably on his side.

The first of the series, the Conference of San Remo (April 19–26, 1920), was held under the presidency of the Italian Premier, Signor Nitti, who did not conceal his desire to revise the Treaty. M. Millerand stood, of course, for its integrity, whilst Mr. Lloyd George (according to The Times of that date) occupied a middle position. Since it was evident that the French would not then accept any new formula, Mr. Lloyd George concentrated his forces on arranging for a discussion face to face between the Supreme Council and the German Government, such a meeting, extraordinary to relate, having never yet been arranged, neither during the Peace Conference nor afterwards. Defeated in a proposal to invite German representatives to San Remo forthwith, he succeeded in carrying a decision to summon them to visit Spa in the following month “for the discussion of the practical application of the Reparation Clauses.” This was the first step; and for the rest the Conference contented itself with a Declaration on German Disarmament. Mr. Lloyd George had had to concede to M. Millerand that the integrity of the Treaty should be maintained; but speaking in the House of Commons on his return home, he admitted a preference for a not “too literal” interpretation of it.

In May the Premiers met in privacy at Hythe to consider their course at Spa. The notion of the sliding scale, which was to play a great part in the Paris Decisions and the Second Ultimatum of London, now came definitely on the carpet. A Committee of Experts was appointed to prepare for examination a scheme by which Germany should pay a certain minimum sum each year, supplemented by further sums in accordance with her capacity. This opened the way for new ideas, but no agreement was yet in sight as to actual figures. Meantime the Spa Conference was put off for a month.

In the following month the Premiers met again at Boulogne (June 21, 1920), this meeting being preceded by an informal week–end at Hythe (June 19, 1920). It was reported that on this occasion the Allies got so far as definitely to agree on the principle of minimum annuities extensible in accordance with Germany's economic revival. Definite figures even were mentioned, namely, a period of thirty–five years and minimum annuities of three milliard gold marks. The Spa Conference was again put off into the next month.

At last the Spa meeting was really due. Again the Premiers met (Brussels, July 2, 3, 1920) to consider the course they would adopt. They discussed many things, especially the proportions in which the still hypothetical Reparation receipts were to be divided amongst the claimants.[5] But no concrete scheme was adopted for Reparation itself. Meanwhile a memorandum handed in by the German experts made it plain that no plan politically possible in France was economically possible in Germany. “The Note of the German economic experts,” wrote The Times on July 3, 1920, “is tantamount to a demand for a complete revision of the Peace Treaty. The Allies have therefore to consider whether they will call the Germans sharply to order under the menace of definite sanctions, or whether they will risk creating the impression of feebleness by dallying with German tergiversations.” This was a good idea; if the Allies could not agree amongst themselves as to the precise way of altering the Treaty, a “complete accord” between them could be re–established by “calling the Germans sharply to order” for venturing to suggest that the Treaty could be altered at all.

At last, on July 5, 1920, the long–heralded Conference met. But, although it occupied twelve days, no time was found for reaching the item on the agenda which it had been primarily summoned to discuss—namely, Reparations. Before this dangerous topic could be reached urgent engagements recalled M. Millerand to Paris. One of the chief subjects actually dealt with, coal, is treated in Excursus I. at the conclusion of this chapter. But the chief significance of the meeting lay in the fact that then for the first time the responsible ministers and experts of Germany and the Allied States met face to face and used the methods of public conference and even private intimacy. The Spa Conference produced no plan; but it was the outward sign of some progress under the surface.

III. The Brussels Conference (December 16–22, 1920)

Whilst the Spa Conference made no attempt to discuss the general question of the Reparation settlement, it was again agreed that the latter should be tackled at an early date. But time passed by, and nothing happened. On September 23, 1920, M. Millerand succeeded to the Presidency of the French Republic, and his place as Premier was taken by M. Leygues. French official opinion steadily receded from the concessions, never fully admitted to the French public, which Mr. Lloyd George had extracted at Boulogne. They now preferred to let the machinery of the Reparation Commission run its appointed course. At last, however, on November 6, 1920, after much diplomatic correspondence, it was announced that once again the French and British Governments were in “complete accord.” A conference of experts, nominated by the Reparation Commission, was to sit with German experts and report; then a conference of ministers was to meet the German Government and report; with these two reports before it the Reparation Commission was to fix the amount of Germany's liability; and finally, the heads of the Allied Governments were to meet and “take decisions.” “Thus,” The Times recorded, “after long wanderings in the wilderness we are back once more at the Treaty of Versailles.” The re–perusal of old files of newspapers, which the industrious author has undertaken, corroborates, if nothing else does, the words of the Preacher and the dustiness of fate.

The first stage of this long procedure was in fact undertaken, and certain permanent officials of the Allied Governments[6] met German representatives at Brussels, shortly before Christmas 1920, to ascertain facts and to explore the situation generally. This was a conference of “experts” as distinguished from the conferences of “statesmen” which preceded and followed it.

The work of the Brussels experts was so largely ignored and overthrown by the meetings of the statesmen at Paris shortly afterwards, that it is not now worth while to review it in detail. It marked, however, a new phase in our relations with Germany. The officials of the two sides met in an informal fashion and talked together like rational beings. They were representative of the pick of what might be called “international officialdom,” cynical, humane, intelligent, with a strong bias towards facts and a realistic treatment. Both sides believed that progress was being made towards a solution; mutual respect was fostered; and a sincere regret was shared at the early abandonment of reasonable conversations.

The Brussels experts did not feel themselves free to consider an average payment less than that contemplated at Boulogne. They recommended to the Allied Governments, accordingly, (1) that during the five years from 1921 to 1926 Germany should pay an average annuity of $750,000,000, but that this average annuity should be so spread over the five years that less than this amount would be payable in the first two years and more in the last two years, the question of the amount of subsequent payments, after the expiry of five years, being postponed for the present;

(2) That a substantial part of this sum should be paid in the form of deliveries of material and not of cash;

(3) That the annual expenses of the Armies of Occupation should be limited to $60,000,000, which payment need not be additional to the above annuities but a first charge on them;

(4) That the Allies should waive their claim on Germany to build ships for them and should perhaps relinquish, or postpone, the claim for the delivery of a certain number of the existing German vessels;

(5) That Germany on her side should put her finances and her budget in order and should agree to the Allies taking control of her customs in the event of default under the above scheme.

IV. The Decisions of Paris (January 24–30, 1921)

The suggestions of the Brussels experts furnished no permanent settlement of the question, but they represented, nevertheless, a great advance from the ideas of the Treaty. In the meantime, however, opinion in France was rising against the concessions contemplated. M. Leygues, it appeared, would be unable to carry in the Chamber the scheme discussed at Boulogne. Prolonged political intrigue ended in the succession of M. Briand to the Premiership, with the extreme defenders of the literal integrity of the Treaty of Versailles, M. PoincarÉ, M. Tardieu, and M. Klotz, still in opposition. The projects of Boulogne and Brussels were thrown into the melting–pot, and another conference was summoned to meet at Paris at the end of January 1921.

It was at first doubtful whether the proceedings might not terminate with a breach between the British and the French points of view. Mr. Lloyd George was justifiably incensed at having to surrender most of the ground which had seemed definitely gained at Boulogne; with these fluctuations negotiation was a waste of time and progress impossible. He was also disinclined to demand payments from Germany which all the experts now thought impossible. For a few days he was entirely unaccommodating to the French contentions; but as the business proceeded he became aware that M. Briand was a kindred spirit, and that, whatever nonsense he might talk in public, he was secretly quite sensible. A breach in the conversations might mean the fall of Briand and the entrance to office of the wild men, PoincarÉ and Tardieu, who, if their utterances were to be taken seriously and were not merely a ruse to obtain office, might very well disturb the peace of Europe before they could be flung from authority. Was it not better that Mr. Lloyd George and M. Briand, both secretly sensible, should remain colleagues at the expense of a little nonsense in unison for a short time? This view of the situation prevailed, and an ultimatum was conveyed to Germany on the following lines.[7]

The Reparation payments, proposed to Germany by the Paris Conference, were made up of a determinate part and an indeterminate part. The former consisted of $500,000,000 per annum for two years, $750,000,000 for the next three, then $1,000,000,000 for three more, and $1,250,000,000 for three after that, and, finally, $1,500,000,000 annually for 31 years. The latter (the indeterminate part) consisted of an annual sum, additional to the above, equal in value to 12 per cent of the German exports. The fixed payments under this scheme added up to a gross total of $56,500,000,000 which was a little less than the gross total contemplated at Boulogne but, with the export proportion added, a far greater sum.

The indeterminate element renders impossible an exact calculation of this burden, and it is no longer worth while to go into details. But I calculated at the time, without contradiction, that these proposals amounted for the normal period to a demand exceeding $2,000,000,000 per annum, which is double the highest figure that any competent person in Great Britain or in the United States has ever attempted to justify.

The Paris Decisions, however, coming as they did after the discussions of Boulogne and Brussels, were not meant seriously, and were simply another move in the game, to give M. Briand a breathing space. I wonder if there has ever been anything quite like it—best diagnosed perhaps as a consequence of the portentous development of “propaganda.” The monster had escaped from the control of its authors, and the extraordinary situation was produced in which the most powerful statesmen in the world were compelled by forces, which they could not evade, to meet together day after day to discuss detailed variations of what they knew to be impossible.

Mr. Lloyd George successfully took care, however, that the bark should have no immediate bite behind it. The consideration of effective penalties was postponed, and the Germans were invited to attend in London in a month's time to convey their answer by word of mouth.

M. Briand duly secured his triumph in the Chamber. “Rarely,” The Times reported, “can M. Briand in all his long career as a speaker and Parliamentarian have been in better form. The flaying of M. Tardieu was intensely dramatic, even if at times almost a little painful for the spectators as well as for the victim.” M. Tardieu had overstated his case, and “roundly asserting that the policy of France during the last year had been based on the conclusion that the financial clauses of the Treaty of Versailles could not be executed, had gained considerable applause by declaring that this was just the thesis of the pacifist, Mr. Keynes, and of the German delegate, Count Brockdorff–Rantzau,”—which was certainly rather unfair to the Paris Decisions. But by that date, even in France, to praise the perfections of the Treaty was to make oneself ridiculous. “I am an ingenuous man,” said M. Briand as he mounted the tribune, “and when I received from M. Tardieu news that he was going to interpellate me, I permitted myself to feel a little pleased. I told myself that M. Tardieu was one of the principal architects of the Treaty of Versailles, and that as such, though he knew its good qualities, he would also know its blemishes, and that he would, therefore, be indulgent to a man who had done his best in fulfilling his duty of applying it—mais voilÀ (with a gesture)—I did not stop to remember that M. Tardieu had already expended all his stock of indulgence upon his own handiwork.” The monstrous offspring of propaganda was slowly dying.

V. The First Conference of London (March 1–7, 1921)

In Germany the Paris proposals were taken seriously and provoked a considerable outcry. But Dr. Simons accepted the invitation to London and his experts got to work at a counter–proposal. “I was in agreement,” he said at Stuttgart on February 13, “with the representatives of Britain and France at the Brussels Conference. The Paris Conference shattered that. A catastrophe has occurred. German public opinion will never forget these figures. Now it is impossible to return to the Seydoux plan put forward at Brussels (i.e., a provisional settlement for five years), for the German people would always see enormous demands rising before them like a specter.... We shall rather accept unjust dictation than sign undertakings we are not firmly persuaded the German people can keep.”

On March 1, 1921, Dr. Simons presented his counter–proposal to the Allies assembled in London. Like the original counter–proposal of Brockdorff–Rantzau at Versailles, it was not clear–cut or entirely intelligible; and it was rumored that the German experts were divided in opinion amongst themselves. Instead of stating in plain language what Germany thought she could perform, Dr. Simons started from the figures of the Paris Decisions and then proceeded by transparent and futile juggling to reduce them to a quite different figure. The process was as follows. Take the gross total of the fixed annuities of the Paris scheme (i.e., apart from the export proportion), namely $56,500,000,000, and calculate its present value at 8 per cent interest, namely $12,500,000,000; deduct from this $5,000,000,000 as the alleged (but certainly not the actual) value of Germany's deliveries up to date, which leaves $7,500,000,000. This was the utmost Germany could pay. If the Allies could raise an international loan of $2,000,000,000, Germany would pay the interest and sinking fund on this, and in addition $250,000,000 a year for five years, towards the discharge of the capital sum remaining over and above the $2,000,000,000, namely, $5,500,000,000, which capital sum, however, would not carry interest pending repayment. At the end of five years the rate of repayment would be reconsidered. The whole proposal was contingent on the retention of Upper Silesia and the removal of all impediments to German trade.

The actual substance of this proposal was not unreasonable and probably as good as the Allies will ultimately secure. But the figures were far below even those of the Brussels experts, and the mode of putting it forward naturally provoked prejudice. It was summarily rejected.

Two days later Mr. Lloyd George read to the German Delegation a lecture on the guilt of their country, described their proposals as “an offense and an exasperation,” and alleged that their taxes were “ridiculously low compared with Great Britain's.” He then delivered a formal declaration on behalf of the Allies that Germany was in default in respect of “the delivery for trial of the criminals who have offended against the laws of war, disarmament, and the payment in cash or kind of $5,000,000,000”; and concluded with an ultimatum[8] to the effect that unless he heard by Monday (March 7) “that Germany was either prepared to accept the Paris Decisions or to submit proposals which would be in other ways an equally satisfactory discharge of her obligations under the Treaty of Versailles (subject to the concessions made in the Paris proposals),” the Allies would proceed to (1) the occupation of Duisberg, Ruhrort, and DÜsseldorf on the right bank of the Rhine, (2) a levy on all payments due to Germany on German goods sent to Allied countries, (3) the establishment of a line of Customs between the occupied area of Germany and the rest of Germany, and (4) the retention of the Customs paid on goods entering or leaving the occupied area.

During the next few days negotiations proceeded, to no purpose, behind the scenes. At midnight on March 6, M. Loucheur and Lord D'Abernon offered the Germans the alternative of a fixed payment of $750,000,000 for 30 years and an export proportion of 30 per cent.[9] The formal Conference was resumed on March 7. “A crowd gathered outside Lancaster House in the morning and cheered Marshal Foch and Mr. Lloyd George. Shouts of ‘Make them pay, Lloyd George!' were general. The German delegates were regarded with curiosity. General von Seeckt wore uniform with a sword. He wore also an eyeglass in the approved manner of the Prussian officer and bore himself as the incarnation of Prussian militarism. Marshal Foch, Field–Marshal Sir Henry Wilson, and the other Allied soldiers also wore uniform.”[10]

Dr. Simons communicated his formal reply. He would accept the rÉgime of the Paris Decisions as fixed for the first five years, provided Germany was helped to pay by means of a loan and retained Upper Silesia. At the end of five years the Treaty of Versailles would resume its authority, the provisions of which he preferred, as he was entitled to do, to the proposals of Paris. “The question of war guilt is to be decided neither by the Treaty, nor by acknowledgment, nor by Sanctions; only history will be able to decide the question as to who was responsible for the world war. We are all of us still too near to the event.” The Sanctions threatened were, he pointed out, all of them illegal. Germany could not be technically in default in respect of Reparation until the Reparation Commission had made the pronouncements due from them on May 1. The occupation of further German territory was not lawful under the Treaty. The retention of part of the value of German goods was contrary to undertakings given by the British and Belgian Governments. The erection of a special Customs tariff in the Rhineland was only permissible under Article 270 of the Treaty for the protection of the economic interests of the Rhineland population and not for the punishment of the whole German people in respect of unfulfilled Treaty obligations. The arguments as to the illegality of the Sanctions were indisputable, and Mr. Lloyd George made no attempt to answer them. He announced that the Sanctions would be put into operation immediately.

The rupture of the negotiations was received in Paris “with a sigh of relief,”[11] and orders were telegraphed by Marshal Foch for his troops to march at 7 A.M. next morning.

No new Reparation scheme, therefore, emerged from the Conference of London. Mr. Lloyd George's acquiescence in the Decisions of Paris had led him too far. Some measure of personal annoyance at the demeanor of the German representatives and the failure of what, in its inception, may have been intended as bluff, had ended in his agreeing to an attempt to enforce the Decisions by the invasion of Germany. The economic penalties, whether they were legal or not, were so obviously ineffective for the purpose of collecting money, that they can hardly have been intended for that purpose, and were rather designed to frighten Germany into putting her name to what she could not, and did not intend to perform, by threatening a serious step in the direction of the policy, openly advocated in certain French quarters, of permanently detaching the Rhine provinces from the German Commonwealth. The grave feature of the Conference of London lay partly in Great Britain's lending herself to a furtherance of this policy, and partly in contempt for the due form and processes of law.

For it was impossible to defend the legality of the occupation of the three towns under the Treaty of Versailles.[12] Mr. Lloyd George endeavored to do so in the House of Commons, but at a later stage of the debate the contention was virtually abandoned by the Attorney–General.

The object of the Allies was to compel Germany to accept the Decisions of Paris. But Germany's refusal to accept these proposals was within her rights and not contrary to the Treaty, since they lay outside the Treaty and included features unauthorized by the Treaty which Germany was at liberty either to accept or to reject. It was necessary, therefore, for the Allies to find some other pretext. Their effort in this direction was perfunctory, and consisted, as already recorded, in a vague reference to war criminals, disarmament, and the payment of 20 milliard gold marks.

The allegation of default in paying the 20 milliard gold marks was manifestly untenable at that date (March 7, 1921); for according to the Treaty, Germany had to pay this sum by May 1, 1921, “in such instalments and in such manner as the Reparation Commission may fix,” and in March 1921 the Reparation Commission had not yet demanded these cash payments.[13] But assuming that there had been technical default in respect of the war criminals and disarmament (and the original provisions of the Treaty had been so constantly modified that it was very difficult to say to what extent this was the case), it was our duty to state our charges precisely, and, if penalties were threatened, to make these penalties dependent on a failure to meet our charges. We were not entitled to make vague charges, and then threaten penalties unless Germany agreed to something which had nothing to do with the charges. The Ultimatum of March 7 substituted for the Treaty the intermittent application of force in exaction of varying demands. For whenever Germany was involved in a technical breach of any one part of the Treaty, the Allies were, apparently, to consider themselves entitled to make any changes they saw fit in any other part of the Treaty.

In any case the invasion of Germany beyond the Rhine was not a lawful act under the Treaty. This question became of even greater importance in the following month, when the French announced their intention of occupying the Ruhr. The legal issue is discussed in Excursus II. at the conclusion of this Chapter.

VI. The Second Conference of London (April 29–May 5, 1921)

The next two months were stormy. The Sanctions embittered the situation in Germany without producing any symptoms of surrender in the German Government. Towards the end of March the latter sought the intervention of the United States and transmitted a new counter–proposal through the Government of that country. In addition to being straightforward and more precise, this offer was materially better than that of Dr. Simons in London at the beginning of the month. The chief provisions[14] were as follows:

1. The German liability to be fixed at $12,500,000,000 present value.

2. As much of this as possible to be raised immediately by an international loan, issued on attractive terms, of which the proceeds would be handed over to the Allies, and the interest and sinking fund on which Germany would bind herself to meet.

3. Germany to pay interest on the balance at 4 per cent for the present.

4. The sinking fund on the balance to vary with the rate of Germany's recovery.

5. Germany, in part discharge of the above, to take upon herself the actual reconstruction of the devastated areas on any lines agreeable to the Allies, and in addition to make deliveries in kind on commercial lines.

6. Germany is prepared, “up to her powers of performance,” to assume the obligations of the Allies to America.

7. As an earnest of her good intentions, she offers $250,000,000 in cash immediately.

If this is compared with Dr. Simons's first offer, it will be seen that it is at least 50 per cent better, because there is no longer any talk of deducting from the total of $12,500,000,000 an alleged (and in fact imaginary) sum of $5,000,000,000 in respect of deliveries prior to May 1, 1921. If we assume an international loan of $1,250,000,000, costing 8 per cent for interest and sinking fund,[15] the German offer amounted to an immediate payment of $550,000,000 per annum, with a possibility of an increase later in proportion to the rate of Germany's economic recovery.

The United States Government, having first ascertained privately that this offer would not be acceptable to the Allies, refrained from its formal transmission.[16] On this account, and also because it was overshadowed shortly afterwards by the Second Conference of London, this very straightforward proposal has never received the attention it deserves. It was carefully and precisely drawn up, and probably represented the full maximum that Germany could have performed, if not more.

But the offer, as I have said, made very little impression; it was largely ignored in the press, and scarcely commented on anywhere. For in the two months which elapsed between the First and Second Conferences of London there were two events of great importance, which modified the situation materially.[17]

The first of these was the result of the Silesian plebiscite held in March 1921. The earlier German Reparation offers had all been contingent on her retention of Upper Silesia; and this condition was one which, in advance of the plebiscite, the Allies were unable to accept. But it now appeared that Germany was in fact entitled to most of the country, and, possibly, to the greater part of the industrial area. But this result also brought to a head the acute divergence between the policy of France and the policy of the other Allies towards this question.

The second event was the decision of the Reparation Commission, communicated to Germany on April 27, 1921, as to her aggregate liabilities under the Treaty. Allied Finance Ministers had foreshadowed 300 milliard gold marks; at the time of the Decisions of Paris, responsible opinion expected 160–200 milliards;[18] and the author of The Economic Consequences of the Peace had suffered widespread calumny for fixing on the figure of 137 milliards,[19] as being the nearest estimate he could make. The public, and the Government also, were, therefore, taken by surprise when the Reparation Commission announced that they unanimously assessed the figure at 132 milliards (i.e., $33,000,000,000).[20] It now turned out that the Decisions of Paris, which had been represented as a material amelioration of the Treaty which Germany was ungrateful not to accept, were no such thing; and that Germany was at that moment suffering from an invasion of her territory for a refusal to subscribe to terms which were severer in some respects than the Treaty itself. I shall examine the decision of the Reparation Commission in detail in Chapter IV. It put the question on a new basis and the Decisions of London could hardly have been possible otherwise.

The decision of the Reparation Commission and the arrival of the date, May 1, 1921, fixed in the Treaty for the promulgation of a definite Reparation scheme, provided a sufficient ground for reopening the whole question. Germany had refused the Decisions of Paris; the Sanctions had failed to move her; the rÉgime of the Treaty was therefore reinstated; and under the Treaty it was for the Reparation Commission to propose a scheme.

In these circumstances the Allies met once more in London in the closing days of April 1921. The scheme there concerted was really the work of the Supreme Council, but the forms of the Treaty were preserved, and the Reparation Commission were summoned from Paris to adopt and promulgate as their own the decree of the Supreme Council.

The Conference met in circumstances of great tension. M. Briand had found it necessary to placate his Chamber by announcing that he intended to occupy the Ruhr on May 1. The policy of violence and illegality, which began with the Conference of Paris, had always included hitherto just a sufficient ingredient of make–believe to prevent its being as dangerous as it pretended to the peace and prosperity of Europe. But a point had now been reached when something definite, whether good or bad, seemed bound to happen; and there was every reason for anxiety. Mr. Lloyd George and M. Briand had walked hand–in–hand to the edge of a precipice; Mr. Lloyd George had looked over the edge; and M. Briand had praised the beauties of the prospect below and the exhilarating sensations of a descent. Mr. Lloyd George, having indulged to the full his habitual morbid taste for looking over, would certainly end in drawing back, explaining at the same time how much he sympathized with M. Briand's standpoint. But would M. Briand?

In this atmosphere the Conference met, and, considering all the circumstances, including the past commitments of the principals, the result was, on the whole, a victory for good sense, not least because the Allies there decided to return to the pathway of legality within the ambit of the Treaty. The new proposals, concerted at this Conference, were, whether they were practicable or not in execution, a lawful development of the Treaty, and in this respect sharply distinguished from the Decisions of Paris in the January preceding. However bad the Treaty might be, the London scheme provided a way of escape from a policy worse even than that of the Treaty,—acts, that is, of arbitrary lawlessness based on the mere possession of superior force.

In one respect the Second Ultimatum of London was lawless; for it included an illegal threat to occupy the Ruhr Valley if Germany refused its terms. But this was for the sake of M. Briand, whose minimum requirement was that he should at least be able to go home in a position to use, for conversational purposes, the charms of the precipice from which he was hurrying away. And the Ultimatum made no demand on Germany to which she was not already committed by her signature to the Treaty.

For this reason the German Government was right, in my judgment, to accept the Ultimatum unqualified, even though it still included demands impossible of fulfilment. For good or ill Germany had signed the Treaty. The new scheme added nothing to the Treaty's burdens, and, although a reasonable permanent settlement was left where it was before,—in the future,—in some respects it abated them. Its ratification, in May 1921, was in conformity with the Treaty, and merely carried into effect what Germany had had reason to anticipate for two years past. It did not call on her to do immediately—that is to say, in the course of the next six months—anything incapable of performance. It wiped out the impossible liability under which she lay of paying forthwith a balance of $3,000,000,000 due under the Treaty on May 1. And, above all, it obviated the occupation of the Ruhr and preserved the peace of Europe.

There were those in Germany who held that it must be wrong that Germany should under threats profess insincerely what she could not perform. But the submissive acceptance by Germany of a lawful notice under a Treaty she had already signed committed her to no such profession, and involved no recantation of her recent communication through the President of the United States as to what would eventually prove in her sincere belief to be the limits of practicable performance.

In the existence of such sentiments, however, Germany's chief difficulty lay. It has not been understood in England or in America how deep a wound has been inflicted on Germany's self–respect by compelling her, not merely to perform acts, but to subscribe to beliefs which she did not in fact accept. It is not usual in civilized countries to use force to compel wrongdoers to confess, even when we are convinced of their guilt; it is still more barbarous to use force, after the fashion of inquisitors, to compel adherence to an article of belief because we ourselves believe it. Yet towards Germany the Allies had appeared to adopt this base and injurious practice, and had enforced on this people at the point of the bayonet the final humiliation of reciting, through the mouths of their representatives, what they believed to be untrue.

But in the Second Ultimatum of London the Allies were no longer in this fanatical mood, and no such requirement was intended. I hoped, therefore, at the time that Germany would accept the notification of the Allies and do her best to obey it, trusting that the whole world is not unreasonable and unjust, whatever the newspapers may say; that Time is a healer and an illuminator; and that we had still to wait a little before Europe and the United States could accomplish in wisdom and mercy the economic settlement of the war.

EXCURSUS I

COAL

The question of coal has always considerable importance for Reparation, both because (in spite of the exaggerations of the Treaty) it is a form in which Germany can make important payments, and also because of the reaction of coal deliveries on Germany's internal economy. Up to the middle of 1921 Germany's payments for Reparation were almost entirely in the form of coal. And coal was the main topic of the Spa Conference, where for the first time the Governments of the Allies and of Germany met face to face.

Under the terms of the Treaty Germany was to deliver 3,400,000 tons of coal per month. For reasons explained in detail in The Economic Consequences of the Peace (pp. 74–89) this total was a figure of rhetoric and not capable of realization. Accordingly for the first quarter of 1920 the Reparation Commission reduced their demand to 1,660,000 tons per month, and in the second quarter to 1,500,000 tons per month; whilst in the second quarter Germany actually delivered at the rate of 770,000 tons per month. This last figure was unduly low, and by the latter date coal was in short supply throughout the world and very dear. The main object of the Spa Coal Agreement was, therefore, to secure for France an increased supply of German coal.

The Conference was successful in obtaining coal, but on terms not unfavorable to Germany. After much bargaining the deliveries were fixed at 2,000,000 tons a month for six months from August 1920. But the German representatives succeeded in persuading the Allies that they could not deliver this amount unless their miners were better fed and that this meant foreign credit. The Allies agreed, therefore, to pay Germany something substantial for this coal, the sums thus received to be utilized in purchasing from abroad additional food for the miners. In form, the greater part of the sum thus paid was a loan; but, since it was set off as a prior charge against the value of Reparation deliveries (e.g., the ships), it really amounted to paying back to Germany the value of a part of these deliveries. Germany's total cash receipts[21] under these arrangements actually came to about 360,000,000 gold marks,[22] which worked out at about 40s. per ton averaged over the whole of the deliveries. As at this time the German internal price was from 25s. to 30s. per ton, the German Government received in foreign currency substantially more than they had to pay for the coal to the home producers. The high figure of 2,000,000 tons per month involved short supplies to German transport and industry. But the money was badly wanted, and was of the utmost assistance in paying for the German food program (and also in meeting German liabilities in respect of pre–war debts) during the autumn and winter of 1920.

This is a convenient point at which to record the subsequent history of the coal deliveries. During the next six months Germany very nearly fulfilled the Spa Agreement, her deliveries towards the 2,000,000 tons per month being 2,055,227 tons in August, 2,008,470 tons in September, 2,288,049 tons in October, 1,912,696 tons in November, 1,791,828 tons in December, and 1,678,675 tons in January 1921. At the end of January 1921 the Spa Agreement lapsed, and since that time Germany has had to continue her coal deliveries without any payment or advance of cash in return for them. To make up for the accumulated deficit under the Spa Agreement, the Reparation Commission called for 2,200,000 tons per month in February and March, and continued to demand this figure in subsequent months. Like so much else, however, this demand was only on paper. Germany was not able to fulfil it, her actual deliveries during the next six months amounting to 1,885,051 tons in February 1921, 1,419,654 tons in March, 1,510,332 tons in April, 1,549,768 tons in May, 1,453,761 tons in June, and 1,399,132 tons in July. And the Reparation Commission, not really wanting the coal, tacitly acquiesced in these quantities. During the first half of 1921 there was, in fact, a remarkable reversal of the situation six months earlier. In spite of the British Coal Strike, France and Belgium, having replenished their stocks and suffering from a depression in the iron and steel trades, were in risk of being glutted with coal. If Germany had complied with the full demands of the Reparation Commission the recipients would not have known what to do with the deliveries. Even as it was, some of the coal received was sold to exporters, and the coal miners of France and Belgium were in danger of short employment.

The statistics of the aggregate German output of pit coal are now as follows, exclusive of Alsace–Lorraine, the Saar, and the Palatinate, in million tons:

The production of rough lignite (I will not risk controversy by attempting to convert this into its pit–coal equivalent) rose from 87.1 million tons in 1913 to 93.8 in 1919, 111.6 in 1920, and 90.8 in the first three–quarters of 1921.

The Spa Agreement supplied a temporary palliative of the anomalous conditions governing the price at which these coal deliveries are credited to Germany. But with the termination of this Agreement they again require attention. Under the Treaty Germany is credited in the case of coal delivered overland with “the German pithead price to German nationals” plus the freight to the frontier; and in the case of coal delivered by sea with the export price; provided in each case this price is not in excess of the British export price. Now for various internal reasons the German Government have thought fit to maintain the pithead price to German nationals far below the world price, with the result that she gets credited with much less than its real value for her deliveries of Reparation coal. During the year ending June 1921 the average legal maximum price of the different kinds of coal was about 270 marks a ton, inclusive of a tax of 20 per cent on the price,[23] which at the exchange then prevailing was about 20s., i.e., between a third and a half of the British price at that date. The fall in the mark exchange in the autumn of 1921 increased the discrepancy. For although the price of German coal was substantially increased in terms of paper marks, and although the price of British coal had fallen sharply, the movements of exchange so out–distanced the other factors, that in November 1921 the price of British coal worked out at about three and half times the price of the best bituminous coal from the Ruhr. Thus not only were the German iron–masters placed in an advantageous position for competing with British producers, but the Belgian and French industries also benefited artificially through the receipt by their Governments of very low–priced coal.

The German Government is in rather a dilemma in this matter. An increase in the coal tax is one of the most obvious sources for an increased revenue, and such a tax would be, from the standpoint of the exchequer, twice blessed, since it would increase correspondingly the Reparation credits. But on the other hand, such a proposal unites two groups against them, the industrialists, who want cheap coal for industry and the Socialists who want cheap coal for the domestic stove. From the revenue standpoint the tax would probably stand an increase from 20 per cent to 60 per cent; but from the political standpoint an increase from 20 per cent to 30 per cent is the highest contemplated at present, with a differential price in favor of domestic consumers.[24]

I take this opportunity of making a few corrections or amplifications of the passages in The Economic Consequences of the Peace which deal with coal.

1. The fate of Upper Silesia is highly relevant to some of the conclusions about coal in Chapter IV of The Economic Consequences of the Peace (pp. 77–84). I there stated that “German authorities claim, not without contradiction, that to judge from the votes cast at elections, one–third of the population would elect in the Polish interest, and two–thirds in the German,” which forecast turned out to be in almost exact accordance with the facts. I also urged that, unless the plebiscite went in a way which I did not expect, the industrial districts ought to be assigned to Germany. But I felt no confidence, having regard to the policy of France, that this would be done; and I allowed, therefore, in my figures for the possibility that Germany would lose this area.

The actual decision of the Allies, acting on the advice of the Council of the League of Nations to whom the matter had been referred, which we have discussed briefly above (pp. 12–14), divides the industrial triangle between the two claimants to it. According to an estimate of the Prussian Ministry of Trade 86 per cent of the total coal deposits of Upper Silesia fall to Poland, leaving 14 per cent to Germany. Germany retains a somewhat larger proportion of pits in actual operation, 64 per cent of the current production of coal falling to Poland and 36 per cent to Germany.[25]

The figure of 100,000,000 tons, given in The Economic Consequences of the Peace for the net German production (i.e., deducting consumption at the mines themselves) in the near future excluding Upper Silesia, should, therefore, be replaced by the figure of (say) 115,000,000 tons, including such part of Upper Silesia as Germany is now to retain.

2. I beg leave to correct a misleading passage in a footnote to p. 79 of The Economic Consequences of the Peace. I there spoke of “Poland's pre–war annual demand” for coal, where I should have said “pre–war Poland's pre–war annual demand.” The mistake was not material, as I allowed for Germany's diminished requirements for coal, due to loss of territory, in the body of the text. But I confess that the footnote, as published, might be deemed misleading. At the same time it is, I think, a tribute to the general accuracy of The Economic Consequences that partizan critics should have fastened so greedily on the omission of the word “pre–war” before the word “Poland” in the footnote in question. Quite a considerable literature has grown up round it. The Polish Diet devoted January 20, 1921, to the discussion and patriotic analysis of this footnote, and concluded with a Resolution ordering the chief speech of the occasion (that of Deputy A. Wierzlicki) to be published throughout the world in several languages at the expense of the State. I apologize for any depreciation in the Polish mark for which I may have been so inadvertently responsible. Mr. Wierzlicki begins: “A book appeared by Keynes ... the author of a well–known work on India, that pearl of the English crown, that land which is a beloved subject of study to the English. Through such studies a man may win himself name and fame,”—which was certainly a little unscrupulous of me. And he concludes: “But England too must believe in facts! And if Keynes, whose book is impregnated with a humanitarian spirit and with understanding of the necessity to get up beyond selfish interests, if Keynes is convinced by actual data that he has done a wrong, that he has wrought confusion in the ideas of statesmen and politicians as regards Upper Silesia, then he too will see with his eyes and must become the friend of Poland, of Poland as an active factor in the development of the natural wealth of Silesia.” I owe it to so generous and eloquent a critic to quote the corrected figures, which are as follows: the Polish lands, united by the Peace Treaty into the new Polish State, consumed in 1913 19,445,000 tons of coal, of which 8,989,000 tons were produced within that area and 7,370,000 tons were imported from Upper Silesia (the total production of Upper Silesia in that year being 43,800,000 tons).[26] The Silesian Plebiscite has been preceded and followed by a mass of propagandist literature on both sides. For the economic questions involved see, particularly, on the Polish side: Wierzlicki, The Truth about Upper Silesia; Olszewski, Upper Silesia, Her Influence on the Solvability and on the Economic Life of Germany, and The Economic Value of Upper Silesia for Poland and Germany respectively; and on the German side: Sidney Osborne, The Upper Silesian Question and Germany's Coal Problem, The Problem of Upper Silesia (papers by various authors, not all on the German side, with excellent maps, edited by Sidney Osborne), various pamphlets by Professor Schulz–Gavernitz, and documents circulated by the Breslau Chamber of Commerce.

3. My observations on Germany's capacity to deliver reparation coal have been criticized in some quarters[27] on the ground that I made insufficient allowance for the compensation which is available to her by the more intensive exploitation of her deposits of lignite or brown coal. This criticism is scarcely fair, because I was the first in popular controversy to call attention to the factor of lignite, and because I was careful from the outset to disclaim expert knowledge of the subject.[28] I still find it difficult, in the face of conflicting expert opinions, to know how much importance to attach to this material. Since the Armistice there has been a substantial increase in output, which was 36 per cent higher in the first half of 1921 than in 1913.[29] In view of the acute shortage of coal this output must have been of material assistance towards meeting the situation. The deposits are near the surface, and no great amount of capital or machinery is needed for its production. But lignite briquette is a substitute for coal for certain purposes only, and the evidence is conflicting as to whether any further material expansion is economically practicable.[30]

The process of briquetting the rough lignite is probably a wasteful one, and it is doubtful whether it would be worth while to set up new plant with a view to production on a larger scale. Some authorities hold that the real future of lignite and its value as an element in the future wealth of Germany lie in improved methods of distillation (the chief obstacle to which, as also to other uses, lies in its high water content), by which the various oils, ammonia and benzine, latent in it can be released for commercial uses.

It is certainly the case that the future possibilities of lignite should not be overlooked. But there is a tendency at present, just as was the case with potash some little time ago, to exaggerate its importance greatly as a decisive factor in the wealth–producing capacity of Germany.

EXCURSUS II

THE LEGALITY OF OCCUPYING GERMANY EAST OF THE RHINE

The years 1920 and 1921 have been filled with excursions and with threats of excursions by the French Army into Germany east of the Rhine. In March 1920 France, without the approval of her Allies, occupied Frankfort and Darmstadt. In July 1920 a threat to invade Germany by the Allies as a whole was successful in enforcing the Spa Agreement. In March 1921 a similar threat was unsuccessful in securing assent to the Paris Decisions, and Duisberg, Ruhrort, and DÜsseldorf were occupied accordingly. In spite of the objections of her Allies France continued this occupation when, by the acceptance of the second Ultimatum of London, the original occasion for it had disappeared, on the ground that so long as the Upper Silesian question was unsettled, it was in the opinion of Marshal Foch just as well to retain this hold.[31] In April 1921 the French Government announced their intention of occupying the Ruhr, though they were prevented from carrying this out by the pressure of the other Allies. In May 1921 the Second Ultimatum of London was successfully enforced by a threat to occupy the Ruhr Valley. Thus, within the space of little more than a year the invasion of Germany, beyond the Rhine, was threatened five times and actually carried out twice.

We are supposed to be at peace with Germany, and the invasion of a country in time of peace is an irregular act, even when the invaded country is not in a position to resist. We are also bound by our adhesion to the League of Nations to avoid such action. It is, however, the contention of France, and apparently, from time to time, that of the British Government also, that these acts are in some way permissible under the Treaty of Versailles, whenever Germany is in technical default in regard to any part of the Treaty, that is to say, since some parts of the Treaty are incapable of literal fulfilment, at any time. In particular the French Government maintained in April 1921 that so long as Germany possessed any tangible assets capable of being handed over, she was in voluntary default in respect of Reparation, and that if she was in voluntary default any Ally was entitled to invade and pillage her territory without being guilty of an act of war. In the previous month the Allies as a whole had argued that default under Chapters of the Treaty, other than the Reparation Chapter, also justified invasion.

Though the respect shown for legality is now very small, the legal position under the Treaty deserves nevertheless an exact examination.

The Treaty of Versailles expressly provides for breaches by Germany of the Reparation Chapter. It contains no special provision for breaches of other Chapters, and such breaches are, therefore, in exactly the same position as breaches of any other Treaty. Accordingly, I will discuss separately default in respect of Reparation, and other defaults.

Sections 17 and 18 of the Reparation Chapter, Annex II. run as follows:

“(17) In case of default by Germany in the performance of any obligation under this part of the present Treaty, the Commission will forthwith give notice of such default to each of the interested Powers, and will make such recommendations as to the action to be taken in consequence of such default as it may think necessary.

“(18) The measures which the Allied and Associated Powers shall have the right to take in case of voluntary default by Germany, and which Germany agrees not to regard as acts of war, may include economic and financial prohibitions and reprisals, and in general such other measures as the respective Governments may determine to be necessary in the circumstances.”

There is also a provision in Article 430 of the Treaty, by which any part of the occupied area which has been evacuated may be reoccupied if Germany fails to observe her obligations with regard to Reparation.

The French Government base their contention on the words “and in general such other measures” in § 18, arguing that this gives them an entirely free hand. The sentence taken as a whole, however, supports, on the principle of ejusdem generis, the interpretation that the other measures contemplated are of the nature of economic and financial reprisals. This view is confirmed by the fact that the rest of the Treaty narrowly limits the rights of occupying German territory, which, as M. Tardieu's book shows, was the subject of an acute difference of opinion between France and her Associates at the Peace Conference. There is no provision for occupying territory on the right bank of the Rhine; and the only provision for occupation in the event of default is that contained in Article 430. This Article, which provides for reoccupation of the left bank in the event of default, would have been entirely pointless and otiose if the French view were correct. Indeed the theory, that at any time during the next thirty years any Ally can invade any part of Germany on the ground that Germany has not fulfilled every letter of the Treaty, is on the face of it unreasonable.

In any case, however, §§ 17, 18 of Annex II. of the Reparation Chapter only operate after a specific procedure has been set on foot by the Reparation Commission. It is the duty of the Reparation Commission to give notice of the default to each of the interested Powers, including presumably the United States, and to recommend action. If the default is voluntary—there is no provision as to who is to decide this—then the paragraphs in question become operative. There is no warrant here for isolated action by a single Ally. And indeed the Reparation Commission have never so far put this procedure in operation.

If, on the other hand, Germany is alleged to be in default under some other Chapter of the Treaty, then the Allies have no recourse except to the League of Nations; and they are bound to bring into operation Article 17 of the Covenant, which provides for the case of a dispute between a member of the League and a non–member. That is to say, apart from procedure by the Reparation Commission as set forth above, breaches or alleged breaches of this Treaty are in precisely the same position as breaches of any other treaty between two Powers which are at peace.

According to Article 17, in the event of a dispute between a member of the League and a State which is not a member of the League, the latter “shall be invited to accept the obligations of membership in the League for the purposes of such dispute, upon such conditions as the Council may deem just. If such invitation is accepted, the provisions of Articles 12 to 16 inclusive shall be applied, with such modifications as may be deemed necessary by the Council. Upon such invitation being given, the Council shall immediately institute an inquiry into the circumstances of the dispute, and recommend such action as may seem best and most effectual in the circumstances.”

Articles 12 to 16 provide, amongst other things, for arbitration in any case of “disputes as to the interpretation of a Treaty; as to any question of international law; as to the existence of any fact which, if established, would constitute a breach of any international obligation; or as to the extent and nature of the reparation to be made for any such breach.”

The Allies as signatories of the Treaty and of the Covenant are therefore absolutely precluded in the event of a breach or alleged breach by Germany of the Treaty, from proceeding except under the power given to the Reparation Commission as stated above, or under Article 17 of the Covenant. Any other act on their part is illegal.

In any case it is obligatory on the Council of the League, under Article 17, to invite Germany, in the event of a dispute between Germany and the Allies, to accept the obligations of membership in the League for the purposes of such dispute, and to institute immediately an inquiry into the circumstances of the dispute.

In my opinion the protest addressed by the German Government to the Council of the League of Nations in March 1921 was correctly argued. But, as with the inclusion of pensions in the Reparation Bill, we reserve the whole stock of our indignation over illegality between nations for the occasions when it is the fault of others. I am told that to object to this is to overlook “the human element” and is therefore both wrong and foolish.