The Legality of the Claim for Pensions

“The application of morals to international politics is more a thing to be desired than a thing which has been in operation. Also, when I am made a participant in crime along with many millions of other people, I more or less shrug my shoulders.”—Letter from a friendly critic to the author of The Economic Consequences of the Peace.

We have seen in the preceding chapter that the claim for Pensions and Allowances is nearly double that for Devastation, so that its inclusion in the Allies' demands nearly trebles the bill. It makes the difference between a demand which can be met and a demand which cannot be met. Therefore it is important.

In The Economic Consequences of the Peace I gave reasons for the opinion that this claim was contrary to our engagements and an act of international immorality. A good deal has been written about it since then, but I cannot admit that my conclusion has been seriously disputed. Most American writers accept it; most French writers ignore it; and most English writers try to show, not that the balance of evidence is against me, but that there are a few just plausible, or just not–negligible, observations to be made on the other side. Their contention is that of the Jesuit professors of Probabilism in the seventeenth century, namely that the Allies are justified unless it is absolutely certain that they are wrong, and that any probability in their favor, however small, is enough to save them from mortal sin.

But most people in the countries of Germany's former enemies are not ready to excite themselves very much, even if my view is accepted. The passage at the head of this chapter describes a common attitude. International politics is a scoundrel's game and always has been, and the private citizen can scarcely feel himself personally responsible. If our enemy breaks the rules, his action may furnish us with an appropriate opportunity for expressing our feelings; but this must not be taken to commit us to a cool opinion that such things have never happened before and must never happen again. Sensitive and honorable patriots do not like it, but they “more or less shrug” their shoulders.

There is some common sense in this. I cannot deny it. International morality, interpreted as a crude legalism, might be very injurious to the world. It is at least as true of these vast–scale transactions, as of private affairs, that we judge wrongly if we do not take into account everything. And it is superficial to appeal, the other way round, to the principles which do duty when Propaganda is blistering herd emotion with its brew of passion, sentiment, self–interest, and moral fiddlesticks.

But whilst I see that nothing rare has happened and that men's motives are much as usual, I do still think that this particular act was an exceptionally mean one, made worse by hypocritical professions of moral purpose. My object in returning to it is partly historical and partly practical. New material of high interest is available to instruct us about the course of events. And if for practical reasons we can agree to drop this claim, we shall make a settlement easier.

Those who think that it was contrary to the Allies' engagements to charge pensions against the enemy base this opinion on the terms notified to the German Government by President Wilson, with the authority of the Allies, on November 5, 1918, subject to which Germany accepted the Armistice conditions.[93] The contrary opinion that the Allies were fully entitled to charge pensions if they considered it expedient to do so, has been supported by two distinct lines of argument: first that the Armistice conditions of November 11, 1918, were not subject to President Wilson's notification of November 5, 1918, but superseded it, more particularly regarding Reparation; and alternatively that the wording of President Wilson's notification properly understood does not exclude Pensions.

The first line of argument was adopted by M. Klotz and the French Government during the Peace Conference, and has been approved more recently by M. Tardieu.[94] It was repudiated by the whole of the American Delegation at Paris, and never definitely supported by the British Government. Responsible writers about the Treaty, other than French, have not admitted it.[95] It was also explicitly abandoned by the Peace Conference itself in its reply to the German observations on the first draft of the Treaty. The second line of argument was that of the British Government during the Peace Conference, and it was an argument on these lines which finally converted President Wilson. I will deal with the two arguments in turn.

1. Various persons have published particulars, formerly confidential, which allow us to reconstruct the course of the discussions about the Armistice. These begin with the examination of the Armistice Terms by the Allied Council of War on November 1, 1918.[96]

The first point which emerges is that the reply of the Allied Governments to President Wilson (which afterwards furnished the text of his notification of Nov. 5, 1918, addressed to Germany), defining their interpretation of the references to Reparation in the Fourteen Points, was drawn up and approved at the same session of the Supreme Council (that of November 1, 2) which drew up the relevant clauses of the Armistice Terms; and that the Allies did not finally approve the reply to President Wilson until after that they had approved that very draft of the Armistice Terms which, according to the French contention, superseded and negatived the terms outlined in the reply to President Wilson.[97]

The record of the proceedings of the Supreme Council (as now disclosed) lends no support to the existence in their minds of the duplicity which the French contention attributes to them. On the other hand, it makes it clear that the Council did not intend the references to Reparation in the Armistice Terms to modify in any way their reply to the President.

The record, in so far as it is relevant to this point, may be summarized as follows:[98] M. Clemenceau called attention to the absence of any reference in the first draft of the Armistice Terms to the restitution of stolen property or to reparation. Mr. Lloyd George replied that there ought to be some reference to restitution, but that reparation was a Peace condition rather than an Armistice condition. M. Hymans agreed with Mr. Lloyd George. MM. Sonnino and Orlando went further and thought that neither had any place in the Armistice Terms but were ready to accept the Lloyd George–Hymans compromise of including Restitution but not Reparation. The discussion was postponed for M. Hymans to draft a formula. On its resumption next day, it was M. Clemenceau who produced a formula consisting of the three words RÉparation des dommages. M. Hymans, M. Sonnino, and Mr. Bonar Law all expressed doubt whether this was in place in the Armistice Terms. M. Clemenceau replied that he only wanted to mention the principle, and that French public opinion would be surprised if there was no reference to it. Mr. Bonar Law objected: “It is already mentioned in our letter to President Wilson which he is about to communicate to Germany. It is useless to repeat it.”[99] This observation met with no contradiction, but it was agreed on sentimental grounds and for the satisfaction of public opinion to add M. Clemenceau's three words. The Council then passed on to other topics. At the last moment, as they were about to disperse, M. Klotz slipped in the words: “It would be prudent to put at the head of the financial questions a clause reserving the future claims of the Allies, and I propose to you the wording ‘without prejudice to any subsequent claims and demands on the part of the Allies.’”[100] It does not seem to have occurred to any of those present that this text could be deemed of material importance or otherwise than as protecting the Allies from the risk of being held to have surrendered any existing claims through failure to mention them in this document; and it was accepted without discussion. M. Klotz afterwards boasted that by this little device he had abolished the Fourteen Points, so far as they affected Reparation and Finance (although the very same meeting of the Allies had despatched a Note to President Wilson accepting them), and had secured to the Allies the right to demand from Germany the whole cost of the War. But I think the world will decide that the Supreme Council was right in attaching to these words no particular importance. Personal pride in so smart a trick has led M. Klotz, and his colleague M. Tardieu, to persist too long with a contention which decent persons have now abandoned.

There was an episode which has lately come to light connected with this passage which may be recounted as illustrating the pitfalls of the world. As M. Klotz only introduced his form of words as the Council was breaking up, it is likely that no undue attention was concentrated on it. But ill–fortune may dog any one, and the same state of affairs seems to have led to one of the scribes getting the words down wrong. Instead of revendication which means demand, the word renonciation which means concession got written in the text handed to the Germans for signature.[101] This word was not so suitable. But M. Klotz suffered less inconvenience from this mistake than might have been expected; since at the Peace Conference no one noticed that the French text of the Armistice Agreement as officially circulated, which M. Klotz used in arguing before the Reparation Committee, agreed in its wording with what he had intended it to be and not with the text which Germany had actually signed. Nevertheless it is the word renonciation which is still to be found in the official texts of the British and German Governments.[102]

2. The other line of argument raises more subtle intellectual issues and is not a mere matter of prestidigitation. If it be granted that our rights are governed by the terms of the Note addressed to Germany by President Wilson in the name of the Allies on November 5, 1918, the question depends on the interpretation of these terms. As Mr. Baruch and M. Tardieu have now published between them the greater part of the official reports (including very secret documents) bearing on the discussion of this problem during the Peace Conference, we are in a better position than before to assess the value of the Allies' case.

The pronouncements by the President which were to form the basis of Peace provided that there should be “no contributions” and “no punitive damages,” but the invaded territories of Belgium, France, Rumania, Serbia, and Montenegro were to be restored. This did not cover losses from submarines or from air raids. Accordingly the Allied Governments, when they accepted the President's formulas, embodied a reservation, on the point as to what “restoration” covered, in the following sentence: “By it (i.e., restoration of invaded territory) they understand that compensation will be made by Germany for all damage done to the civilian population of the Allies and to their property by the aggression of Germany by land, by sea, and from the air.”

The natural meaning and object of these words, which, the reader must remember, are introduced as an interpretation of the phrase “restoration of invaded territory,” is to assimilate submarine and cruiser aggression by sea and aeroplane and airship aggression by air to military aggression by land, which, in all the circumstances, was a reasonable extension of the phrase, provided it was duly notified beforehand. The Allies rightly apprehended that, if they accepted the phrase as it stood, “restoration of invaded territory” might be limited to damage resulting from military aggression by land.

This interpretation of the reservation of the Allied Governments, namely that it assimilated offensive action by sea or air to offensive action by land, but that “restoration of invaded territory” could not possibly include pensions and separation allowances, was adopted by the American Delegation at Paris. They construed the German liability to be in respect of the “direct physical damage to property of non–military character and direct physical injury to civilians”[103] caused by such aggression; the only further liability which they admitted being under a different part of the President's pronouncements, namely, those relating to breaches of International law, such as the breach of the Treaty of Neutrality in favor of Belgium, and the illegal treatment of prisoners of war.

I doubt if any one would ever have challenged this interpretation if the British Prime Minister had not won a General Election by promises to extract from Germany more than this interpretation could justify,[104] and if the French Government also had not raised unjustifiable expectations. These promises were made recklessly. But it was not easy for their authors to admit, so soon after they had been given, that they were contrary to our engagements.

The discussion opened with the delegations, other than the American, claiming that we had not committed ourselves to anything which precluded our demanding from Germany all the loss and damage, direct and indirect, which had resulted from the war. “One of the Allies,” says Mr. Baruch, “went even further, and made claim for loss and damage resulting from the fact that the Armistice was concluded so unexpectedly that the termination of hostilities involved it in financial losses.”

Various arguments were employed in the early stages, the British delegates to the Reparation Committee of the Peace Conference, namely, Mr. Hughes, Lord Sumner and Lord Cunliffe, supporting the demand for complete war costs and not merely reparation for damage. They urged (1) that one of the principles enunciated by President Wilson was that each item of the Treaty should be just, and that it was in accordance with the general principles of justice to throw on Germany the whole costs of the war; and (2) that Great Britain's war costs had resulted from Germany's breach of the Treaty of Neutrality of Belgium, and that therefore Great Britain (but not necessarily, on this argument, all the other Allies) was entitled to complete repayment in accordance with the general principles of International law. These general arguments were, I think, overwhelmed by the speeches made on behalf of the American delegates by Mr. John Foster Dulles. The following are extracts from what he said: “If it is in accordance with our sentiment that the principles of reparation be severe, and in accord with our material interest that these principles be all inclusive, why, in defiance of these motives, have we proposed reparation in certain limited ways only? It is because, gentlemen, we do not regard ourselves as free. We are not here to consider as a novel proposal what reparation the enemy should in justice pay; we have not before us a blank page upon which we are free to write what we will. We have before us a page, it is true; but one which is already filled with writing, and at the bottom are the signatures of Mr. Wilson, of Mr. Orlando, of M. Clemenceau, and of Mr. Lloyd George. You are all aware, I am sure, of the writing to which I refer: it is the agreed basis of peace with Germany.” Mr. Dulles then recapitulated the relevant passages and continued: “Can there be any question that this agreement does constitute a limitation? It is perfectly obvious that it was recognized at the time of the negotiations in October and November 1918 that the reparation then specified for would limit the Associated Governments as to the reparation which they could demand of the enemy as a condition of peace. The whole purpose of Germany was to ascertain the maximum which would be demanded of her in the terms of peace, and the action of the Allies in especially stipulating at that time, for an enlargement of the original proposal respecting reparation is explicable only on the theory that it was understood that once an agreement was concluded they would no longer be free to specify the reparation which Germany must make. We have thus agreed that we would give Germany peace if she would do certain specified things. Is it now open to us to say, ‘Yes, but before you get peace you must do other and further things’? We have said to Germany, ‘You may have peace if among other things you perform certain acts of reparation which will cost you, say, ten million dollars.’ Are we not now clearly precluded from saying, ‘You can have peace provided you perform other acts of reparation which will bring your total liability to many times that which was originally stipulated’? No; irrespective of the justice of the enemy making the latter reparation, it is now too late. Our bargain has been struck for better or for worse; it remains only to give it a fair construction and practical application.”

It is a shameful memory that the British delegates never withdrew their full demands, to which they were still adhering when, in March 1921, the question was taken out of their hands by the Supreme Council. The American Delegation cabled to the President, who was then at sea, for support in maintaining their position, to which he replied that the American Delegation should dissent, and if necessary dissent publicly, from a procedure which “is clearly inconsistent with what we deliberately led the enemy to expect and cannot now honorably alter simply because we have the power.”[105]

After this the discussions entered on a new phase. The British and French Prime Ministers abandoned the contentions of their delegates, admitted the binding force of the words contained in their Note of November 5, 1918, and settled down to extract some meaning from these words which would compose their differences and satisfy their constituents. What constituted “damage done to the civilian population”? Could not this be made to cover military pensions and the separation allowances which had been made to the civilian dependents of soldiers? If so, the bill against Germany could be raised to a high enough figure to satisfy nearly every one. It was pointed out, however, as Mr. Baruch records, “that financial loss resulting from the absence of a wage–earner did not cause any more ‘damage to the civilian population’ than did an equal financial loss involved in the payment of taxes to provide military equipment and like war costs.” In fact, a separation allowance or a pension was simply one of many general charges on the Exchequer arising out of the costs of the war. If such charges were to be admitted as civilian damage, it was a very short step back to the claim for the entire costs of the war, on the ground that these costs must fall on the taxpayer who, generally speaking, was a civilian. The sophistry of the argument became exposed by pushing it to its logical conclusion. Nor was it clear how pensions and allowances could be covered by words which were themselves an interpretation of the phrase, “restoration of invaded territory.” And the President's conscience, though very desirous by now to be converted (for he had on hand other controversies with his colleagues which interested him more than this one) remained unconvinced.

The American delegates have recorded that the final argument which overbore the last scruples of the President was contained in a Memorandum prepared by General Smuts[106] on March 31, 1919. Briefly, this argument was, that a soldier becomes a civilian again after his discharge, and that, therefore, a wound, the effects of which persist after he has left the Army, is damage done to a civilian.[107] This is the argument by which “damage done to the civilian population” came to include damage done to soldiers. This is the argument on which, in the end, our case was based! For at this straw the President's conscience clutched, and the matter was settled.

It had been settled in the privacy of the Four. I will give the final scene in the words of Mr. Lamont, one of the American delegates:[108]

“I well remember the day upon which President Wilson determined to support the inclusion of pensions in the Reparation Bill. Some of us were gathered in his library in the Place des États Unis, having been summoned by him to discuss this particular question of pensions. We explained to him that we couldn't find a single lawyer in the American Delegation that would give an opinion in favor of including pensions. All the logic was against it. ‘Logic! logic!’ exclaimed the President, ‘I don't care a damn for logic. I am going to include pensions!’”[109]

Well! perhaps I was too near these things at the time and have become touched in the emotions, but I cannot “more or less shrug my shoulders.” Whether or not that is the appropriate gesture, I have here set forth, for the inspection of Englishmen and our Allies, the moral basis on which two–thirds of our claims against Germany rest.