Part 26

Even these figures represent something less absurd than the first demands and figures.

On September 5, 1919, the French Minister of Finance, speaking in the French Chamber, calculated the total of the German indemnities arising from the treaty at 375 milliards, whose interest would accumulate until 1921, after which date Germany would begin to pay her debt in thirty-four annual rates of about 25 milliards each, and 13,750 milliards a year would go to France.

Again, in November, 1920, Ogier, Minister of the liberated regions, put before the Reparations Commission in the name of France a detailed memorial which made the value of the territories to be reconstructed only for the cases of private individuals come to 140 milliards, not including the pensions, damage to railways and mercantile marine, which totalled 218 milliards, of which 77 milliards were for pensions and 141 milliards for damages.

Of late the sense of reality has begun to diffuse itself. The Minister Loucheur himself has laughed at the earlier figures, and has stated that the damages do not exceed eighty milliards.

But the French public has been accustomed for some time to take the figures of Klotz seriously, and to discuss indemnities of 150, 200 and 250 milliards. The public, however, is not yet aware of the real position, and will not be able to arrive at a just realization of it without passing through a serious moral crisis which will be the first secure element of the real peace.

Setting aside all questions of indemnities from Austria-Hungary, Turkey and Bulgaria (they have nothing to give, can give nothing; on the contrary, they ask and merit assistance), it is clear that all the indemnities must be paid by Germany.

The French totals of the material damage claims in the invaded districts have been absolutely fantastic and more exaggerated than in the case of Belgium, whose indemnity claims would lead one to suppose the total destruction of at least the third part of her territory, almost as if she had undergone the submersion of, say, ten thousand square metres of her small territory.

This problem of the indemnities, limited to the reparation of damages, and in accordance with the costs contemplated in the Treaty of Versailles, has never been seriously tackled. One may even say it has not been seriously examined. And it is deplorable that there has been created among the public, or among a large part of it, the conviction that Germany will repair the damage of the War by her own effort. This idea, however, finds no acceptance in England among serious persons, and in Italy no one believes in it. But in France and Belgium the idea is widely diffused, and the wish to spread the belief is lively in several sections of opinion, not because intelligent people believe in the possibility of effective payment, but with the idea of putting Germany in the light of not maintaining the clauses of the peace, thus extending the right to prolong the military occupation and even to aggravate it. Germany, thereby, is kept out of the League of Nations and her dissolution facilitated.

John Maynard Keynes, ever since the end of 1919, has shown in his admirable book the absurdity of asking for vast indemnities, Germany's impossibility of paying them, and the risk for all Europe of following a road leading to ruin, thus at the same time accentuating the work of disintegration started by the treaty. That book had awakened a wide-sounding echo, but it ought to have had a still wider one, and would have done but for the fact that, unfortunately, the Press in free countries is anything but free.

The great industrial syndicates, especially in the steel-making industry, which control so large a part of the Press among the majority of the States of Europe, and even beyond Europe, find easy allies in the inadequate preparation of the major part of the journalists to discuss the most important problems, and the indisposition on the part of the public to examine those questions which present difficulties, and are so rendered less convenient for discussion.

I knew Keynes during the War, when he was attached to the British Treasury and chief of the department charged to look after the foreign exchanges and the financial relations between Great Britain and her allies. A serious writer, a teacher of economics of considerable value, he brought to his difficult task a scrupulousness and an exactness that bordered on mistrust. Being at that time Chancellor of the Exchequer in Italy, in the bitterest and most decisive period of the War, I had frequent contact with Mr. Keynes, and I always admired his exactness and his precision. I could not always find it in myself to praise his friendly spirit. But he had an almost mystic force of severity, and those enormous squanderings of wealth, that facile assumption of liabilities that characterized this period of the War, must have doubtless produced in him a sense of infinite disgust. This state of mind often made him very exigent, and sometimes unjustifiably suspicious. His word had a decisive effect on the actions of the English Treasury.

When the War was finished, he took part as first delegate of the English Treasury at the Peace Conference of Paris, and was substituted by the Chancellor of the Exchequer in the Supreme Economic Council. He quitted his office when he had come to the conclusion that it was hopeless to look for any fundamental change of the peace treaties.

His book is not only a document of political uprightness but the first appeal to a sense of reality which, after an orgy of mistakes, menaces a succession of catastrophes. In my opinion it merits a serious reconsideration as the expression of a new conscience, as well as an expression of the truth, which is only disguised by the existing state of exasperation and violence.

After two years we must recognize that all the forecasts of Keynes have been borne out by the facts: that the exchange question has grown worse in all the countries who have been in the War, that the absurd indemnities imposed on the enemies cannot be paid, that the depressed condition of the vanquished is harmful to the victors almost in equal measure with the vanquished themselves, that it menaces their very existence, that, in fine, the sense of dissolution is more widespread than ever.

The moment has come to make an objective examination of the indemnity question, and to discuss it without any hesitation.

Let us lay aside all sentiment and forget the undertakings of the peace treaties. Let us suppose that the Entente's declarations and Wilson's proposals never happened. Let us imagine that we are examining a simple commercial proposition stripped of all sentiment and moral ideas.

After a great war it is useless to invoke moral sentiments: men, while they are blinded by hatred, recognize nothing save their passion. It is the nature of war not only to kill or ruin a great number of men, not only to cause considerable material damage, but also, necessarily, to bring about states of mind full of hate which cannot be ended at once and which are even refractory to the language of reason.

For a long time I myself have looked upon the Germans with the profoundest hatred. When I think of all the persons of my race dead in the War, when I look back upon the fifteen months of anguish when my first-born son was a prisoner of war in Germany, I am quite able to understand the state of mind of those who made the peace and the mental condition in which it was made. What determined the atmosphere of the peace treaties was the fact that there was a conference presided over by Clemenceau, who remembered the Prussians in the streets of Paris after the war of 1870, who desired but one thing: the extermination of the Germans. What created this atmosphere, or helped to create it, was the action of Marshal Foch, who had lost in the War the two persons dearest to him in life, the persons who attached him to existence.

But now we must examine the question not in the light of our sentiments or even of our hatreds. We must see quite calmly if the treaties are possible of application without causing the ruin of the vanquished. Then we must ask ourselves if the ruin of the vanquished does not bring in its train the ruin of the victors. Putting aside, then, all moral considerations, let us examine and value the economic facts.

There is no question that the reparation problem exists solely in the case of Germany, who has still a powerful statal framework which allows her to maintain great efforts, capable not only of providing her with the means of subsistence, but also of paying a large indemnity to the victors. The other vanquished States are more in need of succour than anything else.

What are the reparations?

Let us follow the précis of them which a representative of France made at the signing of the Treaty of Versailles. They are as follows:

1. Germany is responsible for the total of the losses and damages sustained by her victors inasmuch as she caused them.

2. Germany, in consideration of the permanent diminution of her resources, resulting from the Peace Treaty, is only obliged (but is obliged without restitutions or reserves) to reimburse the direct damages and the pensions as precised in Schedule I of Clause viii of the treaty.

3. Germany must pay before May 1, 1921, not less than twenty milliards of gold marks or make equivalent payment in kind.

4. On May 1 the Reparations Commission will fix the total amount of the German debt.

5. This debt must be liquidated by annual payments whose totals are to be fixed by the Commission.

6. The payments will continue for a period of thirty years, or longer if by that time the debt is not extinguished.