Dangers to be Avoided
JUST as the negotiations which produced the Anglo- French naval compromise were beneficent in their. origin and intention but had a sequel of bitter misunder- standing, so the approaching negotiations about repara- tions and the Allied debts are admirable in their aim but contain the seeds of great dangers.
There are two dangers. In the first place we must guard against the political aspect of the negotiations being confused with the economic aspect in such a way as to rob Germany of her hope of a rapid evacuation of the Rhineland. Prolonged delay would be almost as bad as a definite refusal to carry out the evacuation, which would come normally to an end in 1935. Such a political miscarriage would undo many of the good results of Locarno, and would leave us further off from the goal of a settled and peaceful Europe than we may fairly hope to be if all goes well. The second danger—which we reckon the greater—is that America may be convinced, instead of merely suspecting as she does now, that there is a sort of conspiracy among European nations to com- bine to extract better terms from her in regard to their debts and incidentally to do this by putting her morally in the wrong. We know perfectly well that the British Government would be extremely pained if either of these dangers should become realities, for both of them have been definitely marked on their chart. Our course has been plotted in order to avoid them ; nevertheless, winds and currents, which could hardly have been foreseen, seem to be setting us in the direction of these rocks, and the navigation will need all the watchfulness and skill of which the Government are capable.
Great Britain has no desire at the moment for any alteration of the Dawes scheme under which Germany is punctually paying her annual instalments of reparations. All the same, the Dawes scheme was admittedly pro- visional, and nobody has denied that sooner or later there must be a final settling up. ' The Dawes 'scheme did not concern itself with the total amount to be paid by Ger- many, and as Germany is necessarily kept in leading strings until a definite sum is agreed upon for her full discharge she is as anxious as anybody else for the day of her freedom to arrive. It was indeed Germany herself who reopened the whole question of reparations—though she did not do it designedly. Her one object was to bring about an immediate evacuation of the Rhineland, but when she proposed this in Paris last August the French answer was that evacuation would be quite agreeable to France provided that all reason for a continued occupation was removed by a full reparations settlement. For our part, we greatly dislike this linking of two subjects which are not directly related. We hold that Germany who has been received back into the comity of nations, and is a member of the Council of the League, has won a right to be free from the surveillance of occupying troops. Indeed, we are not sure that she cannot fairly cite a clause of the Peace Treaty which provides for an earlier' withdrawal-of the occupying troops when she has met the claims made upon her. She may justifiably argue that by her compliance to the demands so far made and the punc- tuality of her payments she has satisfied the conditions so far as they humanly can be satisfied.
On the other hand, it is impossible to _prevent France from seizing an obvious opportunity to raise a good deal of money which she badly needs. _ As she never ratified the Mellon-Berenger agreement she is under the necessity of paying 400,000,000 dollars for American War stocks next August. What, then, can .be more logical from her point of view--so *he argunient runs—than that the final reparations settlement, which has to come some time; should be tackled at once ? In these circumstances Lord Cushendun did the best thing possible (and from all accounts did it very expeditiously and genially) when he presided over an informal meeting of French, Belgian, Italian, and Japanese delegates the other day at Geneva. It was decided at the meeting to open negotiations simul- taneously on the withdrawal of the troops from the Rhineland and the fixing of a total sum for German reparations. The German delegates professed to regard these two questions as unconnected and the French, of course, tacitly regarded them as inseparable. Whether the two problems can be disentangled or not, they ob- viously present so many difficulties that it would not be surprising if they took in the ordinary course two or three years to unravel. As against that disagreeable possibility there is the fact that France must have a very large sum of money by next summer.
How does France propose to get the money ? She suggests that the German railway and industrial bonds should be put upon the market. This proposal brings into view the second of the two dangers which we have described. It is quite true that America has no objection to a definite fixing of the amount of German reparations. On the contrary, Mr. Parker Gilbert, the Agent-General for Reparation Payments (who is, of course, an American) has said that the " fundamental problem " which remains is the determination of Germany's total liability, and that it is in the interests of the creditor Powers as well as in that of Germany to settle the terms by mutual agreement. The question which America is asking, however, is whether this desirable end will be reached without a united attempt by the nations which were associated with her in the War to wriggle out of some of their debts to her, or at least to transfer the onus of payment from themselves to Germany. She would resent such a policy and if the British Govern- ment place friendship with America high among the aims of their foreign policy they must be determined not to allow themselves to be committed even in appearance to an unfortunate stratagem.
The Sunday Times in its last issue published an article by Mr. Frank H. Simonds, which described what many Americans fear and some, it seems, actually expect. Mr. Simonds' article is much less than generous to this country, which has a habit of acknowledging and paying its debts, but its rather truculent language will be useful if it enables people here to see clearly the manner in which British slips of policy might be interpreted. Mr. Simonds says, quite truly, that the British Government will stand fast by the Balfour Note which declared that they would ask fin. no more in reparations and debt payments than was required to pay the British debt to America. The next step, according to Mr. Simonds, will be that the French will say to GerMany, " We are ready to get out of the Rhineland as soon as you provide us with money to pay the Englishman and the American, or persuade both to drop their claims." Germany will then recognize that she must raise the money necessary to satisfy France if the Rhineland is to be freed—but she will be able to" raise it only in America. In practice what is intended (so Mr. Simonds says) is that Germany shall sell 400,000,000 dollars' worth of securities to America and turn over the proceeds to the Allies who will give her a receipt, and that the Allies, in their turn, will hand over the same sum, or part of it, to America and get an American receipt for the payment of European debts. " Thus reparations, debts and occupation all disappear and the War is liquidated. All that remains is for the American investors who have paid for the German securities to get their money back along with the interest. . . . What it all comes down to is that we are to lend the money by which we are to be paid, and that what we shall actually do is to exchange the promises to pay which we have from all but France for a single German pledge. Our old debtors walk out and Germany walks in, and we have to collect if we can."
Mr. Simonds concludes by saying that the one clear thing is that the nations associated with America in the War do not believe that their debts have moral justifica- tion, and do not mean to pay. It is strange that this delusion that Great Britain—for presumably Great Britain is included, as a nation undoubtedly associated with America in the War—has any thought of shuffling out of her debt to America should persist in the mind of any American who tries to inform himself of the facts by frequent visits to Europe. The idea of persuading America to reconsider the British debt is never even mentioned here. Englishmen look upon the matter as settled. That simple fact, however, does not relieve us of the necessity of avoiding any European arrangement which could reasonably be described as anti-American. And incidentally we owe it to ourselves not to accept anything less than we are now accepting from Europe. We are bearing a far heavier burden of debt than any other nation.
Previous page
