6 JANUARY 1923, Page 13



MR. BONAR LAW is grappling with one of the most difficult and ungrateful tasks which have ever fallen to a statesman. His main difficulty is that he is dealing on the one hand with old friends and Allies, and on the other with a Power which, though not now hostile, was, we cannot forget, lately a relentless enemy. Yet the blindness and the fears of our true Allies are actually forcing us into a position which looks— though, of course, it is not—hke hostility to those with whom we would fain continue the best of friend.

If we were to adopt the French view about Reparations, it is not too much to say that we should ruin the world. The French plan of insisting upon getting that pound of flesh over the heart, which was so unwisely conceded at Versailles, must, if accomplished, make the condition of Germany ten times worse than it is already, though that is bad enough. But it would do even more than that. It would add political and social anarchy to Germany's present difficulties and dangers. The occupa- tion of portions of Germany, if it were physically sup- ported by Great Britain and Italy and if they had the moral support of the United States and of the rest of the civilized world, might make the German people feel hopeless of further evasion and resistance. If, however, France were to take action contrary to the well-con- sidered will of Britain and of Italy, and in face of the strong disapproval of the United States and the rest of the Powers, Germany would be encouraged to make her resistance as strong and as long as possible. Then we must see fatal military triumph added to fatal military triumph till France had committed herself to coercive projects so vast and expensive as to involve her in universal ruin. Directly her soldiers had taken possession of one province it would be found that so much resistance was being organized across the new border that neigh- bouring provinces must be occupied in order to make the military position tenable. But the seizure of these new " strategic guarantees " would only mean further crushing military demands. At last would come the demand that the German capital and centre of government must be occupied because the Central Government was encouraging resistance, and before very long France might find herself in a position—though, of course, on a much larger scale—analogous to that of the Free State Government in Ireland. She would have to deal with the so-called passive resistance, but in truth very active resistance, of some sixty million people.

To put the matter quite plainly, the French Govern- ment appear to have no notion of the terrible predica- ment in which they will find themselves if they are mad enough to approach the problem of coercion con- trary to the wishes of their former Allies and with the stern disapprobation of the rest of the world. France is in many ways a popular nation, but we can assure her that the popularity which has been of so much advantage to her hitherto in the world's history could not possibly last under the conditions we have described. All the rest of the world save France, alas ! is passion- ately anxious to see the affairs of Europe put on a sound basis in order that trade may revive. But if Europe and America see all the hopes on which so much depends blasted by France, France will be regarded as the destroyer of the world—the guilty nation in the new and perhaps the last world's tragedy.

Although the freedom of the Press may allow an Englishman, in spite of his natural love of France— and it is not small—to speak such disagreeable though necessary truths, they cannot, we fully realize, be uttered by a British Prime Minister. Mr. Bonar Law's personal sympathies are with the French, he understands them and desires to help them, yet he cannot tell them the whole saving and friendly truth just because it would have to be in stark and undiplomatic terms. Here comes in what seems to us the greatness of mind, the supreme tact, which is being shown by Mr. Bonar Law at Paris. His statement to the British journalists was a masterly piece of statesmanship. He was faced with the difficulty of explaining the British case in such a way as to make France realize her peril, yet of doing so without using the language of menace. Again, he must avoid what is even worse than menace—the infliction of humiliation on a great and powerful nation by what might easily look like the admonitions of the schoolmaster. While he dared not put our case—the case of sanity and, strangely enough, also the true case for France—to the French themselves in unmistakable terms and with a force which would leave no doubt as to his ultimate intentions, he had somehow to let them know what he really thought. And this almost impossible task he achieved, and achieved with sympathy, dignity and good sense. If he erred at all, it was in putting his contention before the journalists too low, and so running the risk of encouraging the French hotheads to think that we did not really mean business and that they might wear us down by perseverance in perversity.

If his difficulties with regard to the French were great, they were almost as great as regards the Germans. What he obviously wanted to do, and what every Englishman wanted him to do, was to discourage the French from taking a fatal step, and yet to prevent the Germans from thinking that they could permanently separate us from France and, in fact, play the game that Talleyrand played at Vienna when lie very nearly set the Powers of Europe by the ears, and produced a second war of the nations. Without blustering and without any insincere finesse, Mr. Bonar Law in effect made it clear that, though the French were forcing us to take in appearance a pro-German and anti-French attitude, we had not forgotten the harm done by Germany to France, to ourselves, and to the world at large. It is clear that his mind has not been in the least affected by the sophistical pleas now much in fashion that the German wolf was so terrorized and " hemmed in " by a band of hungry and domineering lambs that the poor patient creature had no choice but to attack them. Mr. Bonar Law has not forgotten the cause of the War, but clearly realizes that there are consequences from Germany's crime which cannot be evaded. His wisdom and his statesmanship consist in seeing that to realize these facts is not to make one so merciless to Germany or so foolishly sentimental about the injuries done to France as to forget all other considerations, and to say in effect, " Rather than let Germany escape the full consequences of her misdeeds we will ruin ourselves and all the rest of mankind."

It is evident from Mr. Bonar Law's statement to the Press that he has analyzed the situation to the bottom. He has grasped the essential fact that he who means to recover as much money as possible from a debtor becomes in effect the business partner of that debtor. That is a truth which cannot be denied. You may keep a man in prison, put him on the rack, deal with him by a dozen punitive methods, or finally bring him to the scaffold, but if you do so you must cut you' losses as regards the money he owes you. You cannot send a man to twenty years' penal servitude and a' the same time insist that he shall pay you half his busi- ness profits, for business profits are not made by men in prison. Again, even if you do not insist on drastic punishment, you cannot get full recompense out of him if you fasten upon him burdens greater than he can bear. If you take 100 per cent. of his profits, he will naturally take the slave's point of view and say, " I will not do a stitch of work unless I am compelled." Even if you ask him for 80 per cent. profit and leave him 20 per cent., he will probably shirk work. If you want to get real money, and not merely paper acknow- ledgments, out of him you must give him some incentive to work and some hope of a better day. You must fix a sum which it is possible for him to pay, and so make it worth while for him to put his back into his work, to work overtime, in order to clear off his debt and once more become a free man.

Bismarck clearly understood this. He fixed the French indemnity at a figure which France could pay. This made it possible for her to borrow—a very important factor in the case. Therefore Bismarck got his indemnity in record time. He put the carrot in front of the French taxpayers' nose by means of a fixed sum and the assur- ance that as soon as the money was paid French territory would be completely evacuated. The fatal defect of the Versailles plan was to place the reparations so high that all Germany felt it was impossible to pay them. Instead of giving our late enemies the incentive to redeem their territory, we made them feel that the line of least resist- ance was to destroy their own credit and so make it impossible for them to pay what they were ordered to pay. National bankruptcy, self-induced by the printing press and various other devices, became automatically the road of least resistance for Germany, and with that curious methodical self-consciousness which character- istically belongs to it the German nation has persistently toiled in the ditch of insolvency.

To put the matter in a nutshell, Mr. Bonar Law sees that the only way in which France can get her money is to restore German commercial activity and German credit. To do this, however, Germany must be given hope—the greatest incentive to work known to man. To prove the truth of this view one has only got, as we have said elsewhere, to look at what is happening in Austria. Austria's position is in essence far less favour- able than that of Germany. She has a less industrious, less educated, and far less well-trained people from the point of view of commerce. Yet the very moderate help given to her by the Allies has at once begun to put heart into her people. With hope has come a revival of trade. When once the German reparations to France are placed on a reasonable basis, and the Germans are allowed to feel that they will have some of the profits of a revival of trade when it comes—in a word, when their credit is re-established—they will be in a position to begin paying France a reasonable sum in hard money. For France to be paid thus will be far better for her than any rainbow scheme of vast indemnities. To get three thousand .millions, or even a couple of thousand millions in a reason- ably short period is far better than many more millions later, even if we assume that the greater sum will be sure to materialize.

How many men have ended by losing money because they would not sell when they might ! A. has a country house on his hands which is costing him about £3,000 a year to keep in good and saleable condition. Instead of taking what he can for it, he holds out for what he calls the proper price. This means holding out for, say, six years. At the end of the six years he sells it for perhaps a thousand pounds more than the sum he refused at the beginning. But when his accounts are finally made up, he finds that if he had taken the apparently absurdly low price which he was offered, and had put that money out at compound interest, he would have been on the balance some £15,000 or £16,000 to the good, instead of having lost perhaps £20,000. In the same way if France were to get paid in the end a thousand millions more than she could get by cutting down her claims now, she would find on a strict estimate that she had made a bad bargain. The bargain would be all the worse because in the meantime she would have kept all Europe in hot water.

These obvious truths are implicit in Mr. Bonar Law's statement. Yet there is a benevolent justice in his mind which always expressed them in a way as little unpleasant as possible to France. While never saying a provocative or menacing word to her, he also showed that French stubbornness and want of insight have never made him, and never will make him even in appearance, pro-German. He keeps always before him the fact that the Germans ought to pay, and, therefore, must pay, as much as they can. Though German misdeeds are no- excuse for French folly, French folly can never be an• excuse for Germany's misdeeds. In fine, we must never let ourselves be provoked into injustice towards theFrench people. Mr. Bonar Law has contrived to express his opinions without falling into the odious attitude of those who say:. " We are only hurting you for your good "—an attitude which is as apt to madden nations as individuals.

We have summarized elsewhere the actual British proposals, and therefore shall not repeat them here. We• shall only add how wise we think it was of Mr. Bonar Law to insist that if we fixed reasonable conditions and obtained a general agreement thereto we should not then hesi- tate " to take whatever steps are necessary to compel the Germans to fulfil their obligations." If the Germans, he declared, refused to restore their credit " that in itself would be a justification" for us to use compulsion. It was a difficult thing to say while France is maintaining an attitude which we think so unwise and so dangerous ; and yet it was necessary.

A little reflection will show, too, that Mr. Bonar Law's' courageous words will not do harm, but good. If we really mean business (as we certainly do) when we say that any reparations to which we agree shall be strictly exacted from Germany, we shall be saved from the foolish policy which we were very apt to fall into under the last regime : that is, to bribe other nations into a seeming agreement in the hope that ultimately they would see that they could not have their full pound of flesh. When our negotiators feel that we shall have to insist on the new terms, come what may, they will be careful to see that the terms are just and therefore possible of enforce- ment. We must not light-heartedly put our names to any agreement for getting water out of a stone.