TOPICS OF THE DAY.
FRANCE'S ALTERNATIVES—CO-OPERA- TION OR ISOLATION.
THE Spectator is sometimes, though always most unfairly and erroneously, accused of a prejudice against bankers. We are therefore glad of the oppor- tunity afforded us by the events of the past week to express our gratitude to the British and American bankers and financiers for the high service they are rendering to the world. Their action has brought the Conference to a sense of reality. They have cleared the issues, and made the negotiators see the situation in its true light. And they have done this without laying themselves open to the accusation of playing politics, or of taking one side or the other in the diplomatic game. What they have, in effect, said to the Powers is this : " You tell us that in order to get a solution of the grievous and dangerous problems of reparations, security, and the restoration of German economic life, a loan to Germany of £40,000,000 is essential, and you ask us to obtain it. We are willing to undertake the task ; but it can only be on conditions. We do not ourselves possess the money. We cannot grow it like a crop. We can only deliver it by first getting it from the public. This means putting before them terms which will attract them. Experience has taught us what those terms must be. Only by showing good financial security and giving sound reasons for believing that the interest will be regularly paid, will the money be forth- coming. But to make us able to say this to the potential investor, there must be no menacing stipulations by outsiders—nothing that will bring the loan into the maelstrom of International enmities and disputes. To be specific, if France insists upon her right to decide whether Germany is in wilful default with her reparation payments, and further claims a right under the Treaty of Versailles, or any other diplomatic instrument, or " sanction," to intervene forcibly and invade German territory when she thinks fit, as she invaded it in the case of the Ruhr, it will be impossible for us to get the money. Rightly or wrongly, the investors will not take up the loan if they believe that the Germans are to be at the mercy of French policy, or again, of French panic. What the investor looks to is the economic, moral, and political condition of Germany. If that condition is to be subject to the risks of French violence, or to put it more fairly, to intervention by France through means which will strike at the economic heart of Germany, then our security is gone. We can lend money if there is a fair prospect of peace, quiet, and the gradual re-estab- lishment of German commercial prosperity. In other words, if there arc assets out of which Germany can repay us we can lend. If, however, that basis for a loan is to be liable to devastation by rash action in Paris, then the security is worth nothing."
That is the spirit in which the bankers have approached the question, and remember they are not trying to injure France or anybody else. The British and American bankers are naturally in strong sympathy with France, and would much prefer to help her rather than Germany. But this is a question of fact, not of sympathy. The bankers know the conditions under which money can be got, and also the conditions which will draw the purse strings tight. It is no good to rail at them, as the French Press is doing, for their materialism and their cruelty in stating what is possible and what is impossible. You might just as well rail at a tap, which will only run if you turn it in the right way. And here I may add that I am sure that if the bankers were pressed for further answer, they would say that insistence by France that the power of declaring default by Germany must remain solely in the hands of a body which is under French influence—i.e., the Repara- tions Commission, and, again, France's refusal to give up the power of isolated action, are having a most un- favourable effect upon the money market. The investors of the world are being shown only too clearly that the spirit of France is as dangerous as ever. They are beginning to say that it is not safe to say that France has learnt a lesson by the failure of her policy in the Ruhr and that she is never likely to repeat that blunder. On the contrary, every day that the dispute goes on the potential investor is inclining to mutter to himself, " France is hopeless. They ask us to lend money to Germany, and yet they tell us openly that they mean to insist on conditions which are more than likely to make Germany incapable of paying." This, as we write, is the situation. The people through whom money can alone be got—money comes from bankers and investors, and not from diplomats or politicians—have brought the Conference down to reality. These financial people are not asking to inter- fere or making a claim to direct policy. They are merely giving honest answers to honest questions, and the result is a deadlock. It may be removed by some happy event before these pages come into our readers' hands ; but unfortunately that may not prove to be the case and the negotiations may linger on. In that case it is well for the Spectator, representing the British onlooker, to say what in its opinion ought to be done. The British Prime Minister, I hold, must take the respon- sibility of using plain words to France—words which may be represented in the French Press as brutal, cold and full of English barbarity, but none the less necessary words. To do this will, no doubt, be specially difficult and painful for Mr. Ramsay MacDonald, for he is a true friend of France, and his mind is naturally attuned to the Latin mentality. Yet in the higher sense he will realize that this is a moment when France may be saved from great perplexity, great danger, even from a great disaster, by being made to realize what will be the alternatives which the British Government must adopt if France insists on maintaining her present attitude—insists, that is, on being judge in her own cause.
The first thing that Mr. Ramsay MacDonald will have to tell France is that, if by her action the Conference is broken off, there can be no other. Next, Mr. Bonar Law's old blunder will not be committed for a second time. We have realized only too well that he who biddeth another " God-speed ! is a partaker in his evil deeds." Instead of wishing France God-speed, we shall have to tell her, and mean it when we tell her, that she will have to be held responsible for whatever disasters may come from her acts. If she insists on her pound of f.c3h, we shall insist that it shall not be one scruple more than that pound, and if she sheds blood in the process the responsibility for such bloodshed will be exacted to the uttermost farthing. We shall be reluctant to co-operate with Germany instead of with France, but we have looked at the consequences and we mean to take them. But it would not be wise at this moment to describe in detail how we could and shall act. It is enough at present to let France know that there is a road open to us, that it is practicable, and that we mean if necessary to take it.
If and when we act we shall not be alone. We shall invite the Powers, great and small, to co-operate with us, or, at any rate, to show their sympathy by open exnressions of opinion. And such endorsements we shall unquestionably obtain. American public opinion will certainly be with us; and probably the American Government itself. Next, we can let it be known that those Powers who co-operate with us will not find us asking for our pound of flesh in the matter of their indebtedness. If they stand by us, we shall stand by them. On. the other hand, if France claims the right of isolated action without consideration of our views—claims, that is, to think only of herself—she cannot in equity, nay in decency, refuse us similar independence of action in regard to the money she owes us. We could take our claim to arbitration or. before the Hague Tribunal or the League of Nations without any fear that we should get judgment against us.
France must remember that the British people, if they are really moved to indignation, as they unquestion- ably will be, in the circumstances we are contemplating, will be prepared to grant a loan to Germany and to let France know that, if she takes any action which will make it impossible or difficult for the Germans to pay the interest on our loan, we shall regard their action as an unfriendly action. Finally, France must be informed that we shall put on record our determination to take strong action if she attacks Germany without due warrant, though we shall also put on record that if Germany attacks France we shall take similar action against Germany.
It is very unpleasant for an Englishman to write like this about France. But, pleasant or unpleasant, we must not do France the supreme injury of not telling her the truth because it is disagreeable. There is a story of Caesar warning a politician not to oppose him in severe terms, and adding, " Do believe that it is far more disagreeable to me to have to speak like this than it will be to take the action I have described." That is very much the mood of the British people. They hate saying disagreeable things either privately or publicly or diplomatically far more than they dislike taking hard action when the time for action comes. When that time comes they know neither doubt nor fear.
J. ST. LOE STRACHEY.
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