Where Are We Going?

(1) That Germany should be called upon to take such measures as the Reparations Commission should stipulate, in order to balance her Budget and restore her financial stability.

(2) That the Reichsbank should be made independent of Government control.

(3) That 26 per cent. of the total value of German exports should be collected in gold or foreign currencies and paid into a separate account in the Reichsbank in the name of the Sub-Committee of the Reparations Commission known as the Committee of Guarantees.

(4) That the produce of all German import and export duties other than the levy should be paid monthly to a special account at the Reichsbank, which should be under the scrutiny of the Committee of Guarantees. The German Government should have the disposal of the sums standing to the credit of this account so long as the Reparations Commission was satisfied that it fulfilled the obligations imposed upon it. If at any time the Commission was not satisfied that this was the case the Committee of Guarantees should have the right to take over the sums standing to the credit of this account and to secure the payment to it of the produce of these duties thereafter.

(5) There were stern provisions for supervision of German finance by the Committee of Guarantees and for preventing the export of German capital.

(6) There were provisions for supervision over State mines and forests in the event of their being a failure in delivery of coal or timber as the case might be.

A Moratorium up to December 1922 was to be given conditionally on the acceptance of the above terms by the German Government, and the Reparations Commission were then to proceed to fix the further annual payments.

Had these drastic proposals been adopted and enforced by the Allies, what would have been the result? Deliveries of coal and timber would have been ensured up to the full quota arranged. By means of the levy on exports, £50,000,000 would have been already collected in gold and paid into Allied account. The mark would have been stabilised, and could have been made the basis of a considerable loan. As German trade gradually recovered the export levy would bring in larger amounts. This year would certainly have produced a yield of between £60,000,000 and £70,000,000. This is what would have been effected for Reparations if the plan put forward by the British Government had been accepted and put into execution in August. By the settlement of this most troublous question, the great cost and the still greater irritation of the Ruhr episode would have been avoided, trade would have continued its convalescence, and the peace of Europe would have been established.

What would have happened if Germany had refused these terms? We should certainly have heard what objections or counter-proposals Germany had to offer. But we were resolved to have a settlement that would put an end to the fiscal chaos inside Germany, and having thus put her in a position to pay we were equally resolved that she should pay up to the limit of her capacity. We, therefore, undertook, if Germany rejected the terms finally agreed upon, to join France and the other Allies in any coercive measures deemed advisable to compel acceptance. M. Poincaré refused to agree. His refusal alone rendered that Conference fruitless. Over a year has elapsed since then. He has pursued a different policy. So far it has brought him nothing. I am bold enough to predict that in future it will bring France considerably less than the August 1922 plan would have yielded.

If he is out for reparations his policy will inevitably fail in comparison with that he so rashly threw over. But if he is out for trouble it has been a great success, and in future it will be an even greater triumph for his statesmanship. A permanent garrison in the Ruhr has possibilities of mischief which it does not require any special vision to foresee.

Enduring peace can only rest on a foundation of justice. It is just that Germany should exert herself to the limit of her strength to repair the damage wrought by her armies. She was the aggressor; she was the invader. Her aggression inflicted serious hurt on her neighbours. By the established precepts of every civilised law in the world she ought to pay up. A peace which did not recognise that obligation would be unjust and provoke a righteous resentment in the breasts of the wronged. That sentiment would have been inimical to the good understanding that is one of the essentials of peace. Moreover, it is not conducive to good behaviour amongst nations that they should be allowed to ravage and destroy without paying the penalty of their misdeeds. That is why I do not agree with those who would wipe out the claim for reparations entirely. On the other hand, civilised jurisprudence has also advanced to the stage where it forbids the creditor to attach his debtor's freedom and independence as security for the payment of the debt. The law that permitted a debtor to be sold into bondage for an unliquidated liability has now been voted barbarous by the more humane usage and wont of the day. That is why I protest against using armed force to occupy and control a country whilst the scourge of starvation is being used to whip its workmen into toiling for payment of a foreign debt. As Mr. Gladstone once said: "Justice means justice to all." The main difficulty of a just settlement of reparations comes from the growing disposition to take sides blindly in this dispute. One party sees nothing but the outrage of 1914-18, the costly vindication of right, and the just claim of the victims to compensation for their losses. The other party sees nothing but the harsh fury with which the victors in the cause press their verdict to execution. Peace can only be restored by a full recognition of the equities as well as the humanities--of the humanities as well as the equities. I have sought in these pages to deal fairly with both.

D. LLOYD GEORGE.

September 13th, 1923.