III.—FINANCIAL AND ECONOMIC CLAUSES
The principle being recognized that Germany alone is responsible for the War which she willed and which she imposed on the rest of the world, Germany is bound to give complete and full reparation within the limits specified by Art. 232. The amount of the damages for which reparation is due will be fixed by the Commission of Reparations, consisting of the representatives of the winning countries.
The coal fields of the Saar are to be handed over, in entire and absolute ownership, free of all liens and obligations, to France, in compensation for the destruction of the coal mines in the north of France. Before the War, in 1913, the output of the Saar basin amounted to 17,000,000 tons. The Saar is incorporated in the French douane system and after fifteen years will be submitted to a plebiscite.
Germany may not charge heavier duties on imports from allied countries than on those from any other country. This treatment of the most favoured nation to be extended to all allied and associated States does not imply the obligation of reciprocity (Art. 264). A similar limitation is placed on exports, on which no special duty may be levied.
Exports from Alsace and Lorraine into Germany to be exempt from duty, without right of reciprocity (Art. 268).
Germany delivers to the Allies all the steamers of her mercantile fleet of over I,600 tons, half of those between 1,000 and I,600 tons, and one-fourth of her fishing vessels. Moreover, she binds herself to build at the request of the Allies every year, and for a period of five years, 200,000 tons of shipping, as directed by the Allies, and the value of the new constructions will be credited to her by the Commission of Reparations (Part viii, 3).
Besides giving up all her colonies, Germany surrenders all her rights and claims on her possessions beyond the seas (Art. 119), and all the contracts and conventions in favour of German subjects for the construction and exploiting of public works, which will be considered as part payment of the reparations due. The private property of Germans in the colonies, as also the right of Germans to live and work there, come under the free jurisdiction of the victorious States occupying the colonies, and which reserve unto themselves the right to confiscate and liquidate all property and claims belonging to Germans (Art. 121 and 297).
The private property of German citizens residing in Alsace-Lorraine is subject to the same treatment as that of residents in the ex-German colonies. The French Government may confiscate without granting any compensation the private property of Germans and of German concerns in Alsace-Lorraine, and the sums thus derived will be credited towards the partial settlement of eventual French claims (Art. 53 and 74). The property of the State and of local bodies is likewise surrendered without any compensation whatever. The allies and associates reserve the right to seize and liquidate all property, claims and interests belonging, at the date of the ratification of the treaty, to German citizens or to firms controlled by them, situated in their territories, colonies, possessions and protectorates, including the territories surrendered in accordance with the clauses of the treaty (Art. 217).
Germany loses everything with the exception of her territory: colonies, possessions, rights, commercial investments, etc.
After giving the Saar coal fields in perpetual ownership to France in reparation of the temporary damages suffered by the French coal mines, the treaty goes on to establish the best ways and means to deprive Germany, in the largest measure possible, of her coal and her iron. The Saar coal fields have been handed over to France absolutely, while the war damages of the French mines have been repaired or can be repaired in a few years. Upper Silesia being subject to the plebiscite with the occupation of the allied troops, Germany must have lost several of her most important coal fields had the plebiscite gone against her.
Germany is forced to deliver in part reparation to France 7,000,000 tons of coal a year for ten years, besides a quantity of coal equal to the yearly ante-bellum output of the coal mines of the North of France and of the Pas-de-Calais, which were entirely destroyed during the War; the said quantity not to exceed 20,000,000 tons in the first five years and 8,000,000 tons during the five succeeding years (Part viii, 5). Moreover, Germany must give 8,000,000 tons to Belgium for a period of ten years, and to Italy a quantity of coal which, commencing at 4,500,000 tons for the year 1919-1920, reaches the figure of 8,500,000 tons in the five years after 1923-1924. To Luxemburg Germany must provide coal in the same average quantity as in pre-war times. Altogether Germany is compelled to hand over to the winners as part reparation about 25,000,000 tons of coal a year.
For three years Polish exports to Germany, and for five years exports from Luxemburg into Germany, will be free of all duty, without right of reciprocity (Art. 268).
The Allies have the right to adopt, on the territories left of the Rhine and occupied by their troops, a special customs regime both as regards imports and exports (Art. 270).
After having surrendered, as per Par. 7 of the armistice terms, 5,000 locomotives and 150,000 trucks and carriages with all their accessories and fittings (Art. 250), Germany must hand over the railway systems of the territories she has lost, with all the rolling stock in a good state of preservation, and this measure applies even to Prussian Poland occupied by Germany during the War (Art. 371).
The German transport system is placed under control, and the administration of the Elbe, the Rhine, the Oder, the Danube, owing to the fact that they pass through more than one state and give access to the sea, is entrusted to inter-allied commissions. In all these commissions Germany is represented by a small minority. France and Great Britain, who are not directly interested, have numerous representatives on all the important river commissions, while on the Rhine commission Germany has only four votes out of nineteen (Art. 382 to 337). A privilege of first degree is established on all production and resources of the German States to ensure the payment of reparations and other charges specified by the treaty (Art. 248).
The total cost of the allied and associated armies will be borne by Germany, including the upkeep of men and beasts, pay and lodging, heating, clothing, etc., and even veterinary services, motor lorries and automobiles. All these expenses must be reimbursed in gold marks (Art. 249).
The privilege, as per Art. 248 of the treaty, is to be applied in the following order:
(a) Reimbursement of expenses for the armies of occupation during the armistice and after the peace treaty.
(b) Payment of the reparations as established by the treaty or treaties or supplementary conventions.
(c) Other expenses deriving from the armistice terms, from the peace treaty and from other supplementary terms and conventions (Art. 251). Restitution, on the basis of an estimate presented sixty days after the application of the treaty by the Commission of Reparations, of the live stock stolen or destroyed by the Germans and necessary for the reconstruction of the invaded countries, with the right to exact from Germany, as part reparations, the delivery of machinery, heating apparatus, furniture, etc.
Reimbursement to Belgium of all the sums loaned to her by the allied and associated Powers during the War.
Compensation for the losses and damages sustained by the civilian population of the allied and associated Powers during the period in which they were at war with Germany (Art. 232 and Part viii, I).
Payment, during the first two years, of twenty milliard marks in gold or by the delivery of goods, shipping, etc., on account of compensation (Art. 235).
The reparations owed by Germany concern chiefly:
1st. Damages and loss of life and property sustained by the civilian population.
2nd. Damages sustained by civilian victims of cruelty, violence or ill-treatment.
3rd. Damages caused on occupied or invaded territories.
4th. Damages through cruelty to and ill-treatment of prisoners of war.
5th. Pensions and compensations of all kinds paid by the allied and associated Powers to the military victims of the War and to their families.
6th. Subsidies paid by the allied and associated Powers to the families and other dependents of men having served in the army, etc., etc. (Part viii, I). These expenses, which have been calculated at varying figures, commencing from 350 billions, have undergone considerable fluctuations.
I have given the general lines of the Treaty of Versailles.
The other treaties, far less important, inasmuch as the situation of all the losing countries was already well defined, especially as regards territorial questions, by the Treaty of Versailles, are cast in the same mould and contain no essential variation.
Now these treaties constitute an absolutely new fact, and no one can affirm that the Treaty of Versailles derives even remotely from the declarations of the Entente and from Wilson's solemn pledges uttered in the name of those who took part in the War.
If the terms of the armistice were deeply in contrast with the pledges to which the Entente Powers had bound themselves before the whole world, the Treaty of Versailles and the other treaties deriving therefrom are a deliberate negation of all that had been promised, amounting to a debt of honour, and which had contributed much more powerfully towards the defeat of the enemy than the entry in the field of many fresh divisions.
In the state of extreme exhaustion in which both conquerors and losers found themselves in 1918, in the terrible suffering of the Germanic group of belligerents, deprived for four years of sufficient nourishment and of the most elementary necessaries of life, in the moral collapse which had taken the place of boasting and temerity, the words of Wilson, who pledged himself to a just peace and established its terms, proclaiming them to the world, had completely broken down whatever force of resistance there still remained. They were the most powerful instruments of victory, and if not the essential cause, certainly not the least important among the causes which brought about the collapse of the Central Empires.
Germany had been deeply hit by the armistice. Obliged to hand over immediately 5,000 locomotives and 150,000 railway trucks and carriages at the very time when she had to demobilize, during the first months she found her traffic almost completely paralysed.
Every war brings virulent germs of revolution in the vanquished countries. The war of 1870 gave France the impulsive manifestations of La Commune in exactly the same manner as war gave rise in Germany during the first months after the armistice to a violent revolutionary crisis, overcome not without difficulty and still representing a grave menace.
Forced to surrender immediately a large quantity of live stock, to demobilize when the best part of her railway material had gone, still hampered by the blockade, Germany, against the interest of the Allies themselves, has been obliged to sacrifice her exchange because, in the absence of sufficient help, she has had to buy the most indispensable foodstuffs in neutral countries. Her paper currency, which at the end of 1918 amounted to twenty-two milliard marks, not excessive as compared with that of other countries, immediately increased with a growing crescendo till it reached, in a very short time, the figure of eighty-eight milliards, thus rendering from the very first the payment of indemnities in gold extremely difficult.
The most skilled men have been thrust into an absolute impossibility of producing. To have deprived Germany of her merchant fleet, built up with so much care, means to have deprived the freight market of sixty thousand of the most skilled, intelligent and hard-working seamen.
But what Germany has lost as a result of the treaty surpasses all imagination and can only be regarded as a sentence of ruin and decay voluntarily passed over a whole people.
Germany, without taking into account the countries subject to plebiscite, has lost 7.5 per cent. of her population. Should the plebiscites prove unfavourable to her, or, as the tendency seems to be, should these plebiscites be disregarded, Germany would lose 13.5 per cent. of her population. Purely German territories have been forcibly wrenched from her. What has been done in the case of the Saar has no precedents in modern history. It is a country of 650,000 inhabitants of whom not even one hundred are French, a country which has been German for a thousand years, and which was temporarily occupied by France for purely military reasons. In spite of these facts, however, not only have the coal fields of the Saar been assigned in perpetuity to France as compensation for the damages caused to the French mines in the North, but the territory of the Saar forms part of the French customs regime and will be subjected after fifteen years to a plebiscite, when such a necessity is absolutely incomprehensible, as the population is purely German and has never in any form or manner expressed the intention of changing its nationality.
The ebb and flow of peoples in Europe during the long war of nationalities has often changed the situation of frontier countries. Sometimes it may still be regarded as a necessity to include small groups of alien race and language in different states in order to ensure strategically safe frontiers. But, with the exception of the necessity for self-defence, there is nothing to justify what has been done to the detriment of Germany.
Wilson had only said that France should receive compensation for the wrong suffered in 1871 and that Belgium should be evacuated and reconstructed. What had been destroyed was to have been built up again; but no one had ever thought during the War of handing over to Belgium a part, however small, of German territory or of surrendering predominantly and purely German territories to Poland.
The German colonies covered an area of nearly 3,000,000 square kilometres; they had reached an admirable degree of development and were managed with the greatest skill and ability. They represented an enormous value; nevertheless they have been assigned to France, Great Britain and in minor proportion to Japan, without figuring at all in the reparations account.
It is calculated that as a result of the treaty, owing to the loss of a considerable percentage of her agricultural area, Germany is twenty-five per cent. the poorer in regard to the production of cereals and potatoes and ten to twelve per cent. in regard to the breeding of live stock.
The restitution of Alsace-Lorraine (the only formal claim advanced by the Entente in its war programme) has deprived Germany of the bulk of her iron-ore production. In 1913 Germany could count on 21,000,000 tons of iron from Lorraine, 7,000,000 from Luxemburg, 138,000 from Upper Silesia and 7,344 from the rest of her territory. This means that Germany is reduced to only 20.41 per cent. of her pre-war wealth in iron ore.
In 1913 the Saar district represented 8.95 per cent. of the total production of coal, and Upper Silesia 22.85 per cent.
Having lost about eighty per cent. of her iron ore and large stocks of coal, while her production is severely handicapped, Germany, completely disorganized abroad after the suppression of all economic equilibrium, is condemned to look on helplessly while the very sources of her national wealth dry up and cease to flow. In order to form a correct estimate of the facts we must hold in mind that one-fifth of Germany's total exports before the War consisted of iron and of tools and machinery mostly manufactured with German iron.
If we now consider the fourteen points of President Wilson, accepted by the Entente as a peace programme, comparing the actual results obtained by the Treaty of Versailles, we are faced with the following situation:
1. "After loyal peace negotiations and the conclusion and signing of peace treaties, secret diplomatic agreements must be regarded as abolished," says Wilson. On the contrary, secret peace negotiations have been protracted for more than six months, and no hearing was even granted to the German delegates who wished to expose their views. By a system of treaties France has created a military alliance with Belgium and Poland, thus completely cornering Germany.
2. Absolute freedom of the sea beyond territorial waters. Nothing, as a matter of fact, has been changed from the pre-war state of things; with the difference that the losers have had to surrender their mercantile fleets and are therefore no longer directly interested in the question.
3. Removal of all economic barriers and equality of trade conditions. The treaty imposes on Germany terms without reciprocity, and almost all Entente countries have already adopted protectionist and prohibitive tariffs.
4. Adequate guarantees to be given and received for the reduction of armaments to a minimum compatible with home defence. The treaties have compelled the vanquished countries to destroy or to surrender their navies, and have reduced the standing armies of Germany to 100,000 men, including officers, of Bulgaria to 23,000, of Austria to 30,000 (in reality only 21,000), of Hungary to 35,000. The conquering states, on the other hand, maintain enormous armies numerically superior to those which they had before the War. France, Belgium and Poland have between them about 1,400,000 men with the colours. Germany, Austria, Hungary and Bulgaria altogether have only 179,000 men under arms, while Rumania alone has 206,000 and Poland more than 450,000 men.
5. Loyal and straightforward settlement of colonial rights and claims, based chiefly on the advantage of the peoples directly concerned. All her colonies have been taken from Germany, who needed them more than any other country of continental Europe, having a density of population of 123 inhabitants per square kilometre (Italy has a density of 133 per square kilometre) while France has 74, Spain 40, and European Russia before the War had only 24.
6. Evacuation of all Russian territories and cordial co-operation for the reconstruction and development of Russia. For a long time the Entente has given its support to the military ventures of Koltchak, Judenic, Denikin and Wrangel, all men of the old regime.
7. Evacuation and reconstruction of Belgium. This has been done, but to Belgium have been assigned territories which she never dreamt of claiming before the War.
8. Liberation of French territories, reconstruction of invaded regions and restitution of Alsace-Lorraine to France in respect of the territories taken from her in 1871. France occupies a dominating position in the Saar which constitutes an absolute denial of the principle of nationality.
9. Rectification of the Italian frontier, according to clearly defined lines of nationality. As these lines have never been clearly defined or recognized, the solution arrived at has been distasteful both to the Italians and to their neighbours.
10. The peoples of Austria-Hungary to be left free to unite together or to form autonomous states in the manner best suited to their development. As a matter of fact the treaties have taken the greatest possible number of Germans from Austria and of Magyars from Hungary in order to hand them over to Poland, to Czeko-Slovakia, to Rumania and to Jugo-Slavia, namely to populations for the most part inferior to the Germans.
11. Evacuation of Rumania, Serbia and Montenegro. This has been effected, but whereas the Entente Powers have always proclaimed their fundamental duty for the reconstruction of Montenegro, they all contributed to its disappearance, chiefly at the instigation of France.
12. A limited sovereignty to the Turkish parts of the Ottoman Empire, liberation of other nationalities and freedom of navigation in the Dardanelles placed under international guarantees. What really happened was that the Entente Powers immediately tried to possess themselves of Asia Minor; but events rendered it necessary to adopt a regime of mandates because direct sovereignty would have been too perilous an experiment. A sense of deep perturbation and unrest pervades the whole of Islam.
13. An independent Polish state with populations undoubtedly Polish to be founded as a neutral State with a free and secure outlet to the sea and whose integrity is to be guaranteed by international accords. In reality a Polish state has been formed with populations undoubtedly non-Polish, having a markedly military character and aiming at further expansion in Ukranian and German territory. It has a population of 31,000,000 inhabitants while it should not exceed 18,000,000, and proposes to isolate Russia from Germany. Moreover the Free State of Danzig, practically dependent from Poland, constitutes a standing menace to Germany.
14. Foundation of the League of Nations for the sole purpose of re-establishing order among nations, and laying the basis of reciprocal guarantees of territorial integrity and political independence for all states, both great and small. After more than two years have elapsed since the conclusion of peace and three since the armistice the League of Nations is still nothing but a holy alliance the object of which is to guarantee the privileges of the conquerors. After the vote of the Senate, deserving of all praise from every point of view, the United States does not form part of the League nor do the losing countries, including Germany.
It is therefore obvious that the most solemn pledges on which peace was based have not been maintained; the noble declarations made by the Entente during the War have been forgotten; forgotten all the solemn collective pledges; forgotten and disregarded Wilson's proclamations which, without being real contracts or treaties, were something far more solemn and binding, a pledge taken before the whole world at its most tragic hour to give the enemy a guarantee of justice.
Without expressing any opinion on the treaties it cannot be denied that the manner in which they have been applied has been even worse. For the first time in civilized Europe, not during the War, when everything was permissible in the supreme interests of defence, but now that the War is over, the Entente Powers, though maintaining armies more numerous than ever, for which the vanquished must pay, have occupied German territories, inhabited by the most cultured, progressive and technically advanced populations in the world, as an insult and a slight, with coloured troops, men from darkest and most barbarous Africa, to act as defenders of the rights of civilization and to maintain the law and order of democracy.