There is no doubt that the occupation of the Ruhr has contributed to render the crisis of the Ruhr extremely acute, and therefore to a certain extent hastened a solution.
It will not be inopportune to recall, considering the rapidity of events, that the French and Belgians went to the Ruhr on account of the declarations of a series of failures of the supplies in kind by Germany, admitted also by England, at any rate as regards that of wood, and the failure of the Conference of Paris.
It is certainly worth while to fix exactly in their essential lines the main features of the Italian, English and German projects, in order to have a picture of the situation as regards its agreements and divergencies, and to see what conjectures we can form as to a possible settlement. This will also serve to explain why Italy was not able to accept the Bonar Law scheme at Paris, and why she had to reject the recent Cuno-Rosenberg Memorandum.
The Italian project reduced the German debt to fifty milliards of gold marks, proposed a moratorium of two years, during which Germany would continue the supply of reparations in kind, accepted the distribution of German payments according to the quotas fixed at Spa, by which the Italian quota was put at five milliards of gold marks, fixed the payment of one part of the “C” bonds by means of the security given by the other ex-enemy States, used the remainder of the “C” bonds to settle the debt to America, agreed to the taking of economic pledges as a guarantee of the German payments, and finally, as regards the payments of the reparations owed by Austria, Bulgaria and Hungary, asked for a pledge for the acceptance of the proposals which England had deferred putting forward—proposals, that is, of annulling those debts.
The Italian quota of reparations, which the Italian project fixed at five milliards of gold marks, was thus reduced in the English project to less than half; whilst cancelling the bonds, it partly abolishes to our detriment German solidary responsibility for minor ex-enemy debts and rendered impossible the execution of the agreement of March 1921, which ensures important advantages to Italy upon the basis of the “C” bonds. The larger percentage reserved on the seventeen milliards, representing the interest of the moratorium capitalised to 1923, could not be used for the payment of American debts, in consideration of the aleatory nature of these seventeen milliards.
I do not recall all this to reopen discussions, but only to make clear the main outlines of that which was and remains a noteworthy attempt to find a solution for this grave problem; an attempt which contains worthy elements which can be usefully taken up again in case of a definite settlement.
The conclusion of an agreement between England and America on the problem of debts—the work of the then Chancellor of the Exchequer, Mr. Baldwin, to-day Prime Minister, followed shortly after the presentation of the English project.
Any idea of this debt being itself cancelled, or even of a simple compensation through the payment of reparations, is excluded from this agreement. The obligation to pay, although facilities may be accorded concerning both the number of years in which it must take place and the interests due, is solemnly affirmed and put into execution. In England the Speech from the Throne strongly emphasised this agreement. Even taking into account the diversity of economic strength and the totality of sacrifices borne, it could not remain without effect upon the importance of the whole question for the other European Powers.
Analysis of the German Project. If we compare the English and Italian projects with the German, the inacceptability of the latter appears evident. As is known, one of the fundamental points of the last German project concerns the consolidation of the actual debt of Germany, especially in kind, at the figure of twenty milliard gold marks, with an additional ten milliards, the payment of which depends upon the decision of an International Commission. Deducting the interest, these twenty milliards are reduced to fifteen, and the sums necessary must be found by international loans; and in the very probable eventuality that by 1927 the twenty milliards have not been subscribed, an annuity will be paid which represents five per cent. interest plus one per cent. for the redemption of the loan. Finally, in the German project any provision or regulation for the guarantees demanded is lacking. The total German debt, which in the English and the Italian projects is fixed at the figure of fifty milliards, in the German project is reduced to less than a third, and it is difficult, if not impossible, to determine in it the Italian quota and the sacrifice demanded from Italy.
In view of the representations, especially of England and Italy, Germany has recognised her proposals as insufficient, and yesterday the German Ambassador, Neurath, presented to me the new German Note, on the contents and nature of which I cannot pronounce an opinion for evident reasons, as in consequence of this Note diplomatic action with all the Allies must be taken up. I will only say that the German Note no longer demands the preliminary evacuation of the Ruhr as a condition for negotiation. This might make us believe in a renunciation on the part of Germany of that passive resistance, the utility of which—even for German aims—appears ever more doubtful, and whose cessation would help towards a more rapid attainment of a solution.