The greatest danger that I see in the present situation is that Germany may throw in her lot with Bolshevism and place her resources, her brains, her vast organizing power at the disposal of the revolutionary fanatics whose dream it is to conquer the world for Bolshevism by force of arms. This danger is no mere chimera. The present government in Germany is weak; its authority is challenged; it lingers merely because there is no alternative but the Spartacists, and Germany is not ready for Spartacism, as yet. But the argument which the Spartacists are using with great effect at this very time is that they alone can save Germany from the intolerable conditions which have been bequeathed her by the War. They offer to free the German people from indebtedness to the Allies and indebtedness to their own richer classes. They offer them complete control of their own affairs and the prospect of a new heaven and earth. It is true that the price will be heavy. There will be two or three years of anarchy, perhaps of bloodshed, but at the end the land will remain, the people will remain, the greater part of the houses and the factories will remain, and the railways and the roads will remain, and Germany, having thrown off her burdens, will be able to make a fresh start.

If Germany goes over to the Spartacists it is inevitable that she should throw in her lot with the Russian Bolshevists. Once that happens all Eastern Europe will be swept into the orbit of the Bolshevik revolution, and within a year we may witness the spectacle of nearly three hundred million people organized into a vast red army under German instructors and German generals, equipped with German cannon and German machine guns and prepared for a renewal of the attack on Western Europe. This is a prospect which no one can face with equanimity. Yet the news which came from Hungary yesterday shows only too clearly that this danger is no fantasy. And what are the reasons alleged for this decision? They are mainly the belief that large numbers of Magyars are to be handed over to the control of others. If we are wise, we shall offer to Germany a peace, which, while just, will be preferable for all sensible men to the alternative of Bolshevism. I would therefore put it in the forefront of the peace that once she accepts our terms, especially reparation, we will open to her the raw materials and markets of the world on equal terms with ourselves, and will do everything possible to enable the German people to get upon their legs again. We cannot both cripple her and expect her to pay.

Finally, we must offer terms which a responsible government in Germany can expect to be able to carry out. If we present terms to Germany which are unjust, or excessively onerous, no responsible government will sign them; certainly the present weak administration will not. If it did, I am told that it would be swept away within twenty-four hours. Yet if we can find nobody in Germany who will put his hand to a peace treaty, what will be the position? A large army of occupation for an indefinite period is out of the question. Germany would not mind it. A very large number of people in that country would welcome it, as it would be the only hope of preserving the existing order of things. The objection would not come from Germany, but from our own countries. Neither the British Empire nor America would agree to occupy Germany. France by itself could not bear the burden of occupation. We should therefore be driven back on the policy of blockading the country. That would inevitably mean Spartacism from the Urals to the Rhine, with its inevitable consequence of a huge red army attempting to cross the Rhine. As a matter of fact, I am doubtful whether public opinion would allow us deliberately to starve Germany. If the only difference between Germany and ourselves were between onerous terms and moderate terms, I very much doubt if public opinion would tolerate the deliberate condemnation of millions of women and children to death by starvation. If so, the Allies would have incurred the moral defeat of having attempted to impose terms on Germany which Germany had successfully resisted.

From every point of view, therefore, it seems to me that we ought to endeavour to draw up a peace settlement as if we were impartial arbiters, forgetful of the passions of the war. This settlement ought to have three ends in view.

First of all it must do justice to the Allies, by taking into account Germany's responsibility for the origin of the War, and for the way in which it was fought.

Secondly, it must be a settlement which a responsible German government can sign in the belief that it can fulfil the obligations it incurs.

Thirdly, it must be a settlement which will contain in itself no provocations for future wars, and which will constitute an alternative to Bolshevism, because it will commend itself to all reasonable opinion as a fair settlement of the European problem.

II

It is not, however, enough to draw up a just and far-sighted peace with Germany. If we are to offer Europe an alternative to Bolshevism we must make the League of Nations into something which will be both a safeguard to those nations who are prepared for fair dealing with their neighbours and a menace to those who would trespass on the rights of their neighbours, whether they are imperialist empires or imperialist Bolshevists. An essential element, therefore, in the peace settlement is the constitution of the League of Nations as the effective guardian of international right and international liberty throughout the world. If this is to happen the first thing to do is that the leading members of the League of Nations should arrive at an understanding between themselves in regard to armaments. To my mind it is idle to endeavour to impose a permanent limitation of armaments upon Germany unless we are prepared similarly to impose a limitation upon ourselves. I recognize that until Germany has settled down and given practical proof that she has abandoned her imperialist ambitions, and until Russia has also given proof that she does not intend to embark upon a military crusade against her neighbours, it is essential that the leading members of the League of Nations should maintain considerable forces both by land and sea in order to preserve liberty in the world. But if they are to present a united front to the forces both of reaction and revolution, they must arrive at such an agreement in regard to armaments among themselves as would make it impossible for suspicion to arise between the members of the League of Nations in regard to their intentions towards one another. If the League is to do its work for the world it will only be because the members of the League trust it themselves and because there are no rivalries and jealousies in the matter of armaments between them. The first condition of success for the League of Nations is, therefore, a firm understanding between the British Empire and the United States of America and France and Italy, that there will be no competitive building up of fleets or armies between them. Unless this is arrived at before the Covenant is signed the League of Nations will be a sham and a mockery. It will be regarded, and rightly regarded, as a proof that its principal promoters and patrons repose no confidence in its efficacy. But once the leading members of the League have made it clear that they have reached an understanding which will both secure to the League of Nations the strength which is necessary to enable it to protect its members and which at the same time will make misunderstanding and suspicion with regard to competitive armaments impossible between them its future and its authority will be assured. It will then be able to ensure as an essential condition of peace that not only Germany, but all the smaller States of Europe, undertake to limit their armaments and abolish conscription. If the small nations are permitted to organize and maintain conscript armies running each to hundreds of thousands, boundary wars will be inevitable, and all Europe will be drawn in. Unless we secure this universal limitation we shall achieve neither lasting peace nor the permanent observance of the limitation of German armaments which we now seek to impose.

I should like to ask why Germany, if she accepts the terms we consider just and fair, should not be admitted to the League of Nations, at any rate as soon as she has established a stable and democratic government? Would it not be an inducement to her both to sign the terms and to resist Bolshevism? Might it not be safer that she should be inside the League than that she should be outside it?