Europe Since 1918

by Herbert Adams Gibbons

“What’s the matter with France?” is not an unjustified question, but we cannot answer it fairly unless we consider its corollary, “What’s the matter with ourselves?” Lest it be thought that I do not understand and sympathize with the exceeding difficulty of the French people and Government in shaping their post-bellum policies, it is wise to pause before going into the Ruhr with the French, and outline the fears of France and their justification. This will save us from becoming too pharisaical!

We borrow a French word to express an idea for which the French themselves use another word. We speak of a person as being naïve in his reasoning or attitude, but the French would say simpliste. Simplisme is the error in reasoning of neglecting elements of a problem that ought to be considered in arriving at a solution. Because we are self-centered sentimentalists, we Anglo-Saxons are simplistes. In building up briefs to justify our actions and to condemn the actions of others, we admit contingency only when contingent factors affect us and have influenced us. When others cry out, “But what would you have done in our place?” our answer is, “We are not in your place.” The answer is final. Thus do we dismiss disagreeable and unwelcome conclusions.

Not only because it is unfair and unchivalrous, but also because it is dangerous, we must avoid comfortable and comforting simplisme in our thinking about the European situation. It may be true that the unsheathed sword of France is disastrous to reconstruction and to the return of normal conditions, but does it follow that France is wrong in not having put back into the scabbard her sword? Could France have sheathed her sword before now? Can she afford to sheathe it as long as the United States remains aloof, with Britain tending to follow, from European affairs? If Europe is still under arms in the fifth year of “peace,” is the fault solely, or even primarily France’s? Or is Germany to blame? Or Poland? Can we look for the trouble in Bolshevism? Each of these questions opens up a field for speculation. By the mouths of our statesmen and the pens of our editorial writers we criticize and denounce and advise, but until we ask ourselves whether the attitude of France may not be due to what we have done and what we have left undone, we follow false leads. Winning the war came through pooling of resources. Will winning the peace come in any other way?

When May 1, 1921, was set as a date on which the total amount of reparations due from Germany to her victors should be fixed, it seemed a long way off. American delegates urged that the amount the Allies intended to exact be decided upon immediately and be stipulated in the treaty, but the Allies would have had to determine the proportion of indemnity each country was to receive. This could not have been done during the Peace Conference, which had already too many friction-breathing problems on its hands to risk another. It involved the filing of claims of all the victors. With the fluctuation of exchange and the uncertainty of cost of labor, material, and freight, those who suffered damages could not even approximate the sum necessary to make good their losses. The French advanced a powerful argument against the American suggestion of a fixed indemnity when they said that, since all admitted the liability of Germany to be far more than could be collected from her, it would be wise to wait a year or two to see how hard hit Germany was and how the world would recover from the economic consequences of the war, before deciding how much money could be collected. Mr. Lloyd George supported the French contention. Having recently won a General Election on the promise to make Germany pay all the expenses of the war, he did not dare to return from Paris with a treaty containing a fixed sum for reparations.

Just as I have tried to show, in discussing the internal affairs of Germany since 1918, that the Government could probably have done no more than it has done in the matter of reparations, it is possible on the other side to show how the French Government has been compelled by public opinion to keep hounding Germany for money. The admission of a fixed indemnity in the treaty was not necessarily planned by the French to give them an indefinite strangle-hold upon Germany. At the time they may not have realized that the stipulation concerning the trial of war criminals, which Germany could not fulfil, and the disarmament clauses, which gave unlimited opportunity for quibble and dispute, together with the unpaid bills for reparations, would furnish a legal excuse for retaining the Rhine provinces and a technical ground for the further invasion of Germany. The weapons were at hand. Public opinion clamored for reparations. Briand was thrown out of power to make way for the more energetic Poincaré. Ought we not to give due weight to the popular outcry in France for reparations as a powerful factor forcing or tempting the French Government into its present policy?

Great Britain and the United States have no budget deficits to face. We explain this by our willingness to tax ourselves and by drastic reduction of military and naval expenses. “An admirable example the British set us, and we are following it,” said a treasury official to me in Washington. “And an admirable example the British have set the other Allies in funding their debt to us. Now, if the French would tax themselves, if they would pay their debts, and if they would put their army back on a peace footing, they wouldn’t be in such a hole.” The same evening I read in Washington’s most influential newspaper, “If the French stop bothering the world about a debt they will never collect, and realize that prosperity comes from working, as we Americans do, we shall have peace.”

Although it has been impressed upon them over and over again, British and Americans do not seem to understand that northern and northeastern France were industrial and mining regions, from which France derived most of her wealth; that these regions were ruined by fighting over them and by the German occupation; and that France still suffers not only from the loss of their normal revenue but also from the necessity of incorporating in the national budget enormous sums for reconstruction. Up to the end of 1922 the French Government had advanced from the Treasury, or guaranteed in principal and interest on bonds floated, the huge sum of 85,000,000,000 francs for reconstruction.

Neither the British nor we face this unique problem. Yet, when we speak of the French taxing themselves and cutting down expenses to avoid budget deficits, we give smugly the illustration of ourselves and how nobly we are solving financial problems, as if there were a similarity between our situation and that of France. We can get along without the German indemnity because the Germans did not kill millions of us and cripple our industries in Pittsburg and Chicago. We can tax ourselves and not break under the load, although we groan because the war, taken for its entire period, made us wealthy. The British were hard hit, but, as Mr. Austen Chamberlain complacently explained to the House of Commons, the map of the world showed why the British Empire need not worry about meeting its obligations.

Economists agree on two points: that Germany cannot pay what is demanded of her, and what she was compelled to agree to pay by the May ultimatum of 1921; and that the plan of making Germany pay according to her prosperity (that is, the tax on exports) will be worked out only if the creditors of Germany take over the governing of the country.

The first point is not hard to understand. Payments abroad are made by favorable trade-balances. Gold marks are to be found by selling goods. How many gold marks Germany could pay into the coffers of other countries would depend upon her surplus over what she had to pay for imported raw materials and food-stuffs. Consequently Germany’s good faith alone was not sufficient to enable her to live up to the obligations she assumed. Faced with an impossible financial task, she had to default.