[21] Note of May 22, 1919.
[22] Speech of September 5, 1919. From report in Philadelphia Public Ledger, Sept 6.
[23] In German East Africa we have a case in which practically the whole of the property in land was confiscated. The whole European population were evicted from the farms and plantations—many, of course, representing the labour of a lifetime—and deported. A visitor to the colony describes it as an empty shell, its productivity enormously reduced. In contradistinction, however, one welcomes General Smuts’s statement in the Union House of Assembly in regard to the Government’s intentions as to German property. He declared that the balance of nine millions in the hands of the Custodian after claims for damages had been recovered, would not be paid to the Reparations Commission, as this would practically mean confiscation. The Government would take the nine millions, plus interest, as a loan to South Africa for thirty years at four per cent. While under the Peace Treaty they had the right to confiscate all private property in South-West Africa, they did not intend to avail themselves of those rights. They would leave private property alone. As to the concessions, if the titles to these were proved, they would also be left untouched. The statement of the South African Government’s intentions, which are the most generous of any country in the world, was received with repeated cheers from all sections of the House.
[24] Since the above lines were written the following important announcement has appeared (according to The Times of October 26th., 1920.) in the Board of Trade Journal of October 21st.:—
‘H. M. Government have informed the German Government that they do not intend to exercise their rights under paragraph 18 of Annex II to Part VIII of the Treaty of Versailles, to seize the property of German nationals in this country in case of voluntary default by Germany. This applies to German property in the United Kingdom or under United Kingdom control, whether in the form of bank balances, or in that of goods in British bottoms, or of goods sent to this country for sale.
‘It has already been announced that German property, rights, and interests acquired since the publication of the General Licence permitting the resumption of trade with Germany (i.e. since July 12th., 1919), are not liable to retention under Art. 297 of the Peace Treaty, which gives the Allied and Associated Powers the right to liquidate all German property, rights, and interests within their territories at the date of the coming into force of the Treaty.’
This announcement has called forth strong protests from France and from some quarters in this country, to which the British Government has rejoined by a semi-official statement that the concession has been made solely on account of British commercial interests. The incident illustrates the difficulty of waiving even permissive powers under the Treaty, although the exercise of those powers would obviously injure British traders. Moreover, the Reparations (Recovery) Act, passed in March 1921, appears to be inconsistent with the above announcement.
[25] A point that seems to have been overlooked is the effect of this Treaty on the arrangements which may follow changes in the political status of, say, Egypt or India or Ireland. If some George Washington of the future were to apply the principles of the Treaty to British property, the effects might be far-reaching.
A Quarterly Review critic (April 1920) says of these clauses of the Treaty (particularly Article 297b.):—
‘We are justified in regarding this policy with the utmost apprehension, not only because of its injustice, but also because it is likely to form precedents of a most mischievous character in the future. If, it will be said, the Allied Governments ended their great war for justice and right by confiscating private property and ruining those unfortunate individuals who happened to have investments outside their own country, how can private wealth at home complain if a Labour Government proposes to confiscate private property in any business which it thinks suitable for “nationalisation”? Under another provision the Reparations Commission is actually allowed to demand the surrender of German properties and German enterprises in neutral countries. This will be found in Article 235, which “introduces a quite novel principle in the collection of indemnities.”’