‘The Treaty inflicts on an Empire built up on coal and iron the loss of about one-third cf her coal supplies, with such a heavy drain on the scanty remainder as to leave her with an annual supply of only 60 million tons, as against the pre-war production of over 190 million tons, and the loss of over three-quarters of her iron ore. It deprives her of all effective control over her own system of transport; it takes the river system of Germany out of German hands, so that on every International Committee dealing with German waters, Germans are placed in a clear minority. It is as though the Powers of Central Europe were placed in a majority on the Thames Conservancy or the Port of London Authority. Finally, it forces Germany for a period of years to concede “most favoured nation” treatment to the Allies, while she receives no such reciprocal favour in return.’
This wholesale confiscation of private property[23] is to take place without the Allies affording any compensation to the individuals expropriated, and the proceeds will be employed, first, to meet private debts due to Allied nationals from any German nationals, and, second, to meet claims due from Austrian, Hungarian, Bulgarian, or Turkish nationals. Any balance may either be returned by the liquidating power direct to Germany, or retained by them. If retained, the proceeds must be transferred to the Reparations Commission for Germany’s credit in the Reparations account. Note, moreover, how the identification of a citizen with his State is carried forward by the discrimination made against Germans in overseas trade. Heretofore there were whole spheres of international trade and industrial activity in which the individual’s nationality mattered very little. It was a point in favour of individual effort, and, incidentally, of international peace. Under the Treaty, whereas the property of Allied nationals within German jurisdiction reverts to Allied ownership on the conclusion of peace, the property of Germans within Allied jurisdiction is to be retained and liquidated as described above, with the result that the whole of German property over a large part of the world can be expropriated, and the large properties now within the custody of Public Trustees and similar officials in the Allied countries may be retained permanently. In the second place, such German assets are chargeable, not only with the liabilities of Germans, but also, if they run to it, with ‘payment of the amounts due in respect of claims by the nationals of such Allied or Associated Power with regard to their property, rights, and interests in the territory of other Enemy Powers,’ as, for example, Turkey, Bulgaria, and Austria. This is a remarkable provision, which is naturally non-reciprocal. In the third place, any final balance due to Germany on private account need not be paid over, but can be held against the various liabilities of the German Government.[24] The effective operation of these articles is guaranteed by the delivery of deeds, titles, and information.
It will be noted how completely the Treaty returns to the Tribal conception of a collective responsibility, and how it wipes away the distinction heretofore made in International Law, between the civilian citizen and the belligerent Government. An Austrian who has lived and worked in England or China or Egypt all his life, and is married to an English woman and has children who do not speak a word of German, who is no more responsible for the invasion of Belgium than an Icelander or a Chinaman, finds that the savings of his lifetime left here in the faith of British security, are confiscated under the Treaty in order to satisfy the claims of France or Japan. And, be it noted, whenever attention is directed to what the defenders of the Treaty like to call its ‘sternness’ (as when it deprives Englishborn women and their children of their property) we are invited to repress our misgiving on that score in order to contemplate the beauty of its ‘justice,’ and to admire the inexorable accuracy with which reward and punishment are distributed. It is the standing retort to critics of the Treaty: they forget its ‘justice.’[25]
How far this new tendency is likely to go towards a reassertion of the false doctrine of the complete submergence of the individual in the State, the erection of the ‘God-State’ which at the beginning we declared to be the main moral cause of the War and set out to destroy, will be discussed later. The point for the moment is that the enforcement of this part of the Treaty, like other parts, will go to swell communistic tendencies. It will be the business of the German State to maintain the miners who are to deliver the coal under the Treaty, the workers in the shipyards who are to deliver the yearly toll of ships. The intricate and elaborate arrangements for ‘searching Germany’s pockets’ for the purpose of the indemnity mean the very strictest Governmental control of private trade in Germany, in many spheres its virtual abolition. All must be done through the Government in order that the conditions of the Treaty may be fulfilled. Foreign trade will be no longer the individual enterprise of private citizens. It will, by the order of the Allies, be a rigidly controlled Governmental function, as President Wilson reminded us in the passage quoted above.
To a lesser degree the same will be true of the countries receiving the indemnity. Mr. Lloyd George promises that it will not be paid in cheap goods, or in such a way as to damage home industries. But it must be paid in some goods: ships, dyes, or (as some suggest) raw materials. Their distribution to private industry, the price that these industries shall pay, must be arranged by the receiving Government. This inevitably means a prolongation of the State’s intervention in the processes of private trade and industry. Nor is it merely the disposal of the indemnity in kind which will compel each Allied Government to continue to intervene in the trade and industry of its citizens. The fact that the Reparations Commission is, in effect, to allocate the amount of ore, cotton, shipping, Germany is to get, to distribute the ships and coal which she may deliver, means the establishment of something resembling international rationing. The Governments will, in increasing degree, determine the amount and direction of trade.
The more thoroughly we ‘make Germany pay,’ the more State-controlled do we compel her (and only to a lesser extent ourselves) to become. We should probably regard a standard of life in Germany very definitely below that of the rest of Western Europe, as poetic justice. But it would inevitably set up forces, both psychological and economic, that make not only for State-control—either State Socialism or State Capitalism—but for Communism.
Suppose we did our work so thoroughly that we took absolutely all Germany could produce over and above what was necessary for the maintenance of the physical efficiency of her population. That would compel her to organise herself increasingly on the basis of equality of income: no one, that is, going above the line of physical efficiency and no one falling below it.
Thus, while British, French, and American anti-socialists are declaring that the principle enunciated by the Russian Government, that all trade must be through the Soviet, is one which will prove most mischievous in its example, it is precisely that principle which increasingly, if the Treaty is enforced, they will in fact impose upon a great country, highly organised, of great bureaucratic efficiency, far more likely by its training and character to make the principle a success.
This tendency may be in the right direction or the wrong one. The point is that no provision has been made to meet the condition which the change creates. The old system permitted the world to work under well-defined principles. The new regimen, because it has not provided for the consequences of the changes it has provoked, condemns a great part of Europe to economic paralysis which must end in bitter anarchic struggles unless the crisis is anticipated by constructive statesmanship.
Meantime the continued coercion of Germany will demand on the part of the Western democracies a permanent maintenance of the machine of war, and so a perpetuation of the tendency, in the way already described, towards a militarised Nationalisation.