Ten years after

by Philip Gibbs

The Golden Lie

Or was it just one great lie to deceive the people of the victorious nations and to keep them quiet by golden promises which the liars knew in their hearts could never be fulfilled? One is tempted sometimes to think so. It is now so transparently clear that not even the richest and most powerful nation in the world of commerce—the United States of America—could pay one tenth of the sum expected from Germany after her overwhelming defeat, and the ruin of her world trade, without overwhelming financial disaster, that it is incredible that the greatest statesmen of the Allies and all their experts and advisers could ever have believed in such mad economics. Year after year there were assemblies of financial gentlemen who solemnly sat round tables estimating Germany’s capacity to pay. Year after year they reduced their estimates until they were brought down to 6,600 millions, and then by easy stages to 2,200 millions, while Europe sank deeper into economic misery; while British trade declined; while Austria starved; while France grew desperate for these payments; while Russia was famine-stricken; while Germany poured out paper money which became worthless, until her bankruptcy could no longer be concealed.

Future historians will be baffled by that psychology. They will hunt desperately for some clue to the mystery of that amazing folly which took possession of many people. They will call it perhaps the Great Financial Hoax, and argue that it was a deliberate deception on the part of the world’s leaders, afraid to confess to their nations that after all their sacrifice there would be no “fruits of victory,” but only heavy taxation, to pay for the costs of war which could not be shifted on to enemy nations. I do not think it was quite as simple as all that. I think in the beginning that sheer ignorance of the most elementary economic laws led men like Clemenceau and Lloyd George to over-estimate the power of a nation like Germany to transfer wealth in money values to other nations. They did not understand that all transferable wealth—or nearly all—can only be obtained by a trade balance of exports and imports, and that the potential energy of a nation, its factories and plant, its public buildings, bridges, organisation and industry, are not transferable except by a balance over exchange of goods. They were so hopelessly ignorant of international finance that they actually did believe that they could “squeeze” Germany of vast sums of money which could be divided among the Allies for the settlement of their immense bill of costs, without damaging their own trade or allowing Germany to trade unduly in the markets of the world. One British statesman promised his people that Germany should be squeezed like an orange until the pips squeaked. French statesmen, like Poincaré, dazzled the eyes of their people with golden visions. They balanced their budget by the simple method of assuming that all that war debt would be paid by Germany when pressure was firmly applied.

It was only later, when the politicians began to get a clear notion of economic laws, by the painful lessons of reality and disillusion, that they began to deceive their peoples and keep up the bluff. They were afraid to tell the truth after all those falsities. In France, long before the entry into the Ruhr, French economists, business men and senators confessed privately that France could never hope to get anything like her claims against Germany, and some of them, more candid than others, shrugged their shoulders and said: “We dare not tell the people—the shock would be too great.” The French Press kept up the conspiracy of this deception, audaciously and persistently throwing the blame of delay in getting German payments upon Great Britain who did not stand by them in exerting “pressure.” In Great Britain, dependent upon export trade for her main source of wealth, and seeing the deadly stagnation of Europe and its increasing loss of purchasing power, the truth of economic law was more quickly perceived, and its statesmen shifted their policy and forgot their golden promises more rapidly and with more public candour.

The Downfall of Idealism

Looking back upon the years after the war, one sees that the idealism, which for a little while might have changed the face of the world if there had been great and noble leadership, fell with a crash in many hearts because the interpreters of the Peace Treaty were appealing not to the highest but to the lowest instincts of humanity; to greed rather than justice; to vengeance rather than reconstruction; to lies rather than truth. If only there had been one great leader in the world who had cried: “We were all involved in this crime against humanity, although Germany’s guilt was greatest; let us in the hour of victory put vengeance on one side and so shape the peace that the common folk of the world will have a better chance of life,” I believe that in the time when the agony was great and the wounds were still bleeding the hearts of people would have leapt up to him. They would have responded if he had pleaded for generosity to the defeated nations, if he had refused to punish the innocent for the guilty, if he had asked them to forego the pound of flesh demanded in the name of Justice, to forget the horror of the past, to escape from it together, to march forward to a new chapter of civilisation not based on standing armies, balances of powers, and cut-throat rivalry, but upon new ideals of international law, business, common sense, and Christian ethics.

People will say—do say—“It would have been weakness to let the Germans off. They deserved to be punished. They would have made a peace of terror, if they had had the chance of victory. There is Justice to be considered. Justice demands its due, or God is mocked.”

That is all true. It would have been weakness to let the Germans off, but the surrender of their Fleet, the destruction of their Army, the enormous sum of their dead was not a “let off.” They were broken and punished, in pride and in soul. They would have made a peace of terror? Yes, that is certain, and they would have aroused, intensified and perpetuated a world of hate by which later they would have been destroyed. Their war lords would have made a worse peace than this of ours; but that is no argument why we should have imitated their methods and morals.

The League of Nations

There was one institution created by the peacemakers which held out a promise of a better relationship between nations than that of military alliances and armed force divided into an uncertain Balance of Power. All that was wrong in the Peace Treaties might be put right by the League of Nations. The seeds of war sown by the Treaties might be made to blossom into the laurels of peace by the League. Although the Supreme Council set up by the Allies for the enforcement of its military provisions might act on purely nationalistic lines, the League of Nations would build up the international moral sense, and establish a Court of Appeal by which injustice, aggression, and the war spirit could be extirpated between all nations subscribing to its code of laws, and the spirit of arbitration.