It was with the will of the people and an earnest desire to co-operate in this enquiry and report, that the American Government appointed General Dawes to the international committee which investigated the state of German finance and recommended a plan of action. It was another step towards American co-operation in the arrangement of world peace, and the beginning at least of a settlement in Europe based on business methods and common sense.
The Dawes Report cut like a clean wind through all sophistries, fantasies, illusions, and passions. It stated the realities, to France as well as to Germany.... Germany was a bankrupt State with great assets and immense potential energy. France and other countries could get heavy payments in course of time—if Germany were given industrial liberty and a loan to stabilise her monetary system, in securities which were good. Otherwise, they would get nothing. Take it or leave it. There were the facts.
The acceptance and working of the Report which disillusioned both France and Germany, and excited bitter opposition in both countries, was dependent on one incalculable element—goodwill on all sides. The German nationalists denounced it as an outrage, French nationalists as a surrender; Poincaré was prepared to discuss it subject to many reservations, including the occupation of the Ruhr and the military control of the Rhineland Railways. Not in that political atmosphere between the two nations was there a ghost of a chance for the Dawes Report.
But then two other events happened in the political world which by a kind of miracle changed the mental atmosphere of Europe, at least sufficiently to secure the adoption of the new scheme. They were the advent of the Labour Government in Great Britain and the downfall of Poincaré.
The Social Revolution in England
The Conservative Government under Baldwin, which succeeded the breaking-up of the Coalition under Lloyd George, deliberately committed suicide by appealing to the country for a mandate on Protection. Great Britain would have nothing of it at a time of unemployment, heavy costs of living, and diminishing trade. But the results of the election were unforeseen. The Conservatives lost their great majority, the Liberals were reduced to a minority, and Labour became the strongest single party in the new Parliament and received its call to office.
It was the greatest social revolution that has happened in England in modern history. The highest offices of state and of the very Court itself were occupied by men who had begun life in factories, mines and workshops, or who had gained political notoriety by attack upon the privileges, traditions, social castes, and property rights of the most conservative country in Europe outside Spain. They were the leaders of that spirit of revolt which had surged below the surface of English life among ex-soldiers who had not received reward for service, unemployed men who were living on poor doles, and of all those inarticulate millions who rallied to the Labour cause because it stood solidly and squarely for anti-militarism and world peace, for democratic liberties, and for ideals of a world state in which the common folk should have security, more pay for less work, more joy in life, and social equality levelled up to high standards of education and home comfort. Those I am sure were the instincts and hopes—not yet to be fulfilled!—which brought Labour into office.
They were there only on sufferance, and with guarantees of good behaviour. A combined vote of the Liberals and Conservatives could turn them out at any moment. But they played their cards cleverly, for a time, not adventuring on any revolutionary policy, not trampling on any old traditions, wearing Court uniform as though to the manner born, pleased with their prestige and power, being very polite to everybody, and keeping their hot-heads quiet by promises of future reward when their majority would be substantial.
They were certainly lucky in having Ramsay MacDonald as their leader and Prime Minister. A man of high education, though humble birth, with a fine dignity and grace of manner, sincere in his ideals, believing in evolution and not revolution, and with an intimate knowledge of both foreign affairs and Parliamentary rules, he came as no shock to the House of Commons, and inspired admiration even among his political opponents. Unable to do much to remedy the state of economic life in Great Britain—even to fulfil his promises regarding a remedy for unemployment—he concentrated all his efforts, wisely as well as tactfully, on the endeavour to solve the European problem between France and Germany. He saw at once that it would never be solved as long as hostility and suspicion embittered the relations of France and England. The man whom all England had accused as Pro-German wrote the most charming and conciliatory letters to Poincaré, full of sympathy and understanding for France. Time worked on his side. Poincaré was defeated when he went to the country for re-election, and contrary to nearly all the prophets, his policy was rejected and Herriot, corresponding to Ramsay MacDonald as a leader of the Left, became Premier of France.