Table of Contents

Tragedy and Hope

A History of the World in Our Time

By Carroll Quigley

PART SIX







Part Six: The Versailles System and the Return to Normalcy: 1919-1929

Chapter 15: The Peace Settlements, 1919-1923

     The First World War was ended by dozens of treaties signed in the period 1919-1923. Of these, the five chief documents were the five treaties of peace with the defeated Powers, named from the sites in the neighborhood of Paris where they were signed. These were:

     Treaty of Versailles with Germany, June 28, 1919

     Treaty of Saint-Germain with Austria, September 10, 1919

     Treaty of Neuilly with Bulgaria, November 27, 1919

     Treaty of Trianon with Hungary, June 4, 1920

     Treaty of S่vres with Turkey, August 20, 1920

     The last of these, the Treaty of S่vres with Turkey, was never ratified and was replaced by a new treaty, signed at Lausanne in 1923.

     The peace settlements made in this period were subjected to vigorous and detailed criticism in the two decades 1919-1939. This criticism was as ardent from the victors as from the vanquished. Although this attack was largely aimed at the terms of the treaties, the real causes of the attack did not lie in these terms, which were neither unfair nor ruthless, were far more lenient than any settlement which might have emerged from a German victory, and which created a new Europe which was, at least politically, more just than the Europe of 1914. The causes of the discontent with the settlements of 1919-1923 rested on the procedures which were used to make these settlements rather than on the terms of the settlements themselves. Above all, there was discontent at the contrast between the procedures which were used and the procedures which pretended to he used, as well as between the high-minded principles which were supposed to be applied and those which really were applied

     The peoples of the victorious nations had taken to heart their wartime propaganda about the rights of small nations, making the world safe for democracy, and putting an end both to power politics and to secret diplomacy. These ideals had been given concrete form in Wilson's Fourteen Points. Whether the defeated Powers felt the same enthusiasm for these high ideals is subject to dispute, but they had been promised, on November 5, 1918, that the peace settlements would be negotiated and would be based on the Fourteen Points. When it became clear that the settlements were to be imposed rather than negotiated, that the Fourteen Points had been lost in the confusion, and that the terms of the settlements had been reached by a process of secret negotiations from which the small nations had been excluded and in which power politics played a much larger role than the safety of democracy, there was a revulsion of feeling against the treaties.

     In Britain and in Germany, propaganda barrages were aimed against these settlements until, by 1929, most of the Western World had feelings of guilt and shame whenever they thought of the Treaty of Versailles. There was a good deal of sincerity in these feelings, especially in England and in the United States, but there was also a great deal of insincerity behind them in all countries. In England the same groups, often the same people, who had made the wartime propaganda and the peace settlements were loudest in their complaint that the latter had fallen far below the ideals of the former, while all the while their real aims were to use power politics to the benefit of Britain. Certainly there were grounds for criticism, and, equally certainly, the terms of the peace settlements were far from perfect; but criticism should have been directed rather at the hypocrisy and lack of realism in the ideals of the wartime propaganda and at the lack of honesty of the chief negotiators in carrying on the pretense that these ideals were still in effect while they violated them daily, and necessarily violated them. The settlements were clearly made by secret negotiations, by the Great Powers exclusively, and by power politics. They had to be. No settlements could ever have been made on any other bases. The failure of the chief negotiators (at least the Anglo-Americans) to admit this is regrettable, but behind their reluctance to admit it is the even more regrettable fact that the lack of political experience and political education of the American and English electorates made it dangerous for the negotiators to admit the facts of life in international political relationships.

     It is clear that the peace settlements were made by an organization which was chaotic and by a procedure which was fraudulent.... The normal way to make peace after a war in which the victors form a coalition would be for the victors to hold a conference, agree on the terms they hope to get from the defeated, then have a congress with these latter to impose these terms, either with or without discussion and compromise. It was tacitly assumed in October and November, 1918, that this method was to be used to end the existing war. But this congress method could not be used in 1919 for several reasons. The members of the victorious coalition were so numerous (thirty-two Allied and Associated Powers) that they could have agreed on terms only slowly and after considerable preliminary organization. This preliminary organization never occurred, largely because President Wilson was too busy to participate in the process, was unwilling to delegate any real authority to others, and, with a relatively few, intensely held ideas (like the League of Nations, democracy, and self-determination), had no taste for the details of organization. Wilson was convinced that if he could only get the League of Nations accepted, any undesirable details in the terms of the treaties could be remedied later through the League. Lloyd George and Clemenceau made use of this conviction to obtain numerous provisions in the terms which were undesirable to Wilson but highly desirable to them.

     The time necessary for a preliminary conference or preliminary planning was also lacking. Lloyd George wanted to carry out his campaign pledge of immediate demobilization, and Wilson wanted to get back to his duties as President of the United States. Moreover, if the terms had been drawn up at a preliminary conference, they would have resulted from compromises between the many Powers concerned, and these compromises would have broken down as soon as any effort was made to negotiate with the Germans later. Since the Germans had been promised the right to negotiate, it became clear that the terms could not first be made the subject of public compromise in a full preliminary conference. Unfortunately, by the time the victorious Great Powers realized all this, and decided to make the terms by secret negotiations among themselves, invitations had already been sent to all the victorious Powers to come to an Inter-Allied Conference to make preliminary terms. As a solution to this embarrassing situation, the peace was made on two levels. On one level, in the full glare of publicity' the Inter-Allied Conference became the Plenary Peace Conference, and, with considerable fanfare, did nothing. On the other level, the Great Powers worked out their peace terms in secret and, when they were ready, imposed them simultaneously on the conference and on the Germans....

     As late as February 22nd, Balfour, the British foreign secretary, still believed they were working on "preliminary peace terms," and the Germans believed the same on April 15th.

     While the Great Powers were negotiating in secret the full conference met several times under rigid rules designed to prevent action. These sessions were governed by the iron hand of Clemenceau, who heard the motions he wanted, jammed through those he desired, and answered protests by outright threats to make peace without any consultation with the Lesser Powers at all and dark references to the millions of men the Great Powers had under arms. On February 14th the conference was given the draft of the Covenant of the League of Nations, and on April 11th the draft of the International Labor Office; both were accepted on April 28th. On May 6th came the text of the Treaty of Versailles, only one day before it was given to the Germans; at the end of May came the draft of the Treaty of Saint-Germain with Austria.

     While this futile show was going on in public, the Great Powers were making peace in secret. Their meetings were highly informal. When the military leaders were present the meetings were known as the Supreme War Council; when the military leaders were absent (as they usually were after January 12th) the group was known as the Supreme Council or the Council of Ten. It consisted of the head of the government and the foreign minister of each of the five Great Powers (Britain, the United States, France, Italy, and Japan). This group met forty-six times from January 12th to March 24, 1919. It worked very ineffectively. At the middle of March, because a sharp dispute over the German-Polish frontier leaked to the press, the Council of Ten was reduced to a Council of Four (Lloyd George, Wilson, Clemenceau, Orlando). These four, with Orlando frequently absent, held over two hundred meetings in a period of thirteen weeks (March 27th to June 28th). They put the Treaty of Versailles into form in three weeks and did the preliminary work on the treaty with Austria.

     When the treaty with Germany was signed on June 2 8, 1919, the heads of governments left Paris and the Council of Ten ended. So also did the Plenary Conference. The five foreign ministers (Balfour, Lansing, Pichon, Tittoni, and Makino) were left in Paris as the Council of Heads of Delegations, with full powers to complete the peace settlements. This group finished the treaties with Austria and Bulgaria and had them both signed. They disbanded on January lo, 1920, leaving behind an executive committee, the Conference of Ambassadors. This consisted of the ambassadors of the four Great Powers in Paris plus a French representative. This group held two hundred meetings in the next three years and continued to meet until 1931. It supervised the execution of the three peace treaties already signed, negotiated the peace treaty with Hungary, and performed many purely political acts which had no treaty basis, such as drawing the Albanian frontier in November 1921. In general, in the decade after the Peace Conference, the Conference of Ambassadors was the organization by which the Great Powers ruled Europe. It acted with power, speed, and secrecy in all issues delegated to it. When issues arose which were too important to be treated in this way, the Supreme Council was occasionally reunited. This was done about twenty-five times in the three years 1920-1922, usually in regard to reparations, economic reconstruction, and acute political problems. The most important of these meetings of the Supreme Council were held at Paris, London, San Remo, Boulogne, and Spa in 1920; at Paris and London in 1921; and at Paris, Genoa, The Hague, and London in 1922. This valuable practice was ended by Britain in 1923 in protest against the French determination to use force to compel Germany to fulfill the reparations clauses of the peace treaty.

     At all of these meetings, as at the Peace Conference itself, the political leaders were assisted by groups of experts and interested persons, sometimes self-appointed. Many of these "experts" were members or associates of the international-banking fraternity. At the Paris Peace Conference the experts numbered thousands and were organized into official staffs by most countries, even before the war ended. These experts were of the greatest importance. They were formed into committees at Paris and given problem after problem, especially boundary problems, usually without any indication as to what principles should guide their decisions. The importance of these committees of experts can he seen in the fact that in every case hut one where a committee of experts submitted a unanimous report, the Supreme Council accepted its recommendation and incorporated it in the treaty. In cases where the report was not unanimous, the problem was generally resubmitted to the experts for further consideration. The one case where a unanimous report was not accepted was concerned with the Polish Corridor, the same issue which had forced the Supreme Council to be cut down to the Council of Four in 1919 and the issue which led to the Second World War twenty years later. In this case, the experts were much harsher on Germany than the final decision of the politicians.

     The treaty with Germany was made by the Council of Four assembling the reports of the various committees, fitting the parts together, and ironing out various disagreements. The chief disagreements were over the size and nature of German reparations, the nature of German disarmament, the nature of the League of Nations, and the territorial settlements in six specific areas: the Polish Corridor, Upper Silesia, the Saar, Fiume, the Rhineland, and Shantung. When the dispute over Fiume reached a peak, Wilson appealed to the Italian people over the heads of the Italian delegation at Paris, in the belief that the people were less nationalistic and more favorable to his idealistic principles than their rather hard-boiled delegation. This appeal was a failure, but the Italian delegation left the conference and returned to Rome in protest against Wilson's action. Thus the Italians were absent from Paris at the time that the German colonial territories were being distributed and, accordingly, did not obtain any colonies. Thus Italy failed to obtain compensation in Africa for the French and British gains in territory on that continent, as promised in the Treaty of London in 1915. This disappointment was given by Mussolini as one of the chief justifications for the Italian attack on Ethiopia in 1935.

     The Treaty of Versailles was presented to the Plenary Conference on May 6, 1919, and to the German delegation the next day. The conference was supposed to accept it without comment, but General Foch, commander in chief of the French armies and of the Entente forces in the war, made a severe attack on the treaty in regard to its provisions for enforcement. These provisions gave little more than the occupation of the Rhineland and three bridgeheads on the right bank of the Rhine as already existed under the Armistice of November Il, 1918. According to the treaty, these areas were to be occupied for from five to fifteen years to enforce a treaty whose substantive provisions required Germany to pay reparations for at least a generation and to remain disarmed forever. Foch insisted that he needed the left bank of the Rhine and the three bridgeheads on the right bank for at least thirty years. Clemenceau, as soon as the meeting was over, rebuked Foch for disrupting the harmony of the assembly, but Foch had put his finger on the weakest, yet most vital, portion of the treaty.

     The presentation of the text of the treaty to the Germans the next day was no happier. Having received the document, the chief of the German delegation, Foreign Minister Count Ulrich von Brockdorff-Rantzau, made a long speech in which he protested bitterly against the failure to negotiate and the violation of the pre-armistice commitments. As a deliberate insult to his listeners, he spoke from a seated position..

     The German delegation sent the victorious Powers short notes of detailed criticism during May and exhaustive counter-proposals on May 28th. Running to 443 pages of German text, these counter-proposals, criticized the treaty, clause by clause, accused the victors of bad faith in violating the Fourteen Points, and offered to accept the League of Nations, the disarmament sections, and reparations of 100 thousand million marks if the Allies would withdraw any statement that Germany had, alone, caused the war and would readmit Germany to the world's markets. Most of the territorial changes were rejected except where they could be shown to be based on self-determination (thus adopting Wilson's point of view).

     These proposals led to one of the most severe crises of the conference as Lloyd George, who had been reelected in December on his promise to the British people to squeeze Germany dry and had done his share in this direction from December to May, now began to fear that Germany would refuse to sign and adopt a passive resistance which would require the Allies to use force. Since the British armies were being disbanded, such a need of force would fall largely on the French and would be highly welcome to people like Foch who favored duress against Germany. Lloyd George was afraid that any occupation of Germany by French armies would lead to complete French hegemony on the continent of Europe and that these occupation forces might never be withdrawn, having achieved, with British connivance, what Britain had fought so vigorously to prevent at the time of Louis XIV and Napoleon. In other words, the reduction in German's power as a consequence of her defeat was leading Britain back to her old balance-of-power policies under which Britain opposed the strongest Power on the continent by building up the strength of the second strongest. At the same time, Lloyd George was eager to continue the British demobilization in order to satisfy the British people and to reduce the financial burden on Britain so that the country could balance its budget, deflate, and go back on the gold standard. For these reasons, Lloyd George suggested that the treaty be weakened by reducing the Rhineland occupation from fifteen years to two, that a plebiscite be held in Upper Silesia (which had been given to Poland), that Germany be admitted to the League of Nations at once, and that the reparations burden be reduced. He obtained only the plebiscite in Upper Silesia and certain other disputed areas, Wilson rejecting the other suggestions and upbraiding the prime minister for his sudden change of attitude.

     Accordingly, the Allied answer to the German counter-proposals (written by Philip Kerr, later Lord Lothian) made only minor modifications in the original terms (chiefly the addition of five plebiscites in Upper Silesia, Allenstein, Marienwerder, North Schleswig, and the Saar, of which the last was to be held in 1935, the others immediately). It also accused the Germans of sole guilt in causing the war and of inhuman practices during it, and gave them a five-day ultimatum for signing the treaty as it stood. The German delegation at once returned to Germany and recommended a refusal to sign. The Cabinet resigned rather than sign, but a new Cabinet was formed of Catholics and Socialists. Both of these groups were fearful that an Allied invasion of Germany would lead to chaos and confusion which would encourage Bolshevism in the east and separatism in the west; they voted to sign if the articles on war guilt and war criminals could be struck from the treaty. When the Allies refused these concessions, the Catholic Center Party voted 64-14 not to sign. At this critical moment, when rejection seemed certain, the High Command of the German Army, through Chief of Staff Wilhelm Groener, ordered the Cabinet to sign in order to prevent a military occupation of Germany. On June 28, 1919, exactly five years after the assassination at Sarajevo, in the Hall of Mirrors at Versailles where the German Empire had been proclaimed in 1871, the Treaty of Versailles was signed by all the delegations except the Chinese. The latter refused, protest against the disposition of the prewar German concessions in Shantung.

     The Austrian Treaty was signed by a delegation headed by Karl Renner but only after the victors had rejected a claim that Austria was a succession state rather than a defeated Po\ver and had forced the country to change its name from the newly adopted "German Austria" to the title "Republic of Austria." The new country was forbidden to make any movement toward union with Germany without the approval of the League of Nations.

     The Treaty of Neuilly was signed by a single Bulgarian delegate, the Peasants' Party leader Aleksandr Stamboliski. By this agreement Bulgaria lost western Thrace, her outlet to the Aegean, which had been annexed from Turkey in 1912, as well as certain mountain passes in the west which were ceded from Bulgaria to Yugoslavia for strategic reasons.

     The Treaty of Trianon signed in 1920 was the most severe of the peace treaties and the most rigidly enforced. For these and other reasons Hungary was the most active political force for revision of treaties during the period 1924-1934 and was encouraged in this attitude by Italy from 1927 to 1934 in the hope that there might he profitable fishing in such troubled waters. Hungary had good reason to he discontented. The fall of the Habsburg dynasty in 1918 and the uprisings of the subject peoples of Hungary, like the Poles, Slovaks, Romanians, and Croatians, brought to power in Budapest a liberal government under Count Michael Kแrolyi. This government was at once threatened by a Bolshevik uprising under B้la Kun. In order to protect itself, the Kแrolyi government asked for an Allied occupation force until after the elections scheduled for April 1919. This request was refused by General Franchet d'Esperey, under the influence of a reactionary Hungarian politician, Count Stephen Bethlen. The Kแrolyi regime fell before the attacks of B้la Kun and the Romanians in consequence of lack of support from the West. After B้la Kun's reign of Red terrorism, which lasted six months (March-August, 1920), and his flight before a Romanian invasion of Hungary, the reactionaries came to power with Admiral Mikl๓s Horthy as regent and head of the state (1920 1944) and Count Bethlen as prime minister (1921-1931). Count Kแrolyi, who was pro-Allied, anti-German, pacifist, democratic, and liberal, realized that no progress was possible in Hungary without some solution of the agrarian question and the peasant discontent arising from the monopolization of the land. Because the Allies refused to support this program, Hungary fell into the hands of Horthy and Bethlen, who were anti-Allied, pro-German, undemocratic, militaristic, and unprogressive. This group was persuaded to sign the Treaty of Trianon hy a trick and ever afterward repudiated it. Maurice Pal้ologue, secretary-general of the French Ministry of Foreign Affairs (but acting on behalf of France's greatest industrialist, Eugene Schneider), made a deal with the Hungarians that if they would sign the Treaty of Trianon as it stood and give Schneider control of the Hungarian state railways, the port of Budapest, and the Hungarian General Credit Bank (which had a stranglehold on Hungarian industry) France would eventually make Hungary one of the mainstays of its anti-German bloc in eastern Europe, would sign a military convention with Hungary, and would, at the proper time, obtain a drastic revision of the Treaty of Trianon. The Hungarian side of this complex deal was largely carried out, but British and Italian objections to the extension of French economic control into central Europe disrupted the negotiations and prevented Hungary from obtaining its reward. Pal้ologue, although forced to resign and replaced at the Quai d'Orsay by the anti-Hungarian and pro-Czech Philippe Berthelot, received his reward from Schneider. He was made a director of Schneider's personal holding company for his central-European interests, the Union europ้ene industrielle et financi่re.

     The Treaty of S่vres with Turkey was the last one made and the only one never ratified. There w-ere three reasons for the delay: (1) the uncertainty about the role of the United States, which was expected to accept control of the Straits and a mandate for Armenia, thus forming a buffer against Soviet Russia; (2) the instability of the Turkish government, which was threatened hy a nationalist uprising led by Mustafa Kemal; and (3) the scandal caused by the Bolshevik publication of the secret treaties regarding the Ottoman Empire, since these treaties contrasted so sharply with the expressed war aims of the Allies. The news that the United States refused to participate in the Near East settlement made it possible to draw up a treaty. This was begun by the Supreme Council at its London Conference of February 1920, and continued at San Remo in April. It was signed by the sultan’s government on August 20, 1920, but the Nationalists under Mustafa Kemal refused to accept it and set up an insurgent government at Ankara. The Greeks and Italians, with Allied support, invaded Turkey and attempted to force the treaty of the Nationalists, but they were much weakened by dissension behind the facade of Entente solidarity. The French believed that greater economic concessions could be obtained from the Kemalist government, while the British felt that richer prospects were to be obtained from the sultan. In particular, the French were prepared to support the claims of Standard Oil to such concessions, while the British were prepared to support Royal-Dutch Shell. The Nationalist forces made good use of these dissensions. After buying off the Italians and French with economic concessions, they launched a counteroffensive against the Greeks. Although England came to the rescue of the Greeks, it received no support from the other Powers, while the Turks had the support of Soviet Russia. The Turks destroyed the Greeks, burned Smyrna. and came face-to-face with the British at Chanak. At this critical moment, the Dominions, in answer to Curzon's telegraphed appeal, refused to support a war with Turkey. The Treaty of S่vres, already in tatters, had to be discarded. A new conference at Lausanne in November 1922 produced a moderate and negotiated treaty which was signed by the Kemalist government on July 24, 1923. This act ended, in a formal way, the First World War. It also took a most vital step toward establishing a new Turkey which would serve as a powerful force for peace and stability in the Near East. The decline of Turkey, which had continued for four hundred years, was finally ended.

     By this Treaty of Lausanne, Turkey gave up all non-Turkish territory except Kurdistan, losing Arabia, Mesopotamia, the Levant, western Thrace, and some islands of the Aegean. The capitulations were abolished in return for a promise of judicial reform. There were no reparations and no disarmament, except that the Straits were demilitarized and were to be open to all ships except those of belligerents if Turkey was at war. Turkey accepted a minorities treaty and agreed to a compulsory exchange with Greece of Greek and Turkish minorities judged on the basis of membership in the Greek Orthodox or Muslim religions. Under this last provision, over 1,250,000 Greeks were removed from Turkey by 1930. Unfortunately, most of these had been urban shopkeepers in Turkey and were settled as farmers on the un-hospitable soil of Macedonia. The Bulgarian peasants who had previously lived in Macedonia were unceremoniously dumped into Bulgaria where they were tinder for the sparks of a revolutionary Bulgarian secret society called the Internal Macedonian Revolutionary Organization (IMRO), whose chief method of political action was assassination.

     As a result of the rising tide of aggression in the 1930'5, the clause regarding the demilitarization of the Straits was revoked at the Montreux Convention of July 1936. This gave Turkey full sovereignty over the Straits, including the right to fortify them.

     All the original peace treaties consisted of five chief parts: (a) the Covenant of the League of Nations; (b) the territorial provisions; (c) the disarmament provision; (d) the reparations provisions; and (e) penalties and guarantees. The first of these must be reserved until later, but the others should be mentioned here.

     In theory, the territorial provisions of the treaties were based on "self-determination," but in fact they were usually based on other considerations: strategic, economic, punitive, legal power, or compensation. By "self-determination" the peacemakers usually meant "nationality," and by "nationality" they usually meant "language," except in the Ottoman Empire where "nationality" usually meant "religion." The six cases where self-determination (that is, plebiscites) was actually used showed that the peoples of these areas were not so nationalistic as the peacemakers believed. Because in Allenstein, where Polish-speaking people were 40 percent of the population, only 2 percent voted to join Poland, the area was returned to Germany; in Upper Silesia, where the comparable figures were 65 percent and 40 percent, the area was split, the more industrial eastern portion going to Poland, while the more rural western part was returned to Germany; in Klagenfurt, where Slovene-speakers formed 68 percent of the population, only 40 percent wanted to join Yugoslavia, so the area was left in Austria. Somewhat similar results occurred in Marienwerder, but not in northern Schleswig, which voted to join Denmark. In each case, the voters, probably for economic reasons, chose to join the economically more prosperous state rather than the one sharing the same language.

     In addition to the areas mentioned, Germany had to return Alsace and Lorraine to France, give three small districts to Belgium, and abandon the northern edge of East Prussia around Memel to the Allied Powers. This last area was given to the new state of Lithuania in 1924 by the Conference of Ambassadors.

     The chief territorial disputes arose over the Polish Corridor, the Rhineland, and the Saar. The Fourteen Points had promised to establish an independent Poland with access to the Baltic Sea. It had been French policy, since about 1500, to oppose any strong state in central Europe by seeking allies in eastern Europe. With the collapse of Russia in 1917, the French sought a substitute ally in Poland. Accordingly, Foch wanted to give all of East Prussia to Poland. Instead, the experts (who were very pro-Polish) gave Poland access to the sea by severing East Prussia from the rest of Germany by creating a Polish Corridor in the valley of the Vistula. Most of the area was Polish-speaking, and German commerce with East Prussia was largely by sea. However, the city of Danzig, at the mouth of the Vistula, was clearly a German city. Lloyd George refused to give it to Poland. Instead, it was made a Free City under the protection of the League of Nations.

     The French wished to detach the whole of Germany west of the Rhine (the so-called Rhineland) to create a separate state and increase French security against Germany. They gave up their separatist agitation in return for Wilson's promise of March 14, 1919 to give a joint Anglo-American guarantee against a German attack. This promise was signed in treaty form on June 28, 1919, but fell through when the United States Senate did not ratify the agreement. Since Clemenceau had been able to persuade Foch and Poincar้ to accept the Rhine settlement only because of this guarantee, its failure to materialize ended his political career. The Rhineland settlement as it stood had two quite separate provisions. On the one hand, the Rhineland and three bridgeheads on the right bank of the Rhine were to be occupied by Allied troops for from five to fifteen years. On the other hand the Rhineland and a zone fifty kilometers wide along the right bank were to be permanently demilitarized and any violation of this could be regarded as a hostile act by the signers of the treaty. This meant that any German troops or fortifications were excluded from this area forever. This was the most important clause of the Treaty of Versailles. So long as it remained in effect, the great industrial region of the Ruhr on the right bank of the Rhine, the economic backbone of Germany's ability to wage warfare, was exposed to a quick French military thrust from the west, and Germany could not threaten France or move eastward against Czechoslovakia or Poland if France objected.

     Of these two clauses, the military occupation of the Rhineland and the bridgeheads was ended in 1930, five years ahead of schedule. This made it possible for Hitler to destroy the second provision, the demilitarization of western Germany, by remilitarizing the area in March 1936.

     The last disputed territorial change of the Treaty of Versailles was concerned with the Saar Basin, rich in industry and coal. Although its population was clearly German, the French claimed most of it in 1919 on the grounds that two-thirds of it had been inside the French frontiers of 1814 and that they should obtain the coal mines as compensation for the French mines destroyed by the Germans in 1918. They did get the mines, but the area was separated politically from both countries to be ruled by the League of Nations for fifteen years and then given a plebiscite. When the plebiscite was held in 1935, after an admirable League administration, only about 2,000 out of about 528,000 voted to join France, while about go percent wished to join Germany, the remainder indicating their desire to continue under League rule. The Germans, as a result of this vote, agreed to buy back the coal mines from France for goo million francs, payable in coal over a five-year period.

     The territorial provisions of the treaties of Saint-Germain and Trianon were such as to destroy completely the Austro-Hungarian Empire. Austria was reduced from 115,000 square miles with 30 million inhabitants to 32,000 square miles with 6.5 million inhabitants. To Czechoslovakia went Bohemia, Moravia, parts of Lower Austria, and Austrian Silesia. To Yugoslavia went Bosnia, Herzegovina, and Dalmatia. To Romania went Bukovina. To Italy went South Tyrol, Trentino, Istria, and an extensive area north of the Adriatic, including Trieste.

     The Treaty of Trianon reduced Hungary from 125,000 square miles with 21 million inhabitants to 35,000 square miles with 8 million inhabitants. To Czechoslovakia went Slovakia and Ruthenia; to Romania went Transylvania, part of the Hungarian plain, and most of the Banat; to Yugoslavia went the rest of the Banat, Croatia-Slavonia, and some other districts.

     The treaties of peace set the boundaries of the defeated states but not those of the new states. These latter were fixed by a number of treaties made in the years following 1918. The process lcd to disputes and even to violent clashes of arms, and some issues are still subjects of discord to the present time.

     The most violent controversies arose in regard to the boundaries of Poland. Of these, only that with Germany was set by the Treaty of Versailles. The Poles refused to accept their other frontiers as suggested by the Allies at Paris, and by 1920 were at war with Lithuania over Vilna, with Russia over the eastern border, with the Ukrainians over Galicia, and with Czechoslovakia over Teschen. The struggle over Vilna began in 1919 when the Poles took the district from the Russians but soon lost it again. The Russians yielded it to the Lithuanians in 1920, and this was accepted by Poland, but within three months it was seized by Polish freebooters. A plebiscite, ordered by the League of Nations, was held in January 1922 under Polish control and gave a Polish majority. The Lithuanians refused to accept the validity of this vote or a decision of the Conference of Ambassadors of March 1923, giving the area to Poland. Instead, Lithuania continued to consider itself at war with Poland until December 1927.

     Poland did not fare so well at the other end of its frontier. There fighting broke out between Czech and Polish forces over Teschen in January 1919. The Conference of Ambassadors divided the area between the two claimants, but gave the valuable coal mines to Czechoslovakia (July ).

     Poland's eastern frontier was settled only after a bloody war with the Soviet Union. The Supreme Council in December 1919 had laid down the so-called "Curzon Line" as the eastern boundary of Polish administration, but within six months the Polish armies had crossed this and advanced beyond Kiev. A Russia n counterattack soon drove the Poles back, and Polish territory \vas invaded in its turn. The Poles appealed in panic to the Supreme Council, which was reluctant to intervene. The French, however, did not hesitate, and sent General Weygand with supplies to defend Warsaw. The Russian offensive was broken on the Vistula, and peace negotiations began. The final settlement, signed at Riga in March 1921, gave Poland a frontier 150 miles farther east than the Curzon Line and brought into Poland many non-Polish peoples, including one million White Russians and four million Ukrainians.

     Romania also had a dispute with Russia arising from the Romanian occupation of Bessarabia in 1918. In October 1920, the Conference of Ambassadors recognized Bessarabia as part of Romania. Russia protested, and the United States refused to accept the transfer. In view of these disturbances Poland and Romania signed a defensive alliance against Russia in March 1921.

     The most important dispute of this kind arose over the disposition of Fiume. This problem was acute because one of the Great Powers was involved. The Italians had yielded Fiume to Yugoslavia in the Treaty of London of 1915 and had promised, in November 1918, to draw the Italian-Yugoslav boundary on lines of nationality. Thus they had little claim to Fiume. Nevertheless, at Paris they insisted on it, for political and economic reasons. Having just excluded the Habsburg Empire from the Adriatic Sea, and not wishing to see any new Power rise in its place, they did all they could to hamper Yugoslavia and to curtail its access to the Adriatic. Moreover, the Italian acquisition of Trieste gave them a great seaport with no future, since it was separated by a political boundary from the hinterland whence it could draw its trade. To protect Trieste, Italy wanted to control all the possible competing ports in the area. The city of Fiume itself was largely Italian, but the suburbs and surrounding countryside were overwhelmingly Slav. The experts at Paris wished to give Italy neither Fiume nor Dalmatia, but Colonel House tried to overrule the experts in order to obtain Italian support for the League of Nations in return. Wilson overruled House and issued his famous appeal to the Italian people which resulted in the temporary withdrawal of the Italian delegation from Paris. After their return, the issue was left unsettled. In September 1919 an erratic Italian poet, Gabriele D'Annunzio, with a band of freebooters, seized Fiume and set up an independent government on a comic-opera basis. The dispute between Italy and Yugoslavia continued with decreasing bitterness until November 1920, when they signed a treaty at Rapallo dividing the area but leaving Fiume itself a free city. This settlement was not satisfactory. A group of Fascists from Italy (where this party was not yet in office) seized the city in March 1922 and were removed by the Italian Army three weeks later. The problem was finally settled by the Treaty of Rome of January 1924, by which Fiume was granted to Italy, but the suburb of Port Baros and a fifty-year lease on one of the three harbor basins went to Yugoslavia.

     These territorial disputes are of importance because they continued to lacerate relationships between neighboring states until well into the period of World War II and even later. The names of Fiume, Thrace, Bessarabia, Epirus, Transylvania, Memel, Vilna, Teschen, the Saar, Danzig, and Macedonia were still echoing as battle-cries of overheated nationalists twenty years after the Peace Conference assembled at Paris. The work of that conference had undoubtedly reduced the numbers of minority peoples, but this had only served to increase the intensity of feeling of the minorities remaining. The numbers of these remained large. There were over 1,000,000 Germans in Poland, 550,000 in Hungary, 3,100,000 in Czechoslovakia, about 700,000 in Romania, 500,000 in Yugoslavia, and 250,000 in Italy. There were 450,000 Magyars in Yugoslavia, 750,000 in Czechoslovakia, and about 1,500,000 in Romania. There were about 5,000,000 White Russians and Ukrainians in Poland and about 1,100,000 of these in Romania. To protect these minorities the Allied and Associated Powers forced the new states of central and eastern Europe to sign minority treaties, by which these minorities were granted a certain minimum of cultural and political rights. These treaties were guaranteed by the League of Nations, but there was no power to enforce observation of their terms. The most that could be done was to issue a public reprimand against the offending government, as was done, more than once, for example, against Poland.

     The disarmament provisions of the peace treaties were much easier to draw up than to enforce. It was clearly understood that the disarmament of the defeated Powers was but the first step toward the general disarmament of the victor nations as well. In the case of the Germans this connection was explicitly made in the treaty so that it was necessary, in order to keep Germany legally disarmed, for the other signers of the treaty to work constantly toward general disarmament after 1919 lest the Germans claim that they were no longer bound to remain disarmed.

     In all of the treaties, certain weapons like tanks, poisonous gas, airplanes, heavy artillery, and warships over a certain size, as well as all international trade in arms, were forbidden. Germany was allowed a small navy fixed in number and size of vessels, while Austria, Hungary, and Bulgaria were allowed no navy worthy of the name. Each army was restricted in size, Germany to 100,000 men, Austria to 30,000, Hungary to 35,000, and Bulgaria to 20,000. Moreover, these men had to be volunteers on twelve-year enlistments, and all compulsory military training, general staffs, or mobilization plans were forbidden. These training provisions were a mistake, forced through by the Anglo-Americans over the vigorous protests of the French. The Anglo-Americans regarded compulsory military training as "militaristic"; the French considered it the natural concomitant of universal manhood suffrage and had no objections to its use in Germany, since it would provide only a large number of poorly trained men; they did, however, object to the twelve-year enlistment favored by the British, since this would provide Germany with a large number of highly trained men who could be used as officers in any revived German Army. On this, as in so many issues where the French were overruled by the Anglo-Americans, time was to prove that the French position was correct.

     The reparations provisions of the treaties caused some of the most violent arguments at the Peace Conference and were a prolific source of controversy for more than a dozen years after the conference ended. The efforts of the Americans to establish some rational basis for reparations, either by an engineering survey of the actual damage to be repaired or an economic survey of Germany's capacity to pay reparations, were shunted aside, largely because of French objections. At the same time, American efforts to restrict reparations to war damages, and not allow them to be extended to cover the much larger total of war costs, were blocked by the British, who would have obtained much less under damages than under costs. By proving to the French that the German capacity to pay was, in fact, limited, and that the French would get a much larger fraction of Germany's payments under "damages" than under "costs," the Americans were able to cut down on the British demands, although the South African delegate, General Smuts, was able to get military pensions inserted as one of the categories for which Germany had to pay. The French were torn between a desire to obtain as large a fraction as possible of Germany's payments and a desire to pile on Germany such a crushing burden of indebtedness that Germany would be ruined beyond the point where it could threaten French security again.

     The British delegation was sharply divided. The chief British financial delegates, Lords Cunliffe and Sumner, were so astronomically unrealistic in their estimates of Germany's ability to pay that they were called the "heavenly twins," while many younger members of the delegation led by John Maynard (later Lord) Keynes, either saw important economic limits on Germany's ability to pay or felt that a policy of fellowship and fraternity should incline Britain toward a lo\v estimate of Germany's obligations. Feeling was so high on this issue that it proved impossible to set an exact figure for Germany's reparations in the treaty itself. Instead a compromise, originally suggested by the American John Foster Dulles, was adopted. By this, Germany was forced to admit an unlimited, theoretical obligation to pay but was actually bound to pay for only a limited list of ten categories of obligations. The former admission has gone down in history as the "war-guilt clause" (Article 231 of the treaty). By it Germany accepted "the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of the war imposed upon them hy the aggression of Germany and her allies."

     The following clause, Article 232, was concerned with the reparations obligation, listing ten categories of damages of which the tenth, concerned with pensions and inserted hy General Smuts, represented a liability larger than the aggregate of the preceding nine categories together. Since a considerable period was needed for the Reparations Commission to discover the value of these categories, the Germans were required to begin immediate delivery to the victors of large quantities of property, chiefly coal and timber. Only in May 1921 was the full reparations obligation presented to the Germans. Amounting to 132 thousand million gold marks (about 32.5 billion dollars), this bill was accepted by Germany under pressure of a six-day ultimatum, which threatened to occupy the Ruhr Valley.

     The reparations clauses of the other treaties were of little significance.

     Austria was unable to pay any reparations because of the weakened economic condition of that stump of the Habsburg Empire. Bulgaria and Hungary paid only small fractions of their obligations before all reparations were wiped out in the financial debacle of 1931-1932.

     The treaties made at Paris had no enforcement provisions worthy of the name except for the highly inadequate Rhineland clauses which we have already mentioned. It is quite clear that the defeated Powers could be made to fulfill the provisions of these treaties only if the coalition which had won the war were to continue to work as a unit. This did not occur. The United States left the coalition as a result of the Republican victory over Wilson in the congressional elections of 1918 and the presidential election of 1920. Italy was alienated by the failure of the treaty to satisfy her ambitions in the Mediterranean and Africa. But these were only details. If the Anglo-French Entente had been maintained, the treaties could have been enforced without either the United States or Italy. It was not maintained. Britain and France saw the world from points of view so different that it was almost impossible to believe that they were looking at the same world. The reason for this was simple, although it had many complex consequences and implications.

     Britain, after 1918; felt secure, while France felt completely insecure in the face of Germany. As a consequence of the war, even before the Treaty of Versailles was signed, Britain had obtained all her chief ambitions in respect to Germany. The German Navy was at the bottom of Scapa Flow, scuttled by the Germans themselves; the German merchant fleet was scattered, captured, and destroyed; the German colonial rivalry w-as ended and its areas occupied; the German commercial rivalry was crippled by the loss of its patents and industrial techniques, the destruction of all its commercial outlets and banking connections throughout the world, and the loss of its rapidly growing prewar markets. Britain had obtained these aims by December 1918 and needed no treaty to retain them.

     France, on the other hand, had not obtained the one thing it wanted: security. In population and industrial strength Germany was far stronger than France, and still growing. It was evident that France had been able to defeat Germany only hy a narrow margin in 1914-1918 and only because of the help of Britain, Russia, Italy, Belgium, and the United States. France had no guarantee that all these or even any of them would be at its side in any future war with Germany. In fact, it was quite clear that Russia and Italy would not be at its side. The refusal of the United States and Britain to give any guarantee to France against German aggression made it dubious that they would be ready to help either. Even if they were prepared to come to the rescue ultimately, there was no guarantee that France would be able to withstand the initial German assault in any future war as she had withstood, by the barest margin, the assault of 1914. Even if it could be withstood, and if Britain ultimately came to the rescue, France would have to fight, once again, as in the period 1914-1918, with the richest portion of France under enemy military occupation. In such circumstances, what guarantee would there be even of ultimate success? Doubts of this kind gave France a feeling of insecurity which practically became a psychosis, especially as France found its efforts to increase its security blocked at every turn by Britain. It seemed to France that the Treaty of Versailles, which had given Britain everything it could want from Germany, did not give France the one thing it wanted. As a result, it proved impossible to obtain any solution to the two other chief problems of international politics in the period 1919-1929. To these three problems of security, disarmament, and reparations, we now turn.

Chapter 16: Security, 1919-1935

     France sought security after 1918 by a series of alternatives. As a first choice, it wanted to detach the Rhineland from Germany; this was prevented by the Anglo-Americans. As a second choice, France wanted a "League with teeth," that is, a League of Nations with an international police force empowered to take automatic and immediate action against an aggressor; this was blocked by the Anglo-Americans. As compensation for the loss of these first two choices, France accepted, as a third choice, an Anglo-American treaty of guarantee, but this was lost in 1919 by the refusal of the United States Senate to ratify the agreement and the refusal of Britain to assume the burden alone. In consequence, the French were forced back on a fourth choice—allies to the east of Germany. The chief steps in this were the creation of a "Little Entente" to enforce the Treaty of Trianon against Hungary in 1920-1921 and the bringing of France and Poland into this system to make it a coalition of "satisfied Powers." The Little Entente was formed by a series of bilateral alliances between Romania, Czechoslovakia, and Yugoslavia. This was widened by a French-Polish Treaty (February 1921) and a French-Czechoslovak Treaty (January 1924). This system contributed relatively little to French security because of the weakness of these allies (except Czechoslovakia) and the opposition of Britain to any French pressure against Germany along the Rhine, the only way in which France could guarantee Poland or Czechoslovakia against Germany. In consequence, France continued its agitation both for a British guarantee and to "put teeth" into the League of Nations.

     Thus France wanted security, while Britain had security. France needed Britain, while Britain regarded France as a rival outside Europe (especially in the Near East) and the chief challenge to Britain's customary balance-of-power policy in Europe. After 1919 the British, and even some Americans, spoke of "French hegemony" on the Continent of Europe. The first rule of British foreign policy for four centuries had been to oppose any hegemony on the Continent and to do so by seeking to strengthen the second strongest Power against the strongest; after 1919 Britain regarded Germany as the second strongest Power and France as the strongest, a quite mistaken view in the light of the population, industrial productivity, and general organizations of the two countries.

     Because France lacked security, its chief concern in every issue was political; because Britain had security, its chief concern was economic. The political desires of France required that Germany should be weakened; the economic desires of Britain required that Germany should be strengthened in order to increase the prosperity of all Europe. While the chief political threat to France was Germany, the chief economic and social threat to Britain was Bolshevism. In any struggle with Bolshevist Russia, Britain tended to regard Germany as a potential ally, especially if it were prosperous and powerful. This was the primary concern of Lord D'Abernon, British ambassador in Berlin in the critical years 1920-1926. On the other hand, while France was completely opposed to the economic and social system of the Soviet Union and could not easily forget the immense French investments which had been lost in that country, it still tended to regard the Russians as potential allies against any revival of Germany (although France did not make an alliance with the Soviet Union until 1935).

     Because of its insecurity France tended to regard the Treaty of Versailles as a permanent settlement, wh le Britain regarded it as a temporary arrangement subject to modification. Although dissatisfied with the treaty, France felt that it was the best it could hope to get, especially in view of the narrow margin by which Germany had decided to sign it, even when faced with a worldwide coalition. Britain, which had obtained all of her desires before the treaty was signed, had no reluctance to modify it, although it was only in 1935 (with the Anglo-German naval agreement) that it attempted to modify the colonial, naval, or merchant-marine clauses from which it had benefitted. But in 1935 it had, for more than fifteen years, been seeking to modify the clauses from which France had benefitted.

     The French believed that peace in Europe was indivisible, while the British believed that it was divisible. That means that the French believed that the peace of eastern Europe was a primary concern of the states of western Europe and that the latter states could not allow Germany to move eastward because that would permit her to gain strength to strike back westward. The British believed that the peace of eastern Europe and that of western Europe were quite separate things and that it was their concern to maintain peace in the west but that any effort to extend this to eastern Europe would merely involve the West in "every little squabble" of these continually squabbling "backward" peoples and could, as happened in 1914, make a world war out of a local dispute. The Locarno Pacts of 1925 were the first concrete achievement of this British point of view, as we shall see. To the French argument that Germany would get stronger and thus more able to strike westward if allowed to grow eastward the British usually replied that the Germans were equally likely to become satisfied or get mired down in the great open spaces of the East.

     France believed that Germany could be made to keep the peace by duress, while Britain believed that Germany could be persuaded to keep the peace by concessions. The French, especially the political Right in France, could see no difference between the Germans of the empire and the Germans of the Weimar Republic: "Scratch a German and you will find a Hun," they said. The British, especially the political Left, regarded the Germans of the Weimar Republic as totally different from the Germans of the empire, purified by suffering and freed from the tyranny of the imperial autocracy; they were prepared to clasp these new Germans to their hearts and to make any concession to encourage them to proceed on the path of democracy and liberalism. When the British began to talk in this fashion, appealing to high principles of international cooperation and conciliation, the French tended to regard them as hypocrites, pointing out that the British appeal to principles did not appear until British interests had been satisfied and until these principles could be used as obstacles to the satisfaction of French interests. The British tended to reply to the French remarks about the dangers of English hypocrisy with a few remarks of their own about the dangers of French militarism. In this sad fashion, the core of the coalition which had beaten Germany dissolved in a confusion of misunderstandings and recriminations.

     This contrast between the French and the British attitudes on foreign policy is an oversimplification of both. About 1935 there appeared a considerable change in both countries, and, long before that date, there were differences between different groups within each country.

     In both Britain and France (before 1935) there was a difference of opinion in international politics which followed general political outlooks (and even class lines) rather closely. In Britain, persons who were of the Left tended to believe in revision of the Treaty of Versailles in favor of Germany, collective security, general disarmament, and friendship with the Soviet Union. In the same period, the Right were impatient with policies based on humanitarianism, idealism, or friendship for the Soviet Union, and wanted to pursue a policy of "national interest," by which they meant emphasis on strengthening the empire, conducting an aggressive commercial policy against outsiders, and adopting relative isolationism in general policy with no European political commitments except west of the Rhine (where Britain's interests were immediate). The groups of the Left were in office in Britain for only about two years in the twenty years 1919-1939 and then only as a minority government (1924, 1929-1931); the groups of the Right were in power for eighteen of these twenty years, usually with an absolute majority. However, during these twenty years the people of Britain were generally sympathetic to the point of view of the Left in foreign policy, although they generally voted in elections on the basis of domestic rather than foreign politics. This means that the people were in favor of revision of Versailles, of collective security, of international cooperation, and of disarmament.

     Knowing this, the British governments of the Right began to follow a double policy: a public policy in which they spoke loudly in support of what we have called the foreign policy of the Left, and a secret policy in which they acted in support of what we have called the foreign policy of the Right. Thus the stated policy of the government and the policy of the British people were based on support of the League of Nations, of international cooperation, and of disarmament. Yet the real policy was quite different. Lord Curzon, who was foreign secretary for four years (1919-1923) called the League of Nations "a good joke"; Britain rejected every effort of France and Czechoslovakia to strengthen the system of collective security; while openly supporting the Naval Disarmament Conference at Geneva (1927) and the World Disarmament Conference (1926-1935), Britain signed a secret agreement with France which blocked disarmament on land as well as on the sea (July 1928) and signed an agreement with Germany which released her from her naval disarmament (1935). After 1935 the contrast between the public policy and the secret policy became so sharp that the authorized biographer of Lord Halifax (foreign secretary in 1938-1940) coined the name "dyarchy" for it. Also, after 1935, the policies of both Right and Left were changed, the Left becoming anti-revisionist as early as 1934, continuing to support disarmament until (in some cases) 1939, and strengthening its insistence on collective security, while the Right became more insistent on revisionism (by that time called "appeasement") and opposition to the Soviet Union.

     In France the contrasts between Right and Left were less sharp than in Britain and the exceptions more numerous, not only because of the comparative complexity of French political parties and political ideology, but also because foreign policy in France was not an academic or secondary issue but was an immediate, frightening concern of every Frenchman. Consequently, differences of opinion, however noisy and intense, were really rather slight. One thing all Frenchmen agreed upon: "It must not happen again." Never again must the Hun be permitted to become strong enough to assault France as in 1870 and in 1914. To prevent this, the Right and the Left agreed, there were two methods: by the collective action of all nations and by France's own military power. The two sides differed in the order in which these two should be used, the Left wanting to use collective action first and France's own power as a supplement or a substitute, the Right wanting to use France's own power first, with support from the League or other allies as a supplement. In addition, the Left tried to distinguish between the old imperial Germany and the new republican Germany, hoping to placate the latter and turn its mind away from revisionism by cooperative friendship and collective action. The Right, on the other hand, found it impossible to distinguish one Germany from another or even one German from another, believing that all were equally incapable of understanding any policy but force. Accordingly, the Right wanted to use force to compel Germany to fulfill the Treaty of Versailles, even if France had to act alone.

     The policy of the Right was the policy of Poincar้ and Barthou; the policy of the Left was the policy of Briand. The former was used in 1918-1924 and, briefly, in 1934-1935; the latter was used in 1924-1929. The policy of the Right failed in 1924 when Poincar้'s occupation of the Ruhr in order to force Germany to pay reparations was ended. This showed that France could not act alone even against a weak Germany because of the opposition of Britain and the danger of alienating world opinion. Accordingly, France turned to a policy of the Left (1924-1929). In this period, which is known as the "Period of Fulfillment," Briand, as foreign minister of France, and Stresemann, as foreign minister of Germany, cooperated in friendly terms. This period ended in 1929, not, as is usually said, because Stresemann died and Briand fell from office, but because of a growing realization that the whole policy of fulfillment (1924-1929) had been based on a misunderstanding. Briand followed a policy of conciliation toward Germany in order to win Germany from any desire to revise Versailles; Stresemann followed his policy of fulfillment toward France in order to win from France a revision of the treaty. It was a relationship of cross-purposes, because on the crucial issue (revision of Versailles) Briand stood adamant, like most Frenchmen, and Stresemann was irreconcilable, like most Germans.

     In France, as a result of the failure of the policy of the Right in 1924 and of the policy of the Left in 1929, it became clear that France could not act alone toward Germany. It became clear that France did not have freedom of action in foreign affairs and was dependent on Britain for its security. To win this support, which Britain always held out as a bait but did not give until 1939, Britain forced France to adopt the policy of appeasement of the British Right after 1935. This policy forced France to give away every advantage which it held over Germany: Germany was allowed to rearm (1935); Germany was allowed to remilitarize the Rhineland (1936); Italy was alienated (1935); France lost its last secure land frontier (Spain, 1936-1939); France lost all her allies to the east of Germany, including her one strong ally (Czechoslovakia, 19381939); France had to accept the union of Austria with Germany which she had vetoed in 1931 (March 1938); the power and prestige of the League of Nations was broken and the whole system of collective security abandoned (1931-1939); the Soviet Union, which had allied with France and Czechoslovakia against Germany in 1935, was treated as a pariah among nations and lost to the anti-German coalition (1937-1939). And finally, when all these had been lost, public opinion in England forced the British government to abandon the Right's policy of appeasement and adopt the old French policy of resistance. This change was made on a poor issue (Poland, 1939) after the possibility of using the policy of resistance had been destroyed by Britain and after France itself had almost abandoned it.

     In France, as in Britain, there were changes in the foreign policies of the Right and the Left after Hitler came to power in Germany (1933). The Left became more anti-German and abandoned Briand's policy of conciliation, while the Right, in some sections, sought to make a virtue of necessity and began to toy with the idea that, if Germany was to become strong anyway, a solution to the French problem of security might be found by turning Germany against the Soviet Union. This idea, which already had adherents in the Right in Britain, was more acceptable to the Right than to the Left in France, because, while the Right was conscious of the political threat from Germany, it was equally conscious of the social and economic threat from Bolshevism. Some members of the Right in France even went so far as to picture France as an ally of Germany in the assault on the Soviet Union. On the other hand, many persons of the Right in France continued to insist that the chief, or even the only, threat to France was from the danger of German aggression.

     In France, as in Britain, there appeared a double policy but only after 1935, and, even then, it was more of an attempt to pretend that France was following a policy of her own instead of a policy made in Britain than it was an attempt to pretend it was following a policy of loyalty to collective security and French allies rather than a policy of appeasement. While France continued to talk of her international obligations, of collective security, and of the sanctity of treaties (especially Versailles), this was largely for public consumption, for in fact from the autumn of 1935 to the spring of 1940 France had no policy in Europe independent of Britain's policy of appeasement.

     Thus French foreign policy in the whole period 1919-1939 was dominated by the problem of security. These twenty years can be divided into five sub-periods as follows:

               1919-1924, Policy of the Right

               1924-1929, Policy of the Left

               1929-1934, Confusion and Transition

               1934-1935, Policy of the Right

               1935-1939, Dual Policy of Appeasement

     The French feeling that they lacked security was so powerful in 1919 that they were quite willing to sacrifice the sovereignty of the French state and its freedom of action in order to get a League of Nations possessing the powers of a world government. Accordingly, at the first meeting of the League of Nations Committee at the Paris Peace Conference in 1919, the French tried to establish a League with its own army, its own general staff, and its own powers of police action against aggressors without the permission of the member states. The Anglo-Americans were horrified at what they regarded as an inexcusable example of "power politics and militarism." They rode roughshod over the French and drew up their own draft Covenant in which there was no sacrifice of state sovereignty and where the new world organization had no powers of its own and no right to take action without the consent of the parties concerned. War was not outlawed but merely subjected to certain procedural delays in making it, nor were peaceful procedures for settling international disputes made compulsory but instead were merely provided for those who wished to use them. Finally, no real political sanctions were provided to force nations to use peaceful procedures or even to use the delaying procedures of the Covenant itself. Economic sanctions were expected to be used by member nations against aggressor states which violated the delaying procedures of the Covenant, but no military sanctions could be used except as contributed by each state itself. The League was thus far from being a world government, although both its friends and its enemies, for opposite reasons, tried to pretend that it was more powerful, and more important, than it really was. The Covenant, especially the critical articles l o- 16, had been worded by a skillful British lawyer, Cecil Hurst, who filled it with loopholes cleverly concealed under a mass of impressive verbiage, so that no state's freedom of action was vitally restricted by the document. The politicians knew this, although it was not widely publicized and, from the beginning, those states which wanted a real international organization began to seek to amend the Covenant, to "plug the loopholes" in it. Any real international political organization needed three things: (1) peaceful procedures for settling all disputes, (2) outlawry of non-peaceful procedures for this purpose, and (3) effective military sanctions to compel use of the peaceful procedures and to prevent the use of warlike procedures.

     The League of Nations consisted of three parts: (1) the Assembly of all members of the League, meeting generally in September of each year; (2) the Council, consisting of the Great Powers with permanent seats and a number of Lesser Powers holding elective seats for three-year terms; and (3) the Secretariat, consisting of an international bureaucracy devoted to all kinds of international cooperation and having its headquarters in Geneva. The Assembly, in spite of its large numbers and its infrequent meetings, proved to be a lively and valuable institution, full of hard-working and ingenious members, especially from the secondary Powers, like Spain, Greece, and Czechoslovakia. The Council was less effective, was dominated by the Great Powers, and spent much of its time trying to prevent action without being too obvious about it. Originally, it consisted of four permanent and four nonpermanent members, the former including Britain, France, Italy, and Japan. Germany was added in 1926; Japan and Germany withdrew in 1933; the Soviet Union was admitted in 1934 and was expelled in 1939 after its attack on Finland. Since the number of nonpermanent members was increased during this period, the Council ended up in 1940 with two permanent and eleven nonpermanent members.

     The Secretariat was slowly built up and, by 1938, consisted of more than eight hundred persons from fifty-two countries. Most of these were idealistically devoted to the principles of international cooperation, and displayed considerable ability and amazing loyalty during the brief existence of the League. They were concerned with every type of international activity, including disarmament, child welfare, education, the drug traffic, slavery, refugees, minorities, the codification of international law, the protection of wild life and natural resources, cultural cooperation, and many others.

     Attached to the League were a number of dependent organizations. Two, the Permanent Court of International Justice and the International Labor Office, were semi-autonomous. Others included the Economic and Financial Organization, the Organization for Communications and Transit, the International Health Organization with offices in Paris, and the Intellectual Cooperation Organization with branches in Paris, Geneva, and Rome.

     Many efforts were made, chiefly by France and Czechoslovakia, to "plug the gaps in the Covenant." The chief of these were the Draft Treaty of Mutual Assistance (1923), the Geneva Protocol (1924), and the Locarno Pacts (1925). The Draft Treaty bound its signers to renounce aggressive war as an international crime and to bring military assistance to any signer the Council of the League designated to be the victim of an aggression. This project was destroyed in 1924 by the veto of the British Labour government on the grounds that the agreement would increase the burden on the British Empire without increasing its security. The Assembly at once formulated a better agreement known as the Geneva Protocol. This sought to plug all the gaps in the Covenant. It bound its signers to settle international disputes by methods provided in the treaty, defined as aggressor any state which refused to use these peaceful procedures, bound its members to use military sanctions against such aggressors, and ended the "veto" power in the Council by providing that the necessary unanimity for Council decisions could be achieved without counting the votes of the parties to the dispute. This agreement was destroyed by the objections of a newly installed Conservative government in London. The chief British opposition to the Protocol came from the Dominions, especially from Canada, which feared that the agreement might force them, at some time, to apply sanctions against the United States. This was a very remote possibility in view of the fact that the British Commonwealth generally had two seats on the Council and one at least could use its vote to prevent action even if the vote of the other was nullified by being a party to the dispute.

     The fact that both the Draft Treaty and the Geneva Protocol had been destroyed by Britain led to an adverse public opinion throughout the world. To counteract this, the British devised a complicated alternative known as the Locarno Pacts. Conceived in the same London circles which had been opposing France, supporting Germany, and sabotaging the League, the Locarno Pacts were the result of a complex international intrigue in which General Smuts played a chief role. On the face of it, these agreements appeared to guarantee the Rhine frontiers, to provide peaceful procedures for all disputes between Germany and her neighbors, and to admit Germany to the League of Nations on a basis of equality with the Great Powers. The Pacts consisted of nine documents of which four were arbitration treaties between Germany and her neighbors (Belgium, France, Poland and Czechoslovakia); two were treaties between France and her eastern allies (Poland and Czechoslovakia); the seventh was a note releasing Germany from any need to apply the sanctions clause of the Covenant against any aggressor nation on the grounds that Germany, being disarmed by the Treaty of Versailles, could not be expected to assume the same obligations as other members of the League; the eighth document v.:as a general introduction to the Pacts j and the ninth document was the "Rhine Pact," the real heart of the agreement. This "Rhine Pact" guaranteed the frontier between Germany and Belgium-France against attack from either side. The guarantee was signed by Britain and Italy, as well as by the three states directly concerned, and covered the demilitarized condition of the Rhineland as established in 1919. This meant that if any one of the three frontier Powers violated the frontier or the demilitarized zone, this violation would bring the four other Powers into action against the violator.

     The Locarno Pacts were designed by Britain to give France the security against Germany on the Rhine which France so urgently desired and at the same time (since the guarantee worked both ways) to prevent France from ever occupying the Ruhr or any other part of Germany, as had been done over the violent objections of Britain in 1923-1924. Moreover, by refusing to guarantee Germany's eastern frontier with Poland and Czechoslovakia, Britain established in law the distinction between peace in the east and peace in the west, on which she had been insisting since 1919, and greatly weakened the French alliances with Poland and Czechoslovakia by making it almost impossible for France to honor her alliances with these two countries or to put pressure on Germany in the west if Germany began to put pressure on these French allies in the east, unless Britain consented. Thus, the Locarno Pacts, which were presented at the time throughout the English-speaking world as a sensational contribution to the peace and stability of Europe, really formed the background for the events of 1938 when Czechoslovakia was destroyed at Munich. The only reason why France accepted the Locarno Pacts was that they guaranteed explicitly the demilitarized condition of the Rhineland. So long as this condition continued, France held a complete veto over any movement of Germany either east or west because Germany's chief industrial districts in the Ruhr were unprotected. Unfortunately, as we have indicated, when the guarantee of Locarno became due in March 1936 Britain dishonored its agreement, the Rhine was remilitarized, and the way was opened for Germany to move eastward.

     The Locarno Pacts caused considerable alarm in eastern Europe, especially in Poland and Russia. Poland protested violently, issued a long legal justification of her own frontiers, sent her foreign minister to take up residence in Paris, and signed three agreements with Czechoslovakia (ending the dispute over Teschen, as well as a commercial treaty and an arbitration convention). Poland was alarmed by the refusal to guarantee her frontiers, the weakening of her alliance with France, and the special status given to Germany within the League of Nations and on the Council of the League (where Germany could prevent sanctions against Russia, if Russia ever attacked Poland). To assuage this alarm a deal was made with Poland by which this country also received a seat on the Council of the League for the next twelve years (1926-1938).

     The Locarno Pacts and the admission of Germany into the League also alarmed the Soviet Union. This country from 1917 had had a feeling of insecurity and isolation which at times assumed the dimensions of mania. For this, there was some justification. Subject to the attacks of propaganda, diplomatic, economic, and even military action, the Soviet Union had struggled for survival for years. By the end of 1921, most of the invading armies had withdrawn (except the Japanese), but Russia continued in isolation and in fear of a worldwide anti-Bolshevik alliance. Germany, at the time, was in similar isolation. The two outcast Powers drifted together and sealed their friendship by a treaty signed at Rapallo in April 1922. This agreement caused great alarm in western Europe, since a union of German technology and organizing ability with Soviet manpower and raw materials would make it impossible to enforce the Treaty of Versailles and might expose much of Europe or even the world to the triumph of Bolshevism. Such a union of Germany and Soviet Russia remained the chief nightmare of much of western Europe from 1919 to 1939. On this last date it was brought into existence by the actions of these same western Powers.

     In order to assuage Russia's alarm at Locarno, Stresemann signed a commercial treaty with Russia, promised to obtain a special position for Germany within the League so that it could block any passage of troops as sanctions of the League against Russia, and signed a nonaggression pact with the Soviet Union (April 1926). The Soviet Union, in its turn, as a result of Locarno signed a treaty of friendship and neutrality with Turkey in which the latter country was practically barred from entering the League.

     The "Locarno spirit," as it came to be called, gave rise to a feeling of optimism, at least in the western countries. In this favorable atmosphere, on the tenth anniversary of America's entry into the World War, Briand, the foreign minister of France, suggested that the United States and France renounce the use of war between the two countries. This was extended by Frank B. Kellogg, the American secretary of state, into a multilateral agreement by which all countries could "renounce the use of war as an instrument of national policy." France agreed to this extension only after a reservation that the rights of self-defense and of prior obligations were not weakened. The British government reserved certain areas, notably in the Middle East, where it wished to be able to wage wars which could not be termed self-defense in a strict sense. The United States also made a reservation preserving its right to make war under the Monroe Doctrine. None of these reservations was included in the text of the Kellogg-Briand Pact itself, and the British reservation was rejected by Canada, Ireland, Russia, Egypt, and Persia. The net result was that only aggressive war was renounced.

     The Kellogg-Briand Pact (1928) was a weak and rather hypocritical document and advanced further toward the destruction of international law as it had existed in 1900. We have seen that the First World War did much to destroy the legal distinctions between belligerents and neutrals and between combatants and noncombatants. The Kellogg-Briand Pact took one of the first steps toward destroying the legal distinction between war and peace, since the Powers, having renounced the use of war, began to wage wars without declaring them, as was done by Japan in China in 1937, by Italy in Spain in 1936-1939, and by everyone in Korea in 1950.

     The Kellogg-Briand Pact was signed by fifteen nations which were invited to do so, while forty-eight nations were invited to adhere to its terms. Ultimately, sixty-four nations (all those invited except Argentina and Brazil) signed the pact. The Soviet Union was not invited to sign but only to adhere. It was, however, so enthusiastic about the pact that it was the first country of either group to ratify and, when several months passed with no ratifications by the original signers, it attempted to put the terms of the pact into effect in eastern Europe by a separate agreement. Known as the Litvinoff Protocol after the Soviet foreign minister, this agreement was signed by nine countries (Russia, Poland, Latvia, Estonia, Romania, Lithuania, Turkey, Danzig, and Persia, but not by Finland, which refused), although Poland had no diplomatic relations with Lithuania and the Soviet Union had none with Romania.

     The Litvinoff Protocol was one of the first concrete evidences of a shift in Soviet foreign policy which occurred about 1927-1928 Previously, Russia had refused to cooperate with any system of collective security or disarmament on the grounds that these were just "capitalistic tricks." It had regarded foreign relations as a kind of jungle competition and had directed its own foreign policy toward efforts to foment domestic disturbances and revolution in other countries of the world. This was based on the belief that these other Powers were constantly conspiring among themselves to attack the Soviet Union. To the Russians, internal revolution within these countries seemed a kind of self-defense, while the animosity of these countries seemed to them to be a defense against the Soviet plans for world revolution. In 1927 there came a shift in Soviet policy: "world revolution" was replaced by a policy of "Communism in a single country" and a growing support for collective security. This new policy continued for more than a decade and was based on the belief that Communism in a single country could best be secured within a system of collective security. Emphasis on this last point increased after Hitler came to power in Germany in 1933 and reached its peak in the so-called "Popular Front" movement of 1935-1937

     The Kellogg Pact gave rise to a proliferation of efforts to establish peaceful methods for settling international disputes. A "General Act for the Pacific Settlement of International Disputes" was accepted by twenty-three states and came into force in August 1929. About a hundred bilateral agreements for the same purpose were signed in the five years 1924-1929, compared to a dozen or so in the five years 1919-1924. A codification of international law was begun in 1927 and continued for several years, but no portions of it ever came into force because of insufficient ratifications.

     The outlawry of war and the establishment of peaceful procedures for settling disputes were relatively meaningless unless some sanctions could be established to compel the use of peaceful methods. Efforts in this direction were nullified by the reluctance of Britain to commit itself to the use of force against some unspecified country at some indefinite date or to allow the establishment of an international police force for this purpose. Even a modest step in this direction in the form of an international agreement providing financial assistance for any state which was a victim of aggression, a suggestion first made by Finland, was destroyed by a British amendment that it was not to go into effect until the achievement of a general disarmament agreement. This reluctance to use sanctions against aggression came to the forefront in the fall of 1931 at the time of the Japanese attack on Manchuria. As a result the "peace structure" based on Versailles, which had been extended by so many well-intended, if usually misdirected, efforts for twelve years, began a process of disintegration which destroyed it completely in eight years (1931-1939).

Chapter 17: Disarmament, 1919-1935

     The failure to achieve a workable system of collective security in the period 1919-1935 prevented the achievement of any system of general disarmament in the same period. Obviously, countries which feel insecure are not going to disarm. This point, however obvious, was lost on the English-speaking countries, and the disarmament efforts of the whole period 1919-1935 were weakened by the failure of these countries to see this point and their insistence that disarmament must precede security rather than follow it. Thus disarmament efforts, while continuous in this period (in accordance with the promise made to the Germans in 1919), were stultified by disagreements between the "pacifists" and the "realists" on procedural matters. The "pacifists," including the English-speaking nations, argued that armaments cause wars and insecurity and that the proper way to disarm is simply to disarm. They advocated a "direct" or "technical" approach to the problem, and believed that armaments could be measured and reduced by direct international agreement. The "realists," on the other hand, including most of the countries in Europe, led by France and the Little Entente, argued that armaments are caused by war and the fear of war and that the proper way to disarm is to make nations secure. They advocated an "indirect" or "political" approach to the problem, and believed that once security had been achieved disarmament would present no problem..

     The reasons for this difference of opinion are to be found in the fact that the nations which advocated the direct method, like Britain, the United States, and Japan, already had security and could proceed directly to the problem of disarmament, while the nations which felt insecure were bound to seek security before they would bind themselves to reduce the armaments they had. Since the nations with security were all naval powers, the use of the direct method proved to be fairly effective in regard to naval disarmament, while the failure to obtain security for those who lacked it made most of the international efforts for disarmament on land or in the air relatively futile.

     The history of naval disarmament is marked by four episodes in the period between the wars: (1) the Washington Conference of 1922; (2) the abortive Geneva Conference of 1927; (3) the London Conference of 1930; and (4) the London Conference of 1936.

     The Washington Conference was the most successful disarmament conference of the inter-war period because such a variety of issues came together at that point that it was possible to bargain successfully. Britain wished (1) to avoid a naval race with the United States because of the financial burden, (2) to get rid of the Anglo-Japanese alliance of 1902, which was no longer needed in view of the collapse of both Germany and Russia, and (3) to reduce the Japanese naval threat in the southwestern Pacific. The United States wished (1) to get Japan out of East Asia and restore the "open door" in China, (2) to prevent the Japanese from fortifying the German-mandated islands which stretched across the American communications from Hawaii to the Philippines, and (3) to reduce the Japanese naval threat to the Philippines. Japan wanted (1) to get out of eastern Siberia without appearing to retreat, (2) to prevent the United States from fortifying Wake Island and Guam, its two bases on the route from Pearl Harbor to Manila, and (3) to reduce American naval power in the extreme western Pacific. By bargaining one of these for another, all three Powers were able to obtain their wishes, although this was possible only because of the goodwill between Britain and the United States and, above all, because at that time, before the use of fleet-tankers and the present techniques of supplying a fleet at sea, the range of any battle fleet was limited by the position of its bases (to which it had to return for supplies at relatively short intervals).

     Probably the key to the whole settlement rested in the relative positions of the British and American navies. At the end of 1918, the United States had in its battle line 16 capital ships with 168 guns of 12 to 14 inches; Britain had 42 capital ships with 376 guns of 12 to 15 inches, but the building programs of the two Powers would have given the United States practical equality by 1926. In order to avoid a naval race which would have made it impossible for Britain to balance its budget or get back on the prewar gold standard, that country gave the United States equality in capital ships (with 15 each), while Japan was given 60 percent as much (or 9 capital ships). This small Japanese fleet, however, provided the Japanese with naval supremacy in their home waters, because of an agreement not to build new fortifications or naval bases within striking distance of Japan. The same 10-10-6 ratio of capital ships was also applied to aircraft carriers. France and Italy were brought into the agreements by granting them one-third as much tonnage as the two greatest naval Powers in these two categories of vessels. The two categories themselves were strictly defined and thus limited. Capital ships were combat vessels of from 10,000 to 35,000 tons displacement with guns of not over 16 inches, while carriers were to be limited to 27,000 tons each with guns of no more than 6 inches. The five great naval Powers were to have capital ships and carriers as follows:

                         Tons of          Number of          Tons of

     Country     Ratio          Capital Ships          Capital Ships          Carriers

     U.S.A.               5          525,000               15          135,000

     Britain     5          525,000               15          135,000

     Japan          3          315,000               9          81,000

     France          1.67          175,000           not fixed          60,000

     Italy          1.67          175,000           not fixed          60,000

     These limits were to be achieved by 1931. This required that 76 capital ships, built or projected, be scrapped by that date. Of these the United States scrapped 15 built and 13 building, or 28; the British Empire scrapped 20 built and 4 building, or 24; and Japan scrapped lo built and 14 building, or 24. The areas in which new fortifications in the Pacific were forbidden included (a) all United States possessions west of Hawaii, (b) all British possessions east of 110ฐ East longitude except Canada, New Zealand, and Australia with its territories, and (c) all Japanese possessions except the "home islands" of Japan.

     Among the six treaties and thirteen resolutions made at Washington during the six weeks of the conference (November 1921—February 1922) were a Nine-Power Treaty to maintain the integrity of China, an agreement between China and Japan over Shantung, another between the United States and Japan over the Mandated Pacific Islands, and an agreement regarding the Chinese customs. In consequence of these, the Anglo-Japanese Treaty of 1902 was ended, and Japan evacuated eastern Siberia.

     Efforts to limit other categories of vessels at Washington failed because of France. This country had accepted equality with Italy in capital ships only on the understanding that its possession of lesser vessels would not be curtailed. France argued that it needed a larger navy than Italy because it had a world empire (while Italy did not) and required protection of its home coasts both in the Atlantic and in the Mediterranean) (while Italy could concentrate its navy in the Mediterranean). The same objections led both of these Powers to refuse the American invitation to the Geneva Disarmament Conference of 1927.

     The Geneva Conference of 1927 tried to limit other categories of vessels beyond capital ships and carriers. It failed because of a violent dispute between Britain and the United States regarding cruisers. The United States, with few offshore bases and a "high-seas" navy, wanted "heavy" cruisers of about 10,000 tons each, carrying 8-inch guns. The British, with many scattered naval bases, wanted many "light" cruisers of 7,500 tons each with 6-inch guns, and were eager to limit "heavy" cruisers in order to increase the naval importance of their million tons of fast merchant ships (which could be armed with 6-inch guns in an emergency). The United States accepted the British division of cruisers into two classes, but asked for limitation of both in accordance with the Washington ratios and with the lowest possible maximum tonnage. Britain wished to limit only 'heavy" cruisers, and fixed her own "absolute" cruiser needs at 70 vessels aggregating 562,000 tons, or twice the total suggested by the Americans. The British argued that their cruiser needs had nothing to do with the relative size of the American cruiser fleet, but depended on such "absolute" values as the size of the earth and the miles of shipping lanes to be patrolled. On this point Winston Churchill was adamant and was able to force the chief British delegate to the Geneva Conference (Lord Robert Cecil, who wanted to compromise) to resign from the Cabinet.

     The conference broke up in a recriminatory atmosphere, to the great joy of the lobbyists of shipbuilding companies and "patriotic" societies. These had harassed the delegates throughout the conference. Three American shipbuilding companies stood to lost contracts worth almost $54 million if the conference had been a success, and they did not hesitate to spend part of that sum to ensure that it would not be a success. Later they were sued for more money by their chief lobbyist at the conference, Mr. William B. Shearer. As a sequel to the conference, Britain signed a secret agreement with France by which France promised to support Britain against the United States on the cruiser and other issues, and Britain promised to support France in preventing limitation of trained infantry reserves at the approaching World Disarmament Conference. This agreement, signed in July 1928, was revealed by pro-American employees of the French Foreign Ministry to William Randolph Hearst and published in his newspapers within two months of its signature. France deported the Hearst reporter in Paris at once, deported Hearst himself on his next visit to France in 1930, and published the text of the agreement with Britain (October 1928).

     The London Naval Conference of 1930 was able to reach the agreement which Geneva had failed to achieve. The publicity about Shearer's activities and about the Anglo-French agreement, as well as the arrival of the world depression and the advent of a more pacifist Labour government to office in London, contributed to this success. Cruisers, destroyers, and submarines were defined and limited for the three greatest naval Powers, and certain further limitations were set in the categories fixed at Washington. The agreements were as follows (in tons):

          Typed               U. S.          Britain               Japan

          Heavy cruisers

          with guns over

          6.1 inches          180,000     146,800          108,400

          Light cruisers

          with guns below

          6.1 inches          143,500     192,200          100,450

          Destroyers          150,000     150,000          105,500

          Submarines          52,700          52,700               52,700

     This allowed the United States to have 18 heavy cruisers, Britain 15, and Japan 12, while in light cruisers the three figures would allow about 25, 35, and 18. Destroyers were limited at 1,850 tons each with 5.l-inch guns, and submarines to 2,000 tons each with 5.l-inch guns. This settlement kept the Japanese fleet where it was, forced Britain to reduce, and allowed the United States to build (except in regard to submarines). Such a result could, probably, have been possible only at a time when Japan was in financial stringency and Britain was under a Labour government.

     This treaty left unsolved the rivalry in the Mediterranean between Italy and France. Mussolini demanded that Italy have naval equality with France, although his financial straits made it necessary to limit the Italian navy. The claim to equality on such a small basis could not be accepted by France in view of the fact that it had two seacoasts, a worldwide empire, and Germany's new 10,000-ton "pocket battleships" to consider. The Italian demands were purely theoretical, as both Powers, for motives of economy, were under treaty limits and making no effort to catch up. France was willing to concede Italian equality in the Mediterranean only if it could get some kind of British support against the German Navy in the North Sea or could get a general nonaggression agreement in the Mediterranean. These were rejected by Britain. However, Britain succeeded in getting a French-Italian naval agreement as a supplement to the London agreement (March 1931). By this agreement Italy accepted a total strength of 428,000 tons, while France had a strength of 585,000 tons, the French fleet being less modern than the Italian. This agreement broke down, at the last moment, because of the Austro-German customs union and Germany's appropriation for a second pocket battleship (March 1931). No evil effects emerged from the breakdown, for both sides continued to act as if it were in force.

     The London Naval Conference of 1936 was of no significance. In 1931 the Japanese invasion of Manchuria violated the Nine-Power Pacific Treaty of 1922. In 1933 the United States, which had fallen considerably below the level provided in the Washington agreement of 1922, authorized the construction of 132 vessels to bring its navy to treaty level by 1942. In 1934 Mussolini decided to abandon orthodox financial policies, and announced a building program to carry the Italian fleet to treaty level by 1939. This decision was justified by a recent French decision to build two battle cruisers to cope with Germany's three pocket battleships.

     All these actions were within treaty limitations. In December 1934, however, Japan announced its refusal to renew the existing treaties when they expired in 1936. The Naval Conference called for that date met in a most unfavorable atmosphere. On June 18, 1935, Britain had signed a bilateral agreement with Hitler which alloy. ed Germany to build a navy up to 35 percent of Britain's naval strength in each class and up to 100 percent in submarines. This was a terrible blow to France, which was limited to 33 percent of the British Navy in capital ships and carriers and had to distribute this lesser fleet on two coasts (to deal with Italy as well as Germany) as well as around the world (to protect the French colonial empire). This blow to France was probably the British answer to the French alliance with the Soviet Union (May 2, 1935), the increased German threat on the French northwest coast being intended to deter France from honoring the alliance with the Soviet Union, if Germany struck eastward. Thus France was once again reduced to dependence on Britain. Germany took advantage of this situation to launch twenty-one submarines by October 1935, and two battleships in 1936.

     Under these conditions the Naval Conference at London in 1936 achieved nothing of importance. Japan and Italy refused to sign. As a result, the three signers soon were compelled to use the various escape clauses designed to deal with any extensive building by non-signatory Powers. The maximum size of capital ships was raised to 45,000 tons in 1938, and the whole treaty was renounced in 1939.

     The success achieved in naval disarmaments, limited as it was, was much greater than the success achieved in respect to other types of armaments, because these required that nations which felt politically insecure must be included in the negotiations. We have already indicated the controversy between the proponents of the "direct method" and the advocates of the "indirect method" in disarmament. This distinction was so important that the history of the disarmament of land and air forces can be divided into four periods: (a) a period of direct action, 1919-1922; (b) a period of indirect action, 1922-1926; (c) a new period of direct action, 1926-1934; and (d) a period of rearmament, 1934-1939.

     The first period of direct action was based on the belief that the victories of 1918 and the ensuing peace treaties provided security for the victorious Powers. Accordingly, the task of reaching a disarmament agreement was turned over to a purely technical group, the Permanent Advisory Commission on Disarmament of the League of Nations. This group, which consisted exclusively of officers of the various armed services, was unable to reach agreement on any important issues: it could not find any method of measuring armaments or even of defining them; it could not distinguish actual from potential armaments or defensive from offensive. It gave answers to some of these questions, but they did not win general assent. For example, it decided that rifles in the possession of troops were war materials and so, also, were wood or steel capable of being used to make such rifles, but rifles already made and in storage were not war materials but "inoffensive objects of peace."

     As a result of the failure of the Permanent Advisory Commission, the Assembly of the League set up a Temporary Mixed Commission on which only six of twenty-eight members were officers of the armed services. This body attacked the problem of disarmament by the indirect method, seeking to achieve security before asking anyone to disarm. The Draft Treaty of Mutual Guarantee (1922) and the Geneva Protocol (1924) emerged from this commission. Both of these were, as we have said, vetoed by Britain, so that the disarmament portions of the negotiations were never reached. The achievement of the Locarno Pacts, however, provided, in the minds of many, the necessary security to allow a return to the direct method. Accordingly, a Preparatory Commission to the World Disarmament Conference was set up in 1926 to make a draft agreement which was to be completed at a World Disarmament Conference meeting at Geneva in 1932.

     The Preparatory Commission had delegates from all the important countries of the world, including the defeated Powers and the chief nonmembers of the League. It held six sessions over three years and drew up three drafts. In general, it encountered the same difficulties as the Permanent Advisory Committee. This latter group, acting as a subcommittee of the Preparatory Commission, used up 3,750,000 sheets of paper in less than six months but still was not able to find answers to the same questions which had baffled it earlier. The chief problems arose from political disputes, chiefly between Britain and France. These two countries produced separate drafts which diverged on almost every point.

     The French wanted war potential counted but wanted trained reserves of men excluded from limitation; the British wanted war potential excluded but wanted to count trained reserves; the French wanted supervision by a permanent commission to enforce fulfillment of any agreement, while the Anglo-Americans refused all supervision. Eventually a draft was prepared by including all divergences in parallel columns.

     The Preparatory Commission lost more than one full session in denouncing the disarmament suggestions of Litvinoff, the Soviet representative. His first draft, providing for immediate and complete disarmament of every country, was denounced by all. A substitute draft, providing that the most heavily armed states would disarm by 50 percent, the less heavily armed by 33 percent, the lightly armed by 25 percent, and the "disarmed" by o percent, with all tanks, airplanes, gas, and heavy artillery completely prohibited, was also rejected without discussion, and Litvinoff was beseeched by the chairman of the commission to show a more "constructive spirit" in the future. After an impressive display of such constructive spirit by other countries, a Draft Convention was drawn up and accepted by a vote which found only Germany and the Soviet Union in the negative (December 1930).

     The World Disarmament Conference which considered this draft was in preparation for six years (1926-1932) and was in session for three years (February 1932 to April 1935), yet it achieved nothing notable in the way of disarmament. It was supported by a tremendous wave of public opinion, but the attitudes of the various governments were becoming steadily less favorable. The Japanese were already attacking China; the French and Germans were deadlocked in a violent controversy, the former insisting on security and the latter on arms equality; and the world depression was growing steadily worse, with several governments coming to believe that only a policy of government spending (including spending on arms) could provide the purchasing power needed for economic revival. Once again, the French desire for an international police force was rebuffed, although supported by seventeen states; the British desire to outlaw certain "aggressive" armaments (like gas, submarines, and bombing planes) was rejected by the French, although accepted by thirty states (including the Soviet Union and Italy).

     Discussion of these issues was made increasingly difficult by the growing demands of the Germans. When Hitler came to office in January 1933, he demanded immediate equality with France, at least in "defensive" arms. This was refused, and Germany left the conference.

     Although Britain tried, for a time, to act as an intermediary between Germany and the Disarmament Conference, nothing came of this, and the conference eventually dispersed. France would make no concessions in regard to armaments unless she obtained increased security, and this was shown to be impossible when Britain, on February 3, 1933 (just four days after Hitler came to office), publicly refused to make any commitments to France beyond membership in the League and the Locarno Pacts. In view of the verbal ambiguities or these documents and the fact that Germany withdrew from both the League and the Disarmament Conference in October 1933, these offered little security to France. The German budget, released in March 1934, showed an appropriation of 210 million marks for the air force (which was forbidden entirely by Versailles) and an increase from 345 million to 574 million marks in the appropriation for the army. A majority of the delegates wished to shift the attention of the Disarmament Conference from disarmament to questions of security, but this was blocked by a group of seven states led by Britain. Disarmament ceased to be a practical issue after 1934, and attention should have been shifted to questions of security. Unfortunately, public opinion, especially in the democratic countries, remained favorable to disarmament and even to pacifism, in Britain until 1938 at least and in the United States until 1940. This gave the aggressor countries, like Japan, Italy, and Germany, an advantage out of all proportion to their real strength. The rearmament efforts of Italy and Germany were by no means great, and the successful aggressions of these countries after 1934 were a result of the lack of will rather than of the lack of strength of the democratic states.

     The total failure of the disarmament efforts of 1919-1935 and the Anglo-American feeling that these efforts handicapped them later in their conflicts with Hitler and Japan have combined to make most people impatient with the history of disarmament. It seems a remote and mistaken topic. That it may well be; nevertheless, it has profound lessons today, especially on the relationships among the military, economic, political, and psychological aspects of our lives. It is perfectly clear today that the French and their allies (especially Czechoslovakia) were correct in their insistence that security must precede disarmament and that disarmament agreements must be enforced by inspection rather than by "good faith." That France was correct in these matters as well as in its insistence that the forces of aggression were still alive in Germany, although lying low, is now admitted by all and is supported by all the evidence. Moreover, the Anglo-Americans adopted French emphasis on the priority of security and the need for inspection in their own disarmament discussions with the Soviet Union in the early 1960's. The French idea that political questions (including military) are more fundamental than economic considerations is now also accepted, even in the United States, which opposed it most vigorously in the 1920's and early 1930's. The fact that the secure states could have made errors such as these in that earlier period reveals much about the nature of human thinking, especially its proclivity to regard necessities as unimportant when they are present (like oxygen, food, or security), but to think of nothing else when they are lacking.

     Closely related to all this, and another example of the blindness of experts (even in their own areas), is the disastrous influence which economic, and especially financial, considerations played in security, especially rearmament, in the Long Armistice of 1919-1939. This had a double aspect. On the one hand, balanced budgets were given priority over armaments; on the other hand, once it was recognized that security was in acute danger, financial considerations were ruthlessly subordinated to rearmament, giving rise to an economic boom which showed clearly what might have been achieved earlier if financial consideration had been subordinated to the world's economic and social needs earlier; such action would have provided prosperity and rising standards of living which might have made rearming unnecessary.

Chapter 18: Reparations, 1919-1932

     No subject occupied a larger portion of statesmen's energies than reparations during the decade after the war. For this reason, and because of the impact which reparations had on other issues (such as financial or economic recovery and international amity), the history of reparations demands a certain portion of our attention. This history can be divided into six stages, as follows:

               1. The preliminary payments, 1919-1921

               2. The London Schedule, May 1921-September 1924

               3. The Dawes Plan, September 1924-January 1930

               4. The Young Plan, January 1930-June 1931

               5. The Hoover Moratorium, June 193 l-July 1932

               6. The Lausanne Convention, July 1932

     The preliminary payments were supposed to amount to a total of 20,000 million marks by May 1921. Although the Entente Powers contended that only about 8,000 million of this had been paid, and sent Germany numerous demands and ultimatums in regard to these payments, even going so far as to threaten to occupy the Ruhr in March 1921 in an effort to enforce payment, the whole matter was dropped in May when the Germans were presented with the total reparations bill of 132,000 million marks. Under pressure of another ultimatum, Germany accepted this bill and gave the victors bonds of indebtedness to this amount. Of these, 82 billions were set aside and forgotten. Germany was to pay on the other 50 billion at a rate of 2.5 billion a year in interest and 0.5 billion a year to reduce the total debt.

     Germany could pay these obligations only if two conditions prevailed: (a) if it had a budgetary surplus and (b) if it sold abroad more than it bought abroad (that is, had a favorable balance of trade). Under the first condition there would accumulate in the hands of the German government a quantity of German currency beyond the amount needed for current expenses. Under the second condition, Germany would receive from abroad an excess of foreign exchange (either gold or foreign money) as payment for the excess of her exports over her imports. By exchanging its budgetary surplus in marks for the foreign-exchange surplus held by her citizens, the German government would be able to acquire this foreign exchange and be able to give it to its creditors as reparations. Since neither of these conditions generally existed in the period 1921-1931, Germany could not, in fact, pay reparations.

     The failure to obtain a budgetary surplus was solely the responsibility of the German government, which refused to reduce its own expenditures or the standards of living of its own people or to tax them sufficiently heavily to yield such a surplus. The failure to obtain a favorable balance of trade was the responsibility equally of the Germans and of their creditors, the Germans making little or no effort to reduce their purchases abroad (and thus reduce their own standards of living), while the foreign creditors refused to allow a free flow of German goods into their own countries on the argument that this would destroy their domestic markets for locally produced goods. Thus it can be said that the Germans were unwilling to pay reparations, and the creditors were unwilling to accept payment in the only way in which payments could honestly be made, that is, by accepting German goods and services.

     Under these conditions, it is not surprising that the London Schedule of reparations payments was never fulfilled. This failure was regarded by Britain as proof of Germany's inability to pay, but was regarded by France as proof of Germany's unwillingness to pay. Both were correct, but the Anglo-Americans, who refused to allow France to use the duress necessary to overcome German unwillingness to pay, also refused to accept German goods to the amount necessary to overcome German inability to pay. As early as 1921, Britain, for example, placed a 26 percent tax on all imports from Germany. That Germany could have paid in real goods and services if the creditors had been willing to accept such goods and services can be seen in the fact that the real per capita income of the German people was about one-sixth higher in the middle 1920's than it had been in the very prosperous year 1913.

     Instead of taxing and retrenching, the German government permitted an unbalanced budget to continue year after year, making up the deficits by borrowing from the Reichsbank. The result was an acute inflation. This inflation was not forced on the Germans by the need to pay reparations (as they claimed at the time) but by the method they took to pay reparations (or, more accurately, to avoid payment). The inflation was not injurious to the influential groups in German society, although it was generally ruinous to the middle classes, and thus encouraged the extremist elements. Those groups whose property was in real wealth, either in land or in industrial plant, were benefitted by the inflation which increased the value of their properties and wiped away their debts (chiefly mortgages and industrial bonds). The German mark, which at par was worth about 20 to the pound, fell in value from 305 to the pound in August 1921 to 1,020 in November 1921. From that point it dropped to 80,000 to the pound in January 1923, to 20 million to the pound in August 1923, and to 20 billion to the pound in December 1923.

     In July 1922, Germany demanded a moratorium on all cash payments of reparations for the next thirty months. Although the British were willing to yield at least part of this, the French under Poincar้ pointed out that the Germans had, as yet, made no real effort to pay and that the moratorium would be acceptable to France only if it were accompanied by "productive guarantees." This meant that the creditors should take possession of various forests, mines, and factories of western Germany, as well as the German customs, to obtain incomes which could be applied to reparations. On January 9, 1923, the Reparations Commission voted 3 to 1 (with Britain opposing France, Belgium, and Italy) that Germany was in default of her payments. Armed forces of the three nations began to occupy the Ruhr two days later. Britain denounced this act as illegal, although it had threatened the same thing on less valid grounds in 1921. Germany declared a general strike in the area, ceased all reparations payments, and adopted a program of passive resistance, the government supporting the strikers by printing more paper money.

     The area occupied was no more than 60 miles long by 30 miles wide but contained 10 percent of Germany's population and produced 80 percent of Germany's coal, iron, and steel and 70 percent of her freight traffic. Its railway system, operated by 170,000 persons, was the most complex in the world. The occupation forces tried to run this system with only 12,500 troops and 1,380 cooperating Germans. The non-cooperating Germans tried to prevent this, not hesitating to use murder for the purpose. Under these conditions it is a miracle that the output of the area was brought up to one-third its capacity by the end of 1923. German reprisals and Allied countermeasures resulted in about 400 killed and over 2,100 wounded—most of the casualties (300 and 2,000 respectively) being inflicted by Germans on Germans. In addition almost 150,000 Germans were deported from the area.

     The German resistance in the Ruhr was a great strain on Germany, both economically and financially, and a great psychological strain on the French and Belgians. At the same time that the German mark was being ruined, the occupying countries were not obtaining the reparations they desired. Accordingly, a compromise was reached by which Germany accepted the Dawes Plan for reparations, and the Ruhr was evacuated. The only victors in the episode u, ere the British, who had demonstrated that the French could not use force successfully without British approval.

     The Dawes Plan, which was largely a J. P. Morgan production, was drawn up by an international committee of financial experts presided over by the American banker Charles G. Dawes. It was concerned only with Germany's ability to pay, and decided that this would reach a rate of 2.5 billion marks a year after four years of reconstruction. During the first four years Germany would be given a loan of $800 million and would pay a total of only 5.17 billion marks in reparations. This plan did not supersede the German reparations obligation as established in 1921, and the difference between the Dawes payments and the payments due on the London Schedule were added to the total reparations debt. Thus Germany paid reparations for five years under the Dawes Plan (1924-1929) and owed more at the end than it had owed at the beginning.

     The Dawes Plan also established guarantees for reparations payments, setting aside various sources of income within Germany to provide funds and shifting the responsibility for changing these funds from marks into foreign exchange from the German government to an agent-general for reparations payments who received marks within Germany. These marks were transferred into foreign exchange only when there was a plentiful supply of such exchange within the German foreign-exchange market. This meant that the value of the German mark in the foreign-exchange market was artificially protected almost as if Germany had exchange control, since every time the value of the mark tended to fall, the agent-general stopped selling marks. This allowed Germany to begin a career of wild financial extravagance without suffering the consequences which would have resulted under a system of free international exchange. Specifically, Germany was able to borrow abroad beyond her ability to pay, without the normal slump in the value of the mark which would have stopped such loans under normal circumstances. It is worthy of note that this system was set up by the international bankers and that the subsequent lending of other people's money to Germany was very profitable to these bankers.

     Using these American loans, Germany's industry was largely reequipped with the most advanced technical facilities, and almost every German municipality was provided with a post office, a swimming pool, sports facilities, or other nonproductive equipment. With these American loans Germany was able to rebuild her industrial system to make it the second best in the world by a wide margin, to keep up her prosperity and her standard of living in spite of the defeat and reparations, and to pay reparations without either a balanced budget or a favorable balance of trade. By these loans Germany's creditors were able to pay their war debts to England and to the United States without sending goods or services. Foreign exchange went to Germany as loans, back to Italy, Belgium, France, and Britain as reparations, and finally back to the United States as payments on war debts. The only things wrong with the system were (a) that it would collapse as soon as the United States ceased to lend, and (b) in the meantime debts were merely being shifted from one account to another and no one was really getting any nearer to solvency. In the period 1924-1931, Germany paid 10.5 billion marks in reparations but borrowed abroad a total of 18.6 billion marks. Nothing was settled by all this, but the international bankers sat in heaven, under a rain of fees and commissions.

     The Dawes Plan was replaced by the Young Plan at the beginning of 1930 for a variety of reasons. It was recognized that the Dawes Plan was only a temporary expedient, that Germany's total reparations obligation was increasing even as she paid billions of marks, because the Dawes Plan payments were less than the payments required by the London Schedule; that the German foreign-exchange market had to be freed in order that Germany might face the consequences of her orgy of borrowing, and that Germany "could not pay" the standard Dawes payment of 2.5 billion marks a year which was required in the fifth and following years of the Dawes Plan. In addition, France, which had been forced to pay for the reconstruction of her devastated areas in the period 1919-1926, could not afford to wait for a generation or more for Germany to repay the cost of this reconstruction through reparations payments. France hoped to obtain a larger immediate income by "commercializing" some of Germany's reparations obligations. Until this point all the reparations obligations were owed to governments. By selling bonds (backed by German's promise to pay reparations) for cash to private investors France could reduce the debts she had incurred for reconstruction and could prevent Britain and Germany from making further reductions in the reparations obligations (since debts to private persons would be less likely to be repudiated than obligations between governments).

     Britain, which had funded her war debts to the United States at 4.6 billion dollars in 1923, was quite prepared to reduce German reparations to the amount necessary to meet the payments on this war debt. France, which had war debts of 4 billion dollars as well as reconstruction expenses, hoped to commercialize the costs of the latter in order to obtain British support in refusing to reduce reparations below the total of both items. The problem was how to obtain German and British permission to "commercialize" part of the reparations. In order to obtain this permission France made a gross error in tactics: she promised to evacuate all of the Rhineland in 1930, five years before the date fixed in the Treaty of Versailles, in return for permission to commercialize part of the reparations payments.

     This deal was embodied in the Young Plan, named after the American Owen D. Young (a Morgan agent), who served as chairman of the committee which drew up the new agreements (February to June 1929). Twenty governments signed these agreements in January 1930. The agreement with Germany provided for reparations to be paid for 59 years at rates rising from I.7 billion marks in 1931 to a peak of 2.4 billion marks in 1966 and then declining to less than a billion marks in 1988. The earmarked sources of funds in Germany were abolished except for 660 million marks a year which could be "commercialized," and ail protection of Germany's foreign-exchange position was ended by placing the responsibility for transferring reparations from marks to foreign currencies squarely on Germany. To assist in this task a new private bank called the Bank for International Settlements was established in Switzerland at Basle. Owned by the chief central banks of the world and holding accounts for each of them, the Bank for International Settlements was to serve as "a Central Bankers' Bank" and allow international payments to be made by merely shifting credits from one country's account to another on the books of the bank.

     The Young Plan, which was to have been a final settlement of the reparations question, lasted for less than eighteen months. The crash of the New York stock market in October 1929 marked the end of the decade of reconstruction and opened the decade of destruction between the two wars. This crash ended the American loans to Germany and thus cut off the flow of foreign exchange which made it possible for Germany to appear as if it were paying reparations. In seven years, 1924-1931, the debt of the German federal government went up 6.6 billion marks while the debts of German local governments went up 11.6 billion marks. Germany's net foreign debt, both public and private, was increased in the same period by 18.6 billion marks, exclusive of reparations. Germany could pay reparations only so long as her debts continued to grow because only by increasing debts could the necessary foreign exchange be obtained. Such foreign loans almost ceased in 1930, and by 1931 Germans and others had begun a "flight from the mark," selling this currency for other monies in which they had greater confidence. This created a great drain on the German gold reserve. As the gold reserve dwindled, the volume of money and credit erected on that reserve had to be reduced by raising the interest rate. Prices fell because of the reduced supply of money and the reduced demand, so that it became almost impossible for the banks to sell collateral and other properties in order to obtain funds to meet the growing demand for money.

     At this point, in April 1931, Germany announced a customs union with Austria. France protested that such a union was illegal under the Treaty of Saint-Germain, by which Austria had promised to maintain its independence from Germany. The dispute was referred to the World Court, but in the meantime the French, to discourage such attempts at union, recalled French funds from both Austria and Germany. Both countries were vulnerable. On May 8, 1931, the largest Austrian bank, the Credit-Anstalt (a Rothschild institution), with extensive interests, almost control, in 70 percent of Austria's industry, announced that it had lost 140 million schillings (about 520 million). The true loss was over a billion schillings, and the bank had really been insolvent for years. The Rothschilds and the Austrian government gave the Credit-Anstalt 160 million to cover the loss, but public confidence had been destroyed. A run began on the bank. To meet this run the Austrian banks called in all the funds they had in German banks. The German banks began to collapse. These latter began to call in all their funds in London. The London banks began to fall, and gold flowed outward. On September 2lst England was forced off the gold standard. During this crisis the Reichsbank lost 200 million marks of its gold reserve and foreign exchange in the first week of June and about 1,000 million in the second week of June. The discount rate was raised step by step to 15 percent without stopping the loss of reserves but destroying the activities of the German industrial system almost completely.

     Germany begged for relief on her reparations payments, but her creditors were reluctant to act unless they obtained similar relief on their war-debt payments to the United States. The United States had an understandable reluctance to become the end of a chain of repudiation, and insisted that there was no connection between war debts and reparations (which was true) and that the European countries should be able to pay war debts if they could find money for armaments (which was not true). When Secretary of the Treasury Mellon, who was in Europe, reported to President Hoover that unless relief was given to Germany immediately on her public obligations, the whole financial system of the country would collapse with very great loss to holders of private claims against Germany, the President suggested a moratorium on inter-governmental debts for one year. Specifically, America offered to postpone all payments owed to it for the year following July 1, 1931, if its debtors would extend the same privilege to their debtors.

     Acceptance of this plan by the many nations concerned was delayed until the middle of July by French efforts to protect the payments on commercialized reparations and to secure political concessions in return for accepting the moratorium. It sought a renunciation of the Austro-German customs union, suspension of building on the second pocket battleship, acceptance by Germany of her eastern frontiers, and restrictions on training of "private" military organizations in Germany. These demands were rejected by the United States, Britain, and Germany, but during the delay the German crisis became more acute. The Reichsbank had its worst run on July 7th; on the following day the North German Wool Company failed with a loss of 200 million marks; this pulled down the Schr๖der Bank (with a loss of 24 million marks to the city of Bremen where its office was) and the Darmstไdter Bank (one of Germany's "Big Four Banks") which lost 20 million in the Wool Company. Except for a credit of 400 million marks from the Bank for International Settlements and a "standstill agreement" to renew all short-term debts as they came due, Germany obtained little assistance. Several committees of international bankers discussed the problem, but the crisis became worse, and spread to London.

     By November 1931 all the European Powers except France and her supporters were determined to end reparations. At the Lausanne Conference of June 1932 German reparations were cut to a total of only 3 billion marks, but the agreement was never ratified because of the refusal of the United States Congress to cut war debts equally drastically. Technically this meant that the Young Plan was still in force, but no real effort was made to restore it and, in 1933, Hitler repudiated all reparations. By that date, reparations, which had poisoned international relations for so many years, were being swallowed up in other, more terrible, problems.

     Before we turn to the background of these other problems, we should say a few words about the question of how much was paid in reparations or if any reparations were ever paid at all. The question arose because of a dispute regarding the value of the reparations paid before the Dawes Plan of 1924. From 1924 to 1931 the Germans paid about 10.5 billion marks. For the period before 1924 the German estimate of reparations paid is 56,577 billion marks, while the Allied estimate is 10,426 billion. Since the German estimate covers everything that could possibly be put in, including the value of the naval vessels they themselves scuttled in 1918, it cannot be accepted; a fair estimate would be about 30 billion marks for the period before 1924 or about 40 billion marks for reparations as a whole.

     It is sometimes argued that the Germans really paid nothing on reparations, since they borrowed abroad just as much as they ever paid on reparations and that these loans were never paid. This is not quite true, since the total of foreign loans w as less than 19 billion marks, while the Allies' own estimate of total reparations paid was over 21 billion marks. However, it is quite true that after 1924 Germany borrowed more than it paid in reparations, and thus the real payments on these obligations were all made before 1924. Moreover, the foreign loans which Germany borrowed could never have been made but for the existence of the reparations system. Since these loans greatly strengthened Germany hy rebuilding its industrial plant, the burden of reparations as a whole on Germany's economic system was very slight.

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