the 10th January as an amicable arrangement, a peaceful collaboration which we were offering to Germany in all sincerity in entering the Ruhr'. He denied altogether that the German resistance had been spontaneous, and maintained on the contrary that it had been forced upon an unwilling population by the Berlin Government. As for the conditions of evacuation, we repeat once more that we have no desire to stay in the Ruhr longer than is necessary and that we have no political aims and no intentions of annexing territory. We know perfectly well that Germany can pay us what she owes us quite quickly, and that consequently she has it in her own hands to secure progressive evacuation. The date at which payments are made depends on Germany's will '—and to prove this thesis that the necessary financial effort depended purely on the will of the country concerned, he cited the financial rehabilitation of Austria !1 In regard to the relation between German Reparation and Inter-Allied Debts, and to Germany's capacity to pay, he merely repeated, though perhaps in greater detail and with greater emphasis than before, what he had said and written so many times already. France would abandon none of her 'A' and 'B' bonds, and she would only remit 'C' bonds to Germany in proportion as her own debts to her Allies were remitted to her; the determination of Germany's capacity was provided for in the Versailles Treaty and there was no reason for superseding the Reparation Commission. In two effective parting shots, he pointed out first that, hitherto, all declarations of German default from which the British delegate on the Reparation Commission had dissociated himself had been passed by three votes to one (the Italian delegate voting with the French and the Belgian), so that the French President's casting vote had not in fact been exercised; and secondly that Belgium and France, by themselves, possessed 60 per cent. of the Allied claims against Germany. The British Government often accuses the French Government of taking a delight in abstract theories and not paying sufficient attention to economic and financial realities. As it happens, we too want to look at things as they are. But if we are to handle the question as business men, what are we to say of a company in which shareholders representing 60 per cent. of the shares can be put in a minority by others holding only 20 per cent. ?' The note concluded with a complaint against the publicity which had been given to the negotiations by the British Government and with a demand that,' whether they were continued to-morrow between allies or, after the cessation of passive resistance, with Germany', they should be pursued with 1 See Survey, 1920-3, pp. 311-28.

Ꮓ

more discretion'. The substance of the exposé was repeated in different form in the réfutation.

M. Poincaré's reply of the 20th August was followed on the 27th by a communication from M. Jaspar, the Belgian Minister for Foreign Affairs, to the British Minister at Brussels1 covering: (a) observations on the British note of the 11th August; and (b) supplementary explanations of the suggestions for the settlement of the Reparation Problem contained in the Belgian note of the 30th July. In the former of these memoranda, M. Jaspar once more excused himself for having appeared to ignore the draft identic reply to the German proposals which had been attached to the British note of the 20th July; declared that the suggestions for a reply which had been offered by the Belgian Government had always been subject to modification; reaffirmed the legality of the occupation of the Ruhr, while denying any intention of continuing it indefinitely; reviewed at length the history of Belgian Reparation priority; and set out the actual values received up to date by Belgium from Germany. In the second memorandum he explained that by priority for the restoration of devastated areas he had meant priority for material damages over personal damages (such as those indemnified by pensions), and that he included British losses of ships and cargoes in the former category. He claimed that the payments made by Germany should be divided between the Allies proportionately to the respective total of their material damage'; but this would presumably involve a modification of the Spa percentages, and in another passage he reasserted the principle, which the British Government had steadily refused to admit, that the Spa percentages had been relative to the total liability of Germany embodied in the Schedule of Payments of the 5th May, 1921, and that a modification of the second agreement calls for a readjustment of the first'. M. Jaspar concluded by expressing the view that the discussion had progressed' as a result of the past few months' negotiations, and that the problem has sufficiently advanced for amicable and discreet conversations between the Allied ministers to take place, not of course in the form of a conference properly so called. In its note of the 20th July the British Government put forward an analogous idea in proposing the opening of inter-Allied conversations. In its reply of the 20th August, the French Government asks that the negotiations should be conducted with more discretion. The Belgian Government associates itself with

1 Belgian Grey Book, Doc. 54; The Times, 29th August, 1923.

6

both these suggestions and believes that the interviews which it contemplates would be of a nature to meet the case.'

In fact, however, this Belgian note of the 27th August marked the failure of the Belgian Government's effort to restore the entente between Great Britain and France; and while the position in the Ruhr, and there with the financial and economic prospects of Western Europe, had gone steadily from bad to worse, the voluminous correspondence that had passed between Berlin, Brussels, Paris, and London had apparently resulted in nothing but a barren accentuation of the points of disagreement. In the eyes of the majority of their respective countrymen (in so far as they took an interest in international affairs) Lord Curzon and M. Poincaré had each delivered a coup de grâce to the other, yet the same statesmen continued in power and the old problem remained to be solved. Nor was a solution brought any nearer by a mere reversal of procedure. On the 19th September, for example, the British Prime Minister broke a journey to London from Aix-les-Bains, where he had been taking the waters, in order to pay a personal call upon his French colleague in Paris, the results of which were conveyed to the public in the following brief but reassuring communiqué :

A meeting of the Prime Ministers of France and Great Britain took place this afternoon, of which they took advantage to proceed to an exchange of views on the general political situation. It is not to be expected that in the course of one meeting M. Poincaré and Mr. Baldwin were able to settle upon any definite solution, but they were happy to establish a common agreement of views and to discover that on no question is there any difference of purpose or divergence of principle which could impair the co-operation of the two countries, upon which depends so much the settlement and peace of the world.

This was certainly a different diplomatic technique from that of the two final Curzon and Poincaré notes, yet a comparison of the three documents was sufficient to make the most optimistic observer of events despair. It was the darkest moment in the history of the Reparation Problem, and no one could venture to imagine at the time, or indeed for long åfterwards, that this was the dark that comes before dawn. Nevertheless, the period which followed was marked by decreasing gloom and growing hopes of better things, and this happier phase was inaugurated by Mr. Baldwin himself, less than a month after his futile interview with M. Poincaré, in a note addressed on the 12th October, 1923, to the United States Government, in which he asked whether it would collaborate in the appointment of an expert committee to inquire into Germany's capacity to pay.

(v) The Appointment, Investigations, and Reports of the Two Committees of Experts (12th October, 1923-9th April, 1924).

The note dispatched on the 12th October, 1923, by Mr. Baldwin to the British chargé d'affaires at Washington for presentation to the Secretary of State was itself the response to a gesture which had been made, as far back as the 29th December, 1922, by Mr. Charles Evans Hughes, and which was repeated in October 1923 by President Coolidge.

The United States Government had always kept itself au courant with the Reparation Problem. The American delegation at the Peace Conference of Paris had taken part, not only in the framing of the Versailles Treaty, but in the organization of the Reparation Commission; and since the 10th January, 1920, the date on which that body had entered officially upon its existence, the United States had been continuously represented upon it by an observer— except for a brief interval between the 19th February and the 6th May, 1921, when the American Government temporarily withdrew its observers from the Reparation Commission, the Conference of Ambassadors, and the conferences of Allied statesmen on account of the change of administration which occurred at Washington on the 4th March of that year. It was true that the American observer was not a member of the Reparation Commission, and that in ratifying the treaty of peace with Germany, the Senate made a reservation that the United States should not be represented on the Reparation Commission without consent of the Congress' 2-a consent which had not been given either by the 12th October, 1923, or indeed at any time thereafter before this Survey was written-but this did not rule out the inclusion of American citizens, in their private capacity, in a committee of experts, which might be appointed by the Reparation Commission to examine and report upon the Reparation Problem; and on the 29th December, 1922, when the co-operation of the British and French Governments in the matter of Reparation was on the point of breaking down and the Franco-Belgian occupation of the Ruhr

1 See World Peace Foundation, Vol. VI, No. 5, 1923: Reparation, Part V, The Dawes Report', for the texts of (a) an invitation addressed to the United States Government on the 5th May, 1921, by Mr. Lloyd George, as President of the Allied Conference of the 29th April-5th May, 1921, to reappoint observers to the three bodies above mentioned, and (b) the acceptance of this invitation by the United States Government on the 6th May.

2 Letter of the 27th December, 1922, from President Harding to Senator Lodge, quoted in World Peace Foundation, op. cit., p. 333.

was imminent, Mr. Hughes gave an address1 at New Haven to the American Historical Association, in which he suggested a definite line of procedure.

The economic conditions in Europe give us the greatest concern. . . We cannot dispose of these problems by calling them European, for they are world problems and we cannot escape the injurious consequences of a failure to settle them. They are, however, European problems in the sense that they cannot be solved without the consent of European Governments. We cannot consent for them. The key to the settlement is in their hands, not in ours. . . . But the situation does call for a settlement upon its merits. The first condition of a satisfactory settlement is that the question should be taken out of politics. There ought to be a way for statesmen to agree upon what Germany can pay, for, no matter what claims may be made against her, that is the limit of satisfaction. . . . Why should they not invite men of the highest authority in finance in their respective countries-men of such prestige, experience and honour that their agreement upon the amount to be paid, and upon a financial plan for working out the payments, would be accepted throughout the world as the most authoritative expression obtainable? Governments need not bind themselves in advance to accept the recommendations, but they can at least make possible such an inquiry with their approval and free the men who may represent their country in such a commission from any responsibility to Foreign Offices and from any duty to obey political instructions. In other words, they may invite an answer to this difficult and pressing question from men of such standing and in such circumstances of freedom as will insure a reply prompted only by knowledge and conscience. I have no doubt that distinguished Americans would be willing to serve in such a commission.

Although both Great Britain and Germany made it clear' at the time 'that they would warmly welcome the proffered assistance',2 Mr. Hughes's pregnant proposal could not bear fruit in time to forestall the struggle in the Ruhr; but it presumably inspired the suggestion for an international commission of impartial experts which was made in the German note of the 2nd May and was taken up on the 20th July by Lord Curzon.3 So long as German passive resistance continued this suggestion did not commend itself to the French and Belgian Governments, who still hoped to attain their

1 For an excerpt from the text, see op. cit., pp. 334-8. The question of Inter-Allied Debts which was also dealt with by Mr. Hughes in this address and which was afterwards taken up in the British note of the 12th October, 1923, and the American note of the 15th October, 1923, will be discussed in the Survey for 1925.

2 Quoted from the British note of the 12th October, 1923. (See below, p. 342.)

3 See Section (iv) above, pp. 324 and 330.

See the Franco-Belgian identic note of the 6th May, 1923; the separate French and Belgian notes of the 30th July; and M. Poincaré's exposé of the 20th August, all of which are summarized in Section (iv) above.