CANCEL DEBTS TO SAVE EUROPE

Dunstan Times, Issue 3136, 25 September 1922, Page 2

CANCEL DEBTS TO SAVE EUROPE

(By Sir Philip Gibbs). It is perhaps a little cruel "and insolent to say we are dismayed and surprised at the downfall of German money and her inability to make further reparations payments merely because it reveals the stupendous folly of European politicians and peoples. There is no justification to that surprise. For years it has been perfectly clear to minds which regarded economic laws ol life without illusion that the scale and system of payments imposed on Germany by the Versailles Treaty were impossible of fulfillment, and that an attempt at fulfillment would not only drag Germany to ruin but would prevent the recovery of Europe as a whole, Those who proclaimed this simple, self-evident truth were denounced as pro-Germans, crawling pacifists, enemies of France, when they were mere lv students of elementary arithmetic. All efforts to tranquilise the European situation, to restore the normal laws of supply and demand between nations lv stabilising exchange, were frustrated by the fury of political passion, the fantastic illusions of the popular mind. It was not only France that insisted on the inviolability of the Versailles Treatv upon the false assertion that G finany could and should pay for all war costs, all pensions and all losses ol all the nations engaged in the great war against her. That view was supported for a long time by the public opinion of Great Britain and the British, dominions, and of many peaplo m th 5 United States. Lloyd George came into power by the passionate proclamations of that gospel, though very soon afterward he endeavored to modify its severity in regard to Germany, thereby incurring the enmity of France and of many powerful groups in his own country. ]n France there was not one statesman or publicist of any note who dared to toll the French people they were living in a fool's paradise and that the monev being paid by Germany was only sufficient to maintain the army of occupation ; that not" all the (strength of the French army nor amy invasion ol the Ruhr nor shaking of German pockets under threat of violence could produce real money from an enemy panting under the strarn of defeat without forcing them into bankruptcy. which would also mean bankruptcy tn France. Biiand saw the truth, and thus lost his Premiership by even the timittest advance to more reasonable adjustments of the German indemnity. Poin-t-are came into power by violent professions of faith in the ortl falsities of making Germany pay the full pound of ilesh; many newspapers in manv countries share the blame of bolstering up popular ignorance and passion by asserting constantly that Germany was immensely rich, lightly taxed and well able to fulfill: the. treaty obligations ;u money payments to all her former enelines'. "'"3" Now France and the rest of the world s'ee by the devastating collapse of the German mark, by the actual bankruptcy of Germany, that all these holies and arguments' were based on sheer economic nonsense. The Reparations. Commission no longer hides its d.-('mite conviction that Germany has collie to the end of her resources and that a moratorium or suspension of payments must be granted under certain drastic conditions. France is utterly disillusioned and 1 exceedingly •ibinned. She admits at last that her calculations are unsound; that her financial state is desperate, because it is based on German trold which did not exist. it is no use dodging any longer the plain, unpopular facts about Germany :ind the rest of Europe. In self-de-fence I must chum that 1 have never dodged them. In spite of the theoretic;!! justice that Germany should pay tor the enormous damage and costs of the war. it became-clear to me in Germany itself that the penalties imposed on her were beyond the possibilities of any people. Not even Great Britain or the United States could stagger on under such colossal debts. Immediately alter the war (hey reorganised their industrial life audi worked with a feverish energy which was almost miraculous. For a time the tailing exchange value of the German mark enabled them to undercut prices of goods in all the markets of the world, thereby influencing and doing soycr,, damage to the British ami! American export trade: but it was an industry based on shifting sands. Every time the Gorman Government paid an instalment of the indemnities by the purchase olYl'oreign money their own credit, which was based on real wealth, was undermined, their own momy lost more of its purchasing power. That necessitated the use. of the priming press, ami eery new issue of marks depreciated the mark sf ill further. Germany could soil cheap, hul had. to buy dear. That itbad business, and carrying out the process lo its logical conclusion means thai inevitable default which has now li sppened. H is, of course, true thai great industrialists have invested considerable amounts in lereiuu securities and dodged taxation. That will have to be slopped or accounted for. But, broadly, the truth is ihal German workmen are (axed 10 per cent, on small wages. against which price- are constantly rising; middle class folk are severely pinched, people living on Guar inioincs and dividends paid in marks are ruined and, however much the German people are squeezed by the ia'< collectors, neither Franco nor any oilier country can collect the lebts due under the Versailles Treaty. Now bankruptcy in Germany, following the financial death of Austria ami decay in all the.eentri and east of Eui ope, is, if is is allowed to happen without relief, an absolute checkmate to all hopes of recovery and tranquillity on this side of the world, ii is for that i ; ;ason thai European statesmen and' p oples who hive icfiised to face realii is hitherto arc damnably to blame. The ruling otil of all consideration of Gorman reparations at Genoa made 'that conference barren of results. The natural but short-stilted policy of France in thwarting oil efforts. Jo adjust the penalties of Germany to io re reasonable dimensions has wasted years of valuable time. If passions are still allowed to rule and arithmetic is ignored next year, it will prod new nnajvhv and revolution in Europe com- : 'Table only to the triVgedy of Russia, involving higher types of civilisation. Fortunately there is .still limo to an i-t all that, and at last there is general recognition, even by France, that the painful truth niust be acknowledged and dealt with in a scientific hj ay. The French people are ready to postpone Germany's future payments, to reduce their ultimate amounts by enormous figures, on one condition, which I think is right and just. It is that France should be guaranteed (ho money necessary for Ihe reconstruction of the devastated districts and relieved of the debts to Gresit Britain and the Foiled States in proportion to the amounts bv which Germany is relieved. She insists that the whole of this problem is one :nn\ indivisible, that any revision of the Versailles Treaty must in part be a ...enoral readjustment and settlement of international indebtedness.

My opinion is that France ha® an unanswerable argument on those lines and I believe the problem: of .Europe could bo made enormously more hopeful l if itwere dealt with in that way. It would be scandalous if Germany were given relief denied to France, if she were let off her debts while France was pressed to pay. But it is absolutely necessary to grant Germany relief, not for her sake alone, so. France must be eased of liabilities such! ais her debts to Great Britain and the United States. Beyond any doubt it is for the United States to make the first move 1 in consideration of this matter. There must we another Washington conference entirely devoted to that purpose. The English people have no intention of asking America to cancel their debt or any vart of it; and arrangements have already been made to pay a heavy instalment this year. If we bleed 1 ourselves' to death we shall pay. But it is not beyond the wit of man. certainly not beyond the wit of Hughes, to devise a plan by which there shall' be cancellation of debts all round so far as they balance each other, between one country and another, and am international arrangement among the European peoples based' on mutual concessions in-methods of payment and the wiping out of old iseo'rets which have no present reality. Black as things are because of the situation in Germany, 1 cannot help thinking it has 1 been such a shock to the public imagination and political leadens that it has broken the last illusions and brought us face to. face with the real issues in a way that will result in commonsense arrangements. On the other hand, if such arrangements are delayed there will be a. crash in Europe which will shake the uttermost parts of the earth. That is no fancy language, hut the very sober truth.