AN ESTIMATE of conditions in Central Europe is as dangerous as prophecy. What is true when written may be nonsense after the printers have spent a few days in putting the manuscript into type. Premiers meet--and disagree. The Reparation Commission forgets its judicial capacity and carries out the orders of politicians. There is no agreement anywhere, no common policy, and all the time the reparation question--the crux of the difficulties of Europe--remains unsettled. The reason is that nobody has the courage to speak the truth, to admit that German payments must be based on German capacity to pay. It is fear that this capacity may prove inferior to the hope inspired by propagandists which prevents the appointment of the expert commission suggested by the American Secretary of State. Politicians think that they can serenely override the laws of economics and, because they flout these laws, the waters of disaster are rising everywhere.

In Germany the situation is more serious, and perhaps more interesting, than elsewhere because the outcome is more dubious and the stakes are greater. In Austria one feels that the bottom has been reached, that the people are apathetic, merely waiting for outsiders to come and help. In Hungary there is a universal desire to make good; a government run by able men devises far-reaching and sound economic plans, the success of which, however, depends on the amount of reparation to be demanded--a sum still unfixed more than four years after the war! Everywhere it is the uncertainty and the lack of hope that paralyzes endeavor.

Since world prosperity depends on the prosperity of individual nations as surely as physical health depends on the soundness of different members of the body, it is certain that an economically sick Germany must poison the surrounding nations. For this reason it may be worth while to enumerate some of the causes of this political and economic illness. The two phases are too closely related to be considered separately.

Since the armistice Germany has not had a really stable government. This statement has no reference to the form of government, because there has never been a body of opinion in favor either of a monarchy or a soviet strong enough to endanger the republic. The country has rather been cursed with a multiplicity of parties, so that no government can remain in power except through unstable coalitions. Neither the German National Party, at the extreme right, nor the Communist Party, at the extreme left, has ever entered such a coalition, but with these two exceptions all parties have from time to time been represented. Germany, therefore, has had a government of the centre, sometimes inclining, as at first, to the left, sometimes, as now, to the right. No government has ever dared to take a really firm stand on any important question for fear of losing its coalition majority. The first, a distinctly socialistic government, succeeded in passing labor laws which, whether in themselves good or not, have had the effect of greatly reducing production. The present Cuno government would like to get rid of these laws but dares not for fear that the now united Socialist Party will take up active opposition. Over all succeeding governments has hung the black cloud of reparation--black at first because undetermined in amount, later because so stupendous that such will to pay as may formerly have existed has been nearly snuffed out.

Directly or indirectly, this question of reparations has always been the rock on which governments have crashed. The parties of the extreme right are determined to pay nothing because they claim that Germany owes nothing. The parties of the centre proclaim, sometimes with truth, their willingness to pay what Germany is able to pay, but no more. They make little effort to pay sums which go for nothing in the constantly yawning and widening pit of French demands. The parties of the extreme left would wipe out the whole question by forming a world proletarian union--whatever that may be--and in any case they know that misery is the breeding-ground of communism. As these two widely opposing views become more or less popular, succeeding governments, sensing danger from one side or the other, lean first toward one, then toward the other. There is no continuity of policy, perhaps no possibility of continuity.

There has been a gradual weakening of the will to pay, a will to pay which was never based on an idea of voluntary reparation for wrong done, because practically no German will admit responsibility for the war, but rather on the knowledge that a defeated nation must pay. Partly the result of lack of leadership, largely the result of hopelessness, the German nation as a whole has come to believe that whenever a payment can be avoided it should be avoided, because every payment affects adversely national economic conditions and makes no appreciable diminution in the impossible total of payments. Probably no German would admit today that Germany can ever pay any such amount as the German experts estimated as reasonable in Paris in 1919.

The difficulty arising from the fact that there is no predominant party is accentuated by the lack of really powerful leaders of public opinion who might be able to override party lines and thus bring about some semblance of national unity. It is fair to say that all Germany admires President Ebert. His influence is great, his unselfish patriotism is never questioned. He is a short, square man, with heavy grizzled moustache and hair; a clear, incisive talker; honest; a man who goes straight to the point and wastes no words, although his speech is fluent. He is a keen judge of persons, a man eager to surround himself with strong men, but one who will be equally careful to curb the dangerous tendencies of strong men. He is honestly seeking a way out, a way consistent with patriotism and national reconstruction. He is an admirable balance-wheel but, as President under the continental plan of republican government, he has no power except through his personal influence.

Wirth and Rathenau together were a powerful combination. The one, a bluff, democratic figure, an excellent public speaker, sufficiently honest for a politician, depended on the brains of the other. Rathenau, rather elegant in manner and appearance, almost cold, was a man of admirable intellect, inclined, in spite of his great wealth, to be socialistic--and for that the reactionaries killed him. Together, these men were trying to accomplish the task of preserving German economic stability and at the same time of paying reparations. The public appreciated the value of the combination too little.

Cuno represents the National People's Party. He is conservative but not reactionary. A man of unusually agreeable personality, with no suggestion of the "typical German" of the cartoons, he has a gentleman's sense of honor and of obligation. One might wish, perhaps, for a little more iron and a little less sweetness in his face. Contrary to the general belief abroad, Cuno wants to pay in reparations whatever Germany is able to pay. He knows, however, that payment can only follow the economic recuperation which comes from restoration of confidence. Therefore his first aim is to put Germany economically on its feet. But, this accomplished, he knows well that economic health can be made permanent only through settlement of the reparation question, which must involve payment to the limit of German ability. If he should remain in power he would try honestly to fulfill Germany's obligations.

One great difficulty which all German governments have had to face is lack of cooperation in any attempt to fulfill the terms of the treaty on the part of the great industrialists. These men have gone ahead and made money--though not so much as is often asserted because conditions of labor have cut down production--and have been unwilling to help the state in gathering funds to make foreign payments. In this way the Cuno government has a better opportunity than any of its predecessors because Cuno himself is allied to the great industralists and is of their political faith. Even Hugo Stinnes appears willing to cooperate with Cuno because, although primarily a man of business, he is also a man with vision, patriotic up to a certain point, and convinced that Germany's only salvation lies in a strong conservative government. It is often said that Stinnes looms larger in the eyes of the outside world than he does at home, but this is only because at home he is a leader among many, not the solitary industrial figure which the world considers him. With his black beard, his strongly accentuated features, his massive body, he looks like a figure taken from an ancient Assyrian painting. His voice is quiet but assured and he never fails sharply to accent the points he wishes to make. A man of tremendous personality, he keeps himself in the public eye partly through his very aloofness, yet gives himself fully and freely to those whom he considers worth talking to. Stinnes is emphatically not a politician but he is a man who may well dominate politicians, especially in matters of foreign affairs because of his foreign holdings, and who may thus have more influence in orienting German external relations than any other man. The vital question for the world is the direction in which this powerful influence will lead. The Stinnes interests in Austria are immense and this would cause him, from his own point of view, to work for the eventual union of Austria and Germany, an aim certainly not less likely to be followed because of the large Stinnes holdings in Italy. Frontiers, in these days, are troublesome facts for business. German industry needs the coal of Upper Silesia and for this reason Stinnes looks with little favor on Poland. He is at the moment balked in Russia, but will be ready when opportunity occurs and then the Polish frontier will stand in his way. These two examples, Austria and Poland, perhaps sufficiently indicate the trend of the man's mind. He wants Germany to become the foremost industrial nation of the world and to bring this about feels that political considerations must not stand in the way. This possible ruler of politicians is a man to be watched.

Yet Stinnes is not one of the extremists who is unwilling to pay reparations. He, too, would pay because he knows that this question will remain the great stumbling block to international economic stability until it is settled. But, like Cuno, he would pay if possible in such manner as would also help on German rehabilitation. The Stinnes-Lubersac plan, widely published in its main points, indicates this. It foresaw and provided for immensely heavy payments in the complete rebuilding of the devastated regions of France. Immediate relief to Germany, however, was to be given by the abolition of restrictions on German trade, by the withdrawal of French forces from the occupied territories and the Saar Basin. There was also to be a firm rapprochement between the great French and German industrialists, which would permit common use of the resources of the Ruhr and of Lorraine, which would do away with Franco-German competition, and which, therefore, would mean practically world domination along certain industrial lines. The plan also, in the mind of Stinnes, would have had an immediate favorable reaction on the whole German international economic situation because he believed that the workmen, in order to feel themselves once more free men, would have given up the cherished eight-hour day and thereby vastly have increased production. The principle of maximum work once reestablished, it might have remained indefinitely.

The casual traveler who went through Germany, who saw the factories working, the shop-windows filled, people apparently prosperous, naturally asked why there was any difficulty in paying reparations. If he looked more closely, even at surface appearances, his faith was a little shaken. Except in Berlin he saw few motor cars--practically none in the Ruhr; he realized that the trains were dirty and run down; he saw that people were shabbily dressed, discontented, and sometimes hungry. If he really studied the situation he found that exports had fallen lamentably in accord with the decreasing labor output. He saw profiteers who were concentrating their wealth abroad in order to escape taxes; and yet, because of the diminished exports, he realized that these fortunes held abroad--even if the German Government could seize them--would have comparatively little influence because they could not possibly be of the fabulous sums talked about in France. He railed at the German Government, perhaps, for its supineness in not collecting what was due in taxes, but if he went to a few sessions of the Reichstag he understood that enforcement of the law, if it were in any way possible, would only be temporary because the government would fall. He certainly railed at the government for permitting the issue of floods of paper money, and yet when he wanted to cash a small check he found that no bank could supply his demand for paper. A strong government, to be sure, might have found a way out of the dilemma but a weak government could only try to supply the demand. Even with the floods of paper now in circulation the available circulating medium--and some medium there must be --is far less than half what it was before the war in purchasing power. The traveler, who had become a student, began to be bewildered, gave up making cock-sure statements, began to grope himself for an issue just as the Germans have long been groping for a solution of the problem. If he stayed long enough he probably ended by saying that the country was bankrupt and that payment of any reparations at all was unthinkable. Then he returned to France and, in spite of the unrealities of French statements as compared with his own observations, he re-grasped the idea that Germany was not alone suffering, that for the sake of the world Germany must pay and, furthermore, that Germany could pay up to a certain point. "Are there no men living," he asked, "wise enough to point the way?"

The advent of the Cuno government was the golden opportunity of the Allies to reopen, under favorable circumstances, the question of reparations. The Cuno government, understanding that there could be no peace without a settlement, was willing to pay in accord with German capacity and--most important of all --it had the backing of the great industrialists. But the new government came into power when economic conditions were already disastrous. Herr Cuno said in so many words that a moratorium on German payments was essential to put Germany in a position to pay, and intimated that even this would be useless unless the demands made were commensurate with German capacity. The government, he said, was prepared also to take energetic measures for the stabilization of the mark along the lines indicated by the commission of neutral experts called to Berlin during the preceding month. It seemed clear that without a stable currency there could be nothing to depend on, that any future reparation payments must be based on a stabilized unit of exchange. Furthermore, a currency which meant something, which was not liable to daily fluctuations, would put new heart in the masses of the population, would be a gleam of much needed hope. All the experts had insisted that the first requisite for stabilization was a moratorium, and to this the French would not, perhaps could not, agree. Therefore the adventure in the Ruhr.

It is comparatively easy from the detached standpoint of an American to exercise reason without any admixture of sentiment and to point out wherein the French adventure must almost inevitably fail. It is equally easy to consider it from the sentimental aspect only and to applaud the French for making a vigorous independent effort to overcome German duplicity and evasions. Neither attitude is quite correct, since both reason and sentiment are present in every really truthful conclusion. Most good Americans would be glad to see the French adventure successful, would not too minutely question its legality under the Treaty of Versailles, would waste little sympathy over the lamentations of Germany, if it should be proved that Germany had hidden resources which the advance disclosed. But what if the adventure fails, if it discloses only more fully the poverty of Germany? In this case it must minimize the possibility of collecting any reparations whatever by destroying German productive capacity at the very time that it intensifies and makes permanent the hatred of Germany for France.

The occupation of the Ruhr has united French opinion in support of the French Government in its policy of direct and independent action. It has equally united German opinion in the determination passively to resist further territorial invasion, and thus for the first time the German nation is almost solidly behind the government. The French believe that in the course of a few weeks German solidarity will crumble under the pressure of economic necessity. The Germans believe that after a few weeks the French will see the futility of their move, will find its cost prohibitive, will suffer through the cessation of reparation coal deliveries. They see two alternatives for France--retreat from an untenable position, or a further advance into unoccupied Germany, perhaps to Berlin or even to Koenigsberg. This possibility, galling as it would be to their pride, they foresee with equanimity because, in their opinion, it would mean a repetition of Napoleon's Moscow campaign. Passive resistance would make the maintenance of scattered bodies of troops so far from their bases quite out of the question.

In the meantime German economic conditions are going from bad to worse and reparation coal deliveries to Belgium and France have almost wholly ceased. Even if the miners of the Ruhr are willing to continue to work under French bayonets they will shortly be unable to work because of the coal that is piling up at the pit mouths. There is no use in mining coal which cannot be transported. If insufficient coal makes its way to unoccupied Germany there will be widespread unemployment and widespread suffering, with consequent dangers. The food supply is low and, with the utter crash of mark value, there seems little probability of replenishment from America or elsewhere. Thus, with hunger, cold and unemployment menacing the German people, the outcome is pregnant with possibilities of serious disaster--of disaster which would inevitably involve France as well as Germany.

Because chaotic conditions in Europe would profoundly affect the United States it would seem that the American Government should take some stand, at least through helpful suggestions and support of law and order. Without political involvement, it is said, the Government of the United States can at least act from humanitarian motives and in defense of its own interests. The criticism of the administration has been as violent as it would perhaps be justified were the bases of the criticism true. Those of us on the outside cannot possibly be cognizant of all the factors on which government policy is based and, for this reason, it would seem as though the press and the public should be willing to trust those in responsible positions to safeguard national interests. Yet in this case the sequence of facts, as the thin line of facts runs through the distortions of daily newspaper comment, makes the record clear.

In August there was proposed a conference to be held in Brussels to discuss the whole question of reparations as it affected the economic condition of the world. Whether the American Government would have participated in such a conference is hypothetical, as almost inevitably interallied debts would also have been under discussion and only Congress can deal with this question. Clearly, however, this conference would have afforded the best opportunity for a solution of the matter if it could have been inaugurated with good-will, and any counter suggestion from the United States would have been inopportune. Early in December a conference of Premiers was held in London. The Premiers could not agree on broad principles of reparation policy and adjourned, to meet later in Paris. The idea of a Brussels conference nevertheless was still in the air. Only when at the adjourned meeting in Paris in January the divergence of view was seen to be extreme was the plan of an economic conference definitely given up. When the Premiers themselves were unable to find even a basis of compromise it was clear that their appointed agents in conference assembled would have little chance of reaching a happy conclusion. Long before this adjourned meeting the Secretary of State had suggested to the French Government the idea of an expert commission to pass on German resources and make recommendations to the various governments, but France had ignored the suggestion. After the Premiers' Conference broke up on January 4 the world believed that the French planned to occupy the Ruhr, but Poincaré, as late as January 9, stated categorically to the French Chamber of Deputies that it was intended only to send in engineers and experts, that there was no thought of military occupation nor of permanent occupation of territory. The American Government could not protest against what the French Government denied, but it is inconceivable that France was not fully informed of American opinion in the matter.

Now the cry is for mediation. People forget that the League of Nations has already offered its good offices and been flatly refused. It certainly is not for the American Government to make a suggestion which would only irritate both France and Germany and which could, therefore, lead to no good result. Mediation is possible only when both parties to a dispute request it, and at present both France and Germany desire nothing except to be left alone--France because it believes that the direct action taken will be successful in bringing Germany to terms; Germany because it believes equally strongly that this same direct action will prove futile. An offer of mediation or the formal transmittal of a plan of settlement could have at the present time only the result of humiliating and weakening the influence of the government making the suggestion.

The Secretary of State is steering a wise, helpful and thoroughly patriotic course. He is not a man who is willing to be spectacular for the sake of applause. He is a man who is always ready to act when action is possible and stands a fair chance of being helpful. He is inevitably better informed than are his critics, both as to the extreme seriousness of the present European situation and as to the possibility of useful American intervention. His one aim must continue to be what the record shows it to have been in the past, an aim neither pro-German nor pro-French but only pro-American. And in a case of this sort the pro-American aim is the truly humanitarian aim, the resolve to be of service when America can really be of service, not to expend the possible influence of America in the making of useless gestures nor in promises which, from the nature of our Constitution, cannot be fulfilled. We may, some of us, deplore the fact that Congress did not back up the promises of President Wilson. But that is no reason why President Harding should make more promises which in all probability would not be endorsed by the legislative branch of the government. Europe needs American help. It is still resentful that America withdrew after the Peace Conference, but it is gradually coming to learn that the Administration means what it says because it speaks only when it can speak with full authority.

For its rehabilitation Germany needs American financial aid, but such aid is out of the question when Germany has no security to offer. France is almost equally in need of American financial aid, but this cannot be forthcoming until France settles down to a reasonable plan of rebuilding and financing, until French resources are expended in a constructive fashion, not wasted in armament. The Secretary of State knows all these things more fully than we. As Chief of the Department of Peace his constant aim is to bring about real peace between the nations. When the appropriate moment arrives he will bring into play constructively and effectively the great influence of this country.

You are reading a free article.

Subscribe to Foreign Affairs to get unlimited access.

  • Paywall-free reading of new articles and a century of archives
  • Unlock access to iOS/Android apps to save editions for offline reading
  • Six issues a year in print, online, and audio editions
Subscribe Now