NOBODY can read Hall Caine's beautiful last novel, "The Woman of Knockaloe," without being deeply touched by the wonderful simplicity and charm of this parable. The author, who was a passionate advocate of the Allied cause, shows us that the Great War has not only failed to kill war but has frightfully strengthened and inflamed the spirit of it, and that the after-war, which we call the Peace, has been more productive of evil passions than the war itself. That this is so can hardly be denied, although there may be different opinions as to the causes of this sad state of affairs. The writer of this article does not intend to deal with the past, because to do so necessarily involves inflaming passions still further. Whoever wishes to ascertain why the Peace of Versailles turned out to be a complete failure need only read Ray Stannard Baker's book, "Woodrow Wilson and World Settlement," where he will find all the authentic information he can possibly desire. Nobody can accuse Mr. Wilson or Mr. Hall Caine of being pro-German, and nevertheless they agree in regarding the present deplorable condition as the result of the Treaty of Versailles. The conclusion we have to draw from the past is that neither international welfare nor democracy can be built up on the old Roman principle of vae victis. And yet the United States went into the war to "make the world safe for democracy."

We must discard the past in order to find a remedy for the evils of the present. The urgent problem confronting all European statesmen is the pacification of the continent, an object which it is impossible to attain without first settling the reparation question. The reason why all attempts to bring about a permanent reparation settlement have failed is to be found in the simple fact that the problem is a universal one, and that it can only be solved by the coöperation of the whole world, whilst up to date the two most interested powers, France and Germany, have been left almost to themselves to find a solution. It is not too much to say that as long as France and Germany are left to their own devices the reparation question will never be settled. In that case the franc will go the way of the mark; misery will be universal on the European continent; and--inevitably--a new war will be brought about in the not distant future by national hatreds and the consequent growth of Bolshevism. France and Germany cannot by themselves come to an agreement on the reparation question; their mutual distrust, based on historical facts and national education, is too great to be overcome. The French believe that Germany is determined not to pay, and on the other hand there is not one German to be found who is not firmly convinced that France intends to remain forever in the German territory which she has occupied, partly in accordance with, and partly in violation of, the Treaty of Versailles. Germans cannot be blamed for taking this view, because whenever the French have reached the Rhine they have pressed on beyond it--in the Thirty Years' War and in the wars of Louis XIV, Louis XV and Napoleon I. These wars, too, were justified by invoking the principle of security. The French say that they will keep the German territories which they now occupy until the total debt has been paid off. To which the Germans naturally answer that they cannot pay as long as they are deprived of their chief resources. The occupation of the Ruhr Basin increased German distrust, because such an act seemed inexplicable if the French really desired Germany to pay reparations. It was as if a man who had a mortgage on a farm, and did not receive any interest, set fire to the farmhouse instead of trying to help the farmer improve his grounds.

Even if one considers the distrust unjustified on the one side or on the other, or even on both sides, the fact of the distrust certainly remains and makes a solution of the problem impossible unless a third party steps in. The dual problem is therefore: Who shall it be to intervene, and how shall he do it? This third party, let us remember, would have to be sufficiently powerful to furnish a guarantee on the one hand that Germany will pay, and on the other that France will evacuate the Rhine, the Ruhr and the Saar.

A first step has undoubtedly been taken in the right direction by the appointment of a commission to determine Germany's capacity to pay. However, Europe has been disappointed so often by the results of conferences and commissions that she does not yet see much reason for feeling too hopeful. The names and reputation of the delegates vouch for a very valuable report. But even the best suggestions are ineffective if they are thrown into the waste-paper basket, as was done with all former proposals made by experts. Many useful reports were made in a liberal and progressive spirit, but the leading statesmen of the victorious nations continued their policy of either doing nothing or doing the wrong thing, and the mark, acting as the barometer of the situation, continued to fall. Now by tremendous efforts and sacrifices on the part of the German Government and people the mark has been stabilized, and the franc has taken its place as a barometer. This development has had at least one good effect; it has exploded the theory that Germany has intentionally depreciated her currency. Does anybody pretend to say that France is depreciating her currency of her own free will for the purpose of bringing about a fictitious prosperity? The stabilization of the mark can not be maintained, however, if the expert commission does not succeed in ensuring the flotation of a small loan. About 400 million dollars will be necessary for the permanent stabilization of the mark, and if this sum is not forthcoming the process of inflation must necessarily begin again.

Germany is now taxed to her uttermost capacity. If the Government went further in this respect at the present moment capital would be entirely destroyed and there would be nothing left with which to build up German industries again. Such a procedure would lead to famine and a war between capital and labor, the results of which would be much worse than in Russia, because in Germany agriculture is not, as in Russia, predominant. Under such conditions, naturally, Germany could never pay any reparations.

The expert commission can only lead to a permanent settlement if its proposals are made the basis of a direct appeal to the public opinion of the world. European statesmen have let the matter drift in the wrong direction for such a long time that the expert commission cannot possibly come to any decision save that a moratorium must be granted Germany for several years. This would not have been necessary had a reasonable agreement on an international basis been reached four years ago. Obviously the commission will also come to the conclusion that Germany's capacity to pay is entirely dependent on her currency remaining stabilized. Therefore the small loan mentioned above will prove to be a conditio sine qua non for all further progress. This need not be an obstacle, however, as the sum involved is comparatively small,--so small that it can be provided by the banks without there arising any necessity for the different governments to be called in.

So far all may perhaps go well. Further progress depends entirely on the cooperation of the great powers, and that is a purely political question.

We now, therefore, approach the central problem. The author of this article has always advocated that Germany submit the whole question to the League of Nations. This has not been done because the former actions of the League have made Germans lose confidence in its impartiality, because it is very hard for a German Government to propose a solution which would certainly lead to foreign supervision and control of German finances, and last but not least because it is considered in Berlin that a solution through the League of Nations would be regarded with displeasure in America, and it is realized that no solution of the problem can be found without the assistance of the United States. Certainly these reasons are all very comprehensible, but they are not absolutely convincing. The League, indeed, has hardly ever yet shown justice to Germany. But the League is no super-government, as it should be and as some day it may be. It is simply an assembly of diplomats acting under instructions from their respective governments,--a kind of looking-glass in which the actual spirit of the world is reflected. The League is therefore no better or no worse than any other conference would be under present circumstances. What speaks for the League in this case is the fact that its machinery exists and is in working order, as the Austrian and Hungarian precedents have proved. If the German Government needs a second big loan for the purpose of paying reparations, and there seems to be no difference of opinion on this subject, an international financial control will be inevitable, as the money cannot be raised under any other conditions. There is really no reason, then, why the German Government should not apply to the League except that this move would at first be very unpopular in Germany. However, a statesman who wishes to save his country must brave public opinion. In this we have the example of Monsignor Seipel, who was at first violently attacked in his own country and is now universally considered a great statesman. If Germany will not appeal to the League of Nations, it is to be hoped that the new British Government will do so, or at least that it will call an international conference. The latter course might serve very nearly as well except for the fact that it would not work so quickly. In this case "time is money," if it ever was.

Probably the United States would prefer calling an international conference to using the existing machinery of the League of Nations, and this might force a decision in favor of the former course. There is this to be said, however, that America joined in the task of restoring Austria even though the League of Nations had taken this work in its hands. We have therefore a precedent, and precedents are of great importance in the political methods of the United States. Of course the two cases are not absolutely alike, as the restoration of Germany, which is identical with the restoration of Europe, is a far greater problem than the restoration of Austria, especially as no great nation opposed the latter, whilst France will do all in her power to prevent the internationalization of the German problem. But this resistance on the part of France must be overcome, because we are confronted by the dilemma of either having no solution at all or having an international solution. One cannot repeat this too often.

No European who knows the United States expects America to join actively in solving our troubles; but we hope for moral assistance in the spirit of Abraham Lincoln, who would never have permitted the destruction of a defeated nation, however great might have been his grievances. Victory was won in the war solely by the United States. Without American assistance the end would have been a draw, with all the advantages foreseen by Mr. Wilson in 1916. Nobody knows better than the writer of this article that the political mistakes of the military leaders of Germany drew the United States into the war, but the fact nevertheless remains that America alone won the war.

As the United States did not join the League it seems probable that the League will gradually turn more and more into a European institution. Agreement on the reparation question must naturally create a greater solidarity of the European interests. And some day the formation of the United States of Europe will prove inevitable, because Europe, under present conditions of mechanical development, is much too small for the old game of politics.

Besides moral assistance from the United States we hope for American participation in the international loan to Germany. Such action would not involve the United States politically, as the loan will be a very good business proposition once the reparation question is settled in accordance with international agreement.

Germany stands ready to do everything in her power to come to such an agreement, provided her territorial integrity and the unity of the nation is guaranteed by the League of Nations or by an international conference. Without such a guarantee no German Government would be strong enough to demand the necessary terrible sacrifices from the people. But if the Germans know that they are paying for the purpose of delivering their compatriots from foreign oppression they will bring forth sacrifices which will astonish the world. Unfriendly critics blame Germany on account of the spirit of reaction and revenge which is supposed to be rampant in the country. So far as it really exists, it is the result of the treatment which the territories occupied by France have suffered. Sublata causa tollitur effectus.

Germany realizes that France also desires guarantees. As far as the desired guarantees are connected with the inter-allied debts, Germany can do very little except pay a part, if not all, of the interest, although even this would be a violation of the preliminary treaty of peace signed by Mr. Lansing on November 5, 1919. It certainly would prove more beneficial if these claims were used by the United States for the purpose of obliging Europe to disarm. No government can be expected to cancel debts owing to it so long as the debtors have sufficient money for huge armaments for themselves and are even able to lend large sums to would-be great powers for the same purpose.

The French have reiterated over and over again their anxiety to secure a guarantee for the payment of the reparation debt and for security against a possible recurrence of war with Germany. A financial commission appointed by the League and composed of citizens of neutral states would in reality provide a far safer guarantee of payment than the continued seizure of German territory, which will become a drain upon French resources besides perpetuating the spirit of war and hatred. And from the point of view of security a Commission of Control would be equally effective, as it would be able to prevent any German Government from appropriating large sums of money for the re-arming of Germany. The idea of seeking security against Germany, the only country which has completely disarmed, seems rather ludicrous, considering that France is armed to the teeth and rules the whole continent of Europe with a rod of iron. However, the desire exists and must be satisfied somehow.

In reality there is only one way of preventing wars, and that is by promoting a real and sincere reconciliation between the nations. But France has had no leader like Abraham Lincoln, and so she has missed her great opportunity. This is the point where American moral influence is needed. The United States went into the war to make the world safe for democracy. But the after-war, which we call the Peace, has done everything possible to crush democracy in Germany and has created a worse militarism than has been known in Europe since the days of Napoleon I.

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