Paris 1919, p.27
PARIS 1919, page 27
Both Cunliffe and Sumner believed they should get as good a deal as possible for their own country, but they were prepared to compromise— and to take direction from their prime minister. “We ought to act here like statesmen,” Sumner told his colleagues on the reparations commission, when he argued against piling on the costs. Both would have gone for a fixed amount in the treaty, and a lower figure, if Lloyd George had told them to do so. Why did he not? His vacillation damaged his reputation and caused much trouble with his colleagues in Paris. “I wish,” said Lamont, the American expert, “Mr. Lloyd George could tell us just what he finally wants, so that we could determine whether his ideas, and the President’s as we understand them to be, are in reality far apart or close together.” By exasperating the Americans, from Wilson on down, Lloyd George was putting at risk a relationship he considered of supreme importance. The problem was that he was not sure himself what he, or the British public, wanted. 22
There was a side of him that wanted to see Germany punished. At his moral core—and he had one, despite what his enemies said—Lloyd George deplored war, and Germany had unleashed the worst one the world had ever seen. He also saw the issue as a lawyer. “By every principle of justice,” he told the British empire delegation, “by the principles of justice which were recognized as applicable between individuals, the Germans were liable for the whole of the damages and the cost of recovering them.” Since he was acting, in a sense, for Britain, he had to make sure that Germany’s other creditors did not inflate their claims. “That is an old device when claiming against a bankrupt estate.”23
He was also, however, a statesman. He had been chancellor of the exchequer before the war, and he understood finance and trade. He knew that sooner or later the British would have to sell their goods to the Germans again. He did not want to destroy Germany. At the beginning of March, while the president was still in the United States, Lloyd George discussed reparations with House over lunch. He needed to provide, he told the American, “a plausible reason to his people for having fooled them about the question of war costs, reparations and what not. He admitted that he knew Germany could not pay anything like the indemnity which the British and French demanded.” Wilson, when he heard this on his return, was unsympathetic. He urged Lloyd George to resist demands for high reparations. “Nothing would be finer,” he said, “than to be put out of office during a crisis of this kind for doing what was right.” Lloyd George would have the consolation of knowing that posterity would think well of him. “I could not wish,” Wilson told him, “a more magnificent place in history.”24
Lloyd George did not take this noble, and barren, way out. He was a politician, obliged to weigh what was just against what was practical. He also had to function in a world where the democratic voice of the people had to be heeded. The pressures on him in Paris were considerable. Parts of the liberal press were starting to talk of reconciliation, but the conservative papers were loudly demanding large reparations. Northcliffe had taken it upon himself to keep Lloyd George up to the mark. The press baron hinted darkly to the editors of the Daily Mail and The Times that the prime minister was under the sway of pro-German forces.25
Lloyd George also found himself hemmed in, to a certain extent, by the December 1918 election. Promises to squeeze Germany hard—in one memorable phrase, “until the pips squeaked”—went over very well. He had produced ever larger notional bills for Germany. “We will,” he said, “search their pockets for it.” The last coalition manifesto before the vote stated simply: “1. Punish the Kaiser 2. Make Germany pay.” Many of the Conservatives who were elected in the resulting landslide were new to politics. “Hard-faced men who look as if they had done very well out of the war,” in the words of a leading Conservative, they saw their mission primarily as making the German pips squeak. In April, as he was arguing with Wilson, Lloyd George received a telegram signed by 370 members of Parliament asking him to remain true to his election speeches and “present the bill in full.” He rushed back to London and on April 16 demolished his critics with a tremendous speech in the House of Commons. He had no intention, he told his audience, of breaking his promises. They must not listen to an embittered, madly vain man—here he tapped his forehead significantly—but must trust to the world’s statesmen to do the best for humanity and peace. He left to loud cheers. Back in Paris he told the faithful Frances Stevenson that he had won “complete mastery of the House, while telling them absolutely nothing about the peace conference.”26
Pressure came as well from the empire. While the Canadians, as on much else, took the American position, the Australians were for getting the maximum from Germany. Hughes loathed the Germans, whom he, like most of his compatriots, had long seen as the chief threat to Australia, and he thought the American objection to high reparations unprincipled and self-serving. As he told Lloyd George, a neutral United States had made great profits in the early stages of the war, while the British empire poured out its blood and treasure. Without a huge settlement from Germany, Britain would lose in the coming competition with the United States for world economic supremacy.27
Lloyd George’s handling of the reparations issue was actually more successful than it appeared. By persuading Wilson to include pensions in reparations, he increased Britain’s share. By not mentioning a fixed sum in the treaty (for which there were sound technical reasons), he managed to keep public opinion at home and in the empire happy. (The impact on German opinion was another matter.) He also took out insurance of another sort when he privately urged a prominent European socialist to whip up a public outcry against treating Germany too harshly.28 Finally, he managed to cast the French as the greedy ones, a role they have generally played ever since, with Louis-Lucien Klotz, the minister of finance, as chief villain.
Klotz, described by Clemenceau as “the only Jew I knew who knew nothing of finance,” is supposed to have said in answer to all questions about France’s future, “Germany will pay.” (In fact, he warned that German reparations should not be expected to pay for everything.) Clemenceau treated him contemptuously, as he did so many of his colleagues. Lloyd George found him merciless: “His mind and heart were so stuffed with bonds that he had no room left for the humanities.” Even Wilson was moved to a little joke about Klotz on the brain. Keynes has left a characteristically cruel sketch: “a short, plump, heavy-moustached Jew, well groomed, well kept, but with an unsteady, roving eye, and his shoulders a little bent in an instinctive deprecation” who tried to hold up food shipments to a starving Germany. Whatever Klotz did, though, he did as Clemenceau’s subordinate. If Klotz stood publicly for high reparations, that kept the French right from attacking Clemenceau for not being tough enough on Germany. In private, Clemenceau admitted that France would never get what it hoped for and he sent Louis Loucheur, his most trusted economic adviser, to talk to the Americans in confidence about more moderate terms. In their conversations, Loucheur made it clear that he personally saw no long-term advantage for France in driving Germany into bankruptcy.29
Like Lloyd George, Clemenceau had to worry about public opinion. Most French took a straightforward view. Germany had invaded Belgium, violating its own solemn undertaking to protect its neutrality, and France, not the other way around. And almost all the fighting had been on Belgian and French soil. “Who Ought to Be Ruined?” asked a headline in the conservative Le Matin, “France or Germany?” 30 Surely the aggressor and not the victim should pay for setting the damage right. The Americans might talk of the new diplomacy without indemnities or fines, but the old traditions where the loser customarily paid still ran strong. France had paid up in 1815, when Napoleon was finally defeated, and it had done so again after 1871. Both times Germany had collected; now it was going to pay out.
France, and Belgium, had argued from the start that claims for direct damage should receive priority in any distribution of reparations. Belgium had been picked clean. In the heavily industrialized north of France, the Germans had shipped out what they wanted for their own use and destroyed much of the rest. Even as German forces were retreating in 1918, they found time to blow up France’s most important coal mines. As Clemenceau said bitterly: “The barbarians of whom history spoke took all that they found in the territories invaded by them, but destroyed nothing; they settled down to share the common existence. Now, however, the enemy had systematically destroyed everything that came in his way.” Judging by captured German documents, it looked as though the Germans intended to cripple French industry and leave a clear field for their own.31
France and Belgium had hoped to include war costs in the final tally of reparations. Here Belgium, for once, was on firm ground: Wilson had made it clear that when he talked of Belgian restoration he meant all the harm done by Germany’s initial, and illegal, invasion in August 1914. The French case was weaker. Clemenceau, who did not want to antagonize the Americans when he needed their support on the other issues so crucial to France’s security, chose not to push this. He realized, although he did not say so publicly, that there was a limit to how much Germany could pay. Klotz admitted to the Foreign Affairs Commission of the French Chamber of Deputies that war costs would have produced a figure that even novelists in their wildest dreams would not come up with.32
The French also realized that, since Britain had spent more on the war than France, including war costs would boost the British share of whatever the Germans finally paid. The French quietly changed tack, arguing that only direct damages—for their destroyed towns and villages, their flooded coal mines, their torn-up railway lines—should be included. That would give France about 70 percent of all German payments, Britain perhaps 20 percent and other claimants—Belgium, Italy, Serbia—whatever was left. After intense bargaining, the British insisted on 30 percent, with the French getting 50 percent and the remaining 20 percent shared out among the smaller powers. It took until 1920 to get a final agreement on 28 percent for Britain and 52 percent for France.33
The French, it should be noticed, made the greatest concession. They were to follow a similar pattern on the total figure to be paid by Germany. Clemenceau, who always thought in terms of the overall settlement, may have set a high figure early on partly to persuade the Americans to consider the French proposals for continued Allied economic cooperation. At the end of February, when it was clear that the Americans were not interested, Loucheur came down to £8 billion ($40 billion), just over a quarter of what France had been demanding. Cunliffe, representing Britain, refused to go any lower than £9.4 billion ($47 billion). The British suspected that the French were siding with the Americans on a lower figure and leaving them to appear the most demanding. The picture painted so vividly by Keynes and others of a vindictive France, intent on grinding Germany down, begins to dissolve.34
In the end, mainly because of British resistance, it proved impossible to agree on a figure for the treaty. At the end of March the Allied leaders, now meeting as the Council of Four, decided on the alternative of the special commission. The postponement, one of the American experts wrote in his diary, “will relieve Great Britain and France from their troubles of making public the small amount they are to get from reparations because both Prime Ministers believe their government will be overthrown if the facts are known.” He was right. By the time the commission set a final total of 132 billion gold marks (approximately £6.5 billion, or $34 billion) in 1921, emotions about Germany, especially in Britain, were cooling off.35
The German delegation that came to Versailles in May complained bitterly about the decision not to announce the final figures of the reparations until after the treaty had been signed. “No limit is fixed save the capacity of the German people for payment, determined not by their standard of life but solely by their capacity to meet the demands of their enemies by their labour. The German people would thus be condemned to perpetual slave labour.” The emotion, given the general dismay over the terms, is understandable; the interpretation, however, unduly pessimistic. The special commission on reparations had to take into account Germany’s capacity to pay; it also had to consult the Germans themselves. Furthermore, the categories of damage for which reparations were to be paid were specifically limited; not enough, perhaps, since they included pensions, but they were certainly not open-ended. 36
Starting the section in the treaty on reparations were two articles— Articles 231 and 232—that came to be the object of particular loathing in Germany and the cause of uneasy consciences among the Allies. Article 231 assigned responsibility to Germany and its allies for all the damage caused by the war. Article 232 then restricted what was an unlimited liability by saying that since Germany’s resources were in fact limited, it should be asked to pay only for the specified damages. The first clause—the war guilt clause, as it later came to be known—had been put in after much debate and many revisions, primarily to satisfy the British and the French that Germany’s legal liability was clearly established. The Americans helpfully put one of their clever young lawyers on to it. John Foster Dulles, the future secretary of state, thought he had both established the liability and successfully limited it and that, on the whole, the treaty was pretty fair. The European Allies were happy with his formulation. Lloyd George, always sensitive to political considerations, said, “The English public, like the French public, thinks the Germans must above all acknowledge their obligation to compensate us for all the consequences of their aggression. When this is done we will come to the question of Germany’s capacity to pay; we all think she will be unable to pay more than this document requires of her.” If the Germans balked at paying a particular category of damages, Loucheur thought, the Allies could always threaten them with an unlimited claim. No one thought there would be any difficulty over the clauses themselves. 37
16
Deadlock Over the German Terms
REPARATIONS HAD STILL not been settled when Wilson arrived back in Paris on March 14—and neither had the Rhineland. The president had a quick private meeting with Lloyd George, who suggested that some sort of military guarantee, plus of course his beloved Channel tunnel, might satisfy the French. The two decided to offer to come to France’s aid if Germany attacked. In return, France would have to drop its plans for a separate Rhine state. Clemenceau could be brought round, Wilson thought: “When you have hooked him, you first draw in a little, then give liberty to the line, then draw him back, finally wear him out, break him down, and land him.” 1
That afternoon Clemenceau joined the two men at the Crillon. He talked again of France’s sufferings, its fears for the future, its need for Germany to stop at the Rhine. Lloyd George and Wilson produced their proposal. Clemenceau was delighted but asked for time to think it over. For two days Clemenceau and his closest advisers, including his foreign minister, Pichon, and Tardieu, mulled over the new proposal. He did not bother to consult his cabinet or Poincaré. Tardieu conceded that they would be criminal to turn it down, but there was still a problem: “A French Government satisfied with only this and nothing more would be equally guilty.” France, said the official reply on March 18, needed other guarantees: an Allied occupation of the Rhineland and the bridgeheads for at least five years; no German troops there and none within fifty miles of the east bank of the river. Wilson was greatly irritated. Talking to the French was like handling a rubber ball: “You tried to make an impression but as soon as you moved your finger the ball was as round as ever.” Even Balfour was moved from his customary calm. France, he told Lloyd George, would be better off working for a strong international system, “the very possibility of which many of them regard with ill-concealed derision.” Without that, “no manipulation of the Rhine frontier is going to make France anything more than a second-rate Power, trembling at the nod of its great neighbours on the East, and depending from day to day on the changes and chances of a shifting diplomacy and uncertain alliances.” 2
The next month saw memoranda and notes hurtling back and forth as the French tried to surround the Anglo-American guarantee with additional provisions. Day after day Clemenceau and his colleagues buttonholed the British and the Americans with new proposals: to enlarge the demilitarized zone on the east bank, to set up a commission of inspection with sweeping powers, or to give France the right to occupy the Rhineland if Germany violated any of the other provisions of the peace treaty, from disarmament to reparations payments.3
And they renewed their demand for the Saar, where the southwestern edge of the Rhineland met Alsace-Lorraine. What had been a quiet farming country with beautiful river valleys had become a major coal mining and manufacturing area in the nineteenth century. In 1919, when coal supplied almost all of Europe’s fuel needs, that made the region very valuable. Inconveniently for France, almost all of the Saar’s 650,000 inhabitants were German. The French tried historical arguments: the town of Saarlouis had been built by Louis XIV, the region had briefly been owned by the French during the French Revolution and the borders of 1814 gave most of it to France. “You base your claim,” Wilson told Clemenceau, “on what took place a hundred and four years ago. We cannot readjust Europe on the basis of conditions that existed in such a remote period.” The French did better when they spoke of reparations. Wilson had talked in his Fourteen Points about restitution to France for the damage done by Germany, and everyone agreed that the Germans had deliberately destroyed France’s coalfields. The British and the American experts, who had been working privately together since February, advised that France should control the Saar’s coal. The French held out for outright annexation. 4
