CHAPTER XLIII THE REPARATION SETTLEMENTS: HOW SHOULD THE N O ONE, at the beginning of the Peace Conference, could have visualized the immense difficulties that were to hedge about the problem of Reparations on every side. It seemed comparatively simple to demand that Germany repair the damage caused by the war, but we have seen, in the last chapter, how impossible it was to fix upon the amount Germany should be required to pay. If this primary problem proved insoluble, the other two great issues connected with Reparations were scarcely less difficult. Here was an immense sum-the very vagueness of which made it seem more stupendous-to be recovered from the enemy. How was it to be divided among the various allies? Great as was the sum demanded it would not begin to satisfy the great Powers; and yet here were smaller allied states, each holding up its bowl and piping shrilly to be served. Who should be paid first, and who should wait? And, finally, in what form was this great debt to be paid without endangering the entire economic and financial structure of the world? The smaller powers at Paris were always hard to satisfy, and in no realm harder than in that of Reparation. Belgium, for example, had ideas of what she should receive that varied widely, to say the least, from what France and Great Britain thought she should receive. The great Allies were also acutely aware of the difference it would make to them if the Italians, Serbs, and Rumanians, who had been at war chiefly with Austria-Hungary, could be required to look only to the old empire of the Hapsburgs for their reparations and excluded from any part of the German payments. But this did not satisfy these other states in the least; they had fought and suffered great losses in the war, and knew well that the bankrupt and ruined Austro-Hungarian Empire could pay nothing of any account. Never was there such diplomatic jockeying, such keen efforts at combinations, such intrigue, as over these tangled questions. The French were, frankly, for excluding or limiting the extent to which these claims of Italy and the eastern Allies could be made good against Germany. Here the presence of Italy's able representative, Crespi, on the special committee of the Conference, counted heavily. With invincible logic and ingenious precision of detail he argued for the principle of "joint and several liability” -that the war was a common enterprise on both sides, that each enemy state shared equally in responsibility for the damage done by all, and that whatever each could pay was equally applicable to reparation anywhere. The American advisers, who, beyond any other, could take a detached and disinterested view, saw the reasonableness of Crespi's position and favoured his contention.' It came up for hot discussion during the Dark Period and was provisionally decided in favour of the Italians on April 23, partly no doubt to keep the Italians from break 'See Baruch, "The Making of the Reparation and Economic Sections of the Treaty," pp. 35, 36. ing away entirely from the Peace Conference upon the issue of Fiume, which was then at its very climax. Under this arrangement Italy was to share jointly with other allies in damage payments for "all operations of war by the two groups of belligerents wherever arising." But after the Italians departed from Paris (April 24) in a blaze of protest, although they frugally left behind Crespi and his staff of economic advisers, the French immediately demanded that the Council of Three reverse this decision. M. Klotz, the French Minister of Finance, put the reasons quite baldly: If joint liability was admitted, Italy might be in a position to claim the total of the damage inflicted upon her against Germany. If this was accepted without qualification, it would reduce what France and Great Britain could obtain for reparation.1 Indeed, the other allies had some reason to be apprehensive regarding the Italian claims which were in the beginning no less than nine billion dollars-nearly as much as some of the British and American experts had estimated as the total amount Germany could possibly pay. Throughout the Conference Italy injured her case by greedily demanding too much! And now that the Italians were out of sight and hearing Klotz proposed a clever new plan that would quite effectively cut them and certain small states out of any considerable share; that is, that claims should be permitted against Germany only in proportion to the part that German forces had actually taken in operations against the claimant. Of course German troops were little employed against Italy, and therefore Italy could claim little! The French were so determined, and the feeling against the Italians for their withdrawal from the Con'Secret Minutes, Council of Four, April 30. ference was so strong, that on May 1 a statement was signed by the three Heads of States agreeing to this proposal. But having taken this action the problem of how the bitter pill was to be administered to the Italians—who were not only an allied state, but were capable of making much trouble-was a most difficult one. Lloyd George especially began to have a troubled conscience. He said: Mr. LLOYD GEORGE said he had not been feeling comfortable about the decision on the subject of joint and several responsibility which had been taken in the absence of Italy, though it was to the detriment of Italian interests. He thought undoubtedly that both France and Great Britain would make a good deal out of this decision at Italian expense: France twice as much as Great Britain; and the decision had been taken the moment the Italians left. He decision looked rather like sharp practice.1 thought the When the decision was made known to Crespi he protested bitterly and strongly (May 6). Inasmuch as the Italians had now decided to return and be present when the Treaty was handed to the Germans (May 7) the French suddenly and rather inexplicably swung around and suggested restoring the original agreement; and Lloyd George and Wilson assented. The agreement of May 1 was discarded and the principle of "joint and several liability" was adopted as the permanent method of division. One other delicate problem of distribution arose: who should be paid first? All the negotiations being in the private hands of the four great Powers, the little fellows could not know what was going on. But they always suspected the very 'Secret Minutes, Council of Four, May 2. worst! And of all of them Belgium was at once the shrewdest guesser and the most suspicious. The handsome king of the Belgians came flying down to Paris one afternoon and precipitated, at a moment most critical for the Four, the whole problem of the Belgian demands. The Belgians were not bashful: they had been hurt first and wanted pay first. Just at the moment when the Italians were leaving and the Japanese question was at its worst the Belgians put down before Clemenceau six demands of the most sweeping nature. They wanted full pay for war costs, as indeed they had been promised at the Armistice, though the contrary principle had long before been established regarding other nations. But above all they wanted their pay ahead of any one else: a prior lien on half a billion dollars out of the first cash receipts from Germany and a complete settlement within ten years. M. Hymans, the Belgian delegate, argued all this before the Four on April 29 in the most peremptory manner, even implying that his government might withdraw from the Conference. Little was said at the time of this critical subject; but coming when the Council was so near disruption over the Italian and the Japanese settlements it was most serious. Lloyd George appealed to Hymans not to force the Conference to violate the general principle adopted in order to favour Belgium and the discussion became acrimonious. Compromise offers were rebuffed and the wrangling continued for several days. Lloyd George was peculiarly bitter regarding the whole Belgian case. "He would not accept any specially favourable system for the Belgians." He said on May 2: "Belgium was a very near neighbour and the greatest competitor of Scotland, which had an enormous debt." |