Full Text Archive logoFull Text Archive — Free Classic E-books

Peaceless Europe by Francesco Saverio Nitti

Part 4 out of 5

Adobe PDF icon
Download this document as a .pdf
File size: 0.5 MB
What's this? light bulb idea Many people prefer to read off-line or to print out text and read from the real printed page. Others want to carry documents around with them on their mobile phones and read while they are on the move. We have created .pdf files of all out documents to accommodate all these groups of people. We recommend that you download .pdfs onto your mobile phone when it is connected to a WiFi connection for reading off-line.

formality. The commission can effect all the changes deemed necessary
in the German laws and regulations, as well as all the sanctions,
whether of a financial, economic or military nature arising from
established violations of the clauses put under its control. And
Germany is obliged not to consider these "sanctions" as hostile acts.

In order to guarantee the payments an inter-allied army--in reality
a Franco-Belgian army--occupies the left bank of the Rhine, and is
stationed at the bridgeheads. Germany is completely helpless, and has
lost all the features of a sovereign State inasmuch as she is subject
to "controls" in a way that Turkey never was. In modern history we can
find no parallel for this state of things. These are conditions
which alter the very bases of civilization and the relations between
peoples. Such procedure has been unknown in Europe for centuries.
The public has become accustomed in certain countries to consider
responsible for the War not the government that wished it or the
German people, but the future generations. Thus the indemnities are
to be paid--were such conditions possible--in thirty years and for at
least twenty years afterwards by people still unborn at the time of
the War. This cursing of the guilty people has no parallel in modern
history. We must go back to the early ages of humanity to find
anything of the kind.

But even the most inhuman policies, such as Germany has never adopted
in her victories, although she has been accused of every cruelty, can
find at least some justification if they had a useful effect on the
country which has wished and accepts responsibility for them. The
conqueror has his rights. Julius Caesar killed millions of Germans
and retarded perhaps for some centuries the invasion of Rome. But
the practices established by the Treaty of Versailles are in effect
equally harmful to victors and vanquished, though maybe in unequal
measure, and in any case prepare the dissolution of Europe.

I had my share in arranging at San Remo the Spa Conference, in the
hope and with the desire of discussing frankly with the Germans what
sum they could pay by way of indemnity without upsetting their economy
and damaging severely that of the Allies. But the ministerial crisis
which took place in June, 1920, prevented me from participating at
the Spa Conference; and the profitable action which Great Britain had
agreed to initiate in the common interest, ours as well as France's,
could not be proceeded with. The old mistakes continued to be
repeated, though many attenuations have come about and the truth
begins to appear even for those most responsible for past errors.

We shall have to examine with all fair-mindedness if Germany is in
a position to pay in whole or in part the indemnity established or
rather resulting from the treaty. France especially believes, or has
said on several occasions she believes, that Germany can pay without
difficulty 350 milliards.

After many stupidities and many exaggerations which have helped
considerably to confuse the public, in face of the new difficulties
which have arisen, new arrangements for the payment of the indemnity
have been established. On May 11, in face of the situation which had
arisen, the Allies proposed and Germany accepted a fresh scheme for
the payment of the reparations. Germany is constrained to pay every
year in cash and in kind the equivalent of 500 million dollars, plus
26 per cent. of the total of her exports.

The rest of the accord refers to the procedure for the issue of
bonds guaranteed on the indicated payments, to the constitution of a
guarantee committee, and to the date of payment. Probably Germany will
have been able to get through the year 1921 without insurmountable

At Spa, on April 27, 1921, the proportionate sums assessed for each of
the conquering powers were established on a total indemnity notably
reduced in comparison with the earlier absurd demands.

But leaving alone the idea of an indemnity of 250, 150, or even 100
milliards of gold marks, it will be well to see in a concrete form
what Germany can be made to pay, and whether the useless and elaborate
structure of the Reparations Commission which, with its powers of
regulating the internal life of Germany for thirty years or more,
ought not to be substituted by a simpler formula more in sympathy with
civilized notions.

Shortly before the War, according to successive statistics, the
private wealth of France did not amount to more than 250 milliards.

The wealth of France, according to successive valuations, was
calculated at 208 milliards of francs in 1905 (de Foville), at 214
milliards in 1908 (Turquan), at about 250 milliards according to other
authors. The wealth of Belgium, according to official statistics
published by the Belgian Ministry of Finance in 1913, amounted to
rather less than 30 milliards of francs. The estimate is perhaps a
trifle low. But this official figure must not be considered as being
a long way from the truth. At certain moments Belgium's demands have
surpassed even the total of her national wealth, while the damages
have not been more than some milliards.

The value of the land in France was calculated before the War at
between 62 and 78 milliards; the value of the buildings, according
to _l'Annuaire Statistique de la France_, at 59-1/2 milliards. The
territory occupied by the Germans is not more than a tenth of the
national territory. Even taking into consideration the loss of
industrial buildings it is very difficult to arrive at the figure of
15 milliards. At the same time it is true that the Minister Loucheur
declared on February 17, 1919, in the French Chamber that the
reconstruction of the devastated regions in France required 75
milliards--that is, very much more than double the private wealth of
all the inhabitants of all the occupied regions.

In all the demands for compensation of the various States we have seen
not so much a real and precise estimate of the damages as a kind of
fixing of credit in the largest measure possible in order that in the
successive reductions each State should still have proportionally an
advantageous position.

Making his calculation with a generosity which I assert to be
excessive (and I assert this as a result of an accurate study of
the question, which perhaps I may have occasion to publish), Keynes
maintains that the damages for which Germany should be made to pay
come to 53 milliards for all losses on land and sea and for the
effects of aerial bombardments--53 milliards of francs all told,
including the damages of France, Great Britain, Italy, Belgium,
Serbia, etc.! I do not believe that the damages reach 40 milliards of
gold marks, unless, of course, we calculate in them the pensions and

But these figures have but small interest, since the demands have been
almost entirely purely arbitrary.

What we must see is if Germany can pay, and if, with a regime of
restrictions and violence, she can hand over, not the many milliards
which have been announced and which have been a deplorable speculation
on the ignorance of the public, but a considerable sum, such as is
that which many folk still delude themselves it is possible to have.

Germany has already consigned all her transferable wealth; the gold in
her banks, her colonies, her commercial fleet, a large and even the
best part of her railway material, her submarine cables, her foreign
credits, the property of her private citizens in the victorious
countries, etc. Everything that could be handed over, even in
opposition to the rights of nations as such are known in modern
civilized States, Germany has given. She has also hypothecated all her
national goods. What can she give now?

Germany can pay in three ways only:

1. Merchandise and food products on account of the indemnity: coal,
machines, chemical products, etc.

2. Credits abroad coming from the sale of merchandise. If Germany
exports, that is sells eight milliard marks' worth of goods abroad,
she pays two milliards to the Reparations Commission.

3. Property of private citizens. Germany can enslave herself, ceding
the property of her private citizens to foreign States or citizens to
be disposed of as they wish.

Excluding this last form, which would constitute slavery pure and
simple, as useless, as impossible, and calculated to parallel the
methods in use among barbarous peoples, there only remain the first
two methods of payment which we will examine briefly.

It must be remembered that Germany, even before the War, was in
difficulties for insufficient avenues of development, given the
restricted nature of her territory and the exuberance of her
population. Her territory, smaller than that of France and much less
fertile, must now nourish a population which stands to that of France
as three to two.

If we have had gigantic war losses, Germany, who fought on all the
fronts, has had losses certainly not inferior to ours. She too has
had, in larger or smaller proportion, her dead and her mutilated.
She has known the most atrocious sufferings from hunger. Thus her
productive power is much diminished, not only on account of the grave
difficulties in which her people find themselves (and the development
of tuberculosis is a terrible index), but also for the lowered
productive capacity of her working classes.

The statistics published by the Office of Public Health of the Empire
(_Reichsgesundheitsamt_) and those given in England by Professor
Starling and laid before the British Parliament, leave no doubt in the

Germany has had more than 1,800,000 dead and many more than 4,000,000
of wounded. She has her mass of orphans, widows and invalids. Taken
altogether the structure of her people has become much worse.

What constituted the great productive force of the German people was
not only its capacity to work, but the industrial organization which
she had created with fifty years of effort at home and abroad with
many sacrifices. Now Germany has not only lost 8 per cent. of her
population, but _25_ per cent. of her territory, from which cereals
and potatoes were produced, and 10 to 12 per cent. of her live stock,
etc. We have already seen the enormous losses sustained by Germany in
coal, iron and potash.

The most intelligent and able working classes, created by the
most patient efforts, have been reduced to the state of becoming
revolutionary elements. By taking away from Germany at a stroke her
mercantile marine, about 60,000 sailors have been thrown on the
streets and their skill made useless.

Germany, therefore, impoverished in her agricultural territory,
deprived of a good part of her raw materials, with a population
weakened in its productive qualities, has lost a good part of her
productive capacity because all her organization abroad has been
broken, and everything which served as a means of exchange of
products, such as her mercantile fleet, has been destroyed. Moreover,
Germany encounters everywhere obstacles and diffidence. Impeded from
developing herself on the seas, held up to ridicule by the absurd
corridor of Danzig, whereby there is a Polish State in German
territory, she cannot help seeking life and raw materials in Russia.

In these conditions she must not only nourish her vast population, not
only produce sufficient to prevent her from falling into misery,
but must also pay an indemnity which fertile fantasies have made a
deceived Europe believe should amount even to 350 milliards of gold
marks, and which even now is supposed by seemingly reasonable people
to be able to surpass easily the sum of a hundred milliards.

Could France or Italy, by any kind of sacrifice, have paid any
indemnities after ending the War? Germany has not only to live and
make reparation, but to maintain an inter-allied army of occupation
and the heavy machinery of the Reparations Commission, and must
prepare to pay an indemnity for thirty years. France and Italy have
preserved their colonies (Italy's do not amount to much), their
mercantile fleets (which have much increased), their foreign
organization. Germany, without any of these things, is to find herself
able to pay an indemnity which a brazen-faced and ignorant Press
deceived the public into believing could amount to twenty or
twenty-five milliards a year.

Taking by chance Helferich's book, which valued the annual
capitalization at ten milliards, the difference between an annual
production of forty-three milliards and a consumption of thirty-three
milliards, inexpert persons have said that Germany can pay without
difficulty ten milliards, plus a premium on her exports, plus a
sufficient quantity of goods and products.

One becomes humiliated when one sees newspapers of serious reputation
and politicians deemed not to be unimportant reasoning in language so

The estimates of private wealth, about which the economists make
experiments, and on which I myself have written much in the past, have
a relative value. It may be argued that before the War the total of
all private patrimony in Germany surpassed but by little three hundred
milliards of marks; and this is a valuation made upon generous

But when it is said that the annual capitalization of Germany was
ten milliards, that is not to say that ten milliards of capital is
deposited in the banks ready to be transferred at will. Capitalization
means the creation of instruments of production. The national capital
increases in proportion as these are increased. Therefore the best way
of examining the annual capitalization of a country is to see how many
new industries have arisen, to what extent the old ones have been
improved, what improvements have been introduced into agriculture,
what new investments have been made, etc.

If the capitalization of Germany before the War was scarcely ten
milliards of marks, it was too small for an Empire of some 67,000,000
persons. I believe that in reality it was larger. But even if it came
to fifteen milliards, it represented a very small figure.

The population in the progressive countries augments every year. In
Germany, before the War, in the period 1908-1913, the population
increased on an average by 843,000 persons a year, the difference
between the people born alive and the dead. In other words, the annual
increase of the population per annum was at the rate of 13.0 per

As in certain districts of Italy the peasants plant a row of trees on
the birth of every son, so among nations it is necessary to increase
the national wealth at least in proportion to the newly arrived.
Supposing that the private wealth of the German citizens was from 300
to 350 milliards of marks (an exaggeration, doubtless), it would mean
that the wealth increased each year by a thirteenth part or rather
more. The difference between the increase in population and the
increase in wealth constituted the effective increase in wealth, but
always in a form not capable of being immediately handled. To plant
trees, build workshops, utilize water-power: all this stands for the
output of so much force. One may undertake such works or not, but in
any case the result cannot immediately be given to the enemy.

This is so obvious as to be banal.

To seek to propagate the idea that Germany can give that which
constitutes her annual capitalization either wholly or in great part
is an example of extreme ignorance of economic facts.

It is positively painful to listen to certain types of argument.

A French Minister has said that the success of the war loans for 151
milliards in Germany, and the increase of bank deposits for a sum of
28 milliards, coinciding with an increase of capital of 45 milliards
in limited companies, demonstrate that Germany has saved at least 180
milliards in four years. Leaving aside the exactness of these figures,
it is really sad to observe reasoning of this type. How can the public
have an idea of the reality?

Let us apply the same reasoning to France. We must say that inasmuch
as France before the War had a public debt of 32 milliards, and now
has a debt of 265 milliards, without calculating what she owes to
Great Britain and the United States, France, by reason of the War, has
immensely enriched herself, since, leaving aside the debt contracted
abroad and the previous debt, she has saved during the War 200
milliards, quite apart from the increase in bank deposits and the
increase in capital of limited companies. The War has therefore
immensely enriched her. In reality we are face to face with one of the
phenomena of the intoxication brought about by paper money, by means
of which it has been possible at certain times for the public to
believe that the War had increased wealth. Other features of this
phenomenon we have in the wretched example of the capitalist classes,
after which it was not unnatural that the people should give way to
a great increase in consumption, should demand high wages and offer
little work in return at the very time when it was most necessary
to work more and consume less. There is small cause for wonder that
certain erroneous ideas are diffused among the public when they have
their being in those very sophisms according to which the indemnity to
be paid by the beaten enemy will pay all the debts and losses of the
conquering nations.

We are told that Germany, being responsible for the War, must impose
on herself a regime of restrictions and organize herself as an
exporting nation for the payment of the reparation debts.

Here again the question can be considered in two ways, according as
it is proposed to allow Germany a free commerce or to impose on her a
series of forced cessions of goods in payment of the reparations. Both
hypotheses can be entertained, but both, as we shall see, lead to
economic disorder in the conquering States, if these relations are to
be regulated by violence.

It is useless to dilate on the other aphorisms, or rather sophisms,
which were seriously discussed at the Paris Conference, and which had
even the honour of being sustained by the technical experts:

1. That it is not important to know what Germany can pay, but it is
sufficient to know what she ought to pay.

2. That no one can foresee what immense resources Germany will develop
within thirty or forty years, and what Germany will not be able to pay
will be paid by the Allies.

3. That Germany, under the stimulus of a military occupation, will
increase her production in an unheard-of manner.

4. The obligation arising from the treaty is an absolute one; the
capacity to pay can only be taken into consideration to establish the
number and amount of the annual payments; the total must in any case
be paid within thirty years or more.

5. _Elle ou nous_. Germany must pay; if she doesn't the Allies must
pay. It is not necessary that Germany free herself by a certain date;
it is only necessary that she pay all.

6. Germany has not to discuss, only to pay. Let time illustrate what
is at present unforeseeable, etc. etc.

If we exclude the third means of payment Germany has two ways open to
her. First of all she can give goods. What goods? When we speak of
goods we really mean coal. Now, as we have seen, according to the
treaty Germany must furnish for ten years to Belgium, Italy, and
France especially quantities of coal, which in the first five years
run from 39-1/2 to 42 millions of tons, and in the following five
years come to a maximum of about 32 millions. And all this when
she has lost the Saar coalfields and is faced with the threatening
situation in Upper Silesia.

Germany's exports reached their maximum in 1913, when the figures
touched 10,097 millions of marks, excluding precious metals. Grouping
exports and imports in categories, the millions of marks were
distributed as follows:

Imports. Exports.

Foodstuffs 2,759 1,035
Live animals 289 7.4
Raw materials 5,003 1,518
Semi-manufactured goods 5,003 1,139
Manufactured goods 1,478 6,395

About one-fifth of the entire exports was in iron and machine products
(1,337 [mil.] articles in iron, 680 machines); 722 millions from
coal (as against imports of other qualities of 289), 658 millions
of chemical products and drugs, 446 from cotton, 298 paint, 290
techno-electrical productions, etc.

What goods can Germany give in payment of the indemnity? We have seen
how she has lost a very large part of her iron and a considerable
quantity of her coal.

All the economic force of Germany was based upon:

(a) The proper use of her reserves of coal and iron, which allowed
her to develop enormously those industries which are based on these
two elements.

(b) On her transport and tariff system, which enabled her to fight any

(c) On her potent overseas commercial organization.

Now, by effect of the treaty, these three great forces have been
entirely or in part destroyed.

What goods can Germany give in payment of the indemnity, and what
goods can she offer without ruining the internal production of the
Entente countries? Let us suppose that Germany gives machines,
colours, wagons, locomotives, etc. Then for this very fact the
countries of the Entente, already suffering by unemployment, would
soon see their factories obliged to shut down. Germany must therefore,
above all, give raw materials; but since she is herself a country that
imports raw materials, and has an enormous and dense population, she
is herself obliged to import raw materials for the fundamental needs
of her existence.

If we examine Germany's commerce in the five years prior to the
War--that is, in the five years of her greatest boom--we shall find
that the imports always exceeded the exports. In the two years before
the War, 1912 and 1913, the imports were respectively 10,691 and
10,770 millions, and the exports 8,956 and 10,097 millions. In some
years the difference even exceeded two milliards, and was compensated
by credits abroad, with the payment of freights and with the
remittances (always considerable) of the German emigrants. All this is

Exported goods can yield to the exporter a profit of, let us suppose,
ten, twelve, or twenty per cent. For the Allies to take an income from
the Custom returns means in practice reducing the exports. In fact,
in Germany production must be carried on at such low prices as to
compensate for the difference, or the exports must be reduced.

In the first case (which is not likely, since Germany succeeds only
with difficulty, owing to her exchange, in obtaining raw materials,
and must encounter worse difficulties in this respect than other
countries), Germany would be preparing the ruin of the other countries
in organizing forms of production which are superior to those of
all her rivals. Germany would therefore damage all her creditors,
especially in the foreign markets.

In the second case--the reduction of exports, one would have
the exactly opposite effect to that imagined in the programme
proposed--that is, the indemnities would become unpayable.

In terms of francs or lire at par with the dollar, Germany's
exportations in 1920 have amounted to 7,250 millions. In 1921 an
increase may be foreseen.

If Germany has to pay in cash and kind 2,500 millions of marks at
par, plus 26 per cent. of the total of her exports, then supposing an
export trade of eight milliards, she will have to give 1,840 millions,
or in all 4,540 millions of marks. Thus we arrive by stages at less
hyperbolical figures, coming down from the twenty-five milliards
a year to something less than a fifth. But to come to grips with
reality, Germany in all ways, it must be admitted, cannot give more
than two milliards a year, if, indeed, it is desired that an indemnity
be paid.

Notwithstanding her great resources, France would not be in a
condition to pay abroad two milliards a year without ruining her
exchange, which would drop at once to the level of Germany's. Italy
with difficulty could pay one milliard.

France and Italy are honest countries, yet they cannot pay their war
creditors, and have not been able, and are not able, to pay any share
of their debt either to the United States of America or to Great
Britain. As a matter of fact, up till now they have paid nothing, and
the interest continues to accumulate with the capital.

Why have neither France nor Italy yet started to pay some of their
debt? Having won the War, France has had all she could have--fertile
territories, new colonies, an abundance of raw material, and above all
iron and potash. The simple explanation is that which I have given

Can, then, Germany, who is in a terrible condition, whose circulation
promises ruin, who has no longer credits nor organization abroad, who
has a great shortage in raw materials; can Germany pay four or five
milliards a year?

We must also remember that Germany, in addition to the indemnity, must
pay the cost of the Army of Occupation, which up to now has amounted
to twenty-five milliards of paper marks a year, or more than 1,600
millions of francs at par. That is, Germany has to bear for the
support of the Allied troops a charge equal to the cost of maintaining
the armies of France, Italy and Belgium before the War.

No financier seriously believes that the issue of bonds authorized by
the treaty for the credit of the Reparations Commission has now any
probability of success. Germany's monetary circulation system is
falling to the stage of _assignats_, and the time is not distant
when, if intelligent provision is not made, Germany will not be in a
position to pay any indemnity.

Obliged to pay only one milliard of gold marks, Germany has not been
able to find this modest sum (modest, that is, in comparison with all
the dreams about the indemnity) without contracting new foreign debts
and increasing her already enormous paper circulation. Each new
indemnity payment, each new debt incurred, will only place Germany in
the position of being unable to make payments abroad.

Many capitalists, even in Italy, inspire their Press to state that
Germany derives an advantage from the depreciation of her mark, or,
in other words, is content with its low level. But the high exchanges
(and in the case of Germany it amounts to ruin) render almost
impossible the purchase of raw materials, of which Germany has need.
With what means must she carry out her payments if she is obliged to
cede a large part of her customs receipts, that is of her best form of
monetary value, and if she has no longer either credits or freights

If what is happening injured Germany only, it would be more possible
to explain it, if not to justify it. But, on the contrary, Germany's
fall, which is also the decadence of Europe, profoundly disturbs not
only the European continent, but many other producing countries.
Though the United States and Great Britain partially escape the
effect, they too feel the influence of it, not only in their political
serenity, but in the market of goods and values. Germany's position
is bound up with that of Europe; her conquerors cannot escape dire
consequences if the erstwhile enemy collapses.

We must not forget that before the War, in the years 1912 and 1913,
the larger part of Germany's commerce was with the United States,
with Great Britain, with Russia and with Austria-Hungary. In 1913 her
commerce with the United States represented alone little less than
two milliards and a half of marks according to the statistics of the
German Empire, and 520 millions of dollars according to the figures
of America. If we except Canada, which we may consider a territorial
continuation, the two best customers of the United States were Great
Britain and Germany. They were, moreover, the two customers whose
imports largely exceeded the exports. The downfall of Germany will
bring about inevitably a formidable crisis in the Anglo-Saxon
countries and consequent ruin in other countries.

Up to now Germany has given all she could; any further payment will
cause a downfall without changing the actual monetary position.
Germany, after a certain point, will not pay, but will drag down in
her fall the economic edifices of the victorious countries of the

All attempts at force are useless, all impositions are sterile.

All this is true and cannot be denied, but at the same time it must
be recognized that in the first move for the indemnity there was a
reasonable cause for anxiety on the part of the Allies.

If Germany had had to pay no indemnity this absurd situation would
have come about, that although exhausted, Germany would have issued
from the War without debts abroad and could easily have got into her
stride again, while France, Italy, and in much less degree Great
Britain, would have come out of the War with heavy debts.

This anxiety was not only just and well founded, but it is easy to see
why it gave ground for a feeling of grave disquiet.

France and Italy, the two big victor States of the Continent, were
only able to carry on the War through the assistance of Great Britain
and the United States. The War would not have lasted long without the
aid of the Anglo-Saxons, which had a decisive effect.

France has obtained all she asked for, and, indeed, more than all her
previsions warranted. Italy has found herself in a difficult position.
She too has realized her territorial aspirations, though not
completely, and the assistance of her Allies has not always been

I have had, as head of the Government, to oppose all the agitations,
and especially the Adriatic adventures, which have caused an acute
party division in Italy. From a sense of duty I have also assumed all
responsibility. But the rigidness of Wilson in the Fiume and Adriatic
questions and the behaviour of some of the European Allies have been
perfectly unjustifiable. In certain messages to Wilson during my term
of government I did not fail to bring this fact forward. Certainly,
Jugo-Slavia's demands must be considered with a sense of justice, and
it would have been an error and an injustice to attribute to Italy
large tracts of territory in Dalmatia; but it would have been possible
to find a more reasonable settlement for a country which has had such
sufferings and known such losses during the War. In any case, when
by the absurd system followed in the treaties so many millions of
Germans, Magyars, Turks and Bulgarians have been handed over to States
like Serbia, whose intemperate behaviour precipitated the War, or to
States like Greece, which took only a small and obligatory part in it,
when States like Poland have won their unity and independence without
making war, when Germany has been dismembered in order to give Poland
an access to the sea and the ridiculous situation of Danzig has been
created, when the moral paradox of the Saar, which now becomes a
German Alsace-Lorraine, has been set up, when so many millions of men
have been parcelled out without any criteria, it was particularly
invidious to contest so bitterly Italy's claims. I can freely affirm
this inasmuch as, risking all popularity, I have always done my duty
as a statesman, pointing out that solution which time has proved to be

No one can deny that Italy is passing through a period of crisis and
political ill-health. Such states of public psychology are for peoples
what neurasthenia is for individuals. On what does it depend? Often
enough on reasons which cannot be isolated or defined. It is a state
of mind which may come to an end at any minute, and is consequent upon
the after-effects of the War. Rather than coming from the economic
disorder, it derives from a malady of the temperament.

I have never believed, in spite of the agitations which have been seen
at certain periods, in the possibility of a revolutionary movement in
Italy. Italy is the only country which has never had religious wars,
the only country which in twenty centuries has never had a real
revolution. Land of an ancient civilization, prone to sudden bursts of
enthusiasm, susceptible to rapid moods of discouragement, Italy, with
all the infinite resources of the Latin spirit, has always overcome
the most difficult crises by her wonderful adaptive power. In
human history she is, perhaps, the only country where three great
civilizations have risen up one after another in her limited soil.
If Italy can have the minimum of coal, cereals and raw materials
necessary to her existence and her economic revival, the traditional
good sense of the Italian people will easily overcome a crisis which
is grave, but which affects in various measure all the victors, and is
especially temperamental.

It cannot be denied that if all Europe is sick, Italy has its own
special state of mind. Those who wished the War and those who were
against it are both dissatisfied: the former because, after the
War, Italy has not had the compensations she expected, and has had
sufferings far greater than could have been imagined; the latter
because they attribute to the War and the conduct of the War the great
trials which the nation has now to face. This sickness of the spirit
is the greatest cause of disorder, since malcontent is always the
worst kind of leaven.

Four great countries decided the War: Great Britain, France, Italy,
and the United States of America. Russia fell to pieces soon, and
fell rather on account of her own internal conditions than from enemy
pressure. The action of the United States arrived late, but was
decisive. Each country, however, acted from a different state of mind.
France had of necessity to make war. Her territory was invaded, and
all hope of salvation lay in moral resistance alone. Great Britain
had to wage the War out of sense of duty. She had guaranteed the
neutrality of Belgium, and could not fail to keep her word of honour.
Two countries alone chose freely the sorrowful way of the War: Italy
and the United States. But their sacrifices, sufferings and losses
have been very different. During the War the United States have been
able to develop their immense resources, and, notwithstanding some
crises, they have come out of it much richer than before. From being
debtors to Europe they have become creditors. They had few losses
in men, and a great development in wealth. Italy, who after many
difficulties had developed in her famous but too narrow territory the
germs of a greater fortune, has had, together with very heavy losses
in men, heavy losses in her wealth.

Italy saved the destinies of France for the first time by declaring
her neutrality on August 2, 1914, and letting the certainty of it be
known from July 30, as the diplomatic documents have shown.

It was that sudden and unexpected declaration of neutrality which
rendered it possible for France to concentrate all her forces in the
north and to win the battle of the Marne. Italy for a second time
saved the destinies of the Entente by entering into the War (too
precipitately and unprepared), in May, 1915, thus preventing the
Austrian army, which was formidable for its technical organization and
for its valour, from obtaining the advantages it expected.

Why did Italy go to war?

The diplomatic documents, which are not all documents of political
wisdom, demonstrate the anxiety of the Italian Government to
realize its Adriatic programme and to gain secure frontiers against
Austria-Hungary and its successors. But this was not the _cause_
of the War; it was rather a means of explaining to the people the
necessity for the War. Italy had been for nearly thirty-four years
ally of Austria-Hungary, and the aspirations of Italy's Adriatic
policy had never disturbed the relations between the two countries.
The real cause of Italy's war was a sentimental movement, a form of
extraordinary agitation of the spirits, brought about by the invasion
of Belgium and the danger of France. The intellectual movement
especially, the world of culture, partook largely in fomenting the
state of exaltation which determined the War.

During the progress of the War, which was long and bitter, Italy
passed through some terrible hours. Her privations during the War, and
immediately after, surpassed all expectations. Italy found herself
face to face with an enemy who enjoyed a superior geographical
situation, a numerical superiority, as well as a superiority in
artillery. After the downfall of Russia she had to support a terrible
campaign. Even in 1917, after the military disaster, when allied
troops came to Italy, she sent abroad more men than there came allied
troops to her aid. According to some statistics which I had compiled,
and which I communicated to the Allies, Italy was shown, in relation
to her demographic structure, to have more men in the front line than
any other country. The economic sufferings were, and are, greater
than those endured by others. France is only in part a Mediterranean
country, while Italy is entirely so. During the War the action of the
submarines rendered the victualling of Italy a very difficult matter.
Many provinces, for months on end, had to content themselves with
the most wretched kind of food. Taking population and wealth into
proportion, if the United States had made the effort of Italy they
would have had to arm sixteen millions of men, to have lost a million
and a half to two million soldiers, and to have spent at least four
hundred milliards. In order to work up popular enthusiasm (and it was
perhaps necessary), the importance of the country's Adriatic claims
was exaggerated. Thus many Italians believe even to-day in good faith
that the War may be considered as lost if some of these aspirations
have not been realized or will not be realized.

But, after the War, Italy's situation suddenly changed. The War had
aroused in the minds of all Europeans a certain sentiment of violence,
a longing for expansion and conquest. The proclamations of the
Entente, the declarations of Wilson's principles, or points, became so
contorted that no trace of them could be found in the treaties, save
for that ironic _covenant_ of the League of Nations, which is always
repeated on the front page, as Dante said of the rule of St. Benedict,
_at the expense of the paper_.

For Italy a very curious situation came about. France had but one
enemy: Germany. She united all her forces against this enemy in
a coherent and single action which culminated in the Treaty of
Versailles. France had but one idea: to make the Entente abandon the
principles it had proclaimed, and try to suffocate Germany, dismember
her, humiliate her by means of a military occupation, by controlling
her transports, confiscating all her available wealth, by raising
to the dignity of elevated and highly civilized States inferior
populations without national dignity.

Austria-Hungary was composed of eleven peoples. It was split up into
a series of States. Austria and Hungary were reduced to small
territories and shut up in narrow confines. All the other countries
were given to Rumania, to Serbia, or more exactly to the S.H.S.
State, to Poland, or else were formed into new States, such as
Czeko-Slovakia. These countries were considered by the Entente as
allies, and, to further good relations, the most important of the
Entente nations protected their aspirations even against the wishes of
Italy. The Italians had found themselves in their difficult theatre of
war against Galatians, Bosnians, Croats, Transylvanians, etc. But
by the simple fact of their having changed names, and having called
themselves Poles, Jugo-Slavs, Rumanians, they became friends. In order
to favour some of these new friends, it has happened that not only
have Italy's sentiments been offended, but even justice itself.
Montenegro was always mentioned in the declarations of the Entente.
On January 10, 1917, Briand, speaking in the name of all the Allies,
united at that time _pour la defense et la liberte des peuples_, put
forward as a fundamental programme the restoration of Belgium, Serbia
and Montenegro: Montenegro was in this on an equality with Belgium.
Just a year afterwards, January 8, 1918, Wilson, when formulating his
fourteen points, had included in the eleventh proposition the duty
of evacuating the territories of Rumania, Serbia and Montenegro, and
restoring them. The exact reason for which it was established that
Montenegro should be absorbed (even without plebiscite) by the S.H.S.
State, thus offending also Italy's sentiments, will remain one of the
most melancholy pages of the New Holy Alliance that the Entente has
become, along with that poor prestigeless organism, the League of
Nations. But let us hope this latter will find a means of renovating

While France was ruining the German people's sources of life, the
peoples who had fought most ferociously against Italy became, through
the War, friendly nations, and every aspiration of Italy appeared
directed to lessen the prestige of the new friends and allies.

The territories annexed to Italy have a small economic value.

For more than thirty years Italy had sold a large part of her richest
agricultural produce to Germany and had imported a considerable share
of her raw materials from Russia. Since the War she has found herself
in a state of regular isolation. A large part of the Italian Press,
which repeats at haphazard the commonest themes of the French Press
instead of wishing for a more intense revival of commercial relations
with Germany, frightens the ignorant public with stories of German
penetration; and the very plutocracy in France and Italy--though not
to the same extent in Italy--abandons itself to the identical error.
So to-day we find spread throughout the peninsula a sense of
lively discontent which is conducive to a wider acceptance of the
exaggerations of the Socialists and the Fascists. But the phenomenon
is a transitory one.

Italy had no feeling of rancour against the German people. She
entered the War against German Imperialism, and cannot now follow
any imperialistic policy. Indeed, in the face of the imperialistic
competitions which have followed the War, Italy finds herself in a
state of profound psychological uneasiness.

France worries herself about one people only, since as a matter of
fact she has only one warlike race at her frontiers: Germany. Italy's
frontiers touch France, the German peoples, the Slav races. It is,
therefore, her interest to approve a democratic policy which allows no
one of the group of combatants to take up a position of superiority.
The true Italian nationalist policy consists in being against all
excessive nationalisms, and nothing is more harmful to Italy's policy
than the abandonment of those democratic principles in the name of
which she arose and by which she lives. If the policy of justice is
a moral duty for the other nations, for Italy it is a necessity of
existence. The Italian people has a clear vision of these facts,
notwithstanding a certain section of her Press and notwithstanding the
exaggerations of certain excited parties arisen from the ashes of the
War. And therefore her uneasiness is great. While other countries have
an economic crisis, Italy experiences, in addition, a mental crisis,
but one with which she will be able to cope.

France, however, is in a much more difficult situation, and her policy
is still a result of her anxieties. All the violences against Germany
were, until the day before yesterday, an effect of hatred; to-day they
derive from dread. Moral ideas have for nations a still greater value
than wealth. France had until the other day the prestige of her
democratic institutions. All of us who detested the Hohenzollern
dynasty and the insolent fatuity of William II loved France, heir of
the bourgeois revolution and champion of democracy. So, when the War
came, all the democracies felt a lively pang: the crushing of France
meant the crushing of democracy and liberty. All the old bonds are
broken, all the organization which Germany had abroad is smashed up,
and France has been saved, not by arms alone, but by the potent life
of free peoples.

Yet victory has taken away from France her greatest prestige, her
fascination as a democratic country. Now all the democratic races of
the world look at France with an eye of diffidence--some, indeed, with
rancour; others with hate. France has comported herself much more
crudely toward Germany than a victorious Germany would have comported
herself toward France. In the case of Russia, she has followed purely
plutocratic tendencies. She has on foot the largest army in the world
in front of a helpless Germany. She sends coloured troops to occupy
the most cultured and progressive cities of Germany, abusing the
fruits of victory. She shows no respect for the principle of
nationality or for the right of self-determination.

Germany is in a helpless and broken condition to-day; she will not
make war; she cannot. But if to-morrow she should make war, how many
peoples would come to France's aid?

The policy which has set the people of Italy against one another, the
diffusion of nationalist violence, the crude persecutions of enemies,
excluded even from the League of Nations, have created an atmosphere
of distrust of France. Admirable in her political perceptiveness,
France, by reason of an error of exaltation, has lost almost all the
benefit of her victorious action.

A situation hedged with difficulties has been brought about. The
United States and Great Britain have no longer any treaty of alliance
of guarantee with France. The Anglo-Saxons, conquerors of the War and
the peace, have drawn themselves aside. Italy has no alliance and
cannot have any. No Italian politician could pledge his country, and
Parliament only desires that Italy follow a democratic, peaceful
policy, maintaining herself in Europe as a force for equilibrium and

France, apart from her military alliance with Belgium, has a whole
system of alliances based largely on the newly formed States: shifting
sands like Poland, Russia's and Germany's enemy, whose fate no one can
prophesy when Germany is reconstructed and Russia risen again, unless
she finds a way of remedying her present mistakes, which are much more
numerous than her past misfortunes. Thus the more France increases her
army, the more she corners raw materials and increases her measures
against Germany, the more unquiet she becomes.

She has seen that Germany, mistress on land, and to a large extent on
the seas, after having carried everywhere her victorious flag, after
having organized her commerce and, by means of her bankers, merchants
and capitalists, made vast expansions and placed a regular network of
relations and intrigue round the earth, fell when she attempted her
act of imperialistic violence. France, when in difficulties, appealed
to the sentiment of the nations and found arms everywhere to help her.
What then is able organization worth to-day?

The fluctuations of fortune in Europe show for all her peoples a
succession of victories and defeats. There are no peoples always
victorious. After having, under Napoleon I, humiliated Germany, France
saw the end of her imperialistic dream, and later witnessed the ruin
of Napoleon III. She has suffered two great defeats, and then, when
she stood diminished in stature before a Germany at the top of her
fortune, she, together with the Allies, has had a victory over an
enemy who seemed invincible.

But no one can foresee the future. To have conveyed great nuclei of
German populations to the Slav States, and especially to Poland; to
have divided the Magyars, without any consideration for their fine
race, among the Rumanians, Czeko-Slovaks and the Jugo-Slavs; to have
used every kind of violence with the Bulgars; to have offended Turkey
on any and every pretext; to have done this is not to have guaranteed
the victory and the peace.

Russia sooner or later will recover. It is an illusion to suppose that
Great Britain, France and Italy can form an agreement to regulate the
new State or new States that will arise in Russia. There are too many
tendencies and diverse interests. Germany, too, will reconstruct
herself after a series of sorrows and privations, and no one can say
how the Germans will behave. Unless a policy of peace and social
renovation be shaped and followed, our sons will witness scenes much
more terrible than those which have horrified our generation and upset
our minds even more than our interests.

Meanwhile, in spite of the frightful increase of scrofula, rickets
and tuberculosis, from which the conquered peoples are principally
suffering, the march of the nations will proceed according to the laws
which have hitherto ruled them and on which our limited action can
only for brief periods cause small modifications or alterations.

Demographic forecasts, like all forecasts of social events, have but
a comparative value. It is true that demographic movements are
especially biological manifestations, but it is also true that
economic and social factors exercise a profound influence in limiting
their regularity and can disturb them very considerably. It is better
therefore not to make long prophecies.

What is certain is that the French population has increased almost
imperceptibly while the population of Germany augmented very rapidly.
The annual average of births in the five years before the War,
1908-13, was 762,000 in France and 176,000 in Belgium. In Germany it
was 1,916,000. The average of deaths was 729,000 in France, 117,000 in
Belgium, and 1,073,000 in Germany. Thus, per thousand, the excess of
births in France was 0.9, in Belgium 7.7, in Germany 13. The War
has terribly aggravated the situation in France, whose demographic
structure is far from being a healthy one. From statistics published
giving the first results of the French census of 1921--without the new
territory of Alsace-Lorraine--France, in the interval between the
two census periods, has decreased by 2,102,864; from 39,602,258 to
37,499,394 (1921). The deaths in the War do not represent a half of
this decrease, when is deducted the losses among the coloured troops
and those from French colonies who fought for France. The new
territories annexed to France do not compensate for the War-mortality
and the decrease in births.

We may presume that if normal conditions of life return, the
population of Germany and German-Austria will be more than one hundred
millions, that the population of Belgium altogether little less than
fifty millions, that Italy will have a population much greater than
that of France, of at least forty-five million inhabitants, and that
Great Britain will have about sixty million inhabitants. In the case
of the Germans we have mentioned one hundred million persons, taking
into consideration Germany and German-Austria. But the Germans of
Poland, of Czeko-Slovakia and the Baltic States will amount to at
least twenty millions of inhabitants. No one can make forecasts, even
of an approximate nature, on Russia, whose fecundity is always the
highest in Europe, and whose losses are rapidly replaced by a high
birth-rate even after the greatest catastrophes. And then there are
the Germans spread about the world, great aggregations of populations
as in the United States of America and in a lesser degree in Brazil.
Up to now these people have been silent, not only because they were
surrounded by hostile populations, but because the accusation of being
sons of the Huns weighed down upon them more than any danger of the
War. But the Treaty of Versailles, and more still the manner in
which it has been applied, is to dissipate, and soon will entirely
dissipate, the atmosphere of antipathy that existed against the
Germans. In Great Britain the situation has changed profoundly in
three years. The United States have made their separate peace and want
no responsibility. In Italy there scarcely exists any hatred for the
Germans, and apart from certain capitalists who paint in lurid colours
the danger of German penetration in their papers because they want
higher tariff protection and to be able to speculate on government
orders, there is no one who does not desire peace with all peoples.
The great majority of the Italian people only desire to reconstruct
the economic and social life of the nation.

Certain tendencies in France's policy depend perhaps on her great
anxiety for the future, an anxiety, in fact, not unjustified by the
lessons of the past. Germany, notwithstanding her fallen state, her
anguish and the torment she has to go through, is so strong and vital
that everybody is certain of seeing her once again potent, indeed more
potent and formidable than ever.

Everyone in France is convinced that the Treaty of Versailles has lost
all foundation since the United States of America abandoned it, and
since Great Britain and Italy, persuaded of the impossibility of
putting certain clauses into effect, have shown by their attitude that
they are not disposed to entertain coercive measures which are as
useless as they are damaging.

In France the very authors of the Treaty of Versailles recognize that
it is weakened by a series of successive attenuations. Tardieu has
asserted that the Treaty of Versailles tends to be abandoned on all
sides: "_Cette faillite a des causes allemandes, des causes allies,
des causes francaises_" (p. 489). The United States has asked itself,
after the trouble that has followed the treaty, if wisdom did not lie
in the old time isolation, in Washington's testament, in the Monroe
doctrine: _Keep off_. But in America they have not understood, says
Tardieu, that to assist Europe the same solidarity was necessary that
existed during the War (p. 493).

Great Britain, according to Tardieu, tends now also to stand aside.
The English are inclined to say, "_N'en parlons plus_" (p. 493). No
Frenchman will accept with calm the manner in which Lloyd George has
conceived the execution of the peace treaty. The campaign for the
revision of the treaties sprang up in lower spheres and from popular
associations and workmen's groups, has surprised and saddened the
French spirit (p. 495). In the new developments "_etait-ce une autre
Angleterre, etait-ce un autre Lloyd George_?" (p. 496). Even in France
herself Tardieu recognizes sadly the language has altered: "_les
gouvernements francais, qui se sont succede au pouvoir depuis le_ 10
_janvier_, 1920," that is, after the fall of Clemenceau, accused in
turn by Poincare of being weak and feeble in asserting his demands,
"_ont compromis les droits que leur predecesseur avait fait
reconnaitre a la France_" (p. 503).

Taking into consideration Germany's financial downfall, which
threatens to upset not only all the indemnity schemes but the entire
economy of continental Europe, the state of mind which is prevalent is
not much different from that which Tardieu indicates.

It is already more than a year ago since I left the direction of the
Italian Government, and the French Press no longer accused me of being
in perfect agreement with Lloyd George, yet Poincare wrote on August
1, 1920:

_L'autre jour M. Asquith declarait au parlement britannique: "Quelque
forme de langage qu'on emploie, la conference de Spa a bien ete, en
fait, une conference pour la revision des conditions du traite."
"Chut!" a repondu M. Lloyd George: "c'est la une declaration tres
grave par l'effet qu'elle peut produire en France. Je ne puis la
laisser passer sans la contredire." Contradiction de pure forme, faite
pour courtoisie vis-a-vis de nous, mais qui malheureusement ne change
rien au fond des choses. Chaque fois que le Conseil Supreme s'est
reuni, il a laisse sur la table des deliberations quelques morceaux
epars du traite_.

No kind of high-handedness, no combined effort, will ever be able to
keep afloat absurdities like the dream of the vast indemnity, the
Polish programme, the hope of annexing the Saar, etc. As things go
there is almost more danger for the victors than for the vanquished.
He who has lost all has nothing to lose. It is rather the victorious
nations who risk all in this disorganized Europe of ours. The
conquerors arm themselves in the ratio by which the vanquished disarm,
and the worse the situation of our old enemies becomes, so much
the worse become the exchanges and the credits of the victorious
continental countries.

Yet, in some of the exaggerated ideas of France and other countries of
the Entente, there is not only the rancour and anxiety for the future,
but a sentiment of well-founded diffidence. After the War the European
States belonging to the Entente have been embarrassed not only on
account of the enormous internal debts, but also for the huge debts
contracted abroad.

If Germany had not had to pay any indemnity and had not lost her
colonies and mercantile marine we should have been confronted with the
absurd paradox that the victorious nations would have issued from
the War worn out, with their territories destroyed, and with a huge
foreign debt; Germany would have had her territory quite intact, her
industries ready to begin work again, herself anxious to start
again her productive force, and in addition with no foreign debt,
consequently ample credit abroad. In the mad struggle to break
up Germany there has had part not only hatred, but also a quite
reasonable anxiety which, after all, must be taken into consideration.

Even to-day, three years after the War, Great Britain has not paid her
debt to America, and France and Italy have not paid their debts to
America and Great Britain. Great Britain could pay with a great
effort; France and Italy cannot pay anyhow.

According to the accounts of the American Treasury the Allies' War
debt is 9,587 millions of dollars: 4,277 millions owing from Great
Britain, 2,977 millions from France, 1,648 millions from Italy, 349
millions from Belgium, 187 millions from Russia, 61 millions from
Czeko-Slovakia, 26 millions from Serbia, 25 millions from Rumania, and
15 millions from Greece. Up to last July Great Britain had paid back
110 millions of dollars. Since the spring of 1919 the payment of
the interest on the amounts due to the American Treasury has been
suspended by some European States. Between October and November, 1919,
the amount of the capitalizing and unpaid interests of the European
States came to 236 million dollars. The figure has considerably
increased since then.

According to the _Statist_ (August 6, 1921) the Allies' debt to the
United States on March 31, 1921, amounted to ten milliards and 959
million dollars, including the interests, in which sum Great Britain
was interested to the sum of 4,775 million dollars and France for
3,351 million dollars. But the _Statist's_ figures, in variance to the
official figures, include other debts than strictly war debts.

The debts of the various allied countries' to Great Britain on March
31, 1921, according to a schedule annexed to the financial
statement for 1921-22, published by the British Treasury, came to
L1,777,900,000, distributed as follows: France 557 millions, Italy
476 millions, Russia 561 millions, Belgium 94 millions, Serbia 22
millions, Portugal, Rumania, Greece and other Allies 66 millions. This
sum represents War debts. But to it must be added the L9,900,000 given
by Great Britain for the reconstruction of Belgium and the loans
granted by her for relief to an amount of L16,000,000. So, altogether,
Great Britain's credit to the Allies on March 31, 1921, was
L1,803,600,000, and has since been increased by the interests. Great
Britain had also at the same date a credit of L144,000,000 to her

France has credit of little less than nine milliard francs, of which
875 millions is from Italy, four milliards from Russia, 2,250 millions
from Belgium, 500 millions from the Jugo-Slavs, and 1,250 millions
from other Allies. Italy has only small credits of no account.

Now this situation, by reason of which the victorious countries of
Europe are heavy debtors (France has a foreign debt of nearly 30
milliards, and Italy a debt of more than 20 milliards) in comparison
with Germany, which came out of the War without any debt, has created
a certain amount of bad feeling. Germany would have got on her feet
again quicker than the victors if she had no indemnity to pay and had
no foreign debts to settle.

France's anxieties in this matter are perfectly legitimate and must be
most seriously considered without, however, producing the enormities
of the Treaty of Versailles.

Assuming this, the situation may be stated in the following terms:

1. All the illusions as to the capacity of Germany being able to pay
have fallen to pieces, and the indemnities, after the absurd demands
which tended to consider as inadequate the figure of 350 milliards
and an annual payment of from ten to fifteen milliards have become
an anxious unknown quantity, as troublesome to the victors as to the
vanquished. The German circulation has lost all control under the
force of internal needs, and Germany is threatened with failure.
The other debtors--Austria-Hungary, Turkey, Bulgaria--have need
of succour, and can pay nothing. Austria has need of the most
indispensable objects of existence, and everything is lacking.

2. The indemnity which Germany can pay annually in her present
condition cannot, calculating goods and cash payments altogether,
represent more than two or three milliards at the most.

3. The victorious countries, such as France, have won immense
territories and great benefits, yet they have not been able to pay the
War debts contracted abroad, and not even the interests. France and
Italy, being countries of good faith, have demonstrated that, if they
cannot pay, it is absurd to demand the payment of much higher sums
from countries like Germany, which has lost almost all her best
resources: mercantile fleet, colonies and foreign organization, etc.

4. The danger exists that with the aggravation of the situation in the
vanquished countries and the weakening of the economic structure of
Europe, the vanquished countries will drag the victors down with
them to ruin, while the Anglo-Saxon peoples, standing apart from
Continental Europe, will detach themselves more and more from its

5. The situation which has come about is a reason for everyone to be
anxious, and threatens both the downfall of the vanquished and the
almost inevitable ruin of the victors, unless a way is found of
reconstructing the moral unity of Europe and the solidarity of
economic life.



No right-thinking person has nowadays any doubt as to the profound
injustice of the Treaty of Versailles and of all the treaties which
derive from it. But this fact is of small importance, inasmuch as it
is not justice or injustice which regulates the relations between
nations, but their interests and sentiments. In the past we have seen
Christian peoples, transplanted in America, maintain the necessity of
slavery, and we have seen, and continue to see every day, methods of
reasoning which, when used by the defeated enemy were declared to be
fallacious and wrong, become in turn, when varied only in form, the
ideas and the customary life of the conquerors in the War--ideas which
then assume the quality of liberal expressions of democracy.

If appeals to the noblest human sentiments are not made in vain (and
no effort of goodness or generosity is ever sterile), the conviction
which is gradually forming itself, even in the least receptive minds,
that the treaties of peace are inapplicable, as harmful to the
conquerors as to the conquered, gains in force. For the treaties are
at one and the same time a menace for the conquerors and a paralysis
of all activity on the part of the conquered, since once the economic
unity of Continental Europe is broken the resultant depression becomes

If many errors have been committed, many errors were inevitable. What
we must try to do now is to limit the consequences of these mistakes
in a changed spirit. To reconstruct where we see only ruins is the
most evident necessity. We must also try to diffuse among the nations
which have won the War together and suffered together the least amount
of diffidence possible. As it is, the United States, Great Britain,
France, Italy, Japan, all go their own way. France has obtained her
maximum of concessions, including those of least use to her, but never
before has the world seen her so alone in her attitude as after the
treaties of Paris.

What is most urgently required at the moment is to change the
prevalent war-mentality which still infects us and overcomes all
generous sentiments, all hopes of unity. The statement that war makes
men better or worse is, perhaps, an exaggerated one. War, which
creates a state of exaltation, hypertrophies all the qualities, all
the tendencies, be they for good or for evil. Ascetic souls, spirits
naturally noble, being disposed toward sacrifice, develop a state
of exaltation and true fervour. How many examples of nobility, of
abnegation, of voluntary martyrdom has not the War given us? But in
persons disposed to evil actions, in rude and violent spirits (and
these are always in the majority), the spirit of violence increases.
This spirit, which among the intellectuals takes the form of arrogance
and concupiscence, and in politics expresses itself in a policy of
conquest, assumes in the crowd the most violent forms of class war,
continuous assaults upon the power of the State, and an unbalanced
desire to gain as much as possible with the least possible work.

Before the War the number of men ready to take the law into their own
hands was relatively small; now there are many such individuals.
The various nations, even those most advanced, cannot boast a moral
progress comparable with their intellectual development. The explosion
of sentiments of violence has created in the period after the War in
most countries an atmosphere which one may call unbreathable. Peoples
accustomed to be dominated and to serve have come to believe that,
having become dominators in their turn, they have the right to use
every kind of violence against their overlords of yesterday. Are not
the injustices of the Poles against the Germans, and those of the
Rumanians against the Magyars, a proof of this state of mind? Even in
the most civilized countries many rules of order and discipline have
gone by the board.

After all the great wars a condition of torpor, of unwillingness to
work, together with a certain rudeness in social relations, has always
been noticed.

The war of 1870 was a little war in comparison with the cataclysm let
loose by the European War. Yet then the conquered country had its
attempt at Bolshevism, which in those days was called the Commune,
and the fall of its political regime. In the conquering country we
witnessed, together with the rapid development of industrial groups, a
quick growth in Socialism and the constitution of great parties like
the Catholic Centre. _Mutatis mutandis_, the same situation has shown
itself after the European War.

What is most urgently necessary, therefore, is to effect a return to
peace sentiments, and in the manifestations of government to abandon
those attitudes which in the peaces of Paris had their roots in hate.

I have tried, as Premier of Italy, as writer, and as politician, to
regulate my actions by this principle. In the first months of 1920 I
gave instructions to Italy's ambassador in Vienna, the Marquis della
Torretta, to arrange a meeting between himself and Chancellor Renner,
head of the Government of Vienna. So the chief of the conquered
country came, together with his Ministers, to greet the head of the
conquering country, and there was no word that could record in any way
the past hatred and the ancient rancour. All the conversation was of
the necessity for reconstruction and for the development of fresh
currents of life and commercial activity. The Government of Italy
helped the Government of Austria in so far as was possible. And in so
acting, I felt I was working better for the greatness of my country
than I could possibly have done by any kind of stolid persecution.
I felt that over and beyond our competition there existed the human
sorrow of nations for whom we must avoid fresh shedding of blood and
fresh wars. Had I not left the Government, it was my intention not
only to continue in this path, but also to intensify my efforts in
this direction.

The banal idea that there exist in Europe two groups of nations, one
of which stands for violence and barbarism--the Germans, the Magyars
and the Bulgarians--while the other group of Anglo-Saxons and Latins
represents civilization, must not continue to be repeated, because not
only is it an outrage on truth but an outrage on honesty.

Always to repeat that the Germans are not adapted for a democratic
regime is neither just nor true. Nor is it true that Germany is an
essentially warlike country, and therefore different from all other
lands. In the last three centuries France and England have fought many
more wars than Germany. One must read the books of the Napoleonic
period to see with what disdain pacificist Germany is referred
to--that country of peasants, waiters and philosophers. It is
sufficient to read the works of German writers, including Treitschke
himself, to perceive for what a long period of time the German lands,
anxious for peace, have considered France as the country always eager
for war and conquest.

Not only am I of the opinion that Germany is a land suited for
democratic institutions, but I believe that after the fall of the
Empire democratic principles have a wider prevalence there than in
any other country of Europe. The resistance offered to the peace of
Versailles--that is, to disorganization--may be claimed as a merit for
the democratic parties, which, if they are loyally assisted by the
States of the Entente, can not only develop themselves but establish a
great and noble democracy.

Germany has accustomed us in history to the most remarkable surprises.
A century and a half ago she was considered as a pacificist nation
without national spirit. She has since then become a warlike country
with the most pronounced national spirit. Early in the seventeenth
century there were in Germany more than one hundred territories and
independent States. There was no true national conscience, and not
even the violence of the Napoleonic wars, a century after, sufficed
to awaken it. What was required was a regular effort of thought, a
sustained programme of action on the part of men like Wolff, Fichte
and Hegel to mould a national conscience. Fifty years earlier no one
would have believed in the possibility of a Germany united and
compact in her national sentiment. Germany passed from the widest
decentralization to the greatest concentration and the intensest
national life. Germany will also be a democratic country if the
violence of her ancient enemies does not drive her into a state of
exaltation which will tend to render minds and spirits favourable to a
return to the old regime.

To arrive at peace we must first of all desire peace. We must no
longer carry on conversations by means of military missions, but by
means of ambassadors and diplomatic representatives.


A great step towards peace may be made by admitting at once all
ex-enemy States into the League of Nations. Among the States of
European civilization millions of persons are unrepresented in the
League of Nations: the United States, who has not wished to adhere to
it after the Treaty of Versailles sanctioned violence; Russia, who
has not been able to join owing to her difficult position; Germany,
Hungary, Austria and Bulgaria, who have not been permitted to join;
the Turks, etc. The League of Nations was a magnificent conception in
which I have had faith, and which I have regarded with sympathy. But a
formidable mistake has deprived it of all prestige. Clauses 5 and 10
of its originating constitution and the exclusion of the defeated
have given it at once the character of a kind of Holy Alliance of the
conquerors established to regulate the incredible relations which the
treaties have created between conquerors and conquered. Wilson had
already committed the mistake of founding the League of Nations
without first defining the nations and leaving to chance the resources
of the beaten peoples and their populations. The day, however, on
which all the peoples are represented in the League, the United
States, without approving the treaties of Versailles, St. Germain or
Trianon, etc., will feel the need of abandoning their isolation, which
is harmful for them and places them in a position of inferiority. And
the day when all the peoples of the world are represented, and accept
reciprocal pledges of international solidarity, a great step will have
been taken.

As things stand, the organism of the Reparations Commission,
established by Schedule 2 of Part VIII of the Treaty of Versailles,
is an absurd union of the conquerors (no longer allies, but reunited
solely in a kind of bankruptcy procedure), who interpret the treaty in
their own fashion, and can even modify the laws and regulations in
the conquered countries. The existence of such an institution among
civilized peoples ought to be an impossibility. Its powers must be
transferred to the League of Nations in such a manner as to provide
guarantees for the victors, but guarantees also for the conquered.
The suppression of the Reparations Commission becomes, therefore, a
fundamental necessity.


When the public, and especially in the United States and Great
Britain, become convinced that the spirit of peace can only prevail by
means of an honest revision of the treaties the difficulties will be
easily eliminated. But one cannot merely speak of a simple revision;
it would be a cure worse than the evil. During the tempest one cannot
abandon the storm-beaten ship and cross over to a safer vessel. It is
necessary to return into harbour and make the transhipment where calm,
or relative calm at any rate, reigns.

Inasmuch as Europe is out of equilibrium, a settlement, even of a
bad kind, cannot be arrived at off-hand. To cast down the present
political scaffolding without having built anything would be an error.
Perhaps here the method that will prove most efficacious is to entrust
the League of Nations with the task of arriving at a revision.
When the League of Nations is charged with this work the various
governments will send their best politicians, and the discussion will
be able to assume a realizable character.

According to its constitution, the League of Nations may, in case of
war or the menace of war (Clause 11), convoke its members, and take
all the measures required to safeguard the peace of the nations. All
the adhering States have recognized their obligation to submit all
controversies to arbitration, and that in any case they have no right
to resort to war before the expiration of a term of three months after
the verdict of the arbiters or the report of the Council (Clause 12).
Any member of the League of Nations resorting to war contrary to the
undertakings of the treaty which constitutes the League is, _ipso
facto_, considered as if he had committed an act of war against all
the other members of the League (Clause 19).

But more important still is the fact that the Assembly of the League
of Nations may invite its members to proceed to a fresh examination
of treaties that become inapplicable as well as of international
situations whose prolongation might imperil the peace of the world
(Clause 19).

We may therefore revise the present treaties without violence and
without destroying them.

What requires to be modified there is no necessity to say, inasmuch as
all the matter of this book supplies the evidence and the proof. What
is certain is that in Europe and America, except for an intransigent
movement running strong in France, everyone is convinced of the
necessity of revision.

It will be well that this revision should take place through the
operations of the League of Nations after the representatives of all
the States, conquerors, conquered and neutrals, have come to form part
of it.

But in the constitution of the League of Nations there are two clauses
which form its fundamental weakness, sections desired by France, whose
gravity escaped Wilson.

Clause 5 declares that, save and excepting contrary dispositions, the
decisions of the Assembly or of the Council are to be by the unanimous
consent of the members represented at the meetings. It is difficult
to imagine anything more absurd. If the modification of a territorial
situation is being discussed, all the nations must agree as to the
solution, including the interested nation. The League of Nations is
convinced that the Danzig corridor is an absurdity, but if France is
not of the same opinion no modification can be made. Without a change
of this clause, every honest attempt at revision must necessarily
break down.

Clause 10, by which the members of the League of Nations pledge
themselves to respect and preserve from external attacks the
territorial integrity and the existing political independence of all
the members of the League, must also be altered. This clause, which
is profoundly immoral, consecrates and perpetuates the mistakes
and faults of the treaties. No honest country can guarantee the
territorial integrity of the States now existing after the monstrous
parcelling out of entire groups of Germans and Magyars to other
nations, arranged without scruples and without intelligence. No one
can honestly guarantee the territorial integrity of Poland as it
stands at present. If a new-risen Russia, a renewed Germany, and an
unextinguished Austria desire in the future a revision of the treaties
they will be making a most reasonable demand to which no civilized
country may make objection. It is indeed Clauses 5 and 10 which have
deprived the constitution of the League of Nations of all moral
credit, which have transformed it into an instrument of oppression for
the victors, which have caused the just and profound disapproval of
the most enlightened men of the American Senate. A League of Nations
with Clauses 5 and 10 and the prolonged exclusion of the vanquished
cannot but accentuate the diffidence of all the democracies and the
aversion of the masses.

But the League of Nations can be altered and can become indeed a great
force for renovation if the problem of its functioning be clearly
confronted and promptly resolved.

The League of Nations can become a great guarantee for peace on three

(a) That it include really and in the shortest space of time possible
all the peoples, conquerors, conquered and neutrals.

(b) That clauses 5 and 10 be modified, and that after their
modification a revision of the treaties be undertaken.

(c) That the Reparations Commission be abolished and its powers be
conferred upon the League of Nations itself.

As it exists at present the League of Nations has neither prestige nor
dignity; it is an expression of the violence of the conquering group
of nations. But reconstituted and renovated it may become the greatest
of peace factors in the relations between the peoples.


In the state of mind in which France exists at present there is a
reasonable cause of worry for the future. Since the conclusion of
the War the United States of America have withdrawn. They concern
themselves with Europe no more, or only in a very limited form and
with diffidence. The Monroe doctrine has come into its own again.
Great Britain watches the decadence of the European continent, but,
girt by the sea, has nothing to fear. She is a country of Europe, but
she does not live the life of Europe; she stands apart from it. Italy,
when she has overcome the difficulties of her economic situation, can
be certain of her future. The very fact that she stands in direct
opposition to no State, that she may have competition with various
peoples but not long-nurtured hatreds, gives Italy a relative
security. But France, who has been in less than forty-four years twice
at war with Germany, has little security for her future. Germany
and the Germanic races increase rapidly in number. France does not
increase. France, notwithstanding the new territories, after her war
losses, has probably no more inhabitants than in 1914. In her almost
tormented anxiety to destroy Germany we see her dread for the
future--more indeed than mere hatred. To occupy with numerous troops
the left bank of the Rhine and the bridgeheads is an act of vengeance;
but in the vengeance there is also anxiety. There are many in France
who think that neither now nor after fifteen years must the territory
of the vanquished be abandoned. And so France maintains in effective
force too large an army and nourishes too great a rancour. And for
this reason she helps the Poles in their unjustifiable attempt in
Upper Silesia, will not allow the Germans of Austria to live, and
seeks to provoke and facilitate all movements and political actions
which can tend towards the dismemberment of Germany. The British and
the Italian viewpoints are essentially different. France, which knows
it can no longer count on the co-operation of Great Britain, of the
United States, or of Italy, keeps on foot her numerous army, has
allied herself with Belgium and Poland, and tries to suffocate Germany
in a ring of iron. The attempt is a vain one and destined to fail
within a few years, inasmuch as France's allies have no capacity for
resistance. Yet, all the same, her attempt derives from a feeling that
is not only justifiable but just.

France had obtained at Paris, apart from the occupation of the left
bank of the Rhine and all the military controls, two guaranteeing
treaties from the United States and from Great Britain: in case of
unprovoked aggression on the part of Germany, Great Britain and
the United States pledged themselves to defend France. The British
Parliament, as we have seen, approved the treaty provisionally on the
similar approbation of the United States. But as the latter has not
approved the Treaty of Versailles, and has not even discussed the
guarantee treaty, France has now no guarantee treaty.

If we are anxious to realize a peace politic two things are necessary:

1. That France has security, and that for twenty years at least
Great Britain and Italy pledge themselves to defend her in case of

2. That the measures for the disarmament of the conquered States be
maintained, maybe with some tempering of their conditions, and that
their execution and control be entrusted with the amplest powers to
the League of Nations.

No one can think it unjust that the parties who provoked the War or
those who have, if not the entire, at least the greatest share of
responsibility, should be rendered for a certain time incapable.
The fall of the military caste in Germany and the formation of a
democratic society will derive much help from the abolition, for a not
too brief period of time, of the permanent army, and this will render
possible, at no distant date, an effective reduction of the armaments
in the victorious countries.

Great Britain has the moral duty to proffer a guarantee already
spontaneously given. Italy also must give such a guarantee if she
wishes truly to contribute towards the peace of Europe.

As long as Germany has no fleet, and cannot put together an artillery
and an aviation corps, she cannot present a menace.

Great Britain and Italy can, however, only give their guarantees on
the condition that they guarantee a proper state of things and not a
continued condition of violence. The withdrawal of all the troops from
the Rhine ought to coincide with a clear definition concerning the
fate of the Germans of Austria and the Germans detached from Germany
without motive. Such a retirement must coincide with the definition
of the territory of the Saar, and the assigning, pure and simple, of
Upper Silesia to Germany and the end of all the insupportable controls
and the indemnity regulations.

Being myself contrary to any pledge binding Italy for too long a
period, I am of opinion that it is perfectly right that Great Britain
and Italy should make this sacrifice for the peace of Europe.

But no guarantee is possible, either for Great Britain or Italy, until
the most essential problems be resolved in the justest manner by means
of straightforward and explicit understandings.

Italy's tendency towards British policy on the continent of Europe
depends on the fact that Great Britain has never wished or tolerated
that any continental State should have a hegemony over others. And,
therefore, she has found herself at different epochs ranged against
France, Germany and Russia.

England is in the Mediterranean solely to secure her passage through
it, not to dominate it. She continues to follow the grand policy by
which she has transformed her colonies into dominions, and, in spite
of errors, she has always shown the greatest respect for the liberty
of other peoples.

But Europe will not have peace until the three progressive countries
of the Continent, Germany, France and Italy, find a way of agreement
which can reunite all their energies in one common force.

Russia has conceived the idea of having the hegemony of Europe;
Germany has indeed had the illusion of such a hegemony. Now this
illusion penetrates certain French elements. Can a people of forty
million inhabitants, who are not increasing, who already find
difficulties in dominating and controlling their immense colonies,
aspire to hegemonic action, even taking count of their great political
prestige? Can France lastingly dominate and menace a country like
Germany, which at no distant date will have a population double that
of France?

The future of European civilization requires that Germany, France and
Italy, after so much disaster, find a common road to travel.

The first step to be taken is to give security of existence and of
reconstruction to Germany; the second is to guarantee France from the
perils of a not distant future; the third is to find at all costs a
means of accord between Germany, France and Italy.

But only vast popular movements and great currents of thought and
of life can work effectively in those cases where the labours of
politicians have revealed themselves as characterized by uncertainty
and as being too traditional. Europe is still under the dominion of
old souls which often enough dwell in young bodies and, therefore,
unite old errors with violence. A great movement can only come from
the intellectuals of the countries most menaced and from fresh popular


These two problems are closely connected.

The victorious countries demand an indemnity from the conquered
countries which, except Germany, who has a great productive force even
in her hour of difficulties, are in extreme depression and misery.

Great Britain is in debt to the United States, and France, Italy and
minor nations are in their turn heavy debtors to the Americans and to
Great Britain.

The experience of the last three years has shown that, even with the
best will, none of the countries owing money to the Entente has been
able to pay its debts or even the interest. With an effort Great
Britain could pay; France and Italy will never be able to, and have,
moreover, exchanges which constitute a real menace for the future of

The fact that France and Italy, although they came out of the war
victoriously, have not been able to pay their debts or even the
interest on them is the proof that Germany, whose best resources have
been taken away from her, can only pay an indemnity very different
from the fantastic figures put forward at the time of the Conference
of Paris, when even important political men spoke of monstrous and
ridiculous indemnities.

The problem of the inter-allied debts, as well as that of the
indemnity, will be solved by a certain sacrifice on the part of all
who participated in the War.

The credits of the United States amount to almost 48 milliards of lire
or francs at par, and the credits of Great Britain to 44 milliards.
Great Britain owes about 21 milliards to the United States and is in
turn creditor for some 44 milliards. She has a bad debt owing from
Russia for more than 14 milliards, but 13 milliards are owing from
France, about 12 milliards from Italy, and almost 2-1/2 milliards from
Belgium. That is to say, that Great Britain could well pay her debt
to the United States, ceding the greater part of her credits towards
France and Italy.

But the truth is that, while on the subject of the German indemnities,
stolid illusions continue to be propagated (perhaps now with greater
discretion), neither France nor Italy is in a position to pay its

The most honest solution, which, intelligently enough, J.M. Keynes has
seen from the first, is that each of the inter-allied countries should
renounce its state credits towards countries that were allies or
associates during the War. The United States of America are creditors
only; Great Britain has lent the double of what she has borrowed.
France has received on loan the triple of what she has lent to others.

The credits of France are for almost two-thirds undemandable credits
of Great Britain; more than 14 milliards being with Russia, they are
for considerably more than one-third bad debts.

France and Italy would be benefited chiefly by this provision. Great
Britain would scarcely either benefit or lose, or, rather, the benefit
accruing to her would be less in so much as her chief credits are to

The United States would doubtless have to bear the largest burden. But
when one thinks of the small sacrifice which the United States has
made in comparison with the efforts of France and Italy (and Italy was
not obliged to enter the War), the new sacrifice demanded does not
seem excessive.

During the War the United States of America, who for three years
furnished food, provisions and arms to the countries of the Entente,
have absorbed the greater part of their available resources. Not only
are the States of Europe debtors, but so are especially the private
citizens who have contracted debts during or after the War. Great
Britain during the War had to sell at least 25 milliards of her
foreign values. The United States of America, on the contrary, have
immensely increased their reserves.

But this very increase is harmful to them, inasmuch as the capacity
for exchange of the States of Europe has been much reduced. The United
States now risk seeing still further reduced, if not destroyed,
this purchasing capacity of their best clients; and this finally
constitutes for the U.S.A. infinitely greater damage than the
renouncing of all their credits.

To reconstruct Germany, to intensify exchange of goods with the old
countries of Austria-Hungary and Russia, to settle the situation of
the exchange of goods with Italy and the Balkan countries is much more
important for the United States and the prosperity of its people than
to demand payment or not demand payment of those debts made for the
common cause.

I will speak of the absurd situation which has come about.
Czeko-Slovakia and Poland unwillingly indeed fought against the
Entente, which has raised them to free and autonomous States; and
not only have they no debts to pay, being now in the position of
conquerors, or at least allies of the conquerors, but they have, in
fact, scarcely any foreign debts.

The existence of enormous War debts is, then, everywhere a menace to
financial stability. No one is anxious to repudiate his debts in order
not to suffer in loss of dignity, but almost all know that they cannot
pay. The end of the War, as Keynes has justly written, has brought
about that all owe immense sums of money to one another. The holders
of loan stock in every country are creditors for vast sums towards
the State, and the State, in its turn, is creditor for enormous sums
towards the taxpayers. The whole situation is highly artificial and
irritating. We shall be unable to move unless we succeed in freeing
ourselves from this chain of paper.

The work of reconstruction can begin by annulling the inter-allied

If it is not thought desirable to proceed at once to annulment, there
remains only the solution of including them in the indemnity which
Germany must pay in the measure of 20 per cent., allocating a certain
proportion to each country which has made loans to allied and
associated governments on account of the War. In round figures the
inter-allied loans come to 100 milliards. They can be reduced to 20,
and then each creditor can renounce his respective credit towards
allies or associates and participate proportionately in the new credit
towards Germany. Such a credit, bearing no interest, could only be
demanded after the payment of all the other indemnities, and would be
considered in the complete total of the indemnities.

All the illusions concerning the indemnities are now fated to
disappear. They have already vanished for the other countries; they
are about to vanish in the case of Germany.

Nevertheless it is right that Germany should pay an indemnity. Yet, if
the conquerors cannot meet their foreign debts, how can the vanquished
clear the vast indemnity asked? Each passing day demonstrates more
clearly the misunderstanding of the indemnity. The non-experts have
not learned financial technics, but common sense tells them that the
golden nimbus which has been trailed before their eyes is only a thick
cloud of smoke that is slowly dissipating.

I have already said that the real damages to repair do not exceed
40 milliards of gold marks and that all the other figures are pure

If it be agreed that Germany accept 20 per cent. of the inter-allied
debt, the indemnity may be raised to 60 milliards of francs at par, to
be paid in gold marks.

But we must calculate for Germany's benefit all that she has already
given in immediate marketable wealth. Apart from her colonies, Germany
has given up all her mercantile marine fleet, her submarine cables,
much railway material and war material, government property in ceded
territory without any diminution of the amount of public debts, etc.
Without taking account, then, of the colonies and her magnificent
commercial organization abroad, Germany has parted with at least 20
milliards. If we were to calculate what Germany has ceded with the
same criteria with which the conquering countries have calculated
their losses, we should arrive at figures much surpassing these. We
may agree in taxing Germany with an indemnity equivalent in gold marks
to 60 milliards of francs at par--an indemnity to be paid in the
following manner:

(a) Twenty milliards of francs to be considered as already paid in
consideration of all that Germany has ceded in consequence of the

(b) Twenty milliards from the indemnity which Germany must pay to her
conquerors, especially in coal and other materials, according to the
proportions already established.

(c) Twenty milliards--after the payment of the debts in the second
category to be taken over by Germany--as part of the reimbursement for
countries which have made credits to the belligerents of the Entente:
that is, the United States, Great Britain and France, in proportion to
the sums lent.

In what material can Germany pay 20 milliards in a few years?
Especially in coal and in material for repairing the devastated
territories of France. Germany must pledge herself for ten years to
consign to France a quantity of coal at least equal in bulk to the
difference between the annual production before the War in the mines
of the north and in the Pas de Calais and the production of the mines
in the same area during the next ten years. She must also furnish
Italy--who, after the heavy losses sustained, has not the possibility
of effecting exchanges--a quantity of coal that will represent
three-quarters of the figures settled upon in the Treaty of
Versailles. We can compel Germany to give to the Allies for ten years,
in extinction of their credits, at least 500 millions a year in gold,
with privileges on the customs receipts.

This systematization, which can only be imposed by the free agreement
of the United States and Great Britain, would have the effect of
creating excellent relations. The United States, cancelling their, in
great part, impossible debt, would derive the advantage of developing
their trade and industry, and thus be able to guarantee credits for
private individuals in Europe. It would also be of advantage to Great
Britain, who would lose nothing. Great Britain has about an equal
number of debits and credits, with this difference, that the debits
are secured, while the credits are, in part, unsecured. France's
credits are proportionately the worst and her debits largest, almost
27 milliards. France, liberated from her debt, and in a position to
calculate on a coal situation comparable with that of before the War
and with her new territories, would be in a position to re-establish
herself. The cancellation of 27 milliards of debt, a proportionate
share in 20 milliards, together with all that she has had, represent
on the whole a sum that perhaps exceeds 50 milliards. Italy would
have the advantage of possessing for ten years the minimum of coal
necessary to her existence, and would be liberated from her foreign
debt, which amounts to much more than she can possibly hope for from
the indemnity.

Such an arrangement, or one like it, is the only way calculated to
allow Europe to set out again on the path of civilization and to
re-establish slowly that economic equilibrium which the War has
destroyed with enormous damage for the conquerors and the certain ruin
of the vanquished.

But, before speaking of any indemnity, the Reparations Commission must
be abolished and its functions handed over to the League of Nations,
while all the useless controls and other hateful vexations must be put
an end to.

While the Allied troops' occupation of the Rhine costs Germany
25 milliards of paper marks a year, it is foolish to speak of
reconstruction or indemnity. Either all occupation must cease or the
expenses ought not to exceed, according to the foregoing agreements, a
maximum of 80 millions at par, or even less.

We shall, however, never arrive at such an arrangement until the
Continental countries become convinced of two things: first, that the
United States will grant no credits under any formula; secondly, that
Germany, under the present system, will be unable to pay anything and
will collapse, dragging down to ruin her conquerors.

Among many uncertainties these two convictions become ever clearer.

If in all countries the spirit of insubordination among the working
classes is increasing, the state of mind of the German operatives
is quite remarkable. The workmen almost everywhere, in face of the
enormous fortunes which the War has created and by reason of the
spirit of violence working in them, have worked with bad spirit after
the War because they have thought that a portion of their labour has
gone to form the profits of the industrials. It is useless to say that
we are dealing here with an absurd and dangerous conception, because
the profit of the capitalist is a necessary element of production,
and because production along communist lines, wherever it has been
attempted, has brought ruin and misery. But it is useless to deny that
such a situation exists, together with the state of mind which it
implies. We can well imagine, then, the conditions in which Germany
and the vanquished countries find themselves. The workmen, who in
France, England and Italy exhibit in various degree and measure a
state of intractability, in Germany have to face a situation still
graver. When they work they know that a portion of their labour is
destined to go to the victors, another part to the capitalist, and
finally there will remain something for them. Add to this that in
all the beaten countries hunger is widespread, with a consequent
diminution of energy and work.

No reasonable person can explain how humanity can continue to believe
in the perpetuation of a similar state of things for another forty

In speaking of the indemnity which Germany can pay, it is necessary
to consider this special state of mind of the operatives and other
categories of producers.

But the mere announcement of the settling of the indemnity, of the
immediate admission of the vanquished nations into the League of
Nations, of the settling the question of the occupation of the Rhine,
and of the firm intention to modify the constitution of the League
of Nations, according it the powers now held by the Reparations
Commission, will improve at once the market and signalize a definite
and assured revival.

The United States made a great financial effort to assist their
associates, and in their own interests, as well as for those of
Europe, they would have done badly to have continued with such
assistance. When the means provided by America come to be employed to
keep going the anarchy of central Europe, Rumania's disorder, Greece's
adventures and Poland's violences, together with Denikin's and
Wrangel's restoration attempts, it is better that all help should
cease. In fact, Europe has begun to reason a little better than her
governments since the financial difficulties have increased.

The fall of the mark and Germany's profound economic depression have
already destroyed a great part of the illusions on the subject of the
indemnity, and the figures with which for three years the public has
been humbugged no longer convince anyone.


Among the States of the Entente there is always a fundamental discord
on the subject of Russia. Great Britain recognized at once that if it
were impossible to acknowledge the Soviet Government it was a mistake
to encourage attempts at restoration. After the first moments of
uncertainty Great Britain has insisted on temperate measures, and
notwithstanding that during the War she made the largest loans to the
Russian Government (more than 14 milliards of francs at par, while
France only lent about 4 milliards), she has never put forward the
idea that, as a condition precedent to the recognition of the Soviet
Government, a guarantee of the repayment of the debt was necessary.
Only France has had this mistaken idea, which she has forced to the
point of asking for the sequestration of all gold sent abroad by the
Soviet Government for the purchase of goods.

Wilson had already stated in his fourteen points what the attitude of
the Entente towards Russia ought to be, but the attitudes actually
assumed have been of quite a different order.

The barrier which Poland wants to construct between Germany and Russia
is an absurdity which must be swept away at once. Having taken away
Germany's colonies and her capacities for expansion abroad, we must
now direct her towards Russia where alone she can find the outlet
necessary for her enormous population and the debt she has to carry.
The blockade of Russia, the barbed wire placed round Russia, have
damaged Europe severely. This blockade has resolved itself into a
blockade against the Allies. Before the present state of economic
ruin Russia was the great reservoir of raw materials; she was the
unexplored treasure towards which one went with the confidence of
finding everything. Now, owing to her effort, she has fallen; but
how large a part of her fall is as much due to the Entente as to her
action during the War and since. For some time now even the most
hidebound intelligences have recognized the fact that it is useless
to talk of entering into trade relations with Russia without the
co-operation of Germany, the obvious ally in the vast task of
renovation. Similarly, it is useless to talk of reattempting military
manoeuvres. While Germany remains disassociated from the work
of reconstruction and feels herself menaced by a Poland that is
anarchical and disorderly and acts as an agent of the Entente, while
Germany has no security for her future and must work with doubt and
with rancour, all attempts to reconstruct Russia will be vain. The
simple and fundamental truth is just this: One can only get to Moscow
by passing through Berlin.

If we do not wish conquerors and conquered to fall one after the
other, and a common fate to reunite those who for too long have hated
each other and continue to hate each other, a solemn word of peace
must be pronounced.

Austria, Germany, Italy, France are not diverse phenomena; they are
different phases of the same phenomenon. All Europe will go to pieces
if new conditions of life are not found, and the economic equilibrium
profoundly shaken by the War re-established.

I have sought in this book to point out in all sincerity the things
that are in store for Europe; what perils menace her and in what
way her regeneration lies. In my political career I have found many
bitternesses; but the campaign waged against me has not disturbed me
at all. I know that wisdom and life are indivisible, and I have no
need to modify anything of what I have done, neither in my propaganda
nor in my attempt at human regeneration, convinced as I am that I am
serving both the cause of my country and the cause of civilization.
Blame and praise do not disturb me, and the agitations promoted in the
heart of my country will not modify in any way my conviction. On the
contrary, they will only reinforce my will to follow in my own way.

Truth, be it only slowly, makes its way. Though now the clouds are
blackest, they will shortly disappear. The crisis which menaces and
disturbs Europe so profoundly has inoculated with alarm the most
excited spirits; Europe is still in the phase of doubt, but after the
cries of hate and fury, doubt signifies a great advance. From doubt
the truth may come forth.


ADRAIANOPLE, passes to the Greeks,
Adriatic programme, Italy's
Albania, an Italian expedition into
Alexander the Great as politician
Allenstein, a plebiscite for
Allies, the, war debts of
Alsace-Lorraine, annexation of
restitution of
America, and question of army of occupation
her attitude on reparations
result of her entry into the war
(_see also_ United States)
Apponyi, Count, on the Treaty of Trianon
Arabia, Turkey's losses in
Armaments, reduction of
the peace treaties and
Armenia, movement for liberation of
Armenian Republic, the
Armistice terms, summary of
three words change tenor of
Army of Occupation, the
Asia Minor, the Entente Powers and,
Turkey's losses in
Australasia, British possessions in
Australia as part of British dominions
Austria, financial position of,
loses access to the sea
Austria-Hungary, and the Versailles Treaty
civilizing influence of
pre-war army of
result of Treaty of St. Germain Germain-en-Laye
States of, before the war
victories of
Austrian army, the

BALKANS, the, Russia's policy in
Battles, a military fact
difference between war and
Belgium, acquires German territory
army of
financial position of
population of
violation of, and the consequences
Bernhardi, General von
Bismarck, foresight of
political genius of
Bolshevik Government, the fiasco of
result of
Bolshevism, and what it is
Boxer rebellion, the Kaiser's address to his troops
Briand, M., on the objects of the Entente
Bridgeheads, German, occupation of,
British colonies, before the war,
Brussels, Conference of,
Budapest, conditions in,
mortality in,
Bulgaria, army of,
the Treaty of Neuilly and,

Book of the day: