From the archives of The Memory Hole |
Reparations
The categories of damage in respect of which the Allies were
entitled to ask for reparation are governed by the relevant passages in
President Wilson's Fourteen Points of 8 January 1918, as modified by
the Allied governments in their qualifying Note, the text of which the
President formally communicated to the German government as the basis
of peace on 5 November 1918. These passages have been quoted in full at
the beginning of chapter 4. That is to say, 'compensation will be made
by Germany for all damage done to the civilian population of the Allies
and to their property by the aggression of Germany by land, by sea, and
from the air.' The limiting quality of this sentence is reinforced by
the passage in the President's speech before Congress on 11 February
1918 (the terms of this speech being an express part of the contract
with the enemy), that there shall be 'no contributions' and 'no
punitive damages'.
It has sometimes been argued that the preamble to paragraph 19(1*)
of the armistice terms, to the effect 'that any future claims and
demands of the Allies and the United States of America remain
unaffected,' wiped out all precedent conditions, and left the Allies
free to make whatever demands they chose. But it is not possible to
maintain that this casual protective phrase, to which no one at the
time attached any particular importance, did away with all the formal
communications which passed between the President and the German
government as to the basis of the terms of peace during the days
preceding the armistice, abolished the Fourteen Points, and converted
the German acceptance of the armistice terms into unconditional
surrender, so far as affects the financial clauses. It is merely the
usual phrase of the draftsman who, about to rehearse a list of certain
claims, wishes to guard himself from the implication that such a list
is exhaustive. In any case this contention is disposed of by the Allied
reply to the German observations on the first draft of the treaty,
where it is admitted that the terms of the reparation chapter must be
governed by the President's Note of 5 November.
Assuming then that the terms of this Note are binding, we are left
to elucidate the precise force of the phrase 'all damage done to the
civilian population of the Allies and to their property by the
aggression of Germany by land, by sea, and from the air'. Few sentences
in history have given so much work to the sophists and the lawyers, as
we shall see in the next section of this chapter, as this apparently
simple and unambiguous statement. Some have not scrupled to argue that
it covers the entire cost of the war; for, they point out, the entire
cost of the war has to be met by taxation, and such taxation is
'damaging to the civilian population'. They admit that the phrase is
cumbrous, and that it would have been simpler to have said 'all loss
and expenditure of whatever description'; and they allow that the
apparent emphasis on damage to the persons and property of civilians is
unfortunate; but errors of draftsmanship should not, in their opinion,
shut off the Allies from the rights inherent in victors.
But there are not only the limitations of the phrase in its natural
meaning and the emphasis on civilian damages as distinct from military
expenditure generally; it must also be remembered that the context of
the term is in elucidation of the meaning of the term 'restoration' in
the President's Fourteen Points. The Fourteen Points provide for damage
in invaded territory Belgium, France, Roumania, Serbia, and
Montenegro (Italy being unaccountably omitted) but they do not cover
losses at sea by submarine, bombardments from the sea (as at
Scarborough), or damage done by air raids. It was to repair these
omissions, which involved losses to the life and property of civilians
not really distinguishable in kind from those effected in occupied
territory, that the Supreme Council of the Allies in Paris proposed to
President Wilson their qualifications. At that time the last days of
October 1918 I do not believe that any responsible statesman had in
mind the exaction from Germany of an indemnity for the general costs of
the war. They sought only to make it clear (a point of considerable
importance to Great Britain) that reparation for damage done to
non-combatants and their property was not limited to invaded territory
(as it would have been by the Fourteen Points unqualified), but applied
equally to all such damage, whether 'by land, by sea, or from the air'.
It was only at a later stage that a general popular demand for an
indemnity, covering the full costs of the war, made it politically
desirable to practise dishonesty and to try to discover in the written
word what was not there.
What damages, then, can be claimed from the enemy on a strict
interpretation of our engagements?(2*) In the case of the United
Kingdom the bill would cover the following items
(a) Damage to civilian life and property by the acts of an enemy
government, including damage by air raids, naval bombardments,
submarine warfare, and mines.
(b) Compensation for improper treatment of interned civilians.
It would not include the general costs of the war or (e.g.)
indirect damage due to loss of trade.
The French claim would include, as well as items corresponding to
the above
(c) Damage done to the property and persons of civilians in the war
area, and by aerial warfare behind the enemy lines.
(d) Compensation for loot of food, raw materials, livestock,
machinery, household effects, timber, and the like by the enemy
governments or their nationals in territory occupied by them.
(e) Repayment of fines and requisitions levied by the enemy
governments or their officers on French municipalities or nationals.
(f) Compensation to French nationals deported or compelled to do
forced labour.
In addition to the above there is a further item of more doubtful
character, namely
(g) The expenses of the relief commission in providing necessary
food and clothing to maintain the civilian French population in the
enemy-occupied districts.
The Belgian claim would include similar items.(3*) If it were
argued that in the case of Belgium something more nearly resembling an
indemnity for general war costs can be justified, this could only be on
the ground of the breach of international law involved in the invasion
of Belgium, whereas, as we have seen, the Fourteen Points include no
special demands on this ground.(4*) As the cost of Belgian relief under
(g), as well as her general war costs, has been met already by advances
from the British, French, and United States governments, Belgium would
presumably employ any repayment of them by Germany in part discharge of
her debt to these governments, so that any such demands are, in effect,
an addition to the claims of the three lending governments.
The claims of the other Allies would be compiled on similar lines.
But in their case the question arises more acutely how far Germany can
be made contingently liable for damage done, not by herself, but by her
co-belligerents, Austria-Hungary, Bulgaria, and Turkey. This is one of
the many questions to which the Fourteen Points give no clear answer;
on the one hand, they cover explicitly in point II damage done to
Roumania, Serbia, and Montenegro, without qualification as to the
nationality of the troops inflicting the damage; on the other hand, the
Note of the Allies speaks of 'German' aggression when it might have
spoken of the aggression of 'Germany and her allies'. On a strict and
literal interpretation, I doubt if claims lie against Germany for
damage done, e.g. by the Turks to the Suez Canal, or by Austrian
submarines in the Adriatic. But it is a case where, if the Allies
wished to strain a point, they could impose contingent liability on
Germany without running seriously contrary to the general intention of
their engagements.
As between the Allies themselves the case is quite different. It
would be an act of gross unfairness and infidelity if France and Great
Britain were to take what Germany could pay and leave Italy and Serbia
to get what they could out of the remains of Austria-Hungary. As
amongst the Allies themselves it is clear that assets should be pooled
and shared out in proportion to aggregate claims.
In this event, and if my estimate is accepted, as given below, that
Germany's capacity to pay will be exhausted by the direct and
legitimate claims which the Allies hold against her, the question of
her contingent liability for her allies becomes academic. Prudent and
honourable statesmanship would therefore have given her the benefit of
the doubt, and claimed against her nothing but the damage she had
herself caused.
What, on the above basis of claims, would the aggregate demand
amount to? No figures exist on which to base any scientific or exact
estimate, and I give my own guess for what it is worth, prefacing it
with the following observations.
The amount of the material damage done in the invaded districts has
been the subject of enormous, if natural, exaggeration. A journey
through the devastated areas of France is impressive to the eye and the
imagination beyond description. During the winter of 1918-19, before
Nature had cast over the scene her ameliorating mantle, the horror and
desolation of war was made visible to sight on an extraordinary scale
of blasted grandeur. The completeness of the destruction was evident.
For mile after mile nothing was left. No building was habitable and no
field fit for the plough. The sameness was also striking. One
devastated area was exactly like another a heap of rubble, a morass
of shell-holes, and a tangle of wire.(5*) The amount of human labour
which would be required to restore such a countryside seemed
incalculable; and to the returned traveller any number of milliards of
pounds was inadequate to express in matter the destruction thus
impressed upon his spirit. Some governments for a variety of
intelligible reasons have not been ashamed to exploit these feelings a
little.
Popular sentiment is most at fault, I think, in the case of
Belgium. In any event Belgium is a small country, and in its case the
actual area of devastation is a small proportion of the whole. The
first onrush of the Germans in 1914 did some damage locally; after that
the battle-line in Belgium did not sway backwards and forwards, as in
France, over a deep belt of country. It was practically stationary, and
hostilities were confined to a small corner of the country, much of
which in recent times was backward, poor, and sleepy, and did not
include the active industry of the country. There remains some injury
in the small flooded area, the deliberate damage done by the retreating
Germans to buildings, plant, and transport, and the loot of machinery,
cattle, and other movable property. But Brussels, Antwerp, and even
Ostend are substantially intact, and the great bulk of the land, which
is Belgium's chief wealth, is nearly as well cultivated as before. The
traveller by motor can pass through and from end to end of the
devastated area of Belgium almost before he knows it; whereas the
destruction in France is on a different kind of scale altogether.
Industrially, the loot has been serious and for the moment paralysing;
but the actual money cost of replacing machinery mounts up slowly, and
a very few tens of millions would have covered the value of every
machine of every possible description that Belgium ever possessed.
Besides, the cold statistician must not overlook the fact that the
Belgian people possess the instinct of individual self-protection
unusually well developed; and the great mass of German bank-notes(6*)
held in the country at the date of the armistice shows that certain
classes of them at least found a way, in spite of all the severities
and barbarities of German rule, to profit at the expense of the
invader. Belgian claims against Germany such as I have seen, amounting
to a sum in excess of the total estimated pre-war wealth of the whole
country, are simply irresponsible.(7*)
It will help to guide our ideas to quote the official survey of
Belgian wealth published in 1913 by the Finance Ministry of Belgium,
which was as follows:
Million £ Land ..................... 264 Buildings ................ 235 Personal wealth .......... 545 Cash ..................... 17 Furniture, etc ........... 120 ----- 1,181 |
This total yields an average of �3156 per inhabitant, which Dr
Stamp, the highest authority on the subject, is disposed to consider as
prima facie too low (though he does not accept certain much higher
estimates lately current), the corresponding wealth per head (to take
Belgium's immediate neighbours) being �3167 for Holland, �3244 for
Germany, and �3303 for France.(8*) A total of �31,500 million, giving
an average of about �3200 per head, would, however, be fairly liberal.
The official estimate of land and buildings is likely to be more
accurate than the rest. On the other hand, allowance has to be made
for the increased costs of construction.
Having regard to all these considerations, I do not put the money
value of the actual physical loss of Belgian property by destruction
and loot above �3150 million as a maximum, and while I hesitate to put
yet lower an estimate which differs so widely from those generally
current, I shall be surprised if it proves possible to substantiate
claims even to this amount. Claims in respect of levies, fines,
requisitions, and so forth might possibly amount to a further �3100
million. If the sums advanced to Belgium by her allies for the general
costs of the war are to be included, a sum of about �3250 million has
to be added (which includes the cost of relief), bringing the total to
�3500 million.
The destruction in France was on an altogether more significant
scale, not only as regards the length of the battle-line, but also on
account of the immensely deeper area of country over which the battle
swayed from time to time. It is a popular delusion to think of Belgium
as the principal victim of the war; it will turn out, I believe, that
taking account of casualties, loss of property, and burden of future
debt, Belgium has made the least relative sacrifice of all the
belligerents except the United States. Of the Allies, Serbia's
sufferings and loss have been proportionately the greatest, and after
Serbia, France. France in all essentials was just as much the victim of
German ambition as was Belgium, and France's entry into the war was
just as unavoidable. France, in my judgment, in spite of her policy at
the peace conference, a policy largely traceable to her sufferings, has
the greatest claims on our generosity.
The special position occupied by Belgium in the popular mind is
due, of course, to the fact that in 1914 her sacrifice was by far the
greatest of any of the Allies. But after 1914 she played a minor role.
Consequently, by the end of 1918, her relative sacrifices, apart from
those sufferings from invasion which cannot be measured in money, had
fallen behind, and in some respects they were not even as great as, for
example, Australia's. I say this with no wish to evade the obligations
towards Belgium under which the pronouncements of our responsible
statesmen at many different dates have certainly laid us. Great Britain
ought not to seek any payment at all from Germany for herself until the
just claims of Belgium have been fully satisfied. But this is no reason
why we or they should not tell the truth about the amount.
While the French claims are immensely greater, here too there has
been excessive exaggeration, as responsible French statisticians have
themselves pointed out. Not above 10% of the area of France was
effectively occupied by the enemy, and not above 4% lay within the area
of substantial devastation. Of the sixty French towns having a
population exceeding 35,000, only two were destroyed Reims (115,178)
and St. Quentin (55,571); three others were occupied Lille, Roubaix,
and Douai and suffered from loot of machinery and other property,
but were not substantially injured otherwise. Amiens, Calais,
Dunkerque, and Boulogne suffered secondary damage by bombardment and
from the air; but the value of Calais and Boulogne must have been
increased by the new works of various kinds erected for the use of the
British army.
The Annuaire statistique de la France, 1917, values the entire
house property of France at �32,380 million (59.5 milliard francs).(9*)
An estimate current in France of �3800 million (20 milliard francs) for
the destruction of house property alone is, therefore, obviously wide
of the mark.(10*) �3120 million at pre-war prices, or say �3250 million
at the present time, is much nearer the right figure. Estimates of the
value of the land of France (apart from buildings) vary from �32,480
million to �33,116 million, so that it would be extravagant to put the
damage on this head as high as �3100 million. Farm capital for the
whole of France has not been put by responsible authorities above �3420
million.(11*) There remain the loss of furniture and machinery, the
damage to the coal-mines and the transport system, and many other minor
items. But these losses, however serious, cannot be reckoned in value
by hundreds of millions sterling in respect of so small a part of
France. In short, it will be difficult to establish a bill exceeding
�3500 million, for physical and material damage in the occupied and
devastated areas of northern France.(12*) I am confirmed in this
estimate by the opinion of M. Ren Pupin, the author of the most
comprehensive and scientific estimate of the pre-war wealth of
France,(13*) which I did not come across until after my own figure had
been arrived at. This authority estimates the material losses of the
invaded regions at from �3400 million to �3600 million (10 to 15
milliards),(14*) between which my own figure falls half-way.
Nevertheless, M. Dubois, speaking on behalf of the budget
commission of the Chamber, has given the figure of �32,600 million (65
milliard francs) 'as a minimum' without counting 'war levies, losses at
sea, the roads, or the loss of public monuments'. And M. Loucheur, the
Minister of Industrial Reconstruction, stated before the Senate on 17
February 1919 that the reconstitution of the devastated regions would
involve an expenditure of �33,000 million (75 milliard francs) more
than double M. Pupin's estimate of the entire wealth of their
inhabitants. But then at that time M. Loucheur was taking a prominent
part in advocating the claims of France before the peace conference,
and, like others, may have found strict veracity inconsistent with the
demands of patriotism.(15*)
The figure discussed so far is not, however, the totality of the
French claims. There remain, in particular, levies and requisitions on
the occupied areas and the losses of the French mercantile marine at
sea from the attacks of German cruisers and submarines. Probably �3200
million would be ample to cover all such claims. but to be on the safe
side, we will, somewhat arbitrarily, make an addition to the French
claim of �3300 million on all heads, bringing it to �3800 million in
all.
The statements of M. Dubois and M. Loucheur were made in the early
spring of 1919. A speech delivered by M. Klotz before the French
Chamber six months later (5 September 1919), was less excusable. In
this speech the French Minister of Finance estimated the total French
claims for damage to property (presumably inclusive of losses at sea,
etc., but apart from pensions and allowances) at �35,360 million (134
milliard francs), or more than six times my estimate. Even if my figure
prove erroneous, M. Klotz's can never have been justified. So grave has
been the deception practised on the French people by their ministers
that when the inevitable enlightenment comes, as it soon must (both as
to their own claims and as to Germany's capacity to meet them), the
repercussions will strike at more than M. Klotz, and may even involve
the order of government and society for which he stands.
British claims on the present basis would be practically limited to
losses by sea-losses of hulls and losses of cargoes. Claims would lie,
of course, for damage to civilian property in air raids and by
bombardment from the sea, but in relation to such figures as we are now
dealing with, the money value involved is insignificant �35 million
might cover them all, and �310 million would certainly do so.
The British mercantile vessels lost by enemy action, excluding
fishing vessels, numbered 2,479, with an aggregate of 7,759,090 tons
gross.(16*) There is room for considerable divergence of opinion as to
the proper rate to take for replacement cost; at the figure of �330 per
gross ton, which with the rapid growth of shipbuilding may soon be too
high but can be replaced by any other which better authorities(17*) may
prefer, the aggregate claim is �3230 million. To this must be added the
loss of cargoes, the value of which is almost entirely a matter of
guesswork. An estimate of �340 per ton of shipping lost may be as good
an approximation as is possible, that is to say �3310 million, making
�3540 million altogether.
An addition to this of �330 million, to cover air raids,
bombardments, claims of interned civilians, and miscellaneous items of
every description, should be more than sufficient making a total
claim for Great Britain of �3570 million. It is surprising, perhaps,
that the money value of our claim should be so little short of that of
France and actually in excess of that of Belgium. But, measured either
by pecuniary loss or real loss to the economic power of the country,
the injury to our mercantile marine was enormous.
There remain the claims of Italy, Serbia, and Roumania for damage
by invasion and of these and other countries, as for example
Greece,(18*) for losses at sea. I will assume for the present argument
that these claims rank against Germany, even when they were directly
caused not by her but by her allies; but that it is not proposed to
enter any such claims on behalf of Russia.(19*) Italy's losses by
invasion and at sea cannot be very heavy, and a figure of from �350
million to �3100 million would be fully adequate to cover them. The
losses of Serbia, although from a human point of view her sufferings
were the greatest of all,(20*) are not measured pecuniarily by very
great figures, on account of her low economic development. Dr Stamp
(loc. cit.) quotes an estimate by the Italian statistician Maroi, which
puts the national wealth of Serbia at �3480 million or �3105 per
head,(21*) and the greater part of this would be represented by land
which has sustained no permanent damage.(22*) In view of the very
inadequate data for guessing at more than the general magnitude of the
legitimate claims of this group of countries, I prefer to make one
guess rather than several and to put the figure for the whole group at
the round sum of �3250 million.
We are finally left with the following
Million £ Belgium .................. 500(23*) France ................... 800 Great Britian ............ 570 Other Allies ............. 250 ----- Total ............... 2,120 |
I need not impress on the reader that there is much guesswork in
the above, and the figure for France in particular is likely to be
criticised. But I feel some confidence that the general magnitude, as
distinct from the precise figures, is not hopelessly erroneous; and
this may be expressed by the statement that a claim against Germany,
based on the interpretation of the pre-armistice engagements of the
Allied Powers which is adopted above, would assuredly be found to
exceed �31,600 million and to fall short of �33,000 million.
This is the amount of the claim which we were entitled to present
to the enemy. For reasons which will appear more fully later on, I
believe that it would have been a wise and just act to have asked the
German government at the peace negotiations to agree to a sum of
�32,000 million in final settlement without further examination of
particulars. This would have provided an immediate and certain
solution, and would have required from Germany a sum which, if she were
granted certain indulgences, it might not have proved entirely
impossible for her to pay. This sum should have been divided up amongst
the Allies themselves on a basis of need and general equity.
But the question was not settled on its merits.