Europe After the Treaty

This chapter must be one of pessimism. The treaty includes no
provisions for the economic rehabilitation of Europe -- nothing
to make the defeated Central empires into good neighbours,
nothing to stabilise the new states of Europe, nothing to reclaim
Russia; nor does it promote in any way a compact of economic
solidarity amongst the Allies themselves; no arrangement was
reached at Paris for restoring the disordered finances of France
and Italy, or to adjust the systems of the Old World and the New.

The Council of Four paid no attention to these issues, being
preoccupied with others -- Clemenceau to crush the economic life
of his enemy, Lloyd George to do a deal and bring home something
which would pass muster for a week, the President to do nothing
that was not just and right. It is an extraordinary fact that the
fundamental economic problem of a Europe starving and
disintegrating before their eyes, was the one question in which
it was impossible to arouse the interest of the Four. Reparation
was their main excursion into the economic field, and they
settled it as a problem of theology, of politics, of electoral
chicane, from every point of view except that of the economic
future of the states whose destiny they were handling.

I leave, from this point onwards, Paris, the conference, and
the treaty, briefly to consider the present situation of Europe,
as the war and the peace have made it; and it will no longer be
part of my purpose to distinguish between the inevitable fruits
of the war and the avoidable misfortunes of the peace.
The essential facts of the situation, as I see them, are
expressed simply. Europe consists of the densest aggregation of
population in the history of the world. This population is
accustomed to a relatively high standard of life, in which, even
now, some sections of it anticipate improvement rather than
deterioration. In relation to other continents Europe is not
self-sufficient; in particular it cannot feed itself. Internally
the population is not evenly distributed, but much of it is
crowded into a relatively small number of dense industrial
centres. This population secured for itself a livelihood before
the war, without much margin of surplus, by means of a delicate
and immensely complicated organisation, of which the foundations
were supported by coal, iron, transport, and an unbroken supply
of imported food and raw materials from other continents. By the
destruction of this organisation and the interruption of the
stream of supplies, a part of this population is deprived of its
means of livelihood. Emigration is not open to the redundant
surplus. For it would take years to transport them overseas,
even, which is not the case, if countries could be found which
were ready to receive them. The danger confronting us, therefore,
is the rapid depression of the standard of life of the European
populations to a point which will mean actual starvation for some
(a point already reached in Russia and approximately reached in
Austria). Men will not always die quietly. For starvation, which
brings to some lethargy and a helpless despair, drives other
temperaments to the nervous instability of hysteria and to a mad
despair. And these in their distress may overturn the remnants of
organisation, and submerge civilisation itself in their attempts
to satisfy desperately the overwhelming needs of the individual.

This is the danger against which all our resources and courage
and idealism must now co-operate.
On 13 May 1919 Count Brockdorff-Rantzau addressed to the
peace conference of the Allied and Associated Powers the Report
of the German economic commission charged with the study of the
effect of the conditions of peace on the situation of the German
population. 'In the course of the last two generations,' they
reported, 'Germany has become transformed from an agricultural
state to an industrial state. So long as she was an agricultural
state, Germany could feed 40 million inhabitants. As an
industrial state she could ensure the means of subsistence for a
population of 67 millions; and in 1913 the importation of
foodstuffs amounted, in round figures, to 12 million tons. Before
the war a total of 15 million persons in Germany provided for
their existence by foreign trade, navigation, and the use,
directly or indirectly, of foreign raw material.' After
rehearsing the main relevant provisions of the peace treaty the
report continues: 'After this diminution of her products, after
the economic depression resulting from the loss of her colonies,
her merchant fleet and her foreign investments, Germany will not
be in a position to import from abroad an adequate quantity of
raw material. An enormous part of German industry will,
therefore, be condemned inevitably to destruction.

The need of
importing foodstuffs will increase considerably at the same time
that the possibility of satisfying this demand is as greatly
diminished. In a very short time, therefore, Germany will not be
in a position to give bread and work to her numerous millions of
inhabitants, who are prevented from earning their livelihood by
navigation and trade. These persons should emigrate, but this is
a material impossibility, all the more because many countries and
the most important ones will oppose any German immigration. To
put the peace conditions into execution would logically involve,
therefore, the loss of several millions of persons in Germany.
This catastrophe would not be long in coming about, seeing that
the health of the population has been broken down during the war
by the blockade, and during the armistice by the aggravation of
the blockade of famine. No help, however great, or over however
long a period it were continued, could prevent these deaths en
masse.' 'We do not know, and indeed we doubt,' the Report
concludes, 'whether the delegates of the Allied and Associated
Powers realise the inevitable consequences which will take place
if Germany, an industrial state, very thickly populated, closely
bound up with the economic system of the world, and under the
necessity of importing enormous quantities of raw material and
foodstuffs, suddenly finds herself pushed back to the phase of
her development which corresponds to her economic condition and
the numbers of her population as they were half a century ago.
Those who sign this treaty will sign the death sentence of many
millions of German men, women and children.'
I know of no adequate answer to these words. The indictment
is at least as true of the Austrian, as of the German,
settlement. This is the fundamental problem in front of us,
before which questions of territorial adjustment and the balance
of European power are insignificant. Some of the catastrophes of
past history, which have thrown back human progress for
centuries, have been due to the reactions following on the sudden
termination, whether in the course of Nature or by the act of
man, of temporarily favourable conditions which have permitted
the growth of population beyond what could be provided for when
the favourable conditions were at an end.
The significant features of the immediate situation can be
grouped under three heads: first, the absolute falling off, for
the time being, in Europe's internal productivity; second, the
breakdown of transport and exchange by means of which its
products could be conveyed where they were most wanted; and
third, the inability of Europe to purchase its usual supplies
from overseas.

The decrease of productivity cannot be easily estimated, and
may be the subject of exaggeration. But the prima facie evidence
of it is overwhelming, and this factor has been the main burden
of Mr Hoover's well-considered warnings. A variety of causes have
produced it: violent and prolonged internal disorder as in Russia
and Hungary; the creation of new governments and their
inexperience in the readjustment of economic relations, as in
Poland and Czechoslovakia; the loss throughout the continent of
efficient labour, through the casualties of war or the
continuance of mobilisation; the falling off in efficiency
through continued underfeeding in the Central empires; the
exhaustion of the soil from lack of the usual applications of
artificial manures throughout the course of the war; the
unsettlement of the minds of the labouring classes on the
fundamental economic issues of their lives. But above all (to
quote Mr Hoover), 'there is a great relaxation of effort as the
reflex of physical exhaustion of large sections of the population
from privation and the mental and physical strain of the war'.
Many persons are for one reason or another out of employment
altogether. According to Mr Hoover, a summary of the unemployment
bureaux in Europe in July 1919 showed that 15 million families
were receiving unemployment allowances in one form or another,
and were being paid in the main by a constant inflation of
currency. In Germany there is the added deterrent to labour and
to capital (in so far as the reparation terms are taken
literally), that anything which they may produce beyond the
barest level of subsistence will for years to come be taken away
from them.
Such definite data as we possess do not add much, perhaps, to
the general picture of decay. But I will remind the reader of one
or two of them. The coal production of Europe as a whole is
estimated to have fallen off by 30 per cent; and upon coal the
greater part of the industries of Europe and the whole of her
transport system depend. Whereas before the war Germany produced
85 per cent of the total food consumed by her inhabitants, the
productivity of the soil is now diminished by 40 per cent and the
effective quality of the livestock by 55 per cent.(1*) Of the
European countries which formerly possessed a large exportable
surplus, Russia, as much by reason of deficient transport as of
diminished output, may herself starve. Hungary, apart from her
other troubles, has been pillaged by the Roumanians immediately
after harvest. Austria will have consumed the whole of her own
harvest for 1919 before the end of the calendar year

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