1 . The A B C of War Payments," from International Talks, Wickham Steed . THE LAUSANNE MEETING Its Purpose and Outlook
It would be a good thing if persons talking and writing about 'reparations' or 'war debts' were made to say what it is all about to boys and girls at school. Then they would have to get their ideas clear and be simple. If they had a true knowledge of what they were talking about, it seems to me that they would say something like this :
Not so very long back there was a Great War. It was started because every nation in Europe was in Lear of all the rest. They were fully armed and all had the same fear—that others might have designs to get control of them. At last two of the nations, Austria and Germany, made up their minds to give the others such a hard and sudden blow that they would go down before it. They did a great amount of damage. But the others gave back harder blows and made Germany and Austria put their names to a paper saying that these two countries were responsible for 'starting it,' and give an undertaking to make payment for the damage done. This undertaking to make payment for damage was named 'reparations.'
While they were fighting, the second group of nations were getting short of ready money. They had made payments on a great scale for guns and food and things for firing at the nations who were firing at them. So the poorer countries got money from those who were well-off, till these became poor in their
turn. Then those who had been well-off got money from Amy, lea, who after a time came into the fight and gave them help in overcoming Germany and Austria. These debts between the second group of nations, and between them and America, were named 'war debts.'
Signing I.O.U.’s . At the end of the war all the nations in Europe were poor without being conscious of it. It is simple enough to
on living on money which has been got from others, but it is hard to give it all back again -— even harder when it has been used it smashing things up. If they had been wise, they and America would have let one another off these debts, and only made such payments as •were truly needed for putting together again the things which had been most badly smashed ; and, after making an agreement to have no more war, they would have gone to work to put things in order again.
But, after a fight, men are generally so wounded and angry that they are unable to be wise. They did not keep before the,, the fact that they had not enough money between them to mat a complete payment for damages, and so their talk was of “making others give the money.” It was the desire of France, England, and Italy to “make Germany give the money.” It was America’s desire to “make Europe give the money.”
After a time they all gave I.O.U.’s to all the others and did their best to give effect to their undertakings -— (that is, all but America, who took the view that she was not in debt to anybody, not even for what others had done to get the best of it in the war) -— till most of the nations in Europe made the discovery that they were “without a penny.” Even America, who was of the opinion that it was possible for her to go on living in comfort by herself inside her high garden wall and to take money from all the others, suddenly saw that millions of her countrymen were getting very poor, and that her ready money for house keeping was getting low.
The nations in Europe, who were in her debt, kept saying
to her: “Let us off our debts to you and we will all let one another off our debts.” For a while America gave some thought to the question and then said, “I have let you off a great amount, and I will not let you off another penny.” So the European nations are going to have a meeting at Lausanne in Switzerland, in two weeks’ time, to see what is to be done. The name of this meeting is the “Lausanne Reparations Conference.”
“I Am Unable to Make Payment,’ The only one among them who has come to a decision is Germany. She says : “It is not possible for me to make payment and I will not do it.” The answer of the others is : “How are we able to make payment to one another and America if you do not give us any money?” France says in a loud voice: “I have let Germany off a great part of her debt for damages, and she has given her word to let me have the rest. This it is necessary for me to have.” England and America say angrily : “We have let Germany have a great amount of money privately after the war, and it is right for her to give back that first.” France’s answer to that is : “If you have been so foolish as to let her have money privately, that is your business. I’m going to have my money for damages.” England and America then put forward the argument that most of Germany’s payments for damages up to now have come out of the money they have let her have privately. At this France, shaking her head, says: “Germany is playing a trick. She has put away enough money in safe places in other countries to make payment to us all; only she is attempting to give us the idea that there is nothing in her pockets so as to get us to let her off everything.”
If the discussion at the meeting in Switzerland goes like this, not much will come from it, and then half of Europe may truly be “without a penny.” But if all the European nations make up their minds to have done with fighting -— at least till they have enough money for it again —- they may get into the way of pulling together and, in time, may come to an agreement to put their old I.O.U.’s in the fire.
Seeing the Point. There is some chance that they may do so.
They may make a start by saying, all together, that if the European nations are not able to make payments to one another, nobody in Europe will be able to make payment to America. This is more possible because France and England are now seeing the point. Like America, France at one time had the idea that it was possible to go on living happily inside her garden wall, seated in comfort on her gold bags. Then she made the discovery that a great number of her countrymen had very little food, and that gold is not food. And it is not possible to make use of it for getting things if other nations will not take it, or are unable to make use of it.
England had hopes that, if she put on her best behavior, America would let her off much of her debt, and that with America and Germany she would then be able to get France into trouble.
But America has said that she will not let anyone off another penny, and so England has gone quietly up to France to see if she is ready to do something about it. France has given the answer : “If you will give up saying to me and to the others that the paper we made Germany put her name to after the war, which said that Germany and Austria were responsible for ‘starting it,’ is to be put in the waste-paper basket ; and if you are in agreement that, if Germany is able to make payment or not, it is in fact right for her to do so, I may be ready to let Germany off for quite a long time. Then, if Germany is good and keeps that paper we made her put her name to, we will see what may be done to make things better for everybody in Europe.”
A Ten Years' Rest. Germany may not be quite pleased to see England and France talking in this way. But she may put up with it if she has the feeling that she is truly going to be let off. Some Germans even are of the opinion that this would not be a bad way out of all the trouble, because, if Germany makes an attempt to put that bit of paper in the waste-paper basket, France and other nations which are very much against such a step, may give her another whipping.
One very wise German, Baron von Soden, said not long back,
that Germany’s chiefs have been wrong not to make it clear to their countrymen that, by attempting to put the paper in the waste-paper basket, they are going the right way for another great war, in which Germany and most of Europe might be smashed up for ever. So he said, “Let us at last be straightforward and wise. It is not possible for us to say that we are pleased with that bit of paper, and it is not our opinion that we by ourselves were responsible for starting the war.”
But let us have a 'rest' for ten years, let us put the war and the debts and so on out of our minds, and see what comes of play- kg together as a good European group. Then we may make the discovery that we are all such good friends that we have no more interest in fighting.
If —- . If Germany said something like this, and did it, the nations of Europe would truly be able to say 'A Happy New Year' to one another. France might come down from her bags of gold and let a smiling face be seen over her garden wall. Eng land would take the view that France’s behavior was so good that she would be quite a help in controlling the European group. Even America would be surprised and might say to herself, "Those nations in Europe seem to be quite good friends, I had better come into the circle, and say nothing about their I.O.U's."
And if America saw persons in Europe pushing one or two bricks off their different garden walls, so that it would not be so hard to have a talk with one another, some bricks might come off the American garden wall in addition.
If the persons talking and writing about 'reparation's and 'war debts' were able to see that we are all like boys and girls at their first school in need of a simple account of things, the nations might get some idea of what is taking place and see how to make things different.
Opening Talk at the Banff Conference (1933)
of the Institute of Pacific Relations
[ For the meeting of any international organization, where the general public does not take part in the discussion, the special lists of fifty words covering the sciences in question will naturally be needed, in addition to the 850. Here is a paper by Mr. W.L. Holland at the opening meeting of the Banff Conference (1933) of the Institute of Pacific Relations,1 making use of the fifty words for Economics list on page 239.]
THE WARRING FORCES IN THE PACIFIC
After these observations, let me now go to the harder business of
giving some account of the conditions at the back of the economic and political troubles about to come under discussion. There are a number of ways of attacking these questions and I have no desire to give you the idea that the angle from which I am looking at them is better than others. But it is simplest for me to see the warring forces all over the Pacific, in economic and political fields, and equally in the field of education, as caused by the fact that there is not a good adjustment between geographical limits and the economic needs of the nations in question. The anthropologist may give a deeper account of it in relation to changes in ways of living; the political expert may give greater weight to the political signs of these warring tendencies; but my training has been in economics and you will have to let me make the attack from the angle which is most natural to me. As I see it, then, these bad adjustments are like a number of forces acting unequally on the different countries. The first of these is the unequal distribution of natural produce : that is to say, of food,
of good farm land, or of materials for industry. This is common knowledge and it is unnecessary to say more about it. Japan, for example, is without enough coal and iron if she is looking forward to the development of her industries in years to come; Canada is dependent on other countries for cotton and silk. Second, there are the effects of an unequal distribution of population. This is, in part, the effect of the first conditions which I have been talking about, and in part the effect of conscious economic development. Then comes the fact that conditions of living are unequal; that is to say, not only is living cheaper in some countries than in others, but the deeper values themselves are different in different societies, so that ideas of material wellbeing are unlike. Fourth, there is the unequal distribution of political power in the Pacific. Some countries are politically dependent while, at the other end of the scale, others are Great Powers. Because of these different levels of political power (some would say because of unequal military and sea-power) some countries are more able to take care of their economic interests than others. And last, countries are put in unequal positions through the operation of time: in the sense that by chance or by design some countries have got a better position through having been first in the field of trade or in the development of industry; and looking at the other side of the picture, countries now starting their economic development make the discovery that they are kept back and walled-in by competition with countries which have been longer in the field. What is even more serious, they frequently see that they are shut out from certain parts of the great markets because these have been made the private property of the first-comas. Quite clearly, one side of this question is the way in which some of the most important colonies of the earth, such as Indo-China, Formosa, or parts of Africa, are railed off for the special use of the mother-country.
Now for a long time these unequal forces inside the different countries were able to go on side by side simply because there had been little development of the connections between the different parts of the Pacific. It was as if there were a number of vessels full of different gases in different conditions of expansion and with different chemical properties, side by side but kept separate from one another. But now, with the development of physical transport through railways, roads, and steamships, and the development of apparatus for the transport of ideas such as over-sea telegrams and radio, which are seen less but have even greater effects, it is as if the different vessels had been joined together by pipes. Some of the pipes are wide, so that the different forces quickly become equal. Others are small or are stopped up in some way, so that it takes a long time for a complete adjustment to be made. But generally it is true to say that there is a tendency in the direction of some sort of leveling, and in so far as the gases were said to have different chemical properties, there is a tendency for reactions to take place between them which may be more or less violent and in which much heat may be produced.
The joining together of the different parts of the Pacific was not a process taking place by itself. The very opposite is true :
it was part of a great expansion of political, economic, and other forces from the west of Europe and North America. This is in fact the process to which we have given the name of 'expansionism' in the outline of the present discussions. But for one or two details, we might say that it is almost the same as that process to which the supporter of Marx gives the name of 'imperialism.' It is a process which was possibly at its highest development between 1890 and 1900. The clearest and most surprising sign of it was the competition among the Great Powers of the West to be first in marking off for themselves great stretches of land in countries at a lower stage of development, or in getting important economic rights in countries which were not so strong. such as China, Persia, and South America. One example of ii was the division of Africa, another was the violent competition between England, Germany, and Russia to get special rights in China, while another was the way in which Japan got control of important colonies by taking Formosa and Korea. Sometimes it was a cause of open war: for example, between Spain and the United States or Russia and Japan ; at other times no fight was made against the process.
Frequently the rewards were great, and there is no doubt that much of the driving-force in this expansion came from the desire to get materials for industry, and specially the produce of colonies. Frequently, however, later history has made it seem very probable that the reward was not great enough for the
trouble, and it is possible to give examples of competition for power which now seem surprisingly foolish. There was a time
in the 1880’s when the harbor at Apia in Samoa had in it the warships of four or five Great Powers, all making attempts to get the support of the island chiefs.
It is true that there were great economic tendencies at the back of this expansion of the Powers of the West ; hut it is important to keep in mind that there were in addition great political and other forces. In fact, it is probable that this expansion is best seen as a surprisingly complex knot of purposes, in which the hope of
profit was mixed up with ideas of giving law and order to such countries as the Philippines and China, and with the less self-interested desire to give the Christianity and education of the West to persons who seemed in the opinion of Europe to be living at a much lower level. And these mixed purposes are very far from being a thing of the past. Unhappily, one sees a number of signs of them in the political events of today. So that this 'expansionism' was not simply an outburst of economic forces or the effect of a desire to get new materials for industry and control of new markets ; it was equally an outgoing current of political ideas and ways of living.
From another point of view it may be of use to see the complete process as one of motion. In some places populations them selves made a move in an attempt to get away from the hard living-conditions in the countries of the West, where the development of industry came earlier. It was, in fact, because they gave such outlets that certain forms of expansion through colonies were supported. In other places there was an outgoing current of money for investment and with it some of the ideas, inventions, and forms of organization which had come into being with the growth of industry in the West. Almost everywhere it took the form of trade with other countries. This is only another name for the distribution of goods and services. After a certain stage of development in the industries of one country, these goods were produced in ever-increasing amounts which made new outlets into other countries necessary ; and on the other side, when these outlets had been made, it was necessary to get control of new places overseas where the materials for industry were produced.
Together with all this there was a current of ideas, some of which took root in the countries at a lower stage of economic development, and have later been used for the organization of those countries on the lines of the West. Some were ideas about the equal rights of man which have taken root in new places ant are producing strange fruit. Others were ideas about conditions of material well-being and the right to be free, which are causing great changes in the older forms of society still in existence in a number of Pacific countries.
The outcome of all this is that today almost every part of the Pacific has been changed by outside economic and political control and new ideas of education. In almost all these places their are parts of the population which come from other nation
almost everywhere business is supported by investments from other countries, or money has been sent out to other countries for business purposes : the lands which are not politically dependent on some oversea power are responsible for the government of some colony or dependent country. What is more, almost no land has gone through these processes without some sort of trouble. It is in this question that the Banff Conference will probably be chiefly interested. The trouble may or may not have taken serious political forms, though frequently it has done so.
Sometimes the chief sign of it has been the existence of a generally unbalanced condition of the public mind, so that unimportant or chance events such as the putting to death of a military authority or the punishment of a chief (for example, in a colony) have in a very short time been increased to the size of serious international troubles. To those outside the country this condition may possibly be seen as a wave of public feeling, as if a serious attack was being made on the international position of the country ; while looked at from the inside it may seem to be simply an outlet for a nation’s feelings, sometimes right and sometimes wrong, against an increasingly great weight of economic and other forces.
Most of those who have given attention to the forces at the back of the changes in the government of Germany in the past year, or to the political conditions inside Japan which were responsible for the fighting in Manchuria, will be ready to give full value to these psychological developments which have frequently been given little attention. Whatever form the outburst may take, it is important to keep in mind the fact that its deeper causes may be a long way from the special point about which argument is taking place. It is in part for this reason that this Conference is not simply giving its attention to two or three of the chief international questions in the Pacific. Its experience in past conferences has made it clear that numbers of these international troubles have their roots deep down in questions which are very different from those which are at present causing division-questions which are frequently not international in any sense, but have to do only with conditions inside the country. In such questions -— and the talks at our 'Round-Tables' will almost certainly put numbers of them before us —- it is clearly a waste of time for discussion and suggestions to be limited to the international side only: that is to say, we will not go very far if we make a decision to keep out of the discussion all questions which are generally taken to be the private business of one country, with the old story that international discussion of them would be an attack on the tights of nations.
Because of this belief that for a full knowledge of all the different forms which these warring tendencies may take in the international field it is necessary to give the fullest possible attention to the different forces at the back of them, the Institute
has made a request to the National Councils to give space in their Conference papers to getting at the ways in which the different group interests in a country may make use of their power over the government. In addition there has been a request for accounts of the ways in which these special interests —- (Chambers of Commerce, organizations of business men, workers, producers, etc.) —- have become united for their common profit, or have been forced to come into an organization in the interests of public well-being. This observation may do something to make it clear to representatives at this Conference why an international group (such as this) is giving attention to such seemingly private questions as rice-control in Japan or the organization of the sugar industry in Hawaii, or the work of the National Industrial Recovery Board in the United States. The reason is that a number of the attempts at control inside a nation are faced with the same sort of troubles, on a smaller scale, as those which have to be overcome if attempts at international control are to be made. You will see a number of examples of this point in the discussion-material : to give one only, it was not till special laws had been made in the United States giving traders the right to come together in an organization, that it was possible for the International or "World Copper Cartel" to be formed.
There are some here who are able to give a picture of the trouble of getting Lancashire cotton producers into the sort of working organization which by common agreement is necessary for the development of a market for British goods in China. In the same way we have the example of the Stevenson system of rubber control, which came to nothing because the Dutch government was unable in the end to keep control of the amount of rubber produced by the islanders in the Dutch East Indies.
There is another reason for giving attention to the group interests in different countries. Troubles of the sort which come to mind when we are talking about warring tendencies in international economic development are generally seen to be between groups and not between private persons. The private person only
comes into the picture when his position is one of great power, so that he is more like a group than a private producer. This seems to me to be a good suggestion for testing how far, in the questions under discussion, there is truly a condition of economic war and not simply one of normal competition. When any trouble has at the back of it some sort of group organization, then we have a good reason for the belief that such a condition of economic war is present. This statement, naturally, is not complete without another, which I will give later.
Possibly the best way to make my point clear is to take some of the examples of warring forces given in the discussion-material. Violent competition between producers inside a country or even on an international scale is no new thing, and in a general way it is probably true to say that it is not a cause of serious trouble, because any one business in competition with others is only one small part of the complete organization. But when these units are joined into groups such as shipping conferences or producers' organizations, or even into great separate units like important oil companies, then competition may well
be given the name of war. Clearly, one reason for this is that a united group has a much greater chance of having some effect on its government, and of getting support for what it is doing.
That takes me to the second rough test. It is that when the interests of a given group have got control of the political machine then there is good reason for a belief that the outcome of competition will frequently be economic war. One seemingly unimportant argument about trade competition under these conditions will then take on a political color and may be the cause of a protest from government representatives. The processes of business competition in this way become something like a test of power between two governments. Examples of this are common enough and will frequently come to your attention in the conference. Competition between the shipping companies of different countries has been sharp at all times; but it becomes a question for government protest and bitter argument when it is seen that competition has some connection with government support.
The commonest examples of this are loans of government money to shipping businesses. This, and the other and more roundabout forms of support given by the Japanese Government to ship owners and producers, is one of the chief causes of protest against the serious Japanese competition which is giving so much trouble to English, Indian and American producers today. Those who have been against having normal relations with the government of Soviet Russia or making trade agreements with that country have made it a chief point of attack that Soviet over seas trade (because it is completely in the hands of the Government) may be, and has been, made use of politically. A good example of the complex international troubles which come from this sort of thing may be seen very near us in the way in which the grain (wheat) and wood (lumber) interests of Canada were able to get the governments of Canada and England to put an end to the Trade Agreement between England and Russia.
This uniting of business with political designs is at the back of almost all the international troubles about taxes on goods and has given numbers of examples of the sort of economic war I ant attempting to give an account of ; first, in the changes in the U. S tax list in 1930 ; second, in the agreements giving special rights to British countries at the Ottawa Conference; and third, in the attack on Japanese trade in the new Indian Tax List.
You will see in the outline of the discussions that this uniting of political powers with business interests has been put forward as a possible way of grouping the different sorts of warring forces. In this way the sort of trouble which takes place in competition in private business is put right by private agreements and would come into one group, while those which have connections with government and in which political agreement is necessary would come in another ; while a third group would be made up of troubles which go even deeper, needing special apparatus such as an international conference or an international committee of judges ; and last there are the troubles on an international scale which are only ended by the use of force -— as in boycotts and so on.
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1. Conflict and Control in the Pacific, Institute of Pacific Relations, Honolulu, 1933.