It was towards 1877 that I was first struck with the general and growing distress in Germany as compared with France. I saw furnaces banked, the standard of well-being reduced, and the general position of workmen becoming worse and business as a whole terribly bad.

In the book from which these extracts are taken[20] the author writes as an introduction to Bismarck's speeches:

Trade and industry were in a miserable condition. Thousands of workmen were without employment, and in the winter of 1876-77 unemployment took great proportions, and soup-kitchens and State workshops had to be established.

Every author who deals with this period seems to tell broadly the same tale, however much they may differ in detail. "If only we could get back to the general position of things before the war," said M. Block in 1879. "But salaries diminish and prices go up."[21]

At the very time that the French millions were raining in upon Germany (1873) she was suffering from a grave financial crisis, and so little effect did the transfer of the money have upon trade and finance in general, that twelve months after the payment of the last of the indemnity we find the bank rate higher in Berlin than in Paris; and, as was shown by the German economist Soetbeer, by the year 1878 far more money was in circulation in France than in Germany.[22] Hans Blum, indeed, directly ascribed the series of crises between the years 1873 and 1880 to the indemnity: "A burst of prosperity and then ruin for thousands."[23] Throughout the year 1875 the bank rate in Paris was uniformly 3 per cent. In Berlin (Preussische Bank, which preceded the Reichs Bank) it varied from 4 to 6 per cent. A similar difference is reflected by the fact that, between the years 1872 and 1877, the deposits in the State savings banks in Germany actually fell by roughly 20 per cent., while in the same period the French deposits _increased_ about 20 per cent.

Two tendencies plainly show the condition of Germany during the decade which followed the war: the enormous growth of Socialism--relatively much greater than any which we have ever since seen--and the immense stimulus given to emigration.

Perhaps no thesis is commoner with the defender of war than this: that, though one may not be able in a narrow economic sense to justify an enterprise like that of 1870, the moral stimulus which victory gave to the German people is accepted as being of incalculable benefit to the race and the nation. Its alleged effect in bringing about a national solidarity, in stimulating patriotic sentiment and national pride, in the wiping out of internal differences and Heaven knows what, are claims I have dealt with at greater length elsewhere, and I wish only to note here that all this high-falutin does not stand the test of facts. The two phenomena just mentioned--the extraordinary progress of Socialism and the enormous stimulus given to emigration during the years which immediately followed the war--give the lie to all the claims in question. In 1872-73, the very years in which the moral stimulus of victory and the economic stimulus of the indemnity should have kept at home every able-bodied German, emigration was, relatively to the population, greater than it has ever been before or since, the figures for 1872 being 154,000 and for 1873 134,000.[24] And at no period since the fifties was the internal political struggle so bitter--it was a period of repression, of prescription on the one side and cla.s.s-hatred on the other--"the golden age of the drill-sergeant," some German has called it.

It will be replied that, after the first decade, Germany's trade has shown an expansion which has not been shown by that of France. Those who are hypnotized by this, quietly ignore altogether one great fact or which has affected both France and Germany, not only since the war, but during the whole of the nineteenth century, and that factor is that the population of France, from causes in no way connected with the Franco-Prussian War, since the tendency was a p.r.o.nounced one for fifty years before, is practically quite stationary; while the population of Germany, also for reasons in no way connected with the war, since the tendency was also p.r.o.nounced half a century previously, has shown an abounding expansion. Since 1875 the population of Germany has increased by twenty million souls. That of France has not increased at all. Is it astonishing that the labor of twenty million souls makes some stir in the industrial world? Is it not evident that the necessity of earning a livelihood for this increasing population gives to German industry an expansion outside the limits of her territory which cannot be looked for in the case of a nation whose social energies are not faced with any such problem? There is this, moreover, to be borne in mind: Germany has secured her foreign trade on what are, in the terms of the relative comfort of her people, hard conditions. In other words, she has secured that trade by cutting profits, in the way that a business fighting desperately for life will cut profits, in order to secure orders, and by making sacrifices that the comfortable business man will not make.

Notwithstanding the fact that France has made no sensational splash in foreign trade since the war, the standard of comfort among her people has been rising steadily, and is without doubt generally higher to-day than is that of the German people. This higher standard of comfort is reflected in her financial situation. It is Germany, the victor, which is to-day in the position of a suppliant in regard to France, and it is revealing no diplomatic secrets to say that, for many years now, Germany has been employing all the wiles of her diplomacy to obtain the official recognition of German securities on the French Bourses. France financially has, in a very real sense, the whip hand.

That is not all. Those who point triumphantly to German industrial expansion, as a proof of the benefits of war and conquest, ignore certain facts which cannot be ignored if that argument is to have any value, and they are these:

1. Such progress is not peculiar to Germany; it is shown in an equal or greater degree (I am speaking now of the general wealth and social progress of the average individual citizen) by States that have had no victorious war--the Scandinavian States, the Netherlands, Switzerland.

2. Even if it were special to Germany, which it is not, we should be ent.i.tled to ask whether certain developments of German political evolution, which _preceded the war_, and which one may fairly claim have a more direct and understandable bearing upon industrial progress, are not a much more appreciable factor in that progress than the war itself--I refer particularly, of course, to the immense change involved in the fiscal union of the German States, which was completed before the Franco-German War of 1870 had been declared; to say nothing of such other factors as the invention of the Thomas-Gilchrist process which enabled the phosphoric iron ores of Germany, previously useless, to be utilized.

3. The very serious social difficulties (which have, of course, their economic aspect) that _do_ confront the German people--the intense cla.s.s friction, the backwardness of parliamentary government, the survival of reactionary political ideas, wrapped up with the domination of the "Prussian ideal"--all difficulties which States whose political development has been less marked by successful war (the lesser European States just mentioned, for instance)--are not faced with in the same degree. These difficulties, special, among the great European nations, to Germany, are certainly in a large measure a legacy of the Franco-German War, a part of the general system to which that war gave rise, the general character of the political union which it provoked.

The general ascription of such real progress as Germany has made to the effects of the war and nothing else--a conclusion which calmly ignores factors which have evidently a more direct bearing--is one of those _a priori_ judgments repeated, parrot fashion, without investigation or care even by publicists of repute; it is characteristic of the carelessness which dominates this whole subject. This more general consideration, which does not properly belong to the special problem of an indemnity, I have dealt with at greater length in the next section.

The evidence bearing on the particular question, as to whether in practice the exaction of a large monetary indemnity from a conquered foe can ever be economically profitable or of real advantage to the conqueror, is of a simpler character. If we put the question in this form, "Was the receipt of the indemnity, in the most characteristic and successful case in history, of advantage to the conqueror?" the reply is simple enough: all the evidence plainly and conclusively shows that it was of no advantage; that the conqueror would probably have been better without it.

Even if we draw from that evidence a contrary conclusion, even if we conclude that the actual payment of the indemnity was as beneficial as all the evidence would seem to show it was mischievous; even if we could set aside completely the financial and commercial difficulties which its payment seems to have involved; if we ascribe to other causes the great financial crises which followed that payment; if we deduct no discount from the nominal value of the indemnity, but a.s.sume that every mark and thaler of it represented its full face value to Germany--even admitting all this, it is still inevitable that _the direct cost of preparing for a war and of guarding against a subsequent war of retribution must, from the nature of the case, exceed the value of the indemnity which can be exacted_. This is not merely a hypothetical statement, it is a commercial fact, supported by evidence which is familiar to us all. In order to avoid repaying, with interest, the indemnity drawn from France, Germany has had to expend upon armaments a sum of money at least equal to that indemnity. In order to exact a still larger indemnity from Great Britain, Germany would have to spend a still larger sum in preparations, and to guard against repayment would be led into indefinite expenditure, which has only to go on long enough inevitably to exceed the very definite indemnity. For, it must be remembered that the amount of an indemnity extractable from a modern community, of the credit era, has very definite limits: an insolvent community can pay more. If the Statesmen of Europe could lay on one side, for a moment, the irrelevant considerations which cloud their minds, they would see that the direct cost of acquisition by force must in these circ.u.mstances necessarily exceed in value the property acquired. When the _indirect_ costs are also considered, the balance of loss becomes incalculably greater.

Those who urge that through an indemnity, war can be made to "pay" (and it is for them that this chapter is written), have before them problems and difficulties--difficulties of not merely a military, but of a financial and social character--of the very deepest kind. It was precisely in this section of the subject that German science failed in 1870. There is no evidence that much progress has been made in the study of this phase of the problem by either side since the war--indeed, there is plenty of evidence that it has been neglected. It is time that it was scientifically and systematically attacked.

Those who wish well for Europe will encourage the study, for it can have but one result: to show that less and less can war be made to pay; that all those forces of our world which daily gain in strength make it, as a commercial venture, more and more preposterous. The study of this department of international polity will tend to the same result as the study of any of its facets: the undermining of those beliefs which have in the past so often led to, and are to-day so often claimed as the motives likely to lead to, war between civilized peoples.

CHAPTER VII

HOW COLONIES ARE OWNED

Why twentieth-century methods must differ from eighteenth--The vagueness of our conceptions of statecraft--How Colonies are "owned"--Some little recognized facts--Why foreigners could not fight England for her self-governing Colonies--She does not "own"

them, since they are masters of their own destiny--The paradox of conquest: England in a worse position in regard to her own Colonies than in regard to foreign nations--Her experience as the oldest and most practised colonizer in history--Recent French experience--Could Germany hope to do what England cannot do?

The foregoing chapters dispose of the first six of the seven propositions outlined in Chapter III. There remains the seventh, dealing with the notion that in some way England's security and prosperity would be threatened by a foreign nation "taking our Colonies from us"--a thing which we are a.s.sured her rivals are burning to do, as it would involve the "breaking up of the British Empire" to their advantage.

Let us try to read some meaning into a phrase which, however childish it may appear on a.n.a.lysis, is very commonly in the mouths of those who are responsible for British political ideas.

In this connection it is necessary to point out--as, indeed, it is in every phase of this problem of the relationship of States--that the world has moved, that methods have changed. It is hardly possible to discuss this matter of the necessary futility of military force in the modern world for ten minutes without it being urged that as England has acquired her Colonies by the sword, it is evident that the sword may do a like service for modern States desiring Colonies. About as reasonably could one say that, as certain tribes and nations in the past enriched themselves by capturing slaves and women among neighboring tribes, the desire to capture slaves and women will always be an operative motive in warfare between nations, as though slavery had not been put economically out of court by modern industrial methods, and as though the change in social methods had not put the forcible capture of women out of court.

What was the problem confronting the merchant adventurer of the sixteenth century? There were newly-discovered foreign lands containing, as he believed, precious metals and stones and spices, and inhabited by savages or semi-savages. If other traders got those stones, it was quite evident that he could not. His colonial policy, therefore, had to be directed to two ends: first, such effective political occupation of the country that he could keep the savage or semi-savage population in check, and could exploit the territory for its wealth; and, secondly, such arrangements as would prevent other nations from searching for this wealth in precious metals, spices, etc., since, if they obtained it, he could not.

That is the story of the French and Dutch in India, and of the Spanish in South America. But as soon as there grew up in those countries an organized community living in the country itself, the whole problem changed. The Colonies, in this later stage of development, have a value to the Mother Country mainly as a market and a source of food and raw material, and if their value in those respects is to be developed to the full, they inevitably become self-governing communities in greater or less degree, and the Mother Country exploits them exactly as she exploits any other community with which she may be trading. Germany might acquire Canada, but it could no longer be a question of her taking Canada's wealth in precious metals, or in any other form, to the exclusion of other nations. Could Germany "own" Canada, she would have to "own" it in the same way that Britain does; the Germans would have to pay for every sack of wheat and every pound of beef that they might buy, just as though Canada "belonged" to England or to anybody else. Germany could not have even the meagre satisfaction of Germanizing these great communities, for one knows that they are far too firmly "set." Their language, law, morals, would have to be, after German conquest, what they are now. Germany would find that the German Canada was pretty much the Canada that it is now--a country where Germans are free to go and do go; a field for Germany's expanding population.

As a matter of fact, Germany feeds her expanding population from territories like Canada and the United States and South America without sending its citizens there. The era of emigration from Germany has stopped, because the compound steam-engine has rendered emigration largely unnecessary. And it is the developments which are the necessary outcome of such forces, that have made the whole colonial problem of the twentieth century radically different from that of the eighteenth or seventeenth.

I have stated the case thus: No nation could gain any advantage by the conquest of the British Colonies, and Great Britain could not suffer material damage by their "loss," however much this would be regretted on sentimental grounds, and as rendering less easy a certain useful social co-operation between kindred peoples. For the British Colonies are, in fact, independent nations in alliance with the Mother Country, to whom they are no source of tribute or economic profit (except in the way that foreign nations are), their economic relations being settled not by the Mother Country, but by the Colonies. Economically, England would gain by their formal separation, since she would be relieved of the cost of their defence. Their loss, involving, therefore, no change in economic fact (beyond saving the Mother Country the cost of their defence), could not involve the ruin of the Empire and the starvation of the Mother Country, as those who commonly treat of such a contingency are apt to aver. As England is not able to exact tribute or economic advantage, it is inconceivable that any other country, necessarily less experienced in colonial management, would be able to succeed where England had failed, especially in view of the past history of the Spanish, Portuguese, French, and British Colonial Empires. This history also demonstrates that the position of British Crown Colonies, in the respect which we are considering, is not sensibly different from that of the self-governing ones. It is not to be presumed, therefore, that any European nation would attempt the desperately expensive business of the conquest of England, for the purpose of making an experiment with her Colonies which all colonial history shows to be doomed to failure.

What are the facts? Great Britain is the most successful colonizing nation in the world, and the policy into which her experience has driven her is that outlined by Sir C.P. Lucas, one of the greatest authorities on colonial questions. He writes, speaking of the history of the British Colonies on the American continent, thus:

It was seen--but it might not have been seen had the United States not won their independence--that English colonists, like Greek Colonies of old, go out on terms of being equal, not subordinate, to those who are left behind; that when they have effectively planted another and a distant land, they must, within the widest limits, be left to rule themselves; that, whether they are right, or whether they are wrong--more, perhaps, when they are wrong than when they are right--they cannot be made amenable by force; that mutual good feeling, community of interest, and abstention from pressing rightful claims to their logical conclusion, can alone hold together a true Colonial Empire.

But what in the name of common sense is the advantage of conquering them if the only policy is to let them do as they like, "whether they are right, or whether they are wrong--more, perhaps, when they are wrong than when they are right"? And what avails it to conquer them if they cannot be made amenable to force? Surely this makes the whole thing a _reductio ad absurdum_. Were a Power like Germany to use force to conquer Colonies, she would find out that they were not amenable to force, and that the only working policy was to let them do exactly as they did before she conquered them, and to allow them, if they chose--and many of the British Colonies do so choose--to treat the Mother Country absolutely as a foreign country. There has recently been going on in Canada a discussion as to the position which that Dominion should hold with reference to the British in the event of war, and that discussion has made Canada's position quite plain. It has been summarized thus: "We must always be free to give or refuse support."[25]

Could a foreign nation say more? In what sense does England "own" Canada when Canadians must always be free to give or refuse their military support to England; and in what way does Canada differ from a foreign nation while England may be at war when Canada can be at peace? Mr.

Asquith formally endorses this conception.[26]

This shows clearly that no Dominion is held to be bound by virtue of its allegiance to the Sovereign of the British Empire to place its forces at his disposition, no matter how real may be the emergency. If it should not desire so to do, it is free to refuse so to do. This is to convert the British Empire into a loose alliance of independent Sovereign States, which are not even bound to help each other in case of war. The military alliance between Austria and Germany is far more stringent than the tie which unites, for purposes of war, the component parts of the British Empire.

One critic, commenting on this, says:

Whatever language is used to describe this new movement of Imperial defence, it is virtually one more step towards complete national independence on the part of the Colonies. For not only will the consciousness of the a.s.sumption of this task of self-defence feed with new vigor the spirit of nationality, it will entail the further power of full control over foreign relations. This has already been virtually admitted in the case of Canada, now ent.i.tled to a determinant voice in all treaties or other engagements in which her interests are especially involved. The extension of this right to the other colonial nations may be taken as a matter of course. Home rule in national defence thus established reduces the Imperial connection to its thinnest terms.[27]

Still more significant, perhaps, is the following emphatic declaration from Mr. Balfour himself. Speaking in London, on November 6, 1911, he said:

We depend as an Empire upon the co-operation of absolutely independent Parliaments. I am not talking as a lawyer; I am talking as a politician. I believe from a legal point of view that the British Parliament is supreme over the Parliament of Canada or Australasia or the Cape or South Africa, but in fact they are independent Parliaments, absolutely independent, and it is our business to recognize that and to frame the British Empire upon the co-operation of absolutely independent Parliaments.[28]

Which means, of course, that England's position with regard to Canada or Australia is just England's position with regard to any other independent State; that she has no more "ownership" in Australia than she has in Argentina. Indeed, facts of very recent English history have established quite incontrovertibly this ridiculous paradox: England has more influence--that is to say, a freer opportunity of enforcing her point of view--with foreign nations than with her own Colonies. Indeed, does not Sir C. P. Lucas's statement that "whether they are right or wrong--still more, perhaps, when they are wrong," they must be left alone, necessarily mean that her position with the Colonies is weaker than her position with foreign nations? In the present state of international feeling an English Statesman would never dream of advocating that she should submit to foreign nations when they are wrong. Recent history is illuminating on this point.

What were the larger motives that pushed England into war with the Dutch Republics? To vindicate the supremacy of the British race in South Africa, to enforce British ideals as against Boer ideals, to secure the rights of British Indians and other British subjects, to protect the native against Boer oppression, to take the government of the country generally from a people whom, at that date, she was apt to describe as "inherently incapable of civilization." What, however, is the outcome of spending a billion and a quarter of dollars upon the accomplishment of these objects? The present Government of the Transvaal is in the hands of the Boer party.[29] England has achieved the union of South Africa in which the Boer element is predominant. Britain has enforced against the British Indian in the Transvaal and Natal the same Boer regulations which were one of her grievances before the war, and the Houses of Parliament have ratified an Act of Union in which the Boer att.i.tude with reference to the native is codified and made permanent. Sir Charles Dilke, in the debate in the House of Commons on the South African Bill, made this quite clear. He said: "The old British principle in South Africa, as distinct from the Boer principle, in regard to the treatment of natives, was equal rights for all civilized men. At the beginning of the South African War the country was told that one of its main objects, and certainly that the one predominant factor in any treaty of peace, would be the a.s.sertion of the British principle as against the Boer principle. Now the Boer principle dominates throughout the whole of South Africa." Mr. Asquith, as representing the British Government, admitted that this was the case, and that "the opinion of this country is almost unanimous in objecting to the color bar in the Union Parliament." He went on to say that "the opinion of the British Government and the opinion of the British people must not be allowed to lead to any interference with a self-governing Colony." So that, having expended in the conquest of the Transvaal a greater sum than Germany exacted from France at the close of the Franco-Prussian War, England has not even the right to enforce her views on those whose contrary views were the _casus belli_!

A year or two since there was in London a deputation from the British Indians in the Transvaal pointing out that the regulations there deprive them of the ordinary rights of British citizens. The British Government informed them that the Transvaal being a self-governing Colony, the Imperial Government could do nothing for them.[30] Now, it will not be forgotten that, at a time when Britain was quarrelling with Paul Kruger, one of the liveliest of her grievances was the treatment of British Indians. Having conquered Kruger, and now "owning" his country, do the British themselves act as they were trying to compel Paul Kruger as a foreign ruler to act? They do not. They (or rather the responsible Government of the Colony, with whom they dare not interfere, although they were ready enough to make representations to Kruger) simply and purely enforce his own regulations. Moreover, the Australian Commonwealth and British Columbia have since taken the view with reference to British Indians which President Kruger took, and which view England made almost a _casus belli_. Yet in the case of her Colonies she does absolutely nothing.

So the process is this: The Government of a foreign territory does something which we ask it to cease doing. The refusal of the foreign Government const.i.tutes a _casus belli_. We fight, we conquer, and the territory in question becomes one of our Colonies, and we allow the Government of that Colony to continue doing the very thing which const.i.tuted, in the case of a foreign nation, a _casus belli_.

Do we not, taking the English case as typical, arrive, therefore, at the absurdity I have already indicated--_that we are in a worse position to enforce our views in our own territory--that is to say, in our Colonies--than in foreign territory_?

Would England submit tamely if a foreign Government should exercise permanently gross oppression on an important section of her citizens?

Certainly she would not. But when the Government exercising that oppression happens to be the Government of her own Colonies she does nothing, and a great British authority lays it down that, even more when the Colonial Government is wrong than when it is right, must she do nothing, and that, though wrong, the Colonial Government cannot be amenable to force. Nor can it be said that Crown Colonies differ essentially in this matter from self-governing dominions. Not only is there an irresistible tendency for Crown Colonies to acquire the practical rights of self-governing dominions, but it has become a practical impossibility to disregard their special interests. Experience is conclusive on this point.

I am not here playing with words or attempting to make paradoxes. This _reductio ad absurdum_--the fact that when she owns a territory she renounces the privilege of using force to ensure observance of her views--is becoming more and more a commonplace of British colonial government.

As to the fiscal position of the Colonies, that is precisely what their political relation is in all but name; they are foreign nations. They erect tariffs against Great Britain; they exclude large sections of British subjects absolutely (practically speaking, no British Indian is allowed to set foot in Australia, and yet British India const.i.tutes the greater part of the British Empire), and even against British subjects from Great Britain vexatious exclusion laws are enacted. Again the question arises: Could a foreign country do more? If fiscal preference is extended to Great Britain, that preference is not the result of British "ownership" of the Colonies, but is the free act of the colonial legislators, and could as well be made by any foreign nation desiring to court closer fiscal relations with Great Britain.[31]

Is it conceivable that Germany, if the real relations between Great Britain and her Colonies were understood, would undertake the costliest war of conquest in history in order to acquire an absurd and profitless position from which she could not exact even the shadow of a material advantage?

It may be pleaded that Germany might on the morrow of conquest attempt to enforce a policy which gave her a material advantage in the Colonies, such as Spain and Portugal attempted to create for themselves. But in that case, is it conceivable that Germany, without colonial experience, would be able to enforce a policy which Great Britain was obliged to abandon a hundred years ago? Is it imaginable that, if Great Britain has been utterly unable to carry out a policy by which the Colonies shall pay anything resembling tribute to the Mother Country, Germany, without experience, and at an enormous disadvantage in the matter of language, tradition, racial tie, and the rest, would be able to make such a policy a success? Surely, if the elements of this question were in the least understood in Germany, such a preposterous notion could not be entertained for a moment.

Does anyone seriously pretend that the present system of British Colony-holding is due to British philanthropy or high-mindedness? We all know, of course, that it is simply due to the fact that the older system of exploitation by monopoly broke down. It was a complete social, commercial, and political failure long before it was abolished by law.