WAR INDEMNITIES

Dominion, Volume 9, Issue 2688, 7 February 1916, Page 8

WAR INDEMNITIES

WHEN AND HOW THEY CAN BE DEMANDED

(By Joseph King, M.P., in the London "Daily News").

Often in the history of war the victor has demanded from the vanquished, ivhen the war comes to an end, that a money indemnity shall be paid as a reward of viiitory. In 1807, by the Peace of Tilsit, Napoleon imposed a crushing money indemnity oil Prussia. In 1871 (,!io victorious Germans demanded and obtained a sum of live milliards of francs (or £200,000,000) from tho defeated French. In such cases a double objcct is in view: (1) to recompense the victors for their costly victory, and (2) to leave the vanquished weakened and crushed, and therefore unable to prove dangerous again, at least for a term of years. At the close of the preseni war will it be possible, and if possible, will it be good policy, for the victors to impose a heavy money indemnity on the vanquished; Now, of course, many Englishmen .will be moved . by impulse to say: "Certainly; we shall make Germany pay every penny we can get out of lior' for' the cruel rum which islio has caused; and we shall go on fighting till we can get terms including a big indemnity." That is very simple, if it is possible. Really the imposition of an indemnity is a very complicated and difficult question 'to decide. Here are a few facts which indicate the variety of considerations which arise around it. As a result, or at least a. consequence, of the huge indemnity paid, after 1871 by Franco to Germany, the prosperity and trade of France was recuperative and progressive, while Germany was depressed and suffering. Bismarck himself acknowledged tliig; and economists In both France and Qermany attributed it to tho way in which Germany received her French indemnity debt. In subsequent wars, notably the RussoJapanese war, claims for indemnities in money, even whsn made by the victors, have not been pressed, because of the immense difficulties' they present. The Boxer war indemnity is the only recent indemnity demanded. ' Paying the Price. i!siy Indemnity commensurate with range and, losses of this war must be taken at a huge figuro, and 1000 million pounds, a sum less than the British Parliament has already voted for tho war, may be taken as the lowest figure likely to be named. Now to pay 1000 millions from olio side to anothor is impossible ill gold; and if gold payments could be made the immediate result would be to immensely inflate prices in the country receiving the gold. Prices being raised enormously with no increase in the „volume of trado, manufactures, or commodities, would mean intense privation to the poor and a completo upset of commerce. The French Government surprised the world ■when, in September, 1873, just 27 months after.the date of the first indemnity payment, she repaid-(in advance of time, thus saving the interest otherwise due)_ to Germany the last of those 200 million pounds. Franco could do this by buying bills in London, Amsterdam, and elsewhere. Sixtytwo million pounds' ivorth of bills were bought in London, for English trade had been brisk -while France- and Germany hud been fighting, and London bankers had been lending ivhile French and German armies had been spending; The neutrality aiid activity of England made the indemnity easy. In the circumstances of this war, no such neutral trading, and'.banking countries exist. If Germany has to pay a huge indem-' nity to her enemies, she cannot do it by any shipments of.gold, nor by transferring debts due to licr, nor by creating fresh debts; she can pay only directly or indirectly (and it would have to bo much more directly than was the case with tho French in 1871-3) by her commerce or productive industry. If her manufacturing businesses and trading and shipping houses could'be started' away at once in full swing, immediately the war ends, she might soon be paying off a huge indemnity. But her men will be gone, , her credit vanished, her trade broken, her system overturned. The possibility of paying under these conditions seems remote. A Difficult Prohlsm. If Germany's wonderful productivity and trading enterprise are to be revived, sooner or later, after the war,' in order to pay indemnities to her enemies, it means that her enemies l will have to trade with her far more than they did before the war. If the impoverished workers of Germany are to make wealth to pay for the ruinous policy of the German rulers, then there must bo customers for their work. These can only be found among the Allies, who have conquered her I . Will they want to trade with her, while tjheir own mills and workmen are depressed and perhaps idle? Will those of the Allies who have been Protectionist before, Russia especially, become Free Trade now that Gorman workers may. produce profits to pa.y the indemnity p The. two most recent writers who, since Mr. Norman Aiigell, in his "Great Illusion," argued that war indemnities were futile, have discussed the subject, have treated it with great caution and reservations. These writers (EL H. O'Farrell and F. W. Hirst) appear to agree on the following conclusions: A nation which proves victorious in war may with profit and' advantage impose a money indemnity on the vanquished, but the circumstances' favourable for this.will bo very exceptional; and three conditions are requisite, (a) the nation paying the indemnity must be very wealthy; (b) it must lib immeasurably weaker in military strength than the victor; (c) the war must, be of short duration. AH these circumstances seem to point to the great difficulty of extracting an indemnity from Germany after the war. Still, there aro two points of view whicih make the subject not unworthy of serious consideration. Before Germany entered Belgium she promised full satisfaction for the material and moral losses which Belgium would suffer in allowing German forces to pass through. Though tho war subsequently proclaimed' between tho two States would be taken to show tihat the promise was withdrawn, yet, ou the other hand, tho Allies continue to make the integrity of Belgium an essential object of tho war. The other consideration is this, that in this latest and greatest war new; and astonishing methods of warfare and action have been widely introduced, old traditions and conventions of war have been thrown to tho winds. May it not bo so after the war that new proposals for peace will bo put forward ? For instance, why not require Germany to supply so many tons of steel, (semen t, timber, Btono, bricks, for rebuilding devastated Belgium? Why not agree to trading conventions that would allow tho Allies the benefit of mutual trado and connnci'ce? AVhy not got certain advantages over land rates between the AVcst of Europe and Russia across Germany? And other similar concessions will readily occur. The object of these would not be, like that of an indemnity, to disarm and weaken the vanquished; but it would bo a possiblo policy to arrange trade or services on terms which would obviously be advantageous to'the victors. The possibility of civilisuiov. aro not exhausted, even if a crushing indemnity is in the nature of events <.ut of tho question!