The Economic Consequences of the Peace

their nationals have been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies.” This is a well and carefully drafted Article; for the President could read it as statement of admission on Germany’s part of moral responsibility for bringing about the war, while the Prime Minister could explain it as an admission of financial liability for the general costs of the war. Article 232 continues: “The Allied and Associated Governments recognize that the resources of Germany are not adequate, after taking into account permanent diminutions of such resources which will result from other provisions of the present Treaty, to make complete reparation for all such loss and damage.” The President could comfort himself that this was no more than a statement of undoubted fact, and that to recognize that Germany cannot pay a certain claim does not imply that she is liable to pay the claim; but the Prime Minister could point out that in the context it emphasizes to the reader the assumption of Germany’s theoretic liability asserted in the preceding Article. Article 232 proceeds: “The Allied and Associated Governments, however, require, and Germany undertakes, that she will make compensation for all damage done to the civilian population of the Allied and Associated Powers and to their property during the period of the belligerency of each as an Allied or Associated Power against Germany by such aggression by land, by sea, and from the air, and in general all damage as defined in Annex I hereto.”104 The words italicized being practically a quotation from the pre-Armistice conditions, satisfied the scruples of the President, while the addition of the words “and in general all damage as defined in Annex I hereto” gave the Prime Minister a chance in Annex I.

So far, however, all this is only a matter of words, of virtuosity in draftsmanship, which does no one any harm, and which probably seemed much more important at the time than it ever will again between now and Judgment Day. For substance we must turn to Annex I.

A great part of Annex I is in strict conformity with the pre-Armistice conditions, or, at any rate, does not strain them beyond what is fairly arguable. Paragraph 1 claims damage done for injury to the persons of civilians, or, in the case of death, to their dependents, as a direct consequence of acts of war; Paragraph 2, for acts of cruelty, violence, or maltreatment on the part of the enemy towards civilian victims; Paragraph 3, for enemy acts injurious to health or capacity to work or to honor towards civilians in occupied or invaded territory; Paragraph 8, for forced labor exacted by the enemy from civilians; Paragraph 9, for damage done to property “with the exception of naval and military works or materials” as a direct consequence of hostilities; and Paragraph 10, for fines and levies imposed by the enemy upon the civilian population. All these demands are just and in conformity with the Allies’ rights.

Paragraph 4, which claims for “damage caused by any kind of maltreatment of prisoners of war,” is more doubtful on the strict letter, but may be justifiable under the Hague Convention and involves a very small sum.

In Paragraphs 5, 6, and 7, however, an issue of immensely greater significance is involved. These paragraphs assert a claim for the amount of the Separation and similar Allowances granted during the war by the Allied Governments to the families of mobilized persons, and for the amount of the pensions and compensations in respect of the injury or death of combatants payable by these Governments now and hereafter. Financially this adds to the Bill, as we shall see below, a very large amount, indeed about twice as much again as all the other claims added together.

The reader will readily apprehend what a plausible case can be made out for the inclusion of these items of damage, if only on sentimental grounds. It can be pointed out, first of all, that from the point of view of general fairness it is monstrous that a woman whose house is destroyed should be entitled to claim from the enemy whilst a woman whose husband is killed on the field of battle should not be so entitled; or that a farmer deprived of his farm should claim but that a woman deprived of the earning power of her husband should not claim. In fact the case for including Pensions and Separation Allowances largely depends on exploiting the rather arbitrary character of the criterion laid down in the pre-Armistice conditions. Of all the losses caused by war some bear more heavily on individuals and some are more evenly distributed over the community as a whole; but by means of compensations granted by the Government many of the former are in fact converted into the latter. The most logical criterion for a limited claim, falling short of the entire costs of the war, would have been in respect of enemy acts contrary to International engagements or the recognized practices of warfare. But this also would have been very difficult to apply and unduly unfavorable to French interests as compared with Belgium (whose neutrality Germany had guaranteed) and Great Britain (the chief sufferer from illicit acts of submarines).

In any case the appeals to sentiment and fairness outlined above are hollow; for it makes no difference to the recipient of a separation allowance or a pension whether the State which pays them receives compensation on this or on another head, and a recovery by the State out of indemnity receipts is just as much in relief of the general taxpayer as a contribution towards the general costs of the war would have been. But the main consideration is that it was too late to consider whether the pre-Armistice conditions were perfectly judicious and logical or to amend them; the only question at issue was whether these conditions were not in fact limited