The European Situation
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The Empire Club of Canada Addresses (Toronto, Canada), 15 Feb 1923, p. 45-66
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Foster, Sir George E., Speaker
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A little of the sidelights, the shadows, and the lighter hues in the European situation of the present day. Reasons why this subject interests Canadians: we went into the war; we carried ourselves splendidly through the first part; that although actual war as then waged is ended we have not got rid of our responsibilities yet. More to do by Canadians and by Canada than has yet been done. Why we should trouble ourselves with Europe now. A question asked and answered years ago. Some expressed opinions, and the speaker's response to them. A method of assuagement, of harmonizing and bringing peoples together, even of changing boundaries if that is thought to be best, in the constitution and covenant of the League of Nations. Some words on that League and what it might do, and what it has done. The difficulties of government as seen in Europe today. Having the greatest patience in basing our conclusions with reference to the acts of the Government of other countries. A look at Austria as an instance. Thinking about what happened in Italy just a few months ago and what it means. The economic disorganization which is apparent everywhere in Europe. The speaker's personal experience of that in Germany. Consequences of this disorganization, with examples. The impoverishment of the spiritual and intellectual life of the people in some of the countries of Europe. An observation with reference to what can be done, using Austria as an example. A question often put to the speaker: "Can Germany pay?" Discussion follows. Three observations in closing.
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15 Feb 1923
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English
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THE EUROPEAN SITUATION AN ADDRESS BY SIR GEORGE E. FOSTER, G.C.M.G. Before the Empire Club of Canada, Toronto, February 15, 1923

PRESIDENT WILKINSON introduced the speaker, who was received with applause.

SIR GEORGE E. FOSTER

I thank you, Mr. President, for your kindly introduction, and you members of the Club here assembled, and its guests, for the kindly way in which you received it. Of course neither the Chairman nor you believed all the assertions that were made. I am not, however, going to contradict them. (Laughter) I believe I have been quite an intimate and usual visitor to this Club from year to year, and as memory carries me back, this Club must now be pretty nearly of age, somewhere near twenty years or more you have been in existence. It certainly speaks excellently well for the Club that you have accomplished your period of infancy and of young manhood, and enter now upon the maturer field of Club work with the strong and intelligent membership that you possess. (Hear, hear)

It is impossible for anyone to sit down and calculate just what has been accomplished through the medium of this Club in the way of commerce of thought and opinion. Two or three hundred of you listen to an address, as you will next week, from a

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Rt. Hon. Sir George E. Foster, K.C.M.G., was elected to the House of Commons in 1882 and has held, at different times, the portfolios of Marine and Fisheries, Finance, and Trade and Commerce. He was one of the two representatives of Canada at the first meeting of the League of Nations Assembly at Geneva, and one of the signatories of the Treaty of Versailles. He is now a member of the Senate of Canada.

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distinguished Englishman. You listened a few weeks ago to an address on quite a different line, probably, from another distinguished Englishman, but you include other than Englishmen, in your programme, though you are an Empire Club; and all the springs of thought have been set a-bubbling and flowing, and that are still flowing in your Society connections and your personal connections is a quantum which it is impossible to put down in black and white. Sometimes I am oppressed, almost, with the responsibility of a human being, travelling through this little area of his earthwork, and expressing his opinions now and then to his fellow men. Sometimes a man comes to me, dating from forty years back, and says to me, "I heard you at a certain time on a certain subject; I remember exactly what you said then; I remember the influence it had on me, and I am always thankful that I attended that meeting." Well, multiply that a hundred times, a thousand times, and then by the number of speakers who speak, and what a solemn responsibility is placed on the speaker who sets thoughts in motion and gives tendency and direction to feelings and to policies, whether for individuals or for aggregations of individuals. (Hear, hear) And so I say that a Club like yours is amongst the agencies which can never be accounted for arithmetically in the line of influences and inspiration. Go on and prosper in your good work.

Now I am to speak today in relation to European affairs. I addressed a Club in Montreal the other day on "Distracted Europe," and I told them at the commencement that I did not know whether Europe or myself was a lap ahead on the question of distraction. (Laughter) It is difficult for Europe, but it is almost equally as hard for a spectator outside of Europe to sum up or to give in any fair way the condition of things as they really are. I had the advantage of spending a couple of months on the continent last summer and autumn, but I do not arrogate to myself dogmatic opinions and conclusions that are irresistible or irrevocable because of my two months' flying trip through Europe. What I did get was a bit of the atmosphere, and that is something which is quite important, and which enables a man to correlate his thoughts and his judgments a little more closely to the line of actuality. So don't think I am dogmatic today if I express my opinions; I do not mean to be. In fact, my view is that if I could give you a little of the sidelights, the shadows, and the lighter hues, if there be such, in the European situation of the present day it might enable you to follow the subject, which must interest you as Canadians immensely for these reasons, first, because you went into the war; secondly, because you carried yourselves splendidly through the first part of it; thirdly, that although actual war as then waged is ended you have not got rid of your responsibilities yet; there is more to do than has been done; there is more to do by Canadians and by Canada than has yet been done.

I might be met, in the first place, by the query: "Why should we trouble ourselves with Europe now? Surely we have enough to do in Canada to attend to our own affairs; let Europe alone, and let us devote our energies toward the settlement of Canadian affairs." Well, gentlemen, if that query is put in earnest it comes quite several years too late. We had that query put to us about August, 1914, and we answered the query, and our whole work in the war was an affirmative position that Canada had some interest in the Europeon situation, that she had interest enough to invest in it her money, her men, the blood of her sons, the sympathies and agonies of the major part of her population. She put that in, for some purpose or other. It is too late now for anyone to say, "Why trouble or care with reference to Europe? Attend to your own affairs." It is too late to ask that question. It was asked and answered years ago, and I believe answered correctly. (Hear, hear, and applause)

Another expresses it in this way: "Europe got into that mess herself; let her clean up her own mess; why should we bother helping her to clean it up?" Not quite true, either, is it? It is a mistake we often make, but it is a vital one, to come to the conclusion that such and such a thing happened at such a time, that there was its origin and its outbreak. The origin of things goes a long way back. European mess it was, but it was a mess that had its beginnings and its complications tens of years, scores of years, hundreds of years ago; and as it turned out, it was a world-mess; and the world was mixed up in it, and the world has a common interest and a common responsibility in getting the mess cleaned up and getting on to clear ground and into a sweet-smelling atmosphere once more. (Hear, hear)

Another one says: "Well, it was that confounded Peace Conference, that asinine Peace Conference, that blundering Peace Conference in Paris, and the treaties they made, that has brought all this trouble on Europe." Not true, by any manner of means, not true. You had, at that Peace Conference, probably as good a selection, as eligible an assortment of the political wisdom of the world as you could have gathered; but it met and acted under certain conditions, and in a certain atmosphere. It is futile to say, after those conditions have been modified by years and years, after that atmosphere has been changed and surcharged again and again, that those who settled the peace at that time should have known all that we now know, and should have been able to approach the questions which had to be settled then, when the whole world under the shadow of war was clamouring for peace, that they should translate themselves into the atmosphere and conditions of ten years afterwards, and make their then present peace with this future in mind. No, there is not a single racial, or tribal difficulty, there is not a single creed difference, or a single one of the bitternesses which plague and harass Europe today which were not in Europe before the war began, and all accentuated and sharpened by the war. But they were there before, the product of centuries. As to those, and as to populations, the Peace Treaty at Paris simply made changes and limitations in boundaries, changes in allocation of populations; but all the roots of bitterness were there before. The roots of bitterness axe there still, and we are not human and proper readers of history unless we know, and unless we come to the patent conclusion that it will require time and time and time to assuage and ameliorate those conditions.

Someone says: "Tear up the treaties of Paris and make new ones." What does that mean? It means that you will take, for instance, the old component parts of what is now Poland, which was under three tyrannies or monarchies, where for centuries the old native population had been shorn of all privileges and depressed beneath autocrats. They were there, Polish all those centuries. They were there keeping their rights from dying out, all those centuries. They were there struggling, without appreciable success, for freedom and liberty of governing and regulating their own affairs. There they are now. When the monarchies were dissolved, then the component parts of those monarchies, which had been peoples before, and were tribal and racial, were put together. Are you going to meet in Paris, and rearrange all those things? The very moment you try it, that very moment you are in a dilemma unsolvable. What are you going to do with Poland? Dissolve her? Send her different parts back here and there? What are you going to do with Czecho-Slovakia, which has united the Slavs together in that new republic? Divide them up and send them back to their old tyrants and their old oppressors? Don't you see that the very moment you call statesmen together to rearrange Europe, you get into difficulties ten fold greater than those that you would avoid?

There is one way, and one way only, in my mind. There is a League of Nations which is subscribed to by 52 nations of the world today, and in the constitution and covenant of that League of Nations there is a method of assuagement, of harmonizing and bringing peoples together, even of changing boundaries if that is thought to be best. But that is a thing which is undertaken by a differentiated political agency, a union of nations. The League of Nations is not France, it is not Poland, it is not Britain, it is not any one country; it is the differentiated and sublimated action of all the 52 countries of the world, which approaches these questions without any national bias, and which is looked upon as the -friend and the helper in the spirit of 52 nations in respect of difficulties that exist or differences that may arise. There is a method by which harmony is being brought about, and when, in the fullness of time, the United States and Germany and Russia, by-and-by, come to belong to the League of Nations, the influence will be pre-ponderatingly greater. But there is a method of assuagement, a method of comforting, a method of bringing warring factions closer together and in harmony with each other. And so we must look to that, and I am glad to know that in the three years of its work the League of Nations has impressed itself upon the world as an agency that is absolutely essential, an agency which is now permanent, an agency that nothing else than another cataclysm in Europe can deprive of its present and of its future prestige and the great work that it has to perform for the human race. (Hear, hear, and applause)

One of the things that strikes a sojourner in Europe today is the difficulties of government. Now, we reason these things out from our own standpoint, and it is the hardest thing in the world to translate a Torontonian into a Berliner or a Vienna man, and make him see and know and feel just the influences of that locality rather than his own, of their methods of thinking, of all the ante-dated enterprise and progress they have made, all the lines of policy and changes in business, and the root differences between them--almost impossible. Every once in a while I hear a man say: "Why doesn't the German Government take hold of this thing and put it right amongst its own people? Why doesn't Austria stand up as a man, as a Government, and put things right in Austria? Why go on spreading your paper out without security, by the billions of crowns, and going down hill like a boy on a toboggan, sliding inevitably towards the end?" It is worse there than it is to the boy on the toboggan-slide, by a long lot. Why? Well, when you travel through Europe, when you see what is going on, the impression that is made upon you is very, very strong as to the difficulties that Governments have, because they are insecure; they are weak; they cannot be other than insecure and weak under the present conditions; and we should have the greatest patience in basing our conclusions with reference to the acts of the Governments of those countries. We should be very patient, and we should be very careful in doing that.

For instance, take Austria itself. I found that in the Australian Legislature there were at least nine different parties. Fancy that. But when you speak of parties in Europe, you have parties with an inside vim that not even a party in Ontario has. (Laughter) Ask yourselves what would be added to the political difficulties in the Province of Ontario if instead of three regular parties and your small band of Ishmaelites, (laughter) they had about five or six others tacked on; and then if, in the hearts and policies of those parties there was a racial and creedal and communistic influence and sentiment which gave a dagger's point to their discussions and to their differences that is not found even in the Ontario political parties. Well, there you have it. Now, upon that rests the Government, which belongs seldom to one party, but may be an aggregation of two or three or more. But that Government is at the mercy of combinations between seven, eight, or nine different parties. No man in the world can tell today what will be the temper of those parties tomorrow, or a month hence. Consequently there is an inherent weakness, an instability, and an irresolution which comes from instability, which has to, be reckoned with, and the Government can seldom do what even the wisdom of the Government would like to have done.

But there is a more serious point still. A member of the Government in Vienna told me: "There is not one member of our Government who, when he leaves the Council this afternoon, is certain that he will live to take part in another Council." The instability is not only as to how your parties will look upon you, but there is the insecurity of life itself; and you cannot get the best and strongest legislation from a Governmental party where its own physical existence is at stake if it introduces this, or fails to introduce that particular legislation. Just call to mind the assasinations that have taken place, and the loss of some of the strongest men in Europe because of the assassin's knife or bomb, as proof of that insecurity of life. Then they have universal suffrage, and every one of those parties depends for its existence upon a seething, restless humanity whose morale has been disorganized and weakened, and who are led by this and that and the other fad and argument of the moment. Put those three things together and you have an insecurity of government which has to be taken into account. There is the legislative body with its multiplied parties; there is the restless democracy behind, and every measure of taxation and readjustment, which is bound to press hard upon the human unit of the country, before it can go into force, or be legislated upon, has to be dealt with on the basis of such a democracy based on universal suffrage. Those are the reasons why progress is slow in these countries.

Did you ever think about it, really sit down and really think about what happened in Italy just a few months ago? The world seems to have swallowed the pill without thinking that it had swallowed anything unusual, but the pill was swallowed, and the effects are bound to be felt sometime. (Laughter) What happened? I don't know that I can put it more graphically than this. Imagine if you can that our genial friend Tom Moore, who is chief of the labor organizations of this country, should take into his head that, with only a fractional number of labor representatives in the parliament at Ottawa, he was going to govern the country, and so dressed his labor union men in black shirts, and drilled them in a semi-military way, and one fine day he hustled them all into line and marched up to Ottawa and said to Mr. Mackenzie-King: "Get you gone!" and to the House of Commons, which is supposed to be a part of our constitutional government: "I have no favors to ask of you; I am going to control you;" and said to the representative of his Majesty: "I want you to commission me to form a Government." On the question being put to him, "Have you and your party been elected by the people?", he would reply, "No, I have dispensed with that formality, have elected myself and am here with my demand."

Suppose Tom Moore and his friends had done just that, and esconsed himself and them in the places of authority at Ottawa and Canada, and proceeded forthwith to rule this country by personal orders and had selected associates and made them ministers without election by constituents, wouldn't you think that a very grave question had been raised? (Laughter) In just that way Mussolini walked into Rome, established complete individual autocracy, overturned all the results of the long struggle for constitutional government in Italy, and today reigns supreme dictator in Italy as in Rome. Where is the solid foundation of Government? On what does he base him claims? He has not been before the people for election. After he formed his government he has not gone back for an election. He simply sits there with his black shirts in the distance, and says, "I am the master of this country, by direct force I am here, and by virtue of my black shirts, I am going to rule it." If that can be done in Italy it can be tried anywhere. The circumstances were favorable, to his venture, or to put it better, were unfavorable to the cause of constitutional government in Italy, and so he was enabled to carry it off for the nonce. But the settlement has to come later, and it is either a question as to whether Italy is going to have an autocracy without any regard to the suffrages of the people, or to the constitutional conditions, or whether it is going to get back to constitutional government based upon the authority as expressed at the polls by the people of Italy. There is an action in reversal of constitutional government which, in all this hurly-burly, has not attracted much world attention, but it is there, and it has got to be solved. Already you have lesser Mussolinis starting here and there with their bands of red shirts or white shirts or no shirts at all, (laughter) who are trying to play the same game in many parts of Europe today. So much by the way, as to the insecurity of Government in Europe.

The next thing that impresses one is the economic disorganization, so to speak, which is apparent everywhere in Europe. I had personal experience of that kind of thing, and just one instance will make plain to you what is involved in it. I had been in Germany; where the mark had suffered a lowering of only 1,200 percent at the time I was there, but still maintained quite a respectable countenance, and without inquiring very much into what was taking place or had taken place in Austria I started for Vienna. My wife and I arrived there about 10 o'clock at night. We had to be taken to a hotel, in which I had fortunately been able to secure quarters, so all we had to do was to negotiate with the cab-driver, which I did, and he drove us in his automobile to the hotel, about ten minutes distant. When we arrived there I went to him and said, "And what is your bill?" "Thirty thousand crowns." (Laughter) Well, I began to think that if I did not have a pretty good part of Canada at my back I was in for trouble before I got out of Austria. However, I asked the hotelman if that was a fair charge, and he said, "Yes, that is about the rate here." (Laughter) So I had the hotelman pay him. Next morning I went to the bank to get some funds, and put down a stamped brownish paper, a one-pound English bank note, and the banker without a smile or a frown handed me 375,000 crowns. (Laughter) I felt better then, (laughter) because I had about 20 pounds tucked away in my breast pocket. Now, if you multiply 375,000 crowns by 20, you get 7,500,000 crowns. That was the first time in my life that I ever was a multi-millionaire. (Laughter) So with a good deal of confidence I went down to my hotel and said, "I propose to stay here about ten days; what will be the charge for the room you have given me?" "Three hundred thousand crowns per night." (Laughter) "All right, I will take it, and for ten days." That would be three millions of crowns, and I would still have four and a half millions of crowns to buy food, to pay my fares; and I still felt like a millionaire. (Laughter) But translate that into the ordinary affairs of life and just think what it means in that country, where the people, six or seven millions of a population, have to deal in a currency the par of which before the war was 24 crowns to the pound sterling, of which it now takes 375,000 to come up to a pound sterling, or $4.67 of American money?

That is the situation there, and to what does it lead? To everything that confuses business, beggars the deserving classes of all grades, aids the speculator, helps the robber and the profiteer, and destroys credit abroad. Here's an example. In Vienna there was a couple who before the war had gone out of actual business life and had laid by investments by which they had secured to themselves a yearly income of 6,000 crowns, or £250 sterling, which at the war period or before it would have kept them in decency and comfort from year to year. Now, with the crown at 320,000 to the pound, it will bring them the enormous amount of four and one-half pence of English money. That is the situation in all that class of cases. Take another case. Just before the war one man has gone to another and borrowed 100,000 crowns and given as security a mortgage on his business or property, with interest at 6 per cent., and payable in ten years. The lender advanced the 100; 000 crowns, equal to £4,200 English money, the interest on which would be 6,000 crowns, equivalent to X250 per year. But the crown has gone from a value of 24 to the pound to a value of 320,000 to a pound sterling. So that the debtor can go to the party who lent him eight years ago in good money a hundred thousand crowns, or 4,200 pounds sterling, and can pay him off with six shillings and three pence in English money. That is what is going on all over that country; the transference of wealth, the absolute impoverishment of all that class of people who had fixed salaries, or stipends, or pensions, who had Government bonds, or stocks of companies and the like. All of these have gone nearly to the vanishing point, and the middle class population of all that portion of Europe, whose currency has largely depreciated, is being slowly impoverished, weakened, demoralized, and is becoming a vanishing factor. That is the destructive factor in the present life and in the future prospects of a country, when you impoverish almost the whole mass of its middle class population.

The two great shipping companies, the North German Lloyds and the Hamburg Line made an issue of bonds in marks some ten years ago, amounting to 32,500,000. I saw a notice in a New York paper recently that on a certain day in April those companies would redeem those bonds. They are redeemable in marks, and those 32,500,000 marks of the value of $1,400,000 at the time that the people put their good money in it, can be now taken out of the market for about $3,000. That is where the inequality, the ruinous inequality, takes place; and that reversion and change of values is going on all through that country. You have to work it out for yourselves into all lines of investment to appreciate the effect. I saw in Vienna myself two most respectable old citizens of that city who were dependent on a pension of 8,000 Austrian crowns, the reward of long official service which was sufficient to keep them under pre-war conditions through their old age: The value of this pension in 1914 was 340 English pounds. Those two people today are fed by a charity institution of American, Viennese and English women. They come and get one meal per day. Their pension, which in pre-war time would have kept them in comfort is now reduced to a value of six English pennies. They come for their one meal, and you see them divide it carefully. One-half they eat, the other half they wrap up in paper and take back, their only provision for the other two meals of the day. That is only one instance of the numberless instances of material impoverishment.

But here is this still more deplorable factor in the life of Europe. You take the whole of what you may call, in a certain sense, the sustenance and maintenance of the intellectual and spiritual life of the country, the whole teaching profession, the whole preaching profession, the whole collegiate and university profession, all those who do intellectual and artistic work. Those men and those women have sacrificed nearly everything of the family goods, family treasures, and family keepsakes to the necessities of physical existence, pawned them, sold them to keep alive, and today are in perilous want. Nothing can be got for the replacement of intellectual and spiritual equipment. Nothing can be got to extend it; and the spiritual and intellectual life of the people in some of those countries is absolutely being impoverished. What happens? Think of the lack of education, the, degraded morale, which will fall on the present and future generation, under such conditions. And governments are without power to help them, because they cannot raise the necessary money; so much so that a very strong movement is today being fathered and carried out by Belgians and Swiss and British and American people to send into those countries intellectual and spiritual pabulum by way of support to the impoverished agencies of the same in those countries.

Now I want to make an observation with reference to what can be done when it is approached and carried out in a proper spirit. Outside of Russia, the country that had gone to pieces financially, most of all others, was Australia. I have told you that her crowns, twenty-four of which before the war were worth one pound sterling, have gone down so that now 320,000 are required to purchase a pound note of Great Britain. Well, to make a long story short, it was seen that Austria was approaching the brink, and the nations that surround it knew very well that if it went over the brink there was trouble for all the surrounding countries, and that they might possibly follow suit, anyway would be greatly disturbed and injured by the failure of Austria. So a number of interested peoples, among others Switzerland, Czechoslovakia, Belgium, France and England made an advance of money to Austria more than a year ago to help her through. The Austrian Government spent the advance, but it had not the energy or the power to expend it on a rehabiliation basis, and it was soon gone and they were in a worse condition than before. Then as a last resort they went last spring to the Supreme Council in London, where it had been meeting, and they said, "Austria is at its last gasp. You made us what we are; we come to you and ask you to save us from perdition financial, economic perdition." What did the Supreme Council say? "We cannot get a vote through our legislatures to do that. We are sorry, but we cannot help you." Then they said to them, "Go to the League of Nations and see what they can do for you." So they went to the League of Nations, and again to make a long story short, they put their plea there. The League of Nations had not been one of their creators; it was not a nationality that they might have prejudices against; it was a differentiated, sublimated body representing the good-will of 52 nations of the world. Consequently it appealed to them as a friend and not as an interested party taking advantage of their necessities. The League of Nations Council said, "We can put you on the rails and send you along all right if you will do as we tell you." "What do you want us to do?" "You must, in the first place, enter into a contract with us that we shall control your expenditure, and that not a dollar shall be spent which is not countersigned by our representative in Vienna. Then you must go to work, and in two years' time, by making your public utilities self-sustaining, by taking away the supernumeraries in your public service, which are two to one to what they ought to be, by stopping your doles, and by absolutely printing no more paper money, and submitting to our guidance, and getting the consent of your legislature that for two years from the time you undertake it, no legislative enactment shall have power to prevent you carrying this out; if you do that, in two years' time we can bring you out with a balanced budget and with a stabilized currency." (Applause)

The Austrian Premier said, "We are at your mercy, and we thank you for your offer." They got the legislation through after infinite trouble. They have not issued an unsecured note since November. There has not been a shadow of difference in their crowns during that time. They have established a bank, subscribed for by native Austrians and by outside people which has taken over the old Austrian Bank and become now the bank of issue, which issues notes only on commercial paper as is recognized by good banking systems everywhere. The League has secured a loan from European powers of 650,000,000 gold crowns, guaranteed by ten European countries, which is to carry them over two years of deficits and rearrangements and readjustments, until at the end of 1924 they shall have a balanced budget and a stabilized currency, and have confidence .restored, and business placed upon a proper basis. (Loud applause)

There is no example on record of such a complete change and such a complete system inducing the change; and to the Austrian people it must be counted to their credit that they were sensible enough to say, "Yes, take us, lead us; respect our sovereignty"--and that they are bound to do--"and pilot us until two years hence, through all the grind and grilling difficulties and sacrifices of those two years, we shall at last, at the end, come out into a pure atmosphere and with brightened prospects." Today that is what is going on in Austria. Today that could have been going on in Germany, (hear, hear) if it had been approached at the right time and in the same way. There is no doubt about that in my mind; and in looking at the situation as I look at it now I see no other future but that by-and-by, when passions cool, and when experiments have been carried out, and proved one way or the other, in process of time that same appeal will be made to the League of Nations and some principle like that will be carried out which will put Europe again on its feet. I hope so. So much with regard to that.

But there comes a question now that is put to me, "Can Germany pay?" That is a question to which you will receive almost as many answers as the people to whom you put it. They will divide themselves off into classes, and they will give their opinions. Some say no, some say yes. Well, it is not for me, and I suppose for you individually to say dogmatically whether she can or not. I invite your attention to two or three considerations. Great Britain, powerful as she is, with her multiplied enterprises by sea and by land, in commerce and industry, is bending her back almost to the breaking point to pay to the United States the 868,000,000 pounds that she borrowed from her during the war. The funding arrangement has already been made, has been approved by both governments, and only awaits the action of Congress which I believe is absolutely certain, an arrangement which as between those two great countries, the United States and Great Britain, will remove a grave matter of dispute and of possible ill-feeling. But better than all that, though that is a great thing, by that arrangement a first great step has been made towards the stabilizing of Europe. But what I want to ask you to note is this. The 868,000,000 pounds were what England had to pay. Her statesmen told the United States and the world that England proposed to make that payment, but that she was doing it at a huge cost to the already overburdened taxpayer of Great Britain, and that it would almost drain the red blood out of the commercial and the trading body of the nation; but she would do it. Deducting principal and interest already paid the debt funded is $4,600,000,000 at 3 percent for 10 years, and 31/2 percent thereafter, the whole to be paid within 62 years.

That means that she has to pay $138,000,000 in interest plus the amortization during the first year, and that when the 62 years have passed she will have paid the stupenduous amount of eleven billions of dollars to discharge this portion of her war debt. What did the allies require of Germany? They required that she should pay 6,600,000,000 pounds sterling equivalent to $32,000,000,000, with interest and sinking fund of 6 per cent. per annum and complete the whole payment in thirty years. The first -year's interest would amount to nearly two billions of dollars. If Great Britain finds that to pay 138 millions on her war debt to the United States taxes her resources to the utmost, if France and Italy find it impossible to pay one cent of interest or principal on their war debt to Great Britain or the United States, how can Germany without cash or credit or stability of exchange pay fourteen times as much? Will you, when you get home, just work that out for yourselves? (Laughter) Ask yourselves the question whether Germany economically, in cash or in kind, is able to make such a payment off-hand, and 6,600,000,000 pounds plus interest in the end as reparations towards the allies? Work out that problem on paper, and see whether you think it is possible or not. There is not a Frenchman in France that thinks it is possible. There is not a financier in the British Empire, nor in the AngloSaxon world that thinks it is possible. By general consent it is now acknowledged that it is impossible to extract all that. But France says, "Germany has not played the game, consequently I am going to occupy her territory, and I will sit on her neck until she does make the payment."

Now, here arose a difference between Anglo-Saxon thought and French--and maybe Belgian and Italian thought, but, anyway, between Anglo-Saxon and French thought. The Anglo-Saxon said, "Reparations?--yes, but put them at what Germany really can pay; and to get at that take it away from the political atmosphere, and put it in the hands of a set of experts, gathered from the whole world, the best we can get, and let them fix the amount of reparations and the methods by which it can be paid and the slate finally wiped clean. In the meantime grant them such moratorium as is considered reasonable and then put behind Germany influences from the world of finance by which stabilization and readjustment can be carried out. Thereby you will get reparations; you will get them to a reasonable amount, but it will take time to get them. That is our solution of it."

In the latter part of December Secretary Hughes, of the United States, made a notable speech in New Haven in which he traversed exactly the same ground, and his message, delivered publicly, was put in the hands of France and was available at the Conference of January in Paris. The Anglo-Saxon sentiment coalesced. Secretary Hughes said, in effect, this--"Take the question out of the region of politics; put it into the hands of experts; we are willing to join in the experts' examination, and when their decision is made and agreed to, we are willing to co-operate in the readjustment and rehabilitation that is necessary." I think this proposition coming from the two great branches of the Anglo-Saxon speaking peoples of the world was entitled to great weight. But Mr. Poincare said, "No, I want productive guarantees, and I am going to take this matter into my own hands, and shall send my troops into the Ruhr, and stay there until the Germans settle this business." Well, the English representatives said, "We have put our opinion before you; it is a reasoned opinion; it is the policy that we hold is best in every respect; we cannot go with you in your occupation, but we will stand aside and benevolently wait to see what you can bring out of it." And that is the situation today. France is there, with her grip on the juglar vein of the German Republic, and in control of the coal and iron and metal business of middle Europe. She is getting, comparatively speaking, not an ounce of coal, not a dollar of reparations. She has disorganized every branch of productive business which sends its long lines into the Ruhr district, from European countries and from almost every portion of the world, and there is in it all the spirit of war and of military force. God grant that it may turn out that this method will prove successful. If it does there is none of us going to squeal because the German squeals; not at all. But will it work out? I have not dogmatically given my opinion on it; I have simply placed the matter before you, and there it is.

Will you allow me, in closing, to make three observations? The first is this-You in Canada, every mother's son of you, need to put on your thinking caps and think out this proposition, because you are in it and you cannot get out of it; and if measures are taken which shall result in economic disaster more than at present in Europe, it will have its reflex almost directly upon us in Canada, as upon almost every other part of the world. We need to think clearly on this, and gather all the information we can with reference to it.

My own opinion is simply this--that the world cannot long continue to look on and see what it fears may result, chaos in Europe, or material for future wars stored up to belch forth later their destructive forces ten thousand fold greater than in the late war, without taking some part sooner or later therein. Who is to take the part? My own opinion is that the Anglo-Saxon peoples of the world must get together--as they are getting together-and they must use their good offices to pacify and re-establish Europe; get the maximum reparations; stabilize the currencies of the old world; and place its business on some sure footing and foundation. That is my belief with reference to this matter, and I hope it will work in that way.

As to the French people, our sympathies go out to them absolutely. There is no excuse whatever for the studied, the malicious, the most devilish destruction that was done to cripple France during the war. (Hear, hear) Not for a single instant would I pass a sponge over a single line of that awful record made by the Germans in that destructive warfare; not at all. But this is a matter today which is economic, and the thing to do is to save Europe and the world and at the same time save as much of the reparations as you can, and get back to normal just as quickly as possible. (Hear, hear)

Some things we have that are not shadows, but are lights. One of them is the League of Nations, and I have given you one instance of its beneficent work. It is doing a hundred other things only less striking and almost equally beneficent. Think of the fact that you have a pledge of 52 nations of the world, that they will do everything possible to ensure peace before going to war, before letting loose again the hounds of destructive military operations upon the civilization of the world.

There are men today, and there are not a few of the best thinkers, who fear that chaos may yet result, and that the civilization of Europe will be degraded, weakened in morale, spiritually, economically, intellectually, and that we may have to go through long periods before re-establishment takes place. Whether that be true, in great or in less degree, I am not here today to say. It is a threatening contingency. The League of Nations stands for peaceful instead of warlike methods. It stands as the embodiment of the negation of war and of the apotheosis of peace. There is one thing they have done--given us an International Tribunal of Justice. That court, which is today sitting at the Hague, a week or so ago, made a most important decision, where two great nations, France and Britain, came to loggerheads over what should be done with regard to nationals in Morocco and Tunis. Neither would give way, but there was the League of Nations, and both at last had the good sense to say they would send it to the League of Nations, which would put it before the Tribunal of Justice, and when that Tribunal had cleared the way by its decision they would then leave it to the League to settle if they could not agree among themselves. The case has been tried, and decision has been given in favor of the English contention; and when that decision was made known at the last Council of the League of Nations the representative of France said, "Very well, we agree; we are willing to put this whole matter into the League of Nations to decide, and we will abide by that decision." (Applause) That is one thing. Then there are a great many other little things; you must take them for granted, as we have not time to discuss them today. (Loud applause, the audience standing and giving three cheers for the speaker)

The thanks and appreciation of the Club were extended to the speaker for his most interesting and instructive address.

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The European Situation


A little of the sidelights, the shadows, and the lighter hues in the European situation of the present day. Reasons why this subject interests Canadians: we went into the war; we carried ourselves splendidly through the first part; that although actual war as then waged is ended we have not got rid of our responsibilities yet. More to do by Canadians and by Canada than has yet been done. Why we should trouble ourselves with Europe now. A question asked and answered years ago. Some expressed opinions, and the speaker's response to them. A method of assuagement, of harmonizing and bringing peoples together, even of changing boundaries if that is thought to be best, in the constitution and covenant of the League of Nations. Some words on that League and what it might do, and what it has done. The difficulties of government as seen in Europe today. Having the greatest patience in basing our conclusions with reference to the acts of the Government of other countries. A look at Austria as an instance. Thinking about what happened in Italy just a few months ago and what it means. The economic disorganization which is apparent everywhere in Europe. The speaker's personal experience of that in Germany. Consequences of this disorganization, with examples. The impoverishment of the spiritual and intellectual life of the people in some of the countries of Europe. An observation with reference to what can be done, using Austria as an example. A question often put to the speaker: "Can Germany pay?" Discussion follows. Three observations in closing.