Europe 1937 Prospect and Retrospect

PRESIDENT: Gentlemen: I have the honour of welcoming on behalf of the Empire Club of Canada and of introducing to you Mr. Harold Macmillan, M.P., of London, England. Mr. Macmillan is the joint Chairman of a great publishing house which bears is name. Although a young man he has had a distinguished career already. He was educated at Eton and, proceeding from there to Oxford University accepted the call of the Great War and enlisted with the Grenadier Guards. While in service in France he was wounded three times. Mr. Macmillian is no stranger to Canada having been aide to the Duke of Devonshire during his terms as Governor-General. In the British House of Commons Mr. Macmillan is a Conservative; that is, he goes by that label, but his strength of character and purpose does not restrict him from being the champion of any cause which gains his fidelity and sincere support. He is a writer and has made valuable contributions to the literature of economics and sociology. He is in the British House of Commons one of the most promising and brilliant of the younger members.

I have much pleasure in calling on Mr. Macmillan to address you on the subject, "Europe 1937--Prospect and Retrospect."

MR. HAROLD MACMILLAN: Mr. President, Gentlemen

Yesterday, I spent a troubled day in. New York, discussing with various legal and financial advisors the effects of the rather complicated new taxation system upon certain interests which effected me. In the course of my discussion, one of my advisors said to me, "I suppose you are a N.R.A.?" I said. "What does that mean?" He said, "A nonresident .alien." (Laughter.) And I gather that that category is regarded as about the lowest of God's creatures.

Next in order, I suppose, comes the peripatetic English politician. How well accustomed you must all be to that type! The man who because he is regarded in the Old Country as a bore or a crank, or both, who cannot collect an audience, as a last resort sets out upon a world tour. He begins the trail of desolation in the Mediterranean and there isn't a port or naval base from Gibraltar to Alexandria that doesn't echo with his platitudes. The Red Sea becomes the more oppressive for his presence. At Aden he spreads havoc and dismay. After a few weeks in India he explains to people who have spent a life time in that work the art of governing native people. Then, through Australia he pursues his chattering way. If he can find a corn anywhere he treads on it. If there is any kind of thin ice to be found he plunges bravely on to it. He comes across the Pacific to your hospitable shores. From west to east, from Vancouver to Halifax he goes, lecturing, talking, lunching, dining, always imparting information, never willing to listen to any. He blusters his way across three thousand miles, then, at last, having offended every sensibility and reopened every wound he gets back to the Old Country and the first thing he does is to add the Prime Minister to his list of victims and he besieges Downing Street and, finally, by a mixture of bullying, flattery and cajolery, he at last secures a K.C.M.G., for services to Empire.

Gentlemen, it is indeed a tribute to the strength of the ties that bind together the free nations of the British Commonwealth that they are able to stand such strains and stresses as these. Nevertheless, there may be somewhere a breaking point and I .am very willing to play the role, as it were, of the last straw that breaks the camel's back. Therefore, when I received the kind invitation of your President, I am bound to say I was very hesitant and even reluctant to accept it. Indeed, I should hardly have dared risk being cast into this category except that I have some personal relationships with Canada that made me feel I was coming at least among friends. First, I have a long business connection through the Macmillan Company of Toronto, Canada, which is presided over by one of your former Presidents, my friend, Mr. Eayrs. Secondly, I have lived here for a year, in the year 1920 to '21, when I served a man, not only the most generous of chiefs, but the most modest, genial and, I think, devoted of the many Governor Generals who have served Canada. Lastly, it was in the course of that year that I met my wife and I have always attributed to the genial, rosy atmosphere of optimism which pervades the great Dominion that a marriage which has led to sixteen years of happiness, started in this country.

Now, Gentlemen, I have undertaken a very difficult task and I am going to ask you to realize that in what I have to say, necessarily, from the mere limitation of time, almost every point to be made at all needs to be overstated, but there are limitations and reservations that a more careful treatment of the subject would need; but I am neither so conceited nor so ignorant as not to know I am only presenting a very personal view, one which may not be shared either here or in the Old Country.

The history of modern Europe begins with the Treaty of Versailles and, in spite of many faults, I think that perhaps that Treaty has been unduly criticized. It compares favourably with the Treaty made in Paris, after the war of 1870 and I can't help sometimes saying to my German friends that it compares favourably with the Treaty that might have been made in London by Hindenburg and Ludendorff. The territorial structure of the Treaty is not seriously challenged by Germany today. There has been an official withdrawal of any claim to Alsace-Lorraine, which is much the most important territorial change in Europe as a result of the War. No, the two great mistakes of Versailles were not territorial but psychological and economic. First, I think, we made the mistake of imposing upon the Germans who signed .the Treaty the war guilt clauses which made them recognize the so-called guilt of Germany in originating the War; but the Germans who signed the Treaty were not the Germans who made the Wear. Alas, there was no German Napoleon upon whom, as in 1815, the onus of responsibility could be laid and there was no German Talleyrand to play the part in moderating the necessary concessions that a defeated country must make. I think the war guilt clauses have done a great deal of harm because they were really childish in character, and it is also a mistake, I think--(I was going to say even a schoolmaster would admit) you would either give a boy what used to be called a 'jaw' or beat him, but not both. The economic ill effect of Versailles is due much more to the effect of the Treaty as it applied to south-east Europe, than, as applied to Germany proper, in its original form. As a result of the slightly pedantic Wilsonian importance given to national or racial divisions the main. result might be summed up as this: that Europe went into the war with seventeen sovereign states and came out of the War with--sovereign states. What was the effect of that? It broke up from an economic point of view certain units like the Austrian Empire and has led enormously to the increase of what we call economic nationalism, the main curse of the modern world.

Secondly, the reparation clauses--for which the politicians, I think, have been unduly criticized since they were the result of what is called the experts. The reparation clauses have had this harmful effect. Those financial experts who are here will forgive me if I criticize a part of the community to whom all of us ultimately have to have recourse-I mean the bankers. The experts solemnly produced a report to say that two thousand millions of Wealth could be transported from one country to another, called reparations. I know sometimes people say they wouldn't like to live in a priest-ridden country, but at any rate, priests understand theology. My criticism of bankers is that they don't always understand economics. Of course, the attempt to transfer wealth broke down and the real harm of reparations is not that Germany paid reparations-as a point of fact, Germany borrowed during the whole reparations period more money than she paid out-but the fact that it broke down the whole confidence in the working of the financial system of the world. It caused in Germany the inflation which destroyed the existing social structure of Germany, it produced in Germany the isolation complex, the feeling of being bullied and harried and it produced, arising from that, the anti-Semitic complex, the feeling that somehow one class of the community had escaped the general ruin, and it endangered and finally destroyed the democratic, liberal constitution, known as the Weimar Constitution. That was the real effect of the economic clauses of the Treaty. Leading from that it led to the greatest creditor country in the world, America, indignant about the money she had lost in, the war debts and still more indignant as a result of the money that was lost in the loans to Europe after the War, retiring from the natural duty of a creditor country and shutting herself up in a financial isolation, now strengthened by legislation called the Johnson Act. For the same reasons of ignorance of the only possible working of a world economic system, a country at once refuses payment of debts in the only form in which wealth can be transferred, that is goods and services, and at the same time blames the debtors for repudiation; and let us remember, our friends over the border have not been the only country guilty of that contradiction.

Therefore, arising from all that I think we must recognize that it is not only the authors of the Treaty of Versailles, dangerous as were those results, not only the authors of that Treaty sinned in 1918, but those who have been responsible for foreign policy in the eighteen years that have passed since that time, years which should have been devoted to the curing and avoiding of some oaf the ills.

In my opinion, the conduct of the foreign policy of England has been unimaginative, procrastinating and, to some extent, futile. A temperament like that of the Prime Minister is admirably adapted to internal difficulties, where good temper and delay and a good English handling of the best sort is required, but he has not had the gifts that were necessary to deal with so difficult and complicated a problem and the result is, I think, and I am only stating my own opinion, while English public opinion today is bitterly hostile to the present government of Germany, to Nazi Germany, it also feels a certain responsibility for having to some extent created this government which it fears.

There were, after all, two possible courses after the War. One was to annihilate Germany; the other, to conciliate her. A series of occupations of the Ruhr, of preventive wars might successfully have done the first, France, unhampered by England, left to herself, might have done this or, England, unhampered 'by France, following the natural and traditional instincts of English policy might have recognised German grievances, treated her generously and so established in power and kept in power the democratic German constitution.

Now, remember, it was only in 1932 that that was overthrown. In 1932 Dr. Bruning was still Chancellor. Had some concession been given to him in many of the things which now Germany has done on her own, he might still have been able to hold a free Germany. Locarno was of importance because it was the only attempt in those years to get English and French policy agreed on a policy of conciliation. It led at last to, the fall of Briand and the triumph of Poincare. But even as late as 1932 we could have come to terms; but between us, French and English policy have cancelled each other out and we are left with this nightmare for which we are, I think, partly responsible.

The same dualism in Anglo-French policy has produced our joint humiliation by Italy and the great blow to the League that followed the conquest of Abyssinai. If it had not been for the fear of the now rearming Germany, France would not have betrayed England, Mr. Laval, perhaps naturally, felt that in the difficult situation in which France was placed they couldn't afford to isolate themselves from Italian opinion in view of the increasing German menace. As the result, I do feel that England suffered last year a grave humiliation in the Mediterranean which, after all, we have held since Nelson. We appeared to be in a hesitant position and, much worse, the blow to the whole League system is leading to an increasing tension in Europe.

Onto this sea of troubles comes the Revolution in Spain and here, I think, we may take a real gleam of hope because I think the success of the non=intervention policy or the partial success of the non-intervention policy, the willingness of the rival powers to limit their intervention to what has already been done is really a mark of the shrinking back of powers from what appeared to be the edge of war. Somebody said to me the other day that the Spanish situation, had postponed the danger of war. I asked why. I was told it was because war found that the Russian-French armament was so superior to what the Italian-German experts believed it to be. That is a rather cynical view. I think it would be more true to say that nations and governments rode up to the brink, looked over, and have been willing to find some excuse to save their face, to shrink back again. There, I do think the Foreign Secretary's management and leadership of the non-intervention policy has been eminently successful.

Nevertheless, the Spanish situation has produced am other evil in our country. Some forces are trying to make us all take sides, to be either for Franco or for Cabellero, or for the Rebels or the Loyalists, as if we had to decide, necessarily, between Communism and Facism, as if there were no middle course. And we are now left (and I beg of you, cling to it) we are left almost alone in the world upholding the old traditional rights of free and self governing people. Nor do we admit that all these evils arise from a system equally derided by Hitler and Mussolini, a system of parliamentary reform which is liberal in the broadest sense. We say, at least it seems clear to me, it is just because in Spain neither the relations between Church and State or aristocracy and people or master and man or landlord and tenant have been submitted to that long series of progressively enlightened adjustments to changing conditions which we call reform. Just because over three centuries there has not been this broadening tradition of perpetual readjustment of our policies to new and changing problems that at the end it has brought about this frightful conflict between violence on the right and revolution on the left.

You may say all this is old history and what of future policies? Why rake up the past? Why reciminate about the mistakes that have been made?

I was playing bridge in a club the other day and a young man happened to draw the same partner in three rubbers. He was a rather peppery chap, who played exceedingly good bridge and he took the mistakes of his partner rather hard. After losing three rubbers, almost entirely due to his partner's errors, my young friend couldn't help saying--I think he revoked in the last hand -he couldn't help saying, "Well, General, I don't like bothering you, but I really must ask why you played that particular card." The General said, "O, my boy, I hate post mortems." "Well," said my friend, "that is what murderers always say."

And I think very often in life when a situation has been reached that has become intolerable those who have largely created it turn around and say, "Now, you solve it." Well, I won't claim, and it would be a rash man who would claim that the European problems can be solved today. One or two more things, if I am allowed the time. I would like to say rearmament is not a policy in itself but it is the inseparable condition, in my opinion, of any foreign policy. Now, the unilateral disarmament, which is what we have followed since the war, has proved a mistake from every point of view. It has not led other nations to imitate us. It has merely led them to think that England was down and out and whatever policy you are going to follow I will say it seems to me you must have a strong and powerful Empire in which England must play the leading role as the foundation of such policy. The only policy which would allow you to do without armament is the policy which England will always respect as on opinion-I mean non-resistance--(and I remind you that it was respected throughout the last war as an individual opinion, of what we called the conscientious objector,) but it will never be followed as a policy. Therefore, rearmament is the foundation of and an inseparable condition of any foreign policy a British Government can follow.

Now it seems to me that really at the present time in English opinion, as far as I can judge it, there are two views, two main divergencies f view. There is the isolationist policy, the people who say, "Let us keep out of Europe. Let us have nothing to do with these peoples and develop our own life in our own way." The isolationist, and I expect you have isolationists in Canada, in England seems to me to be making just the same mistake, although there is much less excuse for it, as the isolationists of the Empire. Isolation is a very good defence against chicken pox; it is a very bad defense against invasion. Great Britain, geographically, is part of Europe. Spiritually, it is part of the European tradition just as is the New World, since the whole tradition; of the Roman Empire, of Christianity all our civilization is based upon the European tradition and it is impossible, I think, for us on any ground to absent ourselves altogether.

More than that, a rich, some think over-rich, a powerful, some might think fat, or over-fattened power, cannot afford to be isolationist. The rich have a greater vested interest in a police system than the poor. If England is willing to, shed her Imperial position, to give up her claim to half the world, then she may afford to be isolationist. But with jealous eyes upon her trade, her financial situation, I think she would be foolish to pursue a policy which if it were not to be a mere pacifist policy would demand a degree of rearmament which would make her able to fight the world alone.

It is interesting to note that this division. runs right across party. There was a very interesting debate in the House of Lords the other day. The isolationist position was put forward by Lord Beaverbrook, by Lord Arnold, who is a member of the Labour Party, and by Lord Ponsonby, a member of the Labour Party, but I think the generally accepted English opinion to isolate ourselves wholly from Europe would be impossible and unwise and the real division is now, I think, rather one of emphasis than of theory. Shall we make only limited and stated commitments in certain parts of the world, or shall we try and rebuild the wider commitment which we call the League of Nations? Are we to have just one perfectly clear statement that an attack on France or Belgium would be treated by England as a case of aggression, or are we to 900 further and associate ourselves further with an attempt to build up under the League, a world system of collective security? The advantages of a limited commitment are obviously great. The immediate danger is Germany; it may therefore be an advantage if it is known what England will do in certain stated circumstances and thereby avoid the uncertainty of 1914 that some think may have helped to cause the war. Nor does it preclude England taking a part in questions that arise beyond the mere limited commitments of a definite western pact. But I think the disadvantages are also great but it is practicably saying to Germany, "You may do as you like in the south or the southeast of Europe, as long as you don't do it on the west of Europe." It is to break the peace in one part of the world by saying we are not interested in that part of the world and it may allow to be built up against us, stage by stage and step by step, a very formidable combination in Europe, as formidable as the old middle Europe which the German-Austrian powers had at the beginning of the War. Moreover, the small nation in Europe is practically being told that she is to be abandoned. They are already suspicious, after the fate of Abyssinia, and you may find that in the long run, and I am assuming all through for the purpose that these are dangers which you may have to face, you may find in the long run you have to face without allies, without the concerted support of the members still members of the League, you may have to face a situation sooner or later which you would have done better to have faced with greater courage at an earlier moment. (Applause.)

Therefore, I feel myself, difficult as it is to judge, that the wisest course and the least dangerous course and certainly the most moral course is to put ourselves back at the leadership of the world, back to some sense of responsibility and decency in organizing a new world system; to build on what we have got; not because the League has failed, to say it is no good, but to say, here at any rate are the existing members of the League who combine themselves to assist each other in case of danger. And remember, if we had had in the beginning of the war, if not the assistance by way of armament, the assistance by way of friendly neutrality of some of the smaller countries of Europe, we would have been able to bring the war to an end two years earlier by more effective blockade. I would say, let us not abandon the League becuse some great powers go out. Let us make it clear to the great powers that by standing by the system of collective security we are forming a club that is always open to anyone to join. We are not making an alliance against Italy, Germany, Russia, or any other nation. We are forming a society which they may join at any moment, really a collective security for peace and not an alliance for war.

But, you will say, that is so much hypocrisy, you are asking members to join who have grievances. Then, I would say, let us have a free and frank discussion of those grievances. Let us have a new world conference and let England take the lead to call it. Let us see what are the grievances, in the treaties, the wrongs, if they are wrongs, that need to be righted, and let the powers that feel themselves aggrieved stipulate openly and in conference what remedies they want for the preservation of world peace, based upon fairness and equity. Let the powers that call the conference, the existing powers of the League guarantee, themselves, security, at least during the sittings of these conferences. Let there be as many fact-findings commissions on all questions of finance and tariffs and trading conditions and raw materials as carp build up the basis of an equitable settlement for the world. Then I think England, having shown herself willing to rearm, to expend the money and divert from many more useful economic enterprises so much of her energy and wealth, having shown to the world that she is not afraid, she ought to afford to be generous, and I think we ought to go back and I believe the Foreign Secretary intends to go back to making the League the basis of our policy; but not sticking in a pedantic way to every written letter and word or the present covenant, but taking the spirit of the League and saying to Europe in this crisis, "Here we are in an acute situation, on the surface as near to 1911, 1912 and 1913 as can be. Can we not, before some crash which none of us want, which those of us over there know may bring final destruction to civilization, can we not sit down and state on, what basis it is we would be prepared to live amicably together?" You may get a refusal, you may get hesitancy, and grudging acceptance, or you may get an acceptance upon which you would put no confidence.

Gentlemen, I will finish what I have to say. Let us remember in politics, especially Imperial politics, there are always two problems. We have to find a policy the best we can find under the circumstances, not the best in the world, the best under the circumstances which exist today. I think those circumstances are far worse than they might have been had Germany been more wisely handled during the last fifteen years, and we have to find a policy that commands the maximum of support, both in England and in the Empire. England and the Empire are formidable when they are united. If they are divided half and more than half their power is gone. In 1914 a united Empire took up the challenge. In our country today, I am not saving rightly or wrongly, part of our people, looking perhaps to the past, the traditional patriotism of the country, will be lead, if necessary to make sacrifices for the idea of England's safety and 'her possessions; part of our people, taking a slightly different view of the emphasis on, these problems are prepared to make sacrifices for a moral idea of a new society in Europe and the world. If combined nothing can stand against them. If they are divided you may get a split in British opinion and Imperial opinion which will prevent us having that weight which united we can make. I am certain the policy of His Majesty's Government in England, and I believe the policy of His Majesty's Governments in the Dominions is to try and develop a policy which will unite the maximum support of their own fellow citizens, as well as give the maximum of hope for the getting through what must be two or three dangerous and difficult years. (Applause, prolonged.)

PRESIDENT: Mr. McMillan, may I, on behalf of this large meeting of our membership, and also on behalf of those who have heard you on the air, express our thanks for this wonderful address. I think you have confirmed the belief of many, and created the belief in many others, that a policy of isolation for the British Empire or for any unit of the British Empire is impossible. We have learned a great deal to strengthen that viewpoint today. We have also learned to strengthen our faith in the British Empire as that great power for peace and goodwill in the world in the way you have described it today.

I thank you, and I thank you for the new significance you have given the initials, N.R.A. If we have had a fair sample today of what we can get in the future in the Empire Club under the initials, N.R.A., non-resident alien, I say more strength to the N.R.A.