The European Situation

Mr. President and Gentlemen,--I am going to speak from a text. In 1805, after the Battle of Trafalgar, Pitt made a speech which produced a great impression, and in that speech he gave a phrase that has been famous ever since. It describes so exactly my own view of the place of our own country in the present crisis that some great Statesman might have used it of the situation today. Many of you will know my text:

"England has saved herself by her exertions, and will, as I trust, save Europe by her example." (Applause)

In Paris last summer the Matin had an article in which it exhorted England to do in civil affairs what it had done in military affairs. Late in the wax Great Britain had put her army under the final direction of General Foch, and then victory was assured. The Matin went on to say that now, in civil affairs, England should acknowledge the great

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Mr. Wrong is professor of History in the University of Toronto. He was educated at University College, Toronto, (B.A., 1883; M.A., 1896), at Oxford University and at Berlin University; F.R.S.C., 1908. His work in the Chair of History is widely and favorably known. His books-The British Nation (1903); The Earl of Elgin (1905); A Canadian Manor (1908), etc., and his reviews of historical publications relating to Canada are worthy contributions to Canadian literature.

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prescience of France, and should not be too proud to accept France's lead in settling the affairs of Europe. I rather dissent from that point of view, and therefore I want to repeat my text, that it may be duly impressed upon your minds:-"England has saved herself by her exertions, and will, as I trust, save Europe by her example."

One could draw today a very dark picture of affairs in Europe. A schoolboy made a "howler" which one might quote at the present moment. He said "Charles the First wanted to marry the Infant of Spain; he went to Spain to see her; and after that, as Shakespeare says, he never smiled again." One might be tempted to be like Charles the First after one saw the depths of the present misery of Europe. But I am an incorrigible optimist, and I should wish today not to say a word that would add to the depression which many of us are likely to feel. England has saved herself by her exertions. What has she done? She has balanced her budget--which no other great nation except the United States has done. (Applause) She has undertaken to pay her debts, and is paying interest on them meanwhile. (Applause), And thirdly, and not less important, she has saved her sense of humour. That phrase needs explanation. By a sense of humour we readily recognize incongruities, and smile at them. During the war there appeared a famous German hymn which came to be known as the "Hymn of Hate"you all remember it. One of the finest pieces of humour that I remember in the course of the war was seen when the British soldiers in the trenches sang the Hymn of Hate, each verse ending up with a malediction on England, for the benefit of their German neighbours in the opposing trenches. I call that, Mr. Chairman, a sense of humour (laughter); and it is this sense of humour which will enable us not to take adversity too seriously, not too let gloom settle down finally upon our spirits; to realize incongruities, and out of it all find something that is hopeful and reconstructive in life.

It would do no good to try to follow the affairs of Europe from day to day, or even from month to month. What we need rather is to try to get back to causes. We have come to a terrific crisis, and are in it still. During the last 100 or 150 years the greatest thing in world-history was the growing dominance of Europe in all the continents,--a new thing. Europe came to dominate Asia and Africa and America and Australia. In America, European civilization brushed aside the native culture. The incoming European asserted his dominance over the native American and the imported African and Asiatic. Today America in its culture is just a part of Europe, and we ourselves are Europeans and not Americans.

The cause of this wide-spread dominance of Europe is not readily apparent. My own belief--and I should not wish to over-emphasize it--is that this dominance of Europe in the world is largely due to Europe's adoption of the ideals of the Christian religion, because these ideals foster an independent type of character, and a spirit of sacrifice which enabled Europe to take the lead in all the world. After all, Europe was the only Christian continent, in the full sense of the term. But, whatever the cause, Europe led the world. Its products went everywhere. Supplying the world as it did, the population of Europe grew very rapidly, so rapidly that today in England there are ten people where there was one in the time of Queen Elizabeth. A consequent danger--at any rate to parts of Europe--was the same danger that has developed in China and India, of overpopulation.

Side by side with this growth of European influence came the recent development in Europe of Democracy. The individual man began to assert his rights in a sense in which he did not assert them in the first quarter of the nineteenth century. Professor Leacock, who as an economist can speak with more authority than I, described truly to us last Thursday the appalling condition of the working classes in England after the Napoleonic wars. It is hard to believe the horrors of the working conditions for women and children in the factories. But democracy grew, education increased, with the result that standards of living improved. At first profits were great in foreign trade, but gradually, as the standard of living rose profits decreased, and by 1910 Europe was getting into difficulties in the maintenance of its markets in the far regions of the earth.

Another cause of change was facility of communication, the greatest development today. We now flash our thoughts instantly from one end of the world to the other and in consequence the whole world tends to think of the same things. What England was thinking, India also learned to think. The liberties claimed in Dublin were claimed next day in Calcutta and Bombay. The people of other continents began to assert the rights to liberty and self-government found in Europe and in Europe's child, America.

These were some of the things that brought about the crisis of 1914. In this crisis we find, as perhaps the most startling feature, the fall of three great Empires. Russia fell by the sheer incompetence and the isolation of its rulers. Austria fell for this and for the other reason that it includes races hating each other. Germany fell through her overweening ambition. Memoirs telling us the inner story of these Empires are coming to light day by day, and as one reads them one's wonder is that they lasted as long.

The war has done two chief things; it has shattered the political dominance of Europe in the world. Europe will not henceforth control and rule peoples outside of Europe, unless it be the backward peoples of parts of Africa. The second and the most tragic thing with which we are confronted today is that the war has broken down the whole system of international relations. Once it was easy to pass from one country to another. I have travelled much in Europe, and I remember only one occasion, during the last forty years, until the war, when I required to use a passport. The war has broken down commercial relations owing to the uncertain value of currency. The nations are finding it very hard to trade with each other, to fix prices and to make contracts. Since the war this has made it so difficult to carry on trade that stagnation has tended to become chronic.

In 1919 we made a peace. I should not like to say of this peace what Mr. Birrell said of the Crimean war--that the nation did the cheering, the soldiers did the dying, and nobody did the thinking. Probably the Treaty of Versailles is as good a Treaty as could have been made in view of allied public opinion at the time. It was, however, a Treaty dictated by one side--the first modern treaty, so far as I know, thus made without consulting the enemy principals. The treaty is defective. Five years of experience have shown us some of its defects and some parts of it will have to be modified.

Germany, as we all know, is in a state of financial collapse. There died two months ago the President of the Reichs Bank, Herr Havenstein. His policy for the bank was that the paper mark should always be taken in contracts at its face value. It did not matter what outside countries might think of it. The Reichs Bank would take the German mark in 1923 just as it would have taken it in 1914. I am not enough of an economist to explain to you many of the results, but let me point out one. The practice was a god-send to the debtor but it brought disaster to the creditor. Any one who owed marks was the happier the longer he could put off payment, since the mark became always cheaper. At last he could buy for a few dollars what would pay off millions. The bigger the debt the better. In days when marks counted for something, a trader could incur a heavy debt to his bank. He could with the money thus secured buy foreign exchange-pounds or dollars-and put the money where it would remain pounds or dollars. He might buy a factory, pay for it in his marks, and he had his factory. He might buy shares in an industrial company, and he had his shares. He might buy a house, and he would have his house. He might pay for all those things with borrowed marks. After six months or a year he could repay the bank with marks which at the end of 1923 cost almost nothing.

Who lost by the transaction? The debtor to the bank had his foreign currency, his factory, his house, or his shares. Who lost? Well, the foreigner who bought German marks lost. The man who took German marks for his factory lost, unless he was quick in exchanging them into something stable. Anyone who took the marks and held them lost. But the people who lost most through this German system of finance-involving the most diabolical cruelty, I suppose, that the world has ever seen-was the whole of the creditor class. To be in debt as long as you could, while the mark was going downhill, meant wealth. The losers were the people who had to take pay in marks; the plain, careful people who had saved money and bought Government loans, the prudent people who held mortgages because they seemed safe, the people who had lent good money and could be repaid in worthless paper.

When you read in the newspapers that German profiteers are spending freely in Swiss hotels, remember how easily they got their money. Remember also at what cost to suffering women and children in Germany they secured it, because the class at whose expense they were largely enriched was the class that through long years of careful saving had put by something for their old age in the form of bonds or mortgages. The rich industrials are revelling in luxury. The saving middle class is starving.

Now glance at France. Some time ago, speaking in public, I said I thought that unless France changed her policy, it would be necessary for the entente to come to an end. Some of you may remember the old maid who gave her age at a certain figure and three years later gave it at exactly the same figure. When she was reproached she said: "Well, I am not the sort of person who says one thing today and something else tomorrow." (Laughter) Now, I should wish France to become like the old maid. Our relations with France depend entirely upon what France is going to do. If France continues in a certain course it seems to me that Great Britain and France will have to part company. But I should like to say here that the charges now being hurled against France--that she is militaristic, that she wants a war--seem to me quite devoid of foundation. France does not want war. The French people enjoy life. They love France as perhaps no other people love their native land. They have resources of enjoyment within themselves that make life sweet and delightful to them. They do not want war. What they do want is security, and they feel themselves to be in a dangerous position in Europe. They know that they have a very difficult frontier to defend, and they want to be perfectly safe.

Well, I think they have made themselves tolerably safe, from a military point of view. France is astride of Europe today like a military Colossus. No other power, either now or in any past time, has rivaled the present military dominance of France in Europe. But France seemed to forget two things. She has forgotten that Europe resents the military dominance of any one power. (Hear, hear) Great Britain resents this dominance. France began to think that she had better play for safety even against her chief ally, and we find her building in the West great aerodromes, the only purpose of which is to be able to attack England from the air. She is building submarines; she would not agree to limitations with respect to them; and the submarines can be directed only against the naval power of Britain. This has aroused resentment, and now we find the British Labour Government reluctantly taking steps to make Britain's power in the air equal to any menace that France may bring. At this moment we have the British fleet manoeuvring in the Mediterranean, probably to show to France that Great Britain can cut off France's communication with Africa, which, linked with France, gives her a population of a hundred million people. The policy of France has alarmed Great Britain, and Great Britain has felt it necessary to be able to say to France that she, too, is in some measure a military and naval power with which France must reckon.

The other thing that France has tended to forget is finance. She has been so anxious about her own security that she has failed to heed the warnings of British and American financiers that, unless she would follow the example of Great Britain and balance her budget and undertake to pay her debts, the day of reckoning would come in the decline of the franc. And this, alas, is what is happening now. France is on the verge of an abyss with respect to finance. Pray God she may be saved. Let us not have another collapse in Europe. But at this moment the danger is appalling. One of the most difficult things in finance is for a depreciated currency to recover the former value. The debtor class does not want such a currency to recover for this makes it harder to pay. It is going to be difficult for France to recover her credit. She must balance her budget, a difficult thing, and she must in some way reach a settlement with her creditors. Nothing else will restore her credit.

Great Britain's difficulty is, of course, in the loss of her markets. She was dependent upon the stability and prosperity of other countries, now lost. The result is that we have today in Great Britain about two million people unemployed. It is a dreadful word, a dreadful thing. There are tens of thousands of youths in Britain who have grown up to manhood and who never yet have had a job. They are suffering in a two-fold way: suffering in their manhood, because they are being helped by the State without earning the money; and suffering also from the lack of development in character, which downright work brings to us all.

Let us try to see what we may hope for in the near future. Germany can pay. She has got rid of her domestic debt, for she can pay it off in worthless marks. She has ruined her domestic creditors, and I do not suppose she proposes to help them in the future. Germany can take the money that should have gone to her own people, and add to it, and she can pay indemnities for the horror that she has brought on Europe. (Hear, hear, and applause) Germany can pay. France can save the franc, though it is going to be an uphill pull. What can we do? We can support constructive things. Thank God, we are safe; no enemy menaces us. Great Britain is not in danger; her fleet is in command of the seas-more completely on command of the seas, so far as Europe is concerned, than it ever was before. (Applause) We are safe. Now, what can we do? Well, we can learn some lessons from the war, and try to apply them with respect to our own daily conduct.

We must try to realize that a nation's mentality is permanent. You cannot turn Germans into Frenchmen, nor Frenchmen into Germans. Some of our enthusiasts have been trying for the last century and a half to turn French-Canadian Catholics into English Protestants (laughter) with what success we all know. Napoleon tried to carve up Europe into new nations but, the moment the controlling hand was removed, Europe fell back into its natural national divisions. We should recognize that we cannot alter the mentality of the different nations of Europe. Again, Europe will not stand a single master; Europe will not be, dominated by any one power; I believe that is a permanent outlook in the mentality of Europe.

We can find some reassuring things in respect to the time. What we shall all need is patience. It took England ten years more, after Pitt spoke, to save Europe by her example, but she did it in the end. There are reassuring things. The despotic dynasties in Europe have gone. Monarchies may come back in Europe but we shall not have any more Hapsburgs or any more Romanoffs to trouble us by dynastic ambitions in respect to other states. I do not believe that even Germany is going to trouble the world again with any Hohenzollern ambitions outside of Germany. The despotic dynasties have gone. The period of privilege, in large measure, is also gone. In Great Britain last summer a Labour orator said he hoped the day would come for equal chances for the child born with a silver spoon in his mouth and one born with a pick and shovel in his mouth. (Laughter) Privilege has received something like its death-blow through the events of the last few years. The land in Europe has also in large measure been handed over to the peasant worker as owner of the land. The most stable type of society--that which we have here--is one in which an owner works his own land.

All this is encouraging. Moreover we have now a League of Nations. It is easy to deride the League of Nations. When Etna was in eruption last summer I heard a statesman say that he had not heard of any proposal to put Etna under the League of Nations. What he meant was that the politics of Europe are a good deal like the convulsions of Etna, not to be controlled by any organization. I do not believe it; I believe that wise, patient, constructive statesmanship, expressed through the League of Nations, can work untold benefits in Europe. (Hear, hear, and applause).

Mr. Leacock said last week that he hoped he might say something to you that you would not like. I should like very much to say a lot of things to you that you would disagree with; I daresay I have said some already. I am going now to say my last word; if you disagree with me you may take it from me that you are entirely in the wrong. (Laughter) Let us learn to think of political questions in terms of light and not in terms of darkness. Let us believe that there is in man an ultimate nobility that will enable him to live on the earth in proper relations with his neighbour. (Hear, hear, and applause) Let us abolish hate from our outlook on life. (Hear, hear) When I hear some of my friends speaking of the present condition of the women and children in Germany as well deserved, because of Germany's conduct, I feel that but for the Grace of God I too might feel like that. Thank God, I do not. (Hear, hear) The time has come when serious people, who are hoping that our poor shattered world may be reconstructed on proper lines, must think in terms of light and not in terms of darkness. So I am going to leave with you as my last word a text. I began with one. I told you where the first one came from; you can find out for yourselves where the second one comes from, and this is it:

"He that loveth his brother abideth in the light,

but he that hateth his brother walketh in darkness, and knoweth not whither he goeth,

because that darkness hath blinded his eyes." (Loud applause)

MR. W. G. MCWHINNEY, K.C., expressed the thanks of the Club to the speaker.