Germany"s exports reached their maximum in 1913, when the figures touched 10,097 millions of marks, excluding precious metals. Grouping exports and imports in categories, the millions of marks were distributed as follows:
Imports. Exports.
Foodstuffs 2,759 1,035 Live animals 289 7.4 Raw materials 5,003 1,518 Semi-manufactured goods 5,003 1,139 Manufactured goods 1,478 6,395
About one-fifth of the entire exports was in iron and machine products (1,337 [mil.] articles in iron, 680 machines); 722 millions from coal (as against imports of other qualities of 289), 658 millions of chemical products and drugs, 446 from cotton, 298 paint, 290 techno-electrical productions, etc.
What goods can Germany give in payment of the indemnity? We have seen how she has lost a very large part of her iron and a considerable quant.i.ty of her coal.
All the economic force of Germany was based upon:
(a) The proper use of her reserves of coal and iron, which allowed her to develop enormously those industries which are based on these two elements.
(b) On her transport and tariff system, which enabled her to fight any compet.i.tion.
(c) On her potent overseas commercial organization.
Now, by effect of the treaty, these three great forces have been entirely or in part destroyed.
What goods can Germany give in payment of the indemnity, and what goods can she offer without ruining the internal production of the Entente countries? Let us suppose that Germany gives machines, colours, wagons, locomotives, etc. Then for this very fact the countries of the Entente, already suffering by unemployment, would soon see their factories obliged to shut down. Germany must therefore, above all, give raw materials; but since she is herself a country that imports raw materials, and has an enormous and dense population, she is herself obliged to import raw materials for the fundamental needs of her existence.
If we examine Germany"s commerce in the five years prior to the War--that is, in the five years of her greatest boom--we shall find that the imports always exceeded the exports. In the two years before the War, 1912 and 1913, the imports were respectively 10,691 and 10,770 millions, and the exports 8,956 and 10,097 millions. In some years the difference even exceeded two milliards, and was compensated by credits abroad, with the payment of freights and with the remittances (always considerable) of the German emigrants. All this is lost.
Exported goods can yield to the exporter a profit of, let us suppose, ten, twelve, or twenty per cent. For the Allies to take an income from the Custom returns means in practice reducing the exports. In fact, in Germany production must be carried on at such low prices as to compensate for the difference, or the exports must be reduced.
In the first case (which is not likely, since Germany succeeds only with difficulty, owing to her exchange, in obtaining raw materials, and must encounter worse difficulties in this respect than other countries), Germany would be preparing the ruin of the other countries in organizing forms of production which are superior to those of all her rivals. Germany would therefore damage all her creditors, especially in the foreign markets.
In the second case--the reduction of exports, one would have the exactly opposite effect to that imagined in the programme proposed--that is, the indemnities would become unpayable.
In terms of francs or lire at par with the dollar, Germany"s exportations in 1920 have amounted to 7,250 millions. In 1921 an increase may be foreseen.
If Germany has to pay in cash and kind 2,500 millions of marks at par, plus 26 per cent. of the total of her exports, then supposing an export trade of eight milliards, she will have to give 1,840 millions, or in all 4,540 millions of marks. Thus we arrive by stages at less hyperbolical figures, coming down from the twenty-five milliards a year to something less than a fifth. But to come to grips with reality, Germany in all ways, it must be admitted, cannot give more than two milliards a year, if, indeed, it is desired that an indemnity be paid.
Notwithstanding her great resources, France would not be in a condition to pay abroad two milliards a year without ruining her exchange, which would drop at once to the level of Germany"s. Italy with difficulty could pay one milliard.
France and Italy are honest countries, yet they cannot pay their war creditors, and have not been able, and are not able, to pay any share of their debt either to the United States of America or to Great Britain. As a matter of fact, up till now they have paid nothing, and the interest continues to acc.u.mulate with the capital.
Why have neither France nor Italy yet started to pay some of their debt? Having won the War, France has had all she could have--fertile territories, new colonies, an abundance of raw material, and above all iron and potash. The simple explanation is that which I have given above.
Can, then, Germany, who is in a terrible condition, whose circulation promises ruin, who has no longer credits nor organization abroad, who has a great shortage in raw materials; can Germany pay four or five milliards a year?
We must also remember that Germany, in addition to the indemnity, must pay the cost of the Army of Occupation, which up to now has amounted to twenty-five milliards of paper marks a year, or more than 1,600 millions of francs at par. That is, Germany has to bear for the support of the Allied troops a charge equal to the cost of maintaining the armies of France, Italy and Belgium before the War.
No financier seriously believes that the issue of bonds authorized by the treaty for the credit of the Reparations Commission has now any probability of success. Germany"s monetary circulation system is falling to the stage of _a.s.signats_, and the time is not distant when, if intelligent provision is not made, Germany will not be in a position to pay any indemnity.
Obliged to pay only one milliard of gold marks, Germany has not been able to find this modest sum (modest, that is, in comparison with all the dreams about the indemnity) without contracting new foreign debts and increasing her already enormous paper circulation. Each new indemnity payment, each new debt incurred, will only place Germany in the position of being unable to make payments abroad.
Many capitalists, even in Italy, inspire their Press to state that Germany derives an advantage from the depreciation of her mark, or, in other words, is content with its low level. But the high exchanges (and in the case of Germany it amounts to ruin) render almost impossible the purchase of raw materials, of which Germany has need.
With what means must she carry out her payments if she is obliged to cede a large part of her customs receipts, that is of her best form of monetary value, and if she has no longer either credits or freights abroad?
If what is happening injured Germany only, it would be more possible to explain it, if not to justify it. But, on the contrary, Germany"s fall, which is also the decadence of Europe, profoundly disturbs not only the European continent, but many other producing countries.
Though the United States and Great Britain partially escape the effect, they too feel the influence of it, not only in their political serenity, but in the market of goods and values. Germany"s position is bound up with that of Europe; her conquerors cannot escape dire consequences if the erstwhile enemy collapses.
We must not forget that before the War, in the years 1912 and 1913, the larger part of Germany"s commerce was with the United States, with Great Britain, with Russia and with Austria-Hungary. In 1913 her commerce with the United States represented alone little less than two milliards and a half of marks according to the statistics of the German Empire, and 520 millions of dollars according to the figures of America. If we except Canada, which we may consider a territorial continuation, the two best customers of the United States were Great Britain and Germany. They were, moreover, the two customers whose imports largely exceeded the exports. The downfall of Germany will bring about inevitably a formidable crisis in the Anglo-Saxon countries and consequent ruin in other countries.
Up to now Germany has given all she could; any further payment will cause a downfall without changing the actual monetary position.
Germany, after a certain point, will not pay, but will drag down in her fall the economic edifices of the victorious countries of the Continent.
All attempts at force are useless, all impositions are sterile.
All this is true and cannot be denied, but at the same time it must be recognized that in the first move for the indemnity there was a reasonable cause for anxiety on the part of the Allies.
If Germany had had to pay no indemnity this absurd situation would have come about, that although exhausted, Germany would have issued from the War without debts abroad and could easily have got into her stride again, while France, Italy, and in much less degree Great Britain, would have come out of the War with heavy debts.
This anxiety was not only just and well founded, but it is easy to see why it gave ground for a feeling of grave disquiet.
France and Italy, the two big victor States of the Continent, were only able to carry on the War through the a.s.sistance of Great Britain and the United States. The War would not have lasted long without the aid of the Anglo-Saxons, which had a decisive effect.
France has obtained all she asked for, and, indeed, more than all her previsions warranted. Italy has found herself in a difficult position.
She too has realized her territorial aspirations, though not completely, and the a.s.sistance of her Allies has not always been cordial.
I have had, as head of the Government, to oppose all the agitations, and especially the Adriatic adventures, which have caused an acute party division in Italy. From a sense of duty I have also a.s.sumed all responsibility. But the rigidness of Wilson in the Fiume and Adriatic questions and the behaviour of some of the European Allies have been perfectly unjustifiable. In certain messages to Wilson during my term of government I did not fail to bring this fact forward. Certainly, Jugo-Slavia"s demands must be considered with a sense of justice, and it would have been an error and an injustice to attribute to Italy large tracts of territory in Dalmatia; but it would have been possible to find a more reasonable settlement for a country which has had such sufferings and known such losses during the War. In any case, when by the absurd system followed in the treaties so many millions of Germans, Magyars, Turks and Bulgarians have been handed over to States like Serbia, whose intemperate behaviour precipitated the War, or to States like Greece, which took only a small and obligatory part in it, when States like Poland have won their unity and independence without making war, when Germany has been dismembered in order to give Poland an access to the sea and the ridiculous situation of Danzig has been created, when the moral paradox of the Saar, which now becomes a German Alsace-Lorraine, has been set up, when so many millions of men have been parcelled out without any criteria, it was particularly invidious to contest so bitterly Italy"s claims. I can freely affirm this inasmuch as, risking all popularity, I have always done my duty as a statesman, pointing out that solution which time has proved to be inevitable.
No one can deny that Italy is pa.s.sing through a period of crisis and political ill-health. Such states of public psychology are for peoples what neurasthenia is for individuals. On what does it depend? Often enough on reasons which cannot be isolated or defined. It is a state of mind which may come to an end at any minute, and is consequent upon the after-effects of the War. Rather than coming from the economic disorder, it derives from a malady of the temperament.
I have never believed, in spite of the agitations which have been seen at certain periods, in the possibility of a revolutionary movement in Italy. Italy is the only country which has never had religious wars, the only country which in twenty centuries has never had a real revolution. Land of an ancient civilization, p.r.o.ne to sudden bursts of enthusiasm, susceptible to rapid moods of discouragement, Italy, with all the infinite resources of the Latin spirit, has always overcome the most difficult crises by her wonderful adaptive power. In human history she is, perhaps, the only country where three great civilizations have risen up one after another in her limited soil.
If Italy can have the minimum of coal, cereals and raw materials necessary to her existence and her economic revival, the traditional good sense of the Italian people will easily overcome a crisis which is grave, but which affects in various measure all the victors, and is especially temperamental.
It cannot be denied that if all Europe is sick, Italy has its own special state of mind. Those who wished the War and those who were against it are both dissatisfied: the former because, after the War, Italy has not had the compensations she expected, and has had sufferings far greater than could have been imagined; the latter because they attribute to the War and the conduct of the War the great trials which the nation has now to face. This sickness of the spirit is the greatest cause of disorder, since malcontent is always the worst kind of leaven.
Four great countries decided the War: Great Britain, France, Italy, and the United States of America. Russia fell to pieces soon, and fell rather on account of her own internal conditions than from enemy pressure. The action of the United States arrived late, but was decisive. Each country, however, acted from a different state of mind.
France had of necessity to make war. Her territory was invaded, and all hope of salvation lay in moral resistance alone. Great Britain had to wage the War out of sense of duty. She had guaranteed the neutrality of Belgium, and could not fail to keep her word of honour.
Two countries alone chose freely the sorrowful way of the War: Italy and the United States. But their sacrifices, sufferings and losses have been very different. During the War the United States have been able to develop their immense resources, and, notwithstanding some crises, they have come out of it much richer than before. From being debtors to Europe they have become creditors. They had few losses in men, and a great development in wealth. Italy, who after many difficulties had developed in her famous but too narrow territory the germs of a greater fortune, has had, together with very heavy losses in men, heavy losses in her wealth.
Italy saved the destinies of France for the first time by declaring her neutrality on August 2, 1914, and letting the certainty of it be known from July 30, as the diplomatic doc.u.ments have shown.
It was that sudden and unexpected declaration of neutrality which rendered it possible for France to concentrate all her forces in the north and to win the battle of the Marne. Italy for a second time saved the destinies of the Entente by entering into the War (too precipitately and unprepared), in May, 1915, thus preventing the Austrian army, which was formidable for its technical organization and for its valour, from obtaining the advantages it expected.
Why did Italy go to war?
The diplomatic doc.u.ments, which are not all doc.u.ments of political wisdom, demonstrate the anxiety of the Italian Government to realize its Adriatic programme and to gain secure frontiers against Austria-Hungary and its successors. But this was not the _cause_ of the War; it was rather a means of explaining to the people the necessity for the War. Italy had been for nearly thirty-four years ally of Austria-Hungary, and the aspirations of Italy"s Adriatic policy had never disturbed the relations between the two countries.
The real cause of Italy"s war was a sentimental movement, a form of extraordinary agitation of the spirits, brought about by the invasion of Belgium and the danger of France. The intellectual movement especially, the world of culture, partook largely in fomenting the state of exaltation which determined the War.
During the progress of the War, which was long and bitter, Italy pa.s.sed through some terrible hours. Her privations during the War, and immediately after, surpa.s.sed all expectations. Italy found herself face to face with an enemy who enjoyed a superior geographical situation, a numerical superiority, as well as a superiority in artillery. After the downfall of Russia she had to support a terrible campaign. Even in 1917, after the military disaster, when allied troops came to Italy, she sent abroad more men than there came allied troops to her aid. According to some statistics which I had compiled, and which I communicated to the Allies, Italy was shown, in relation to her demographic structure, to have more men in the front line than any other country. The economic sufferings were, and are, greater than those endured by others. France is only in part a Mediterranean country, while Italy is entirely so. During the War the action of the submarines rendered the victualling of Italy a very difficult matter.
Many provinces, for months on end, had to content themselves with the most wretched kind of food. Taking population and wealth into proportion, if the United States had made the effort of Italy they would have had to arm sixteen millions of men, to have lost a million and a half to two million soldiers, and to have spent at least four hundred milliards. In order to work up popular enthusiasm (and it was perhaps necessary), the importance of the country"s Adriatic claims was exaggerated. Thus many Italians believe even to-day in good faith that the War may be considered as lost if some of these aspirations have not been realized or will not be realized.
But, after the War, Italy"s situation suddenly changed. The War had aroused in the minds of all Europeans a certain sentiment of violence, a longing for expansion and conquest. The proclamations of the Entente, the declarations of Wilson"s principles, or points, became so contorted that no trace of them could be found in the treaties, save for that ironic _covenant_ of the League of Nations, which is always repeated on the front page, as Dante said of the rule of St. Benedict, _at the expense of the paper_.