Philip Viscount Snowden’s Autobiography – Chapter LXIII
‘The Hague Conference’
The most defining moment in his Political Career.
The Hague Conference
I come now to the story of what was perhaps the most sensational episode in my career; an episode which to my great surprise brought me for a time into world-wide notoriety. This was the Reparations Conference which was held at The Hague in the month of August 1929.
Perhaps I had better begin with a brief statement of the events which led to the calling of this Conference. Ever since the end of the War the question of Reparations and War Debts had caused considerable trouble. A great many International Conferences had been held on these matters, but no working and permanent settlement of Reparations had been reached. The Peace Conference met in Paris after the War in an atmosphere still charged with war passions. Fantastic ideas were then entertained as to the possibility of compelling the defeated Powers to pay the whole cost of the War. These ideas were soon found to be vain delusions, and the successive Conferences on the subject made unsuccessful efforts to reduce the amount of Reparations to be exacted from Germany to a limit which might be within her capacity to pay.
Three years after the end of the War some wiser heads began to realise that the whole idea of exacting Reparations and discharging War Debts was financially and economically impossible without inflicting injury upon debtor and creditor alike. On the 1st August 1922, the British Government made a bold and statesmanlike declaration on the subject, which was embodied in a Note addressed by Lord Balfour to our European Allies in the War. This document insisted upon the relationship between Reparations and Inter-Allied Debts; and set forth in plain language the British view of the problem. It was pointed out that up to that time the British Government had abstained from making any demands upon their Allies either for the payment of interest or the repayment of capital on the debts due to Great Britain. In the meantime Great Britain had been required to meet her obligations to the United States. In this Note the British Government announced that they were prepared, if such a policy formed part of a satisfactory international settlement, to remit all debts due to Great Britain by her Allies in respect of Loans, or by Germany in respect of Reparations. This magnificent offer met with no response either from the Allied countries or from the United States.
Further efforts were made to place the Reparations Payments on a more practical basis, culminating in the London Conference held in July 1924, to put the Dawes Scheme into operation. The Dawes Plan was never regarded as being of more than a temporary character. It involved serious interference by the Creditor Powers with the economic and commercial affairs of Germany, and even those who fixed the figure which was to be paid by Germany had grave doubts as to whether it would be within the capacity of Germany to meet these obligations, and especially whether it would be possible to transfer the payments to the creditors without seriously upsetting the International Exchanges.
The question of revising the Dawes Plan was first raised by Mr. Parker Gilbert, the Agent-General for Reparations, in his Report on the working of the Plan published in December 1927. He urged the advisability of opening up negotiations for this purpose between the German and the ex-Allied Governments. No further step towards a revision of the Dawes Plan was taken until September of the following year (1928), when during the sitting of the League of Nations Assembly at Geneva the German Ministers raised the question of the Evacuation of the Rhineland. The French Government insisted that the Evacuation of the Rhineland could not be considered until the matter of German Reparations had been placed in a more satisfactory position. It was finally agreed that there should be parallel discussions about evacuation and about a final settlement of Reparations, and that a Committee of Experts should be appointed to draw up proposals for a complete and final settlement of the Reparation problem. Negotiations on the matter took place between Mr. Churchill (who was then Chancellor of the Exchequer) and M. Poincare. In connection with these negotiations Mr. Churchill visited Paris, and finally Notes were exchanged between the two Governments placing on record their points of view in regard to a final settlement of Reparations.
It is important here to note, in view of the controversy which arose at The Hague Conference, that Mr. Churchill insisted that in any alteration of the amount of the Annuities to be paid by Germany the distribution of these Annuities between the different Creditor Nations should be based upon the percentage which had been fixed by agreement at the Spa Conference held in 1920, and which since then had been maintained in all the Reparation Plans. He also insisted that full cover from Reparations and Allied Debt payments should be assured under any new Plan. He pointed out that up to that time the British payments on her Debt to America had exceeded our receipts from Reparations and Allied Debts by £180,000,000, and he insisted that the British Government must reserve their right to deal with this deficiency and to recover supplementary payments over and above their current debt liabilities.
When I come to deal with the proposals of the Young Committee, which was the outcome of these negotiations, it will be seen that in demanding amendments to their Report at the Hague Conference I was doing no more than acting upon the policy of the British Government, with which the Allied Governments ought to have been familiar.
The new Committee of Experts, charged with the duty of drawing up proposals for a complete and final settlement of the Reparations problem, was formally appointed on the 19th January 1929, and it first met on the 9th February. The Chairman of this Committee was Mr. Owen Young, an American, and it consisted of ten other members—two Belgians, two French, two Germans, two Italians and two British. The British members of the Committee were Sir Josiah Stamp and Lord Revel-stoke—who unfortunately died before the Committee reported, and his place was taken by Sir Charles Addis. This Committee sat for four months and, according to all reports, its proceedings were not of a very harmonious nature. Each of the Allied members of the Committee who had been appointed by their respective Governments, and who regarded it their duty to get as much as they could for their own country, put forward claims which, if satisfied, would have resulted not in a decrease in the amount of Reparations Germany would have to pay, but an increase in the full Dawes Annuity from £125,000,000 to £150,000,000. It had been made quite plain that the two British members of the Committee were in no sense representatives of the British Government. They had been appointed to give their expert knowledge to the problem of what sum Germany might be able to pay. The opposition to the unreasonable claims put forward by the representatives of the Latin Governments had to be contested mainly by Sir Josiah Stamp, who during these four months had a most strenuous and unpleasant time. He has since made it known that he eventually agreed to proposals demanded by the Latins in order to avoid a total break-down of the Committee.
It leaked out in the Press at the beginning of May, while the Committee was still sitting, that in order to reconcile difficulties and to meet the demands of the French, Italians and Belgians, the chairman had produced a fresh scheme. Under this scheme the average share of the British Empire was to be reduced to a figure which would fail to cover even our future Debt Payments. When this became known there was a storm of protest from all shades of opinion in this country, and Mr. Churchill was questioned upon it in the House of Commons. He stated that the British Government was in no way bound by the recommendations of the Committee of Experts, and he made it quite clear that there could be no chance of any such proposals being accepted by this country. Eventually fresh proposals for the distribution of the Annuities were made which slightly increased the share of the British Empire.
Anyone who has had experience of such Committees can understand quite well how it came to pass that the recommendations of the Committee were so unfavourable to Great Britain. The representatives of France, Belgium and Italy on the Committee were a solid block, and by insistence upon their demands they wore down the opposition and reduced the chairman to a state of almost complete nervous prostration. Finally, to prevent a complete break-down, the British members of the Committee had to accept a Report with some points on which they did not agree, and which they quite realised involved unfair sacrifices on the part of Great Britain.
In order to get an understanding of the matters which caused such acute differences in the Hague Conference, I will try to make as plain as possible the objections of the British Government to certain proposals of the Young Report.
The Report fixed the amount of the payments to be made by Germany at an average of £100,000,000 a year over the next fifty-nine years. This was a reduction of about 20 per cent, upon the Annuities under the Dawes Plan. This reduction in the German payments was accepted by the British Government, but we took the position that so long as Reparations were paid they must be fairly distributed amongst the Creditor Powers. This question of the distribution had been hotly debated in the earlier Conferences. Two years after the War, at a Conference at Spa in 1920 a scale of distribution among the Creditor Powers was agreed upon. The percentage of Reparations allotted to Great Britain under the Spa Agreement was substantially below the percentage to which Great Britain was entitled on merits. But it was accepted, and although the system of German payments had been altered at least four times in the subsequent eight years, the Spa scale of distribution had been maintained. The Young Report recommended a change in the percentage of distribution of the Annuities which would reduce the shares of the United Kingdom, the United States of America, and some of the smaller Powers by £2,000,000 a year for thirty-seven years, and Great Britain’s loss was to be distributed amongst France, Italy and Belgium, the major part of the advantage going to Italy.
There was a further feature of the Young Report to which the British Government took strong exception. It was proposed to divide the German Annuities into two classes—Conditional and Unconditional Annuities.
About one-third of the total Annuities—equal to a sum of £33,000,000—was to be placed in the category of Unconditional, and was to take priority of payment over the other two-thirds. Five sixths of this prior charge was allotted to France. Italy was to get about £2,000,000 a year, and the remainder, amounting to less than £2,000,000, was to be distributed amongst all the other Creditor Powers. The purpose of dividing the Annuities into two categories, giving absolute security for the receipt of the unconditional part, was to enable the countries receiving these payments to fund them into a Capital Debt against Germany. It was extremely unlikely that Germany would be able to maintain the regular payments of the whole of the Annuities, and, as practically the whole of Great Britain’s share of the Annuities was to come from the postponable part, while half of the share of France was guaranteed against postponement, France in this respect was placed at a great advantage compared with Great Britain.
The other part of the Report to which the British attached importance was that dealing with the payments of Annuities in kind. This method of paying Reparations was especially disadvantageous to Great Britain, as these exports from Germany entered into competition with British exports.
These were the three principal matters in the Report to which the British Government took strong exception, and the British Delegation went to the Hague Conference with the authority of the Cabinet to insist on such adjustments of these matters as would secure justice to this country. A delegation to a Conference of this character must necessarily be given a certain measure of liberty, within their general instructions, to deal with matters which may unexpectedly arise, and with developments that cannot have been foreseen. It was understood that if the British Delegation found it impossible to secure the acceptance of their demands, and if the break-down of the Conference seemed likely, the British Delegation would refer to their Cabinet colleagues for further instructions.
A week before the Delegation left for The Hague, the Young Report was raised in a debate in the House of Commons by Mr. Lloyd George, who took exception to the three points in the Report to which I have just referred. In replying to this Debate I left no doubt that the Government took the view on these matters which Mr. Lloyd George had stated, and I concluded by saying: ” I am expressing my own view, and, I think, the view of the Government, when I say that the limit of concession by this country has been reached.” The outcome of this debate made it quite clear that the three points would be raised at the Conference by the British Delegation; and it came as a great surprise to me when the matters were raised at the Conference that the foreign delegates appeared to be in complete ignorance of the attitude of the British Government in regard to them.
The British Delegation left for the Hague on Sunday, the 4th August. We arrived on the Sunday evening, and were received at the station by the British Minister, and on behalf of the Dutch Government by M. Beelaerts van Blokland, the Foreign Minister. We had to submit to the usual infliction of being photographed, and then proceeded to our headquarters at the Grand Hotel, Scheveningen, a seaside resort two or three miles from The Hague.
The formal opening of the Conference had been fixed for Tuesday morning, the 6th August. The Dutch Parliament was not then in session, and the Government had very generously placed the Parliamentary buildings in the Binnenhof at the service of the Conference.
On the evening before the Conference assembled, the heads of the six principal Powers, including Germany, met at the hotel at which the French Delegates were staying for an informal talk about the proceedings of the Conference. This was the first occasion on which I had met M. Briand, and M. Jaspar, the principal Belgian delegate. I renewed my acquaintance with Dr. Strese-mann who, I was pained to see, was obviously in a very poor state of health. We discussed at this informal gathering the question of the Chairmanship of the Conference, and the appointment of a Secretary-General. In regard to the latter appointment there were no differences of opinion as to the man beyond all others best qualified to fill that important post. Sir Maurice Hankey was well known to the foreign delegates, who had met him when acting in a similar capacity at many previous international conferences. In regard to the Chairmanship of the Conference arrangements were made which, however, were never carried through, that the chair should be occupied successively by the heads of the principal Delegations.
M. Jaspar, the principal Belgian delegate, was selected to take the chair at the first plenary session of the Conference, a position he accepted in complete innocence of the onerous duties he was undertaking.
M. Jaspar had a head of hair which reminded one of Mr. Lloyd George, and this resemblance had led at a previous Conference at Cannes to an amusing incident. Two Englishwomen saw M. Jaspar, who they believed was Mr. Lloyd George, enter a barber’s shop. They waited outside, and when M. Jaspar emerged they went into the barber’s shop and begged for a lock of hair which had been cut from the gentleman’s head who had just gone out. This was given to them, and it is very likely to this day two Englishwomen are wearing a lock of M. Jaspar’s hair in the belief that they are treasuring a lock of Mr. Lloyd George’s!
The arrival of the delegates for the opening session the following morning was watched by vast and cheering crowds. On this occasion the public were admitted to the galleries, as the proceedings were to be of a purely formal character. There were thirty-three chief delegates at the Conference, representing fourteen nations. The Dutch Foreign Minister welcomed the Conference on behalf of the Government and the Queen to the calm and peaceful atmosphere of The Hague. M. Briand, as the senior Minister among the delegates, followed with one of his appropriate little orations. He referred to The Hague as a symbol of peace, and ” here “, he added, ” is a propitious atmosphere in which to serve the cause of humanity, and to make yet another effort to promote peace and good-will between the nations which have by sad experience learned that war is bad business, even for victors.” Dr. Stresemann followed, and, though physically weak, made a bold speech in which he referred indirectly, but still quite pointedly, to the idea which M. Briand had recently put of a ” United States of Europe “. I followed with a very brief speech in which I expressed regret that M. Poincare and Herr Mueller, the German Chancellor, were prevented by illness from attending the gathering, and I congratulated Holland upon being free from the necessity of taking part in the proceedings, and expressed the conviction that though Holland was not directly concerned with such troublesome problems as Reparations, she, like all nations, would benefit by a just and satisfactory settlement of the problems before the Conference. After these formalities the opening session came to an end, to be resumed for business purposes at four o’clock that afternoon.
It had been decided that the business sessions of the Conference should be held in private, though it was soon discovered that it might have been better if the Press had been admitted. It was impossible to keep the proceedings and debates of the Conference secret. There were scores of Press men from all parts of the world assembled at The Hague, and, being denied access to the meetings of the Conference, they were driven upon other resources for their information. With the exception of Great Britain, all the other Delegations had brought with them strongly staffed and highly efficient Press departments, and they had also perfect arrangements for meeting the Press representatives from their respective countries and putting them in possession of the news they wanted circulated in their own countries. Nothing transpired at the Conference which was not immediately conveyed to the foreign Press representatives, and, naturally, coloured by the impression they wished to make upon the people of their respective countries. The British Delegation were driven to adopt similar methods, although our Press department was never so elaborate as that of the other Delegations.
At four o’clock that afternoon the first business session of the Delegates assembled under the chairmanship of M. Jaspar. I thought it desirable that the British attitude towards the Young Plan should be stated at the outset of the proceedings, and I rose at once for that purpose. In view of the impression which my statement made on the Conference and the sensation it created throughout the world, it might be well if I reproduce the fairly full report of my remarks which was afterwards communicated to the Press. I began by saying:
“The experts had stated that the Young Report must be regarded as indivisible and must be accepted as a whole, but I was afraid that if the Conference accepted that statement and took the proposals as they now stood, they would have to follow in some respects an inconsistent and rather contradictory decision. The British experts were not Government servants, and the British Government was in no way committed to adopt the committee’s recommendations.
” The views of the British Government were that the annuities which had been fixed were not beyond Germany’s capacity to pay. If a difficulty should arise, it would not be in Germany finding it difficult to obtain the money, but because Germany could not pay the money into the creditors’ pockets.
“The abolition of financial control was heartily welcomed by the British Government. As regards financial security, this was now based upon a solemn undertaking by the German nation, which also was a departure from that laid down by the Treaty of Versailles. There were a few safeguards in case of difficulties, which 1 hoped and believed would not arise, and I was glad that the sanctions had been removed.
“The British Government had no objection to the volume and the amount of the annuities, but it objected to the proposal to divide the amount into two categories. So long as conditional annuities were being paid it did not matter much, because all nations were getting their money, but unconditional annuities carried the right of mobilisation, and therefore attained greater security than the conditional annuities.
“The British Government objected to the present proposed division whereby France got five-sixths of the unconditional annuities and Italy had a very considerable sum amounting to £2,000,000 annually, which was much larger than her revenue under the Dawes Plan. There remained a perfectly negligible part to be divided among the other creditor Powers. I hoped they would forgive me for speaking frankly and firmly. The division was utterly indefensible, and the Experts themselves had made no attempt whatever to explain it or to justify or to defend it. The British Government attached the greatest possible importance to the proposed modifications which had been made in the distribution of annuities among the various creditor nations, and which was a departure from agreements which already existed, and, unfortunately, this division was very much to the disadvantage of certain creditor countries and very much to the advantage of other creditor countries. Great Britain was a very heavy sufferer from these suggested alterations in the distribution of annuities, and some of the smaller nations would also suffer. That was in one respect very unfortunate, because the small nations who were now asked to make sacrifices in their percentages were not represented at the Experts’ Conference.
” This was the first time that a suggestion had ever been made that there should be a departure from the Spa percentages. There had been eight conferences since that of Spa on the Reparations problem, but this was the first time any suggestion had been made that there should be any change or modification in the percentages then decided upon. The question had never been raised by the Dawes Scheme, and the experts had no authority to interfere with existing arrangements for the distribution of annuities. When the Young Committee was convened, it was agreed among the chief creditor Powers that there should be no interference with the Spa percentages.
“The effect of the reduction was very heavy upon some countries which did not share at all in the mobilisable part of the annuities. Great Britain would lose under the proposed scheme 48,000,000 marks a year. France, in addition to five-sixths of the unconditional annuities, would gain 10,700,000 marks, Italy 36,800,000 marks and Belgium 12,200,000 marks. Japan, Serbia, Greece and Rumania, and the United States would also lose small amounts.
“We have paid to the United States £150,000,000 which, with accrued interest, is now £200,000,000 before we have received any payments from our debtors on account of their debts to us. It is estimated that if the scale is adopted Great Britain will get just her bare debt to the United States covered. But it must be remembered that it makes no allowance whatever for the sum of £200,000,000 which is due to Great Britain under the terms of the Balfour Note.”
I then touched on the question of payments in kind, and said Great Britain attached great importance to this question, adding:
” Our relations with Germany are very friendly commercially, and long may they continue so, but we compete in the markets of the world, and payments in kind therefore have assumed a great and serious importance.
” Forgive me if I appear to speak with great firmness in regard to the distribution of annuities. The House of Commons would never agree to any further sacrifices of British interests in this matter. We are agreed—and as you all know, all parties in Great Britain are agreed—upon this.
“We are prepared to wipe the slate clean of all international debts and all Reparations. That was implied in the Balfour Note. It was the declaration of our Party before we came into power. But so long as Reparations are paid and received, so long as debts are payable, every Government in Great Britain will insist upon Great Britain being fairly treated in this matter.”
At the conclusion of my speech the Conference evidently felt that they had had as much for that session as they could comfortably digest, and a motion was made for the adjournment of the Conference.
To my surprise the speech, which contained nothing which ought to have surprised the delegates if they had been aware of the position of the British Government as stated in the House of Commons debate, caused a great sensation. The French, Italian and Belgian Delegations had evidently come to the Conference expecting no opposition to any of the recommendations of the Report. They had assumed that the business of the Conference would be confined to drafting a protocol laying down the conditions for putting the Plan into operation. As a matter of fact, I was appalled at the ignorance which was displayed by the Delegations of these countries. They had no appreciation at all of the contributions which Great Britain had made to France, Italy and Belgium in the settlement of their War Debts to this country.
The full Conference assembled next morning (Wednesday, 7th August). It was clear that the French, Italian and Belgian delegates had kept their officials up all night preparing statements for them, which were read to the Conference. The statements were moderate in tone, but emphatic that there could be no concessions by them on the demands I had put forward. The smaller Powers who suffered to some extent from the alteration of the Spa percentage were unanimous in their criticisms of the Report. There was, however, an underlying feeling that I had thrown out a challenge which would have to be taken up, and the speeches made that morning were obviously drafted to gain time for a further exploration of the British case. At a reception given by the Dutch Government the previous evening my ” bombshell ” was almost the sole topic of conversation, and amongst neutrals the feeling was frankly expressed that the Conference would have to face up to the facts, and that a little plain speaking had been introduced into an International Conference which had been strikingly absent from the proceedings of previous Conferences.
The French and Italian Press were most violent in their remarks upon my speech, and were insistent that no sacrifice of the advantages which France and Italy derived from the Young Plan should be made.
On the next day (Thursday, 8th August) the Conference went into Commission. It had not been my intention to speak at the first meeting of the Finance Commission, but events made it necessary that I should make a second speech and repeat in stronger language the demands of the British Delegation. It had come to our knowledge that the statement was being widely circulated that I was simply bluffing, and that a strong line of opposition would expose the bluff. The Chairman of this Finance Committee really precipitated my second speech by proposing the setting up of a number of sub-committees to draft a protocol for the putting of the Plan into operation. This proposal I strongly opposed, and said that until the Conference had come to a decision upon the three demands made by the British Government it was useless to proceed to other business. I took advantage of this opportunity, also, to reply to the speech which had been made by M. Cheron the previous day in the plenary session. The following is a summary of the remarks I made on this occasion:
” Mr. Chairman, I quite agree with what you have said that it will be desirable to draw up a programme for the consideration of the Sub-Committees after we have got an idea of the points to which the Commission attaches importance. The Commission will be aware from what I said the other day that there are two or three matters arising out of the Report to which the British Government attach supreme importance, and indeed I may emphasise what I said the other day by declaring now that the British Delegation must have an assurance that the three main points I raised the other day, namely, the distribution of the annuities, the unconditional part of the annuities and deliveries in kind, must be considered and some decision must be reached before the British Delegation can take part in the discussion of any further matters arising out of the Report. The Experts’ Report says in two or three places that the Government must accept the Young Plan in principle before they proceed to the appointment of certain Committees, such as the Committee to deal with the alteration of the German Laws and the Bank project, and one or two other matters.
” I hope my remarks will not be regarded as being in the least offensive if I say that there was no reply whatever given to any one of the arguments which I advanced, and no figure which I gave was challenged. Indeed all the speeches which were made yesterday purporting to be criticisms of my speech might be summarised in one sentence, namely, that we must accept the Young Report as a whole, that it is indivisible, that if any changes are made in the Report the whole structure will fall. . . .
“In regard to the first of these points we do not accept the statement of the Experts that the Report is indivisible. If that were so we should not be here at all. . . . But all the changes we have asked for could be made within the structure of the Plan without in the least undermining the foundations of that Report.
“What were the sacrifices to which M. Cheron referred, namely, that the amount of the annuities will be smaller than the amount which was fixed under the Dawes Plan. But I do not call that a sacrifice at all, because we are not making a sacrifice when we are giving up something which we should never have received. This is not a sacrifice at all, and even if it were a sacrifice it is a sacrifice which every one of the Creditor Powers is called upon to share proportionately. The French Finance Minister went so far as to claim as a sacrifice the loss of the prosperity index. That again is no sacrifice at all, but if we are to talk about sacrifices here then I have to say something about the sacrifices which the British Empire has made. As a matter of fact there is not a single one of the countries which were engaged in the War which has made anything at all approaching the financial sacrifices which Great Britain has made. . . . We have a war debt now of £7,500,000,000, which is more than double the war debt of any other nation which was engaged in the War. The taxation of our people is double per head of our population than of any other country that took part in the War. I have to provide 125,000,000 francs every day of the year for the service of our war debt.”
I dwelt in considerable detail with the magnanimous character of our settlements with our late Allies, and laid stress upon the following fact:
“As a matter of fact, we settled with Italy a debt of £560,000,000 for a present value of £78,000,000, and if the proposal made in the Young Report were carried into effect we should have to sacrifice to Italy another £30,000,000 of that £78,000,000. Therefore all that we should get from Italy for a loan which at the time of funding amounted to £560,000,000 is in effect no more than £48,000,000.
“Therefore, if as a result of this Report we were called upon to make certain sacrifices, we should be perfectly within our moral rights if we insisted on a reconsideration of our present debt arrangements with them.”
Turning to the distribution of the annuities, both conditional and unconditional, I repeated that “The Young Committee had no right whatever to interfere with the Spa percentages.”
I concluded by saying:
” We must have a decision upon these questions before we proceed any further, and I wish to submit to the Commission a Resolution on this matter for which I shall ask approval . . .
” I have behind me the unanimous support of my Government, the support of the House of Commons irrespective of Party, and the support, I believe, of the whole of the people of Great Britain. Upon this matter I am speaking quite frankly. We cannot compromise . . .
” The Young Report states that before it can come into operation it must be ratified by the Governments concerned, and I want to tell this Conference that the British House of Commons will never ratify this Young Report in the form in which it is at present. Suppose that we here were to accept it, supposing the British Government were to accept it, what would happen? We might go back to the House of Commons and submit it to the House of Commons, but the House of Commons would not accept it, the country would not accept it, and therefore all the work would have to be begun all over again, and I am quite sure that that is a situation which every one of us would deplore, and every effort should be made at this Conference to avoid such a catastrophe as that.”
I submitted the following Resolution:
“That a Sub-Committee of Treasury Experts should be appointed to consider and submit proposals for the settlement of any questions raised in regard to the amount and the method of payment of the annuities provided for in the Young Plan, and (without the German representatives) to revise the scheme of distribution of these annuities so as to bring it into accord with the existing inter-Allied agreement.”
This speech, as might have been expected, ” put the cat among the pigeons “, and drew excited replies from the French and Belgian and Italian Delegations. In none of the speeches was any attempt made to deal with the arguments and statements I put forward. They were in the main a repetition of the phrase—” the Young Report is an indivisible whole and we cannot admit any alteration of its recommendations “.
At the end of this meeting of the Financial Commission the divergence between Great Britain and the other Creditor Powers had become so marked that it was decided to adjourn for two days to see what might happen in the meantime. I agreed to this adjournment only on the condition that the next session should be devoted to a continuance of the general debate, and that Mr. Graham’s speech on Deliveries in Kind should come first. The debate on Deliveries in Kind at this particular moment was really a time-killing arrangement while private consultations were going on behind the scenes on the questions I had insisted should be dealt with before other matters were discussed.
At this meeting, on Saturday the 10th, Mr. Graham made a clear statement of the British position on Deliveries in Kind. Mr. Graham’s speech was moderate and persuasive, and it made a distinctly favourable impression upon the meeting.
At the conclusion of this speech, ignoring the fact that it had been agreed to confine the business of that session to the subject raised by Mr. Graham, M. Cheron rose, and without any remonstrance from the Chairman, said that he proposed to reply to the speech I had made two days before. He innocently confessed that he was doing this because the French Press had attacked him on account of the weakness and inadequacy of his earlier reply. This turn in the proceedings of the Commission had taken me completely by surprise, but I could not quite allow M. Cheron’s speech to pass without an immediate reply. M. Cheron had read his long speech, and he evidently did not expect that I should reply to him at once. I was getting rather impatient with this constant repetition of statements which were no answer to the case that I had put forward, and I did not spare M. Cheron on this occasion. It was in the course of this speech that I used the expression which became notorious, and which M. Cheron has not lived down to this day. The following is an extract from what I said:
” I hope that I shall not be considered discourteous if I say that M. Cheron’s speech has taken me somewhat by surprise. I understood that the sitting was to be devoted wholly to the question of Deliveries in Kind. But M. Cheron has replied to what I said when I spoke on Wednesday. Had this been a continuation of the general debate on the whole Plan, I should have had no complaint to make about the nature of M. Cheron’s intervention this morning.
“I am not going to follow M. Cheron in the points he has made, and particularly in the figures he has submitted to the Committee. I will practically confine myself to saying that I do not accept the accuracy of a single figure M. Cheron has put forward. If this were the occasion for going into details on this matter I should refute every one of the constructions which M. Cheron has placed upon his figures. It is not true to say that Great Britain did not suffer, in the proposed distribution, under the Young Plan in comparison with the distribution which she received under existing agreements. I hope that the word will not be considered offensive, but M. Cheron’s interpretation of the Balfour Note is grotesque and ridiculous to anyone who understands its full character.
” It is no good going on arguing the question day after day in the Committee, one side repeating its arguments and the other side repeating its claims. It is high time that we came to grips with this matter. I have not come here to spend the rest of my days at The Hague. I want to get back to my own country. I am as anxious as any member of the Committee to come to an agreement which will be mutually satisfactory and which will place this vexed question upon a permanent foundation. But there can be no settlement unless it is a settlement based upon justice. This general debate will have to come to a close very soon. My resolution is before the Committee, and I cannot delay a decision upon that resolution very much longer.”
At the close of my speech a number of delegates rose to continue the discussion, but the Chairman was of opinion that the atmosphere had become so electric that it would be well to adjourn the Conference until the debate could be continued in a calmer spirit.
After the adjournment of the Conference there was a violent reaction on the part of the French to the words ” grotesque and ridiculous ” which I had used in describing M. Cheron’s interpretation of the Balfour Note. Although these words were not used by the interpreter in translating my speech into French (he had translated in their place the milder expression of ” wholly inaccurate “), the actual words I had used became known. They were seized upon by the Press correspondents, and were prominently displayed in the Paris Press next morning. This storm was apparently due to one of those differences in the precise meaning in the two languages of words which are identical in form. But I learnt afterwards that the reason why M. Cheron was so indignant at the use of this expression was because he was habitually cartooned by his political opponents in the French Press in the character of a clown.
A story is told that during a recent political crisis in Paris, there was a demonstration of students in protest against the part M. Cheron was supposed to have taken in overthrowing the previous Government. During this street demonstration the students encountered M. Cheron, seized him, and compelled him to sit down in the middle of the street. They drew a circle round him, and danced around singing: “You are grotesque and ridiculous! ” Only those who know M. Cheron could imagine the full humour of that situation.
During that week-end I had a visit from two of M. Cheron’s seconds, who came to demand from me an explanation of my language. I had no difficulty in assuring them that the words in English had not the offensive meaning they had in French, and were a common Parliamentary expression. At a meeting of the principal delegates next morning, called for other business, there was a delightful exchange of courtesies between M. Cheron and myself which cleared up this incident and put everybody into good humour once more.
That same Saturday afternoon an embarrassing episode occurred which might have had the effect of breaking up the Conference altogether. It appears that on this Saturday afternoon in Edinburgh Mr. MacDonald had had a long interview with two international bankers, who had impressed upon him that there was a danger that my opposition to the French might lead them to take retaliatory action against Great Britain by withdrawing French francs deposited in London.
At the end of this interview Mr. MacDonald sent the following open telegram addressed to ” The Treasury, London.”
“Prime Minister, Edinburgh to Treasury. ” Most Urgent.
” Send to Chancellor at Hague in code immediately.
“My information is worsening from all sides: even an adjournment strikes in minds of important people an ominous note. I am relying upon three of you before break occurs to get into touch with me and perhaps we could arrange to meet before any action for adjournment is taken or if you prefer that one of you should meet me in London.
This telegram reached the Treasury at three o’clock on Saturday afternoon. There was no responsible official at the Treasury on duty at that time, and the telegram fell into the hands of a young clerk who opened it. He discovered that the telephone girl on duty was not in possession of a copy of the code, so he rang up the British Delegation at The Hague, and he read the contents of the telegram to an official of the British Delegation there.
When it became known to us that this telegram had been telephoned to The Hague en clair we were staggered at the possible consequences. It was well known to us that the telephone lines were being tapped, and it was highly probable that the contents of this important message would soon be known to all the Press correspondents at The Hague. As a matter of fact, the newspapers next morning had an account of the long interview between the Prime Minister and the bankers in Edinburgh. If this message from him to me became known to the delegates of the other Powers it would confirm the widespread impression that I was simply bluffing and had not the support of the British Government in insisting upon the demands I had made.
I immediately sent the following message to the Prime Minister. After quoting the terms of the telephoned message, I said:
“This message was read over the telephone en clair by some officer in London to a junior Foreign Office official at the, Delegation Office here. It looks as if a serious error of judgment has been committed in London and this I am investigating at once. But in the meantime I should like to know whether your telegram from Edinburgh to Treasury was also sent en clair. The consequences of any leakage of this message may be disastrous. So far my main task has been to convince the foreign delegations that I am not bluffing and have been speaking with the full authority of His Majesty’s Government and with the complete approval of the country at large. Yesterday there seemed every indication that this lesson had at last been learnt and distinct signs of cracking have been shown by both French and Belgians. To-day, as appears in the letter which I had already written before this telephone message was received and which goes by to-night’s bag, there has been a very marked stiffening. The reason for this I have not so far discovered. Of course, the fact of this message having been sent and its tenour are bound to become known to other delegations, and I very much fear that my task of reconciling the Young Plan with British interests has become almost impossible. The only chance seems to me immediate issue by you of a statement that I have the fullest support both of yourself and of every member of the Government in the position which I have taken up and which I intend to maintain.”
The Prime Minister responded immediately with this communication:
” The Financial Commission will make a most serious mistake and may wreck immediate prospects of a settlement unless they understand quite finally that the Experts’ Report requires readjustment to meet the just claims of this country. Irrespective of party or section the country supports the case you have made. Every newspaper so far as I have seen backs you. All parties in House of Commons stand by you. I hope most sincerely your colleagues on the Financial Commission will see that they have to face a position when the most elementary considerations of fair-play as between country and country compel a reconsideration of some of the recommendations of the Report. Our action hitherto in promoting the settlement of Europe on a basis of good-will is a proof that we wish this Conference to succeed both on its political and financial sides, but we have reached the limits of inequitable burden-bearing.”
On the receipt of the Prime Minister’s communication I got in touch with M. Jaspar, and told him that I proposed to read this at the meeting of the Financial Commission to be held on Monday. M. Jaspar, however, urged that I should not do this as ” the patient is so weak that this will kill him “. I gathered from this remark that the foreign delegates were still under the impression that I was bluffing, and that to be suddenly disillusioned might give them a fatal shock. However, I did not wait until Monday, but gave the Prime Minister’s message to the Press at once, and it certainly produced a marked effect upon the French delegates. For some days previous there had been rumours among the Press correspondents that M. Briand had appealed to Mr. MacDonald to come to The Hague and take charge of the British Delegation, or, failing that, M. Briand was in favour of an adjournment of the Conference to Geneva in the hope that Mr. MacDonald would be more amenable. On Monday, however, it became clear that Mr. Mac-Donald’s original telegram had leaked out, and among the Press correspondents there was a general talk to the effect that a private message from the Prime Minister had been received instructing the British Delegation to climb down. The intractable attitude of the foreign delegates during the whole of the following week was undoubtedly due to their knowledge of the Prime Minister’s first telegram.
At the end of the first week of the Conference the outlook was black. The French, Belgian and Italian delegates showed no disposition to meet us on the demands I had put forward. It had been arranged that the Financial Commission should resume its meetings on Monday (12th August) to continue the debate on Deliveries in Kind. But it was realised that this was a mere pretence to keep the Commission in existence. In these circumstances it was felt that if any progress was to be made on the matter which was holding up the Conference the principal delegates would have to meet privately and discuss the situation. At my interview with M. Jaspar on Saturday afternoon I suggested that the principal delegates should meet on Sunday morning to talk over matters. The meeting was to be strictly private, and no secretaries or officials, apart from the Secretary-General, should be present. But before this meeting took place I had arranged with M. Jaspar that the British, French, Belgian, Italian and Japanese Experts should meet informally to discuss how the British claims could be met. This was the first real advance in the way of acknowledging the substance of the British claims. The Sunday morning meeting, therefore, was of a perfunctory nature, the only incident of importance being the clearing up of the misunderstanding about the ” grotesque and ridiculous ” incident, and the exchange of courtesies between M. Cheron and myself. The meeting, however, was useful as it put everybody in a good humour and restored a favourable atmosphere.
The informal meetings of the Experts began at once to consider in what way the demands of the British could be met. From that time the Financial Commission practically ceased to function, and all the negotiations were carried on privately between the principal delegates. The Financial Commission was adjourned indefinitely until the Chairman might consider it necessary to call it together.
There were between thirty and forty delegates of the Minor Powers at the Conference, and scores of officials and experts, and they were left with nothing to do but kick their heels and await the outcome of the private negotiations which were going on.
The Political Commission, of which Mr. Henderson was Chairman, and which was concerned with the question of the evacuation of the Rhineland, was also in a state of suspended animation, as the French insisted that this question must be held over until the decision had been reached on the Young Plan.
The Committee of Experts got to work at once on the Sunday afternoon. The chief British official on this informal Committee was Sir Frederick Leith Ross, to whose ability and profound knowledge of the whole problem, and his skill in negotiating, it is impossible for me to pay too high a tribute. This Committee continued its discussions until late on Sunday evening and throughout the following Monday, Tuesday and Wednesday. At no stage, however, did the representatives of the other Creditor Powers make any serious offer. One cause of the difficulty in coming to grips with the problem was the selection of the Experts of the other Creditor Powers. The French, Italian and Belgian representatives at this Committee had all been members of the Young Committee, and they seemed to regard their duty to be to maintain the inviolability of the Young Report. Throughout the three days the consultations were carried on, the representatives of the other Creditor Powers declined to make any concessions worth considering. Such offers as they did make were simply derisory, and by Tuesday evening it became clear that nothing practical was going to emerge from the consultations of the Committee.
When the failure of this Committee to reach any conclusion was reported to me, I got into touch with M. Jaspar, and expressed my views strongly about the way in which the representatives of the other Creditor Powers were treating our demands. Following upon this conversation, next morning (Wednesday, 14th August) I addressed the following letter to M. Jaspar: ” Dear M. Jaspar,
” Referring to my remarks to you about the deadlock on the Committee of Treasury Experts, I repeat that I must press for a definite decision on the points I have submitted to the Conference at an early date. I agree that it might be best to have a talk to-day among the Heads of the other Creditor Powers, and if they desire I will submit my proposals, which are definitive, in writing, but they are known to you. The time has come for a decision, and I expect this by Friday evening, or the session on Saturday will be futile.
” I repeat that on the matter of distribution I cannot accept anything less than the restitution of our share under existing agreements.
” I am very anxious that we should arrive at a friendly agreement.”
” Philip Snowden.”
The delegates of the other Creditor Powers acted upon the suggestion contained in this letter, and by midnight on Friday M. Jaspar handed to the Secretary-General a letter addressed to me covering proposals to the British Delegation by the other Creditor Powers. They had evidently been working very hard, for the memorandum of proposals accompanying M. Jaspar’s letter was a lengthy document. It transpired that the other Creditor Powers had had some fears about the reception which would be given by me to these documents, and that was the reason why they were sent to the Secretary-General instead of direct to myself. It also came out that on the previous day M. Cheron and M. Loucheur had approached the Secretary-General to sound him informally as to whether any proposals they put forward would be acceptable as a basis for discussion. This form of approach to me, however, was not adopted, and on enquiry from M. Jaspar what the actual intention of the Four Powers was, the Secretary-General was informed that the document must be regarded as non-confidential, but not to be published without a fresh instruction. If, however, the Memorandum contained an acceptable basis for discussion, then further consultations could take place.
The British Delegation met immediately to examine these proposals from the other Creditor Powers, and it was at once realised that the document was so wholly unsatisfactory that it could not be accepted as providing even a basis for discussion. After this decision of the British Delegation I saw M. Jaspar at four o’clock the same afternoon and told him that I had received his letter and the Statement from the other Creditor Powers, and I wanted to have a few words with him before I sent the reply which was being prepared to it. I said that I thought he would not be surprised to hear from me that the Statement was quite unacceptable, and that it made no advance, indeed in some respects it was less satisfactory than the talk between the Experts in the early part of this week. I wanted to speak to him quite frankly, and at the moment between ourselves. I did not press him to give me a categorical answer to my question, but I would like to know whether I was to regard this Statement as the last word. He threw up his arms and said: ” Well, I do not know. It is difficult for me to say that.” To this I replied: ” Quite right! Your gesture is perhaps the best answer I could have. So I will not press you any more.”
He then went on to say that I must not regard it as their last word, and indicated that he was not at all satisfied with it, and added that if it rested with him there would be little difficulty in coming to an agreement. He was very anxious that there should be further time for conversations, and implied that if they were given more time they might go further. He also said that if it rested with the French he thought that they and the French could work together and do something more satisfactory, but the Italians were the difficulty. I suggested that the Japanese might help him, as they were in a much more independent position. He replied that he had already seen the Japanese, and that they would help. I then went on to say that I had put that direct question to him as to whether this was their last word because, if that were not so, I did not wish to prevent them from having further time for consideration.
That raised the question of the meeting of the Financial Commission which had been fixed for next day, and I put the proposal to him that he might send out notice postponing the meeting until Monday. He very readily fell in with the suggestion. We agreed that he might intimate on the postponement notices that no date could be fixed for the next meeting. He left me, expressing his desire and intention to do all he could to bring about a settlement.
After my interview with M. Jaspar, the British Delegation met again the same evening (Friday, 16th August) to approve the reply and the covering letter which was to accompany it. Our reply was a very lengthy document, extending to over two thousand words, and it is not necessary either to reproduce it here or even to summarise it, as it was in effect a restatement of the British demands. But the following is a copy of my covering letter:
“Dear M. Jaspar,
“My colleagues and I have read with much disappointment the Memorandum that you sent me this morning. This Memorandum, so far from representing any advance towards meeting our point of view, merely repeats in a quite vague and tentative manner suggestions which our Experts discussed informally some days ago, and which I then rejected as quite inadequate. I need not go into details in this letter, but they are set out in the Memorandum which I enclose herewith, and which I reserve the right to publish should circumstances at any time make it desirable to do so.
” If the Conference is to arrive at the successful result which we all hope for, it is essential that the other Creditor Governments should make a further and more serious effort to meet our position. We are claiming no unfair advantages; we are simply asking that the rights to which we are entitled under existing agreements should be respected. For this purpose means must be found—
(a) To restore to Great Britain (by means either of annual pay-
ments or an equivalent capital sum) the £2,400,000 a year which she loses under the distribution proposed by the Experts; or more precisely £2,000,000 a year, in addition to the adjustment required to provide debt cover in the current year; and
(b) To assure to Great Britain a share approximating to, if not
fully equivalent to, the British percentage of the unconditional annuities.
“The questions of deliveries in kind will, I hope, be found capable of arrangement, but it should be understood that we are not prepared to abandon the financial rights to which we are entitled in return for any concessions on other points.
This letter and the accompanying Memorandum were handed to M. Jaspar’s secretary at midnight that day. M. Jaspar had retired to bed after an exceptionally arduous day. This brief recital of the events of one day will give some idea of the pressure under which the principal delegates were working. The Secretary-General and his staff and the principal officials of the respective Delegations were given no rest, and I often wondered during these days how they managed to keep going at such a pace.
On the next day (Saturday, 17th August) the delegates of the other four Powers were in conference considering our letter and Memorandum, and about nine o’clock that evening M. Jaspar called to see me. I had asked Mr. Graham to be present at this interview. M. Jaspar handed a Memorandum containing a proposal that the ” technicians ” attached to the interested Delegations should meet to determine the various allocations proposed in their previous Note. In view of the inadequacy of the offer and the failure of the previous Expert conversations, Mr. Graham and myself had some hesitation in accepting this proposal. We felt, however, that it would be undesirable to risk a break-down of the Conference until further opportunity had been given for expert or other review of the available documents. We therefore agreed to M. Jaspar’s proposal, on condition that there must be no going back on the central points of the British claim, and that the experts selected should not include any persons who had been members of the Young Committee; and, further, that this enquiry should not be made an excuse for further delay. M. Jaspar accepted these conditions for himself, and undertook to consult the other Creditor Powers, who also agreed with them.
Sunday (18th August) was a comparatively quiet day. The weather during the whole time we were at The Hague had been remarkably fine. I took advantage of a brief respite to see something of the interior of Holland, and my wife and I took a long motor drive, which included a visit to the cities of Utrecht and Leyden We were much impressed by the appearance of prosperity everywhere, and with the cleanliness of the towns through which we passed, and the evidences of a thrifty and hard-working population which were to be seen. On my return I learnt from Sir Maurice Hankey that no further crisis had developed during my temporary absence from The Hague!
The situation at this time was undoubtedly very grave. We expected no result from the meeting of the Experts, and this expectation proved correct, for, after working for two days, they produced a Report which in no respect altered the situation. The Conference now had been more or less in existence for a fortnight, and we had to seriously consider the possibility of a complete break-down of the negotiations. I may say here that during all the difficulties which we had met with in the previous fortnight I never really believed that the Conference would come to a break-down. The French, Italians and Belgians had far too much to lose by the rejection of the Young Plan to persist to the end with their opposition to any concessions being made to the British demands.
On the Monday morning (19th August) the British Delegation met to take a review of the position and to examine the possible developments. Up to that time we had acted strictly in accordance with the instructions we had received from the Cabinet before we went to the Conference. We realised that within the next few days a situation might develop which would require further consultation with the Cabinet, and to meet this possibility a full statement of the case was prepared and submitted to the Prime Minister. We pointed out, however, that the situation changed from day to day, almost from hour to hour; and, therefore, we could only be prepared for anything which might happen without at the moment deciding definitely on a course of action.
On that Monday evening, however, an incident happened which gave a new turn to events. Throughout all the negotiations which I have described, Mr. Adatci, the principal Japanese delegate, had acted as an intermediary, using his influence to try to reconcile the conflicting views. On the previous Friday, just after the Note from the other Creditor Powers had been received, Mr. Adatci and a Japanese colleague asked for an interview with me. Mr. Adatci explained that the Japanese Expert had collaborated with the Experts of the other principal Powers in drawing up this Note; but Mr. Adatci wished me to understand that, owing to the distance, it had been impossible for the Japanese Delegation to consult their Government, and they had informed the other Powers that they must reserve complete liberty of action. They intended to keep their hands free so that they could join either the one party or the other, and their object was to assist in every possible way to concert the conflicting views of the other Powers and thus secure a successful outcome of the Conference. Their relations with Great Britain had always been close and friendly, and they would be particularly glad if they could at any time be of service to the British Delegation. They hoped that if the occasion arose I would not hesitate to call upon them. I thanked Mr. Adatci warmly for his offer, and expressed my great appreciation of the motives which had inspired it.
During the week-end Mr. Adatci had not been idle, and he had taken a step which turned out to be of very great importance and which contributed in no small measure to the eventual settlement of the disagreements.
On Monday evening I received an invitation from Mr. Adatci to meet M. Briand and M. Loucheur the following day at tea in Mr. Adatci’s hotel. This friendly meeting took place on Tuesday, the 20th August, at 4 p.m. The conversation between M. Briand and myself was of a most gratifying character, and was carried on in a most friendly spirit.
After this meeting M. Loucheur called at my hotel, evidently at the request of M. Briand, and he explained that M. Briand had been deeply impressed by the determined manner in which I had insisted that we must have satisfaction as regarded the Spa percentages. Both M. Briand and himself felt that it would be a tragic thing if the whole plan of the Conference broke down about the question of two millions. If the Young Plan had been still under discussion privately the French Government would have had no objection to altering the table of distribution; but, now that it had been published, any change in that table, he was afraid, in view of French public opinion, was out of the question. They were prepared, however, to arrange some compensation to Great Britain for the loss she had suffered without altering the table of the Plan; and they were trying their best to see what could be done in this way. France was prepared to guarantee to Great Britain half of the loss we complained of, and they would pay this either by means of an annuity or in a capital sum. As regarded the balance of the deficit, M. Loucheur suggested that we might arrange as best we could with the Italians, and he was under the impression that the Italians, if pressed, would be prepared to make some contribution.
Later, I saw M. Pirelli, the principal Italian delegate, but he declined to make a substantial advance beyond an offer to co-operate in putting through a general settlement of the debts for liberation and ceded properties, and to allocate to us an unspecified proportion of any rights that Italy might obtain from Czechoslovakia under such a settlement. M. Pirelli was not a free agent in this matter, and he evidently was working under strict instructions from Mussolini, who was opposed to Italy surrendering any part of the unmerited advantages offered to her under the Young Plan.
Notwithstanding the difficulty with Italy, I felt very much encouraged by the outcome of my conversation with M. Briand and M. Loucheur. I got into touch with M. Jaspar, who I found was still extremely anxious for a settlement. He said his difficulty was that the other Creditor Powers did not know what I was prepared to accept; and I said that if he could induce the Italians to make an offer similar to that of France and Belgium we could begin to talk business. My tea-table talk with M. Briand undoubtedly did improve the relations between the French Delegation and ours, and henceforth my conversations with them were of a very cordial nature.
Nothing of material importance happened during the next three days; but on Thursday, the 22nd August, we had a meeting of the delegates of the six Powers, and it was decided to push on immediately and uninterruptedly with conversations in regard to the British demands with a view to reaching a decision. These conversations resulted in a fresh offer by the other Creditor Powers, which was communicated to the British Delegation at midnight the same day. Again the offer was regarded by us as inadequate. The estimate of the other Creditor Powers was that it would give us £1,430,000 annually. The British Delegation met at ten o’clock on Friday morning and agreed to my view that the offer was quite unacceptable.
M. Jaspar was undismayed by the failure of this and all the previous offers to satisfy the British Delegation, and he begged that he might be given a little more time to produce ” a final offer “. So we agreed to postpone further meetings over the week-end.
In view of what seemed now a strong probability that we should come to a break-down within a few days, acting upon our instructions from the Cabinet we telegraphed to the Prime Minister, suggesting that some of the members of the Cabinet might come to The Hague for a consultation on Sunday, the 25th August. There were two courses open to us, to both of which considerable objection might be raised. The Delegation might return to London—but we felt that if we did that it would risk the disruption of the Conference. On the other hand, for the Cabinet to come to Holland would undoubtedly cause great excitement, and would give the other Powers the impression that we were weakening in our determination. During the week-end the other Creditor Powers were preparing their final offer, and it was certain that if it became known that the British Cabinet was meeting in Holland their offer would be affected adversely.
We placed the whole position before our colleagues in London, and they agreed with us that it would be inadvisable for any of them to cross to Holland. The decision in the last resort was left to the Delegation. Nothing, however, that happened could be kept secret, and on the Sunday morning the Dutch newspapers came out with sensational stories that the British Cabinet was secretly meeting in Holland. This information appears to have leaked out from London, for the reports in the Dutch newspapers were attributed to an English source. It came to our knowledge that the Note which the other Creditor Powers were preparing, and which had been finished on the Saturday night, was rewritten on Sunday morning when this sensational news about the British Cabinet coming to Holland became known. These Powers had evidently assumed that there were divisions in the British Cabinet, and that if they took a firm line they would force the acceptance of their terms. This new Note was not delivered to us until eight o’clock on Monday morning, and I at once called the other British Delegates and our Experts into consultation. The Note was submitted to careful examination, and to our surprise it made no substantial advance on the previous offer, and was in fact merely a repetition of it.
At two o’clock that afternoon I sent this letter to M. Jaspar as the agreed reply of the British Delegation:
“August 26th 1929. “Dear Mr. Jaspar,
“We have received your communication of the 25th August conveying to us the reply to my letter of the 23rd August in which I asked for a definite settlement in writing of the final proposals which the other Creditor Powers were prepared to make.
“The British Delegation have considered your Memorandum, and they note with regret that it shows no appreciable advance on your previous offer and is altogether inadequate.
I heard indirectly that M. Jaspar felt some annoyance at the brevity of this reply and the rapidity with which it had been dispatched after the other Powers had spent so much time in drafting their Memorandum. It was explained to him that the British Delegation saw no useful purpose in going over the same ground time after time, and the only long reply the British Delegation could have made to this last Note would be to repeat what they had already stated at great length.
I had a considerable amount of sympathy with M. Jaspar, because I felt quite sure that the tenor of this last Note must have been a disappointment to him, and represented the failure of his efforts to induce his colleagues to make some further concession. When M. Jaspar had cooled down he admitted that there was some justification for the tone of our reply.
At eleven o’clock on the morning we had received this last Note, Mr. Adatci called to see me. He said that he assumed that I had received the Memorandum containing the proposals drawn up by the other Creditor Powers for the satisfaction of the British claims. He wished to explain the position of Japan in this matter. The Japanese Delegation had attended the discussions as an observer, and they had offered their advice, but did not take part in signing the Memorandum and did not associate themselves with it. He had explained this to the representatives of the other Powers, and had obtained their consent to making this declaration to the British Government as a matter of loyalty. He further explained in order to assist at a settlement the Japanese Delegation had agreed to rebate the 7.5 million reichmarks which they had received during the past five months of the Dawes Annuities. I thanked Mr. Adatci for his statement, and said that the Memorandum was even less satisfactory than the verbal proposals made last week. The other Creditor Powers knew quite well that an offer on these lines must be unacceptable, and that it was a waste of time to put it forward.
I told him that I had expected that if the new proposal did not satisfy our full demands it would at least represent a substantial advance on previous offers, which might furnish the basis of a new agreement. As a fact, the Memorandum actually closed the door to any agreement. Mr. Adatci said that he did not regard this last Note as a final offer. The other Creditor Powers were prepared to make further concessions, but they wanted to know what was the Chancellor’s minimum. I replied that if the other Creditor Powers had made a substantial advance towards meeting our views we might have been able to say what we would in the last resort take, but I could make no suggestion upon the basis of an offer such as that contained in the Memorandum. Mr. Adatci said that he feared that we were very near a break-down at the Conference. The other Ministers were so tired that nothing could be done that morning.
In the evening of the same day Mr. Adatci paid me a further visit. It was quite evident to me that he was acting as a friendly intermediary between the parties. He told me that he had been informed that the French Council of Ministers had met that day, and had decided that the proposals put forward in the Memorandum of yesterday represented the last word so far as France was concerned. Public opinion in France would not allow their delegates to go any further. Mr. Adatci enquired whether it would be any use trying to get the other Powers to put up a proposal which would increase our share from 60 per cent. to 70 per cent. I did not wish to put Mr. Adatci into a difficult position, and to encourage other people to put forward such an offer in the belief that it would be accepted.
I was very much encouraged by these visits from Mr. Adatci, because it was quite evident that the other Creditor Powers were prepared to make a substantial advance upon the proposals in the offer put forward in their latest Note.
Three hours after we had received this new Note, M. Jaspar summoned the Secretary-General and asked that the details of the new Note should not be published. It would be very disastrous if the details leaked out, and would make further progress at the Conference impossible. It was quite clear to me from this that the authors of this Note did not wish it to be regarded as their final offer. The Secretary-General reported this request to us, and we agreed to the desire, without any hope that it would be kept. As matters turned out, two hours later the Press men were in possession of the contents of the Note, including even the figures, which they have said they derived from French sources. A late edition of the London morning newspapers of the same date, which arrived later in the day, showed that the information had been extracted by the journalists from experts who had drafted the Note. As a matter of fact, the Press were in possession of the full details of the Note twelve hours before it had been received by the British Delegation!
I got into communication with M. Jaspar at once, and said that in view of this disclosure I felt free to give the substance of the Note to the Press so that the public could have it officially. M. Jaspar, still so anxious that the Note should not be regarded as the final offer, pressed me to see that any commentary upon it should not be put in such a way as to indicate that the Conference was about to break down.
After the receipt on Monday (26th August) of this unsatisfactory Note from the other Creditor Powers, the deadlock appeared to be complete. The Conference had now been sitting for three weeks. For nearly a fortnight there had been no meetings of the full Conference. The private negotiations between the principal delegates had, so far, resulted in no offer from the Latin Powers which the British Delegation could regard as in the least satisfactory. They themselves admitted that their offer did not represent more than 60 per cent, of the British share of the Annuities of which we were being deprived by the proposals of the Young Report.
Substantial progress, it is true, had been made on the political side, and an agreement was almost complete provided a settlement could be reached of our financial claims. The matters of Deliveries in Kind, which had been in the very able hands of Mr. Graham, had also made some progress, though our requirements had not been completely met. In these circumstances the British Delegation at an early meeting on Tuesday (27th August) decided to ask M. Jaspar to summon the heads of the six principal Powers at three o’clock that afternoon, and to arrange for a meeting of the Plenary Conference on the following morning at ten o’clock. When this message was delivered to M. Jaspar we learnt that the French, Belgian and Italian Delegations had just made a similar request to him.
This meeting, which marked the turning-point in the fortunes of the Conference, assembled in a Committee Room of the First Chamber of the States-General at five o’clock.
It had been reported from Rotterdam that the French Delegation had booked the whole of the sleeping accommodation in the Paris Express for that evening.
M. Briand, up to this time, had taken no part in the conversations at previous meetings of the heads of the Delegations and of the proceedings in the Financial Committee and the Plenary Sessions of the Conference. At the opening of this meeting he became the spokesman of the Latin Powers, and rather cleverly tried to put the responsibility for the failure to come to an agreement upon the British Delegation. He spoke of the grave political consequences which were at stake, and asked us to soar above the consideration of paltry figures! The difference was so small—not worth the break-up of the Conference!
My reply to this argument was obvious. The deadlock was due to the fact that the other Creditor Powers were determined to grasp an advantage at the expense of Great Britain, and if, as M. Briand asserted, the difference between the other Creditor Powers and Great Britain on this matter was so paltry, the matter could be settled at once if the other Creditor Powers would concede the just demands of Great Britain.
M. Briand, I said, complained that we had never stated the minimum sum that we were prepared to accept. I pointed out that we were justly entitled to the full sum of which we were being deprived, and it was for the others to say how much of that demand they were prepared to concede. The efforts they had made up to the present time, amounting to not more than 60 per cent, of our just claim, did not provide a basis for bargaining. M. Briand had repeatedly admitted the justice of our case, and he had said that if the other Creditor Powers could make a concession to us without altering the Young Plan he would have been willing to do so. It was for them to state their maximum offer, and if that approached to any minimum which the British Delegation might have in mind they would examine it and see whether the gap could be bridged. Mr. Henderson strongly supported the position we were holding, and complained that we could not get the other Creditor Powers to state definitely whether their offer of 60 per cent, was the final offer they could make.
The room was insufferably hot, and it was suggested that we might adjourn for ten minutes to ” air the room “. As it turned out, however, the ten minutes were spun out to five hours. During this ten minutes’ interval the British Delegation remained in the Conference Chamber, and the other Creditor Powers went into another room. The other parties used this short interval to get their heads together.
Within five minutes M. Jaspar returned to our room to say that his friends had been talking the matter over and they were only prepared to advance 60 per cent. But he had declined to return to the British Delegation without offering 70 per cent., which he had achieved. I rejected this offer, and told M. Jaspar that he had done remarkably well in securing an advance of 10 per cent, in five minutes, but I should require him to make an advance upon this.
While these consultations were going on in the other room we were discussing amongst ourselves whether we could help matters by making a definite offer of what we would be prepared to accept. I put down on a half-sheet of note-paper five points constituting our minimum demands. They were:
(1) Their offer of £1,400,000 to be raised to £2,000,000.
(2) Some further concession on the non-conditional annuities.
(3) Coal orders from Italy 1,500,000 tons as a minimum.
(4) International Bank to be situated in London.
(5) Existing concessions to be confirmed.
I handed this Note to M. Jaspar, who went away to submit it to his friends. He returned in half an hour with the following counter-offer :
(1) They were prepared to offer £1,750,000.
(2) They found a difficulty in granting this owing to the position
of the Smaller Powers.
(3) Italy had been persuaded to increase the coal orders to
(4) They were not willing to discuss the Bank.
This proposal was not acceptable to us, and M. Jaspar withdrew to see if he could gain any further concessions. I congratulated him upon the progress he was making, and pointed out that in half an hour he had made very considerable advance. At the same rate he would come up to our minimum demands before midnight.
He returned in a quarter of an hour with a further advance of £50,000. ” You are doing first-rate, M. Jaspar,” I said; ” be not weary in well-doing.” During the next two or three hours he passed to and fro between the two rooms, each time bringing some small advance. Before midnight he had come to within £240,000 of the British claim. M. Jaspar was in despair. He said: ” What do you say when a horse will not run for your Derby? ” ” You mean ‘ scratched ‘.” ” Yes “, he said, ” I am ‘ scratched ‘. I cannot do more. You have emptied our pockets.” ” Go through your pockets again,” I said, very kindly, “lam sure you will find enough left to cover what remains between us.” ” You told me you had a very kind heart,” he said. ” You are a bit too hard. I have never met a man like you before. You are a new type.” I assured him it was out of the kindness of my heart that I wished him to continue his efforts, for I wanted him to have the satisfaction of having saved the Conference. Then someone had a brain-wave! A hitherto undiscovered means of giving us the sum we needed was found, and at midnight our demands were accepted and the Conference was saved!
All this time from noon of the previous day no delegate had had a meal. It was an intolerably hot evening. Swarms of midges and mosquitoes covered the table of the Committee Room. In the interval between M. Jaspar’s wanderings from one Committee Room to the other I spent my time murdering hordes of these insects as they settled on the table. The delegates were famished. At last some Good Samaritan produced a few dry rolls and some musty cheese, and our lives were saved.
The Germans, who had taken no part in these conversations, were summoned. There was a long wait before they arrived, and when they did Dr. Stresemann was not with them, as the doctor had refused to allow him to leave his bed. For certain parts of the agreement the consent of the German Delegation was necessary. The heads of the agreement at which we had arrived were explained to them so far as they affected them.
At two o’clock in the morning this long and momentous meeting ended. When we went outside we found the square of the Binnenhof crowded with journalists who had been waiting all these hours, and who had enlivened the time by making bonfires of copies of the Young Report! The news of the agreement had already been communicated to them, and they were the first to offer their congratulations to the British Delegation.
I got back to our hotel about three o’clock in the morning, where I found my wife in a state of great anxiety about the outcome of this protracted meeting. She was greatly relieved at the good news I had to tell her. She had suffered, like all of us, from the strain of the last four weeks, and was happy that our efforts had at last been crowned with success. Throughout all this time she had been an inspiration and a consoler. No matter how black things might seem, she had a word of hope. She had never despaired of success when success seemed farthest away. Her quiet confidence was an encouragement to us all. Nor was this the only help she gave. She had attended throughout to an enormous mass of personal correspondence, and when I returned to the hotel tired in the early mornings after a day of conference she was there waiting for me to see that food and rest were immediately provided.
Three years later the Young Plan, like its numerous predecessors, was found to be unworkable, and is no longer being operated. It may be of historic interest to explain what our four weeks’ strenuous struggle at The Hague for British rights gained for the time being.
We claimed an addition to our Annuity of £2,400,000 a year, a fairer share of the Unconditional Annuities, and some improvement in regard to the Deliveries in Kind. The agreement reached on the first of these three claims gave us an increase in our guaranteed Annuities of £2,000,000 a year for thirty-seven years. This payment was to be guaranteed to the extent of £990,000 by the French and Belgian Governments, and £450,000 by Italy. We received at once a lump sum of £5,000,000—the equivalent of an additional Annuity of £360,000 a year. In addition, by a rearrangement of the dates on which the debt payments were to be made to us, we gained an additional sum of £200,000 a year. Of these sums 90 per cent, were guaranteed, and were therefore placed in the category of Unconditional Annuities. This addition may be regarded as a full compensation for that small sacrifice we made from the total of our original amounts. With regard to the second point, we obtained a larger percentage of the Unconditional Annuities. On the third claim, namely, Delivery in Kind, we secured a very substantial advance. These three matters constituted our gains in what I might call the financial and commercial sphere.
The British Delegation were equally successful on the political side, the credit for which is wholly due to Mr. Henderson. An agreement was reached between France, Belgium and Great Britain on the one hand, and Germany on the other, by which the complete evacuation of the Rhineland was to be effected. The withdrawal of the British troops began at once, and our evacuation was completed before Christmas.
The next three days were spent in winding up for the time being the work of the Conference. We had some trouble with the Germans, who offered a strong resistance to the proposal that they should be asked to abandon a claim to the surplus of the last five months of the Dawes Plan, and to the proposals in regard to the Unconditional Annuities, unless the question of the cost of the Armies of Occupation was settled simultaneously. They had, of course, no claim whatever in a share of the surplus of the Dawes Loan. They proved to be extremely stubborn, and it was not until we had discussed these matters with them the whole of the following day that we succeeded in coming to an agreement with them.
In the course of a conversation I had with the German Ministers, I was astounded to learn that they had been given to understand by representatives of the Creditor Powers that the British delegates desired Germany to undertake additional obligations in order to assist in making good the British losses under the Young Plan. There was, of course, no foundation for this suggestion. I had made it clear from the outset that Great Britain would not accept any concessions to her just claims at the expense of Germany or of the Smaller Powers. I wrote to M. Jaspar on this matter, and he replied:
“It is necessary to lay special emphasis on the fact that, contrary to what you have apparently understood, the German Delegation have never been given to understand that you desired Germany to undertake additional obligations, nor to assist in making good the losses imposed upon you by the Young Plan.”
After the final agreement had been reached the British delegates voluntarily sacrificed some share of the Un conditional Annuities to which we were entitled in order that they might be divided amongst the Smaller Powers, and this consideration won for us their ardent gratitude and respect.
It was necessary to hasten the conclusion of the Conference, as some of the delegates had to go to Geneva for the meetings of the League of Nations Assembly. During these three hectic days the officials attached to the delegations worked day and night in order to prepare the Protocol embodying the Resolutions of the Conference and the preliminary schemes for putting the Young Plan into operation from the 1st September. The work of the Conference at this stage would have broken down altogether if it had not been for the energy and skill of Sir Maurice Hankey, the Secretary-General, who, I believe, never went to bed for two nights. The French half of the Secretariat-General was quite unable to do this part of the work, and the result was that the Resolutions of the Conference were laid on the Table in the English language only. This led to a certain amount of suspicion and increased the prevailing irritation.
On Saturday morning (31st August) the Financial Commission met and passed the final Protocol, and the Plenary Meeting followed an hour later. There was no time for an open public ceremony in the presence of the Press and the Diplomatic Corps, nor for long and eloquent speeches which might have been expected on such an historic occasion. A few words of mutual congratulation and satisfaction were offered, and on my motion a warm vote of thanks was accorded to M. Jaspar, who had carried out the arduous duties of President with such conspicuous tact and success. This day happened to be the birthday of the Queen of the Netherlands, and as the delegates passed from the Conference Hall into the stately square of the Binnenhof a band played the well-known hymn, ” Now thank we all our God. …”
It had been frequently asserted in the foreign Press that the British Delegation were fighting only for some sordid material gain. It is quite true that we were demanding our just right in the matter of the distribution of Reparations, but behind our insistence upon that right there was a much more important principle involved. Our resistance to the call upon Great Britain to make further sacrifices was an indication that we had reached the limit of our quixotic generosity, and that we should not allow Great Britain any longer to be regarded as the ” milch cow of Europe “. And still beyond that, and of greater importance, was our assertion of our international rights and of our determination that international agreements should be respected. I am convinced that our stand made a profound impression upon our future relations with other European countries. The rights and the influence of Great Britain in international diplomacy had been reasserted. We had won the respect of the nations with whom we had been in acute controversy during these four momentous weeks.
Throughout the Conference the personal relations between the British Delegation and those of the other Powers had been of a friendly character, which was a striking contrast to the bitterness of the personal attacks which were made upon me in the French Press. These criticisms were more amusing than irritating. One of the mildest caricatures of myself which appeared in the French Press was one which represented me as the reincarnation of the men who had burned Joan of Arc, beheaded Mary Queen of Scots, and banished Napoleon!
I am sure that Yorkshire had to bear a measure of the unpopularity which my determined and stubborn attitude inspired in the French Press and among the French people. When the Dutch pressmen interviewed my wife to ask her what she thought about these French attacks upon her husband, she quietly remarked: ” He is a Yorkshire-man, and they do not understand the Yorkshire character.” M. Cheron shared M. Jaspar’s opinion that I was a new type of diplomatist. M. Cheron was asked from what part of England he would like the British delegate to come whom he might meet in a future international conference. He replied: ” Show me a map of England “, and when this was done he said: ” Where is Yorkshire ? ” It was pointed out to him, and then he said, pointing to Land’s End: ” I would like him to come from there.”
M. Jaspar remarked at a meeting in Belgium of the British Chamber of Commerce some months later:
“At The Hague recently I had some valuable lessons in English which have given me an irresistible desire to visit Yorkshire. I have learnt how an Englishman defends the interests of his country; I have learnt what it is to be firm, vigorous and expressive.”
Before leaving for Geneva, M. Briand sent my wife a beautiful bouquet of orchids, accompanied by a large photograph of himself inscribed ” With expressions of admiration and good wishes.”
A few days later I received a very warm letter from Mr. Adatci, who had been so useful as a conciliator. He said:
“When on Saturday, August 31st, The Hague Conference adjourned its work, I was obliged to go to the station to take the first train which would bring me direct to Geneva. It was this special circumstance which absolutely prevented me from realising my great desire; I wish to express to Your Excellency all my admiration, as well as my affection for you personally as well as for the attitude you so courageously took up in regard to Great Britain and the cause of justice and equity.
“I wish to add that, thanks to the confidence you showed in me, I was able to contribute in some small measure to the success of the Conference.
“When in Geneva I saw in the papers what an enthusiastic welcome you received in London, I leapt for joy at the thought that the heart of the British people was indeed beating in unison with yours. To-day the whole world understands completely the attitude you took up for England.”
It was a great surprise to me that our stand made such an impression on world opinion. We were supported with enthusiasm by practically the whole of the British Press and British public opinion. I was given to understand later that the proceedings of the Conference were followed in England with the interest and excitement of a Test Match. Telegrams and cables of encouragement from all parts of the world came to us hourly. When the agreement had been reached we were overwhelmed with messages of congratulation upon the outcome of our stand for British interests. The Lord Mayor of London telegraphed as follows:
“Hearty congratulations of the Citizens of London on the success of your splendid efforts at The Hague.
” Lord Mayor.”
Three months later the Freedom of the City of London was conferred upon me ” for my courageous stand for the interests of Great Britain.”
I gathered from the British Press that preparations were being made to give the British Delegation a great reception on their return to London. This prospect inspired me with more terror than all the foreign delegates I had had to fight during these four weeks. Mr. Henderson had gone direct from The Hague to Geneva, and Mr. Graham and myself and our officials decided to return by the midnight boat from The Hook of Holland which would land us at Liverpool Street at 8.30 on Sunday morning. I thought that this early hour on a Sunday would enable us to avoid a too tumultuous reception. However, when we arrived at Liverpool Street there was a great crowd of enthusiastic people. According to the Press it was the greatest welcome that had been given to British statesmen returning from an international conference since Disraeli brought back ” Peace with Honour ” from Berlin fifty years before.
When I reached Downing Street I found the following much appreciated message from the King:
“On your return home after three strenuous weeks at The Hague Conference I warmly congratulate you on an achievement which has earned for you the gratitude and admiration of your fellow-countrymen. I hope you may now have some rest, and I look forward to seeing you before long.
“George R. I.”
When we sat down in the quiet of my room in Downing Street, my Parliamentary Secretary said to me: ” Well, what do you think about it all.” I replied: ” These things do not move me. I have seen too much of the fickleness of public opinion. One day the public put a halo round your head, and the next day they press a crown of thorns upon your brow. Ten years ago I was turned out of Parliament because I could not take the popular side upon the War, and you were in prison for the same reason.” The only thing that had touched me on this journey was the sight of that crowd of boys and girls assembled near the line as the train came along from Harwich shouting and waving their little Union-Jacks.
Three days after our return we had the honour of an invitation from the King to visit Their Majesties at Sandringham. This was a very pleasant experience, and
the honour of being admitted for twenty-four hours into the simple and beautiful home life of Their Majesties is a very happy memory. The story of the happenings of The Hague were delightfully interspersed with visits to various parts of the Sandringham estates, where we had witness of the friendly relations between the tenants and their Royal landlord. The King presented me with a reading-table, and the Queen gave to my wife an afternoon tea-table which had been made in the royal workshop on the estate. These are gifts which we shall always treasure.
Shortly after our return from The Hague my wife and I paid a visit to Lord Balfour, who at that time was lying ill and living with his brother at Woking. Lord Balfour was anxious to hear my account of the proceedings at The Hague. He was in bed, but showed no signs of illness. His intellect was as clear as ever, and his conversation had lost nothing of its great charm. He was particularly pleased to have my impressions of the foreign delegates, many of whom he had met at former international conferences. It gave him real joy to hear of the enquiries they had made about him, and their wishes that I should give to him their warmest regards. We shall always remember with much pleasure our last conversation with this great statesman.