Paris 1919 - Margaret Macmillan [122]
There was also much disagreement over what counted as damage. Wilson had said firmly that he would consider only restitution for damage done by unlawful acts of war and not for war costs themselves. His Fourteen Points had talked merely of “restoration” of invaded territories, and he had promised that there would be “no annexations, no contributions, no punitive damages.” When Germany had signed the armistice agreement, it had done so on that understanding. Germany would thus be liable for repairing the battlefields in France and Belgium but not for the money Allied governments had spent on, for example, munitions or feeding their soldiers. When Lloyd George tried to blur the line between reparations and indemnities, Wilson would have none of it: “Bodies of working people all over the world had protested against indemnities, and he thought the expression reparations would be sufficiently inclusive.”16
Lloyd George, optimistic as always, told his colleagues that he did not really think Wilson had ruled out indemnities. The British were concerned that, if Wilson stuck to his guns, the British empire would end up with compensation largely for ships sunk by the Germans. France would get the lion’s share, which, in the British view, it would probably waste with its usual inefficient financial management. The British also suspected that France was not trying very hard to repay its debts to Britain. As Churchill said severely, “France was going bankrupt as a nation, but the French were growing wealthy as individuals.” 17
Lloyd George tried persuasion with Wilson and then he tried threats. He might not be able to sign the treaty, he told him at the end of March 1919, unless some of Britain’s costs were included. Fortunately, Smuts had come up with an ingenious solution. He pointed out that, when the armistice had been arranged, the European Allies had stated, and the Americans had accepted, that Germany was liable for all damage done to civilians by its aggression. Therefore, reparations must include separation allowances for soldiers’ families, as well as pensions for widows and orphans. The effect was to double the potential bill. And this came from the same Smuts who four months earlier had warned Lloyd George against excessive claims, and who was to protest vigorously a month later that reparations would cripple Germany. High-minded, moralistic and clever, Smuts persuaded himself that he had not been inconsistent. In his own defense, he claimed that he had simply expressed an opinion shared by most of the legal experts at the Peace Conference. More revealingly, he wrote that, if pensions had been excluded, France would have got most of the reparations.18
Wilson listened to Smuts where he would not have listened to Lloyd George. The American experts thought the argument absurd and illogical. “Logic! Logic!” Wilson told them. “I don’t give a damn for logic. I am going to include pensions!”19 His decision in the end affected only the distribution of reparations, because the final figure was to be determined by what Germany could actually pay.
Although Wilson has been blamed for backing down, Lloyd George has been blamed even more for, as Keynes would have it, bamboozling the Americans and allowing the British public to dream of exacting huge sums from Germany. At best, he has been seen, as he was by many at the time, as a liberal who did not have the courage to be true to his principles. Certainly, he was not consistent. When Hughes of Australia first talked in terms of millions of pounds, Lloyd George pointed out that Germany could raise the sum only by expanding its manufacturing and dumping cheap goods on world markets. “It would mean that for