Germany Makes its Final WWI Reparations Payment

Tuesday, October 19, 2010 2:13 PM

[Taki’s Magazine]

Taki's praise of F. Scott Fitzgerald and the The Great Gatsby is much deserved. If Gatsby is not quite the best American novel, then in any case, its first chapter should be regarded as the most perfect first chapter ever written. Gatsby falls off in its latter stages. In addition to the improbable background of James Gatz--whose “parents were shiftless and unsuccessful farm people” from North Dakota--it turns out that Jay Gatsby is a straw-man for a vague financial criminal enterprise presided over by one Meyer Wolfsheim. All of this is not exactly believable, and is not what the reader wants to hear after living in a dreamworld on Long Island. 

The narrator of Gatsby, Nick Carraway, is the true hero of the novel and Fitzgerald's alter ego. This young Yale graduate, who studies the bond business in New York, describes himself thusly “I am one of the few honest people that I have ever known.” His thoughts and actions bear this out. He never lets us down. Nick remarks on the very first page, “I'm inclined to reserve all judgments.” Further down the page: “Reserving judgments is a matter of infinite hope.” Wonderfully put. Infinite hope, however, reminds me of what Henry Miller wrote in Tropic of Cancer: “Hope is a bad thing.” I have lived long enough to concur with Miller.

Which brings me to Germany and the Great War, “the war to end all wars” that commenced in August 1914. There is a nexus. Without World War I--and, thanks to the intervention of Woodrow Wilson, the defeat of Germany, Austria-Hungary and the Ottoman Empire--there would have been no Roaring Twenties, no Jazz Age in America, and no affordable France for Hemingway and Fitzgerald to enjoy during the 1920's. As a direct albeit delayed result, there also would have been no Great Depression. The inevitable economic collapse in 1929 broke Fitzgerald's spirit and ruined him, but it created an even more affordable Paris in the 1930's. It provided Henry Miller with a landscape in which he was able to bum, ruminate and thrive, after escaping Brooklyn.  

In terms of geopolitics, most of us know that China has just surpassed Germany as the world's leading exporter of manufactured goods. Less known is that Germany, in its capacity as the alleged instigator of World War I, has recently made its final installment of reparations to France and England. Can you believe it? Who knew this was going on? Der Spiegel reported the bizarre denouement in a dispatch dated October 4th. It quotes Professor Gerd Kremeich, a specialist in such matters: “It's a historical curiosity that the Versailles Treaty should continue to have a financial impact to this day.” Not only curious. It is astonishing in view of the fact that Germany was not responsible for precipitating the Great War in 1914. The basis of the reparations is bogus.

These final payments to the nominal victors of World War I make me wonder whether Germany ultimately picked up the tab for both sides of both world wars. I'm inclined to think that it did. Despite the avalanche of British Empire propaganda to the contrary, Kaiser Wilhelm II was a man of peace, integrity, learning and wisdom. Unfortunately, he lost the war, mainly due to the intrigues of Lloyd George, Winston Churchill, and Lord Arthur Balfour in 1916/17, which machinations dragged America into the war to rescue John Bull and the French. 

The quid pro quo connection between the formal entry of America into the war in April 1917 and the subsequent Balfour Declaration of November 1917 was significant. Lloyd George acknowledged this in his memoirs. The woeful repercussions are with us today in the Middle East. That aside, Wilson and Wall Street had a great incentive to jump into the European war in 1917 to cover their bets, that is, to recover America's outstanding loans to England and France. If London and Paris lost the war--as they had arguably already done on the battlefield--or if they were to negotiate a compromise peace which the Kaiser proposed to them in 1916--then there would be no German reparations flowing to London and Paris, and hence no assets to reroute to Wall Street and Washington.   

Unconditional victory, however, provided the victors with a free pass to fantasize, fabricate and defame. They could  demand reimbursement from Germany for their own folly, and use it to repay Wall Street. The Der Spiegel article points out as an afterthought: “France and Britain needed the reparations to repay their war debts. Both countries had borrowed vast sums from the U.S. during the war.” Understood. The only problem is, Berlin was not responsible for the outbreak of war in 1914. London was--in particular England's long-time Foreign Secretary, Sir Edward Gray.

Remember, the spark started in the Balkans at Sarajevo when Serbian fanatics assassinated the Hapsburg Archduke who was heir to the throne of Austria-Hungary. The assassination had nothing whatever to do with England and little to do with Germany. The violence could have been localized south of Vienna and not involved the great powers. At the time, it was naturally assumed by Berlin and Vienna that regicide would not be supported by the Czar or by His Majesty's Government in London. The outrage to Austria did not seem to matter, however. In the end, it was the pan-Slavism of Russia combined with the balance-of-power fixations of Whitehall which account for the Great War. If only Sir Edward Grey, the enormously influential Foreign Secretary, had taken a deep breath and another cup of tea, history could have taken a peaceful course. 

All Sir Edward had to do in the summer of 1914 was inform the Czar's ministers in Moscow and the French revanchists in Paris that they should relax, desist and rethink the matter. Instead, the British Ambassador in Moscow, Sir George Buchanan, was urging Russian mobilization in response to Austria's moves against Serbia. In those days, mobilization meant war. Without the Czar succumbing to England's mischief-making in Moscow, there would have been no outbreak of a general European conflagration in August 1914. This ground has been covered in "Balkan Blowup, the closing of the Circle", the first chapter of The Unauthorized World Situation Report, and in my August 2007 essay for Takimag entitled “Childish Unreason, Then and Now” which deals with Frank Harris and his opposition to England's war policy.

Under article 231 of the Versailles Treaty, Germany and her allies were declared solely responsible for the outbreak of the war. This was a preposterous idea fabricated by London and Paris. The German representatives at Versailles were aghast. In effect, it amounted to yet another blunder by England and France. The war guilt clause led directly to the rise of fascism in Germany and hence to World War II. Germany lost again. This time Germany was blasted to kingdom come, and the European continent divided up between Moscow and Washington. The state of Prussia, by order of FDR, disappeared from the map of the world forever.

And yet, Germany rose from the ashes and somehow managed to pay off everybody, as a kind of bribe to stay alive. In various ways, Germany is still paying out to this day. The re-installment of unjustified reparations to England and France relating to the previous war is yet another outstanding example of extortion. All told, Germany can be said to have paid for everything, to have financed both sides of both wars.

The Great War and its sequel, World War II, constitute a tremendous poker game, with men and material acting as the cards. Both sides felt obliged to go all in to win the pot. Who arranged this game? Who was responsible? It was not Germany. In my view, it was England. More precisely, it was a handful of unscrupulous, unwise and foolhardy politicians in Whitehall who found themselves in charge of an overextended British Empire during its declining years. The parallel with the current  implosion of Washington’s empire should be obvious.

The received wisdom notwithstanding, Winston Churchill is at the very top of this list of marplots and malefactors. As First Lord of the Admiralty at the outbreak of World War I, then as Prime Minister during most of World War II, Churchill was in the thick of it. In addition to Whitehall officialdom, there were other self-interested parties working diligently behind the scenes to contrive the outcome of events. You see the result. Unlike Nick Carraway, I am not a gentleman from Yale, and I do not reserve judgement. We are looking back at wreckage and disaster, all of it eminently avoidable.

--Copyright 2010 Patrick Foy--