Chapter 12: Foreign Policy, 1919-1940
Any effort to write an account of the influence exercised by the Milner Group in foreign affairs in the period between the two World Wars would require a complete rewriting of the history of that period. This cannot be done within the limits of a single chapter, and it will not be attempted. Instead, an effort will be made to point out the chief ideas of the Milner Group in this field, the chief methods by which they were able to make those ideas prevail, and a few significant examples of how these methods worked in practice.
The political power of the Milner Group in the period 1919-1939 grew quite steadily. It can be measured by the number of ministerial portfolios held by members of the Group. In the first period, 1919-1924, they generally held about one-fifth of the Cabinet posts. For example, the Cabinet that resigned in January 1924 had nineteen members; four were of the Milner Group, only one from the inner circle. These four were Leopold Amery, Edward Wood, Samuel Hoare, and Lord Robert Cecil. In addition, in the same period other members of the Group were in the government in one position or another. Among these were Milner, Austen Chamberlain, H. A. L. Fisher, Lord Ernie, Lord Astor, Sir Arthur Steel-Maitland, and W. G. A. Ormsby-Gore. Also, relatives of these, such as Lord Onslow (brother-in-law of Lord Halifax), Captain Lane-Fox (brother-in-law of Lord Halifax), and Lord Greenwood (brother-in-law of Amery), were in the government.
In this period the influence of the Milner Group was exercised in two vitally significant political acts. In the first case, the Milner Group appears to have played an important role behind the scenes in persuading the King to ask Baldwin rather than Curzon to be Prime Minister in 1923. Harold Nicolson, in Curzon: The Last Phase (1934), says that Balfour, Amery, and Walter Long intervened with the King to oppose Curzon, and "the cumulative effect of these representations was to reverse the previous decision." Of the three names mentioned by Nicolson, two were of the Cecil Bloc, while the third was Milner's closest associate. If Amery did intervene, he undoubtedly did so as the representative of Milner, and if Milner opposed Curzon to this extent through Amery, he was in a position to bring other powerful influences to bear on His Majesty through Lord Esher as well as through Brand's brother, Viscount Hampden, a lord-in-waiting to the King, or more directly through Milner's son-in-law, Captain Alexander Hardinge, a private secretary to the King. In any case, Milner exercised a very powerful influence on Baldwin during the period of his first government, and it was on Milner's advice that Baldwin waged the General Election of 1924 on the issue of protection. The election manifesto issued by the party and advocating a tariff was written by Milner in consultation with Arthur Steel-Maitland.
In the period 1924-1929 the Milner Group usually held about a third of the seats in the Cabinet (seven out of twenty-one in the government formed in November 1924). These proportions were also held in the period 1935-1940, with a somewhat smaller ratio in the period 1931-1935. In the Cabinet that was formed in the fall of 1931, the Milner Group exercised a peculiar influence. The Labour Party under Ramsay MacDonald was in office with a minority government from 1929 to September 1931. Toward the end of this period, the Labour government experienced increasing difficulty because the deflationary policy of the Bank of England and the outflow of gold from the country were simultaneously intensifying the depression, increasing unemployment and public discontent, and jeopardizing the gold standard. In fact, the Bank of England's policy made it almost impossible for the Labour Party to govern. Without informing his Cabinet, Ramsay MacDonald entered upon negotiations with Baldwin and King George, as a result of which MacDonald became Prime Minister of a new government, supported by Conservative votes in Parliament. The obvious purpose of this intrigue was to split the Labour Party and place the administration back in Conservative hands.
In this intrigue the Milner Group apparently played an important, if secret, role. That they were in a position to play such a role is clear. We have mentioned the pressure which the bankers were putting on the Labour government in the period 1929-1931. The Milner Group were clearly in a position to influence this pressure. E. R. Peacock (Parkin's old associate) was at the time a director of the Bank of England and a director of Baring Brothers; Robert Brand, Thomas Henry Brand, and Adam Marris (son of Sir William Marris) were all at Lazard and Brothers; Robert Brand was also a director of Lloyd's Bank; Lord Selborne was a director of Lloyd's Bank; Lord Lugard was a director of Barclay's Bank; Major Astor was a director of Hambros Bank; and Lord Goschen was a director of the Westminster Bank.
We have already indicated the ability of the Milner Group to influence the King in respect to the choice of Baldwin as Prime Minister in 1923. By 1931 this power was even greater. Thus the Milner Group was in a position to play a role in the intrigue of 1931. That they may have done so is to be found in the fact that two of the important figures in this intrigue within the Labour Party were ever after closely associated with the Milner Group. These two were Malcolm MacDonald and Godfrey Elton.
Malcolm MacDonald, son and intimate associate of Ramsay MacDonald, clearly played an important role in the intrigue of 1931. He was rewarded with a position in the new government and has never been out of office since. These offices included Parliamentary Under Secretary in the Dominions Office (1931-1935), Secretary of State for the Dominions (1935-1938 and 1938-1939), Secretary of State for the Colonies (1935-and 1938-1940), Minister of Health (1940-1941), United Kingdom High Commissioner in Canada (1941-1946), Governor-General of Malaya and British South- East Asia (since 1946). Since all of these offices but one (Minister of Health) were traditionally in the sphere of the Milner Group, and since Malcolm MacDonald during this period was closely associated with the Group in its other activities, such as Chatham House and the unofficial British Commonwealth relations conferences, Malcolm MacDonald should probably be regarded as a member of the Group from about 1932 onward.
Godfrey Elton (Lord Elton since 1934), of Rugby and Balliol, was a Fellow of Queen's College, Oxford, from 1919, as well as lecturer on Modern History at Oxford. In this role Elton came in contact with Malcolm MacDonald, who was an undergraduate at Queen's in the period 1920-1925. Through this connection, Elton ran for Parliament on the Labour Party ticket in 1924 and again in 1929, both times without success. He was more successful in establishing himself as an intellectual leader of the Labour Party, capping this by publishing in 1931 a study of the early days of the party. As a close associate of the MacDonald family, he supported the intrigue of 1931 and played a part in it. For this he was expelled from the party and became honorary political secretary of the new National Labour Committee and editor of its News-Letter (1932-1938). He was made a baron in 1934, was on the Ullswater Committee on the Future of Broadcasting the following year, and in 1939 succeeded Lord Lothian as Secretary to the Rhodes Trustees. By his close association with the MacDonald family, he became the obvious choice to write the "official" life of J. R. (Ramsey) MacDonald, the first volume of which was published in 1939. In 1945 he published a history of the British Empire called Imperial Commonwealth.
After the election of 1935, the Milner Group took a substantial part in the government, with possession of seven places in a Cabinet of twenty-one seats. By the beginning of September of 1939, they had only five out of twenty-three, the decrease being caused, as we shall see, by the attrition within the Group on the question of appeasement. In the War Cabinet formed at the outbreak of the war, they had four out of nine seats. In this whole period from 1935 to 1940, the following members of the Group were associated with the government as officers of state: Halifax, Simon, Malcolm MacDonald, Zetland, Ormsby- Gore, Hoare, Somervell, Lothian, Hankey, Grigg, Salter, and Amery.
It would appear that the Milner Group increased its influence on the government until about 1938. We have already indicated the great power which they exercised in the period 1915-1919. This influence, while great, was neither decisive nor preponderant. At the time, the Milner Group was sharing influence with at least two other groups and was, perhaps, the least powerful of the three. It surely was less powerful than the Cecil Bloc, even as late as 1929, and was less powerful, perhaps, than the rather isolated figure of Lloyd George as late as 1922. These relative degrees of power on the whole do not amount to very much, because the three that we have mentioned generally agreed on policy. When they disagreed, the views of the Milner Group did not usually prevail. There were two reasons for this. Both the Cecil Bloc and Lloyd George were susceptible to pressure from the British electorate and from the allies of Britain. The Milner Group, as a non-elected group, could afford to be disdainful of the British electorate and of French opinion, but the persons actually responsible for the government, like Lloyd George, Balfour, and others, could not be so casual. As a consequence, the Milner Group were bitterly disappointed over the peace treaty with Germany and over the Covenant of the League of Nations. This may seem impossible when we realize how much the Group contributed to both of these. For they did contribute a great deal, chiefly because of the fact that the responsible statesmen generally accepted the opinion of the experts on the terms of the treaty, especially the territorial terms. There is only one case where the delegates overruled a committee of experts that was unanimous, and that was the case of the Polish Corridor, where the experts were more severe with Germany than the final agreement. The experts, thus, were of very great importance, and among the experts the Milner Group had an important place, as we have seen. It would thus seem that the Milner Group's disappointment with the peace settlement was largely criticism of their own handiwork. To a considerable extent this is true. The explanation lies in the fact that much of what they did as experts was done on instructions from the responsible delegates and the fact that the Group ever after had a tendency to focus their eyes on the few blemishes of the settlement, to the complete neglect of the much larger body of acceptable decisions. Except for this, the Group could have no justification for their dissatisfaction except as self-criticism. When the original draft of the Treaty of Versailles was presented to the Germans on 7 May 1919, the defeated delegates were aghast at its severity. They drew up a detailed criticism of 443 pages. The answer to this protest, making a few minor changes in the treaty but allowing the major provisions to stand, was drafted by an inter-allied committee of five, of which Philip Kerr was the British member. The changes that were made as concessions to the Germans were made under pressure from Lloyd George, who was himself under pressure from the Milner Group. This appears clearly from the minutes of the Council of Four at the Peace Conference. The first organized drive to revise the draft of the treaty in the direction of leniency was made by Lloyd George at a meeting of the Council of Four on 2 June 1919. The Prime Minister said he had been consulting with his delegation and with the Cabinet. He specifically mentioned George Barnes ("the only Labour representative in his Cabinet"), the South African delegation (who"were also refusing to sign the present Treaty"), Mr. Fisher ("whose views carried great weight"), Austen Chamberlain, Lord Robert Cecil, and both the Archbishops. Except for Barnes and the Archbishops, all of these were close to the Milner Group. The reference to H. A. L. Fisher is especially significant, for Fisher's views could "carry great weight" only insofar as he was a member of the Milner Group. The reference to the South African delegation meant Smuts, for Botha was prepared to sign, no matter what he felt about the treaty, in order to win for his country official recognition as a Dominion of equal status with Britain. Smuts, on the other hand, refused to sign from the beginning and, as late as 23 June 1919, reiterated his refusal (according to Mrs. Millen's biography of Smuts).
Lloyd George's objections to the treaty as presented in the Council of Four on 2 June were those which soon became the trademark of the Milner Group. In addition to criticisms of the territorial clauses on the Polish frontier and a demand for a plebiscite in Upper Silesia, the chief objections were aimed at reparations and the occupation of the Rhineland. On the former point, Lloyd George's advisers"thought that more had been asked for than Germany could pay." On the latter point, which "was the main British concern," his advisers were insistent. "They urged that when the German Army was reduced to a strength of 100,000 men it was ridiculous to maintain an army of occupation of 200,000 men on the Rhine. They represented that it was only a method of quartering the French Army on Germany and making Germany pay the cost. It had been pointed out that Germany would not constitute a danger to France for 30 years or even 50 years; certainly not in 15 years.... The advice of the British military authorities was that two years was the utmost limit of time for the occupation." To these complaints, Clemenceau had replied that "in England the view seemed to prevail that the easiest way to finish the war was by making concessions. In France the contrary view was held that it was best to act firmly. The French people, unfortunately, knew the Germans very intimately, and they believed that the more concessions we made, the more the Germans would demand.... He recognized that Germany was not an immediate menace to France. But Germany would sign the Treaty with every intention of not carrying it out. Evasions would be made first on one point and then on another. The whole Treaty would go by the board if there were not some guarantees such as were provided by the occupation." (1)
Under such circumstances as these, it seems rather graceless for the Milner Group to have started at once, as it did, a campaign of recrimination against the treaty. Philip Kerr was from 1905 to his death in 1940 at the very center of the Milner Group. His violent Germanophobia in 1908-1918, and his evident familiarity with the character of the Germans and with the kind of treaty which they would have imposed on Britain had the roles been reversed, should have made the Treaty of Versailles very acceptable to him and his companions, or, if not, unacceptable on grounds of excessive leniency. Instead, Kerr, Brand, Curtis, and the whole inner core of the Milner Group began a campaign to undermine the treaty, the League of Nations, and the whole peace settlement. Those who are familiar with the activities of the "Cliveden Set" in the 1930s have generally felt that the appeasement policy associated with that group was a manifestation of the period after 1934 only. This is quite mistaken. The Milner Group, which was the reality behind the phantom-like Cliveden Set, began their program of appeasement and revision of the settlement as early as 1919. Why did they do this?
To answer this question, we must fall back on the statements of the members of the Group, general impressions of their psychological outlook, and even a certain amount of conjecture. The best statement of what the Group found objectionable in the peace of 1919 will be found in a brilliant book of Zimmern's called Europe in Convalescence (1922). More concrete criticism, especially in regard to the Covenant of the League, will be found in The Round Table. And the general mental outlook of the Group in 1919 will be found in Harold Nicolson's famous book Peace-Making. Nicolson, although on close personal relationships with most of the inner core of the Milner Group, was not a member of the Group himself, but his psychology in 1918-1920 was similar to that of the members of the inner core.
In general, the members of this inner core took the propagandist slogans of 1914-1918 as a truthful picture of the situation. I have indicated how the Group had worked out a theory of history that saw the whole past in terms of a long struggle between the forces of evil and the forces of righteousness. The latter they defined at various times as "the rule of law" (a la Dicey), as "the subordination of each to the welfare of all," as "democracy," etc. They accepted Wilson's identification of his war aims with his war slogans ("a world safe for democracy," "a war to end wars," "a war to end Prussianism," "self- determination," etc.) as meaning what they meant by "the rule of law." They accepted his Fourteen Points (except "freedom of the seas") as implementation of these aims. Moreover, the Milner Group, and apparently Wilson, made an assumption which had a valid basis but which could be very dangerous if carried out carelessly. This was the assumption that the Germans were divided into two groups, "Prussian autocrats" and "good Germans." They assumed that, if the former group were removed from positions of power and influence, and magnanimous concessions were made to the latter, Germany could be won over on a permanent basis from "Asiatic despotism" to "Western civilization." In its main outlines, the thesis was valid. But difficulties were numerous.
In the first place, it is not possible to distinguish between "good" Germans and "bad" Germans by any objective criterion. The distinction certainly could not be based on who was in public office in 1914-1918. In fact, the overwhelming mass of Germans — almost all the middle classes, except a few intellectuals and very religious persons; a considerable portion of the aristocratic class (at least half); and certain segments of the working class (about one-fifth) — were "bad" Germans in the sense in which the Milner Group used that expression. In their saner moments, the Group knew this. In December 1918, Curtis wrote in The Round Table on this subject as follows: "No one class, but the nation itself was involved in the sin. There were Socialists who licked their lips over Brest-Litovsk. All but a mere remnant, and those largely in prison or exile, accepted or justified the creed of despotism so long as it promised them the mastery of the world. The German People consented to be slaves in their own house as the price of enslaving mankind." If these words had been printed and posted on the walls of All Souls, of Chatham House, of New College, of The Times office in Printing House Square, and of The Round Table office at 175 Piccadilly, there need never have been a Second World War with Germany. But these words were not remembered by the Group. Instead, they assumed that the "bad" Germans were the small group that was removed from office in 1918 with the Kaiser. They did not see that the Kaiser was merely a kind of facade for four other groups: The Prussian Officers' Corps, the Junker landlords, the governmental bureaucracy (especially the administrators of police and justice), and the great industrialists. They did not see that these four had been able to save themselves in 1918 by jettisoning the Kaiser, who had become a liability. They did not see that these four were left in their positions of influence, with their power practically intact — indeed, in many ways with their power greater than ever, since the new "democratic" politicians like Ebert, Scheidemann, and Noske were much more subservient to the four groups than the old imperial authorities had ever been. General Groner gave orders to Ebert over his direct telephone line from Kassel in a tone and with a directness that he would never have used to an imperial chancellor. In a word, there was no revolution in Germany in 1918. The Milner Group did not see this, because they did not want to see it. Not that they were not warned. Brigadier General John H. Morgan, who was almost a member of the Group and who was on the Inter- allied Military Commission of Control in Germany in 1919- 1923, persistently warned the government and the Group of the continued existence and growing power of the German Officers' Corps and of the unreformed character of the German people. As a graduate of Balliol and the University of Berlin (1897-1905), a leader-writer on The Manchester Guardian (1904-1905), a Liberal candidate for Parliament with Amery in 1910, an assistant adjutant general with the military section of the British delegation to the Peace Conference of 1919, the British member on the Prisoners of War Commission (1919), legal editor of The Encyclopedia Britannica (14th edition), contributor to The Times, reader in constitutional law to the Inns of Court (1926- 1936), Professor of Constitutional Law at the University of London, Rhodes Lecturer at London (1927-1932), counsel to the Indian Chamber of Princes (1934-1937), counsel to the Indian State of Gwalior, Tagore Professor at Calcutta (1939) — as all of these things, and thus close to many members of the Group, General Morgan issued warnings about Germany that should have been heeded by the Group. They were not. No more attention was paid to them than was paid to the somewhat similar warnings coming from Professor Zimmern. And the general, with less courage than the professor, or perhaps with more of that peculiar group loyalty which pervades his social class in England, kept his warnings secret and private for years. Only in October 1924 did he come out in public with an article in the Quarterly Review on the subject, and only in 1945 did he find a wider platform in a published book (Assize of Arms), but in neither did he name the persons who were suppressing the warnings in his official reports from the Military Commission.
In a similar fashion, the Milner Group knew that the industrialists, the Junkers, the police, and the judges were cooperating with the reactionaries to suppress all democratic and enlightened elements in Germany and to help all the forces of "despotism" and "sin" (to use Curtis's words). The Group refused to recognize these facts. For this, there were two reasons. One, for which Brand was chiefly responsible, was based on certain economic assumptions. Among these, the chief was the belief that "disorder" and social unrest could be avoided only if prosperity were restored to Germany as soon as possible. By "disorder," Brand meant such activities as were associated with Trotsky in Russia, Bela Kun in Hungary, and the Spartacists or Kurt Eisner in Germany. To Brand, as an orthodox international banker, prosperity could be obtained only by an economic system under the control of the old established industrialists and bankers. This is perfectly clear from Brand's articles in The Round Table, reprinted in his book, War and National Finance (1921). Moreover, Brand felt confident that the old economic groups could reestablish prosperity quickly only if they were given concessions in respect to Germany's international financial position by lightening the weight of reparations on Germany and by advancing credit to Germany, chiefly from the United States. This point of view was not Brand's alone. It dominated the minds of all international bankers from Thomas Lamont to Montague Norman and from 1918 to at least 1931. The importance of Brand, from out point of view, lies in the fact that, as "the economic expert" of the Milner Group and one of the leaders of the Group, he brought this point of view into the Group and was able to direct the great influence of the Group in this direction. (2)
Blindness to the real situation in Germany was also encouraged from another point of view. This was associated with Philip Kerr. Roughly, this point of view advocated a British foreign policy based on the old balance-of-power system. Under that old system, which Britain had followed since 1500, Britain should support the second strongest power on the Continent against the strongest power, to prevent the latter from obtaining supremacy on the Continent. For one brief moment in 1918, the Group toyed with the idea of abandoning this traditional policy; for one brief moment they felt that if Europe were given self-determination and parliamentary governments, Britain could permit some kind of federated or at least cooperative Europe without danger to Britain. The moment soon passed. The League of Nations, which had been regarded by the Group as the seed whence a united Europe might grow, became nothing more than a propaganda machine, as soon as the Group resumed its belief in the balance of power. Curtis, who in December 1918 wrote in The Round Table: "That the balance of power has outlived its time by a century and that the world has remained a prey to wars, was due to the unnatural alienation of the British and American Commonwealths" — Curtis, who wrote this in 1918, four years later (9 January 1923) vigorously defended the idea of balance of power against the criticism of Professor A. F. Pollard at a meeting of the RIIA.
This change in point of view was based on several factors. In the first place, the Group, by their practical experience at Paris in 1919, found that it was not possible to apply either self-determination or the parliamentary form of government to Europe. As a result of this experience, they listened with more respect to the Cecil Bloc, which always insisted that these, especially the latter, were intimately associated with the British outlook, way of life, and social traditions, and were not articles of export. This issue was always the chief bone of contention between the Group and the Bloc in regard to India. In India, where their own influence as pedagogues was important, the Group did not accept the Bloc's arguments completely, but in Europe, where the Group's influence was remote and indirect, the Group was more receptive.
In the second place, the Croup at Paris became alienated from the French because of the latter's insistence on force as the chief basis of social and political life, especially the French insistence on a permanent mobilization of force to keep Germany down and on an international police force with autonomous power as a part of the League of Nations. The Group, although they frequently quoted Admiral Mahan's kind words about force in social life, did not really like force and shrank from its use, believing, as might be expected from their Christian background, that force could not avail against moral issues, that force corrupts those who use it, and that the real basis of social and political life w as custom and tradition. At Paris the Group found that they were living in a different world from the French. They suddenly saw not only that they did not have the same outlook as their former allies, but that these allies embraced the "despotic" and "militaristic" outlook against which the late war had been waged. At once, the Group began to think that the influence which they had been mobilizing against Prussian despotism since 1907 could best be mobilized, now that Prussianism was dead, against French militarism and Bolshevism. And what better ally against these two enemies in the West and the East shall the newly baptized Germany? Thus, almost without realizing it, the Group fell back into the old balance-of-power pattern. Their aim became the double one of keeping Germany in the fold of redeemed sinners by concessions, and of using this revived and purified Germany against Russia and France. (3)
In the third place, the Group in 1918 had been willing to toy with the idea of an integrated Europe because, in 1918, they believed that a permanent system of cooperation between Britain and the United States was a possible outcome of the war. This was the lifelong dream of Rhodes, of Milner, of Lothian, of Curtis. For that they would have sacrificed anything within reason. When it became clear in 1920 that the United States had no intention of underwriting Britain and instead would revert to her prewar isolationism, the bitterness of disappointment in the Milner Group were beyond bounds. Forever after, they blamed the evils of Europe, the double-dealing of British policy, and the whole train of errors from 1919 to 1940 on the American reversion to isolationism. It should be clearly understood that by American reversion to isolationism the Milner Croup did not mean the American rejection of the League of Nations. Frequently they said that they did mean this, that the disaster of 1939-1940 became inevitable when the Senate rejected the League of Nations in 1920. This is completely untrue, both as a statement of historical fact and as a statement of the Group's attitude toward that rejection at the time. As we shall see in a moment, the Group approved of the Senate's rejection of the League of Nations, because the reasons for that rejection agreed completely with the Group's own opinion about the League. The only change in the Group's opinion, as a result of the Senate's rejection of the League, occurred in respect to the Group's opinion regarding the League itself. Previously they had disliked the League; now they hated it — except as a propaganda agency. The proofs of these statements will appear in a moment.
The change in the Group's attitude toward Germany began even before the war ended. We have indicated how the Group rallied to give a public testimonial of faith in Lord Milner in October 1918, when he became the target of public criticism because of what was regarded by the public as a conciliatory speech toward Germany. The Group objected violently to the anti-German tone in which Lloyd George conducted his electoral campaign in the "khaki election' of December 1918. The Round Table in March 1919 spoke of Lloyd George and "the odious character of his election campaign." Zimmern, after a devastating criticism of Lloyd George's conduct in the election, wrote: "He erred, not, like the English people, out of ignorance but deliberately, out of cowardice and lack of faith." In the preface to the same volume (Europe in Convalescence) he wrote: "Since December, 1918, when we elected a Parliament pledged to violate a solemn agreement made but five weeks earlier, we stand shamed, dishonoured, and, above all, distrusted before mankind." The agreement to which Zimmern referred was the so-called Pre-Armistice Agreement of 5 November 1918, made with the Germans, by which, if they accepted an armistice, the Allies agreed to make peace on the basis of the Fourteen Points. It was the thesis of the Milner Group that the election of 1918 and the Treaty of Versailles as finally signed violated this Pre- Armistice Agreement. As a result, the Group at once embarked on its campaign for revision of the treaty, a campaign whose first aim, apparently, was to create a guilty conscience in regard to the treaty in Britain and the United States. Zimmern's book, Brand's book of the previous year, and all the articles of The Round Table were but ammunition in this campaign. However, Zimmern had no illusions about the Germans, and his attack on the treaty was based solely on the need to redeem British honor. As soon as it became clear to him that the Group was going beyond this motive and was trying to give concessions to the Germans without any attempt to purge Germany of its vicious elements and without any guarantee that those concessions would not be used against everything the Group held dear, he left the inner circle of the Group and moved to the second circle. He was not convinced that Germany could be redeemed by concessions made blindly to Germany as a whole, or that Germany should be built up against France and Russia. He made his position clear in a brilliant and courageous speech at Oxford in May 1925, a speech in which he denounced the steady sabotage of the League of Nations. It is not an accident that the most intelligent member of the Group was the first member to break publicly with the policy of appeasement.
The Milner Group thus regarded the Treaty of Versailles as too severe, as purely temporary, and as subject to revision almost at once. When The Round Table examined the treaty in its issue of June 1919, it said, in substance: "The punishment of Germany was just, for no one can believe in any sudden change of heart in that country, but the treaty is too severe. The spirit of the Pre- Armistice Commitments was violated, and, in detail after detail, Germany was treated unjustly, although there is broad justice in the settlement as a whole. Specifically the reparations are too severe, and Germany's neighbors should have been forced to disarm also, as promised in Wilson's Fourth Point. No demand should have been made for William II as a war criminal. If he is a menace, he should be put on an island without trial, like Napoleon. Our policy must be magnanimous, for our war was with the German government, not with the German people." Even earlier, in December 1918, The Round Table said: "It would seem desirable that the treaties should not be long term, still less perpetual, instruments. Perpetual treaties are indeed a lien upon national sovereignty and a standing contradiction of the principle of the democratic control of foreign policy. ... It would establish a salutary precedent if the network of treaties signed as a result of the war were valid for a period of ten years only." In March 1920, The Round Table said: "Like the Peace Conference, the Covenant of the League of Nations aimed too high and too far. Six months ago we looked to it to furnish the means for peaceful revision of the terms of the peace, where revision might be required. Now we have to realize that national sentiment sets closer limits to international action than we were willing then to recognize." The same article then goes on to speak of the rejection of the treaty by the United States Senate. It defends this action and criticizes Wilson severely, saying: "The truth of the matter is that the American Senate has expressed the real sentiment of all nations with hard-headed truthfulness.... The Senate has put into words what has already been demonstrated in Europe by the logic of events — namely that the Peace of Versailles attempted too much, and the Covenant which guarantees it implies a capacity for united action between the Allies which the facts do not warrant. The whole Treaty was, in fact, framed to meet the same impractical desire which we have already noted in the reparation terms — the desire to mete out ideal justice and to build an ideal world."
Nowhere is the whole point of view of the Milner Group better stated than in a speech of General Smuts to the South African Luncheon Club in London, 23 October 1923. After violent criticism of the reparations as too large and an attack on the French efforts to enforce these clauses, he called for a meeting "of principals" to settle the problem. He then pointed out that a continuation of existing methods would lead to the danger of German disintegration, "a first-class and irreparable disaster.... It would mean immediate economic chaos, and it would open up the possibility of future political dangers to which I need not here refer. Germany is both economically and politically necessary to Central Europe." He advocated applying to Germany "the benevolent policy which this country adopted toward France after the Napoleonic War.... And if, as I hope she will do, Germany makes a last appeal ... I trust this great Empire will not hesitate for a moment to respond to that appeal and to use all its diplomatic power and influence to support her, and to prevent a calamity which would be infinitely more dangerous to Europe and the world than was the downfall of Russia six or seven years ago." Having thus lined Britain up in diplomatic opposition to France, Smuts continued with advice against applying generosity to the latter country on the question of French war debts, warning that this would only encourage "French militarism."
"Do not let us from mistaken motives of generosity lend our aid to the further militarization of the European continent. People here are already beginning to be seriously alarmed about French armaments on land and in the air. In addition to these armaments, the French government have also lent large sums to the smaller European States around Germany, mainly with a view to feeding their ravenous military appetites. There is a serious danger lest a policy of excessive generosity on our part, or on the part of America, may simply have the effect of enabling France still more effectively to subsidize and foster militarism on the Continent.... If things continue on the present lines, this country may soon have to start rearming herself in sheer self-defence."
This speech of Smuts covers so adequately the point of view of the Milner Group in the early period of appeasement that no further quotations are necessary. No real change occurred in the point of view of the Group from 1920 to 1938, not even as a result of the death of democratic hopes in Germany at the hands of the Nazis. From Smuts's speech of October 1923 before the South African Luncheon Club to Smuts's speech of November 1934 before the RIIA, much water flowed in the river of international affairs, but the ideas of the Milner Group remained rigid and, it may be added, erroneous. Just as the speech of 1923 may be taken as the culmination of the revisionist sentiment of the Group in the first five years of peace, so the speech of 1934 may be taken as the initiation of the appeasement sentiment of the Group in the last five years of peace. The speeches could almost be interchanged. We may call one revisionist and the other appeasing, but the point of view, the purpose, the method is the same. These speeches will be mentioned again later.
The aim of the Milner Group through the period from 1920 to 1938 was the same: to maintain the balance of power in Europe by building up Germany against France and Russia; to increase Britain's weight in that balance by aligning with her the Dominions and the United States; to refuse any commitments (especially any commitments through the League of Nations, and above all any commitments to aid France) beyond those existing in 1919; to keep British freedom of action; to drive Germany eastward against Russia if either or both of these two powers became a threat to the peace of Western Europe.
The sabotage of the peace settlement by the Milner Group can be seen best in respect to reparations and the League of Nations. In regard to the former, their argument appeared on two fronts: in the first place, the reparations were too large because they were a dishonorable violation of the Pre-Armistice Agreement; and, in the second place, any demand for immediate or heavy payments in reparation would ruin Germany's international credit and her domestic economic system, to the jeopardy of all reparation payments immediately and of all social order in Central Europe in the long run.
The argument against reparations as a violation of the Pre- Armistice Agreement can be found in the volumes of Zimmern and Brand already mentioned. Both concentrated their objections on the inclusion of pension payments by the victors to their own soldiers in the total reparation bill given to the Germans. This was, of course, an obvious violation of the Pre-Armistice Agreement, which bound the Germans to pay only for damage to civilian property. Strangely enough, it was a member of the Group, Jan Smuts, who was responsible for the inclusion of the objectionable items, although he put them in not as a member of the Group, but as a South African politician. This fact alone should have prevented him from making his speech of October 1923. However, love of consistency has never prevented Smuts from making a speech.
From 1921 onward, the Milner Group and the British government (if the two policies are distinguishable) did all they could to lighten the reparations burden on Germany and to prevent France from using force to collect reparations. The influence of the Milner Group on the government in this field may perhaps be indicated by the identity of the two policies. It might also be pointed out that a member of the Group, Arthur (now Sir Arthur) Salter, was general secretary of the Reparations Commission from 1920 to 1922. Brand was financial adviser to the chairman of the Supreme Economic Council (Lord Robert Cecil) in 1919; he was vice-president of the Brussels Conference of 1920; and he was the financial representative of South Africa at the Genoa Conference of 1922 (named by Smuts). He was also a member of the International Committee of Experts on the Stabilization of the German Mark in 1922. Hankey was British secretary at the Genoa Conference of 1922 and at the London Reparations Conference of 1924. He was general secretary of the Hague Conference of 1929-1930 (which worked out the detailed application of the Young Plan) and of the Lausanne Conference (which ended reparations).
On the two great plans to settle the reparations problem, the Dawes Plan of 1924 and the Young Plan of 1929, the chief influence was that of J. P. Morgan and Company, but the Milner Group had half of the British delegation on the former committee. The British members of the Dawes Committee were two in number: Sir Robert Molesworth (now Lord) Kindersley, and Sir Josiah (later Lord) Stamp. The former was chairman of the board of directors of Lazard Brothers and Company. Of this firm, Brand was a partner and managing director for many years. The instigation for the formation of this committee came chiefly from the parliamentary agitations of H. A. L. Fisher and John Simon in the early months of 1923.
The Milner Group was outraged at the efforts of France to compel Germany to pay reparations. Indeed, they were outraged at the whole policy of France: reparations, the French alliances in Eastern Europe, the disarmament of Germany, French "militarism," the French desire for an alliance with Britain, and the French desire for a long-term occupation of the Rhineland. These six things were listed in The Round Table of March 1922 as "the Poincare system." The journal then continued: "The Poincare system, indeed, is hopeless. It leads inevitably to fresh war, for it is incredible that a powerful and spirited people like the Germans will be content to remain forever meekly obeying every flourish of Marshal Foch's sword." Earlier, the reader was informed: "The system is impracticable. It assumes that the interests of Poland and the Little Entente are the same as those of France.... It forgets that the peoples of Europe cannot balance their budgets and recover prosperity unless they cut down their expenditures on armaments to a minimum.... It ignores the certainty that British opinion can no more tolerate a French military hegemony over Europe than it could a German or Napoleonic, with its menace to freedom and democracy everywhere."
When the French, in January 1923, occupied the Ruhr in an effort to force Germany to pay reparations, the rage of the Milner Group almost broke its bounds. In private, and in the anonymity of The Round Table, they threatened economic and diplomatic retaliation, although in public speeches, such as in Parliament, they were more cautious. However, even in public Fisher, Simon, and Smuts permitted their real feelings to become visible.
In the March 1923 issue The Round Table suggested that the reparations crisis and the Ruhr stalemate could be met by the appointment of a committee of experts (including Americans) to report on Germany's capacity to pay reparations. It announced that H. A. L. Fisher would move an amendment to the address to this effect in Parliament. This amendment was moved by Fisher on 19 February 1923, before The Round Table in question appeared, in the following terms:
"That this House do humbly represent to your Majesty that, inasmuch as the future peace of Europe cannot be safeguarded nor the recovery of reparations be promoted by the operations of the French and Belgian Governments in the Ruhr, it is urgently necessary to seek effective securities against aggression by international guarantees under the League of Nations, and to invite the Council of the League without delay to appoint a Commission of Experts to report upon the capacity of Germany to pay reparations and upon the best method of effecting such payments, and that, in view of the recent indication of willingness on the part of the Government of the United States of America to participate in a Conference to this end, the British representatives on the Council of the League should be instructed to urge that an invitation be extended to the American government to appoint experts to serve upon the Commission."
This motion had, of course, no chance whatever of passing, and Fisher had no expectation that it would. It was merely a propaganda device. Two statements in it are noteworthy. One was the emphasis on American participation, which was to be expected from the Milner Group. But more important than this was the thinly veiled threat to France contained in the words "it is urgently necessary to seek effective securities against aggression by international guarantees." This clause referred to French aggression and was the seed from which emerged, three years later, the Locarno Pacts. There were also some significant phrases, or slips of the tongue, in the speech which Fisher made in support of his motion. For example, he used the word "we" in a way that apparently referred to the Milner Group; and he spoke of "liquidation of the penal clauses of the Treaty of Versailles" as if that were the purpose of the committee he was seeking. He said: "We are anxious to get the amount of the reparation payment settled by an impartial tribunal. We propose that it should be remitted to the League of Nations.... But I admit that I have always had a considerable hesitation in asking the League of Nations to undertake the liquidation of the penal clauses of the Treaty of Versailles.... It is an integral part of this Amendment that the Americans should be brought in." Lord Robert Cecil objected to the amendment on the ground that its passage would constitute a censure of the government and force it to resign. John Simon then spoke in support of the motion. He said that France would never agree to any reparations figure, because she did not want the reparations clauses fulfilled, since that would make necessary the evacuation of the Rhineland. France went into the Ruhr, he said, not to collect reparations, but to cripple Germany; France was spending immense sums of money on military occupation and armaments but still was failing to pay either the principal or interest on her debt to Britain.
When put to a vote, the motion was defeated, 305 to 196. In the majority were Ormsby-Gore, Edward Wood, Amery, three Cecils (Robert, Evelyn, and Hugh), two Astors (John and Nancy), Samuel Hoare, Eustace Percy, and Lord Wolmer. In the minority were Fisher, Simon, and Arthur Salter.
By March, Fisher and Simon were more threatening to France. On the sixth of that month, Fisher said in the House of Commons: "I can only suggest this, that the Government make it clear to France, Germany, and the whole world that they regard this present issue between France and Germany, not as an issue affecting two nations, but as an issue affecting the peace and prosperity of the whole world. We should keep before ourselves steadily the idea of an international solution. We should work for it with all our power, and we should make it clear to France that an attempt to effect a separate solution of this question could not be considered otherwise than as an unfriendly act." Exactly a week later, John Simon, in a parliamentary maneuver, made a motion to cut the appropriation bill for the Foreign Office by £100 and seized the opportunity to make a violent attack on the actions of France. He was answered by Eustace Percy, who in turn was answered by Fisher.
In this way the Group tried to keep the issue before the minds of the British public and to prepare the way for the Dawes settlement. The Round Table, appealing to a somewhat different public, kept up a similar barrage. In the June 1923 issue, and again in September, it condemned the occupation of the Ruhr. In the former it suggested a three- part program as follows: (1) find out what Germany can pay, by an expert committee's investigation; (2) leave Germany free to work and produce, by an immediate evacuation of the Rhineland; and (3) protect France and Germany from each other [another hint about the future Locarno Pacts]. This program, according to The Round Table, should be imposed on France with the threat that if France did not accept it, Britain would withdraw from the Rhineland and Reparations Commissions and formally terminate the Entente. It concluded: "The Round Table has not hesitated in recent months to suggest that [British] neutrality . . . was an attitude inconsistent either with the honour or the interests of the British Commonwealth." The Round Table even went so far as to say that the inflation in Germany was caused by the burden of reparations. In the September 1923 issue it said (probably by the pen of Brand): "In the last two years it is not inflation which has brought down the mark; the printing presses have been engaged in a vain attempt to follow the depreciation of the currency. That depreciation has been a direct consequence of the world's judgment that the Allied claims for reparation were incapable of being met. It will continue until that judgment, or in other words, those claims are revised."