A Perfidious Distortion of History

by Jurgen Tampke

Subsequent documents illustrated Austria-Hungary’s determination to cripple Serbia, which was supported in Berlin, and showed that warnings from the British government failed to stop Vienna’s declaration of war on 28 July. Kantorowicz did not see the mobilisation of the Russian army as a necessarily aggressive act. The tsar’s claim that this step was a precautionary measure may well have been valid; the Netherlands and Switzerland had also ordered full mobilisation on that day. Kantorowicz felt that Berlin was responsible for the subsequent escalation of the war: although the government regarded the Russian mobilisation as a defensive measure, it nevertheless embarked upon preventive warfare as outlined in the Schlieffen Plan. 13 The German declaration of war on Russia on 1 August and on France on 3 August, together with the German invasion of Belgium in the morning of 4 August, turned a regional war into a global war. 14

  The Foreign Office was further outraged by Kantorowicz’s account of the extent to which the principle of preventive warfare had gripped Germany’s political and military elites. His references to statements made by Bethmann-Hollweg in the final days of peace, that the impression had to be be given ‘that Germany was forced into the war’, that under no circumstances should the German people get the impression that this was otherwise, and that it was ‘most important that Russia must be seen as the guilty party’ for the widening of the conflict, brought the office’s anger to boiling point. 15 With the Gutachten unpublished, Kantorowicz saw six years of intense work wasted.

  Worse was the fate of the left-wing journalist Felix Fechenbach, who was charged after having published in 1919 Bavarian files suggesting Germany’s responsibility for the First World War. He was accused of having damaged Germany’s position at the Versailles Peace Conference, and was sentenced to eleven years imprisonment by a ‘People’s Court’. These courts had been set up during the Bavarian Revolution of 1918 to dispense summary justice to looters and murderers. Their function, however, was soon widened to deal with ‘treason’ cases. They were outlawed by the Weimar constitution, but ‘People’s Courts’ continued to function in Bavaria for a further five years. Those charged had no right of appeal against their verdicts. 16

  The leading Social-Democratic revisionist Eduard Bernstein urged the party at its first post-war congress, held in Weimar in June 1919, to tell the truth about the war, but he was firmly opposed. Refusal to face reality was bound to have grave consequences:

  The incessant din about the injustices heaped upon a defeated Germany, allegedly undefeated in the field and stabbed in the back at home, in effect serve to reinforce an idea that things would be normal if only the external burdens, imposed by the allies, could be lifted. That is to say, the constant — indeed ritual — complaints about Versailles in effect served to disguise the extent to which the War really had impoverished Germany … These illusions were dangerous … [because] … as long as the truth about the War, its causes and consequences remained excluded from mainstream public political discussion, it was impossible to face harsh economic and political realities … Responsible politics remained a hostage to myths about the First World War, and Weimar democracy eventually had to pay the price. 17

  John Maynard Keynes and other appeasers

  Enlargement of the German navy had led Britain to abandon its policy of ‘splendid isolation’ and to enter into an entente cordial with France in 1904 and with Russia in 1907. The subsequent years saw a general deterioration in British-German relations. This policy of moving away from their ‘racial cousins’ on the continent by siding with the Latin French and the Slavonic Russians caused apprehension among sections of Britain’s social and intellectual elite and middle classes. Throughout the nineteenth century, Oxbridge historians had emphasised Britain’s Germanic past, and German achievements in the arts and sciences were widely admired. An image of two Germanys began to emerge: the traditional Germany of cultural achievements, of Goethe, Schiller, Hegel, and Wagner, and the Prussian Germany — expansionist, militarist, aggressive, and arrogant. 18

  Apart from a small group of pacifists, Britain’s war effort enjoyed the full support of the country, but this consensus started breaking down during the peacemaking process. Parliamentarians, leading churchmen, journalists, and members of the British delegation at Paris claimed that the terms imposed on Germany were far too harsh. Perhaps spending the war in the safety of the workplace or home had inclined some to call for a generous peace. Younger civil servants in the Treasury and Foreign Office may also have seen their hopes for a new and better world dashed. Among these was John Maynard Keynes.

  First Baron Keynes of Tilton was born at Cambridge in 1883, son of John Neville Keynes, a lecturer in moral sciences at Cambridge University, and his wife, Florence Ada Keynes, a local social reformer. John Maynard showed from his early youth great talent in all subjects, and above all in mathematics. He won a scholarship to Eton College in 1897, entered King’s College at Cambridge in 1902, and graduated with a first class B.A. in mathematics in 1904. His career as public servant began in October 1906 as a clerk in the India Office. The quality of his publications on various economic aspects over the next years saw him appointed to a position at the Treasury shortly after the outbreak of war. This appointment was soon to lead him into moral conflict.

  In his Cambridge days, Keynes had befriended a group of young intellectuals with pacifist leanings known as the Bloomsbury Circle. Most of his friends had applied for exemption from military service as conscientious objectors — and were facing severe consequences. Keynes himself toyed with the idea of becoming a conscientious objector, which would have meant resigning from the Treasury, but eventually decided against it. A bitter confrontation with his Bloomsbury friends followed. 19

  Sent to Paris as chief Treasury representative of the British delegation at Versailles, he established himself as the leading advocate for moderate peace terms. His estimate that Germany would not be able to pay more than £3 billion brought upon his head the wrath of the chair of the Reparation Commission, Billy Hughes, and of the ‘heavenly twins’, Lords Cunliffe and Sumner. The German counter-proposal of £5 billion in gold undermined his reputation. 20 Although the final amount Germany would pay was yet to be specified, Keynes felt that the treaty was repugnant, resigned from the Treasury, and immediately began to work on what would become The Economic Consequences of the Peace.

  According to his biographer, it was not only the Peace Conference that led to his furious attacks upon Wilson, Lloyd George, Clemenceau, and other participants in the peacemaking process. He felt guilt for his part in the war. Other historians saw the reasons for the jeremiad that flowed from his pen in his resentment ‘at seeing his authority usurped by the deaf little Australian Prime Minister and the detestable “heavenly twins”.’ 21 An American observer claimed that ‘Keynes got sore because they wouldn’t take his advice, his nerve broke and he quit.’ 22

  The Germanophile sentiments of his social class and peer group influenced his Economic Consequences. The fact that he fell in love with a German financial delegate to the conference, the banker Dr. Melchior, was another influence, 23 as was his dislike of the French. Keynes did not want to be objective. Passions were to guide him. The book, he admitted, ‘is the child of much emotions’. 24

  ‘Paris’, he wrote, ‘was a morass, a nightmare, and everyone there was morbid’, the atmosphere ‘hot and poisoned’, the halls ‘treacherous’, the conference rooms ‘a thieves’ kitchen’. The statesmen at the conference were ‘dangerous spellbinders … most hypocritical draftsmen’, inspired by ‘debauchery of thought and speech’. Their labours were ‘empty and arid intrigue’. President Wilson was a ‘blind and deaf Don Quixote … playing a blind man’s bluff’. He was ‘bamboozled’ by the French Chauvinist and the Welsh Siren. The treaty was clothed with a ‘web of Jesuit exegesis’, its provisions were ‘dishonourable’, ‘abhorrent and detestable’, revealing ‘imbecile greed’ reducing ‘Germany to servitude’, perpetrating its economic ruin, starving and crippling its children. All told
, Versailles was a ‘Carthaginian Peace’, a huge repository of vindictiveness, masquerading as justice — ‘one of the most outrageous acts of a cruel victor in civilised history’. 25

  Overpowering emotions have led to outstanding literature. They do not provide a good basis, however, for the writing of a monograph on the economic consequences of the Versailles Peace Treaty, and Keynes’ book is flawed.

  Keynes reiterated the false claim made by Count Brockdorff-Rantzau in his speech replying to the presentation of the Fourteen Points that the treaty ‘would sign the death-sentence of many millions of Germans, men, women, and children’. The malnutrition that observers noticed was caused by a distribution system which favoured the military and kept rations for the civilian population scarcely above subsistence levels. The ending of the war brought internal improvements in distribution, and food entered Germany from neutral countries.

  It was ambitious of Keynes to attempt a major analysis of Germany’s ability to meet reparation claims in view of the huge overall dislocation of industry and commerce in all countries brought about by the war, the uncertainty of international trade conditions post-war, and the absence of reliable data about Germany’s economic potential. Other factors affecting the viability of his study were questions not yet settled at the time of writing, to do with collecting the booty and the liability amount. None of Keynes’ Cassandra calls eventuated.

  Nevertheless, his arguments were accepted more or less without question by an increasingly guilt-ridden English-speaking world. Those who finally analysed his claims in detail found them wanting. French economist Étienne Mantoux wrote The Carthaginian Peace, or the Economic Consequences of Mr. Keynes during the Second World War. He was killed in action one week before Germany capitulated. His monograph, which debunked Keynes’s book as a self-fulfilling prophesy, was published posthumously by his son Paul Mantoux, but went virtually unnoticed, 26 perhaps because the author was a Frenchman. It is worthwhile presenting his conclusions, which left the emperor with few clothes, verbatim:

  In The Economic Consequences of the Peace, Mr. Keynes predicted that the Treaty, if it was carried into effect, ‘must impair yet further, when it might have restored, the delicate, complicated organisation, already shaken and broken by war, through which alone the European peoples can employ themselves and live’. Europe would be threatened with ‘a long, silent process of semi-starvation, and of a gradual, steady lowering of the standards of life and comfort’. Ten years after the Treaty, European production was well above its pre-war level, and European standards of living had never been higher.

  He predicted that the iron output of Europe would decline as a consequence of the Treaty. In the ten years that followed the Treaty, the iron output of Europe, which had fallen considerably during the War, increased almost continuously. In 1929, Europe produced 10 per cent more iron than in the record year 1913, and would no doubt have produced still more had not the producers combined to restrict output for fear of injuring prices by overproduction.

  He predicted that the iron and steel output of Germany would diminish. By 1927, Germany produced nearly 30 per cent more iron and 38 per cent more steel than in the record year 1913, within the same territorial limits.

  He predicted that the efficiency of the German coal-mining industry lowered by the War, would remain low as a consequence of the Peace. By 1925, the efficiency of labour, which had dropped seriously in the meantime, was already higher, in the Ruhr coal industries, than in 1913; in 1927 it was higher by nearly 20 per cent; and in 1929 by more than 30 per cent.

  He predicted that a pre-war level of output could not be expected in the German coal industry. In 1920, 1921, and 1922, coal output was well above the average level of the five years preceding the war, within the same territorial limits. It fell sharply in 1923, and was slightly below pre-war average in 1924. It was above that average in 1925; and in 1926, it was already higher than in the record year 1913.

  He predicted that Germany ‘cannot export coal in the near future … if she is to continue as an industrial nation. In the first year following the Treaty, Germany exported (net) 15 million tons of coal; and in 1926 she exported (net) 35 million tons, or twice [Mantoux’s italics] the amount of the average (1909–13) pre-war exports of all [Mantoux’s italics] her pre-war territories.

  He predicted that the German mercantile marine ‘cannot be restored for many years to come on a scale adequate to meet the requirements of her own commerce’. The total German tonnage was a little above 5 millions in 1913. It was reduced in 1920 to 673,000; but in 1924 it already approached 3 million tons; in 1930 it was well above 4 million, and German liners were the wonder of the transatlantic world.

  He predicted that ‘after what she has suffered in the war and by the Peace’, Germany’s annual savings would ‘fall far short of what they were before’. The monthly increase in German savings bank deposits was 84 million in 1913; in 1925 it had become 103 million; and in 1928 it was nearly 210 million.

  He predicted that Germany’s annual surplus would be reduced to less than 2 milliard marks. In 1925, the net accumulation of domestic capital was estimated at 6.4 milliards, and in 1927 at 7.6 milliards.

  He predicted that in the next thirty years, Germany could not possibly be expected to pay more than 2 milliard marks a year in Reparation. In the six years preceding September 1939, Germany, by Hitler’s showing, had spent each year on re-armament alone about seven times as much. 27

  With new sources becoming available in the second half of the twentieth century, Mantoux’s Economic Consequences of Mr. Keynes has been vindicated by scholars in the field. Their studies have shown that a relatively moderate increase in taxation, coupled with an equally moderate reduction in consumption, would have enabled the Weimar Republic to meet the reparation debt. 28 In fact, Stephen Shuker has shown that the net capital inflow ran towards Germany in the period 1919 to 1933 at a minimum of at least 2 per cent. 29

  The reparation terms obliged Germany to pay 50 billion gold marks. Keynes — expecting that the C Bonds would eventually be cancelled — advised the German government to accept. 30 Despite his undisputed command of economics, he did not pick up that most of the London schedule was phony money. When, by the second half of the 1930s, it had become clear that Germany had not been ruined by the Treaty of Versailles but was recommencing its attempt to take possession of most of continental Europe, he saw that he had erred, and regretted having written The Economic Consequences of the Peace. 31

  It was too late. There is little to challenge Antony Levin’s summary of the Keynesian tragedy:

  Despite his personal aversion towards the President, Keynes’s vision of regeneration was in its way as humane and inspiring as Wilson’s. His book was conceived as an instrument of correction and enlightenment, a vehicle ‘for the assertion of truth, the unveiling of illusions, and the dissipation of hate’ … If, as Colonel House had warned, ‘we are so stupid as to let Germany train and arm a large army and again become a menace to the world, we would deserve the fate which such folly would bring upon us’. But the accepted wisdom of centuries was overturned, the sagacity of ripe practitioners set at naught, the deep policy and nice calculations of Clemenceau or Foch dismissed at a stroke of the pen by a Cambridge don 35 years old. ‘Nous avons changé tout cela’ he wrote in effect; and such was the national mood which he expressed, that his paradoxes passed for home-truths. But Clio is not lightly defied: and to those who flout her admonitions, she brings if not nemesis, then certainly consequences. In this case, they came with disconcerting, with devastating speed. Keynes had assured the world of Germany’s utter prostration, her condemnation by the Treaty to decades of hopeless servitude and impoverishment — and now German, not French sentries, stood on the Rhine, armed to the hilt and not noticeably undernourished. Keynes awoke, dumbfounded at the spectacle, and, noted [Harold] Nicolson, ‘very defeatist’, as well he might be. It would be a melancholy pastime to speculate, of acreage of territory, of bridgehead secured, o
f tactical advances, of bloodless victories, on the value to the Wehrmacht of The Economic Consequences of the Peace. 32

  Harold Nicolson, another of the young public servants, should also have had second thoughts. He was a member of the Foreign Office delegation at Versailles, which had little influence on the peacemaking process. ‘Seldom in history’, he wrote, ‘has such vindictiveness cloaked itself in such unctuous sophistry’. 33 Published in 1933, his Peacemaking 1919 presented the treaty as a product of confusion, turmoil, stress, overwork, and time pressure. To him, Paris was the ‘scurrying cacophony’, a ‘riot in a parrot house’ which created an atmosphere that made it impossible to devise a peace of moderation and fairness 34 — only a ‘bloody bullying peace’. 35

  Many liberals soon joined the German attack on the Kriegsschuld article and other aspects of the treaty, and the need to redress the wrongs of Versailles became a basic part of the Weltanschaung of the chattering classes. 36 Oxbridge soon joined the club. In October 1920, 57 eminent Oxford academics signed a letter expressing regret about the disruption of relations with their German and Austrian counterparts during the war, and appealed for the restoration of ‘a wider sympathy and better understanding between our kindred nations’. A few months later, students of the Cambridge and Oxford Union defeated motions to continue the Anglo-French Entente as the guiding principle of British foreign policy. Subsequent motions passed by unions at both universities regretted the crushing defeat of Germany, attacked the Treaty of Versailles, and — illustrating the ever-present racism of the English educated classes — claimed that ‘the selfishness of French policy since 1918 has condemned humanity to another World War’. 37

  Historians followed. George Peabody Gooch, the president of the Historical Association, took the lead by blaming the outbreak of war on all the major European powers, on the division of the continent, and on the ‘international anarchy’ that had caused a breakdown in international relations. 38 Historians Goldsworthy Lowes Dickinson and W.H. Dawson also declared that the alliance system and the conduct of secret diplomacy was the fundamental cause. 39 Raymond Beayley, vice-president of the Royal Historical Society, went furthest in his desire to clear Germany of major war guilt. He argued that ‘she had not plotted the Great War, had not desired a war, and had made genuine, though belated and ill-organised efforts to avert it’. 40 These historians, when Hitler proceeded to dismantle the Versailles system in the 1930s, ‘urged acceptance of his aggression on the grounds that Germany’s grievances were valid’. 41