C. Ernest (Charles Ernest) Fayle.

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THE GREAT
SETTLEMENT






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THE LIBRARY
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THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES



EX LIBRIS
CLARENCE ADDISON DYKSTRA



THE GREAT SETTLEMENT



THE

GREAT SETTLEMENT

BY C. ERNEST FAYLE



WITH MAPS



NEW YORK
DUFFIELD AND COMPANY

i9 r 5






PREFATORY NOTE

As a Trustee of the Garton Foundation I
gladly say a word to those who may read Mr.
Fayle's thoughtful book.

The Foundation invites, as it has always
done, academic discussion of questions relat-
ing to War and Peace. It has never, as a
Foundation, expressed disapproval of, or
concurrence with, the views of those who
have written or spoken under its auspices.
Free discussion was the atmosphere in which
the Foundation was born and lives.

I am not concerned with Mr. Fayle's pre-
sentment of historical facts or with his deduc-
tions. For the ability and clearness of his
statements he alone is responsible.

My views, if they interest any one, I share
with the majority of our countrymen. The
German cult and German methods are alike
abhorrent to me. Since we have been forced
to draw the sword, I would never willingly
sheathe it till both are in the dust. If the

V

665034



VI PREFATORY NOTE

free nations of Europe consent to a Peace
under any other conditions it will be no
Peace. Our children and our children's chil-
dren will then have to suffer again what we
are suffering to-day. Our struggle is not only
against a military caste. It is a fight to the
death with a nation steeped in odious fal-
lacies, bred on hateful dogmas, and imbued
with a false philosophy of life and its aims.

Peace can only be the outcome of victory
or exhaustion. When the point of discussing
terms has been reached, when the machinery
for ensuring tranquillity in Europe has to be
fashioned, the settlement will be in the hands
of men entrusted with tremendous powers,
but only more or less adequately equipped
for the task. Let them ponder beforehand
upon the lessons of history, reflect upon the
mistakes of their ancestors, and examine the
varied aspects of the problem they will have
to solve. Mr. Fayle's book is a most able
contribution to such an inquiry.

During the war I have lived much with the
French Armies and among the French people.
There is no soldier of France, and very few
of her men and women, to whom the issues
at stake are not pellucidly clear.

Their agony, and sacrifice of wealth, of



PREFATORY NOTE Vll

blood, and of life, are not laid upon the altar
of ambition. They are not offered for terri-
tory or power, for commercial predominance
or to impose French ideas upon mankind.
They are a contribution, by France, of her
youth and manhood, of the tears of her
women and children, to the cause of freedom,
and the inherent right of free races and free
nations to live their own lives in their own
manner.

This is the supreme objective of the war.
No diplomatic compromises, no shuffling of
the European cards, no redrawing of the map
of Europe, in the narrower interests of this
or that Great Power, that fails to secure it,
will prove to be more than an armed and
minatory truce.

Esher.

France,
April 1915.



AUTHOR'S NOTE TO AMERICAN
EDITION

It may be asked why Americans should
interest themselves in the details of what is
likely to happen in Europe at the close of
the present war. The answer to this question
is to be found in the history of the war itself.
No conflict on the present scale can be
waged in Europe without profoundly affecting
American interests, and it is of the first
importance to America that this stupendous
conflict should be followed by a real settlement,
giving reasonable hope of security and perma-
nence, and not by a mere patched-up truce,
containing the seeds of future wars no less
gigantic and devastating. It may seem to
matter very little to a citizen of the United
States whether an odd million or two of Serbs
and Croats should remain under the Austrian
Crown or be united to their independent
kinsmen, but it matters immensely to Ameri-
cans whether the future is to see Europe



it AUTHOR'S NOTE TO AMERICAN EDITION

peaceful and productive, a good market and
a good neighbour ; whether the sanctity of
international law is to be strengthened or
destroyed ; whether the policy of the Euro-
pean Powers is to be guided by considerations
of justice, by the conception of international
co-operation for world development, or by a
dream of conquest and domination. Not
only the interests of American commerce,
but the course of American policy and arma-
ments must be determined to no small extent
by the future development of Europe, and
that development depends, not perhaps upon
each detail of the settlement, but upon the
principles which underlie whatever arrange-
ments are effected.

It is this question of the underlying prin-
ciples which is the crux of the matter. It is
not likely that all the problems discussed in
this book will be finally settled at the peace.
But upon the spirit in which they are ap-
proached will depend the future policy of the
Powers and the possibility of gradually
settling those questions which remain out-
standing. It is because it treats of the
principles underlying each separate problem
that this book is offered to American readers.

The book is written by an Englishman,



AUTHOR'S NOTE TO AMERICAN EDITION Ml

and to those whose studies have lain chiefly
in the history of the New World, with its
clear fields for experiment, it may seem to
lay overmuch emphasis upon the limitations
imposed by circumstances, by the dead-weight
of the past, by historical associations. But if
Americans are to understand not only what
is desirable, but what is possible, in the
shaping of the Europe of to-morrow, they
must take account of these limitations. It
is certain that they cannot be ignored by
those in whose hands the destinies of Europe
will lie. We shall be dealing with States
in very varying stages of development, with
those like France or Britain, who have been
among the leaders of civilisation for centuries,
with those like Russia, whose history as
members of the world community lies largely
before them, States united by historic friend-
ships or divided by age-long feuds, having
policies and desires stretching far back into
the past. The vital concern of America in
European conditions, the possibility of her
entrance into that World Alliance which is
the subject of the concluding chapter of this
book, render these considerations of practical
politics of living interest to Americans.
The author can, of course, speak only for



IV AUTHOR S NOTE TO AMERICAN EDITION

himself. But he believes that this book does
substantially represent the views of a very
large section in this country who look forward
to the victory of the Allies not only from
motives of patriotism, but because it seems
to them to afford a hope, in the words of the
British Prime Minister, of " the vindication
of public right in Europe."

When this book was written Italy had not
yet entered into the conflict, but her claims
will be found fully discussed and the con-
siderations put forward do not appear to call
for modification.

C. Ernest Fayle.

London,
July 1915.



AUTHOR'S PREFACE

The object of this book is to set forth as
briefly and as clearly as possible the problems
which have created or have been created by
the present war, which will become of over-
whelming importance when the time comes
for considering terms of peace and which
must inevitably form the chief preoccupa-
tion of European politics for the next two or
three generations. At the root of the politi-
cal and racial conflicts in which these problems
have become embodied there will be found
a deeper conflict of ideas, a more subtle
antagonism between two opposed concep-
tions of the nature of States and the elements
of national greatness. On the one hand
there is the theory of a natural law of struggle
between States and of military power as not
merely a necessity of existence but the
ultimate sanction of conduct in international
affairs — a theory from which it follows that
the smaller nations can hope to exist, if at



AUTHOR S PREFACE



all, only on the sufferance of the stronger,
and that the greatness of a nation consists
in its successful exercise of military power,
without regard to the justice or morality with
which that power is used. On the other
hand, there is the conception of civilised
nations as forming a community founded
upon common interests and upon certain
generally accepted ideas of international law
and equity, a community of which every
member has the right to develop its own
culture and its own institutions in peace and
security so long as it refrains from wanton
interference with the affairs of its neighbours.
With this conception is bound up the prin-
ciple of nationality, which means simply the
right of a population united by race and
language, or by common history and tradi-
tions, to live under the government of its
own choice. My aim has been to trace the
working of these opposed conceptions in the
conditions and events which led up to the
war ; to examine their bearing upon the
questions which will have to be answered at
its close ; and to see what light they throw
upon the possibility of safeguarding Europe
against a repetition of the catastrophe.
It is this last problem, the preservation of



AUTHOR S PREFACE XI

Europe from future conflicts on this scale,
which dwarfs all others in importance. In
dealing with each question, territorial, racial,
colonial, economic or political, I have en-
deavoured to bring it to this test — what
solution will make most surely for the
stability and security of the European
Society ? At the same time, I have kept in
mind the necessity for subordinating theories
to facts and I have sought to deal with each
problem in the light of practical politics,
of the conditions which actually exist, even
where this involved the rejection of schemes
theoretically preferable.

It is perfectly true that the conditions
which will obtain at the close of the war are
in large part a matter of conjecture. This
may and probably does render it useless to
discuss any detailed programme whether for
the terms of peace or for the future policy
of the Powers, but our knowledge of the
present situation and an analysis of the
causes from which it has arisen will at least
throw light upon the general principles which
make for liberty and security on the one
hand, for unrest and conflict on the other. It
is with these general principles that I have
been chiefly concerned. If we are to achieve



xii author's preface

a settlement which shall contain the elements
of permanence, which shall pave the way
for the creation, in whatever form, of that
recognised European Community (forming
the subject of my concluding chapter)
which has been foreshadowed by more than
one of our leading statesmen, it will be
by the acceptance of a few outstanding
principles — the rights of nationalities, the
sanctity of international law, the equal
rights of small States, the necessity for inter-
national co-operation in preserving order and
in the development of the world's resources.
It is far more important that we should
realise the bearing of these principles upon
the problems presented to us than that we
should have a definite and detailed programme
for the settlement of each individual question.
Many of these questions have been admir-
ably treated in books or in periodicals since
the outbreak of the war. To many of the
Oxford Pamphlets, to the post-bellum numbers
of the Round Table, to the writings of Mr.
Seton- Watson, Mr. G. M. Trevelyan, and
others upon the questions of race and
nationality, I feel myself gratefully indebted.
There have appeared also many pamphlets
and articles dealing with the general issues



AUTHOR S PREFACE Xlll

of the war and suggested reconstructions
of European society. But I am not aware
that an attempt has yet been made to present
a survey of the problems of the war and the
settlement as a whole and to found upon
that survey an inquiry into the practical
prospects of establishing some such under-
standing between the European nations as
shall preserve us from a repetition of the
events of last summer. This is what I have
tried to do, and as I have endeavoured through-
out to be suggestive rather than dogmatic,
I hope that the book may serve at least as a
starting-point for discussion.

To the Garton Foundation for encouraging
the Study of International Polity I owe the
opportunity of writing this book and access
to most of the material on which it is based.
I have to express my gratitude to Lord
Esher and Sir Richard Garton for their active
interest and encouragement, without which it
would hardly have been written.

I am also indebted to Lord Parker of
Waddington for his advice and suggestions
on the general treatment of the subject ;
to Mr. C. Roden Buxton and Mr. J. M. Keynes
for their criticisms on various points dealt
with in the fourth and sixth chapters re-



XIV AUTHOR S PREFACE

spectively ; and to Mr. John Hilton of the
Garton Foundation and Mr. Harold Wright
of Cambridge for generous assistance in the
work of revision.

C. Ernest Fayle.

London,
A-pril 1915.



CONTENTS
CHAPTER I

THE NECESSITY OF A SETTLEMENT

National unanimity with regard to the war — Revolt against
the Prussian theory of aggression — The determination to
achieve future security — Military victory essential but not
sufficient — A European settlement the only security for
peace — The necessity of understanding the problems of
the settlement — The underlying causes of wars — The
doctrine of armed rivalry and domination — The doctrine
of agreement and co-operation — The one has given us war
— Will the other give us peace ? . . . pp. 1-16

CHAPTER II

THE ORIGINS OF THE WAR

The real issues of the war deeper than its immediate cause
— The significance of the Austro-Serbian quarrel — The
Austro-Hungarian Empire and the principle of domination
— Austrian policy in the Balkans and the development of
Serbian nationality — Why war became inevitable — Russia's
position with regard to the Slav States — The struggle for
prestige in the Balkans — The collision of Austrian and
Russian policies — Germany as the ally of Austria — The
unification of Germany and her rise as a Great Power —
The price of Prussian leadership — Moral effects of the war
of 1870 — Alsace and Franco-German relations — The Dual
Alliance — Anglo-German relations — The Entente — The guar-
antee of Belgian neutrality — The grouping of the Powers
— The outbreak of war — The attitude of Italy . pp. 17-41
xv



XVI CONTENTS

CHAPTER III

THE PRINCIPLES OF THE SETTLEMENT

The " crushing " of Germany, will it give us permanent security ?
— A warning from history — Treaties of Peace and the
seeds of war — Wars of revenge — Wars arising from division
of the spoils — Conquered provinces as sources of unrest —
The menace of artificial arrangements of territory — The
Congress of Vienna and its attempt at a settlement — The
Holy Alliance — The idea of security by treaty — The prin-
ciple of nationality — What is a nation ? — Nationality and
the settlement — Independence and autonomy — The value
and limitations of guarantees — The changing conceptions
of international relations and their bearing upon the
settlement — The objects of the Allies — Justice and ex-
pediency in the settlement — The relation of strategical to
political considerations — Shall the settlement be European ?
— The position of the neutrals — The common interests of
nations — The place of Germany in the European system —
The possibility of a European entente — The place of Utopia
in practical politics ..... pp. 42-80



CHAPTER IV

THE TERRITORIAL PROBLEMS OF THE SETTLEMENT

The principle of nationality in the settlement — " Re-drawing
the map of Europe " — The futility of dogmatising — The
unknown factors — Geographical and economic factors and
their bearing upon nationality — The problems of Austria-
Hungary — Disintegration or federation ? — Is federation
possible to-day ? — The fears of a Slav hegemony — The Slav
menace and Slav grievances — The German Empire and
nationality — The actual problems — Poland — The partitions
— The three Polands — The Russian proclamation — The
revival of Polish nationality — Some questions of frontiers —
The Ruthenes — Their relations with Russia — The future of
the Ruthenian districts — The Czechs — Shall the Czech
question be included in the settlement? — Autonomy or
independence ? — The Germans in Bohemia — The Slovaks
— The Southern Slavs and Greater Serbia — Serbs, Croats,



CONTENTS XV11

and Slovenes — Do they desire union ? — The capacity of
the Southern Slavs for self-government — Greater Serbia —
Italy and the coast provinces — Albania — Montenegro — A
Southern Slav Confederation — The Roumanians in Tran-
sylvania — The position of Roumania in Balkan politics —
The demand for Roumanian unity — Roumanian inter-
vention — Bessarabia — Bulgaria and a Balkan entente —
The Balkan rapprochement — The possibilities of an enlarged
Balkan League — Constantinople — The Trentino and Trieste
— Italy and the settlement — The Trentino — Trieste — Alsace-
Lorraine — Racial character and history — The French
declaration — Some suggestions considered — Territorial com-
pensation to Belgium — Would it appeal to the Belgians ? —
Schleswig-Holstcin — The plebiscite of the northern districts
— Denmark and the Kiel Canal — The position of Austria-
Hungary after the war — The possible union of Austria with
Germany — The position of Hungary — A summary of the
principles involved — The practical difficulties of the ple-
biscite — The task of European statesmanship, pp. 81-163



CHAPTER V

COLONIAL QUESTIONS IN THE SETTLEMENT

Colonies as spoils of war — The period of colonial conquest —
Failure of the policy of exploitation — The growth of the
British Empire — Beginnings of German expansion — The
scramble for Africa — Germany's colonial empire — Strate-
gical reasons for capture of the colonies — Their value as
pledges — Interests of British Overseas Dominions — Togo-
land — Kamerun — German South-West Africa and the South
African Union — German East Africa and the all-red route
— German New Guinea and the Pacific Islands — The atti-
tude of Australia — Kiau-Chau — The question of coaling
stations — The larger problems of colonial policy — Ger-
many's " place in the sun " — Concession-hunting and the
mailed fist — Commercial penetration and political influence
— Common interests in the opening up of undeveloped
territory — The necessity of co-operation — The possible
break-up of Asiatic Turkey — A possible all-round agree-
ment . . . . . . -PP. 164-199

2



XV111 CONTENTS

CHAPTER VI

THE ECONOMIC FACTORS OF THE SETTLEMENT

The economics of conquest — Territorial compensation — Colonies
and cash value — Indemnities, their possibility and desira-
bility — -Their economic effects — Their political effects —
Compensation to Belgium — The crushing of Germany and
British commerce — Fiscal arrangements in the settlement
— Counter-bounties — Free Trade areas — Roads to the
sea and ports — Some details of the settlement — Allowances
for State-owned property — Interned ships — Confiscation of
sums held in trust — Discrimination against German bills —
Patents — Economics and international relations — The inter-
national partnership .... pp. 200-247

CHAPTER VII

THE EUROPE OF TO-MORROW

Is peace in itself desirable ? — Resistance to Prussian arms and
the victory over Prussian ideals — The burden of armaments
and its real significance — Why attempts at limitation have
failed — The Congress of Vienna and the Holy Alliance —
The situation at the end of the present war — Fear of
aggression and its influence on policy — The law of struggle
and the community of nations — The Triple Alliance and
the Triple Entente — An alliance of all the Great Powers —
Mutual guarantee against aggression — The small States
and the alliance — Possible grouping in confederations — The
proposals for an International Court and Police Force —
The practical difficulties — The dangers of prematurity —
First the community, then the law, then the executive — ■
A Consultative Council as opposed to an International
Tribunal — Limitation of armaments by consent — The
example of the Canadian frontier — The position of America
■ — Possible non-military sanctions — The underlying prin-
ciple — The Great Settlement , . . pp. 248-287



CONTENTS



XIX



APPENDIX A

PAGE

THE RACE QUESTION IN AUSTRIA-HUNGARY . 289

APPENDIX B

THE FRANCO-GERMAN WAR INDEMNITY . . 2f)I

INDEX ....... 301



MAPS



RACIAL MAP OF CENTRAL EUROPE

THE AUSTRO-HUNGARIAN EMPIRE .

THE PARTITIONS OF POLAND

ALSACE-LORRAINE

SCHLESWIG-HOLSTEIN .

THE GERMAN COLONIES IN AFRICA

THE GERMAN COLONIES IN THE PACIFIC

TURKEY IN ASIA .



83
89

95
151
155
1S1
189
197



THE GREAT SETTLEMENT

CHAPTER I

THE NECESSITY OF A SETTLEMENT

The present war is distinguished from other
conflicts in which Great Britain has been
engaged by the practical unanimity of national
feeling with regard to it. Those who wel-
comed the outbreak of war were very few ;
those who believe that it could have been
avoided in August last, still fewer ; those
who do not share the general determination
to carry it through, at all costs, to a vic-
torious issue, so few as to be practically
negligible. There is to-day neither a war
party nor a peace-at-any-price party. The
almost universal sentiment is one of sober
resolve to perform, quietly and thoroughly,
an unsought and unwelcome task which we
could not in honour or with safety refuse.
At the back of this determination there is



2 THE NECESSITY OF A SETTLEMENT

an instinctive revolt against the whole Prus-
sian theory of aggressive war as a legitimate
expression of national policy. We have often
been told that international law has no real
existence ; that treaties will be observed only
so long as it suits the convenience of the
parties ; that the nations are subject to a
law of struggle in which the weakest must
go to the wall. Yet the violation of Belgian
neutrality, under the plea of military neces-
sity, has undoubtedly shocked the public
conscience. Seen in action, the Prussian
theory is felt by the whole British people to
be destructive of those conceptions of order
and public right upon which the development
of modern civilisation rests. There is a deep
and fierce resentment against the interruption
of the life of the world by the activities of a
militarist system which has become an ana-
chronism. It is as if a merchant with whom
we had business relations had suddenly failed
to honour his bills. The foundations of
public faith have been shaken and we find
ourselves suddenly thrown back upon out-
worn conditions, conditions in which sheer
military strength becomes the only security
against outrage.

Hence, the resolution to win is coupled



THE NATIONAL DETERMINATION 3

with a steady determination that Europe
shall not again be plunged into chaos. In
every utterance of our public men or our
Press there occurs in some form or other the
determination to make an end of this mili-
tarist menace, to secure ourselves against
any future outbreak of this policy of the
jungle. The very vastness of the conflict
reinforces this determination. The enormous
numbers engaged, the terrible proportions of
the casualty lists, the greatness of the sacri-
fices which we have made and are prepared
to make, demand an adequate recompense.
If we make some effort to realise the long
agony of Belgium, the terror and anguish and
desolation of the peaceful population in
Flanders and Northern France, the heroism
and the sufferings of our troops in the
trenches, we feel that it would be intolerable
that these sacrifices should have been made
in vain. It is unthinkable that they should
result in some patched-up truce, in a victory,
however glorious, which would expose us in
twenty years' time to the risk of another


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