The World's Policeman: Foreign Policy under Austen Chamberlain and Winston Churchill
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The Editor of the Paris Treaty: Winston Churchill and his entourage at the London Conference, February 1925
Despite a career that had been focused on the domestic stage, Chamberlain had always had an interest in foreign affairs and it was on this that he devoted much of his attention during his premiership. His ally Churchill returned to government as Foreign Secretary and they worked together closely. Both men saw it as their duty to fix the problems of the Treaty of Versailles and push a reconciliation between France and Germany. Initially, Chamberlain planned to use the League of Nations as a broker between the two powers, something helped by the entry of the United States into the organisation under President Wood (at the instigation of Vice President Henry Cabot Lodge) in 1921. However, the inauguration of W.E.B. Du Bois as President, who was cool on overseas entanglements, in March 1925 put a halt to this possibility and forced the United Kingdom to act outside of the League.
John Maynard Keynes had been elected as the MP for Cambridge University at the 1924 and, although his controversial economic views meant that he was sidelined from economic policy-making, Chamberlain took him into his confidence when it came to matters of global geopolitics and macroeconomics. Chamberlain accepted Keynes’ view that the reparations set in the Paris Treaty would be impossible to pay and should be reduced. A conference in London in February and March 1925 implemented the German debt relief package known as the Churchill Plan. The Plan was tied to a number of geopolitical agreements struck at the same time, and in turn provided a large capital injection into the German economy. This effectively transferred the burdens of Germany’s reparations bill off the German government’s books and to British bond investors. Thus, neatly, British citizens and businesses received a new market for their goods and, in return, they took on the associated economic risk.
Outside of the purely economic sphere, both Churchill and Chamberlain were dissatisfied with the borders agreed at Paris, viewing them as arbitrary and unstable. This assessment had been seemingly borne out by the five years since the end of the Great War, with German governments of various stripes being stuck in a permanent state of near-collapse (there were nine separate ministries between 1918 and 1924) and in August 1924 the entire government had been replaced by Erich Ludendorff and his allies in what amounted to a coup (even if there had been a veneer of legality to it). In January 1923, France had invaded the Ruhr in response to German non-payment of bonds. Meanwhile, in Germany’s eastern provinces and in the new state of Poland-Slovakia, there was a constant state of low-level insurgency, as ethnic German paramilitaries (some sponsored by Junkers, others seemingly acting on their own) attacked Polish and other Slavic communities, with the Polish government instigating reprisals against ethnic Germans in Poland. By the terms of the Churchill Plan, the French government agreed to end their occupation of the Ruhr and the Polish and German governments agreed to undertake population swaps under the auspices of the League of Nations.
While the British government was not entirely sympathetic to German irredentist claims (indeed, behind the scenes Churchill was already warning about giving too much away), the Liberal view was that they should be entitled to pursue them by peaceful means in the context of an international scaffolding (of which the Churchill Plan was seen as the economic plank). To this end, Germany was admitted into the League of Nations in September 1925. In March 1926, France, Germany, Belgium, Italy and the UK signed what came to be known as the Locarno Pact, in which they agreed to settle all future territorial disputes by arbitration. For their work on this agreement, Churchill and Chamberlain shared the 1926 Nobel Peace Prize. Further reductions in Germany reparations would be negotiated in February 1929 under what was known as the Norman Plan.
While these agreements were successful on their own terms, they have since been regarded somewhat ambivalently by historians. On the one hand, the Churchill Plan definitely played a part in stabilising the German economy after its rocky 1918-23 period. However, writers have also pointed to the underlying strength of German industry and its energy sector, the sure footed economic management of the Finance Minister Gustav Stresemann and improved commercial relations with the Soviet Union. It should also be noted that the plan also accepted the Ludendorff coup, and the commensurate death of German democracy, as a fait accompli. Furthermore, while all agree that the underlying impetus behind the Locarno Pact - world peace - was a basically good thing, it should be noted that Chamberlain’s policy of negotiating bilateral arrangements outside of the auspices of the League served to undermine the League’s authority and render it effectively a dead letter, as a potential geopolitical actor, by 1926.