Paris Peace Conf. 184.013102/51

The Chargé in Denmark (Grant-Smith) to the Acting Secretary of State10

No. 3224

Sir: I have the honor to transmit herewith, for the information of the Department, copies of two reports on the Situation in Germany, dated the 24th and 30th ultimo respectively, prepared by Mr. Lithgow Osborne, formerly a Second Secretary of this Legation and now attached to the Commission to Negotiate Peace, at Paris, and forwarded by him to the Commission from Berlin.

I have [etc.]

U. Grant-Smith
[Enclosure 1]

Memorandum by Mr. Lithgow Osborne

This is a rather complicated situation we’ve run into here. One thing is evident. It would have been well for Ellis Dresel to have known a little more exactly what the terms of peace are to be, before setting out. In a sense, everything depends on exactly what they are, perhaps even exactly how they are phrased,—how the dose is administered.

What I have to say relative to the situation is posited upon the peace terms containing the following settlements:

Saar Basin to be settled in accordance with the [illegible] Note, i. e. French administration for 15 years, plebiscite at the end of that time and, in case it results favorably to the Germans, opportunity for them to re-purchase the coal-fields by paying gold.
Danzig to be a free-port but largely under Polish control and the Poles to have a corridor to the sea with the administration of large German populations and the separation of East and West Prussia as a result.
Cession of practically all the East Silesian coal-fields together with the German populations in those districts to Poland.
Military occupation by the French of the Left bank of the Rhine for 15 years.

In what follows, when I say peace I mean a peace containing these four settlements, as they constitute the terms which will arouse the greatest opposition. The question of the colonies and of the referendum in Alsace-Lorraine are still raised by many people who represent the point of view of the government parties, but the government, if they tried to object on these points, would certainly not have the support of public opinion and they can be left out of consideration. [Page 95] The loss of Schleswig and the indisputably Polish parts of Prussia fall into the same class.

On the part of the government and the parties representing it there is a very stiff-necked opposition to the reported peace terms on the following grounds:

They are not in accordance with the 14 points on which Germany agreed to make peace with the Allies.
They could not be fulfilled even if signed.
Peace with the Allies on the basis of the 14 points and co-operation with the Western powers has been the basis of the policy of the present democratic government. If they fail to obtain such a peace, the failure of democratic idea in Germany is signed and sealed with their own signatures.
Peace on the basis of the reported terms would furnish the reactionaries and militarists with tremendous material for agitation (presence of the French troops in the Rhineland etc.) while Germany’s hopeless economic and industrial condition, resulting from the indemnities, and the loss of great coal-fields would create industrial confusion and accrue to the advantage of the Bolshevik agitators.
If Germany signs the peace terms indicated, a catastrophe is certain, and the government does not wish to assume responsibility for it. If there is a refusal to sign, they evidently count on radical and labor opinion in the Allied countries preventing further military action or the long continuance of a re-established blockade. In other words they profess to see one ray of hope, if they do not sign, and nothing but catastrophe, if they do.

So think the Government and their supporters. In the meantime their inward cogitations are accompanied by a vitriolic press campaign aimed particularly at the French, and which, though possibly understandable, is exceedingly foolish. They have undoubtedly succeeded in aligning some public opinion behind them.

Militating in favor of the acceptance of the peace terms by the present Government (with one or two possible changes of personnel) are the following factors:

The widespread popular demand, particularly among the industrial populations, for peace at any price.
The realization by the Government that the only possible alternative to themselves is an Independent Socialist Government or possibly a coalition of the two Socialist wings, with a strong leaning toward Bolshevism.
The fear of Bolshevism.

When it comes to the point of deciding to accept or refuse the peace, the Government, being lamentably weak as far as being able and willing to do anything positive, will be anxious to shift responsibility. They will undoubtedly place the decision in the hands of the National Assembly which in turn may submit the matter to a popular vote. It is my impression that the probability of this last is decreasing; it [Page 96] had apparently been first thought of about the time we came, and the Government would undoubtedly be glad to “pass the Buck” to the people. But in the meantime the objections to the scheme have become evident—the chance for agitation against the Government and the political unrest it would cause, as well as the impossibility, under existing conditions, of getting a really representative vote on the question. The whole campaign, however short would only accrue to the advantage of the more violent elements, namely the Independents, Spartacans and the Nationalists.

Another factor, I believe, which is against the present Government signing the peace is the psychological. Human beings are naturally optimistic. The Germans have little left but Hope. But having only that I think they have clung to it—the Hope that the Americans would do something, the Hope that the final terms would not be so severe as the Armistice indicated, and so on. Sub-consciously I think the Germans have been more optimistic than they realized. Hence, when they see the terms in cold print, there will be intense bitterness, hate and desperation. Also, all the anger they have worked up recently has been directed first at one specific indicated settlement, then at another. In the peace document the whole lot will appear en masse with a cumulative effect that will be crushing. The result will be that the belief will be increased that Germany is ruined anyhow and that it is better to take a chance on the radical and socialistic forces in England and France forcing a different settlement or on the whole of Europe “going Bolshevik.”

But personally—and here is where I differ greatly from Ellis—I think all these considerations are beside the point. The key to the situation lies in—Oskar Cohn’s diabolically benevolent smile!! Cohn is an Independent Socialist who is at heart a Bolshevist; he admits that his idea of things is the same as Lenin’s. He favors an immediate understanding with Russia. He indicated plainly that he hopes for a revolution in France and England.

Now the Government seems at the moment pretty strong. It is supported by two factors.

The general political passiveness and apathy.
Noske’s excellent military organization.

But no one takes it seriously; it has no enthusiastic supporters; it has compromised itself with the left by its lack of socialism and the fact that it depends on old-time militarists and the financial help of the Big Business interests. The only thing that could make it really popular is a peace more favorable to Germany than any that there is the remotest chance of their obtaining.

In the meantime the industrial situation grows steadily worse and the food situation does not improve. The American food has made [Page 97] no particular impression and will only serve to keep the people on their present starvation rations until the next harvest. Faced with such problems and with no ability to take forceful decisions in time, there seems little chance of it getting more popular. It can only increase its hold in the country by increasing its military supremacy—which is a double-edged weapon.

The Independents say that they favor signing the peace, but it is certain that, if and when it is signed, the Independents will at once begin an agitation because the German masses have been made the “Economic slaves” of the Entente as a result of the stupidity of the Government.

As a matter of fact the Independents and Spartacans don’t really care. They believe that they have the Government, going or coming, simply as a result of the pressure of events and regardless of whether peace is signed or not.

If the Government refuses to sign, the Independents will assume the Government and sign the peace with a tacit or expressed reservation that its terms are impossible for Germany to fulfill. They will also promptly hook up with Moscow without necessarily, in any way adopting a hostile attitude toward the western states. They will further carry on propaganda directed at the labor populations of England and France which will have all the effectiveness that the present Government’s propaganda of whines lacks. They will, in fact, play Lenin’s game at and after Brest-Litovsk only much more cleverly.

Everyone admits that the Independents and Spartacans are, politically, making great headway. The last meeting of the Soviets was controlled by the Majority-Socialists and Democrats but they saw themselves compelled to criticize the Government and to adopt a resolution concerning the constitutional status of the “Räte” which is shelved for the moment but which Scheidemann has stated is impossible.

There seems some possibility of a re-union between the Independents and the Majority Socialists minus the “Compromised” leaders (Scheidemann, Noske, Landsberg, etc.); if such a re-union is effected, the chances of it taking over the Government, when the “Peace crisis” comes seem very good. In such a combination it seems inevitable that the Independents will play the leading role (as the Majority Socialists have no leaders who aren’t compromised and the leadership would hence fall to the Independents) and what I have written about the policy which would be followed by a pure Independent Socialist Government is also true of a mixed Socialist Government. Such a government, moreover, would be only the precursor to a still more radical one, as they would dispense with Noske and strict military control and the lid would be off for violence on the part of the Spartacans, unemployed etc., etc.

[Page 98]

It all comes down to this: Faced with the problems which exist in Germany no Government not of the Extreme Left can permanently maintain itself, without far-reaching assistance’ from outside—more far-reaching assistance, financial, economic, alimentary, etc., than the Entente and the U. S. are either willing or able to give.

The Independent Socialist[s] of the Left realize this,—realize that time and pressure of the economic situation, etc. are always working in their favor; hence Dr. Cohn’s smile.

In other words I feel certain that, whether peace is signed or not (and it will be signed, probably, either by this Government or some other) there will be some kind of a Socialist Government in Germany within one, two, or three months, which will be on the most friendly terms with Moscow and will be working, either openly or secretly, to bring about upsets in France and Italy. If the present Government signs the peace, they may hang on for sometime longer; if they refuse their place will be taken by a Socialist Government (either purely Independent or Socialist coalition) which will sign with expressed or tacit reservations. On the whole I think the latter the most probable.

April 25th.

After a talk with Haase and Breidscheid, I am more than ever convinced that there is an imminent possibility of a reunion between the two Socialist wings—including part of the “Communists”. Whether it will actually be consummated, I don’t know. If it is, the Government will fall at once. It seems more probable to me that there will be a reunion, but that many of the Maj. Soc. leaders and a good part of their following will be left out of the new party. Haase said among other things that the Ind. Socs. would not take over the Government unless there were Maj. Socs. with them.

[Enclosure 2]

Memorandum by Mr. Lithgow Osborne

It can hardly be said that the situation here is much clarified through longer acquaintance. German politics, so-called, used to be comparatively simple to follow. There were certain personalities and parties of whom it was rather easy to keep track; they represented, or pretended to represent, certain definite political ideas. And the very artificiality of the whole game helped to simplify it.

It is no longer a problem of personalities and parties; it is a problem of currents and drifts, whereon persons and parties float, trying to control the tides that bear them and to steer their own courses, but apparently quite powerless in the rush and flood of circumstances.

[Page 99]

Even to an outsider, bent only on observation and who endeavors to get a simplified view of things, the picture is confusion. It almost seems to me that, were I a German, I should be an Independent Socialist one day, a Conservative the next and a Spartacan on the third. There is so much to be said for all sides—and so little for any.

The party lines are no longer clear. Thus the most radical of the Democrats—like v. Gerlach, for instance—in some questions such as that of responsibility for the war and the maintenance of Noske’s military forces go further than the Majority Socialists (who theoretically stand to the left of them) and believe that Germany’s responsibility for the war should be admitted and that Noske’s forces should be demobilized; but they do not believe in far-reaching socialization as do the Independents. Schiffer, on the other hand, also a Democrat, left the Ministry because he more or less agreed with the Independents about immediate socialization, whereas the Majority Socialists opposed, he would not agree with the Independents regarding the admission of Germany’s guilt or the demobilization of Noske’s army. Some of the Majority Socialists are ready for a coalition with the Right Wing of the Independents; some of the Independents want a coalition of Majority Socialists, Independents and the most sensible Communists. Other Independents would refuse any coalition with the Majoritarians but would be glad to join forces with the Communists. Some of the Communists favor violent attempts to gain control of things; others are for more subtle methods. The so-called “continental” economic policy is favored by persons of such diversified coloring as Georg Bernhard, Jingo-Democrat, and Cohen-Reuss, Majority Socialist of the left wing. Most of the Independent Socialists and many of the Nationalists (old regime) favor a rapprochement with Russia.

These are only a few of the most obvious contradictions in the present political chaos, and when it appears on a background of imminent bankruptcy, general public corruption, mal-nutrition, reckless frivolity and extravagance, fantastic prices, industrial chaos, and yet withal an utterly astounding normality in the everyday aspect of affairs (lovely yellow spring flowers are just being planted in the Pariser Platz), it is all a touch confusing.

Through this confusion I find two great political currents are growing daily more evident:

The Nationalist current.
The Bolshevist current.

(I use Bolshevist here in the sense in which the word is now generally employed, not as signifying a clear political conception but as a generic term for a radicalism which is anti-capitalistic, international, [Page 100] and, in general, dissatisfied with the methods and catchwords of democracy and the abuses to which they have led.)

Both these currents are gradually acquiring volume from the pseudo-democratic river on which, partly in order to please their enemies, the Germans tried to launch their ship of state. The conflict of these two currents forms cross-currents, eddies, and whirlpools creating the confusion I have described. To forsake metaphor, the forces behind the Government (who still pretend to represent the ideas of western democracy) are dividing to Right and Left and I am more than ever convinced that it will fall or that it will radically change its nature and become a nationalist government, leaning more and more on the support of the old militarist crowd, for whom Noske will become more and more of a stalking-horse.

As I see it, events are bound to take one of the following courses:

Rejection of the Peace Terms by the present Government without a plebiscite; accession to power of some sort of Socialist coalition which will sign any peace terms; rapprochement with Moscow, etc.
Resignation of the present Government (presumably after a plebiscite favorable to signing peace) without either rejection or acceptance of the peace terms; accession to power of a socialist government which will sign any peace terms; rapprochement with Moscow etc.
Rejection of peace terms by the present government as the result of a plebiscite; violent opposition by the Left, necessitating even greater and more evident dependence of the government on armed force and the nationalist elements, quite possibly resulting in a military dictatorship; eventual overthrow of the government from the Left as a result of the re-enforced blockade or military occupation.
Acceptance of the Peace Terms by the present Government without a plebiscite but with mental reservations that they are not to be kept; alliance of the Government with the nationalist elements on a policy of revenge, increasing opposition from the Left; eventual overthrow of the Government unless it is given assistance and support by the Entente.
Acceptance of the Peace Terms by the present Government after a plebiscite, sincerely and without mental reservations, nationalist agitation favoring a “revenge” policy; continued opposition from the Left on questions of internal policy; attempted coup d’états from both groups of extremists, resulting in eventual victory for the Left.

These are the possibilities. I regard 1. and 2. as much the most probable.

Notice one thing. No development in this country, according to present indications, leads towards democracy, on the contrary. I see no possible development which does not lead directly away from the democratic idea. For the moment, democracy, as we think of it, is finished here, whether the government signs or does not sign. I see no chance of anything but a practical dictatorship either of the Right or the Left, and the betting is about 100 to 1 on the Left.

[Page 101]

Ellis is still inclined to believe in the staying powers of the present government under certain circumstances. The one chance I see of its staying in I have dealt with under (4) above. But even so, it will not remain unless it is supported by the Entente—loans, raw materials, food, moral support, etc. A Socialist government, by turning toward Russia and getting moral support from that quarter and the promise of more material assistance, might exist without active co-operation from our side. No non-Socialist Government can exist here without our support. That needs to be repeated. When I say support, I mean real support which includes a certain amount of real or expressed sympathy. If we do not care to give it, we must be prepared not to be upset when one of the alternatives to a non-Socialist government (some sort of Socialist government, tending always to the Left) becomes an actuality. Of course, I am not sure that even support from the West can maintain the present pseudo-democratic Government. Perhaps it is best if it is not saved.

Personally, I am inclined to believe that, if it can be pulled off, a coalition Socialist government here is the best for all concerned. The present Government, under the circumstances, is a thoroughly dishonest one. (Ellis disagrees here, and I probably have over-stated the case. He agrees that the Government is weak, opportunistic, time-serving and employs idiotic measures. I suppose that there are sincere democrats in it, but no “feel” for democratic methods has been acquired, and couldn’t be made use of, if it had been.) It consists of tame pseudo-Socialists, still tamer Pseudo-Democrats and of persons who pretend to base their democracy on Catholicism. (Imagine politics based on revealed religion in this day and age). The government’s instruments are the old “Beamtentum”, and as regards democracy, no more need be said about them.

The government’s methods undoubtedly smack strangely of the old regime; it depends on military forces; there is still the attempt to “imponieren”. “Imponieren” is the basis of foreign policy—see Rantzau’s answer to the first “invitation” to Versailles. And that whole incident is regarded here as a “diplomatic victory” for Germany!!!!

Of course the case for the Government is: People can’t change their manners and methods in a night. If they have “imponiert” all their lives and striven for “Diplomatic victories” they can’t get out of the habit by labelling themselves “Democrats”. The Germans “went in” for democracy to please their enemies but found no sympathy and have been forced by their enemies’ intransigence to adopt the worn out methods they were used to. The Government must depend on the old machinery which is at present impossible to replace, etc., etc., etc.

[Page 102]

Some or all of this may or may not be true. But the fact remains that the Government is a fake as far as democracy is concerned and, although it might in the course of time and by degrees develop into a democratic government, it is unsuited to the present crisis with which only a government, unified and determined to practice what they preach, can deal. The present government is too much open to attack from both Right and Left and from outside of Germany. To a large extent it lacks the guts to take decisions.

Of course its apologizers say that if it had had moral support from abroad it would have been in a position to carry out decisions and to democratize itself, but the fact remains that it did not receive such support and is now in a thoroughly flabby condition, holding its seats largely through mere inertia. It is technically democratic and constitutional, I suppose, as it probably still has the ballots of a majority of Germans behind it. But that doesn’t alter its complete incapacity to deal with the present situation.

Now the problem facing Germany is:

To secure outside assistance, including moral support, raw materials, food, etc.
To bring internal industrial peace.

The second depends largely on the first, but at the same time certainty that the Government is really anti-capitalistic (the Socialists now in power are quite evidently only petite bourgeoisie) would go far toward restoring the confidence of the proletariat, would take the wind out of the sails of the Spartacan agitators, and help to put an end to the industrial sabotage which is what these strikes really are. Then, if the outside help were forthcoming the machine might get going once more. I am not certain whether a Socialist government would enjoy any more sympathy or would be afforded any more help from the Western countries than the present government. It at least would not (in fact could not) get less, and at least it could gracefully come to an understanding with Moscow which, if it did nothing else, would help to restore confidence.

The alternatives, as I see them, to the present government (aside from the very remote possibility of a temporarily successful military dictatorship) are:

A Majority-Right Minority Coalition (minus the “compromised” Majority leaders, including some of the younger Democrats of the Left Wing.)
A Minority Socialist Government, probably including some Communists.

The first would, of course, be preferable. Many people are working for such a combination, but there is some doubt whether Haase, Colin, [Page 103] etc. could swing their followers, (who in general have gone already too far to the Left) even if the opportunity offered. It may be too late to form such a coalition, but it is possible. The moment may come for it when the present Government rejects the peace terms, or possibly later.

The Entente still has, to a certain extent, the control over German internal affairs and, unless they desire to see complete chaos here, it would be well for them to consider what sort of a government they must want here—always remembering that no government can remain in power permanently which does not receive support from outside. I am doubtful if the present Government can be saved by anything except what the Daily Mail would call a “German peace.” If the present Government signs at Versailles, it may be possible to bolster it up by granting Germany loans, and giving her raw materials and food on credit. If the Entente and the United States are unwilling or unable to do this, there is a chance of a Socialist Coalition government, which will not be essentially Communistic, though it will be anti-capitalist, and (in the beginning at least) non-democratic. Such a government can perhaps keep this country from a complete collapse—which I presume is not desired by the Entente—but again only if assistance is given them. Possibly we have our plans laid for giving it. If we haven’t, we’d better get busy, if we’re not to be too late again, and this time it will be absolutely the last call.

  1. Copy transmitted to the Commission to Negotiate Peace, received May 19, 1919.