FOREIGN AND COLONIAL HISTORY.

CHAPTER I.

THE LEAGUE OF NATIONS.

THERE is not much that need be said concerning the constitutional development of the League of Nations during 1923. The Assembly was as successful as before, and its machinery worked with equal, if not greater efficiency. The Council dealt with a greater range of important questions than it has had in any previous year. It has continued to give greater and greater publicity to its proceedings, with the result that now practically everything except what concerns the appointment of individuals -which must evidently be done in private-is now dealt with in the presence either of the Press alone or of the Press and the public. The immense value of this tradition of publicity was shown in the Council's proceedings on the Corfu dispute between Italy and Greece in September.

Another satisfactory feature of the constitutional development of the League has been the work of the various technical and expert Commissions. All these Commissions have now built up an effective system of co-operation between the administrations of different National Governments.

Of the general work accomplished by the Governments through the machinery of the League during 1923 the most important has been that connected with the economic reconstruction of Europe, and in this direction three great reconstructive schemes have been launched. The first and most important was the plan for the financial rehabilitation of Austria. In August, 1922, the finances of the Austrian Republic were in such a state of confusion that its political and social dissolution appeared inevitable. At the eleventh hour the question was referred by the Allied Governments, who had tried unsuccessfully to deal with it themselves, to the Council of the League. The Council, with the support of the Assembly, worked out a scheme based on internal reform and an external loan, by which it was hoped that the Austrian currency might be stabilised, its Budget balanced within a period of two years, and its economic life thus restored. [see ANNUAL REGISTER, 1922, pp. 148-9]. But at the beginning of 1923 it was still uncertain, in spite of the initial successes that had been obtained, whether the external loan could be raised, and whether in any event the Austrian Republic had

economic strength enough to achieve its own recovery. The early months of 1923 supplied a decisive answer. The external loan when floated on the various markets of Europe and America was, on the day of its issue, many times oversubscribed, and at the end of the year, the stock still stood at a premium. The internal results achieved through the scheme have been no less remarkable. The programme of reforms drawn up by the League of Nations Commissioner has been promptly and loyally carried through by the Austrian Government. The Austrian currency has been the most stable in Europe, not excepting the pound sterling. The cost of living has fallen to a considerably lower level than that at which it was when the scheme came into operation. The Bank of Issue, with the assistance of a foreign League of Nations adviser, has been completely successful. The savings of individual citizens have increased by more than fourteen-fold. In spite of the dismissal of Government officials, unemployment has steadily fallen until it stands to-day at a very low figure. So successful has the economic rehabilitation of Austria been that whereas eighteen months ago starving Austrian children were being received into German homes, to-day starving German children are coming to the homes of Austria.

The success of the Austrian scheme encouraged Hungary. Early in 1923 that country, overburdened as Austria had been with Reparation and other external charges, and threatened like Austria with complete financial disaster, on its own initiative appealed to the Council of the League to bring into operation on its behalf a scheme similar to that which had saved Austria. The Council were not able at first to respond to this appeal, but in September the three Powers of the Little Entente, who were of course the Powers principally interested in any reparation payments which Hungary might be able to make, jointly laid before the Council a proposal for a scheme of the sort which the Hungarian Government had requested. Their initiative changed the situation. The Reparations Commission forthwith gave its preliminary consent. The Financial Committee of the League, which consists of some of the leading experts of the world, met in November to draw up proposals, and at the Council Meeting in Paris in December these proposals were provisionally approved. The plan put forward by the Financial Committee differed from the Austrian plan in some important respects, but principally in that the external loan was not to be based on the guarantees of other Governments, and that provision was made for the payment of certain claims for reparation during the reconstruction period. At the close of the year it was not certain that all the difficulties which remained would be overcome, but the lesson of Austria gave every ground for hope.

The third reconstructive scheme drawn up by the Council of the League related to the settlement of refugees in Greece.

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At the end of 1922 Dr. Nansen had gone on behalf of the Assembly to Constantinople and Greece to inquire into the problems caused by the influx into Greece of more than a million destitute refugees. He had come to the conclusion that it was impossible to hope that these refugees could return to their homes in Asia Minor and Eastern Thrace. The only alternative was their settlement on the vacant lands of Greece, in agriculture or in industry, according to their several capacities. He recommended that for this purpose the Council of the League should assist the Greek Government in raising an international loan for the settlement schemes which were required. The Greek Government in January, 1923, professed to the Council their willingness to assign to the services of such an international loan revenues which they held would be more than sufficient for the purpose. Their position was not, however, sufficiently strong to inspire confidence in the money markets of the world. The Council had therefore to find some plan by which such confidence could be created. In July Dr. Nansen's High Commission and the Financial Committee of the League collaborated in the preparation of a scheme which received the acceptance both of the Council and of the Greek Government. Under this scheme a Refugee Settlement Commission was to be appointed, consisting of two Greek members and two foreign members, one of the latter acting as Chairman with a casting vote. To this Commission the Greek Government were to make over a million and a quarter acres of agricultural land to become the absolute property of the Commission, and the revenues from it were to be the first asset for the service of the loan. At the September meeting of the Council the Protocols establishing the Commission were signed by all the Governments concerned; the Commission was appointed, and Mr. Henry Morgenthau, at one time United States Ambassador at Constantinople, was appointed as its Chairman. The first part of the Loan was floated, the Bank of England providing 1,000,000l. sterling, and with this sum in November and December the Settlement Commission began its practical work. There is little doubt that but for this practical scheme of reconstruction the additional burden of destitute refugees, amounting to 20 per cent. of her total population, might well have added Greece to the number of States ruined by the war.

A number of disputes were brought before the League in 1923. The first of the year concerned the territory of Memel. Since Germany renounced its rights over Memel in 1919 the territory had been under the administration of an Allied Commission supported by a French occupying force. It was the intention of the Allies to concede the sovereignty over this territory to Lithuania on certain conditions, guaranteeing the autonomy of the town and providing a free economic outlet for the commerce of other nations through its port. The Lithuanians, however, feared that this plan would be dropped in

favour of an alternative scheme which in their view would lead to Polish domination over Memel. They therefore engineered in January, 1923, a coup de force and assumed the administration of the territory. In February the Conference of Ambassadors, representing the Principal Allies, came to terms with Lithuania on the general principles of the settlement. These general principles they were, however, unable to translate into a concrete convention, and after six months of failure they referred the whole question to the Council of the League. The Council dealt with the matter at its December meeting. They agreed that the settlement should be on the basis of the principles agreed on between Lithuania and the Ambassadors in February, and for the practical application of these principles they appointed a special Commission of Inquiry to draw up a report. The Commission was to consist of three persons, two economic experts nominated by the Transit Committee of the League, and as Chairman a distinguished American, Mr. Norman Davis, late Under-Secretary of State in the United States administration. This Commission was to report to the Council at its next meeting.

Another dispute related to the frontier to be drawn between Poland and Czechoslovakia in the neighbourhood of a village called Jaworzina. This again was a question which it lay within the competence of the Principal Allies to decide. After negotiations lasting for two years, however, they had been unable to agree on a frontier which satisfied the two parties, and rather than impose a decision against the will of either, the Conference of Ambassadors referred the question to the Council of the League. Before the Council the Czechoslovak Government contended that there were a number of legal issues involved concerning which the Council ought to ask for the advisory opinion of the Permanent Court of International Justice. The Council accordingly referred these issues, together with all the relevant papers, to the Permanent Court, which held a special session in November to consider them. Its opinion was received by the Council in time for a final decision to be taken in December. The Boundary Commission has since been instructed by the Principal Allies to draw the frontier in accordance with this decision. The dispute was in itself insignificant, the territory small, and the inhabitants involved less than 1,000. It had, however, assumed an altogether fictitious importance owing to the propaganda of the two parties, and had become a question of national prestige on which neither Government was able on its own initiative to give way. The intervention of the Permanent Court demonstrated the value of impartial judicial verdicts in such difficult international questions.

Much the most important political work of the year arose, however, out of the Corfu dispute between Italy and Greece. On August 29 General Tellini, the Italian Chief of an Allied Commission engaged in delimiting the frontier between Albania and

Greece, was, with four of his staff, murdered on the high-road to Janina, a mile or two from the frontier. There was no evidence that the murder was committed by Greek subjects, still less that it was committed at the instigation of the Greek Government. Nevertheless, Signor Mussolini, the Prime Minister of Italy, immediately issued an ultimatum, demanding in violent language material and moral reparation of an unprecedented character. The Greek Government having only accepted part of his demands, Signor Mussolini proceeded on the eve of the opening of the Assembly, and while the Council was actually in session, to despatch the Italian fleet to Corfu. After a brief bombardment, naval forces occupied the Island without resistance from the insignificant Greek garrison. As the Greek Government had already indicated a willingness to accept the decision of the Council of the League on the dispute, Signor Mussolini's action was in every respect a challenge to the authority of Geneva, and in the view of practically the whole world also a violation of the principles of the Covenant.

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Signor Mussolini followed up his action by resounding challenges to the authority of the Council issued in the form of interviews to the Daily Mail. In accordance with instructions, the Italian member of the Council contended that the Greek Government had no right to bring the dispute before the Council, and demanded that the Council should not deal with it. Despite his representations, however, the Council held a series of very remarkable public meetings, during which the Italian contentions and the whole merits of the dispute were submitted to searching examination before the public opinion of the world. result the Council laid proposals before the Conference of Ambassadors, the offices of which as a mediatory body both parties had agreed to accept. The recommendations of the Council were at first accepted practically as they stood by the Conference of Ambassadors. Later, the Conference unscrupulously abandoned the most important clause of the agreement which had been arrived at, and accepted by Greece, and they imposed upon Greece a fine of 50 million lire, in spite of the fact that no evidence had been forthcoming that the Greek Government were in the smallest degree to blame. No responsibility for this decision rested with the Council of the League.

It was the unanimous opinion of all those who followed the proceedings at Geneva and Paris that, but for the intervention of the Council and the strong pressure from the Assembly, not even this unjust settlement could have been arrived at, and war would probably have resulted between Italy and Greece.

Of the work of the Permanent Court of International Justice during 1923, perhaps the most important was the settlement of the dispute between Germany and the Principal Allies concerning the right of passage through the Kiel Canal. This case, known by the name of S.S. Wimbledon, was the first brought before the Court in virtue of the obligatory jurisdiction clauses