THE CONSERVATIVE MINISTRY.

MR. A. BONAR LAW, PRIME MINISTER TO MAY 20.
MR. STANLEY BALDWIN, PRIME MINISTER FROM MAY 25.

CABINET MINISTERS.

Prime Minister and First Lord of (Mr. A. Bonar Law (to May 20).

Major A. B. Boyd-Carpenter (from July 27).
Earl of Ancaster.

Lord Eustace Percy.

Mr. Henry B. Betterton.

Colonel Wilfrid Ashley (to October 5).
Lt.-Col. J. T. C. Moore-Brabazon (from
October 9).

Lt.-Col. Leslie Wilson (to July 26).
B. M. Eyres-Monsell (from July 27).
Lord Wolmer.

Mr. Rupert S. Gwynne.

Lt.-Col. Albert Buckley (to November 19).
Captain Charles C. Craig.
Earl of Onslow.

J. C. C. Davidson.
Major A. B. Boyd-Carpenter.

SCOTLAND.

Viscount Novar (in the Cabinet).
Hon. William Watson.

Mr. F. C. Thomson.

ANNUAL REGISTERARY

FOR THE YEAR

1923.

PART I.

ENGLISH HISTORY.

CHAPTER I.

BENEVOLENT NEUTRALITY IN THE RUHR.

THE New Year found England and France in the midst of a "Reparations crisis" admittedly more serious than any which had preceded. Before the close of the previous year M. Poincaré had given unmistakable indications that France intended to seize the Ruhr coal mines unless Germany considerably quickened her rate of reparation payment-an event of which there was very little prospect. In a final effort to dissuade France from taking this step, Mr. Bonar Law, the Prime Minister, accompanied by Sir P. Lloyd-Greame, President of the Board of Trade, Sir Eyre Crowe, of the Foreign Office, and Mr. O. E. Niemeyer, Controller of Finance, had crossed over to France on December 28. In Paris Mr. Law conferred with the Minister for Foreign Affairs, Lord Curzon, who came over from Lausanne, where he was negotiating with the Turks, and obtained from him entire concurrence in his proposals. The chief object of these, it was known, was to give Germany a "breathing space,' and to put her in a position in which she would be able to pay her debts. The French plan was entirely different, and from the outset it was more than doubtful whether an agreement would be reached.

These fears were soon justified by the event. The Conference opened on January 2 at the Quai d'Orsay. The tone of the negotiations was most friendly, but it soon became apparent that the differences between England and France were

A

irreconcilable. Mr. Law detailed his plan, the chief points in which were as follows:

Germany was to be granted a moratorium for a maximum period of four years, apart from certain deliveries in kind. The capital sum of her debt was to be 50 milliard gold marks (2,500,000,0001.), for which the German Government would issue 5 per cent. bonds repayable at par in thirty-two years (1954).. For the first four years no interest should be paid. For the next four years interest should be paid at 4 per cent. (100,000,000l. per annum), and after that at 5 per cent. (125,000,000l. per annum). At the end of ten years Germany should issue bonds bringing up the annual payment to 166,000,000l., but if this should be considered beyond her capacity by an impartial tribunal, this series of bonds should be cancelled, and payments should continue at 125,000,0001. A special inducement was to be offered to Germany to raise private loans and redeem the bonds at early dates in the form of a generous schedule of redemption prices. Should the Allies accept the proposed reparation settlement, then for the fixed obligations of the European Allies to Great Britain there would be substituted arrangements under which all except a small percentage (which would be accepted in the form of a transfer of German bonds) would be remitted.

In the evening of the same day, Mr. Law, addressing a gathering of British journalists in his hotel, added some comments for the benefit of the British public. He said that the supposition that England was quite independent of reparations had absolutely no justification. She needed them to a much greater extent than those outside the British Islands were ready to believe. They had, it was true, succeeded in balancing the Budget, but how? By submitting to a load of taxation absolutely unprecedented in any other country. They had made their Budget position strong by making the taxpayer poor, one result of which was a great increase in unemployment. Unless there was a general development of the trade of the world, they were running the risk of finding themselves, not indeed in the worst financial position from the point of view of the Treasury, but in a far worse position as regards the mass of the people than many of the Allied countries which seemed to be less strong financially. As to his scheme for obtaining payment from Germany, it was put forward purely as a business proposition. There was no chance of receiving any considerable sums from Germany till German credit had been restored, and this could not be brought about until there was some certainty as to the maximum amount which Germany might be called upon to pay. At the same time, having fixed reasonable conditions, they would be prepared, if the Germans refused to carry them out in goodwill, to take any steps necessary to compel them to fulfil their obligations. These remarks of the Premier contained nothing strikingly new, but the reason of his making