SPRING 2006 • NUMBER 130 - Winston Churchill

F R O M T H E C A N O NThe United States of EuropeBY WINSTON S. CHURCHILL, 1938 • PART 2“WE ARE BOUND to further every honest and practical stepwhich the nations of Europe may make to reduce the barrierswhich divide them and to nourish their common interests andtheir common welfare. We rejoice at every diminution of theinternal tariffs and the martial armaments of Europe. We seenothing but good and hope in a richer, freer, more contentedEuropean commonalty.”The reflections of Europeannations upon the need ofunity must be stimulated bythe financial relations ofEurope to the United States. Underthe arrangements which have nowbeen agreed to by all parties, practicallythe whole of the reparationspaid by Germany to the countries shehas injured will flow by one channelor another to the least harmed andmost prosperous member of the victorcombination against her.For sixty years to come* animmense flow of wealth must rolloutward from Europe across theAtlantic. It cannot go in the form ofmerchandise, for the United Statestariffs, rising ever higher, bar the paymentof a debit in such a form. It isthe declared economic policy of theUnited States to aim at an excess ofexports. Therefore, on the one hand,the United States is entitled to theseimmense prolonged payments and,on the other, will not receive them inany form which can be conveyedacross the ocean. From this there hasfollowed and, whatever temporarychecks may intervene, there mustcontinue to follow, a process of reinvestmentof American capital inEurope. This process is cumulativefrom year to year; consciouslythrough the excess of Americanexports, almost unconsciously, perhaps,by the subtle and surprisingmanifestations of profits and compoundinterest.Sir Josiah Stamp—perhaps themost eminent of practical economists—made calculations whichshow that before the reparations anddebt payments to the United Statesare completed, Washington andAmerican investors together ownperhaps two-thirds of the entire presentincome of Germany.Such conclusions transcend thelimits of imagination. Inch by inch,with mathematical certainty, theyapproach a conclusion of monstrousEditor’s note: We publish this long, reflective article not as a prescription for modern timesbut to shed light on Churchill’s thinking when he wrote it, and on those concepts of his thatmay be worthy of reflection. His article was published in The Saturday Evening Post and inThe News of the World on 9 May 1938, under the heading “Why Not ‘The United States ofEurope’?” An abridged version, “A Great Big Idea,” appeared in John Bull on the same day.Reprinted by permission of Winston S. Churchill.*Delivering the Fifth Churchill Lecture in Washington on October 18th, Sir Martin Gilbertannounced that at midnight on 31 December 2005, all British war debts to the United Stateswill have been paid.absurdity. The most hopeful comment—andthere is solid reassurancein it— is the German saying: “Thetrees do not grow up to the sky.”To write thus is not to blamethe policy of the United States; stillless to impugn their lawful and contractualrights. American statesmenmay with blunt justice and unanswerablelogic point out that Europehas no grievance against the UnitedStates. The ancestors of the men andwomen who inhabit the Americancontinent took little with them whenthey quitted Europe. They leftbehind and surrendered an immenseaccumulated inheritance. All thatthey have, they and their descendantshave made for themselves by toil andscience, and the resolute exploitationof those natural resources they hadthe courage to go out and find. If theNew World has grown rich, it is notat the expense of the Old.The Government and people ofthe United States were in no wayresponsible for Armageddon. They didnot create or foment the hatreds andquarrels which led to that supremecatastrophe. They were drawn into thewar against their will, against their tradition,because they were jostled andknocked about by the combatants andforced to take a side and take a part.The movement of soldiers, of warships,supplies, and of treasure, wassolely eastward. The traffic was “oneway only”—from the United States toEurope. And this ought never to beforgotten by Europe, and will never beforgotten by the rest of the Englishspeakingworld.Nevertheless, American statesmenand leaders of public opinion inevery part of the United Statesshould ponder carefully, and as realists,upon the chains of causationwhich have now been forged. ForFINEST HOUR 130 / 45