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were subjected to fluctuations in prices and market conditions
which rendered their life and employment uncertain. Only an
agreement between nations to. sacrifice part of their economic
isolation, either in some internationally enforced system of
multi-lateral clearing arrangements or in a low tariff group or
economic union comparable to that formed by the States of the
U.S.A. or the U.S.S.R., could have stabilised the trade conditions
of a capitalist and politically divided continent. Only thus could
the peacemakers have averted the fluctuations that devastated
human society in the early 'thirties and, among other evils,
carried Hitler to power on the flood-tide of central European
misery and unemployment.
But in the bitterness of their aggravated racial feelings the
Versailles statesmen, constant to the grooves of their vanished
youth, deliberately discouraged international economic co-
operation. The fiscal anschluss between republican Germany
and the German rump of the old Austria was forbidden, as was
a Danubian tariff union between the States which had con-
stituted the Hapsburg Empire. Either permitted in time .might
have saved central Europe from ruin and Nazi domination.
And with every year that passed any modification of economic
barriers between the nations became harder because of the vested
interests which grew up round even the most artificial and
restrictive trade and financial channels. In the great slump of
the 'thirties even generous Britain—fiscally the most liberal of
all States—invoked her "most favoured* nation rights to prevent
the formation of mutually beneficial low-tariff groups, first
between the Scandinavian countries and then between Holland
and Belgium.
For by a curious paradox the very insistence of Britain on the
freedom of international trade now had the effect of restricting
its free flow. A kind of intellectual petrification in its leaders
caused them to insist on the retention of the identical form of
commercial treaty employed in the days of Cobden. The "most
favoured" nation clause, which the Foreign Office still rigidly
inserted in every trade treaty, had been designed in a very different
age to prevent countries which had not adopted free trade from
obtaining concessions from which Britain was excluded. Its
object, by making it impossible for any party to it to reduce
its tariffs to another nation or nations without reducing them
to every nation with which it had ever signed a treaty, had been