In October 1919, after I had returned to Cambridge, some Dutch financiers invited me to visit Amsterdam to discuss the situation with them; and on the 12th of October I arrived in Holland. Melchior had resigned from his position sooner than be party to the Peace Treaty. Since that time he had twice refused to become Minister of Finance in the new German State, and had quietly gone back to his banking business at Hamburg. I longed to see him again; and this was an opportunity. So from Amsterdam I caused a telegram to be sent to him saying that I should be there for a few days and would like to see him. Three days later he had arrived.
Amsterdam swarms with spies and busybodies, and it was thought better that we should not meet in a hotel. Accordingly my friend Dr. Vissering, the Governor of the Bank of the Netherlands, placed his study at our disposal. He lived in the Keizersgracht, one of those canals which, situated in concentric circles, give to Amsterdam its peculiarity. Before his house was one canal and behind his garden another. The house, one of the merchant mansions of Dutch glory, had a narrow front, but immense depth, and was so place that, bales being drawn up into the attics from barges, it could be residence and warehouse in one.
Earlier in his career Dr. Vissering had been Governor of the Bank of Java, and in his long study, running back from the window over the canal into darkness, Chino-Javanese lamps and images and cabinets, and all the ungainly bric-a-brac of a middle-class merchant from the East, overlaid the comfortable dignity of seventeenth-century Holland. No one was there; it was drizzling heavily; and I looked out over the canal. I began to wonder at the impulse which had caused me to send for Melchior, for no such idea had entered my head before I left England, and what possible purpose this interview could serve. All the same I wanted to see him immediately. At last the door opened and he came in.
It was extraordinary to meet without barriers, we two who had faced one another so often in opposition and etiquette and constraint. Those Paris negotiations seemed to be absurd and to belong to a dream; and after a moment’s emotional embarrassment we settled down to a long rambling gossip as two ordinary people. He told me of the last days of Weimar, and the struggle over the signature of the Treaty, his own resignation, how these days had been the most dreadful of all, how Erzberger had deliberately betrayed to an agent of the English Government the decision of a secret Cabinet Meeting between Noske, David and himself, in which it had been decided that in any event they must sign, and how he, Melchior, believed that it was out of a knowledge of this decision that Lloyd George finally decided to abandon his efforts towards moderation.
Melchior’s emotions were towards Germany and the falsehood and humiliation which his own people had brought on themselves, rather than towards us. I also understood most clearly, then for the first time, how dwellers in East Germany look to the East and not Westwards. The war for him had been a war against Russia; and it was the thought of the dark forces which might now issue from the Eastwards, which most obsessed him.. I also understood better than before, what a precisian he was, a strict and upright moralist, a worshipper of the Tablets of the Law, a Rabbi. The breach of promise, the breach of discipline, the decay of honorable behavior, the betrayal of undertakings by the one party and the insincere acceptance by the other of impossible conditions which it was not intended to carry out, Germany almost as guilty to accept what she could not fulfill as the Allies to impose what they were not entitled to exact – it was these offenses against The Word, which so much wounded him.
As we talked on, the morning passed and it began to seem ridiculous to me that we should not lunch together openly, like any other couple. So asked him to my hotel, where a German American Jew, Paul Warburg, brother of Melchior’s Hamburg partner, but one of the leading financiers of the United States and formerly the chief spirit of the Federal Reserve Board, was also to be my guest. We strolled out through Amsterdam, and Melchior, who know it well, took me on our way to see the courtyards of ancient almshouses, which conveyed to him, he said, most perfectly the intimate atmosphere of the town. It was a charming spot, indicative of order and retirement.
My book was not then out, and I had with me the manuscript of my chapter on the President. After lunch I read it to them. We went upstairs for privacy, this time to my bedroom not Melchior’s. I noted its effect on the two Jews. Warburg, for personal reasons, hated the President and felt a chuckling delight at his discomfiture; he laughed and giggled and thought it an awfully good hit. But Melchior, as I read, grew ever more solemn, until at the end he appeared almost to be in tears. This, then, was the other side of the curtain,; neither profound causes, nor inevitable fate, nor magnificent wickedness. The Tablets of the Law, it was Melchior’s thought at that moment, had perished meanly.
*To Keynes's dismay, Lloyd George and Clemenceau were able to pressure Wilson to agree to include pensions in the reparations bill. Towards the end of the conference, Keynes came up with a plan that he argued would not only help Germany and other impoverished central European powers but also be good for the world economy as a whole. It involved the radical writing down of war debts, which would have had the possible effect of increasing international trade all round, but at the same time thrown the entire cost of European reconstruction on the United States. Lloyd George agreed it might be acceptable to the British electorate. However, America was against the plan; the US was then the largest creditor, and by this time Wilson had started to believe in the merits of a harsh peace and thought that his country had already made excessive sacrifices. Hence despite his best efforts, the end result of the conference was a treaty which disgusted Keynes both on moral and economic grounds, and led to his resignation from the Treasury.
Two Memoirs; Dr. Melchior: A Defeated Enemy & My Early Beliefs by John Maynard Keynes; Augustus M. Kelley, New York; Rubert Hart-Davis, London 1949