17 
marks to be issued forthwith repayable at par on December 81, 1954, and 
bearing interest at the rate of 5 per cent ner annum payable half-yearly, the 
nterest to be suspended in its entirety for the first four years (until January 
L, 1927), and to the extent of 1 per cent per annum for the next four years 
(until January 1, 19381); (b) second ieries bonds to the amount of 17.31 
milliard gold marks (being the amount of the deferred interest on the bonds 
of the first series compounded at 5 per cent to April 1, 1933), or such lesser 
tmount (if any) as the arbitral tribunal provided for in paragraph 3 may 
determine, to be issued on April 1, 1933, repayable at par on March 31, 1965, 
and bearing interest at 5 per cent per annum payable half-yearly. 
If at any time before January 1, 1927, the supervising authority provided 
for in paragraph 2 decides unanimously that the condition of German finances 
is such that cash payments for reparation can be commenced, Germany to pay 
in cash such sums as the authority may prescribe in each of the calendar years 
1925 and 1926, not exceeding 2 milliard gold marks in either year. 
Any such payments to be applied to the concellation of first series bonds 
at redemption price or otherwise in reduction of the aggregate liability under 
the preceding paragraph as the supervising authority may direct. 
3. If before April 1, 1933, Germany proves to the satisfaction of an arbitral 
cribunal that the payments required to meet the interest upon the second 
series of bonds exceed her capacity, her obligation to issue such honds to be 
cancelled in whole or in part as the tribunal may decide. 
The arbitral tribunal to be appointed upon application hy the German Gov- 
ernment, to be made not later than October 1, 1932, and to consist of one per- 
son nominated by the Reparation Commission, one person nominated by the 
German Government, and a third by agreement between the other two, or, in 
default of agreement, by the President of the United States of America. 
4. The bonds issued and to be issued under paragraph 2 to be accepted by the 
Allied Governments in commutation of all financial liabilities of the German 
Government remaining undischarged on December 31, 1922, under the treaty 
of Versailles to powers which have ratified that treaty, including all liabilities 
ander agreements with particular powers in commutation of treaty obligations, 
but excluding the treasury bills issued to Belgium in respect of the last five 
installments of the cash payments due in 1922. 
Germany to pay at maturity the bills issued to Belgium in respect of the 
first two of these five installments, those issued in respect of the remaining 
shree installments to be canceled and the amounts thereof recredited to 
Belgium. 
Treaty obligations to make deliveries of coal, dyestuffs, timber, ete, to con- 
tinue, subject to the various conditions in regard to quantities and prices 
laid down in the treaty. Such deliveries (in so far as they may exceed new 
annual maxima to be agreed) to be paid for by the respective receiving powers 
in eash, unless otherwise agreed between Germany and the power concerned, 
All deliveries within the new annual maxima, or which may be made the sub- 
ject of such special agreement, to he paid for by the receiving power hy set- 
off against the interest receivable upon the bonds held by it, or (until such 
interest payments have begun or in so far as they may be insufficient) by 
surrender at redemption price of bonds for cancellation. 
5. Germany to have the right to redeem bonds of the first series as on any 
interest date after June 30, 1923, at the price shown in scheduel © A 
As soon as, but not hefore, the first series of bonds has been redeemed, Ger- 
many to have the right to redeem bonds of the second series as on any inter- 
est date at a discount of three-eichths of 1 per cent for each unexpired half 
year. 
Redemption of both series at more favorable rates to be permissible by 
Agreeinent between Germany and the respective powers interested subiect to 
the approval of the Reparation Commission. 
The bonds to be negotiable as between the Governments of the powers to 
which they are issued and as between these Governments and the Reparation 
Commission, but not otherwise, except with the specific sanction of the Repa- 
ration Commission.’ Redemption to be effected by direct agreement between 
‘he German Government and the respective hondholders. In default of 
® The intention is that these bonds should in no case he placed on the market, the 
‘ mobilization ” of the German debt being effected exclusively by the Botation of German 
loans to effect the redemption of the original bonds. The exception is introduced to 
provide for the contingency of the United States Government agreeing to accept the 
honds in pavment of debts owing to the United States.