29 creditor Powers should also decide to cancel the C bonds which would be made over to them. ‘ As regards the condition of payment of the German reparations debt, as fixed by the schedule of payments or as eventually reduced subjeet to the hypothesis above mentioned, the French Government is of opinion that it is in the common interest of the Allies and of Germany to insure payment within a briefer space of time than that contemplated for the redemption of the A and B bonds. The French Government therefore admits that the payments which it is anticipated that Germany would make should be discounted to her at an aquitable rate to a date to be fixed. In view of Germany’s actual inability to make such payments upon an ap- preciable scale, except from the yield of loans contracted by her abroad, the French Government considers that the Allied Governments should by every means in their power facilitate the issue of these loans. Moreover, it is of opinion that such loans would be possible in the very near future, as substantial securities could at once be procured in Germany for the service of limited loans and as the appropriation of these securities to such loans could be effectively controlled by the guaranties committee, to which would be added, in harmony with the. provisions of article 6 of the schedule of payments, representatives of the subscribers. An extensive mobilization of the German debt could not, however, be brought about until order is reestablished in German finance, subject to the conditions and to the control indicated in the following chapter. REORGANIZATION OF GERMAN FINANCES The French Government is of the opinion that the program of reorganization ’f German finance ought to include the following essential articles: (A) 1. Elaboration by the German Government of a plan of stabilization of German currency to be submitted to the approval of the Reparation Commis- sion entailing no intervention upon the money market beyond such as will be necessary to maintain the value of the mark in foreign exchanges at the rate recorded at the beginning of operations until the internal value currency has fallen to a rate bordering upon the foreign value which will remain constant. 2. Measures to be immediately adopted to restore the equilibrium of the Ger- man budget and to maintain that equilibrium by progressively introducing into the expenditure the credits necessary to enable Germany to discharge her reparation debt. . 3. The stoppage of the discounting of treasury bills by the Reichsbank from the beginning of the application of the plan of stabilization. Provision would be made for the needs of the Reich which would not be provisionally covered by normal receipts by means of the issue of internal loans in gold. 4. Strengthening of the measure designed to prevent the flight of capital abroad and the hoarding of foreign securities at home. (B) Organization of the control of the application of the foregoing provi- sions by the guaranties committee subject to the following conditions : (2) A complete plan of legislative and administrative measures will be adopted by the German Government in agreement with the Reparation Com- mission. The German Government will undertake immediately to lay this plan before the Reichstag, and so far as is necessary before the assemblies of the States, which must support it and undertake not to modify it excepting in agreement with the guaranties committee. (b) The guaranties committee will be placed in a position to follow the execution of this program and more particularly at any moment respecting every detail and every stage, to know the state of the administration of the finances of the Reich and of the States. For this purpose it may have recourse to every method of investigation which it judges useful. It may prohibit all expenditure which it considers inopportune and prescribe any increase of rev- enue deemed possible by it and designed to enable Germany to meet the reparation charges. It will exercise over the Reichsbank and all other organi- zations called upon to cooperate in the modification of the German currency régime the control necessary to assure the execution of the scheme of reform approved by the Reparation Commission. (¢) If the program contemplated above is not voted within the period fixed by the Allied Governments, if the obligations mentioned are not assumed, or if they are not kept, or, finally, if the German Government does not at once conform