accepted the responsibility of herself and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals had been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies. That State was thus obliged incidentally to undertake to make compensation for all damage done to the civilian population of the Allied and Associated Powers and to their property during the period of the belligerency of each as an Allied or Associated Power against Germany by such aggression by land, by sea and from the air, and in general all damage as defined in a particular Annex of the treaty.2 The amount of the damage was to be determined by an Inter-Allied Commission to be called the

1 Art. 251.

2 Art. 232. It was declared in Annex I (following Art. 244) that compensation might be claimed from Germany under Art. 232 in respect of the total damage under the following categories:

"(1) Damage to injured persons and to surviving dependents by personal injury to or death of civilians caused by acts of war, including bombardments or other attacks on land, on sea, or from the air, and all the direct consequences thereof, and of all operations of war by the two groups of belligerents wherever arising.

"(2) Damage caused by Germany or her allies to civilian victims of acts of cruelty, violence or maltreatment (including injuries to life or health as a consequence of imprisonment, deportation, internment or evacuation, or exposure at sea or of being forced to labour), wherever arising, and to the surviving dependents of such victims.

"(3) Damage caused by Germany or her allies in their own territory or in occupied or invaded territory to civilian victims of all acts injurious to health or capacity to work, or to honour, as well as to the surviving dependents of such victims.

"(4) Damage caused by any kind of maltreatment of prisoners of war. "(5) As damage caused to the peoples of the Allied and Associated Powers, all pensions and compensation in the nature of pensions to naval and military victims of war (including members of the air force), whether mutilated, wounded, sick or invalided, and to the dependents of such victims, the amount due to the Allied and Associated Governments being calculated for each of them as being the capitalised cost of such pensions and compensation at the date of the coming into force of the present Treaty on the basis of the scales in force in France at such date.

"(6) The cost of assistance by the Governments of the Allied and Associated Powers to prisoners of war and to their families and dependents.

"(7) Allowances by the Governments of the Allied and Associated Powers to the families and dependents of mobilised persons or persons serving with the forces, the amount due to them for each calendar year in which hostilities occurred being calculated for each Government on the basis of the average scale for such payments in force in France during that year.

"(8) Damage caused to civilians by being forced by Germany or her allies to labour without just remuneration.

"(9) Damage in respect of all property wherever situated belonging to any of the Allied or Associated States or their nationals, with the exception of naval and military works or materials, which has been carried off, seized, injured or destroyed by the acts of Germany or her allies on land, on sea or from the air, or damage directly in consequence of hostilities or of any operations of war.

"(10) Damage in the form of levies, fines and other similar exactions imposed by Germany or her allies upon the civilian population."

THE GENERAL THEORY OF REPARATION

[§ 298 Reparation Commission, for the constitution and powers of which elaborate provision was made.1 The function of that body (which was not to be dissolved until all the amounts due from Germany and her allies, under the treaty or the decisions of the Commission, should have been discharged, and all sums received, or their equivalents, should have been distributed to the Powers interested) was not only to determine the amount of damage chargeable to Germany, but also to fix, according to the resources and capacity of that State, the time and form of payment. It was recognized that the resources of Germany were not adequate, after taking into account permanent diminutions which would result from certain provisions of the treaty, to furnish complete reparation for the loss and damage for which that State was burdened with responsibility. It was perceived that complete satisfaction of the obligation would necessarily consume much time, and require a degree of flexibility of treatment of the obligor which could best be applied through the instrumentality of the Commission. Upon that body were, therefore, conferred vast discretionary powers. It was declared also that the insufficiency of the resources of German territory rendered it imperative that the German Government should be called upon to exercise its functions to place within reach of the Allied and Associated Powers assets of various kinds outside of its domain and which that Government might assert the right to control and utilize for its own benefit.1

In establishing a plan of compensation for losses, it was insisted that Germany should make restitution of tangible things which had been seized when it was possible to identify them in territory belonging to Germany or her allies, and that without allowing

1 Art. 233. The provisions for the Reparation Commission referred to therein were set forth in Annex II (between Arts. 244 and 245). It may be noted that according to Section 10 of this Annex the Commission is to consider the claims and to give to the German Government a just opportunity to be heard, but not to take any part whatever in the decision of the Commission. A similar opportunity is to be afforded the allies of Germany, when the Commission considers that their interests are in question.

Paragraph 11 of the Annex declares that the Commission shall not be bound by any particular code or rules of law or by any particular rule of evidence or of procedure, but shall be guided by justice, equity and good faith. It is said that its decisions must follow the same principles and rules in all cases where they are applicable. It is, moreover, to establish rules relating to methods of proof of claims. It is empowered to act on any trustworthy modes of computation.

3 Art. 232.

2 Arts. 233 and 234. See Reply of the Allied and Associated Powers to the Observations of the German Delegation on the Conditions of Peace (accompanying letter of M. Clemenceau, President of the Peace Conference, to Count Brockdorff-Rantzau, President of the German Delegation, June 16, 1919), Misc. No. 4, 1919 [Cmd. 258], pp. 32-36, 47-49.

credit for so doing on account of the general reparation due.1 This principle operating as a check upon credits otherwise to be claimed was given numerous specific applications. These appeared to lack uniformity, by reason of the variety of the modes by which reparation was to be made.2

In fixing broadly the methods by which reparation should be effected and available assets utilized to that end, the Allied and Associated Powers compelled Germany to agree to pursue primarily the following courses: to pay at an early date, in gold (or in such other manner as the Reparation Commission might determine) a specified sum,3 to be followed from time to time by other payments, with a view to satisfying the entire fiscal obligation within thirty years from May 1, 1921; 4 as a measure of partial reparation, to make direct application of her economic resources to replace merchant shipping and fishing boats lost or

1 Thus according to Art. 238, Germany was obliged to effect "restitution in cash of cash taken away, seized or sequestrated, and also restitution of animals, objects of every nature and securities taken away, seized or sequestrated, in the cases in which it proves possible to identify them in territory belonging to Germany or her allies." The procedure for so doing was to be laid down by the Reparation Commission. See, also, Art. 243.

2 Art. 243 announced certain credits to be allowed to Germany in respect of her reparation obligations.

The terms on which the numerous and varied transfers of property as such were to be made, commonly indicated whether credit was to result on account of reparation. Cessions of territory do not appear generally to have been regarded as furnishing a basis of credit.

See, in this connection, J. R. Clark, Jr., "Data on German Peace Treaty", presented to the Committee on Foreign Relations, United States Senate, 66 Cong., 1 Sess., in which that author has pointed out the design as to credit, with respect to each relevant Article of the treaty.

3 Art. 235. It should be observed that out of such sum the expenses of the armies of occupation subsequent to the Armistice of November 11, 1918, were first to be met. It was provided also that such supplies of food and raw material as might be judged by the Governments of the Principal Allied and Associated Powers to be essential to enable Germany to meet her obligations for reparation might also, with the approval of those Governments, be paid out of the same sum. The balance was to be reckoned towards liquidation of the amounts due for reparation. In the same Article it was agreed that Germany should deposit further bonds as prescribed in paragraph 12(c) of Annex II of Part VIII of the treaty.

4 Art. 233. It was here announced that the findings of the Commission as to the amount of damage should be notified to the German Government on or before May 1, 1921, as representing the extent of that Government's obligations.

Agreement was made in the same Article for the issuance of bonds by Germany to cover by way of guarantee and acknowledgment such part of its debt due on account of proved claims, as might not be paid in gold, or in ships, securities and commodities, or otherwise. See paragraph 12 of Annex II, Part VIII. This Annex contained elaborate provision for the plan by which Germany should, from time to time, under the direction of the Reparation Commission, issue further bonds by way of acknowledgment and security.

See Art. 237 with reference to the division by the Allied and Associated Governments of successive installments of moneys paid by Germany.

THE GENERAL THEORY OF REPARATION

[§ 298 damaged through the war,1 to make physical restoration of invaded areas, to furnish coal and derivatives of coal, to deliver, if required, dyestuffs and chemical drugs; to possess itself, upon demand of the Reparation Commission within a fixed time, of rights and interests of German nationals in public utility undertakings or concessions operating in the territories of specified countries, and transfer the same, if acquired, to the Reparation Commission; to deliver sums of gold deposited in Germany by Turkish authorities for purposes defined, embracing any title of Germany therein, and to transfer any sums in gold transferred to the German Government as a pledge or collateral security for loans to the Austro-Hungarian Government; to transfer any claims which Germany might have to certain payments or repayments by the Governments of Austria, Hungary, Bulgaria or Turkey; and to acquiesce generally in the utilization of the

7

5

1 Art. 236, and also Annex III of Part VIII. In this Annex Germany recognized the right of the Allied and Associated Powers to the replacement, ton for ton (gross tonnage) and class for class, of all merchant ships and fishing boats lost or damaged owing to the war. The German Government undertook 'on behalf of themselves and so as to bind all other persons interested", to cede to the Allied and Associated Governments the property in all German merchant ships of 1600 tons gross and upwards, as reckoned in a specified manner of division. Germany undertook also, among other things, to cause to be built in German yards for the account of the Allied and Associated Governments an amount of tonnage to be laid down within a specified period of years and under the direction of the Reparation Commission.

2 Annex IV of Part VIII, in which the plan of physical restoration of invaded areas was elaborated.

3 Annex V, Part VIII.

Annex VI, Part VIII. See, also, so-called Special Provisions embraced in Arts. 245, 246 and 247, with reference to the restoration to the French Government, to the King of the Hedjaz, and to Belgium, respectively, of certain tangible articles. By Art. 247, Germany undertook also to furnish to the University of Louvain manuscripts, incunabula, printed books, maps and objects of collection corresponding in number and value to those destroyed in the burning by Germany of the Library of Louvain.

5 Art. 260. The countries specified were Russia, China, Turkey, Austria, Hungary and Bulgaria, as well as their possessions or dependencies, and also any territory formerly belonging to Germany or her allies, to be ceded by Germany or her allies to any Power, or to be administered by a Mandatory under the treaty.

It should be noted that Germany agreed to assume responsibility for indemnifying her nationals so dispossessed.

Art. 259. In the same Article Germany undertook to transfer, either to Roumania or to the Principal Allied and Associated Powers, as the case might be, all monetary instruments, specie, securities and negotiable instruments, or goods, which she had received under the treaties of Bucharest and of Brest-Litovsk. According to this Article Germany recognized an obligation to make annually for the period of twelve years the payments in gold "for which provision is made in the German Treasury Bonds deposited by her from time to time in the name of the Council of the Administration of the Ottoman Public Debt as security for the second and subsequent issues of Turkish Government currency notes."

7 Art. 261. Particular reference was here made to "any claims which may

property of German nationals in territories of the Allied and Associated Powers, in satisfaction of claims of their nationals.1

The foregoing requirements, which were supplemented by numerous others providing for special undertakings in relation to particular matters, indicate the scope of the general obligation assumed and the plan of its fulfillment. The treaty established the theory of liabilities, leaving for solution questions respecting the amount of damage sustained by the Allied and Associated Powers. In performing the task of estimating the extent of that damage, and of regulating the times and modes of making compensation for it, the Reparation Commission appears to have been designed to exercise an administrative rather than a judicial function.

(b)

§ 299. Adjustment of Claims of Nationals of Allied and Associated Powers.

The treaty made provision that the nationals of Allied and Associated Powers should be entitled to compensation in respect of damage or injury inflicted upon their property, rights or interests, including any company or association in which they were interested, in German territory as it existed August 1, 1914, by the application of exceptional war measures or measures of transfer.3 It was declared that such claims should be investigated and the amount of compensation determined by the Mixed Arbitral Tribunal (provided for in Section VI of Part X), or by an arbitrator appointed by the Tribunal. It seems important to observe that while such compensation was to be borne by Germany, it was agreed that it might be charged upon the property of German nationals within the territory or under the control of the claimant's State, and that such property might be constituted as a pledge arise, now or hereafter, from the fulfillment of undertakings made by Germany during the war to those Governments."

1 Art. 297 (b), (e) and (i). By this Article Germany undertook to compensate her nationals in respect of the sale or retention of their property, rights or interests in Allied or Associated States. See, also, Art. 252.

2 See, for example, the provisions of Art. 232, whereby Germany, in accordance with pledges previously given, as to the complete restoration of Belgium, in addition to compensation for damage elsewhere provided for, as a consequence of a violation of the Treaty of 1839, undertook “to make reimbursement of all sums which Belgium has borrowed from the Allied and Associated Governments up to November 11, 1918, together with interest at the rate of five per cent. (5%) per annum on such sums."

3 Such measures were defined in paragraphs 1 and 3 of the Annex following

Art. 298.

4 Art. 297 (b) and (e).