IV

THE TREATY

67

within whose jurisdiction the liquidation takes place,and, second, to the satisfaction of claims arising outof the acts of Germany 's former allies. Any balance,if the liquidating Government elects to retain it,must be credited in the Reparation account. 1 It is,however, a point of considerable importance that theliquidating Government is not compelled to transferthe balance to the Reparation Commission, but can,if it so decides, return the proceeds direct toGermany. For this will enable the United States, if they so wish, to utilise the very large balances, inthe hands of their enemy-property custodian, to payfor the provisioning of Germany, without regard tothe views of the Reparation Commission.

These provisions had their origin in the scheme forthe mutual settlement of enemy debts by means of aClearing House. Under this proposal it was hopedto avoid much trouble and litigation by making eachof the Governments lately at war responsible for thecollection of private debts due from its nationals tothe nationals of any of the other Governments (thenormal process of collection having been suspended byreason of the war), and for the distribution of the fundsso collected to those of its nationals who had claimsagainst the nationals of the other Governments, anyfinal balance either way being settled in cash. Sucha scheme could have been completely bilateral andreciprocal. And so in part it is, the scheme being

1 Part X. Sections III. and IV. and Art. 243.