V

REPARATION

arising out of it, which will be quite beyond thecapacity of any such body. If the Reparation Com-mission makes any serious attempt to administer thecollection of this sum of £1,000,000,000, and toauthorise the return to Germany of a part of it,the trade of Central Europe will be strangled bybureaucratic regulation in its most inefficient form.

2. In addition to the early payment in cash orkind of a sum of £1,000,000,000, Germany isrequired to deliver bearer bonds to a further amountof £2,000,000,000, or, in the event of the paymentsin cash or kind before May 1, 1921, available forReparation, falling short of £1,000,000,000 by reasonof the permitted deductions, to such further amountas shall bring the total payments by Germany incash, kind, and bearer bonds up to May 1, 1921,to a figure of £3,000,000,000 altogether. 1 Thesebearer bonds carry interest at 2-| per cent per annumfrom 1921 to 1925, and at 5 per cent plus 1 percent for amortisation thereafter. Assuming, therefore,that Germany is not able to provide any appreciablesurplus towards Reparation before 1921, she will haveto find a sum of £75,000,000 annually from 1921 to1925, and £180,000,000 annually thereafter. 2

1 This is the effect of Para. 12 (c) of Annex II. of the ReparationChapter, leaving minor complications on one side. The Treaty fixes thepayments in terms of gold marks, "which are converted in the above at therate of 20 to £1.

2 If, per impossibile, Germany discharged £500,000,000 in cash or kindby 1921, her annual payments would be at the rate of £62,500,000 from1921 to 1925 and of £150,000,000 thereafter.