2o6 THE ECONOMIC CONSEQUENCES OF THE PEACE CH.

merchant ships, including those of large tonnage,that in her own country and in the world at largeshe shall enjoy the same freedom' of action as allother peoples, that all war legislation shall be atonce annulled, and that all interferences during thewar with her economic rights and with German private property, etc., shall be treated in accordancewith the principle of reciprocity " ;—that is to say,the offer is conditional on the greater part of the restof the Treaty being abandoned. In the second place,the claims are not to exceed a maximum of £5000million, of which £1000 million is to be dischargedby May 1, 1926 ; and no part of this sum is to carryinterest pending the payment of it. 1 In the thirdplace, there are to be allowed as credits against it(amongst other things): (a) the value of all deliveriesunder the Armistice, including military material [e.g.Germany' s navy); (6) the value of all railways andState property in ceded territory; (c) the pro ratashare of all ceded territory in the German publicdebt (including the war debt) and in the Reparationpayments which this territory would have had tobear if it had remained part of Germany ; and (d)the value of the cession of Germany' s claims for sumslent by her to her allies in the war. 2

1 Assuming that the capital sum is discharged evenly over a period asshort as thirty-three years, this has the effect of halving the burden ascompared with the payments required on the basis of 5 per cent interest onthe outstanding capital.

2 I forbear to outline further details of the German offer as the above arethe essential points.