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32 A REVISION OF THE TREATY chap.

VI. The Second Conference of London(April 29-May 5, 1921)

The next two months were stormy. The Sanctionsembittered the situation in Germany without pro-ducing any symptoms of surrender in the German Government. Towards the end of March the lattersought the intervention of the United States andtransmitted a new counter - proposal through theGovernment of that country. In addition to beingstraightforward and more precise, this offer wasmaterially better than that of Dr. Simons in London at the beginning of the month. The chief provisions 1were as follows :

1. The German liability to be fixed at£2,500,000,000(gold) present value.

2. As much of this as possible to be raised imme-diately by an international loan, issued on attractiveterms, of which the proceeds would be handed overto the Allies , and the interest and sinking fund onwhich Germany would bind herself to meet.

3. Germany to pay interest on the balance at 4 percent for the present.

4. The sinking fund on the balance to vary withthe rate of Germany 's recovery.

5. Germany , in part discharge of the above, totake upon herself the actual reconstruction of thedevastated areas on any lines agreeable to the Allies ,

1 The full text is given in Appendix No. V.