64

A REVISION OF THE TREATY

CHAP.

3. The Provisions for Payment in Cash and Kind —The Bonds and. the Guarantees are apparatus andincantation. We come now to the solid part of thesettlement, the provisions for payment.

Germany is to pay in each year, until her aggregateliability is discharged :

(1) Two milliard gold marks. 1

(2) A sum equivalent to 26 per cent of the valueof her exports, or alternatively an equivalent amountas fixed in accordance with any other index proposedby Germany and accepted by the Commission.

(1) is to be paid quarterly on January 15, April 15,July 15, and October 15 of each year, and (2) is tobe paid quarterly on February 15, May 15, August15, and November 15 of each year.

This sum, calculated on any reasonable estimateof the future value of German exports, is materiallyless than the original demands of the Treaty .Germany's total liability under the Treaty amountsto 138 milliard gold marks (inclusive of the liabilityfor Belgian debt). At 5 per cent interest and 1 percent sinking fund, the annual charge on this wouldbe 8-28 milliard gold marks. Under the new scheme

1 Germany' s liabilities are all fixed in terms of gold marks. The valueof gold in terms of sterling varies, broadly speaking, with the fluctuationsin the dollar sterling exchange. The following table is convenient forconverting gold marks into sterling :

Dollar Sterling Exchange. Value in Sterling of 2000 Gold Marks.

4-524143-823-55

£110£120£130£140