The Economic Consequences of the Peace

delays. It was only possible to place this body in a position to exact the utmost year by year by giving it wide powers over the internal economic life of the enemy countries, who are to be treated henceforward as bankrupt estates to be administered by and for the benefit of the creditors. In fact, however, its powers and functions have been enlarged even beyond what was required for this purpose, and the Reparation Commission has been established as the final arbiter on numerous economic and financial issues which it was convenient to leave unsettled in the Treaty itself.134

The powers and constitution of the Reparation Commission are mainly laid down in Articles 233⁠–⁠241 and Annex II of the Reparation Chapter of the Treaty with Germany. But the same Commission is to exercise authority over Austria and Bulgaria, and possibly over Hungary and Turkey, when Peace is made with these countries. There are, therefore, analogous articles mutatis mudandis in the Austrian Treaty135 and in the Bulgarian Treaty.136

The principal Allies are each represented by one chief delegate. The delegates of the United States, Great Britain, France, and Italy take part in all proceedings; the delegate of Belgium in all proceedings except those attended by the delegates of Japan or the Serb-Croat-Slovene State; the delegate of Japan in all proceedings affecting maritime or specifically Japanese questions; and the delegate of the Serb-Croat-Slovene State when questions relating to Austria, Hungary, or Bulgaria are under consideration. Other allies are to be represented by delegates, without the power to vote, whenever their respective claims and interests are under examination.

In general the Commission decides by a majority vote, except in certain specific cases where unanimity is required, of which the most important are the cancellation of German indebtedness, long postponement of the instalments, and the sale of German bonds of indebtedness. The Commission is endowed with full executive authority to carry out its decisions. It may set up an executive staff and delegate authority to its officers. The Commission and its staff are to enjoy diplomatic privileges, and its salaries are to be paid by Germany, who will, however, have no voice in fixing them. If the Commission is to discharge adequately its numerous functions, it will be necessary for it to establish a vast polyglot bureaucratic organization, with a staff of hundreds. To this organization, the headquarters of which will be in Paris, the economic destiny of Central Europe is to be entrusted.

Its main functions are as follows:⁠—

1. The Commission will determine the precise figure of the claim against the enemy Powers by an examination in detail of the claims of each of the Allies under Annex I of the Reparation Chapter. This task must be completed by May, 1921. It shall give to the German Government and to Germany’s allies “a just opportunity to be heard, but not to take any part whatever in the decisions of the Commission.” That is to say, the Commission will act as a party and a judge at the same time.

2. Having determined the claim, it will draw up a schedule of payments providing for the discharge of the whole sum with interest within thirty years. From time to time it shall, with a view to modifying the schedule within the limits of possibility, “consider the resources and capacity of Germany⁠ ⁠… giving her representatives a just opportunity to be heard.”

   “In periodically estimating Germany’s capacity to pay, the Commission shall examine the German system of taxation, first, to the end that the sums for reparation which Germany is required to pay shall become a charge upon all her revenues prior to that for the service or discharge of any domestic loan, and secondly, so as to satisfy itself that, in general, the German scheme of taxation is fully as heavy proportionately as that of any of the Powers represented on the Commission.”

3. Up to May, 1921, the Commission has power, with a view to securing the payment of $5,000,000,000, to demand the surrender of any piece of German property whatever, wherever situated: that is to say, “Germany shall pay in such installments and in such manner, whether in gold, commodities, ships, securities, or otherwise, as the Reparation Commission may fix.”

4. The Commission will decide which of the rights and interests of German nationals in public utility undertakings operating in Russia, China, Turkey, Austria, Hungary, and Bulgaria, or in any territory formerly belonging to Germany or her allies, are to be expropriated and transferred to the Commission itself; it will assess the value of the interests so transferred; and it will divide the spoils.

5. The Commission will determine how much of the resources thus stripped from Germany must be returned to her to keep enough life in her economic organization to enable her to continue to make Reparation payments in future.137

6. The Commission will assess the value, without appeal or arbitration, of the property and rights ceded under the Armistice, and under the Treaty⁠—roiling-stock, the mercantile marine, river craft, cattle, the Saar mines, the property in ceded territory for which credit is to be given, and so forth.

7. The Commission will determine the amounts and values (within certain defined limits) of the contributions which Germany is to make in kind year by year under the various Annexes to the Reparation Chapter.

8. The Commission will provide for the restitution by Germany of property which can be identified.

9. The Commission will receive, administer, and distribute all receipts from Germany in cash or in kind. It will also issue and market German bonds of indebtedness.

10. The Commission will assign the share of the prewar public debt to be taken over by the ceded areas of Schleswig, Poland, Danzig, and Upper Silesia. The Commission will also distribute the public debt of the late Austro-Hungarian Empire between its constituent parts.

11. The Commission will liquidate the Austro-Hungarian Bank, and will supervise the withdrawal and replacement of the currency system of the late Austro-Hungarian Empire.

12. It is for the Commission to report if, in their judgment,