5. This debt must be liquidated by annual payments whose totals are to be fixed by the Commission.
6. The payments will continue for a period of thirty years, or longer if by that time the debt is not extinguished.
7. Germany will issue one hundred milliards of gold marks of bearer bonds, and afterwards all such issues as the Reparations Commission shall demand, until the amount of the debt be reached in order to permit the stabilization of credit.
8. The payments will be made in money and in kind. The payments in kind will be made in coal, live stock, chemical products, ships, machines, furniture, etc. The payments in specie consist of metal money, of Germany's credits, public and private, abroad, and of a first charge on all the effects and resources of the Empire and the German States.
9. The Reparations Commission, charged with seeing to the execution of this clause, shall have powers of control and decision. It will be a commission for Germany's debt with wider powers. Called upon to decide, according to equity, justice and good faith, without being bound by any codex or special legislation, it has obtained from Germany an irrevocable recognition of its authority. Its duty is to supervise until the extinction of the debt Germany's situation, her financial operations, her effects, her capacity for production, her provisioning, her production. This commission must decide what Germany can pay each year, and must see that her payments, added to the budget, fall upon her taxpayers at least to the extent of the allied country most heavily taxed. Its decisions shall be carried out immediately and receive immediate application, without any other formality. The commission can effect all the changes deemed necessary in the German laws and regulations, as well as all the sanctions, whether of a financial, economic or military nature arising from established violations of the clauses put under its control. And Germany is obliged not to consider these "sanctions" as hostile acts.
In order to guarantee the payments an inter-allied army—in reality a Franco-Belgian army—occupies the left bank of the Rhine, and is stationed at the bridgeheads. Germany is completely helpless, and has lost all the features of a sovereign State inasmuch as she is subject to "controls" in a way that Turkey never was. In modern history we can find no parallel for this state of things. These are conditions which alter the very bases of civilization and the relations between peoples. Such procedure has been unknown in Europe for centuries. The public has become accustomed in certain countries to consider responsible for the War not the government that wished it or the German people, but the future generations. Thus the indemnities are to be paid—were such conditions possible—in thirty years and for at least twenty years afterwards by people still unborn at the time of the War. This cursing of the guilty people has no parallel in modern history. We must go back to the early ages of humanity to find anything of the kind.
But even the most inhuman policies, such as Germany has never adopted in her victories, although she has been accused of every cruelty, can find at least some justification if they had a useful effect on the country which has wished and accepts responsibility for them. The conqueror has his rights. Julius Caesar killed millions of Germans and retarded perhaps for some centuries the invasion of Rome. But the practices established by the Treaty of Versailles are in effect equally harmful to victors and vanquished, though maybe in unequal measure, and in any case prepare the dissolution of Europe.
I had my share in arranging at San Remo the Spa Conference, in the hope and with the desire of discussing frankly with the Germans what sum they could pay by way of indemnity without upsetting their economy and damaging severely that of the Allies. But the ministerial crisis which took place in June, 1920, prevented me from participating at the Spa Conference; and the profitable action which Great Britain had agreed to initiate in the common interest, ours as well as France's, could not be proceeded with. The old mistakes continued to be repeated, though many attenuations have come about and the truth begins to appear even for those most responsible for past errors.
We shall have to examine with all fair-mindedness if Germany is in a position to pay in whole or in part the indemnity established or rather resulting from the treaty. France especially believes, or has said on several occasions she believes, that Germany can pay without difficulty 350 milliards.
After many stupidities and many exaggerations which have helped considerably to confuse the public, in face of the new difficulties which have arisen, new arrangements for the payment of the indemnity have been established. On May 11, in face of the situation which had arisen, the Allies proposed and Germany accepted a fresh scheme for the payment of the reparations. Germany is constrained to pay every year in cash and in kind the equivalent of 500 million dollars, plus 26 per cent. of the total of her exports.