Germanyʼs obligation being stated in terms of gold and not in terms of commodities, provision has necessarily been made in all cases for crediting Germany, from time to time, with the fair value, as assessed by the Reparation Commission, of such deliveries. Moreover, since the proportions received by the respective Powers in kind need not necessarily correspond exactly with their respective shares in Germanyʼs reparation payments, as determined by Inter–Allied agreement, provision is further necessarily made in the Treaty to render each Power accountable not only to Germany, but to the Reparation Commission, for the value of these deliveries. Thus, on the one hand, the Treaty stipulates as between the Allies and Germany that the value of services under the Annexes shall be credited towards the liquidation of Germanyʼs general obligation, and the Schedule of Payments assigns the value of Annex deliveries to the service of the bonds handed over by Germany as security for her debt. On the other hand, the Treaty provides that for the purpose of equitable distribution as between the Allies, the value of Annex deliveries shall be reckoned in the same manner as cash payments effected in the year, and the Schedule of Payments stipulates that the value of the deliveries received by each Power shall, within one month of the date of delivery, be paid over to the Reparation Commission, either in cash or in current coupons.
Further, the Treaty imposes upon the Reparation Commission not only the duty of fixing prices, but also of determining the capacity of Germany to deliver goods demanded by any of the Allies, and, by implication, of deciding between the competing demands which are made upon that capacity by the Allies themselves.
The Wiesbaden Agreement provides for the delivery by a German company[116] to French “sinistrés” of “all plant and materials compatible with the productive capacity of Germany, her supply of raw materials and her domestic requirements,” that is to say, of the articles and materials which can be demanded under Annex IV. and Paragraph 19 of Annex II., which are, by the terms of the Agreement, in so far as France is concerned, virtually suspended, the obligations of Germany to deliver to France under the other Annexes remaining unaffected.
Any question as to the capacity of Germany to satisfy the requirement of France, and all questions of price, are to be settled by a Commission of three members, one French and one German, and a third selected by common agreement or nominated by the Swiss President.
The aggregate value of the deliveries to be made under the Agreement, and of the deliveries to be made under Annexes III., V. and VI. (hereafter, for the sake of brevity, called the “Annex deliveries”) in the period expiring on the 1st May 1926, is fixed at a maximum of 7 milliard gold marks.
In regard to the Annex deliveries the Agreement in no way modifies the Treaty provisions under which Germany is credited and France debited forthwith with the value, but special provisions, which are financially the essential part of the Agreement, are made for bringing to reparation account the value of the Agreement deliveries. These special provisions are designed to secure that Germany shall only be credited on reparation account at the time of delivery with a certain proportion of them, and that deliveries not thus accounted for, which may be called “excess deliveries,” shall be liquidated over a period of years beginning at the earliest on 1st May 1926. The provisions themselves are somewhat intricate, comprising, as they do, a series of interacting limitations, and they require some elucidation.
(1) In no case is credit to be given to Germany in any one year for Annex and Agreement deliveries together to an amount exceeding one milliard gold marks.
(2) In no case is credit to be given to Germany in any one year for more than 45 per cent of the value of the Agreement deliveries or for more than 35 per cent if the value of the Agreement deliveries exceeds one milliard gold marks.
The effect of the above is to prescribe that 55 per cent (or, if the Agreement operates successfully, 65 per cent) of the value of the Agreement deliveries as a minimum will be the object of deferred payment by instalments. If the Agreement deliveries reached really high figures, the operation of the milliard limitation would make the carry forward much more than 65 per cent.
The excess deliveries are to be liquidated with interest at 5 per cent per annum in 10 equal annual instalments as from 1st May 1926, subject to certain conditions:—