Guarantees to cover claims.
The Commission may require Germany to give from time to time by way of guarantee, issues of bonds or other obligations to cover such claims as are not otherwise satisfied. In this connection and on account of the total amount of claims, bond issues are presently to be required of Germany in acknowledgment of its debt as follows: 20,000,000,000 marks gold, payable not later than May 1, 1921, without interest; 40,000,000,000 marks gold bearing 2-1/2 per cent interest between 1921 and 1926, and thereafter 5 per cent, with a 1 per cent sinking fund payment beginning 1926; and an undertaking to deliver 40,000,000,000 marks gold bonds bearing interest at 5 per cent, under terms to be fixed by the Commission.
Interest on Germany's debt.
Certificates to represent bonds or goods.
Interest on Germany's debt will be 5 per cent unless otherwise determined by the Commission in the future, and payments that are not made in gold may "be accepted by the Commission in the form of properties, commodities, businesses, rights, concessions, &c." Certificates of beneficial interest, representing either bonds or goods delivered by Germany, may be issued by the Commission to the interested powers, no power being entitled, however, to have its certificates divided into more than five pieces. As bonds are distributed and pass from the control of the Commission, an amount of Germany's debt equivalent to their par value is to be considered as liquidated.
SHIPPING
Right to Allies to have merchant shipping replaced.
The German Government recognizes the right of the Allies to the replacement, ton for ton and class for class, of all merchant ships and fishing boats lost or damaged owing to the war, and agrees to cede to the Allies all German merchant ships of 1,600 tons gross and upward; one-half of her ships between 1,600 and 1,000 tons gross, and one-quarter of her steam trawlers and other fishing boats. These ships are to be delivered within two months to the Separation Committee, together with documents of title evidencing the transfer of the ships free from encumbrance.
"As an additional part of reparation," the German Government further agrees to build merchant ships for the account of the Allies to the amount of not exceeding 200,000 tons gross annually during the next five years.
All ships used for inland navigation taken by Germany from the Allies are to be restored within two months, the amount of loss not covered by such restitution to be made up by the cession of the German river fleet up to 20 per cent thereof.