There is no question that the reparation problem exists solely in the case of Germany, who has still a powerful statal framework which allows her to maintain great efforts, capable not only of providing her with the means of subsistence, but also of paying a large indemnity to the victors.  The other vanquished States are more in need of succour than anything else.

What are the reparations?

Let us follow the precis of them which a representative of France made at the signing of the Treaty of Versailles.  They are as follows: 

1.  Germany is responsible for the total of the losses and damages sustained by her victors inasmuch as she caused them.

2.  Germany, in consideration of the permanent diminution of her resources, resulting from the Peace Treaty, is only obliged (but is obliged without restitutions or reserves) to reimburse the direct damages and the pensions as precised in Schedule I of Clause viii of the treaty.

3.  Germany must pay before May 1, 1921, not less than twenty milliards of gold marks or make equivalent payment in kind.

4.  On May 1 the Reparations Commission will fix the total amount of the German debt.

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.