The German offer of an alleged sum of $25,000,000,000 amounted to the following.  In the first place it was conditional on concessions in the Treaty insuring that “Germany shall retain the territorial integrity corresponding to the Armistice Convention,[140] that she shall keep her colonial possessions and merchant ships, including those of large tonnage, that in her own country and in the world at large she shall enjoy the same freedom of action as all other peoples, that all war legislation shall be at once annulled, and that all interferences during the war with her economic rights and with German private property, etc., shall be treated in accordance with the principle of reciprocity";—­that is to say, the offer is conditional on the greater part of the rest of the Treaty being abandoned.  In the second place, the claims are not to exceed a maximum of $25,000,000,000, of which $5,000,000,000 is to be discharged by May 1, 1926; and no part of this sum is to carry interest pending the payment of it.[141] In the third place, there are to be allowed as credit against it (amongst other things):  (a) the value of all deliveries under the Armistice, including military material (e.g. Germany’s navy); (b) the value of all railways and State property in ceded territory; (c) the pro rata share of all ceded territory in the German public debt (including the war debt) and in the Reparation payments which this territory would have had to bear if it had remained part of Germany; and (d) the value of the cession of Germany’s claims for sums lent by her to her allies in the war.[142]

The credits to be deducted under (a), (b), (c), and (d) might be in excess of those allowed in the actual Treaty, according to a rough estimate, by a sum of as much as $10,000,000,000, although the sum to be allowed under (d) can hardly be calculated.

If, therefore, we are to estimate the real value of the German offer of $25,000,000,000 on the basis laid down by the Treaty, we must first of all deduct $10,000,000,000 claimed for offsets which the Treaty does not allow, and then halve the remainder in order to obtain the present value of a deferred payment on which interest is not chargeable.  This reduces the offer to $7,500,000,000, as compared with the $40,000,000,000 which, according to my rough estimate, the Treaty demands of her.

This in itself was a very substantial offer—­indeed it evoked widespread criticism in Germany—­though, in view of the fact that it was conditional on the abandonment of the greater part of the rest of the Treaty, it could hardly be regarded as a serious one.[143] But the German Delegation would have done better if they had stated in less equivocal language how far they felt able to go.