[Sidenote:  Germany’s capacity to pay.]

The commission shall consist of one representative each of the United States, Great Britain, France, Italy, and Belgium, a representative of Serbia or Japan taking the place of the Belgian representative, when the interests of either country are particularly affected, with all other allied powers entitled, when their claims are under consideration, to the right of representation without voting power.  It shall permit Germany to give evidence regarding her capacity to pay, and shall assure her a just opportunity to be heard.  It shall make its permanent headquarters at Paris, establish its own procedure and personnel; have general control of the whole reparation problem; and become the exclusive agency of the Allies for receiving, holding, selling, and distributing reparation payments.  Majority vote shall prevail, except that unanimity is required on questions involving the sovereignty of any of the Allies, the cancellation of all or part of Germany’s obligations, the time and manner of selling, distributing, and negotiating bonds issued by Germany, any postponement between 1921 and 1926 of annual payments beyond 1930 and any postponement after 1926 for a period of more than three years of the application of a different method of measuring damage than in a similar former case, and the interpretation of provisions.  Withdrawal from representation is permitted on twelve months’ notice.

[Sidenote:  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.

[Sidenote:  Interest on Germany’s debt.]

[Sidenote:  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.