(7) Separation allowances on the French scale.

(8) Damage done to property-other than naval and military works or materials—directly in consequence of hostilities, and damage suffered by Allied nationals, through the seizure or injury of their property, wherever situated, by Germany or her allies.

(9) Fines, levies, and exactions imposed by Germany or her allies on the civilian population.

6. (a) Damage by Germany's Allies. The specific categories of damage here enumerated do not in all respects correspond with the general description of the damage for which Germany undertakes to make reparation by the terms of Article 232. In the first place Article 232 makes no specific mention of the damage caused by Germany's Allies. It is true that under Article 231 Germany and her Allies are declared to be jointly responsible for all war damage, but the financial liability of Germany is described in Article 232 without any specific statement that Germany is to be made financially responsible for damage caused by others than herself.

(b) Indirect Damage. Germany undertakes that she will make compensation for all damage done to the civilian population .. Besides omitting to mention by whom the damage must have been done, these words fail to distinguish between direct and indirect damage, and the Treaty does not in fact anywhere determine how far it is permissible to trace out the ulterior consequences of war losses and to charge them to Germany's account if they arise out of damage falling within the categories of admissible claims.

The question would have been of very great importance if the losses due to unrestricted submarine warfare had been charged to Germany's account. It may still be raised both in regard to categories where indirect damage is not mentioned, and in connexion with the assessment of indirect damages where they are definitely allowed by the Treaty. If the ulterior consequences of direct losses were to be traced out indefinitely, large amounts might be involved and estimates might be expected to vary considerably.

(c) Damage to Civilians. The most striking difference between the general description of the claims in Article 232 and their particular enumeration in Annex I, is in regard to damages suffered by combatants. These are formally excluded from

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the general statement of Germany's liabilities quoted above, though they are of course included among the injuries for which Germany accepts moral responsibility by Article 231. It may be held that, though excluded by the general description damage done to the civilian population', they are covered by the addition at the end of Article 232 of the words and in general all damage as defined in Annex I hereto. The accepted canons of legal interpretation would scarcely admit of the contention that and in general' here means and in addition', or that this phrase extends the limits of the claim as already defined. But it may, none the less, be taken for granted that in practice the terms of the Annex will in this case be held to override the main Treaty text. Differences of principle which had to be reconciled are here seen imperfectly fused together in the terms of Peace.

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7. Impossibility of confident Interpretation. In a document of so wide a scope, dealing-especially in these chapters-with a subject-matter so necessarily complicated, and compiled, as we know the Treaty was compiled, in many separate parts by different people, it was perhaps inevitable that obscurities and inconsistencies should remain. They serve to emphasize the fact that international legislation of this kind stands in need, at least as much as national legislation, of the interpretation of the Courts and of development and modification by the authorities who are charged to administer it. They should also tend still further to diminish the confidence with which any one at this date can say what the Treaty, with its network of clauses, annexes, protocols, and provisos will be held to mean. Even if this were known it would not follow that its practical effect could be foretold.

8. The Determination of Claims. The Treaty, then, lays down not what Germany is to pay but what Germany is to pay for. But it also prescribes the method by which the amount that Germany is to pay shall be determined. The amount of the reparation claims admissible against Germany under the Treaty is to be determined by the Reparation Commission. The Commission must before the 1st May 1921,1 notify to Germany both the total amount of reparation eventually to be paid and the time and manner for securing and discharging the entire obligation within a period of thirty years from that date.

1 Article 233.

The Commission, in making its notification, need not specify the manner in which this total amount is distributed or assigned among the different categories of damage for which compensation is due. Their award will be expressed in the form simply of a lump sum in gold marks and a schedule or timetable giving the provisional programme up to 1951. But before the award is made or notified, the Commission is obliged by the Treaty to consider the claims and give to the German Government a just opportunity to be heard '.1 Though the final award is expressed and notified in the form of an aggregate, it cannot be arrived at until the evidence on which the findings are based has been divulged and discussed before the Commission: and the German Government must be given an opportunity of being heard in regard to the separate elements that go towards the constitution of the final result. The case may therefore be argued before the Commission for and against each separate category of damage, both as to the amounts included and as to the admissibility of different items within the terms of any category.

The German Government is not, however, entitled, in these deliberations, to be heard on the subject of the capacity of Germany to pay any given total. Until the 1st May 1921, the Reparation Commission in considering the total amount eventually to be paid by Germany will be concerned purely with questions of fact and with valuations. It will be their task, for example, to determine whether in fact such and such damage was committed, whether it falls within the definition of damage for which Germany is liable under the Treaty, and what is a fair assessment of the damage in terms of money. It is not until after the 1st May 1921 (Article 234) that any consideration need be given to the resources and capacity of Germany in general or that the representatives of Germany need be given an opportunity to be heard on this subject as provided for in Annex II, 9.

Under other clauses of the Treaty German representations may be considered regarding the possibility of meeting any particular demand which may be made for part payment of the first £1,000,000,000. But this does not alter the fact that the Reparation Commission is to arrive at its award by the addition of a multitude of separate items, each of which 1 Reparation, Annex II, 10.

Germany is allowed to dispute on other grounds, but which may neither individually nor collectively be disputed on the ground that the final total is thereby swollen to a figure beyond Germany's capacity to pay. The Commission are to assess the claims without regard to the total to which together they amount.1

9. Method of discharging the Debt. But the Allies have need to proceed at once to the restoration of their industrial and economic life. They cannot afford to wait for the first substantial payment from Germany until the whole amount due has been assessed. The Treaty therefore provides for a payment on account, to be made by Germany before the 1st May 1921, while the Reparation Commission are arriving at their final aggregate award through the assessment of particular claims. During 1919, 1920, and the first four months of 1921 Germany is to pay the equivalent of 20,000 million gold marks' (Article 235). Though the amount to be paid within this period is specified, there is no departure here from the general principle of avoiding immediate assessment. The Treaty merely requires that a determinate amount--not a determinate proportion-of Germany's debt shall be discharged within a stated time, in order to enable the Allies to proceed at once with reconstruction.

Just as the pressing needs of the moment require that a minimum of reparation should be paid within a certain time, so the particular needs of the Allies require that a certain minimum should be paid in a particular way. The Treaty consequently demands particular restitutions and prescribes particular modes of payment-in coal, shipping, dyestuffs and so on-for limited amounts (Annex V and VI). The time and method of discharging the balance of the debt-as eventually assessed by the Reparation Commission—are not laid down by the Treaty, but left to be adjusted in the light of the changing circumstances of the future.

It would be

10. Argument of Mr. David Hunter Miller. unnecessary to dwell upon this point if a different view of the logical structure of the Treaty had not been taken by the legal adviser of the American Peace Commission. Mr. David Hunter Miller published in the New York Tribune of 9th February 1920, an entirely new and unexpected interpretation 1 Reparation, Annex IV, 4; Annex V, 10.

of the Reparation Chapter. In his view the Treaty does not merely prescribe the method of discharging particular amounts of Germany's whole debt to the Allies, leaving the settlement of the greater part to be made as may seem best at a later date. He gives it as his opinion that payment is solely by means of bonds '.

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The consequences of this interpretation are so important as to merit detailed consideration. The effect would be that nothing could be demanded from Germany beyond the 60,000 million marks to be delivered in bonds under par. 12 of Annex II, unless the Reparation Commission unanimously agreed to demand such payment. In that event, whatever were the amount of Germany's debt as fixed by the Commission, any single member could effectively veto the discharge of any part of that debt in excess of 60,000 million marks gold. The intention of the Treaty, it can scarcely be doubted, was that unanimity should be required of the Reparation Commission not for the discharge but for the postponement of the discharge or diminution of the amount of Germany's debt (Annex II, par. 13 (d)). But if the United States representative on the Commission took a different view, the consequences would be all the more serious in view of the fact that unanimity is certainly required in all questions of the interpretation of this Part of the Treaty (Annex II, par. 13 (f)).

The argument of Mr. David Hunter Miller is as follows:

'Articles 231 to 233 relate simply to the total amount which Germany owes. As to payments, they are controlled wholly by Annex II of Part VIII. .: It is of the utmost importance to distinguish the debt of Germany from the payment prescribed by the Treaty.

It is the payment that matters, and payment is solely by means of bonds (which are extinguished pro tanto by deliveries of coal, ships, &c.). . . . No bonds other than the sixty billion marks can be issued until the Reparation Commission is satisfied (the French text is convaincue ') that Germany can meet the interest and sinking fund obligations thereof... . The Commission, to be convinced, must be unanimously convinced. This is specifically provided by Annex II, Clause 13 (b).'

The pivot of the argument is the assertion that payment is solely by means of bonds. The generally accepted opinion is that the Treaty does not lay down any general method for the discharge of Germany's obligations. A particular minimum (20,000 million marks gold) is to be paid by 1st May 1920, Art. 235, because of the pressing nature of the Allies'