Note to IX, 260—Continued

"Concession" embraces grants (octrois) of the right of exploiting mines or deposits. . . on condition that, according to the legislation of the country, the grant has been made by the state, or by an authority which is dependent upon a special act, and in virtue of a power discretionary in principle.

The award distinguished between enterprises which include exploitations independent of the concession and are not public utilities, these elements being separable or inseparable. Both words comprise movable and immovable property.

Certain Austrian, Hungarian, Russian, Turkish, and Polish securities were sold by the commission and the proceeds included in the annuities of the Experts' (Dawes) Plan. A list of Danzig, Austrian, Hungarian, Russian, and Slesvig securities, held by the Reparation Commission, was returned to Germany. A further agreement of September 16, 1926 restored to Germany small amounts of company shares and other securities in ruble values and various contracts and concessions relating to African and Pacific areas in application of article 123.

The list of securities transferred by Germany is given in Report on the Work of the Reparation Commission from 1920 to 1922, p. 191. Altogether 9,281,133 gold marks was realized on securities under this article.

The provisions of the article, the Reparation Commission decided, were applicable only to rights and interests situated in ceded, reincorporated or mandated territory which the competent government did not liquidate under the provisions of article 297. Such liquidations gave rise to no credit on the reparation account.

ARTICLE 261.

Germany undertakes to transfer to the Allied and Associated Powers any claims she may have to payment or repayment by the Governments of Austria, Hungary, Bulgaria or Turkey, and, in particular, any claims which may arise, now or hereafter, from the fulfilment of undertakings made by Germany during the war to those Governments.

Note to IX, 261

The claims of Germany against Austria, Bulgaria, and Hungary referred to in this article and the debts of Germany referred to in

Note to IX, 261-Continued

articles 213 of the Austrian treaty, 196 of the Hungarian treaty, and 145 of the Bulgarian treaty were "finally canceled" by annex II, 2 (ii), of the agreement of January 20, 1930.

ARTICLE 262.

Any monetary obligation due by Germany arising out of the present Treaty and expressed in terms of gold marks shall be payable at the option of the creditors in pounds sterling payable in London; gold dollars of the United States of America payable in New York; gold francs payable in Paris; or gold lire payable in Rome.

For the purpose of this Article the gold coins mentioned above shall be defined as being of the weight and fineness of gold as enacted by law on January 1, 1914.

Note to IX, 262

See part VIII, annex II, paragraph 12 (c).

ARTICLE 263.

Germany gives a guarantee to the Brazilian Government that all sums representing the sale of coffee belonging to the State of Sao Paolo in the ports of Hamburg, Bremen, Antwerp and Trieste, which were deposited with the Bank of Bleichröder at Berlin, shall be reimbursed together with interest at the rate or rates agreed upon. Germany, having prevented the transfer of the sums in question to the State of Sao Paolo at the proper time, guarantees also that the reimbursement shall be effected at the rate of exchange of the day of the deposit.

Text of May 7:

Germany gives a guarantee to the Brazilian Government that all sums representing the compulsory sale of coffee belonging to the State of Sao Paolo in the ports of Hamburg, Bremen, Antwerp and Trieste, which were deposited with the Bank of Bleichröder at Berlin, shall be reimbursed together with interest at 5 per cent. from the day of the deposit

Note to IX, 263

The proceeds of the sale of São Paulo coffee, running from November 25, 1914 to November 30, 1920, amounted to £6,259,673 19s. 6d.

PART X.

ECONOMIC CLAUSES.

Notes to Part X, Articles 264 to 312

Appealing to President Wilson's speeches and the pre-armistice agreement, the German delegation demanded that the economic provisions of the treaty should be based on the principle of “the complete equality of Germany with other nations". It was in the interest of the Allies to keep Germany solvent, especially as its strength had been greatly impaired by the illegal blockade (Foreign Relations, The Paris Peace Conference, 1919, vi, 850). Germany therefore insisted on immediate admission to the League of Nations, with the economic rights and obligations set forth in the German league draft (p. 69) and proposed an unrestricted grant for a number of years of mutual most-favored-nation treatment instead of the one-sided rights attributed to the Allies in the draft treaty, together with special provisions for the territories to be transferred. In the present unsettled state of the world all nations should retain full freedom as to tariffs, which in Germany's case would facilitate the payment of reparation. Questions as to the certificates of vessels, navigation, unfair competition, industrial, artistic, and literary property, and international railway traffic could be settled through the League of Nations or by an international conference. Germany agreed not to discriminate against Allied goods going by rail or vessel, but rejected interference with its own internal railway and commercial arrangements. Germany could not accept any obligation to surrender railway material to Poland because it had taken no railway material from Congress Poland.

The Allies replied that the pronouncements of President Wilson relative to equality of trade conditions applied to the permanent settlement of the world after the League of Nations had been fully constituted (Foreign Relations, The Paris Peace Conference, 1919, vi, 972). The illegal acts of Germany had placed many of the Allied states in a position of economic inferiority, and therefore for a period of five years reciprocity had to be denied to Germany. In order, however, to enable Germany to establish such customs tariffs as it deemed necessary, the Allies had limited to six months the period for which Germany must maintain generally the most favorable rates of duty which were in force on July 31, 1914.

Notes to Part X, Articles 264 to 312-Continued

The treaty restoring friendly relations between the United States. and Germany signed at Berlin, August 25, 1921 and in force on November 11, 1921 with retroactive effect to July 2, 1921, stipulates that "Germany undertakes to accord to the United States and the United States shall have and enjoy all the rights and advantages" stipulated for its benefit by this part of this treaty, "notwithstanding the fact that such treaty has not been ratified by the United States". The rights and advantages of nationals of the United States specified in the joint resolution of Congress, approved July 2, 1921 (p. 18), were specifically mentioned in an understanding included in the Senate's resolution of advice and consent to ratification of October 18, 1921. The Senate in that resolution made a further condition "that the United States shall not be represented or participate in any body, agency or commission, nor shall any person represent the United States as a member of any body, agency or commission in which the United States is authorized to participate by this Treaty, unless and until an Act of the Congress of the United States shall provide for such representation or participation".

This part is, ipsissimis verbis, an annex, technically a schedule, of the treaty restoring friendly relations as printed by the Department of State in Treaty Series 658, but not as printed in 42 Stat. 1939.

SECTION I-Commercial Relations.

CHAPTER I.—CUSTOMS REGULATIONS, DUTIES AND

Note to X, sec. I

RESTRICTIONS.

In March 1920 the French Government raised the question with other governments of German violation of these provisions. The "unofficial" representatives of the United States participated in the investigation by the Reparation Commission and the United States passed upon the conclusion through the diplomatic channel of the Embassy at Paris (Foreign Relations, 1920, 11, 273). On June 22, 1920 the president of the Peace Conference sent a letter to the German delegation in the name of the Allied and Associated Powers (United Kingdom, Protocols and Correspondence Between the Supreme Council and the Conference of Ambassadors and the German Government and the German Peace Delegation Between January 10,

Note to X, sec. I—Continued

1920, and July 17, 1920, Respecting the Execution of the Treaty of Versailles of June 28, 1919 (Misc. No. 15, Cmd. 1325), p. 151). The German commercial regime which was then leading to violations and which subsequently laid the basis for phases of German commercial policy was described as follows:

"The re-establishment by successive ordinances, culminating in that of the 22nd March, 1920, of that absolute control which the German State had instituted for war purposes in 1917 over the imports of the Empire, the establishment of certain monopolies which provide the State with the means not only of regulating purchases abroad, but of proceeding to summary measures of confiscation and taxation of foreign goods already imported into its territory; the system of individual import and export licences, the granting of which is made subject to conditions which are variable, and at any rate impossible of verification, as regards prices, rates, exchange, credits, &c.; the direct or indirect intervention of the 'Reichskommissar' of the 'Preisprüfungstelle' or local 'Aussenhandelstellen', with the object of altering the conditions or suspending the execution of contracts freely accepted, are so many instruments thanks to which Germany is at present in a position to carry on a policy of discrimination, in contradiction with the spirit and the letter of the obligations undertaken by her."

After recording the practices which had become evident as a result of the investigation, "the Allied and Associated Powers invite the German Government to make the necessary alterations in the commercial regime instituted by it, so as to ensure the following results:

"1. Should it be impossible to apply the import or export regulations enacted by Germany without exceptions, it is important that contingents accepted for import or export must not be subjected to arbitrary distribution, nor to individual licences arbitrarily granted. "2. No measures of confiscation or seizure must be applied in virtue of Reich monopolies or any other administrative organisation to goods imported into Germany without a regular licence before the date on which the prohibition referring to them was enacted, or before the expiration of the periods provided for its coming into force.

"3. No export duty may be levied unless it has been regularly enacted and published in the journal of the laws of the Reich, and

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