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agreements primarily in that the obligation is expressed in reichmarks rather than in dollars and the bonds evidencing the obligation are not in negotiable form.

With the exception of the already mentioned 10 per cent reduction on the Army costs account, the proposed agreement involves no reduction in the principal amount to be paid by Germany. It does involve an extension of Germany's payments over a longer period than would have been required had the Dawes plan arrangements continued to function without interruption. Fifty-five million marks a year would have paid the Army costs in about 15 years. The proposed agreement extends the payment over 37 years with 3% per cent interest on postponed payments. Forty-five million marks per annum would have paid the mixed claims awards in about 44 years. It is estimated that 40,800,000 marks per annum will pay them in about 52 years with interest which generally is at the rate of 5 per cent.

The security for the payments is the full faith and credit of Germany.

On every occasion the United States has expressly reserved its rights under existing treaties and agreements, thus preserving intact the rights of the Congress to dispose of this matter. The time has now come to reach an agreement providing for the final payment and discharge of these outstanding claims.

With this in view, it is suggested that legislation be sought from the Congress authorizing the Secretary of the Treasury with the approval of the President to enter into an agreement with Germany in general terms as set forth in the attached form of agreement and exchange of notes.

The execution of the agreement and the exchange of notes, if authorized, will, of course, be conditional on the coming into operation of the Young plan as accepted by The Hague Conference in substitution for the Dawes plan which is still legally in force. The proposed agreement will be retroactive to September 1, 1929, and Germany will be credited for its payments since then as set forth in the draft of notes to be exchanged simultaneously with the execution of the agreement. Faithfully yours,

A. W. MELLON,

Secretary of the Treasury. The PRESIDENT,

The White House.

AGREEMENT

Made the day of

19, at the City of Washington, District of Columbia, between the Government of the German Reich, hereinafter called Germany, party of the first part, and the Government of the United States of America, hereinafter called the United States, party of the second part.

Whereas Germany is obligated under the provisions of the Armistice Convention signed November 11, 1918, and of the Treaty signed at Berlin, August 25, 1921, to pay to the United States the awards, and interest thereon, entered and to be entered in favor of the United States Government and its nationals by the Mixed Claims Commis.

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sion, United States and Germany, established in pursuance of the Agreement of August 10, 1922; and

Whereas, the United States is also entitled to be reimbursed for the costs of its Army of Occupation; and

Whereas, Germany having made and the United States having received payments in part satisfaction on account of these two obligations desire to make arrangements for the complete and final discharge of said obligations;

Now, therefore, in consideration of the premises and the mutual covenants herein contained, it is agreed as follows:

1. Amounts to be paid.-(a) Germany shall pay and the United States shall accept in full satisfaction of all of Germany's obligations remaining on account of awards, including interest thereon, entered and to be entered by the Mixed Claims Commission, United States and Germany, the sum of 40,800,000 reichsmarks for the period of September 1, 1929, to March 31, 1930, and the sum of 40,800,000 reichsmarks per annum from April 1, 1930, to March 31, 1981. As evidence of this indebtedness, Germany shall issue to the United States at par, as of September 1, 1929, bonds of Germany, the first of which shall be in the principal amount of 40,800,000 reichsmarks, dated September 1, 1929, and maturing March 31, 1930, and each of the others of which shall be in the principal amount of 20,400,000 reichsmarks, dated September 1, 1929, and maturing serially on September 30, 1930, and on each succeeding March 31 and September 30 up to and including March 31, 1981. The obligations of Germany hereinabove set forth in this paragraph shall cease as soon as all of the payments contemplated by the Settlement of War Claims Act of 1928 have been completed and the bonds not then matured evidencing such obligations shall be canceled and returned to Germany.

(6) Germany shall pay and the United States shall accept in full reimbursement of the amounts remaining due on account of the costs of the United States Army of Occupation, the amounts set forth on the several dates fixed in the following schedule: March 31

March 31-Continued 1930. R. M. 25, 100, 000 1955..

R. M. 17, 650, 000 1931. 12, 750, 000 1956.

17, 650, 000 1932. 12, 650, 000 1957.

17, 650, 000 193312, 650, 000 1958.

17, 650, 000 1934.

9, 300, 000
1959.

17, 650, 000 1935. 9, 300, 000 1960.

17, 650, 000 1936. 9, 300, 000 1961

17, 650, 000 1937.

9, 300, 000
1962.

17, 650, 000 1938. 8, 200, 000 1963.

17, 650, 000 1939. 8, 200, 000 1964.,

17, 650, 000 1940. 9, 300, 000 1965.

17, 650, 000 1941. 9, 300, 000 1906.

17, 650, 000 1942.

12, 650, 000 September 301943. 12, 650, 000 1930..

R. M. 12, 750, 000 1944. 12, 650, 000 1931

12, 650, 000 1945_ 12, 650, 000 1932.

12, 650, 000 1946. 12, 650, 000 1933.

9, 300, 000 1947 12, 650, 000 1934.

9, 300, 000 1948. 12, 650, 000 1935.

9, 300, 000 1949. 12, 650, 000 1936.

9, 300, 000 1950.

17, 650, 000
1937.

8, 200, 000 1951 17, 650, 000 1938.

8, 200,000 1952 17, 650, 000 1939

9, 300, 000 1953 17, 650, 000 1940.

9, 300, 000 1954. 17, 650, 000 1911.

12, 650, 000

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September 30—Continued.

September 30—Continued. 1942.. R. M. 12, 650, 000 1954.

R. M. 17, 650, 000 1943 12, 650, 000 1955.

17, 650, 000 1944 12, 650, 000 1956.

17, 650, 000 1945. 12, 650, 000 1957.

17, 650, 000 1946 12, 650, 000 1958,

17, 650, 000 1947.

12, 650, 000
1959.

17, 650, 000 1948. 12, 650, 000 1960.

17, 650, 000 1949. 17, 650, 000 1961,

17, 650, 000 1950. 17, 650, 000 1962

17, 650, 000 1951,

17, 650, 000
1963

17, 650, 000 1952. 17, 650, 000 1964.

17, 650, 000 1953. 17, 650, 000 1965.

17, 650, 000 As evidence of this indebtedness, Germany shall issue to the United States at par, as of September 1, 1929, bonds of Germany, dated September 1, 1929, and maturing on March 31, 1930, and on each succeeding September 30 and March 31 in the amounts and on the several dates fixed in the preceding schedule.

2. Form of Bonds.-All bonds issued hereunder to the United States shall be payable to the Government of the United States of America and shall be signed for Germany by The Reichsschuldenverwaltung. The bonds issued for the amounts to be paid under Paragraph numbered 1 (a) of this Agreement shall be issued in 103 pieces with maturities and in denominations corresponding to the payments therein set forth and shall be substantially in the form set forth in “Exhibit A” hereto annexed and shall bear no interest, unless payment thereof is postponed pursuant to Paragraph numbered 5 of this Agreement. The bonds issued for the amounts to be paid under Paragraph numbered 1 (b) of this Agreement shall be issued in 73 pieces with maturities and in denominations corresponding to the payments therein set forth and shall be substantially in the form set forth in “Exhibit B” hereto annexed and shall bear no interest unless payment thereof is postponed pursuant to Paragraph numbered 5 of this Agreement.

3. Method of Payment.-All bonds issued hereunder shall be payable both principal and interest, if any, at the Federal Reserve Bank of New York for credit in the general account of the Treasurer of the United States in funds immediately available on the date when payment is due in United States gold coin in an amount in dollars equivalent to the amount due in reichsmarks, at the average of the middle rates prevailing on the Berlin Bourse, during the half monthly period preceding the date of payment. Germany undertakes to have the Reichsbank certify to the Federal Reserve Bank of New York on the date of payment the rate of exchange at which the transfer shall be made. Germany undertakes for the purposes of this Agreement that the reichsmark shall have and shall retain its convertibility into gold or devisen as contemplated in Section 31 of the present Reichsbank law and that for these purposes the reichsmark shall have and shall retain a mint parity of 1/2790 kilogram of fine gold as defined in the German coinage law of August 30, 1924.

4. Security.-- The United States hereby agrees to accept the full faith and credit of Germany as the only security and guaranty for the fulfilment of Germany's obligations hereunder.

5. Postponement of Payment.--Germany, at its option, upon not less than ninety days' advance notice in writing to the United States, may postpone any payment on account of principal falling due as

hereinabove provided, to any subsequent September 30 and March 31 not more than two and one-half years distant from its due date, but only on condition that in case Germany shall at any time exercise this option as to any payment of principal, the two payments falling due in the next succeeding twelve months cannot be postponed to any date more than two years distant from the date when the first payment therein becomes due unless and until the payments previously postponed shall actually have been made, and the two payments falling due in the second succeeding twelve months cannot be postponed to any date more than one year distant from the date when the first payment therein becomes due unless and until the payments previously postponed shall actually have been made, and further payments cannot be postponed at all unless and until all payments of principal previously postponed shall actually have been made. All payments provided for under Paragraph numbered 1 (a) of this Agreement so postponed shall bear interest at the rate of 5% per annum, payable semiannually, and all payments provided for under Paragraph numbered 1 (b) of this Agreement so postponed shall bear

( interest at the rate of 35% per annum, payable semiannually.

6. Payments before Maturity.--Upon not less than 90 days' advance notice in writing to the United States and the approval of the Secretary of the Treasury of the United States, Germany may, on March 31 or September 30 of any year, make advance payments on account of any bonds issued under this Agreement and held by the United States. Any such advance payments shall be applied to the principal of such bonds as may be indicated by Germany at the time of the payment.

7. Eremption from Taxation. The principal and interest if any of all bands issued hereunder shall be paid without deduction for, and shall be exempt from, any and all taxes or other public dues, present or future, imposed by or under authority of Germany or any political or local taxing authority within Germany.

8. Notices.- Any notice from or by Germany shall be sufficient if delivered to the American Embassy at Berlin or to the Secretary of the Treasury at the Treasury of the United States in Washington. Any notice, request or consent under the hand of the Secretary of the Treasury of the United States shall be deemed and taken as the notice, request or consent of the United States and shall be sufficient if delivered at the Germany Embassy at Washington or at the office of the German Ministry of Finance at Berlin. The United States in its discretion may waive any notice required hereunder, but any such waiver shall be in writing and shall not extend to or affect any subsequent notice or impair any right of the United States to require notice hereunder.

9. Compliance with Legal Requirements.—Germany and the United States, each for itself, represents and agrees that the execution and delivery of this Agreement have in all respects been duly authorized, and that all acts, conditions, and legal formalities which should have been completed prior to the making of this Agreement have been completed as required by the laws of Germany and of the United States respectively and in conformity therewith.

10. Counterparts.-This Agreement shall be executed in two counterparts, each of which shall be in the English and German languages, both texts having equal force, and each counterpart having the force and effect of an original.

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In witness whereof, Germany has caused this Agreement to be executed on its behalf by its Ambassador Extraordinary and Plenipotentiary at Washington thereunto duly authorized, and the United States has likewise caused this Agreement to be executed on its behalf by the Secretary of the Treasury, with the approval of the President, pursuant to the Act of Congress approved

all on the day and year first above written.

THE GERMAN REICH
By
Ambassador Ertraordinary and Plenipotentiary

THE UNITED STATES OF AMERICA
By

Secretary of the Treasury Approved:

President

EXHIBIT A

(Form of Bond)

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THE GERMAN REICH R. M. 20,400,000

No. The German Reich, hereinafter called Germany, in consideration of the premises and the mutual covenants contained in an agreement dated

between it and the United States of America, hereby promises to pay to the Government of the United States of America, hereinafter called the United States, on

the sum of Twenty Million Four Hundred Thousand Reichsmarks (R. M. 20,400,000). This bond is payable at the Federal Reserve Bank of New York in gold coin of the United States of America in an amount in dollars equivalent to the amount due in reichsmarks at the average of the middle rates prevailing on the Berlin Bourse during the half monthly period preceding the date of payment.

This bond is payable without deduction for, and is exempt from, any and all taxes and other public dues, present or future, imposed by or under authority of Germany or any political or local taxing authority within Germany.

This bond is issued pursuant to the provisions of paragraph numbered i (a) of an Agreement dated

between Germany and the United States, to which Agreement this bond is subject and to which reference is hereby made.

In witness whereof, Germany has caused this bond to be executed on its behalf by The Reichsschuldenverwaltung and delivered at the City of Washington, District of Columbia, by its Ambassador Extraordinary and Plenipotentiary at Washington, thereunto duly authorized, as of September 1, 1929.

For THE GERMAN REICH

THE REICHSSCHULDENVERWALTUNG
By

President

Member

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