herein above 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 3%% 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. Exemption from Taxation.-The principal and interest if any of all bends 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.

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, 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 1 (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.

EXHIBIT B

(Form of Bond)

THE GERMAN REICH

R. M.

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

sum of

Reichsmarks (R. M.

the -). 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 1 (b) 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.

BETWEEN

NOTES TO BE EXCHANGED
GERMANY AND THE UNITED
STATES SIMULTANEOUSLY WITH EXECUTION OF THE AGREEMENT
FOR THE COMPLETE AND FINAL DISCHARGE OF THE OBLIGATIONS
OF GERMANY TO THE UNITED STATES WITH RESPECT TO THE AWARDS
MADE BY THE MIXED CLAIMS COMMISSION, UNITED STATES AND
GERMANY, AND FOR THE COSTS OF THIS GOVERNMENT'S ARMY OF
OCCUPATION.

The German Government (The Government of the United States) has the honor to set forth its understanding of paragraph numbered four of the Agreement executed this day between the United States and Germany in the following sense:

(a) In respect of the acceptance by the United States of the full faith and credit of Germany as the only security and guaranty for the fulfillment of Germany's obligations under the Agreement, Germany will be in the same position as the principal debtors of the

United States under the debt funding agreements which exist between them and the United States.

(b) Nothing contained therein shall be construed as requiring the United States to release any German property which it now holds other than as heretofore or hereafter authorized by the Congress of the United States.

The German Government (The Government of the United States) also desires to expressly recognize, so far as the Agreement executed this day between the United States and Germany is concerned, the prior rights of the holders of the bonds of the German External Loan as provided in the general bond securing the loan dated October 10, 1924.

The United States has received the sum of R. M. the sum of R. M.

and

on account of the bonds numbered one to be delivered under paragraphs numbered 1. (a) and 1. (b) respectively of the Agreement executed this day between the United States and Germany. The receipt of these amounts will be evidenced by an endorsement by the United States on the bonds on account of which the sums were received.

The Agreement executed this day between the United States and Germany is substituted for the direct arrangement providing for the realization by the United States of its 2% per cent share in German payments under the Experts' Plan of 1924.

O