Reparations____________________ 3964

goods unlawfully taken. It has been used
specifically since the World War to designate
the payments levied by the Allies upon the
defeated Central Powers in the peace treaties.
The legal basis for the imposition of repara-
tions upon Germany was provided in Article
231 of the Versailles Treaty, which read as
follows: 'The Allied and Associated Govern-
ments affirm and Germany accepts the re-
sponsibility of Germany and her allies for
causing all the loss and damage to which the
Allied and Associated Governments and their
nationals have been subjected as a conse-
quence of the war imposed upon them by the
aggression of Germany and her allies.*

With the rejection of the Versailles Treaty
by the United States, the Reparations Com-
mission was composed of representatives of
France, Great Britain, Italy, and Belgium,
with Japan and Yugoslavia replacing Belgium
In certain cases. This committee finally fixed
the amount of reparations due and the ar-
rangements for payment by Germany. A con-
ference of the Allied premiers at Paris in
January, 1923, resulted in a deadlock be-
tween the British and French. On the basis
of two decisions of the Reparations Com-
mission that Germany had defaulted in her
timber and coal deliveries, France and Bel-
gium occupied the Ruhr Valley, the indus-
trial center of Germany (Jan. ri, 1923).

They hoped to exploit the rich coal mines
and other industries of the Ruhr so as to
secure greater reparation payments than had
been forthcoming from the German Govern-
ment. Although they took over the railways
and the local government and introduced
French and Belgian technicians and engin-
eers to run the mines and other properties,
the occupation was not a financial success.
The troops met with the passive resistance of
a large part of the German population, who
were supported in their refusal to work for
the invaders by relief funds supplied by the
German Government. The French and Bel-
gians placed the entire region under martial
law, evicted 31,000 Germans, imprisoned
thousands of others, and executed 10. The ef-
fect was to bring the entire German industrial
system to the verge of collapse.

The other powers, led by Great Britain,
exerted strong pressure upon Poincar6 to end
the Ruhr occupation. British trade had been
seriously injured by the stoppage of German
industrial activity and Italy and Belgium
showed dissatisfaction. These considerations
anally induced Poincare* to accept the Ger-

Reparatiotis

man offer of an impartial examination of
Germany's capacity to pay.

In 1924, an advisory committee convened,
which included Charles G. Dawes and Owen
D. Young, unofficially representing the U. S.
The report of the Dawes Commission, sub-
mitted April 9,1924, provided a basis for the
temporary settlement of the reparation prob-
lem. Germany made full reparation payments
as provided by the Dawes plan for five years,
from Sept. i, 1924, to Sept. i, 1929, when the
Young plan, ratified in 1930 by the govern-
ments, went provisionally into effect.

The Dawes plan did not fix the total re-
paration payments to be made by Germany.
It did fix a definite schedule of annual pay-
ments, to be continued for an indefinite per-
iod. It also provided elaborate machinery and
a detailed method of raising the payments, of
transferring them out of Germany, and of
settling disputes or defaults that might arise.
The Dawes payments were based upon the
estimated capacity of Germany to pay, rather
than on the total of Allied claims.

The Dawes.plan was admittedly a stop-
gap affair. It was obvious that sooner or
later the Allied governments would be obliged
to reach a definitive agreement with Ger-
many as to the total payments to be made.
Accordingly, representatives of Germany,
France, Great Britain, Belgium, Italy and
Japan met at Geneva Sept. 16, 1928, and es-
tablished a new committee of experts to work
out a 'complete and definite settlement* of
the reparations problem.

With Owen D. Young as chairman, the
committee met at Paris from Feb. u to June
7,1929, on the latter date submitting a unan-
imous report to the Reparations Commission
and the governments concerned. The number
of annuities payable by Germany was fixed
at 59, commencing at 1,707,900,000 gold
marks and progressing gradually to a maxi-
mum of 2,428,800,000 marks in 1965-66. The
average annual payment for the first 37 years
was set at 2,050,600,000 marks. An interna-
tional bank (the Bank of International Set-
tlements) was to be established to receive and
distribute the reparation annuities. The
Young report was adopted in principle, with
certain modifications, by official representa-
tives of the 12 interested nations who met at
The Hague, Aug. 6-31,1929.

A second conference to deal with the Ger-
man reparations problem and related finan-
cial issues was held at The Hague Jan. 3-20,
1930. There 14 agreements were signed by