Treaty and the Dawes Plan, which had ex hypothesi to be kept in operation and brought into operation respectively without being allowed to fall foul of one another. This necessitated not less than four agreements: one between the Reparation Commission and Germany for putting into operation those provisions, relative to the payment of Reparation, in the Dawes Plan which were Germany's concern; a second between the Allies and Germany for the interpretation of the first agreement, and for the settlement by arbitration of disputes which might arise out of it and also for putting into operation those provisions, relative to the payment of Reparation, in the Dawes Plan in which action by or on behalf of the Allies, as well as action by Germany, was required; a third between the Allies and Germany for the restoration of the fiscal and economic unity of Germany (that is, for executing the condition upon which the Dawes Committee had insisted as essential to the accomplishment of the main part of their scheme, which referred to the payment of Reparation); and a fourth between the Allies themselves to interpret and if necessary to limit (with a view to making possible the negotiation of the German loan contemplated in the Dawes Plan) the rights, possessed by the Allies under the Versailles Treaty, of taking sanctions in the event of defaults on Germany's part.

The first of these necessary agreements was supplied by the instrument which had been signed by the Reparation Commission and the German delegation in London on the 9th August.1 As for the others, it will be noted that the field of the second coincided with that of paragraphs (g) and (h) of the Anglo-French Memorandum of the 9th July. Of these paragraph (g) had been referred to the Third Committee of the London Conference and had afterwards been supplemented by the extension of that Committee's terms of reference. Accordingly the five resolutions of the Third Committee, as modified by the corresponding International Sub-Committee and by the Special International Committee appointed to consider the German observations on the third of them, and as then approved by the conference, supplied the text for clauses 2-5 inclusive of the second necessary agreement mentioned above, while the text of Clause 1 was supplied by the report of the Legal Committee which had been appointed to deal with paragraph (h) of the Anglo-French Memorandum.3 Similarly, the field of the third necessary agreement

1 Text in the enclosure in No. 33 of Cmd. 2270.
2 See p. 372, above.

3

See p. 379, above.

coincided with that of paragraph (e) of the Anglo-French Memorandum, which had been referred to the Second Committee of the conference; and thus the plan drawn up by that committee, as modified by the corresponding International Sub-Committee and then approved by the conference, supplied the text for the third necessary agreement except that point (1) in the Second Committee's Article 7, which related to deliveries in kind, was omitted, while the text of point (2), which related to the amnesty, gave place to the text on the same subject which had been supplied in the report of the Belgian, French, and German jurists. Lastly, the field of the fourth necessary agreement coincided with that of paragraphs (c) and (d) of the Anglo-French Memorandum, which had been referred to the First Committee of the conference, and thus the report of that committee, of which certain interpretations had been accepted by the Allied delegations in view of the German delegation's observations, supplied the text for the fourth necessary agreement. In pursuance of a further recommendation contained in the Fromageot-Hurst Report of the 25th July, the texts of the four agreements which the simultaneous labours of the Allied and German delegations to the London Conference and of the Reparation Commission had brought into existence between the 16th July and the 16th August were interlocked by being attached, as four annexes, to the Final Protocol of the conference which was initialed on the date last mentioned. It may be recalled that the first two agreements of the four were interlocked still more closely by the fact that the second of them constituted Annex II of the first.

As to the effect of these four instruments, it was not possible, either on the 16th August, 1924, or at the time of writing, to certify that they constituted a definitive settlement of the Reparation Problem; but there was no doubt whatever that they represented an almost immeasurable advance upon any attempt to solve the 1 See p. 379, above.

2 See p. 379, above.

3 It seemed unlikely that any attempt to collect Reparation by force would ever be made again. On the other hand, it was far from certain whether the Germans would pay-or, indeed, be able to pay-the full amount of the annuities required under the Dawes Plan, and there had been a diplomatic conspiracy-no doubt wisely inspired-not to raise such awkward questions as: (1) How long were the Dawes annuities to continue? (2) What was their relation to, and what had become of, the famous 132 milliards? and (3) Upon the true construction of the Dawes Plan, what was to happen when the railway and industrial bonds had all been redeemed? Would the Germans be under an obligation automatically to increase their budget contribution to the extent of the interest and sinking fund payments (which would then have come to an end) on the railway and industrial bonds ?

question that had been made since the signature of the Versailles Treaty on the 30th June, 1919, more than five years before.

It may be [said Mr. MacDonald in his concluding speech] that we have not been able to eliminate from every line and paragraph of our decisions the fears and suspicions which have flourished in Europe since the War as lustily as weeds in the devastated districts, but we believe that they are now the remnants of the crop, and that, as a whole, we can be happy at the results. . . We are now offering the first really negotiated agreement since the War; every party here represented is morally bound to do its best to carry it out, because it is not the result of an ultimatum; we have tried to meet each other as far as the public opinion of the various countries would allow us. This agreement may be regarded as the first Peace Treaty, because we sign it with a feeling that we have turned our backs on the terrible years of war and war mentality.

Mr. MacDonald proceeded to console the German delegation, in friendly language, for the burdens imposed upon Germany in the agreements which they had just accepted, by pointing out the extent to which provision had been made for arbitration, and this point was taken up by Dr. Marx in his reply. There had, in fact, been agreement in the conference on the principle of arbitration for everything which was not to be found in the Treaty of Versailles 2,2 and this was a hopeful feature in the proceedings, though, as far as the Treaty itself was concerned, a general agreement to arbitrate questions of interpretation arising under it had not been arrived at. As another indication that the turning-point had indeed been passed, Mr. MacDonald was able in the same speech to announce to the conference that, as the result of diplomatic negotiations which had taken place between the Belgian, French, and German Governments while the conference was sitting, notes (dated on the day on which he was speaking) had been exchanged between those Governments by which it was arranged that, if the four agreements were carried out in the spirit of loyalty and pacification which had inspired the deliberations of the conference', the evacuation of the Ruhr should take place within a maximum period of twelve months to run from that day itself—that is, should take place not later than the 16th August, 1925 -and that in the meantime the additional areas occupied after the 11th January, 1924,3 should be evacuated without delay as a proof of French and Belgian goodwill.4

1 Cmd. 2270, p. 100. 2 Statement by Sir John Bradbury (ibid., p. 314). 3 See Section (ii) above, p. 274.

4 The texts of these four notes, and of a letter, likewise dated the 16th August, from Mr. MacDonald to MM. Herriot and Theunis in which the British Prime Minister took note of this Belgo-Franco-German correspondence,

(vii) The Execution of the London Agreements.

It remains to trace briefly the steps by which the various agreements of the 16th August, 1924, were carried into effect. It will be noted that, in the Final Protocol, the date for the actual signature of the four agreements was deferred from the 15th to the 30th August, and in consequence the time-table laid down in the agreement between the Allies and Germany (Annex III to the Final Protocol), as finally approved by the conference, was postponed by seventeen days.

1

On the 21st August the German draft laws for putting the relevant portions of the Dawes Plan into effect passed the Reichsrat ; on the 29th August they passed the Reichstag; 2 and on the 12th October it was announced that they had come into operation.3

4

On the 24th August the four conference agreements were approved in the French Chamber of Deputies by 336 votes against 204; and on the 30th they were formally signed. On the same date, effect was given to Article 1 of the fourth (inter-Allied) agreement by the signature of a special instrument, providing for identical modifications of Annex II to Part VIII (Reparation) of the Versailles Treaty on the part of those six Allied Powers-Belgium, Great Britain, France, Italy, Japan, and Jugoslavia-which were represented on the Reparation Commission.5

On the 30th August the Reparation Commission announced are reprinted in the Appendix from The Times, 18th and 19th August, 1924. While the tone of all five documents was friendly, each party maintained its own point of view. MM. Herriot and Theunis reaffirmed that the occupation of the Ruhr had been effected in virtue of the Versailles Treaty'. Dr. Marx reaffirmed that the occupation of German territory beyond the line defined in Article 428 of the Treaty could not be recognized as legal'. Mr. MacDonald recalled that the British Government had never recognized the legitimacy of the occupation or the Franco-Belgian interpretation of the Treaty on this point.

1 The Times, 22nd August, 1924.

3 Ibid., 13th October, 1924.

2 Ibid., 30th August, 1924. 4 Ibid., 25th August, 1924. 5 This fifth instrument, which was purely formal or architectonic' and had no new content, had not been annexed to the Final Protocol of the Conference. The text will be found in Cmd. 2270, No. 53, and also (together with Annexes II, III, and IV, but not Annex I of the Final Protocol) in Cmd. 2259 of 1924. This was really the exercise of a power (unprecedented, apparently, in an international document) by which one party to a Treaty was entitled to modify its provisions without the concurrence of the other party. There was a good deal of controversy as to how far this power extended and the Germans in fact objected (probably with reason) that the modifications introduced into Annex II as a result of the London Agreement went beyond the power of amendment reserved to the Allies. They agreed, however, as part of the general settlement, not to object to these particular amendments. The controversy on this head might possibly have some interest in the future.

CC

that Mr. Owen D. Young had agreed to act temporarily as AgentGeneral for Reparation Payments under the Dawes Plan, and on the 3rd September it appointed Mr. S. P. Gilbert as the permanent occupant of the post.1

On the 1st September the Reparation Commission made the announcement (due to be made by the 2nd September at latest) 2 that the German laws necessary for the working of the Dawes Plan had been promulgated in the terms approved by the Commission and that the Agent-General had taken up his duties.3

On the 9th September the levying of duty on the Franco-Belgian customs line between the Occupied and Unoccupied German Territory ceased. It must be mentioned that, as from the same date, the rate of levy on goods imported from Germany into Great Britain under the Reparation (Recovery) Act,5 which had been lowered from 26 to 5 per cent. as from the 26th February, 1924, by an agreement concluded between the British and German Governments on the 23rd February, was raised to 26 per cent. again. On the 20th September the French Government followed this British example in a decree imposing a 26 per cent. duty on German goods imported into France as from the 1st October.8 These measures did not affect the total of the German annuities, in which, under the Dawes Plan, any proceeds of Reparation (Recovery) Acts were to be included.9

6

7

On the 10th October an agreement between British, French, Belgian, and American bankers and German financial delegates for 1 The Times, 4th September, 1924.

2 Third Agreement of London, Article 3.

3 Le Temps, 2nd and 3rd September, 1924.

4 In accordance with Ordinance No. 262 of the Rhineland High Commission dated the 3rd September, 1924.

5 See Survey, 1920-3, p. 147.

The Deutsche Allgemeine Zeitung, 26th February; The Times, 26th and 29th February, 1924. This agreement had been twice renewed, on the 15th April and the 15th June, 1924.

7 Le Temps, 2nd September, 1924.

8 For the text of this decree, which was made in execution of a law of the 21st March, 1921, see Le Temps, 21st September, 1924. See also the same journal, 22nd September, 1924. For texts of correspondence on the subject between the German and French Governments (notes of 26th September and 29th September respectively), see Le Temps, 3rd October, 1924.

9 In a note addressed on the 14th November to the German Finance Minister, Mr. Gilbert, the Agent-General for Reparation Payments, insisted that the reimbursement to private German exporters of deductions made from their invoices on account of Reparation (Recovery) Acts must be made by himself, under authorization from the Transfer Committee, and not by the German Government (The Times, 17th and 18th November; the Deutsche Allgemeine Zeitung, 25th November, 1924. See further The Times, 29th November and 3rd and 19th December, 1924).