The obligations take the form of 5 per cent. bonds
redeemable at call by the German Government—at the outset on easy terms, gradually rising to par at the end of thirty-two years. There is to be no sinking fund, but redemption, especially in the earlier years, is per- mitted upon such liberal terms that the saving in annual interest on the bonds redeemed will, if German credit is re-established, make it a profitable business for the Germans to redeem their bonds. In other words, Germany will be given a strong inducement to raise as soon as possible loans for clearing off her indemnity charges. Germany will at first enter into debt obligations with the nations concerned, but not with individual capitalists ; but, if financial stability is reached it will always be well worth while for Germany to turn these national obligations into ordinary State loans.