Next follow proposals for dealing with the Inter- Allied debts..
(1) Gold deposits' now held by Great Britain as security for Inter-Allied debts are to be applied towards thereduction of these debts. (2) The First Series of German Bonds to be received by France in respect of the Belgian War Debt, and the one and a half milliards of the First Series Bonds to be received by Italy in respect of her share of the reparation are to be transferred to Great Britain. (3) The balance of the net debts owing as between European Allies in respect of advances for the purposes of carrying on the war is to be entirely written off, all counter-claims being abandoned on condition that the debtors transfer their interests in the Second Series (Contingent) Bonds to a pool for distribution to the debtors of America. The British plan ends with the following summary of its purposes, which we quote textually To fix a minimum German liability which is within recent estimates which have been made by financial experts of German capacity, and a supplementary liability which is prima facie not unduly onerous, but which can be reduced or cancelled by an impartial tribunal if it should prove in the event to be excessive. To substitute for the present fixed obligations of the European Allies to Great Britain arrangements under which all except a small percentage (which would 1'e accepted in the form of a transfer of German obligations) would be remitted, but under which the contingent German payments in excess of the fixed minimum would be available for discharging European debts to America generally. To give attractive terms to Germany for the early redemption of the annual payments by anticipation."
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