in the period mentioned, Hungary fails to discharge her obligations, any balance remaining unpaid may, within the discretion of the Commission, be postponed for settlement in subsequent years or may be handled otherwise in such manner as the Allied and Associated Governments acting in accordance with the procedure laid down in this Part of the present Treaty shall determine.

ARTICLE 164.

The Reparation Commission shall, after May 1, 1921, from time to time consider the resources and capacity of Hungary, and, after giving her representatives a just opportunity to be heard, shall have discretion to extend the date and to modify the form of payments such as are to be provided for in accordance with Article 163, but not to cancel any part except with the specific authority of the several Governments represented on the Commission.

ARTICLE 165.

Hungary shall pay in the course of the year 1920 and the first four months of 1921, in such instalments and in such manner (whether in gold, commodities, ships, securities or otherwise) as the Reparation Commission may lay down, a reasonable sum which shall be determined by the Commission. Out of this sum the expenses of the armies of occupation subsequent to the Armistice of November 3, 1918, provided for by Article 181, shall first be met, and such supplies of food and raw materials as may be judged by the Governments of the Principal Allied and Associated Powers essential to enable Hungary to meet her obligations for reparation may also, with the approval of the said Governments, be paid for out of the above sum. The balance shall be reckoned towards the liquidation. of the amount due for reparation. Hungary shall further deposit bonds as prescribed in paragraph 12 (c) of Annex II hereto.

ARTICLE 166.

Hungary further agrees to the direct application of her economic resources to reparation as specified in Annexes III, IV and V relating respectively to merchant shipping, to physical restoration and to raw material; provided always that the value of the property transferred and any services rendered by her under these Annexes, assessed in the manner therein prescribed, shall be credited to her towards the liquidation of her obligations under the above Articles.

ARTICLE 167.

The successive instalments, including the above sum, paid over by Hungary in satisfaction of the above claims will be divided by the Allied and Associated Governments in proportions which have been determined upon by them in advance on a basis of general equity and the rights of each.

For the purposes of this division the value of the credits referred to in Article 173 and in Annexes III, IV and V shall be reckoned in the same manner as cash payments made in the same year.

ARTICLE 168.

In addition to the payments mentioned above, Hungary shall effect, in accordance with the procedure laid down by the Reparation Commission, restitution in cash of cash taken away, seized or sequestrated, and also restitution of animals, objects of every nature and securities taken away, seized or sequestrated in the cases in which it proves possible to identify them on territory belonging to, or during the execution of the present Treaty in the possession of, Hungary or her allies.

ARTICLE 169.

The Hungarian Government undertakes to make forthwith the restitution contemplated in Article 168 and to make the payments and deliveries contemplated in Articles 163, 164, 165 and 166.

ARTICLE 170.

The Hungarian Government recognises the Commission provided for by Article 163 as the same may be constituted by the Allied and Associated Governments in accordance with Annex II, and agrees irrevocably to the possession and exercise by such Commission of the power and authority given to it under the present Treaty.

The Hungarian Government will supply to the Commission all the information which the Commission may require relative to the financial situation and operations and to the property, productive capacity and stocks, and current production of raw materials and manufactured articles of Hungary and her nationals, and, further, any information relative to the military operations of the war of 1914–1919 which, in the judgment of the Commission, may be necessary.

The Hungarian Government shall accord to the members of the Commission and its authorised agents the same rights and immunities as are enjoyed in Hungary by duly accredited diplomatic agents of friendly Powers.

Hungary further agrees to provide for the salaries and the expenses of the Commission and of such staff as it may employ.

ARTICLE 171.

Hungary undertakes to pass, issue and maintain in force any legislation, orders and decrees that may be necessary to give complete effect to these provisions.

ARTICLE 172.

The provisions in this Part of the present Treaty shall not affect in any respect the provisions of Sections III and IV of Part X (Economic Clauses) of the present Treaty.

ARTICLE 173.

The following shall be reckoned as credits to Hungary in respect of her reparation obligations:

(a) any final balance in favour of Hungary under Sections III and IV of Part X (Economic Clauses) of the present Treaty;

(b) amounts due to Hungary in respect of transfers provided for in Part IX (Financial Clauses) and in Part XII (Ports, Waterways and Railways);

(c) all amounts which, in the judgment of the Reparation Commission, should be credited to Hungary on account of any other transfers under the present Treaty of property, rights, concessions or other interests.

In no case, however, shall credit be given for property restored in accordance with Article 168.

ARTICLE 174.

The transfer of the Hungarian submarine cables, in the absence of any special provision in the present Treaty, is regulated by Annex VI hereto.

ANNEX I.

Compensation may be claimed from Hungary in accordance with Article 162 above in respect of the total damage under the following categories:

(1) Damage to injured persons and to surviving dependants by personal injury to or death of civilians caused by acts of war, including bombardment or other attacks on land, on sea or from the air, and of the direct consequences thereof and of all operations of war by the two groups of belligerents wherever arising.

(2) Damage caused by Hungary or her allies to civilian victims of acts of cruelty, violence or maltreatment (including injuries to life or health as a consequence of imprisonment, deportation, internment or evacuation, of exposure at sea, or of being forced to labour) wherever arising, and to the surviving dependants of such victims.

(3) Damage caused by Hungary or her allies in their own territory or in occupied or invaded territory to civilian victims of all acts injurious to health or capacity to work or to honour, as well as to the surviving dependants of such victims.

(4) Damage caused by any kind of maltreatment of prisoners of

war.

(5) As damage caused to the peoples of the Allied and Associated Powers, all pensions or compensations in the way of pensions to naval and military victims of war, including members of the air force, whether mutilated, wounded, sick or invalided, and to the dependants of such victims, the amount due to the Allied and Associated Governments being calculated for each of them as being the capitalised cost of such pensions and compensations at the date of the coming into force of the present Treaty on the basis of the scales in force in France on May 1, 1919.

(6) The cost of assistance by the Governments of the Allied and Associated Powers to prisoners of war, to their families and dependants.

(7) Allowances by the Governments of the Allied and Associated Powers to the families and dependants of mobilised persons or persons serving with the forces, the amount due to them for each calendar year in which hostilities occurred being calculated for each Government on the basis of the average scale for such payments in force in France during that year.

(8) Damage caused to civilians by being forced by Hungary or her allies to labour without just remuneration.

(9) Damage in respect of all property, wherever situated, belonging to any of the Allied or Associated States or their nationals, with the exception of naval or military works or materials, which has been carried off, seized, injured or destroyed by the acts of Hungary or her allies on land, on sea or from the air, or damage directly in consequence of hostilities or of any operations of war.

(10) Damage in the form of levies, fines and other similar exactions imposed by Hungary or her allies upon the civilian population.

ANNEX II.

1.

66

The Commission referred to in Article 163 shall be called the "Reparation Commission" and is hereafter referred to as the Commission."

2.

The Delegates to this Commission shall be appointed by the United States of America, Great Britain, France, Italy, Japan, Belgium, Greece, Poland, Roumania, the Serb-Croat-Slovene State and CzechoSlovakia. The United States of America, Great Britain, France, Italy, Japan and Belgium shall each appoint a Delegate. The other five Powers shall appoint a Delegate to represent them all under the conditions indicated in the second sub-paragraph of paragraph 3 hereafter. At the time when each Delegate is appointed there shall also be appointed an Assistant Delegate, who will take his place in case of illness or necessary absence, but at other times will only have the right to be present at the proceedings without taking any part therein.

On no occasion shall Delegates of more than five of the above Powers have the right to take part in the proceedings of the Commission and to record their votes. The Delegates of the United States, Great Britain, France and Italy shall have this right on all occasions. The Delegate of Belgium shall have this right on all occasions other than those referred to below. The Delegate of Japan will have this right when questions relating to damage at sea are under consideration. The Delegate representing the five remaining Powers mentioned above shall have this right when questions relating to Austria, Hungary or Bulgaria are under consideration.

Each of the Governments represented on the Commission shall have the right to withdraw after giving twelve months' notice to the Commission and confirming it six months after the date of the original notification.

3.

Such of the Allied and Associated Powers as may be interested shall have the right to name a Delegate to be present and act as assessor only while their respective claims and interests are under examination or discussion, but without the right to vote.

The Section to be established by the Commission under Article 163 shall include representatives of the following Powers: The

United States of America, Great Britain, France, Italy, Greece, Poland, Roumania, the Serb-Croat-Slovene State and CzechoSlovakia. This composition of the Section shall in no way prejudge the admissibility of any claims. In voting the representatives of the United States of America, Great Britain, France and Italy shall each have two votes.

The representatives of the five remaining Powers mentioned above shall appoint a Delegate to represent them all, who shall sit on the Reparation Commission in the circumstances described in paragraph 2 of the present Annex. This Delegate, who shall be appointed for one year, shall be chosen successively from the nationals of each of the said five Powers.

4.

In case of death, resignation or recall of any Delegate, Assistant Delegate or Assessor, a successor to him shall be nominated as soon as possible.

5.

The Commission shall have its principal permanent bureau in Paris, and shall hold its first meeting in Paris as soon as practicable after the coming into force of the present Treaty, and thereafter will meet in such place or places and at such time as may be deemed convenient and as may be necessary for the most expeditious discharge of its duties.

6.

At its first meeting the Commission shall elect from among the Delegates referred to above a Chairman and a Vice-Chairman, who shall hold office for a year and shall be eligible for re-election. If a vacancy in the chairmanship or vice-chairmanship should occur during the annual period, the Commission shall proceed to a new election for the remainder of the said period.

7.

The Commission is authorised to appoint all necessary officers, agents and employees who may be required for the execution of its functions, and to fix their remuneration; to constitute the Sections or Committees, whose members need not necessarily be members of the Commission, and to take all executive steps necessary for the purpose of discharging its duties; and to delegate authority and discretion to officers, agents, Sections and Committees.

8.

All the proceedings of the Commission shall be private unless on particular occasions the Commission shall otherwise determine for special reasons.

9.

The Commission shall be required, if the Hungarian Government so desire, to hear within a period which it will fix from time to time evidence and arguments on the part of Hungary on any questions connected with her capacity to pay.