to the grantees and paid for by them to the Reparation Committee to the credit of the German Government on account of the sums due for reparation (Article 256).

The foregoing provisions of Articles 254 and 255 are based on the simple theory that the effect of a change of sovereignty by cession should be to cause the apportionment of the debts of the grantor. The application of this principle to the general as well as essentially local indebtedness of the grantor is due to the circumstance that the former may be normally deemed to be as closely and beneficially connected with the territory transferred as with that retained by the former sovereign.1

It would appear to be unjust to permit the transferee to gain the benefits accruing to the territory acquired from the use of borrowed funds unless the obligation to make repayment were undertaken. It is believed that the treaty, although not without precedent, marks a decided step forward, in its respect for a theory concerning which the publicists have heretofore oftentimes betrayed confusion of thought and yielded to unconvincing reasoning.

Obviously, the doctrine of apportionment suggests the limits of its own application. Whatever indebtedness is shown to be adverse to the welfare of the territory ceded, is not so related to it as to pass as a fiscal burden to the grantee. This limitation is closely observed in the foregoing articles of the treaty. It is well brought out in the exception as to indebtedness incurred for the German colonization of Poland. Doubtless the limitation excluding from apportionment German expenditures, both imperial and state, on governmental properties is of wide scope. But this does not signify, as has been observed, that the transferees, in cases where the limitation is made applicable, acquire those properties as a free gift or as the fruits of conquest. The case of Alsace-Lorraine, for reasons stated in the treaty, stands by itself.

According to Article 256, "all property and possessions" situated in German territory and belonging to the German Empire or to the German States, pass to the Powers to which German territory is ceded. The value of these acquisitions is to be fixed by the Reparation Commission, and, as has been noted, paid by the State acquiring the

1 See opinion of Mr. Justice Holmes, in behalf of the Supreme Court of the United States in the case of Virginia v. West Virginia, 220 U. S. I, 29-30, this JOURNAL, Vol. 5, p. 523.

territory to that commission for the credit of the German Government on account of the sums due for reparation. The property thus described is deemed to include all the property of the Crown, the Empire or the States, and the private property of the former German Emperor and other royal personages. In a word, the cession embraces every form of property, but subject to payment to be credited in diminution of the sums which, by way of reparation, Germany is obliged to undertake to pay. Such payments or credits are, however, excepted in the case of property in Alsace-Lorraine (by reason of the terms of the cession of that territory to Germany in 1871), and in that of property in land ceded to Belgium.

According to Article 257, all property and possessions belonging to the German Empire or the German States, within any of the former German territories, including colonies, protectorates or dependencies, administered by a mandatory (under the terms of the Covenant of the League of Nations), are to be transferred with the territories to the mandatory Power in its capacity as such, and no payment is to be made or credit given "to those governments" in consideration of the transfer. It should be observed that this article is outside of the scope of the limitations announced in Article 255 concerning the apportionment of the public debt, and is unrelated to that matter.

While the several cessions are rendered broadly comprehensive with respect to the amount and kinds of property to pass to the grantee, the duty imposed upon the latter to pay for what is transferred is apparently adjusted according to the equities of the particular grantee as against the grantor, and especially as derived from the former relation of the grantee to the property ceded. In measuring such equities, claims based upon prescription appear to be little heeded, save as they establish a title more respectable than one derived from conquest.

The extent to which the provisions for the apportionment of the public indebtedness of the grantor as it stood on August 1, 1914, may in fact serve to promote respect for international justice, will correspond precisely to the spirit and determination with which the Reparation Commission undertakes to fulfil its task. In view of the terms of the treaty as expressed in Articles 254 and 255, it is given to that body to develop a practice which is sound in theory, not unjust to grantee or grantor, and therefore, not conducive to inter

national controversy. All must hope that the commission, although not a judicial tribunal, will seize the opportunity so to exercise its vast discretionary powers as to convince enlightened sentiment in every land that the States victorious in the war remain steadfast to the fundamental principles of justice and for the sake of which they unsheathed the sword.

CHARLES CHENEY HYDE.

THE NEW ANGLO-PERSIAN AGREEMENT

On August 9, 1919, there were signed at Teheran two agreements between Great Britain and Persia which have been subjected to some severe criticism.1

As stated in the preamble, the main agreement was concluded "in virtue of the close ties of friendship which have existed between the two governments in the past, and in the conviction that it is in the essential and mutual interest of both in future that these ties shall be cemented, and that the progress and prosperity of Persia should be promoted to the utmost."

In the body of the first agreement the British Government gives the following undertakings:

(1) It "reiterates, in the most categorical manner, the undertakings which they have repeatedly given in the past to respect absolutely the independence and integrity of Persia.'

(2) It promises to "supply, at the cost of the Persian Government, the services of whatever expert advisers may, after consultation between the two governments, be considered necessary for the several departments of the Persian administration. These advisers shall be engaged on contracts and endowed with adequate powers,

1 This agreement was published September 11, 1919, as Senate Document No. 90, 66th Congress, 1st session. This document also includes a subsidiary agreement between the two governments relating to a loan of £2,000,000 at 7%; Article 5 of a contract between the Persian Government and the Imperial Bank of Persia, relating to the Persian Government 5% loan of £1,250,000 of May 8, 1911; and two notes by Sir P. Cox, the British Minister at Teheran, to His Highness Vossug-ed-Dowleh, the Persian Prime Minister.

the nature of which shall be the matter of agreement between the Persian Government and the advisers."

(3) It agrees to "supply, at the cost of the Persian Government, such officers and such munitions and equipment of modern type as may be adjudged necessary by a joint commission of military experts, British and Persian, which shall assemble forthwith for the purpose of estimating the needs of Persia in respect of the formation of a uniform force which the Persian Government proposes to create for the establishment and preservation of order in the country and on its frontiers."

(4) "For the purpose of financing the reforms indicated in clauses 2 and 3 of this agreement, the British Government offer to provide or arrange a substantial loan for the Persian Government, for which adequate security shall be sought by the two governments in consultation in the revenues of the customs or other sources of income at the disposal of the Persian Government. Pending the completion of negotiations for such a loan the British Government will supply on account of it such funds as may be necessary for initiating the said reforms."

(5) "The British Government, fully recognizing the urgent need which exists for the improvement of communications in Persia, with a view both to the extension of trade and the prevention of famine, are prepared to coöperate with the Persian Government for the encouragement of Anglo-Persian enterprise in this direction, both by means of railway construction and other forms of transport; subject always to the examination of the problems by experts and to agreement between the two governments as to the particular projects which may be most necessary, practicable and profitable."

(6) "The two governments agree to the appointment forthwith of a joint committee of experts for the examination and revision of the existing customs tariff with a view to its reconstruction on a basis calculated to accord with the legitimate interests of the country and to promote its prosperity."

The second agreement provides for a loan of £2,000,000 sterling by the British to the Persian Government on such terms as are customary in these cases. The rate of interest-7% payable monthlymight in certain quarters be deemed somewhat usurious. The securities for this loan are thus described in Article 3 of the second agreement:

All the revenues and customs receipts assigned in virtue of the contract of May 8, 1911,2 for the repayment of the loan of £1,250,000 are assigned for the repayment of the present loan with continuity of all conditions stipulated in the said contract, and with priority over all debts other than the 1911 loan and subsequent advances made by the British Government. In case of insufficiency of the receipts indicated above, the Persian Government undertakes to make good the necessary sums from other resources, and for this purpose the Persian Government hereby assigns to the service of the present loan, and of the other advances above mentioned, in priority and with continuity of conditions stipulated in the aforesaid contract, the customs receipts of all other regions, in so far as these receipts are or shall be at its disposal.

It is further provided in Article 4 that the "Persian Government will have the right of repayment of the present loan at any date out of the proceeds of any British loan which it may contract for."

There are added to the texts of these agreements two letters, dated August 9, 1919, from Sir P. Cox, the British Minister at Teheran, to the Persian Prime Minister. Of these letters, one conveys the assurance to Persia of British coöperation in securing the "revision of treaties actually in force between the two Powers," "compensation for material damages suffered at the hands of other belligerents," and "rectification of the frontier of Persia at the points where it is agreed upon by the parties to be justifiable." The other letter assures the Persian Government that Great Britain will not claim the cost of maintenance of British troops sent into Persia for the defence of her neutrality, and requests a similar assurance that the Persian Government will not claim indemnity for damage done by British troops in Persian territory.

It is stated that these agreements are the result of negotiations which had been in progress for nine months at the time of the signing of the treaty, i.e., they were begun before the Peace Conference had commenced its labors at Paris and therefore before the Covenant for a League of Nations existed even on official paper. This would seem to dispose of the charge that they constitute a violation of the Covenant of the League of Nations, in spirit at least.

To this charge Lord Curzon has thus replied:3

He had also seen it stated in some quarters that the agreement was a disparagement or deliberate neglect of the League of Nations to which most of us

2 For these securities, see No. 3 of the Senate Document, included in it for the purpose of reference.

3 See London Times, September 19, 1919.