nationals and such persons from the general rule of dissolution of contracts. The treaty, which settles the relations between allied nationals and German nationals, has not to settle the question of the relations between allied nationals; this question is entirely a domestic matter.

(Annex, paragraph 12:) The rule laid down in this paragraph with regard to the cancellation of groups of contracts with German life insurance companies is perfectly equitable, for the German insurance company will get rid of its liability on the policies by handing over the proportion of its assets attributable to those policies.

(Article 75:) The reasons of an economic character which require the cancellation of contracts concluded before the war between nationals of enemy powers do not apply to contracts concluded during the war between Alsace-Lorrainers who regain French nationality and Germans. The maintenance of these contracts is accordingly provided for by the treaty. At the same time, reasons of a political character may require the cancellation by the French Government in the general interest of certain contracts which were or may have been imposed on Alsace-Lorraine manufacturers with a view to subjecting their interests to German economic interests.

In order to avoid perpetuating the disturbance which cancellations of this character might introduce into commercial relations, the exercise of the right of cancellation has been limited to six months. Nevertheless, the allied and associated powers agree to add to article 75 the following provision:

If the dissolution provided for in the second paragraph of this article would cause one of the parties substantial prejudice, equitable compensation, calculated solely on the capital employed, without taking account of loss of profits, shall be accorded to the prejudiced party.

II. PRESCRIPTIONS.

(Article 300 (b):) This provision applies to judicial or administrative measures of execution which may have been taken in consequence of the nonperformance of any act or formality during the

war.

(Article 300 (d) :) This provision applies to cases in which a contract has been dissolved without resorting to any judicial or similar procedure. The allied and associated powers agree to the addition of the words "between enemies" after the word "contract" in the first line of the paragraph in order to limit definitely the application of the paragraph to a contract between enemies.

It is suggested by the German delegation that paragraph (d) is unnecessary, because of the provisions of paragraph (c); but it should be pointed out that paragraph (c) only deals with cases in which rights have been prejudiced by measures referred to in paragraph (b). Paragraph (d) is accordingly necessary.

III. JUDGMENTS.

(Article 302) The treaty provides that in certain cases allied or associated courts are competent to decide certain disputes, but this power is not given to the German courts. Reciprocity is not there

fore possible with regard to the execution of judgments or the application to the mixed arbitral tribunal for compensation.

VIII. MIXED ARBITRAL TRIBUNAL.

(Article 304) The suggestion that the jurisdiction of the mixed arbitral tribunal be extended may be answered as follows: The purpose of the tribunal is not only to decide new rights arising under the treaty, but also to provide a new forum to which may be referred certain disputes concerning private rights already in existence. As to these, the courts of the allied and associated powers already have jurisdiction, and some of these powers find insuperable difficulties in attempting to deprive their courts of it. Under their systems of jurisprudence, and in existing circumstances, they find no sufficient reason for excluding their citizens from the access to their own courts which their laws now afford. No new jurisdiction is conferred upon any such courts, and German litigants are not prejudiced through the retention by such courts of the jurisdiction which they now have.

(Article 304 (f) :) The German proposal to bring into accord the wording of article 304 (f) and of paragraph 24 of the annex to article 296, Section III, may be accepted. For this purpose, the more precise of the two versions should be selected, viz, "The high contracting parties agree to regard the decisions of the mixed arbitral tribunal as final and conclusive, and to render them binding upon their nationals."

(Annex, paragraphs 8 and 9:) Objection is raised by the German delegation to the provision in paragraphs 8 and 9 of the annex to article 304 providing that the language of the mixed arbitral tribunal and the place and time of its sessions shall be determined by the allied or associated power concerned; in order to meet this objection the allied and associated powers agree that the language of the proceedings shall, unless otherwise agreed, be English, French, Italian, or Japanese as may be determined by the allied or associated power concerned, and that the time and place of meeting shall be determined by the president of the tribunal.

(Article 304 (g):) The allied and associated powers further agree to accept the suggestion of the German delegation according to which the tribunals and authorities of the high contracting parties will furnish to the mixed arbitral tribunals direct all the assistance in their power, particularly by transmitting notices and collecting evidence.

With regard to the German note of the 29th May asking for information as to the property of German nationals in allied and associated countries, it is not possible to furnish a reliable estimate of the value of such property, but the German delegation no doubt has information in its possession from the returns made to the German Government.

IX. INDUSTRIAL PROPERTY.

(Article 306) 1. The term "ayants droit" in the French text and "legal representatives" in the English text, used in article 306 as having an identical meaning, ought to be understood: the first as denoting the persons who legally represent the beneficiaries whose

rights they have acquired, whether by succession or any other regular transfer, the second as signifying "heirs, executors, and assigns." 2. The last paragraph of article 306 relates only to cases where German-owned companies and businesses have been, or will be hereafter, liquidated under article 297 of Section IV of the treaty (property, rights, and interests). The provision, which moreover corresponds to the measures taken by Germany in respet of property belonging to nationals of the allied and associated States is, therefore, limited to the businesses or companies which are, or will be, in existence at the coming into force of the treaty.

3. The allied and associated powers are not prepared to grant the request of the German delegation for reciprocity in regard to the maintenance of the legal and administrative acts taken by the Governments during the war in respect of industrial, literary, and artistic property. Certain allied and associated States have not taken any measures of this kind, so that if reciprocity were accorded it would be to the detriment of the rights of the nationals of such States without any offset.

4. The clause providing that no action shall be brought by Germany or her nationals in respect of the use during the war of her industrial, literary or artistic property by the Government of any allied or associated power, or by any person acting on behalf or with the assent of such Government, is clearly a proper and necessary clause providing for amnesty for all acts done by a Government or its agents. The allied and associated powers are not, however, prepared to make the clause reciprocal, especially as they have no knowledge as to the action which may have been taken by the German Government with respect to the industrial, literary, and artistic property owned by their citizens.

As regards the disposition of funds arising from the use of industrial property during the war, it should be pointed out that the procedure in this matter must necessarily be the same as that followed in regard to other debts.

5. The words "unless the legislation of anyone of the allied and associated powers otherwise directs" in the fourth paragraph of article 306 apply only to the legislation existing at the moment of the signature of the treaty of peace. There is no objection, in order to make this clear, to inserting the words " in force at the moment of the signature of the present treaty" to qualify the word "legislation " in the first phrase of the fourth paragraph of article 306.

6. The differences between the expression "sums due or paid" on the one hand and "sums produced "on the other, in the fourth paragraph of article 306, is explained by the fact that the effect of the allied emergency measures will continue and that sums will be paid in the future, whereas the measures taken by Germany will cease to have effect.

7. The fifth paragraph of article 306, which provides that the allied and associated powers shall have the right to impose limitations, conditions, or restrictions on rights of industrial property owned by Germans, has by no means for its object the outlawing of such property or the confiscation of these rights.

(a) It is intended, on the one hand, to reserve to the allied and associated powers the right to impose restrictions on industrial, literary, and artistic property when considered necessary for national

defense or public interest. This right, which Germany has reserved to herself by her domestic legislation, is a general and continuing right, to be exercised as occasion arises in respect of industrial, literary, and artistic property acquired before or after the coming into force of the treaty of peace.

(b) It is intended, on the other hand, to retain the power to use industrial, literary, and artistic property as a pledge for the accomplishment of the obligations of Germany and for the reparation of damages in the same manner as it is proposed to retain power to deal with other German property. But it is not the intention of the allied and associated powers to utilize for this purpose the industrial, literary, and artistic property which may arise after the coming into force of the present treaty. Only the industrial, literary, and artistic property arising before or during the war will be subjected by the allied and associated powers to limitations, conditions, or restrictions for assuring the fair treatment by Germany of the rights of industrial, literary, and artistic property held in German territory by their nationals or for securing the due fulfilment of all the obligations undertaken by Germany in the present treaty.

To make clear the different treatment which they intend to accord to property acquired before the coming into force of this treaty and that acquired thereafter, the allied and associated powers are prepared to add to the fifth paragraph of article 306 the following provision:

As regards the rights of industrial, literary, and artistic property acquired after the coming into force of the present treaty, the above-mentioned right reserved by the allied and associated powers shall only be exercised in the case where these limitations, conditions, or restrictions may be considered necessary for national defense or in the public interest.

The allied and associated powers see no objection to making it clear that the measures which can be taken under the fifth paragraph of article 306 will not be exercised without compensation to the German beneficiaries of the rights, and with this object are prepared to insert after the above-mentioned addition to this paragraph the following new paragraph:

In the event of the application of the provisions of the preceding paragraph by any allied or associated power, there shall be paid reasonable indemnities or royalties, which shall be dealt with in the same way as other sums due to German nationals are directed to be dealt with by the present Treaty.

(Article 307) 8. The German objection to the reservation by the allied and associated powers of freedom to apply their war legislation to patents which may be revived under articles 307 and 308 is based on an exaggerated view of the effect of this provision, which would probably affect only a small number of patents revived. All such patents would, if they had been kept up, have been subject to similar provisions during the war. The allied and associated powers are prepared to limit their rights in this matter to the grant of licenses, and for this purpose to insert the words "as to the grant of licenses" after the word "provisions" in the penultimate line of the second paragraph of article 307.

(Article 310) 9. Since contracts for licenses in respect of rights in industrial, literary, and artistic property should receive the same treatment as other prewar contracts, the same procedure should be

applied to them as is applied to contracts generally, as provided in articles 299 to 305.

(Article 311:) 10. As regards the recognition and the protection of rights in industrial, literary, and artistic property belonging to Germans in the territories separated from Germany, the following addition is made to article 311:

The rights of industrial, literary, and artistic property which are in force in the territories separated from Germany in accordance with the present treaty, at the moment of the separation of these territories from Germany, or which will be reestablished or restored in accordance with the provisions of article 306 of the present treaty, shall be recognized by the State to which the said territory is transferred and shall remain in force in that territory for the same period of time given them under the German law.

PART XII.

PORTS, WATERWAYS, AND RAILWAYS.

The remarks of the German delegation regarding the clauses affecting communications (Part XII of the conditions of peace) are, for the most part, too general to allow of a detailed reply, and, further, are not in the nature of technical objections. On all points the German delegation seems to recognize that the proposed measures are capable of practical application; its opposition is essentially one of principle, both from the theoretical and the political point of view.

These objections and criticisms can, indeed, be summarized as follows:

In the first place, Germany considers her sovereign rights to be infringed by any stipulation introducing into the régime of her ports, navigable waterways and railways any kind whatever of international control, and indeed, by any stipulation introducing any definite contractual obligation in the treaty of peace. Further, since Germany claims to enter the league of nations forthwith on a footing of complete equality with other peoples, she therefore refuses to subscribe to any engagements which would not be imposed on a basis of reciprocity, and immediately, on the allied and associated powers as on herself.

Opposition on points of detail and objection to the solution of particular problems are explained only on the basis of these two fundamental differences. Germany seems to agree as to the rules of freedom of transit and international circulation, but directly the question as to the measures necessary to secure the application thereof on her territory is raised, she alleges either that she can not submit to a "meddling in her internal organization as regards railway traffic and working" or that "the vital strength of German coast towns is intentionally weakened by the allied and associated powers securing to themselves the right to use the ports and navigable waterways exempt, in practice, from any German control," or, finally, that adhesion in advance to future international conventions on means of communication is an affront to her dignity, and that the provisions for the construction of railways and canals on her territory are a violation of her independence. In other cases (régime of tariffs on railways, equal treatment for all nations in ports and on navigable