■t^i ^0 -r. r^u^ ''^^.-^^ ^'}^^\ ^.K^^ ,3^"-. X/' p ,0 n^ : '- \ i^- ^ -■ 66th CONGRESS 1 SENATE COMMITTEE PRINT 1st session I ECONOMIC CLAUSES PROVISIONAL DRAFT OF THE ECONOMIC CLAUSES OF THE TREATY OF PEACE WITH GERMANY WITH EXPLANATORY HEADINGS AND MARGINAL COMMENTS FOR THE USE OF THE AMERICAN DELEGATES PRESENTED TO THE SENATE COMMITTEE ON FOREIGN RELATIONS BY HON. BERNARD BARUCH ^-Z6 '5(^^ Printed for the use of the Committee on Foreign Relations WASHINGTON GOVERNMENT PRINTING OFFICE 1919 ^^^^^ This is not the final text nor is the numbering or lettering that of the treaty. n. of B. FEB 3 1920 ECONOMIC COMMISSION. Draft of Clauses for the Treaty With Germani. Part I. Commercial relations. Chapter A. Customs reouhitions. duties, and restrictions. Chapter B. Shipping. Chapter C. Unfair competition. Chapter D. Treatment of nationals of allied and associated powers in ex-enemy countries. Chapter E. General articles. Part II. Revival or abrogation of economic treaties. Part III. Debts. Part IV. Property, rights and interests. Part V. Contracts, prescriptions judgments, mixed arbitral tril)unals. Part VI. Industrial property. ECONOMIC COMMISSION. DRAFT OF CLAUSES TO BE INSERTED IN THE TREATY WITH GERMANY. Part I. COMMERCIAL RELATIONS, CUSTOMS DUTIES, SHIPPING, UNFAIR COMPETITION, TREATMENT OF NATIONALS. SUMMARY OF CHAPTER A— CUSTOMS REGULATIONS, DUTIES AND RESTRICTIONS. COMMENTS. CONTENTS. MEMORANDUM BY AMERICAN DELEGATES. As regards customs tariffs, the proposed arrangement is that for a period of six months, Germany shall impose no duties higher than the lowest duties in force in 1914. After these six months she is free to do as she pleases, subject however, for a limited period, to giving most-favored-nation treatment to the Allies, and in general to discrim- inating in no way against the Allies. This requirement of most- favored-nation treatment has no counterpart in the form of any requirement imposed on the Allies to give Germany most-favored- nation treatment. Hence at the close of five years Germany is left free The belief is that during that five year period things wall settle down, and reasonable commercial arrangements will be made between Germany and other countries. Similar stipulations, favorable for the Alhes, are made for vessels, transit duties or charges, and the hke. Here too, a limit of five years is set for the unilateral obhgation imposed on Germany, m the ex- pectation that reasonable reciprocal relations will be restored. The five year periods in these cases are subject to modification by the League of Nations, under conditions somewhat different m the two sets of cases. „ ,,. , ^ ■ ^i As re* a party, the High Contracting Parties shall renew, in so far as con- cerns them ana under the reserv^ations indicated in the second paragraph of the present Article, the Conventions and arrangements signed at Berne on the 14th October, 1890, the 20th September, 1893, the 16th July, 1895, 18 ECONOMIC CLAUSES. COMMENTS. Chinese tariff. Whang-Poo Conservancy the 16 June, 1898, and the 19tli September, 1906, regard- ing the transportation of goods by rail. When a new Convention for the transportation of u. s. not a party. passengers, luggage and goods by rail shall have been Drafted by concluded to replace the Berne Convention (14th Octo- Ports, water- ^ ways and Rail- ber, 1890) this new Convention shall bind Germany even ways, and pro- ' ' , '^ posed by that if the said Power shall have refused either to take part commission. in the preparation of the Convention or to subscribe thereto. Article G. From the date of bringing into force the ])resent Treaty, the High (Contracting Parties shall renew in so far as concerns them: — (1.) The arrangement of the 29th August. 1902. re- u. s. a party, garding the Xew Chinese Customs Tariff. (2.) The ariangement of the 27th September, 1905. ^ s. a party. regarding Whang-Poo, and the provisional sui)plenientary arrangement of the 4th Aj)ril, 1912. C'hina, however, is no longer bound to grant to Ger- many the advantages or privileges which she allowed Germany under these arrangements, and which she has annulled as fiom the rui)ture of dii)lomatic relations. Article H. Protocol of Peking. Germany renounces all claims to all benefits and priv- Affects the ilegcsunderthepiovisionsof the Final Protocol signed at indemnity. Peking on 7th September, 1901, and likewise to all in- demnities accruing under the said Protocol subsecpient to 14th Maich, 1917. Article I. From the date of bringing into force the present Treaty, European. the High Contracting Parties shall renew, in so far as concerns them, the Hague Convention of the 17th July, 1905, relating to civil procedure. This renewal, however, does not and shall not apply to France, Portugal and Roiunania. 19 SUMMARY OF CONTENTS. National treatment of German trade in Samoa to terminate. Treaties Germany is asked to sign. Revival of bi- lateral treaties with Germany. ECONOMIC CLAUSES. COMMENTS. Article J. The special rights and privileges granted to Germany by J^^^'j^^^^J*^' Article III of the Convention of 2nd December, 1899, re- ^. s. and Great Britain, were lating to Samoa, shall terminate at the date of bringing incidental to the into force the present Treaty. Article K. Gemiany undertakes to adhere to the Treaties, Conven- tions or Agreements hereinafter mentioned or to ratify them : — (1.) Convention of the 23rd January, 1912, signed at the Hague, regarding opium, morphine and cocaine. (2.) Act and Protocol of the 20th March, 1914, relating to the protection of literary and artistic works. (5.) Convention of the 4th March, 1914, regarding the diseases' of plants. {4.) Convention of the 16th October, 1912, for a uni- fomi system of giving the results of analysis of food stuffs for human beings and animals. (5.) Convention of the 16th October, 1912, for a perma- nent International Bureau of Analytical Chemistry con- cerning food stuffs for human beings and animals. Bilateral Treaties. Article L. Each of the Allied or Associated Pov^^ers, being guided by the general principles or special provisions of the present Treaty, shall notify to Germany the bilateral Treaties or Conventions which such Allied or Associated Power wishes to revive with Germany. The Allied and Associated Powers undertake among themselves not to revive with Gennany any Conven- tions or Treaties which are not in accordance with the tenns of the present Treaty. In case of differences of opinion the League of Nations wdll be called upon to decide. Samoan adjustment Already signed, but not ratified by Germany. U. S. a party. TJ. S. not a party. U. S. not a party. As regards the three last named Conventions, the United States delegation has made a reser- vation which it proposes to refer to the Council of Four. 20 ECONOMIC CLAITSES. COMMENTS. The notification referred to in the present article shall be made either directly or through the intemiediary of another Power. The receipt thereof shall be acknowl- edged in writing by Germany. The date of the revival shall be that of the notification. The notification shall mention any provisions of the said Treaties and Conven- tions which, not being in accordance with the temis of the present Treaty, shall not be considered as revived. A period of six months from the date of ratification of the present Treaty is allowed to the Allied and Asso- ciated Powers in which to make their notification. Only those bilateral Treaties and Conventions which a'"i° ^^^ ^^^^^^ '' Powers decide have been the subject of such a declaration shall be ^^^^| '/eaties "' _ _ shall be revived, revived between the Allied and xVssociated Powers and ^y ^^^ '""^^ of these Treaties, Geraiany ; all the others arc and shall remain abrogated. Germany wiu •' ' * still be able to denovmce most of them by giving twelve months' notice. The above reg-ulations apply to all bilateral Treaties or Conventions existing between any of the Allied and Associated Powers signatories to the ^jrcsent Treaty and Germany, even if the said Allied and Associated Powers have not l)een in a state of war with Germany. Article M. Enemy treaties entered into during the war are abrogated by this clause. Gemiany recognizes that all the Treaties, Conventions or Agreements which she has concluded with Austria, Bulgaria, Hungaiy or Turkey since the 1st August, 1914, until the bringing into force of the present Treaty are, and shall remain, abrogated by the present Treaty. Article X Most-favored- Nation treatment under pre-war enemy treaties. GeiTuany undertakes to secure, fully and uncoudition- u. s. reserves •^ '' privilege of ally, to the Allied and As^sociated Powers, and to the ofii- referring this to '' . the State De- cials and subjects of the said Powers, the enjojinent of all panmentfor the rights and advantages of any kind which she may have consideration, granted to Austria, Bulgaria, Hungaiy or Turkey, or to the ofiicials and subjects of these States, by Treaties, Con- ventions or Arrangements concluded before the 1st August, 21 SUMMARY OF CONTENTS. ECONOMIC CLAUSES. 1914, SO long as these Treaties, Conventions, and Arrange- ments remain in force. The Allied or Associated Powers reserve the right to accept or not the enjoyment of these rights and advantages. Article 0. COMMENTS. Enemy treaties with Russia an( Roumania abrogated. Annuls conces- sions, etc. granted under pressure by Russia to Germany. Arrangements which she concluded with Russia, or with any State or Government of which the territory pre- viously formed a part of Eussia, or with Roumania, before the 1st August, 1914, or after that date until the putting into force of the present Treaty, are, and shall remain, abrogated. Article P. Should an Allied or Associated Power signatoiy to the present Treaty, or Russia, or a State or Government of which the territory formerly constituted a part of Russia, have been forced, since the 1st August, 1914, by reason of military occupation, or by any other means or for any other cause, to grant or allow to be granted by the act of any public authority, concessions, privileges and favors of any kind to a subject of Germany, such concessions, privileges and favors are fully and unconditionally an- nulled by the ])resent Treaty. No claims or indemnities which may result from this nullification shall be at the charge of the Allied and Associated Powers or of the Powers, States, Govern- ments or Public Authorities which are released from their engagements by the present Article. This abrogates all German treaties with Finland, as well as with the Ukraine. Most-favored Nation treat- ment under enemy treaties with neutrals during the war. Article Q. From the coming into force of the present Treaty, (Germany undertakes to enable the Allied and Associated Powers, and the subjects of the said Powere, to enjoy fully and unconditionally the rights and advantages of any kind which she has granted by Treaties, Conventions, or Arrangements to non-belligerent States, or the sub- 22 jects of these States, since the 1st August, 1914, until the bringing- into force of the present Treaty, so long as these Treaties, Conventions and Arrangements remain in force. Tlio Roumanian dologation put I'orwaid an additional aiticlo with a view to the abrogation of all the privilogos granted to the enemy powers or to enemy shipping companies in Danube ports. This article and an abstract from the note relating thereto are given in the gen- eral report. The Commission decided that it could not adopt^he Roumanian proposition but decided to call the attention of the Peace Conference to its importance. The Comniission considered another very important group of multi- lateral treaties which it was necessary to examine in view of their combined political and economic bearing. Tlie group in question comprised the Act of Algeciras, the Conven- tion of the 31st May, 1865, regarding the Cape Spartel Lighthouse, the General Act of the Brussels (\)nference of the 2nd July, 1890, the Declaration of the 15th June, 1910, amending the Declaration annexed to the General Act of Brussels, the Conventions of the 8th June, 1899, and 3rd Xovember, 1906, relating to the liquor traffic in Africa, the General Act of Berlin of 26th February, 1885, and the Conventions regarding the navigation of the Danube (Paris Treaty of the 30th March, 1856, Convention of the 28th March, 1866, Treaty of the 15th March, 1871, Treaty of Berlin of the 13th July, 1878, Treaty of the 28th May, 1871 and 10th March, 1873). The Commission considered that if these various treaties and con- ventions requiring to be revised were not revived, the Peace Confer- ence should deal with the matter and take any necessary steps. As regards the Convention of the 31st May, 1865, regarding the Cape Spartel Lighthouse, the British Delegation expressed the desire that the examination of this instrument should not be overlooked by the competent Commission, and that in such examination the importance of the matter from the point of view of shipping, as well as its political aspect, should be borne in mind. The Commission recommended that this Convention should be revived except in so far as inconsistent with changes affecting the political status of Morocco. The Commission thought finally that the formulation of sugges- tions concerning treaties dealing with the conduct of hostilities, such as the Geneva Convention, the Hague Conventions, etc., did not come within its competence. 23 Paet III. DEBTS. SUMMARY OF MEMORANDUM BY AMERICAN DELEGATES. COMMENTS. CONTENTS. Article A and Regulation X provide for a system under which clearing offices are created, one between each Allied State and Ger- many, for the settlement of debts. In order to make the plan workable, it is provided that: (a.) Each State shall guarantee the payment of all debts owing by its nationals to nationals of the enemy State, except in cases of the insolvency of the debtor before the war; (b.) The proceeds of the sale of private enemy property in each State shall be used by the said State to pay the debts of its own nationals ; (r.) Debtors and creditors in States formerly enemy are forbidden to settle their debts with each other; or to communicate with each other regarding them. This plan may be desirable for Great Britam, but is extremely undesirable, if nor actually impossible for the United States. It is accordingly recommended that it be not accepted by the United States. 1. Our Government should not accept the burden of guaranteeing the private debts owed by its citizens. This would be an obligation of unknown and probably very great proportions. 2. The Treaty should not compel the United States to use the private property of Germans in our country for the payment of debts owed by other Germans to our citizens. To do so might amount to confiscation; moreover, Congress has expressly reserved to itself the power to decide what shall become of the enemy property in the United States. On the other hand, there seems no objection to the United States retaining the enemy property, for the present, as a hostage or pledge to secure American rights, and then deciding m its own way what is the fair and proper course. To accept the clearing house system would commit the United States to a course which, it is firmly believed. Congress will not wish to follow. 3. To forbid our citizens from adjusting their debts and accounts with former enemies privately, would be a wholly unnecessary and unjustifiable interference with private affairs. It would be a most serious obstacle in the resumption of business and commercial rela- tions. Our financial houses and business firms had many complicated accounts, and transactions which were suspended by war. These houses, and especially the bankers, must speedily adjust their finan- cial accounts. Otherwise commerce cannot be properly resumed. 24 KCONOMIC CLAUSES. COMMENTS. The Clearing House plan would compel all such adjustments and all payments to be made through governmental agencies. As regards other countries than the United States, the adoption of the clearing house plan by some of them would be extermely detri- mental to their own interests, and might be ruinous to a nation whose balance of private debts was largely in favor of Germany. The principle is already accepted, Ai'ticle A, clause (e) that anj^ Allied State may exclude itself from the operation of the clearing house plan. Article A. Provides for clearing house system for the collection of debts, and the use of proceeds of enemy prop- erty. Prohibits allied and enemy nationals from settling their debts with each other, or even from communi- cating with each other about Debts iKiyal)le before the war and due by nationals of one of the Contracting States residing within the territoiy of such State to nationals of an opposing State residing within the territory of such State, interest which has be- come due during the war on Government securities and bonds redeemed during the war of which the payment to the nationals of that Government or neutrals has not been suspended during hostilities, and debts which have become payable during the war and arose out of transactions or contracts the total or partial execution of which was sus- pended at the date of the declaration of war, shall be settled through the intennediary of clearing offices to be established by each of the High Contracting Parties within three months of the coming into operation of the present Treaty. The proceeds of liquidation of enemy property, rights, and interests mentioned in Article B and Regulations Y will l^e accounted for through the clearing offices, and disposed of by them under the conditions provided In' the said article and regulations. The above-mentioned settlements shall be effected according to the following i)rinci})les and in accordance with Regulations X annexed hereto : — (a.) Each of the High Contracting Parties shall pro- hibit as from the coming into operation of the })resent Treaty, both the payment and the acceptance of payment of such debts, and also all conmiunications between the parties for the purpose of settlement of the said debts. Should not be adopted by U. S. U. S. delegate has notified other states that it could not accept this Art. A and Reg. X. No objections made, and clause (el per- mits any allied state to except itself. 25 SUMMARY OF CONTENTS. Requires each government to guarantee the payment of debts owed by its nationals to former enemy nationals. Permits any Allied state to decline to adopt Art. A and Reg. X. ECONOMIC CLAUSES. (/>.) Each of the High Contracting parties shall be respectively responsible for the payment of such debts due by its nationals, except in the cases where before the war the debtor was in a state of bankruptcy or failure, or had given formal indication of insolvency. Nevertheless, debts due by the inhabitants of territory invaded or occupied by the enemy before the annistice will not be guaranteed by the States of which those territories form part. (c.) The sums due to the nationals of one of the High- Contracting Parties by the nationals of the other will be debited to the clearing office of the country of the debtor and will be paid to the creditors by the clearing office of the country of the creditor. {(L) [Rate of Exchange.] * (e.) The provisions of Article A and Regulations X shall not apply as between Germany on the one hand and any one of the Allied or Associated States, their colonies or protectorates, or any one of the British Dominions or India on the other hand, unless within a period of six months from the coming into force of the present Treaty, notice to that effect is given to Gennany by the Govern- ment of such Allied or Associated State or of such Domin- ion or of India as the case may be. (/.) The Allied or Associated States who have adopted Article A and Regulations X may agree between them- selves to apply these Regulations to their respective nationals established in their territory so far as regards matters between nationals and German nationals. In this case the pa3Tiients made by application of this provi- sion will be subject to arrangements between the Allied and Associated offices concerned. *NoTE. — The Economic Commi?sion considers that the basis of tlierate of exchan£te for the operation of the clearing offices shall be fixed by tiie Financial Commission, and it has referred to that Commission the suggestions put forward by the different Delegations. COMMENTS. 26 ECONOMIC CLAUSES. COMMENTS. Regulations X. 1. Each of the Hig-h ( 'ontracting- Parties Avill, within should not be three months of the cominsi; into operation of the present u. s. Treaty, establish a clearino' office for the collection and payment of enemy debts. Local clearing- offices may be estal)lished for any par- ticular portion of the territories of the High Contracting Parties. Such local clearing offices may perform all the functions of a central clearing office in their respective districts, except that all transactions with the clearing office in the enemy countiy must be effected through the central clearing office. 2. In the present Regulations the debts referred to in the first paragraph of Article A of the present Treaty are described as "enemy debts," the persons from whom the same are due as "enemy debtors," the persons to whom they are due as "enemy creditors," the clearing office in the country of the creditor is called the "Creditor Clearing Office," and the clearing office in the countiy of the debtor is called the "Debtor Clearing Office." 3. The High Contracting Parties will subject contra- ventions of paragraph (a) of Article A of the present Treaty to the same penalties as are at present provided by their legislation for trading with the enemy. They will similarly i)rohibit within their territoiy all legal process relating to payment of enemy debts, except in accordance with the provisions of the present Regulations. 4. The (lovernment guarantee specified in paragraph (b) of Article A shall take effect whenever, for any reason, a debt shall not be recoverable, except in a case where, at the date of the outbreak of war the debt was barred by the laws of prescription in force in the country of the debtor, or where the debtor was at that time in a state of bankruptcy or failure or had given formal indication of insolvency. In such case the procedure specified by the present Regulations shall apply to payment of the divi- dends due or accruing due by the trustee. 27 ECONOMIC CLAUSES. COMMENTS. The temis "bankruptcy" and "failure" refer to the ap- plication of legislation providing for such juridical condi- tions, the expression "formal indication of insolvency" includes a similar juridical condition provided for in English law. 5. Creditors shall give notice within six months to the Creditor Clearing Office of debts due them, and shall furnish the clearing office with any documents and in- formation required of them. The High Contracting Parties will take all suitable measures to trace and punish collusion between enemy creditors and debtors. The clearing offices will conmmni- cate to one another any evidence and information which might help the discovery and i)unishment of such col- lusion. The High Contracting Parties will facilitate as much as possible postal and telegraphic communications at the expense of the parties concerned and through the inter- mediary of the clearing offices between debtors and credi- tors desirous of coming to an agreement as to the amount of their debt. The Creditor Clearing Office will notify the Debtor Clearing Office of all debts declared to it. The Debtor Clearing Office will, in due course, inform the Creditor Clearing Office which debts are admitted and which debts are contested. In the latter case, the Debtor Clearing Office will give the grounds for the non-admission of the debt. 6. When a debt has been admitted, in whole or in {^"^^ s"' ^^^^^ part, the Debtor Clearing Office will at once credit the Creditor Clearing Office with the amount admitted, and at the same time notify it of such credit. 7. If, within the space of three months (unless the Creditor Clearing Office has agreed to an extension) the Debtor Clearing Office has not given notice whether the debt is or is not admitted, the debt shall be deemed to be admitted in full and shall be credited forthwith to the Creditor Clearing Office. 28 ECONOMIC CLALTSES. 8. When the whole or part of a debt is not admitted the two clearing- offices will examine into the matter jointly and will endeavor to bring the parties to an agreement. 9. The Creditor Clearing Office will pay to the indi- vidual creditor the sums credited to it out of the funds placed at its disposal by the Government of its country and in accordance with the conditions fixed by the said Government, retaining any sums considered necessary to cover risks, expenses or conmiissions. 10. Any person having claimed pajmient of an enemy debt which is not admitted in whole or in part shall pay to the clearing office, by way of fine, interest at 5 per cent, on the part not admitted. Any person having unduly refused to admit the whole or part of a debt claimed from him shall pay, by way of fine, interest at 5 per cent, on the amount with regard to wliich his refusal shall be disallowed. Such interest shall run from the date of expiration of the period provided for in paragraph 7 till the date on which the claim shall have been disallowed or the debt paid. Each clearing office shall in so far as it is concerned take steps to collect the fines above provided for, and will be responsible if such fines cannot be collected. The fines will be credited to the other clearing office, which shall retain them as a contribution towards the cost of carrying out the present regulations. 11. The balance shall be struck monthly and the credit balance paid in cash by the debtor State within a week. Nevertheless, any credit balances which may be due by one or more of the Allied or Associated States shall be retained until complete payment shall have been effected of the smns due to the Allied or Associated States or their nationals on account of the war. 12. To facilitate discussion between the Clearing Offices each of them shall have a representative in the town in which the other is established. 29 COMMENTS. SUMMARY OF ECONOMIC CLAUSES. COMMENTS. CONTENTS. 13. Except for special reasons all discussions in regard to claims will, so far as possible, take place at the Debtor Clearing Office. 14. In conformity with Article A, paragraph (b), the High Contracting Parties are responsible for the pay- ment of the enemy debts owing by their nationals. The Debtor Clearing Office will therefore credit the Creditor Clearing Office with all debts admitted, even in case of inability to collect them from the individual debtor. The Governments concerned will, nevertheless, invest their respective clearing offices with all necessary powers for the recovery of debts which have been ad- mitted. As an exception, the admitted debts of persons having Does not apply suffered injury from acts of war shall only be credited to the Creditor Clearing Office when the compensation due to the person concerned in respect of such injury shall have been paid. 15. Each Government will defray the expenses of the Clearing Office set up in its territory, including the sala- ries of the staff and the various expenses. 16. Where the two clearing offices are unable to agree whether a debt claimed is due, or in case of a difference between an enemy debtor and an enemy creditor, or be- tween the clearing offices, the dispute shall either be referred to arbitration if the parties so agree under con- ditions fixed by agreement between them, or referred to the Mixed Arbitral Tribunal provided for in Article I. At the request of the Creditor Clearing Office the dis- pute may, however, be submitted to the jurisdiction of the Courts of the place of domicile of the debtor. 17. Recovery of sums found by the Mixed Arbitral Tribunal, the Court, or the Arbitration Tribunal to be due shall be effected through the clearing offices as if these sums were debts admitted by the Debtor Clearing Office. 18. Each of the Governments concerned shall appoint an agent who will be responsible for the presentation to KCONOMIC CLAUSES. the Mixed Arbitral Tribunal of the cases conducted on behalf of its clearing office. This agent will exercise a general control over the representatives or counsel em- ployed by its nationals for the conduct of their cases. Decisions will be arrived at on documentary evidence, but it will be open to the Tribunal to hear the parties in person, or according to their preference by their repre- sentatives a])proved by the two Governments, or by the agent referred to in the preceding paragraph, who shall be com])etent to intervene along with the party or to re-open and maintain a claim abanrloned by the same. 19. The clearing offices concerned will lay before the Mixed Arbitral Tribunal all the information and docu- ments in their possession, so as to enable the Tribunal to decide rapidly on the cases which are brought before it. 90. Where one of the parties concerned ap])eals against the joint decision of the two clearing offices he shall make a deposit against the costs, which deposit shall only be refunded when the first judgment is modified in favor of the appellant and in proportion to the success he may attain, his opjwnent in case ol' such a refund being required to pay an equivalent proportion of the costs and expenses. Security accej)ted by the Tribunal may be substituted for a deposit. A fee of 5 per cent, of the amount in dis]nite shall be charged in respect of all cases l)rought before the Tribunal. This fee shall, unless the Tribunal directs otherwise, be borne by the unsuccessful party. Such fee shall be added to the deposit referred to in the preceding i)aragraph. It is also independent of the security provided for by the same paragraph. The Tribunal may award to one of the parties a sum in respect of the expenses of the proceedings. Any sum payable under this paragraph shall be credited to the clearing office of the successful party as a separate item. 31 COMMENTS. ECONOMIC CLAITSES. 21. With a view to the rapid settkMiient of ehiims, due regard shall be paid in the appointment of all persons connected with the clearing oflSces or with the Mixed Arbitral Tribunal to knowledge of the language of the other country concerned. Each of the clearing offices will be at liberty to correspond with the other, and to forward documents in its own language. 22. Subject to any special agreement to the contrary between the Governments concerned, debts shall carry interest in accordance w^ith the following provisions : — Interest shall not be payable on sums of money due by way of dividend, interest, or other periodical payments which themselves represent interest on capital. The rate of interest shall be 5 ])or cent, per annum except in cases where, by contract, law, or custom, the creditor is entitled to payment of interest at a different rate. In such cases the rate to which he is entitled shall prevail. Interest shall run from the date of commencement of hostilities (or, if the sum of money to be recovered fell due during the war, from the date at which it fell due) until the sum is credited to the clearing office of the creditor. Sums due by way of interest shall be treated as debts admitted by the clearing offices and shall be credited to the Creditor Clearing Office in the same way as such debts. 23. Where by decision of the clearing offices or the Mixed Arbitral Tribunal a claim is not recognized as an enemy debt, the creditor shall be at liberty to prosecute the claim before the Courts, or in any other way open to him. The presentation of a claim to the clearing office prevents the time of limitation of right of action from running. 2-i. The High Contracting Parties agree to regard the decisions arrived at in accordance with the provisions of these regulations as final and conclusive, and to render them binding upon their nationals. 32 COMMENTS. ECONOMIC CLAUSES. COMMENTS. 25. In any case where a Creditor Clearing Office de- clines to notify a claim to the Debtor Clearing Office, or to take any step provided for in these Regulations, in- tended to make effective in whole or in part a request of which it has received due notice, the enemy creditor shall be entitled to receive from the Clearing Office a certificate setting out the amount of the claim, and shall then be entitled to prosecute tlu^ claim before the courts or in any other way open to him. 130358—19 5 Part IV. rROPERTY, RIGHTS AND INTERESTS. SUMMARY OF MEMOUANDUM BY AMERICAN DEI.EGATES. COMMENTS. CONTENTS. Tlie principles for dealing with enemy property are as follows : 1. Germany is required to restore to the owners all private property seized in Germany, not already sold. As regards all such property which has been sold, it must either restore the property or pay the proceeds of sales to the Government of the owner. Germany is also recpired to pay for any damages or injuries inflicted by its Govern- ment upon the private property of the nationals of Allied citizens in GermanjT. The amount of said damages or injuries is to be deter- mined by a mixed tribunal with a neutral president. The Allied countries are allowed to hold the property of German nationals in their countries, and at their option to sell such property and use the proceeds: (1) to pay for the property of their citizens not restored or paid for by Germany; or (2) to pay for damages to their property, in Germany; or (3) to pay debts of their nationals owed by nationals of Germany. In case, however, Germany keeps its obliga- tion to restore or pay for the Allied property in Germany, the Allied Countries would not have to use the proceeds of German property for such purposes. 2. In addition, the Allied Countries are allowed, at their option, to use the German private property which is in their countries, to pay other claims against Germany, in accordance witli the other terms of the Treaty. 3. Germany agrees to compensate its own nationals for any ]n-operty of theirs retained or sold by the Allied States. The adoption of the above principles will leave the United States free to deal with German property in the United States as Congress may decide. It may (a) return all or any part of the property to the former owners: (b) sell all or any part of such property and use all or any part o{ the proceeds of aU sales to pay the claims of American citizens on account of their property and rights in Germany; (c) use the proceeds of such sales to pay any claims against Ger- many which may arise according to the other terms of the Treaty (e. g. on possible reparation or indemnity account). The Trading with the Enemy Act pro^^des that the ultimate dis- jrosition of the enemy property taken by the Alien Property Custo- dian shall be decided by Congress, after the \ ar. The above plan provides for Germany's consent to this enactment. The I'nited States agrees, however, to give due credit to Germany, for any property of its citizens (mcluding the proceeds of sales) which the United States may apply to the purposes specified above and to give due credit either to Germany or to its nationals for the remainder of 34 ECONOMIC CLAUSES. COMMENTS. For brevity, in the margin and memorandum, •AUied" will include "Associated." (a) Requires the restoration of Allied property in Germany, not already sold. (b) Authorizes the Allies to sell in future German property in their terri- tory, at their option. Doe; apply to past sales. not such ])n)perty or proceeds, not so aj)plied. This stipuhxtion expressly exclutles the idea that the United States will coniiscate any ])roperty. Meanwhile all acts under war legislation in all countries, including Germany, m dealing with enemy property, arc confirmed, so tliat the titles to property sold by the Alien Property Custodian in the United States, as well as the titles to that sold by the German Gov- ernment, are confirmed. This is intended to preclude, as far as possible, litigation to question such titles. The United States must, however, elect not to accept ^Vitide A and Regulation X of Part III (Pre-War Debts) as e,\p>lained in the comments on that part. Artk^le B. The question of private i)roperty, riglits and interests in enemy countries shall be settled according to the pro- visions of the annexed Regulations Y, which cany out and apply the following princii)les : {a.) The exceptional war measures and measures of transfer defined in paragraph 3 of Regulations Y taken by Germany with respect to the property, rights and interests of nationals of Allied and Associated States when the liquidation has not already been completed shall be immediately discontinued or stayed and the property, rights, and interests concerned restored to their owners, who shall enjoy full rights therein in accordance with the ])rovisions of Article C. (/>.) Subject to any contrary stipulations which may be (b) probawy ju-ovided for in the present Treaty, the Allied and Asso- m1 make S ciated States reserve the right to retain and liquidat<> all "''"" '*^''' l)roi)erty, rights and interests of German nationals or companies controlled by them within their territories, colonies, possessions and protectorates such as restilt from the Treaty of Peace. The liquidation shall be carried out in accordance with the laws of the Allied or Associated State concerned, and the German owner shall not l)e able to dispose of such property, rights or interests nor subject them to any charge without the consent of that State. German nationals who automatically acquire the na- tionality of an Allied or Associated State in accordance with the provisions of the Treaty of Peace will not be con- sidered as German nationals within paragraph (b). iCONOMIC CLAUSES. COMMENTS. (c) The prices and valuations for future sales in Allied countries will be fixed by such countries. (d) All sales and action here- tofore taken in all states, in- cluding Germany, are coniirnied. (e) Claims of Allied citizens for injuries to their property in Germany to be settled by a new court with a neutral presi- dent. Such claims shall be assumed by Germany, and may be paid by Allied states out of German property in their hands. (f ) Requires the restoration of property sold, but, under (g), applies only to countries (c.) The price or the amount of compensation in respect 1^ 'future "a\^e'r of the exercise of the right referred to in the preceding ""^^y- paragrai)h (b) will be fixed in accordance with the prin- ciples of sale or valuation determined by the laws of the country in which the property shall have been retained or liquidated. {d.) As ))etween the Allied and Associated States or their nationals on the one hand, and Germany or her nationals on the other hand, all the exceptional war measures or measures of transfer or acts done or to be done in execution of such measures as defined in Regulations Y, paragraphs 1 and 3, shall be considered as final and bind- ing as to all persons except as regards the reservations provided in the present Treaty or its annexes. [Additional sentence proposed April 23 by American Delegation: "But this paragraph and the said Regulations Y shall not affect the rights of Allied and Asso- ciated States, or their nationals as between one another."] [e.) The claims made by the nationals of Allied or Asso- ciated States in respect of damage or injury inflicted upon their property, rights or interests, or on any company or association in which they are interested in German terri- tory by the application either of exceptional war measures or of measures of transfer mentioned in Regulations Y, paragraphs 1 and 3, shall be investigated, and the total of the compensation due to the claimant shall be determined by the mixed Arbitral Tribunal provided for in Article I or by an Arbitrator appointed by that Tribunal. This compensation will be borne by Germany, and may be charged upon the property of German nationals within the territory or under the control of the claimant's State. This property may be constituted as a pledge for enemy liabilities under the conditions fixed by Regulations Y, paragraph 4. The payment of this compensation may be made by the Allied or Associated State, and the amount will be debited to Germany. (/.) AVhenever an Allied or Associated owner of i)roi)- W r>oes not erty which has been subjected to a measure of transfer in German territory expresses a desire for its restitution, his 36 SUMMARY OF CONTENTS. KCOXOMIC CLAUSES. claim for compensation in accordance with paragraph {e) shall be satisfied b}- the restitution of the said ])roperty if it still exists in specie. In such case Germany shall take all necessary steps to restore the evicted owner to the possession of his property, free from all encumbrances or burdens with which it may have been charged after the liquidation, and to indemnify all third parties injured by the restitution. If the restitution provided for in the first paragTaph can- not be effected, private agreements arranged by the inter- mediation of the States concerned oi the offices provided for in Regulations X may be made, in order to secure that the Allied or Associated national be compensated for the injui-y referred to in paragraph (e) by the grant of advan- tages or equivalents which he agrees to accept in place of the property, rights or interests from which he was evicted. Through restitution in accordance with this article the price or the amount of compensation fixed by the applica- tion of paragraph (e) Avill be reduced by the actual value of the property restored, account being taken of compensa- ti n in respect of use or deterioration. ((J.) The rights conferred ))}■ paragraph (/) are reserved to owners who are nationals of Allied or Associated States within whose territoiy legislative measures prescribing the general liquidation of enemy property, rights or interests were not applied before the signature of the armistice. (//.) Except in cases where, by an application of para- gra[)h (/), restitutions in s])ecie have been made, the net proceeds of sales of enemy proj)erty carried out either l)y virtue of exceptional Avar legislation, or by application of the present Treaty or its annexes, and in general all cash assets of enemies, shall be dealt with as follows: — COMMENTS. (h) Requires that proceeds of sales of enemy property in Allied states shall be credited to Germany. Such proceeds may be used to pay claims of allied nationals. or claims against Germany under reparation clauses. (ii Requires /J \ \>, regards countries adopting Article A and Reau- '^^^ u. s. does Germany to pay V / <-■ 1 )!-. ,-~" „ot accept Art. rt °^°/^*'°°^i^ lations X. the said proceeds and cash assets shall be t ^*^ ^ "^ for their prop- i Part iii (printed erty if taken credited through the clearing office established by the =»bove, and by Allied states. said Article and Regulations owner is a national. therefore (hi ii to the State of which the r^" ^^F'^ '^"'^ enemy property in TJ. S. leaves the use of future action by Congress. ECONOMIC CLAUSES. COMMENTS. (ii.) As regards countries not adopting- Article A and sfaL^^red reservation in regard to the Regulation X, the proceeds of the property, and the cash assets, of the nationals of Allied and Associated States held by Germany shall be paid immediately to the person entitled thereto or to his Government ; the proceeds of the property, and the cash assets, of German nationals re- ceived by an Allied or Associated State may be used by the said State, in accordance with its laws, in payment of the claims and debts of its nationals specified in Regu- lations Y, paragraph 4, or in payment of claims against Germany in accordance with the other terms of this Treaty. Credit shall be given to Germany for the pro- ceeds and cash assets so used, and the remainder, if any, shall be credited to Germany or its nationals. (i.) Compensation which may be due to German na- tionals in respect of the sale or retention of their property, rights or interests in Allied or Associated States \\ ill be paid by Germany.* Article C. Germany undertakes, with regard to the property, rights and interests restored to nationals of Allied and Associated countries in accordance with the provisions of Article B, paragrajA (a) or (/). (a.) To restore and maintain, except as expressly pro- vided in the present Treaty, the property, rights and in- terests of the nationals of Allied or Associated States in the legal position obtaining in respect of the property, rights and interests of German nationals under the laws in force before the war. {b.) Not to subject the property, rights or interests of the nationals of the Allied or Associated States to any measure in derogation of property rights which is not applied equally to the property, rights and interests of its own *[ReviBed wording proposed by American Delegation April 2.3: "Germany under- takes to compensate its nationals in respect of the sale or retention of their property, rights or interests in Allied or Associated States.'"] 38 words cordance with the other terms of this treaty," and recommended that the words be, "specified in this treaty." A mem- orandum will be sent to the State Department in ex- planation of this recommendation. STTMMARy OF CONTENTS. 1. Merely am- plifies Art. B (di; applies to all countries alike, including Germany. ECONOMIC CLAUSES. COMMENTS. nationals, and to pay adequate compensation in the event of the application of such measure. * * Beyulalions Y. 1. In accordance with the provisions of Article B, para- graph {d), 1. Most impor- tant, as it vali- the validity of vesting orders and of orders for ^ates action of '' _ ° Alien Property the winding up of businesses or companies, and of any custodwn, so other orders, directions or authorities of any court or anv p™perty in ' -' « u. s. is con- department of the Government of any of the High Con- c«"ed. tracting Parties made or given, or purporting to be made or given, in pursuance of war legislation with regard to enemy property, rights and interests is confimied. The interests of all persons shall be regarded as having been effectively dealt with by any order, direction, decision or instruction dealing with ])roperty in which they may be interested, whether such interests are specifically men- tioned in the order, direction, decision, or instruction or not. Xo question shall be raised as to the regularity of a transfer of any property or rights dealt with in pursuance of any such order, direction, decision or instruction. Eveiy action taken with regard to any property, busi- ness, or company, whether as regards its investigation, sequestration, compulsory administration, use, requisition, supei-vision, or \\'inding-up, the sale or management of property rights or interests, the collection or discharge of debts, the payment of costs, charges or expenses, or any other matter whatsoever, in pursuance of orders, direc- tions, decisions, or authorities of any court or of any de- partment of the Govermnent of any of the High Con- tracting Parties, made or given, or purporting to be made or given, in pursuance of war legislation with regard to enemy property or interests, is confirmed. **The followins; |)aragraph of this article, whicli was originally proposed by the French Delegation, was supported by the Italian, Polish, Portuguese, Roumanian and Serbian Delegations, and opposed by the United States, British, Japanese, Bel- gian and Chinese Delegations: "Not to apply to the said property, rights or interests any charge, tax or contri- bution, the effect of wliich would be to make them assist in the payment of the indem- nities due bv Germany on account of the war." 39 SUMMARY OF CONTENTS. 2. Prevents claims being brought by Germany or its nationals on account of war measures. 3. Merely de- fines the terms used. ECONOMIC CLAUSES. Provided that the provisions of this paragraph shall not be held to prejudice the titles to property heretofore ac- quired in good faith and for value and in accordance with the laws of the country in which the property is situated by nationals of the Allied and Associated Countries.* The provisions of this paragraph do not apply to such of the above-mentioned measures as have been taken by the German authorities in invaded or occupied territory. 2. No claim or action shall be made or ])roug-ht against any Allied or Associated State or against any person acting on behalf of or under the direction of any legal authority or Department of the Government of such a State by Ger- many or by any German national wherever resident in respect of any act or omission with regard to his jn-operty, rights or interests during the war or in preparation for the war. Similarly no claim or action shall be made or brought against any person in respect of any act or omission under or in accordance with the exceptional war measures, laws or regulations of any Allied or Associated State. 3. In Article B the expression "exceptional war measures" includes measures of all kinds, legislative, administrative, judicial, or otherwise that have been taken or will be taken hereafter with regard to enemy property, and which have had or will have the effect of removing from the proprietors the power of disposition over their property, though without affecting the ownership, such as measures of supervision, of compulsory administration, and of sequestration ; or measures having as an object the seizure of, the use of, or the interference with enemy assets, for whatsoever motive, under whatsoevei form or in what- soever place. Acts in the execution of these measures include all detentions, instructions, orders or decrees of Government departments or courts applying these meas- ures to enemy property, as well as acts executed by any person connected with the administration or the super- *[Additional paragraph proposed by American Delegation April 23 : "No rights of any Allied or Associated Power or its nationals which existed prior to the entry of such Power into the war shall be prejudiced by the provisions of Article B or Regulations Y."] 40 COMMENTS. This proviso is intended to pre- serve rights of our citizens who bought property of Germans in good faith be- fore we entered the war. 2. Intended to prevent claims on account of operation of our war legisla- tion, e. g. black list of War Trade Board. SUMMARY OF CONTENTS. ECONOMIC CLAUSES. COMMENTS. 4. Allows allies, at their option, to use property of German nationals in their countries to secure or pay claims of their own nationals against Germans 5. Provides pro- tection for an Allied Corpora- tion from un- fair use of its devices in a neutral country, through seizure of the subsidiary of such Allied Cor- poration in Ger- many. vision of enoniy property, such as the payment of debts, the collecting of credits, the ])ayment of any costs, charges, or expenses, collecting of fees, etc. Measures of transfer are those which have affected or will affect the ownership of enemy ])roperty by trans- ferring it in whole or in part to a pereon other than the enemy owner, and without his consent, such as measures directing the sale, liquidation, or devolution of ownership in enemy ])roperty, the cancelling of titles or seciu'ities, etc. 4. .Vll property, estates, goods and interests of German nationals within the territor}' of any Allied or Associated State and the net proceeds of their sale, liquidation or other dealing therewith may be charged by that Allied or Associated State in the first place with pa^inent of amounts due in respect of claims l)y the nationals of that Allied or Associated State, with i-egard to their property, estates, goods, and interests in German territory, or del)ts owing to them by Gennan nationals. They may be charged in the second place with pa>Tnent of the amounts duo in respect of claims by the nationals of such Allied or Associated State with regard to their property, estates, goods and interests in other enemy States, or debts owing to them by nationals of such States in so far as those claims are otherwise unsatisfied. .■). Notwithstanding the ])rovisions of Article B Avhere inmiediately before the outbreak of Avar a com])any in- corporated in an Allied or Associated State had rights in common with a comparty controlled by it and incorporated in Gennany to the use of trade marks in third countries, or enjoyed the use in common with such company of unique means of reproduction of goods or articles for sale in third countries, the former company shall alone have the right to use these trade-marks in third countries to the exclusion of the Genuan company, and these unique means of repro- duction shall be handed over to the former company, not- withstanding any action taken under German war legis- lation Avith regard to the latter company or its business, industri-al property or shares. Nevin-theless, the former 130358—19 6 41 4. U. S. objects to last sentence which, although merely permis- sive, allows allied state to charge property of German nationals with claims of allied nationals against nationals of other enemy states, e.g. Austria or Turkey. 5. Very special case. V. S. probably not concerned. SUMMARY OF CONTENTS. 10. Extremely important clause, as we cannot adjust serious compli- cations regard- ing German properties in U. S. without information sent from Germany. ECONOMIC CLAUSES. company, if requested, shall deliver to the latter company derivative copies permitting the continuation of repro- duction of articles for use within German territory. 6. As provided in the present Treaty, the German Government is responsible for the conservation of prop- erty, rights and interests of the nationals of the Allied or Associated States that have been subjected to excep- tional war measures, up to the time when restitution is carried out in accordance with Article B. 7. Within one year from the date of the Treaty coming into force the Allied or Associated States will specify the property, rights and interests over which they intend to exercise the right provided in Article B paragraph (/). 8. The restitution provided in Article B will be cur- ried out by order of the German Government or of the authorities who have taken its place. Detailed accounts of the action of administrators shall be furnished to the interested persons by the German authorities upon request, which may be sent in at any time after the signature of the present Treaty. 9. Until completion of the liquidation provided for by Article B, (paragraph {h), the property, rights and inter- e'sts of Gemian nationals will continue to be subject to exceptional war measures that have been or will be taken with regard to them. 10. Gemiany will, within six months from the coming into operation of the presei\t Treaty, deliver to each Allied or Associated State all -securities, certificates, deeds, or other documents of title held by its nationals and relating to property, rights or interests situated in that Allied or Associated State, including any shares, stock,* debentures^debenture stock, or other obligations of any company incorporated in accord^nce^dtlTth^ Ijtws of such State. Germany will at any time on demand of any Allied or Associated State furnish such infomiation as may be required with regard to the property, rights and interests of German nationals within the territory of such Allied or Associated State, or "with regard to any 42 COMMENTS. 9. Of little effect in TJ. S. without addi- tional Act of Congress. ECONOMIC CLAUSES. COMMENTS 12. Applies to all countries and requires funds invested to be accounted for irrespective of investment. 13. Detail re- garding return of Allied prop- erty by Ger- many. 14. Makes clear that debts, and accounts are in- cluded as prop- erty. tran^jactioiis concerning such property, rights or interests effected since 1st July, 1914. 11. The expression "cash assets" inckides all deposits or funds established l;eforc or after the declaration of war, as well as all assets coming from de])osits, revenues, or ])rofits collected by administrators, sequestrators, or others from funds ])laced on deposit, etc. 12. All investments effected ■\\'ith the cash assets of enemies, vvhether in the territory of the Btate responsible for the administration or in Allied territory Avhich (Jer- many occupied, by persons responsible for the administra- tion of enemy properties or having control over the admin- istration, or by order of such pereons or of any authority whatsoever, shall be annulled. These cash assets shall be accounted for irrespective of any such investment. IP). Within one month from the coming into operation of the present Treaty, and on demand at any tune, Ger- many will deliver to the Allied and Associated States all accounts, vouchers, records, docmiients, and infomiation of any kind which may be within German territory, and which concern the property, rights and interests of the nationals of those States that have been subjected to an exce])tional war measure, or to a measure of transfer either in Gennan territory or in the Allied territoiy which Gennany has occupied. The controllers, supervisors, managers, administrators, sequestrators, liquidators, and receivers shall be person- ally responsible under guarantee of the Gennan Govern- ment for the innnediate deliveiy in whole of these ac- counts and documents, and for their accuracy. 14. The provisions of Article B and Regulations Y relating to property, rights and interests in enemy coun- tries, and the proceeds of the liquidation thereof, ai)ply to debts, credits and accounts. Article A and Regulations X regulating only the method of pajancnt.* *[.\dditionaI .sentence proposed by -Imeriean Delegation April 23: "The property, rights and interests of nationals of the Allied and Associated Powers include any sub.stantial interest of such nationals in companies or associations organized under German law".] 43 14. InU. S., Alien Property Custodian has already adopted this method. ECONOMIC CLAUSES. COMMENTS. change very between (iermany and the Allied or xVssociated States, ^'^l^^^- Referred to sion and not Dominions or India, in respect of which a declaration ^a^^y decided shall not have been made that they adopt Article A and Regulations X, and between their respective nationals, the provisions of Article A respecting currency in which payment is to bo made and the rate of exchange shall apply. 15. Questions concerning industrial, literary, or artistic a provisional property are regulated by other provisions of the present wm be eiimi- rn i^i" 1 11 -iiiii "^'^'l °° fl"='l ireaty, except so far as they nave been or will be dealt drafting and with in the liquidation of property, rights, interests, other treaty companies or businesses under war legislation, or in ac- cordance wdth the stipulations of the present Treaty, 44 Tart V. CONTRACTS, PRESCRIPTIONS, JUDGMENTS, MIXED ARBITRAL TRIBUNAL. MEMOEANDUJI BY AMERICAN DELKGATES. Prewar contracts. — Most of the other countries have msistetl upon a general plan bj- which contracts existing before the war, between their nationals and nationals of Germany shall be generally cancelled. There are some exceptions like pecimiary liabihties; and some special kinds of contracts like insurance are otherwise treated. The United States, Brazil, and Japan, however, have not adhered to this plan, and are expressly excepted from its (iperation. In the United States many contracts were dissolved, under om- laws, by the state of war. Examples are: partnerships: contracts requiring communication with the enemy; and, under decisions of oiu- courts, contracts the performance of which was rendered unjust or inequitable on account of the changed conditions produced by the state of war. Other contracts were merely suspended. These last would be revived automatically under our laws, at the end of the war, and, so far as the United States is concenicd, are treated as revived in this draft. The dissolution of all contracts which are now merely suspended, would entail g^-eat confusion and hardship upon many persons and businesses, including both those of the United States and of Germany; it would not seem just to cancel such contracts without the consent of the owners. The other countries represented on the Economic Commission have appreciated the position of the United States in this respect and have consented that tJiis coimtry, as well as Brazil and Japan should leave unchanged the legal status of contracts to wliich their nationals are Provision is made, however, in Article I., whereby nationals of all the Allied and Associated Countries, the United States included, •shall have access to a new tribunal with a neutral president, so that they need not be compelled to resort to German courts f(u- the adjudi- cation of their contractual rights after the war. Article D. COMMENTS. General dissolu- tion of all pre- war contracts, with certain exceptions. (a.) Any contract concluded between enemies shall be Art. d does regarded as having- been dissolved as from the time when u^'s'^^see" any two of the parties became enemies, except in respect ^^''^^"^'^ ^"^ of any debt or other pecuniary obligation arising out of 45 SUMMARY OF ECONOMIC CLAUSES. COMMENTS. CONTENTS. any act done or money paid thereunder, and sul)ject to the exceptions and special rules with regard to particular contracts or classes of contracts contained hereinafter or in Regulations Z annexed hereto. (b.) Any contract of which the execution shall be re- quired in the general interest within six months from the date of coming into force of the present Treaty by the Allied or Associated Government of which one of the parties is a national shall be excepted from dissolution under this article. The Mixed Arbitral Tribunal provided for by Article I shall be empowered, when the execution of the contract thus kept alive would, owing to the alteration of trade conditions, cause one of the parties considerable prejudice, to grant to the prejudiced party equitable compensation. (a.) Having regard to the provisions of the constitution and law of the United States of America, of Brazil, and of Japan, neither the present article nor Article E, nor Regulations Z shall apply to contracts made between nationals of these States, and German nationals, nor shall Article J apply to the United States of America or her nationals. (d.) The present Article and Regulations Z shall not apply to contracts to which inhabitants of territories of which the sovereignty has been transferred are parties, if such parties shall acquire under the present Treaty the nationality of an Allied or Associated country. Nor shall they apply to contracts between nationals of the Allied and Associated States between whom trading has been prohibited by reason of one of the parties being in Allied " or Associated territory in the occupation of the enemy. (e.) Nothing in the present Article or Regulations Z shall be deemed to invalidate a transaction lawfully carried out in accordance with a contract between enemies if it has been carried out with the authority of one of the belligerent States. 46 SUMMARY OF CONTENTS. Details with respect to Art. D. ECONOMIC CLAUSES. Article E. (a.) All periods of prescription or limitation of right of action, whether they began to run before or after the outbreak of war, shall be treated in the territory of the High Contracting Parties, so far as regards relations between enemies, as having been suspended for the dura- tion of the war. They shall begin to run again at the earliest, three months after the coming into ooperation of the present Treaty. This proAision shall ap])l>' to the period prescribed for the presentation of interest or divi- dend couj)ons or for the presentation for repanuent of securities dra^vn for repayment or repayable on any other ground. (b.) Where, on account of the failure to perform any act or comply with any fonnality during the war, measures of execution have been taken in Genuan territory to the prejudice of a national of an Allied or Associated State, the claim of such national shall, if the matter does not fall within the competence of the Courts of an Allied or Associated State, be heard b\ the :ylixed Arbitral Tribunal provided for bv Article I. (f.) The .Mixed Arl)itral Tribunal shall, upon the ai)plication of the Allied or Associated party interested, order the restoration, wherever having regard to the i)ar- ticular circumstances of the case this is equitable and pos- sible, of the rights which have been prejudiced by the measure of execution referred to in paragraph (/>). In the contrary case, the Mixed Arbitral Tribunal may grant compensation to the prejudiced party at the charge of the German (irovernment. (d.) \\'here a contract has been dissolved l)y reason either of failure on the part of either party to carry out its provisions or of the exercise of a right stipulated in the contract itself, the party prejudiced may apply to the Mixed Arbitral Tribunal for relief. The Tribunal Avill have the powers provided for in jmragraph (c) . COMMENTS. Art. B doe: apply to TJ. 47 SUMMARY OF CONTENTS. ECONOMIC CLAUSES. COMMENTS. Negotiable instruments not rendered invalid for failure to pre- sent them during the Wi (<■.) Tlio provisions of the preceding paragraphs shall apply to the nationals of the Allied and Associated States who have been prejudiced by reason of measures referred to above taken by the enemy in invaded or occupied terri- tory, if they have not been otherwise compensated. (/.) The German Government shall compensate any third party who may be prejudiced by any measures of restitution or restoration ordered by the Mixed Arbitral Tribunal under the provisions of the preceding paragraphs. {(/.) As regards negotiable instruments, the period of three months provided under paragraph (a) shall com mence as from the date on which any exceptional regula tions applied in the contracting countries with regard to negotiable instruments shall have definitely ceased to have force. Article F. As l)etween enemies no negotiable instrument made Applies to u. s. before the war shall be deemed to have become invalid l)y reason only of failure within the stipulated time to present the instrument for acceptance or payment or to give notice of non-acceptance or non-payment to drawers or indorsers or to protest the instrument, nor by reason of failure to complete any formality during the war. Where the period within which a negotiable instru- ment should have been presented for acceptance or for payment, or within which notice of non-acceptance or non-payment should have been given to the drawer or indorser, or within which the instrument should have been protested, has elapsed during the war, and the party who should have presented or protested the instru- ment or have given notice of non-acceptance or non- payment has failed to do so during the war, a period of not less than three months shall be allowed after ratifica- tion of the present Treaty within which presentation, notice of non-acceptance or non-payment or protest may be made. 48 ECONOMIC CLAUSES. COMMENTS. Abrogates judgments in German courts when allied defendant was not able to de- fend his rights. Article G. If a judgment has been given during the war in res})ect Applies to u. s. of any dispute which may have arisen, l)y the Gemian ("ourts against a national of an Allied or Associated State in a case in which he was not able to make his defence, the Allied and Associated national who has suffered prejudice there])y shall be entitled to recover compensation, to be fixed by the Mixed Arbitral Tribunal provided for in Article I. At the instance of the national of the Allied or Asso- ciated State the compensation above-mentioned may, upon order to that effect of the ]\rixed Arl)itral Tril)unal, l)e effected where it is possible by replacing the parties in the situation which they occupied Ijefore the judgment w^as given l)y the Gennan C-ourt. The above compensation may likewise be obtained before the same Tribunal by the nationals of Allied or Associated States who have suffered prejudice by judicial measures taken in invaded or occupied territories, if they have not been otherwise compensated. Details regard- ing contracts annulled by this treaty. Does not apply to V. S. Regulations Z. 1. — (Joncral P(ira(ini})lis. 1 . Within the meaning of Articles I), E and F the par- ties to a contract shall be regarded as enemies when trading between them shall have been prohibited by the laws, orders or regulations of a State to whose jurisdiction one of those parties is subject. They shall be deemed to have become enemies from the date when such trading was prohil)ited. 2. The following classes of contracts are excepted from r>oes not apply dissolution by Article D and, without prejudice to the right of liquidation contained in Article B, (b) of Part IV, remain in force subject to the a])plication of domestic laws, orders and regulations made during the war by the 49 ECONOMIC CLAUSES. COMMENTS. Allied and Associated States, and subject to the terms of the contracts: — (a.) Agreements having for their object the transfer of estates or of real or personal property where the property therein had passed or the object had been delivered before the parties had become enemies ; (b.) Leases and agreements for leases of land and (c.) Contracts of mortgage, pledge, or lien; {d.) Concessions of mines or quarries or deposits; (e.) Contracts between individuals or companies and States, provinces, municipalities, or other similar jurid- ical persons charged with administrative functions and concessions granted by States, provinces, municipal- ities or other similar juridical persons charged with administrative fimctions. 3. If the provisions of a contract are in ])art dissolved Does not appiy . . . . . to U. S. under Article D, the remaining provisions of that con- tract shall continue in force if the provisions of such contract are severable, but where the provisions are not severable the contract shall be deemed to have been dissolved in its entirety. II. — Paraf/rapJis relating to certain Clauses of Contracts. Stock ExcJtange and Conimercial Exchange Con- tracts. 4. — {a.) Rules made during the war by any recognized Exchange or Conmiercial Association providing for the closure of contracts entered into before the war by an enemy are confirmed by the High Contracting Parties, as also any action taken thereunder, provided — (i.) That the contract was expressed to be made subject to the rules of the Exchange or Association in question ; (ii.) That the rules in question applied to all persons concerned ; (iii.) That the conditions attaching to the closure were fair and reasonable. 50 Does not apply to U. S, ECONOMIC CLAUSES. COMMENTS. (h.) The preceding paragraph shall not apply to the rules made during the occupation by Exchanges or Com- mercial Associations in the districts occupied by the enemy. (c.) The closure of contracts relating to cotton "fu- tures, ' ' which were closed as on 31st July, 1914, under the decision of the Liverpool Cotton Association, is also confirmed. Secwity. 5. The sale of a security for a debt owing by an enemy Does not apply shall be deemed to have been valid if the debt was unpaid irrespective of notice to the owner if the creditor acted in good faith and with reasonable care and prudence, and no claim by the debtor on the ground of such sale shall be admitted. This stipulation shall not apply to any sale of securities effected by an enemy during the occupation in regions occupied by the enemy. Negotiable Instruments. 6. So far as regards countries which adopt Regulations Does not apply X the pecuniary obligations existing between enemies and resulting from the issue of negotiable instruments shall be adjusted in confonnity with the said Regulations by the instrumentality of the Clearing Offices, which shall assume .the rights of the holder as regards the various remedies open to him. 7. If a person has either before or during the assumed liability upon a negotiable instriunent in accord- ance with an undertaking given to him by a pei*son who has subsequently become an enemy, the latter shall remain liable to indemnify the former in respect of his liability notwithstanding the outbreak of war. 51 ECONOMIC CLAUSES. COMMENTS. III. — Contracts of Insurance. 8. Contracts of insurance entered into by any person Does not apply with another person who subsequently became an enemy will be dealt with in accordance with the following paragraphs : — Fire Insuraiuf'. 9. Contracts for the insurance of property against fire Does not apply , . 1 . , toU. s. entered into by a person interested m such property with another person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war. or by the person becoming an enemy, or on account of the failure during the war and for a period of three months thereafter to perform his obligations under the contract, but they shall be dissolved from the time of the annual ])remium becoming due three months after the coming into operation of the present Treaty. A settlement of unpaid premiums Avhich became due during the war, or of claims for losses which occurred during the war shall be effected. 10. Where by administrative or legislative action an Does not apply insurance against fire effected before the war has been transferred during the war from the original to another insurer, the transfer will be recognised and the liability of the original insurer will be deemed to have ceased as from the date of the transfer. The original insurer will, however, be entitled to receive on demand full infonnation as to the terms of the transfer, and if it should appear that these terms were not equitable they shall be amended so far as may be necessary to render them equitable. Furthermore, the insured shall, subject to the con- currence of the original insurer, be entitled to retransfer the contract to the original insurer as from the date of the demand. 52 ECONOMIC CLAUSES. COMMENTS. Life Insurance. 11. Contracts of life insurance entered into between Does not apply to TJ. S. an insurer and a person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war, or by the person becoming an enemy. Any sum which during the war became due upon a contract deemed not to have been dissolved u'nder the preceding paragraph shall be recoverable after the war with the addition of interest at 5 per cent, per annum from the date of its becoming due up to the day of pay- ment. AMiere the contract has lapsed during the war owing to nonpayment of premiums, or has become void from breach of the conditions of the contract, the assured or his repre- sentatives or the persons entitled shall have the right at any time within twelve months of the coming into force of the present Treaty to claim from the insurer the sur- render value of the policy at the date of its lapse or avoidance. Where the contract has lapsed during the war owing to nonpayment of premiums the payment of which has been prevented by the enforcement of measures of war, the policy-holder or his representatives or the persons entitled shall have the right to restore the contract on payment of the premiums with interest at five per cent, per annum within three months from the coming into operation of the present Treaty. 12. Any Allied and Associated Power may within Does not apply to TJ. S. three months of the coming into operation of the present Treaty cancel all the contracts of insurance running be- tween a German insurance company and its national under conditions which shall protect its nationals from any prejudice. 53 SUMMARY OF CONTENTS. ECONOMIC CLAUSRS. COMMENTS. Te.vt Previously Adopted by the Coinnmsioii as a Compromise : To this end the German insurance company will hand over to the Allied or Associated Government concerned the proportion of its assets attributable to the policies so cancelled and will be relieved from all liability in respect of such policies. The assets to be handed over shall be deter- mined by an actuary ap- pointed by the Mixed Ar- bitral Tribunal. Neio Text Proposed by the Belgian Delegation: To this end, if the con- tracts are continued by na- tional or Allied companies, the previous insurer shall be bound to pay the amount of the mathematical reserve to the Government of the new insurer. The said Govern- ment shall be responsible for transferring th-e amount to the new insurers. The mathematical reserve shall be calculated in accordance with the decree of the 20th January, 1906, for the ap- plication of the French law of the 17th March, 1905, relative to the supervision and control of life assurance companies. The payment may be ex- tended over a period of ten years at the most, interest being calculated at a rate of one-half per cent above that on which the mathe- matical reserves were cal- culited.* *This text was referred by the Commis- sion to a Sub-Commission which was un- able to come to an agreement, the Belgian, French, and Roumanian Delegations sup- porting it, and the United States and British Delegations stating they could not accept it. 54 ECOJ^OMIC CLAUSES. COMMENTS. 13. Whoro contracts of life insurance have been en- ^"^^ s"' ^''^^^ tered into by a local ])rancli of an insurance company established in a country which subsequently l:)ecame an enemy country, the contract shall, in the absence of any stipulation to the contrary in the contract itself, be gov- erned by the local law, but the insurer shall be entitled to demand from the insured or his representatives the refund of sums paid on claims made or enforced under measures taken dming the war, if the making or enforce- ment of such claims was not in accordance with the terms of the contract itself nor consistent with the laws or treaties existing at the time when it was entered into. 14. In any case where by the law applicable to the Does not apply contract the insurer remains bound l)y the contract not- withstanding the non-payment of premiums until notice is given to the insured of the termination of the con- tract, he shall be entitled where the giving of such notice was prevented by the war to recover the unpaid premiums with interest at five per cent, per annum from the insured. 15. Insurance contracts shall be considered as con- Does not apply tracts of life assurance for the purpose of paragraphs 11 to 14 when they depend on the probabilities of human life combined with the rate of interest for the calculation of the reciprocal engagements between the two parties. Marine Insurance. 16. Contracts of marine insurance, including time Does not apply policies and voyage policies entered into between an ° ' ' insurer and a person who subsequently became an enemy, shall be deemed to have been dissolved on his becoming an enemy, except in cases where the risk undertaken in the contract had attached before he became an enemy. Where the risk had not attached, money paid by way of premium or otherwise shall Ije recoverable from the insurer. Where the risk had attached, effect shall be given to the contract notwithstanding the party becoming an enemy, and sums due under the contract either by way of 55 ECONOMIC CLA*LTSE.S. COMMENTS. ])nMuiuiiis or in respect of losses shall be recoverable after the war. In the event of any agreement being come to for the pa3anent of interest on sums due before the war to or by the nationals of States which have been at war and re- covered after the war, such interest shall in the case of losses recoverable under contracts of marine insurance run from the expiration of a period of one year from the date of the loss. 17. No contract of marine insurance with an insured poes not apply to U. S. person who subsequently became an enemy shall be deemed to cover losses due to belligerent action by the State of which the insurer was national or by the allies of such State. 18. Where it is shown that a person who had before i^oes not apply / . . to u. s. the war entered into a contract of marine insurance with an insurer who subsequently became an enemy entered after the outbreak of war into a new contract covering the same risk with an insurer who was not an enemy, the new contract shall be deemed to be substituted for the original contract as from the date when it was en- tered into, and the premiums payable shall be adjusted on the basis of the original insurer having remained liable on the contract only up till the time when the new con- tract was entered into. Other Insurances. 19. Contracts of insurance entered into before the war Does not apply to U.S. between an insurer and a person Avho subsequently became an enemy other than contracts dealt with in paragraphs 9 to 18 shall be treated in all respects on the same footing as contracts of fire insurance between the same persons would be dealt with under the said paragraphs. Be-Insurance. 20. All treaties of re-insurance with a person who poes not apply ^ to U. S. became an enemy shall be regarded as having been abro- gated by the person becoming an enemy, but without prejudice in the case of life or marine risks which had 56 SXTMMARY OF CONTENTS. COMMENTS. attached before the war to the right to recover payment after the war for sums due in respect of such risks. Nevertheless if, owing to invasion, it has. been impos- sible for the re-insm-ed to find another re-insurer, the treaty shall remain in force until three months after the coming into operation of the present Treaty. Where a re-insurance treaty becomes void under this paragraph, there shall be a reciprocal adjustment of ac- counts between the i)arties in respect both of premiums paid and payable and of liabilities for losses in respect of life or marine risks which had attached before the war. In the case of risks other than those mentioned in para- graphs 11 to 18 the adjustment of accounts shall be made as at the date of the parties becoming enemies Avithout regard to claims for losses which may have occurred since that date. 21'. The provisions of the preceding paragra])h will Does not apply extend equally to re-insurances existing at the date of ° the parties becoming enemies of particular risks under- taken by the insurer in a contract of insurance against any risk other than life or marine risks. 22. Re-insurance of life risks effected by particular con- Does not apply tracts and not under any general treaty, remain in force. The provisions of paragraph 12 apply to treaties of re- insurance of life insurance contracts in which enemy companies are the re-insurers. 23. In case of a re-insurance effected before the war Does not apply of a contract of marine insurance, the cession of a risk which had been ceded to the re-insurer shall, if it had at- tached before the outbreak of war. remain valid and effect be given to the contract notAvithstanding the outbreak of war : smus due under the contract of re-insurance in respect either of premimns or of losses shall be recoveral)le after the war. 24. The provisions of paragra])hs 17 and l.S and the Does not apply last part of paragraph IH shall a])ply to contracts for the re-insurance of marine risks. SUMMARY OF CONTENTS. Definition of "during the war." Creation of new mixed arbitral Tri- bunal between each allied state and Germany. Jurisdiction of Mixed Arbitral Tribunals. ECONOMIC CLAUSES. , COMMENTS. Article H. For the purposes of Articles A, B, D, E, F and G and Apples to u. s Regulations X and Z, the expression "during the war" means for each Allied or Associated State the period be- tween the declaration of war between that State and Ger- many and the date of the coming into operation of the present Treaty. Article I. {(I.) Within three months from the date of the coming Applies to u. s. into operation of the present Treaty, a Mixed Arbitral Tribunal shall be established between each of the Allied and Associated States on the one hand, and Germany on the other hand. Each such tribunal shall consist of three members. Each of the Governments concerned shall appoint one of these members. The President shall be chosen by agreement between the two Governments con- cerned. In case of failure to reach agreement the President and two other persons who may in case of need take his place, • shall be chosen by the Executive Council of the League of Nations, or, until this is set up, by M, Gustave Ador. These persons shall belong to countries that have re- mained neutral during the war. If any Government shall fail, within one month of notice, to designate a member of a Tribunal as provided above, this member shall be chosen by the other Govern- ment from the two persons other than the President mentioned above. The decisions of the majority of the members of the Tribunal shall be the decision of the Tribunal. {}).) The Mixed Arbitral Tribunals established by appli- cation of paragraph (a) shall decide the disputes which in accordance with Articles A, B, D, E, F and G and Regu- lations X and Z, are within its competence. In addition all disputes, whatsoever they may be, re- lating to contracts concluded before the date of the present Treaty between nationals of the Allied and Associated 58 M. Ador is the present presi- dent of the Swiss Republic. ECONOMIC CLAUSES. COMMENTS. Htates and German nationals shall bo decided by the Mixed Arbitral Tribunal. ah\ays excepting disputes which under the laws of the Allied, Associated or Xeutral States, are within the jurisdiction of the National Courts of those States. Such disputes shall be decided by the National Courts in question, to the exclusion of the Mixed Arbitral Tribunal. The Allied or Associated party may nevertheless bring the case before the Mixed Arbitral Tribunal if this is not prohibited by the laws of his country. Judgments given in all cases which, under the present Treaty, they are competent to decide, by the Courts of an Allied or Associated State shall be recognized in Ger- many as final, and shall be enforced without it being necessary to have them declared executory. (c.) If the number of cases justifies it, additional mem- bers will be appointed so that each Mixed Arbitral Tri- bunal may sit in divisions. Each of these divisions will be constituted as above. (d.) Each Mixed Arbitral Tribunal will settle its own procedure, and is empowered to award the sums to be paid by the loser in respect of the costs and expenses of the proceedings. (e.) Each Government will pay the remuneration of the member of each Mixed Arbitral Tribunal nominated by it and of the agent whom it appoints to represent it before the Tribunal. Tfie remuneration of the President will be determined by special agreement between the govermnents concerned; and this remuneration and the joint expenses of each Tribunal will be paid by the two Governments in equal moieties. (/.) The High Contracting Parties agree to regard the decisions of each Mixed Arbitral Tribunal as final and conclusive, and to render them binding upon their nationals. 59 SUMMARY OF ECONOMIC CLAUSES. COMMENTS. CONTENTS. Aeticle J, Enforcement of Wlieiiever a competeiit tribunal has given or gives a ?°" "o* ^pp^y decisions of new ^ _ ° ° to TI. S. Tribunal. (lecision in a case covered by Articles A, B, D, E, F, or G or by Regulations X or Z, and such decision is incon- sistent with the provisions of the Articles or Regulations in question, the party who is prejudiced by the decision shall be entitled to recover compensation which shall be fixed by the Mixed Arbitral Tribunal established by Article I. At the request of the national of an Allied or Associ- ated State concerned, the compensation referred to above may, whenever possible, be effected by the Mixed Arbi- tral Tribunal directing the replacement of the parties in the position occupied by them before the judgment was given by the German Court. Part YI. ECONOMIC ('0MMIS8I0X. Industrial Property. Bestores operation of certain inter- national conventions. MEMORANDUM BY AMERICAN DELEGATES. We have not been able, on behalf of the United States of America, to consent to the provisions of Article V, entitled "Reciprocal Am- nesty," nor to the provisions of Article VI, referring to "Pre-War Licenses." As to both of these articles, it is our opinion that their provisions conflict with the prmciples of public law and perhaps with the con- stitution of the United States, depriving our nationals of property rights, without providing for the ascertainment of the value of those rights and their due compensation. The provisions of these articles also amount to a confiscation of the private rights of German na- tionals without compensation, and without the justification inherent in a measiu-e taken in the pu])lic interest or for purposes of national defence. We are unable to concede that the princii)les of international law justify the annulment of private contracts relating to industrial prop- erty or the annulment of rights of action under such contracts, ex- cept for and to the extent required by war measiu-es. Under the provisions of Article II, together with the general prmciples of in- ternational law, sufficient protection is afforded to provide for acts done by the Allied or Associated Powers in the prosecution of the war in so far as industrial property rights are concerned. Beyond the prt)tection given to the Allied and Associated Powers and their nationals by the provisions of Article II, we do not believe that rights of action relating to industrial property, or pre-war contracts relating to industrial property, should be regarded as differing in substance from or requiring different treatment from rights of action in general or pre-war contracts in general. In accord with our representations, clauses have been mserted (Clauses 16 and 20, below) by which these parts of the draft are made to have no application as between the United States and Germany. [Article I. — International ( 'on vent ions.']* I The International Convention of Paris, of the 20th tj. s. is not L party to March, 1883, for the protection of industrial property, Be™<= ' ' ^ X X- ./ ' Convention. revised at Washington in 1911, and the International These matters * ' are also dealt *Thi8 Article is covered by Article E in Part II relating ( of Economic Treaties. 61 „ . , . , . with in Part II, Revival or Abrogation Art. V. Duplications to be eliminated. SUMMARY OF CONTENTS. Re-establishes industrial prop- erty rights. Acts of Allies under special War Measures tc remain valid and effective. Allied Govern- ments absolved from claims for use of German In- dustrial Property during the war. ECONOMIC CLAUSES. Convention of Berne, of the 9th September, 1886, for the protection of literary and artistic works, revised at Berlin in 1908, shall be restored and their provisions shall again be put into full force and effect as from the ratification of the present Treaty, in so far as they are not affected or modified by the exceptions and restrictions resulting from the said Treaty .^ Article II. — Be-establishment of Rights. 1. Subject to the stipulations of the present Treaty, rights of industrial, literary, and artistic property, as defined by the International Conventions of Paris and of Berne, mentioned in the preceding article, shall be re- established or restored, as from the date of ratification of the present Treaty, in the territories of the Allied or Associated Powers of the one part and of Germany of the other, in favor of the persons entitled to the benefit of them at the moment of the declaration of war or their legal representatives. Equally, rights which, except for the war, would have been acquired during the war in con- sequence of an application made for the protection of indus- trial property, or the publication of a literary or artistic work, shall be recognized and established in favor of those persons who would have been entitled thereto, from the date of the ratification of the present Treaty. 2. ^Nevertheless, all acts done by virtue of the special measures taken during the war in accordance with the legislation, or by the Government of any Allied or Asso- ciated Power in regard to the rights of the subjects or citizens of Germany shall remain in force and shall con- tinue to maintain their full effect. 3. No claim or action by Germany or German subjects or ciUizens shall be permitted in respect of the use during the war by the Government of any Allied or Associated Power, or by any persons acting on their behalf or under their direction, of any rights in industrial, literary or artistic property, nor in respect of the sale, offering for COMMENTS. Restoration is subject to limitations of the following clauses: 62 economic; clauses. COMMENTS. to be treated same l\'^^l'JT^^'^ soever, made in the course of such use. lunds due to oi from Geiman Nationals. Reserves right after war to im- pose restrictions on German Industrial Property for public interest. Transfers during war to evade special measures not recognized. U. S. legislation Covers our funds in hand. 4. Unless the legislation of any one of the Allied or Associated Powers otherwise directs, sums due or paid in virtue of any act or operation resulting from the execution of the special measures mentioned in paragraph 2 of this article shall be dealt with in the same way as the other sums due to German nationals arc directed to be dealt with by the present Treaty; and sums produced by any special measures taken by the German Government in respect of rights in industrial, literary, or artistic property belonging to the subjects and the citizens of the Allied or Associated Powers shall be considered and treated in the same way as other debts due fi-om German nationals. 5. Each of the Allied and Associated Powers reserves u°iiat"ai. to itself the right to impose such limitations, conditions, or restrictions on rights of industrial, literary, or artistic property (with the exception of trade-marks) acquired before or during the war, or which may be subsequently accpiired in accordance' with their l(>gislation, 1)V (Jerman Germany has , . . . ' . ' simUar rights subjects or citizens, whether by granting licenses, or by by her laws. the working, or by the preserving control over their ex- ploitation, or in any other way. as may be considered necessars' for national defence, or in the public interest, or for assuring the fair treatment liy Germany of the rights of industrial, literary, and artistic property held in Ger- man territory by its nationals, or for securing the due ful- filment of all the obligations undertaken by Germany in the present Treaty. (i. Each of the Allied Associated Powers reserves Necessary to prevent fraudu- tlie right to treat as void and of no effect any transfer of or i^nt transfers other dealing with rights of or in respect of industrial, literar}', or artistic property effected after the outbreak of the war* or in the future, which would have the result of defeating the objects of the provisions of this article. *[Chang» proposed by American Delegation April 23: "After August 1, 1914"]. 63 SUMMARY OF CONTENTS. Property sold by Government not thereafter subject to additional restrictions. ECONOMIC CLAUSES. COMMENTS. All defaults in formalities since Aug. 1, may be EaA country may impose conditions to protect bona fide intervening rights. 7. The provisions of tliis article siiall not a])])ly to iii- (liistrial, literary, or artistic property wliicli has been dealt A\ith in the liquidation of businesses or companies under war legislation by the Allied or Associated Powers, or which may be so dealt with by virtue of the present Treaty. Article III. — Extension of Time for doin;/ any Acts neressorji for Hi'storotio)!. 1. A minimum of one year after the ratification of the Applies to aii pivstMit Treaty shall be accorded to the nationals of the fnfTr^s"" . . , . m , • , . , • c i.T Excepts TJ. S. sionatones to this Treaty, Avithout extension tees or other interference 1 , 11 I J !• 1 Proceedings. ])enalty, in order to enable such persons to accomplish any act, fulfill any formality, i)ay any fees, and generally satisfy any obligation prescril)ed by the laws or regulations of the respective States relating to the obtaining, preserv- ing, or opposing rights to, or in respect of, industrial property either acquired before the 1st August, 1914, or which, except for the war, might have been acquired since that date as a result of an application made before the war or during its continuance, but nothing in this article shall give any right to reopen interferem-e proceed- ings in the United States of America where a final hearing has taken place. 2. All rights in, or in respect of, such property which German rights may have lapsed by reason of any failure to accomplish conditions applied any act, fulfill any formality, or make any payment, shall revive, but subject in the case of patents and designs to the imijosition of such conditions as each Allied or Asso- ciated State may deem reasonably necessary for the pro- tection of persons who have manufactured or made use of the subject-matter of such property while the rights had lapsed. Turther, where rights to patents or designs be- longing to German nationals are revived under this article, they shall be subject to the same provisions as would have been applicable to them during the war, as well as to all the provisions of the present treaty. during the war. 64 Priority of the International Convention extended during war and six months after. JIuure to'exploit" '^- '''^1^^ I't'l'iod IVoill the Ist AllgUSt, 11)14, lllltil thc YaH- AppUes equally during the war. |i,.,t[oj^ ^f ^^^ ^^^.^^^^^^^ rj.^^^^^ ^j^^„ ,^^ ,,^^.^j^,^,^, Jj^ ^^j^_ ^ ^•'"" ""' .siflerjng- the tune within which a patent shouhl he Avorked or a trade mark or design used, and it is further agreed that no patent, registered trade mark or design in force on the 1st August, 1914, sliall he suhjcct to revocation or cancellation hy reason onl.y of the failure to work such patent or use such trade mark or design for two years after the ratification of the present Treaty. Article IV. — Bights of Pviovitij under the Convention. 1. The rights of priority provided hy Article lY of the ^pp^es to aii T A J.' 1 /-< • P signatories international Convention for the Protection of Industrial i"*" ^«- Property of Paris, of the 20th March, 1883, revised at Washington in 1911, or hy any other Convention or Statute, for the filing of applications for patents, and for the registration of trade marks and designs and models of utility which had not expired on the 1st August, 1914, and those which have arisen during the war, or would have arisen hut for the war, shall he extended by each signatory in favor of all nationals of the other signatories to this Treaty for a period of six months after the ratification of the present Treaty. 2. Nevertheless, such extension shall in no way affect the right of the (lovenmient of any State or of any person who before the signature of this Treaty was bona fide in possession of any rights of industrial property conflicting with rights applied for by another w^ho claims rights of priority in respect of them to exercise such rights by himself personally, or l)y such agents or licensees as derived their rights from him before the signature of this Treaty ; and such persons shall not be amenable to any action or other process of law in respect of infringement. Protection of all bona fide third persons having inter- vening rights. SUMMARY OF CONTENTS. Cancels all rights to sue for infringements committed during the war. E(;ONOMIC CLAUSES. COMMENTS. Article V. — Special Eestrictions on Right of Actio?}, in Begard to Industrial Property. 1. No action shall be brought and no claim made by ^of accept Immunity as to sales of infring- ing articles ex- tended 1 year after the war. tories of Germany on the one part and of the Allied or Associated Powers on the other, or persons who are subjects or citizens of such Powers respectively, or by any one deriving title during the war from such persons, by reason of any action which has taken place Avithin the territory of the other party between the date of the declaration of war and that of the signature of this Treaty, which might constitute an infringement of the rights of industrial prop- erty or rights of literary and artistic property, either ex- isting at any time during the war or revived under the provisions of Articles III. and IV. 2. Equally, no action by such persons shall at any time be pemiissable in respect of the sale or offering for sale for a period of one year after the signature of this Treaty in the territories of the Allied or Associated Powers, on the one hand, or Germany on the other, of products or articles manufactured, or of literary or artistic works published, during the period between the declaration of war and the signature of this Treaty or against those who have acquired and continue to use them. It is understood, nevertheless, that this provision shall not apply when the possessor of the rights was domiciled or had an industrial or commercial establisliment in the districts occupied by Germany during the war. 3. As between the United States of America on the one hand, and Gemiany on other, this Article shall have no effect. Article VI. — Pre-War Licenses. Cancels all pre- 1. Liceuses in respect of industrial, literary, or artistic war licenses. -■- ^ j ^ accepted by 1. See memorandum. Right to renew property concluded before the war between nationals of on terms fixed i a ii- tiibS Allied or Associated Powers or persons residing in their^ territory or carrying on business therein, on the ae SUMMAKY OF CONTENTS. ECONOMIC CLAUSES. COMMENTS. Pre-war licenses to have no effect on those granted by Governments during the war. Royalties paid on pre-war licenses during one part, and the subjects or citizens of Germany, on the other part, shall be considered as cancelled as from the date of the declaration of war between Genuany and the Allied or Associated eountiy. But, in any case, the former benificiary of a contract of this kind shall have the right, within a ])eriod of six months after the ratification of the present Treaty, to demand from the ])roprietor of the rights the grant of a new license, the conditions of which, in default of agreement between the parties, shall be fixed by the duly qualified tribunal in the country under whose legislation the rights had been acquired, except in the case of licenses held in respect of rights acquired under Gennan law. In such cases the conditions shall be fixed by the ]\[ixed Ar))itral Tribunal referred to in Article I, Part V, of the present Treaty. The tribunal may, if necessary, fix also the amount which it may deem just should be paid l)y reason of the use of the rights during the war. 2. No license in respect of industrial, literar-v , or artistic Reciprocal. , "^ Refused by U. S. property, granted under the special war legislation of any see memoran- Allied or Associated country, shall be affected by the con- tinued existence of any license entered into before the war, but shall remain valid and of full effect, and a license so granted to the former beneficiary of a license entered into before the Avar shall be considered as substituted for such license entered into before the declaration of war if granted to the former beneficiaiy. 3. A\Tierc sums have been paid during the war by virtue Not accepted by of a license or agreement concluded before the war in memorandum, respect of rights of industrial property or for the repro- duction or the representation of literary, dramatic, or artistic works, these sums shall be dealt with in the same manner as^other debts or credits of German nationals as provided by the present Treaty. 4. \^s between the United States of America on the one hand, and Germany on the other, this Article shall have no effect. 67 SUMMARY OF ECONOMIC CLAUSES. COMMENTS. CONTENTS. Article VII. — Rhjhls in Separated Tprritorles. fwned^bri'n"*^ The exlstliig ihliabitauts of territories separated from detached terri- Genuaiiy by virtue of the present Treaty shall, notwith- twyo remain standing tliis separation and the change of nationality consequent thereon, continue to enjo}^ in Germany all the rights in industrial, literary, and artistic property to which thev were entitled under German legislation. 68 MB - 6 1 .N'' ^^ . mm, ^ «> .^" .-.. w <^ ' . . ' ' G k^.- ^^ ^^ o'' 4 V ^ - ^ ^ J. -v V ,0 ^ . . ^% 1 ^. . '^Jir-^,* ■'>^^ A^' ''^^^ ./ '>^%f^'^ U .<^' -fU-n^ "^^■^ ^■!^ Z',-:??^!'. -^^ ' .<^' ^-.^.^•^ .'.i