I suspect that the only real and useful purpose of the Committee of Guarantees is as an office of the Reparation Commission _in Berlin_, a highly necessary adjunct; and the clause about “guarantees” is merely one more of the pretenses, which, in all these agreements, the requirements of politics intermingle with the provisions of finance. It is usual, particularly in France, to talk much about “guarantees,” by which is meant, apparently, some device for making sure that the impossible will occur. A “guarantee” is not the same thing as a “sanction.” When M. Briand is accused of weakness at the Second Conference of London and of abandoning France’s “real guarantees,” these provisions enable him to repudiate the charge indignantly. He can point out that the Second Conference of London not only set up a Committee of Guarantees but secured, as a new and additional guarantee, the German Customs. There is no answer to that![36] 3. _The Provisions for Payment in Cash and Kind._—The Bonds and the Guarantees are apparatus and incantation. We come now to the solid part of the settlement, the provisions for payment. Germany is to pay in each year, until her aggregate liability is discharged: (1) Two milliard gold marks. (2) A sum equivalent to 26 per cent of the value of her exports, or alternatively an equivalent amount as fixed in accordance with any other index proposed by Germany and accepted by the Commission. (1) is to be paid quarterly on January 15, April 15, July 15, and October 15 of each year, and (2) is to be paid quarterly on February 15, May 15, August 15, and November 15 of each year. This sum, calculated on any reasonable estimate of the future value of German exports, is materially less than the original demands of the Treaty. Germany’s total liability under the Treaty amounts to 138 milliard gold marks (inclusive of the liability for Belgian debt). At 5 per cent interest and 1 per cent sinking fund, the annual charge on this would be 8.28 milliard gold marks. Under the new scheme the annual value of Germany’s exports would have to rise to the improbable figure of 24 milliard gold marks before she would be liable for so much as this. As we shall see below, the probable burden of the new settlement in the near future is probably not much more than half that of the Treaty. There is another important respect in which the demands of the Treaty are much abated. The Treaty included a crushing provision by which the part of Germany’s nominal liability on which she was not able to pay interest in the early years was to accumulate at compound interest.[37] There is no such provision in the new scheme; the C Bonds are not to carry interest until the receipts from Germany are adequate to meet their service; and the only provision relating to back interest is for the payment of _simple_ interest in the event of there being a surplus out of the receipts.