II. Germany declares her readiness, further, to recognise Latvia de jure, as soon as one of the Great Allied Powers named in the Treaty of Peace* of Versailles, shall have announced its recognition.

III. The Contracting Parties mutually bind themselves not to support or permit in their territory any agitation of any kind whatsoever which may be directed against the legally established Government of the other party. In particular, neither of the contracting parties shall permit in its territory the passage or organisation of military forces hostile to the other State.

IV. The nationals of each contracting party within the territories of the other party shall not receive worse treatment than the nationals of the most favoured nation, whether in respect to the legal protection of their persons, possessions or property, or in respect to their taxation. Both contracting parties also guarantee each other such privileges under the most-favoured-nation clause as apply to mutual trade, industrial undertakings and navigation.

Each contracting party shall immediately revoke all measures already in force which accord differential treatment to the private liberties of nationals of the other party on the ground of their nationality.

V. Both Governments shall immediately proceed to determine their mutual claims for compensation, and shall appoint a special Commission for this purpose. At the same time Germany binds herself to indemnify Latvia, according to a scale to be determined by this Commission, for all damage done on Latvian territory by German troops or under German command.

The Commission shall especially determine the period of time within which there is a liability for compensation in cases where damage was done by German troops or troops under German command and also the amount of such compensation. It shall further determine the amount to be repaid by Latvia for such public works as have been undertaken at Germany's expense on Latvian territory.

The Commission shall not take cognisance of any claims for compensation where immediate reparation has been made, or for settlement of which an agreement in principle has already been attained between all parties concerned.

VI. The German Government which, now as hitherto, repudiates all responsibility for the Bermondt enterprise, agrees, for its part, that the war material and army property of the Bermondt troops be used to defray the damage done by these troops, and will render the Latvian Government

every possible assistance in collecting the said war material and army property.

VII. The German Government shall guarantee its intervention in order to obtain for Latvia a goods credit on a scale of conditions to be defined by a special Commission.

VIII. Latvia agrees that no special difficulties shall be placed in the way of, nor shall special dues be imposed on, goods passing through Latvia from Germany, or through Latvia from other countries to Germany. Details of this through traffic shall be settled by a special Commission.

IX. Other economic, financial and traffic questions shall also be settled by special Commissions.

X. The special Commissions as provided for in Articles V, VII, VIII and IX shall consist of an equal number of representatives of both contracting parties.

The negotiations of the Commission provided for in Article V shall take place at Riga, those of the others in Riga or Berlin as may be necessary.

XI. This preliminary Agreement shall be ratified with all possible despatch and shall come into force on the exchange of the ratifications.

In testimony whereof the Plenipotentiaries of the two parties have signed the present Agreement and have affixed thereto their seal.

Done in duplicate in the German and Lettish languages. Berlin, July 15, 1920.

TREATY and Protocol between Germany and the Netherlands concerning the grant of a Loan to Germany and the Exportation of Coal to the Netherlands.-The Hague, May 11, 1920.

[Ratifications exchanged at The Hague, December 28, 1920.]

(Translation.*)

THE Governments of the Netherlands and of Germany, animated by a desire to formulate an agreement with regard to the grant of a credit to Germany and to the export of coal "League of Nations Treaty Series," No. 97. Signed in the German and Dutch languages.

to the Netherlands, have, with this object, appointed the following as their respective Plenipotentiaries:-

The Government of the Netherlands: M. R. J. H. Patijn, Envoy Extraordinary and Minister Plenipotentiary, Secretary-General of the Foreign Office; C. J. K. van Aalst, Member of the Advisory Committee of the Board of Control for Economic Affairs of the Foreign Office; M. J. C. A. Everwijn, Director of the Commercial Section of the Department of Agriculture, Industry and Trade; F. H. Fentener van Vlissingen, Member of the Advisory Committee of the Board of Control for Economic Affairs of the Foreign Office; Jonkheer A. M. Snouck Hurgronje, Director of the Board of Control for Economic Affairs of the Foreign Office; M. L. J. A. Trip, Treasurer-General;

The German Government: S. Moesle, Under-Secretary of State of the Imperial Ministry of Finance; L. Kempff, Councillor of Legation at the Foreign Office; Fritz Rechberg, Commercial Councillor; Dr. Kreuter, Privy Councillor; Freiherr von Reiswitz und Kaderzin, Councillor of Embassy; Director Wallmichrath, Plenipotentiary Representative of the Imperial Coal Commissioner;

Who, having exchanged their full powers, found in good and due form, have made the following Agreement:

The Netherlands shall extend to Germany a credit of 200 million gulden for ten years at 6 per cent. interest (Annex A: Loan to Germany).

The German Government shall, in return for this loan, undertake:

1. To deliver 90,000 tons of coal, coal briquettes and coke monthly from the 1st January, 1920, to the 31st December, 1923, force majeure always excepted (Annex B: Delivery of coal to Holland).

2. To settle in accordance with the wishes of the Government of the Netherlands the question of the coalfields of the "Nederlandsche Maatschappij tot Ontginning van Steenkolenvelden" situated on the German-Dutch border, and the kindred question of the export to Holland of products derived from them (Annex C: Settlement of the position of the coalfields of the Nederlandsche Maatschappij tot Ontginning van Steenkolenvelden" situated on the German-Dutch border).

In the event of a dispute with regard to the present Treaty, each of the contracting parties shall have the right to appeal to a Court of Arbitration (Annex D).

ANNEX A.

Loan to Germany.

The Netherlands shall open a credit in favour of Germany to the amount of 200 million gulden for a period of ten years at 6 per cent. interest and subject to the following provisions :

1. The credit shall be divided into an amount of 60 million gulden for the purchase of foodstuffs in the Netherlands (Account A), and an amount of 140 million gulden for the purchase of raw materials (Account B).

Account A shall be devoted to the purchase of foodstuffs of Dutch or Dutch Indian origin, which are bought by Germany in the Netherlands.

Twenty-five per cent. of the treaty price of the coal, coal briquettes and coke supplied by Germany in accordance with Section B of the present Treaty shall be allocated to Account A up to an annual amount of 20 million gulden. The German Government shall make the coal merchants responsible for the payment of this 25 per cent. to the Netherlands Government.

Account B shall be utilised as a revolving credit with a maximum debit of 140 million gulden, in such a way that the purchase of raw materials with this credit shall be balanced by the export of goods manufactured therefrom. The raw materials obtained by means of this credit may be procured from any country. Similarly, manufactured goods may be exported to any country.

The import of raw materials shall, as far as possible, be effected through Dutch ports, in order to benefit Dutch trade.

Account shall also be taken of the most economical method of transport, of the origin of the various classes of goods and of their shipment via certain specified ports, also of the vital interests of German ports.

2. Application shall be made for credit, in the manner provided in the Annex, through the agency of a German trustee, the appointment of whose members shall be approved by the German Government in consultation with the Netherlands Government.

3. Interest at the rate of 6 per cent. per annum shall be paid half-yearly upon the current debit balance of Accounts A and B. Interest due upon Account A shall be paid in cash. That due upon Account B shall be allowed to accumulate, provided that a total debit of 140 million gulden is not thereby exceeded.

4. The German Government shall deposit with the Netherlands Bank, as security, Imperial Treasury Bonds to the value of 200 million gulden. Stamp duties paid by the German Government shall be simultaneously refunded by the Government of the Netherlands.

Each

The Imperial Treasury Bonds shall be payable in Amsterdam, shall be in terms of Dutch gulden. and shall be prepared in series. Treasury Bond shall be for 100.000 gulden. They shall be redeemable on the 1st March, 1930, and shall be provided with half-yearly coupons. These coupons shall, as they become payable, be returned to the German Government, after taking account of the interest due in accordance with paragraph 3.

5. So long as the German Government fulfils the obligations contained in this Treaty, the credit shall not be altered. Should the supply of coal not be maintained, or should the provisions of the Treaty in regard to the credit not be carried out, the Netherlands Government may, cases of force majeure excepted, and subject to the ultimate decision of a Court of Arbitration, cancel Credit A (foodstuffs) by giving six months' notice with effect from the coming into force of the arbitral award It may further, in such circumstances,

by giving similar notice, reduce the maximum debit on Credit B (raw materials) to 70 million gulden.

The debit balances of both accounts shall be fully covered by Germany by the 31st December, 1929. at the latest.

ADDENDUM TO ANNEX A.

In accordance with the wish of the Government of the Netherlands, a special organisation shall be instituted for the control of the credit for raw materials; this organisation shall be divided into two sections, one in Germany and one in the Netherlands.

1. The following duties shall be incumbent upon a Trust Company to be established in Germany :

:

(a.) The administration of the credit in Germany in accordance with the principles laid down in the Treaty;

(6.) The determination of the pledges and securities to be required from industrial firms wishing to obtain credits, and the holding of such securities on behalf of the Dutch Government.

2. The Board of Directors of the Trust Company shall be composed of an equal number of bankers, manufacturers and wholesale merchants, and shall also include a German Imperial Commissioner.

The statutes of the company shall be drawn up and the appointments of members of the Board of Directors to be made by the company in accordance with the statutes shall be approved by the German Government in consultation with the Netherlands Government. 3. The organisation to be set up in Holland shall be divided as follows:

(a.) A branch office of the German Trust Company, which shall deal with accounts, the entry of securities received by the German Trust Company and correspondence with the Dutch authorities;

(b.) A Dutch High Commissioner, who shall maintain close relations with the German High Commissioner and who shall be authorised to inspect the accounts of the administration of the credit and examine the entry of the securities in the German branch office in Holland, or to cause under his responsibility one of his officials or members of the Dutch Commission referred to in Clause C to make such examination. The Dutch High Commissioner has further the right in co-operation with the German High Commissioner to satisfy himself as to the existence and administration of the securities.

(c.) A Dutch-German Commission in Holland, which shall consist of the two High Commissioners and a number of permanent German and Dutch Delegates; this Commission shall be summoned when necessary for the discussion of any question which may arise.

4. Applications by persons desiring to obtain credit shall be addressed to the Trust Company in Germany and shall be decided by that company, which shall at the same time determine the securities which must be provided. The representative of the Trust Company in Holland shall inform the Dutch High Commissioner when wishing to draw on the credit.

5. The expenses of the administration of the credit shall be met from the credit itself, but shall not include the expenses of the Dutch High Commissioner.