HKB
There are also many other relatively minor duties assigned to the Commission. The above summary, however, shows sufficiently the scope and significance of its authority. This authority is rendered of far greater significance by the fact that the demands of the Treaty generally exceed Germany's capacity. Consequently the clauses which allow the Commission to make abatements, if in their judgment the economic conditions of Germany require it, will render it in many different particulars the arbiter of Germany's economic life. The Commission is not only to inquire into Germany's general capacity to pay, and to decide (in the early years) what import of foodstuffs and raw materials is necessary; it is authorized to exert pressure on the German system of taxation (Annex II. para. 12(b))[139] and on German internal expenditure, with a view to insuring that Reparation payments are a first charge on the country's entire resources; and it is to decide on the effect on German economic life of demands for machinery, cattle, etc., and of the scheduled deliveries of coal.
By Article 240 of the Treaty Germany expressly recognizes the Commission and its powers "as the same may be constituted by the Allied and Associated Governments," and "agrees irrevocably to the possession and exercise by such Commission of the power and authority given to it under the present Treaty." She undertakes to furnish the Commission with all relevant information. And finally in Article 241, "Germany undertakes to pass, issue, and maintain in force any legislation, orders, and decrees that may be necessary to give complete effect to these provisions."
The comments on this of the German Financial Commission at Versailles were hardly an exaggeration:--"German democracy is thus annihilated at the very moment when the German people was about to build it up after a severe struggle--annihilated by the very persons who throughout the war never tired of maintaining that they sought to bring democracy to us.... Germany is no longer a people and a State, but becomes a mere trade concern placed by its creditors in the hands of a receiver, without its being granted so much as the opportunity to prove its willingness to meet its obligations of its own accord. The Commission, which is to have its permanent headquarters outside Germany, will possess in Germany incomparably greater rights than the German Emperor ever possessed, the German people under its rÈgime would remain for decades to come shorn of all rights, and deprived, to a far greater extent than any people in the days of absolutism, of any independence of action, of any individual aspiration in its economic or even in its ethical progress."
In their reply to these observations the Allies refused to admit that there was any substance, ground, or force in them. "The observations of the German Delegation," they pronounced, "present a view of this Commission so distorted and so inexact that it is difficult to believe that the clauses of the Treaty have been calmly or carefully examined. It is not an engine of oppression or a device for interfering with German sovereignty. It has no forces at its command; it has no executive powers within the territory of Germany; it cannot, as is suggested, direct or control the educational or other systems of the country. Its business is to ask what is to be paid; to satisfy itself that Germany can pay; and to report to the Powers, whose delegation it is, in case Germany makes default. If Germany raises the money required in her own way, the Commission cannot order that it shall be raised in some other way; if Germany offers payment in kind, the Commission may accept such payment, but, except as specified in the Treaty itself, the Commission cannot require such a payment."