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be paid in each year under this paragraph shall be reduced to the amount required in that year to meet the interest and sinking fund on the bonds then outstanding.
Subject to the provisions of Article 5, the payments to be made in respect of Paragraph (1) above shall be made quarterly before the end of each quarter, i.e. before January 15, April 15, July 15, and October 15 each year, and the payments in respect of Paragraphs (2) and (3) above shall be made quarterly, November 15, February 15, May 15, August 15, and calculated on the basis of the exports in the last quarter but one preceding that quarter, the first payment to be made November 15, 1921.
Germany will pay within 25 days from this notification one milliard gold marks (£50,000,000) in gold or approved foreign bills or in drafts at three months on the German Treasury, endorsed by approved German banks and payable in London, Paris, New York, or any other place designated by the Reparation Commission. These payments will be treated as the first two quarterly instalments of the payments provided for in compliance with Article 4 (1).
The Commission will within 25 days from this notification, in accordance with Paragraph 12 (d), Annex II. of the Treaty as amended, establish the special Sub–Commission, to be called the Committee of Guarantees. The Committee of Guarantees will consist of representatives of the Allied Powers now represented on the Reparation Commission, including a representative of the United States of America, in the event of that Government desiring to make the appointment.
The Committee shall co–opt not more than three representatives of nationals of other Powers whenever it shall appear to the Commission that a sufficient portion of the bonds to be issued under this agreement is held by nationals of such Powers to justify their representation on the Committee of Guarantees.
It shall supervise the application to the service of the bonds provided for in Article 2 of the funds assigned as security for the payments to be made by Germany under Paragraph 4. The funds to be so assigned shall be—
(a) The proceeds of all German maritime and land customs and duties, and in particular the proceeds of all import and export duties.
(b) The proceeds of the levy of 25 per cent on the value of all exports from Germany, except those exports upon which a levy of not less than 25 per cent is applied under the legislation referred to in Article 9.
(c) The proceeds of such direct or indirect taxes or any other funds as may be proposed by the German Government and accepted by the Committee of Guarantees in addition to or in substitution for the funds specified in (a) or (b) above.
The assigned funds shall be paid to accounts to be opened in the name of the Committee and supervised by it, in gold or in foreign currency approved by the Committee. The equivalent of the 25 per cent levy referred to in Paragraph (b) shall be paid in German currency by the German Government to the exporter.
The German Government shall notify to the Committee of Guarantees any proposed action which may tend to diminish the proceeds of any of the assigned funds, and shall, if the Committee demand it, substitute some other approved funds.