Chapter XLII: Section 7: Reparation--Germany accepts responsibility for all loss and

damages to which civilians of the allies have been subjected by the war, and agrees to compensate them. Germany binds herself to repay all sums borrowed by Belgium from the Allies. Germany irrevocably recognizes the authority of a reparation commission named by the Allies to enforce and supervise these payments. She further agrees to restore to the Allies cash and certain articles which can be identified. As an immediate step toward restoration, Germany shall pay within two years $5,000,000,000 in either gold, goods, ships or other specific forms of payment.

The measures which the allied and associated powers shall have the right to take, in case of voluntary default by Germany, and which Germany agrees not to regard as acts of war, may include economic and financial prohibitions and reprisals and in general such other measures as the respective governments may determine to be necessary in the circumstances.

The commission may require Germany to give from time to time, by way of guaranty, issues of bonds or other obligations to cover such claims as are not otherwise satisfied.

The German government recognizes the right of the Allies to the replacement, ton for ton and class for class, of all merchant ships and fishing boats lost or damaged owing to the war, and agrees to cede to the Allies all German merchant ships of sixteen hundred tons gross and upward.

The German government further agrees to build merchant ships for the account of the Allies to the amount of not exceeding 200,000 tons' gross annually during the next five years.