the satisfaction of private debts due from Germany to the nationals of
the Allied Government within whose jurisdiction the liquidation takes
place, and, second, to the satisfaction of claims arising out of the
acts of Germany's former allies. Any balance, if the liquidating
Government elects to retain it, must be credited in the Reparation
account.[22] It is, however, a point of considerable importance that the
liquidating Government is not compelled to transfer the balance to the
Reparation Commission, but can, if it so decides, return the proceeds
direct to Germany. For this will enable the United States, if they so
wish, to utilize the very large balances, in the hands of their
enemy-property custodian, to pay for the provisioning of Germany,
without regard to the views of the Reparation Commission.

These provisions had their origin in the scheme for the mutual
settlement of enemy debts by means of a Clearing House. Under this
proposal it was hoped to avoid much trouble and litigation by making
each of the Governments lately at war responsible for the collection of
private _debts_ due from its nationals to the nationals of any of the
other Governments (the normal process of collection having been
suspended by reason of the war), and for the distribution of the funds
so collected to those of its nationals who had _claims_ against the
nationals of the other Governments, any final balance either way being
settled in cash. Such a scheme could have been completely bilateral and
reciprocal And so in part it is, the scheme being mainly reciprocal as
regards the collection of commercial debts. But the completeness of
their victory permitted the Allied Governments to introduce in their own
favor many divergencies from reciprocity, of which the following are the
chief: Whereas the property of Allied nationals within German
jurisdiction reverts under the Treaty to Allied ownership on the
conclusion of Peace, the property of Germans within Allied jurisdiction