The Contracting Powers recognize the principle that the establishment and maintenance of peace will require the reduction of national armaments to the lowest point consistent with domestic safety and the enforcement by common action of international obligations; and the Delegates are directed to formulate at once plans by which such a reduction may be brought about. The plan so formulated shall be binding when, and only when, unanimously approved by the Governments signatory to this Covenant.
As the basis for such a reduction of armaments, all the Powers subscribing to the Treaty of Peace of which this Covenant constitutes a part hereby agree to abolish conscription and all other forms of compulsory military service, and also agree that their future forces of defence and of international action shall consist of militia or volunteers, whose numbers and methods of training shall be fixed, after expert inquiry, by the agreements with regard to the reduction of armaments referred to in the last preceding paragraph.
The Body of Delegates shall also determine for the consideration and action of the several governments what direct military equipment and armament is fair and reasonable in proportion to the scale of forces laid down in the programme of disarmament; and these limits, when adopted, shall not be exceeded without the permission of the Body of Delegates.
The Contracting Powers further agree that munitions and implements of war shall not be manufactured by private enterprise or for private profit, and that there shall be full and frank publicity as to all national armaments and military or naval programmes.
The Contracting Powers jointly and severally agree that, should disputes or difficulties arise between or among them which cannot be satisfactorily settled or adjusted by the ordinary processes of diplomacy, they will in no case resort to armed force without previously submitting the questions and matters involved either to arbitration or to inquiry by the Executive Council of the Body of Delegates or until there has been an award by the arbitrators or a decision by the Executive Council; and that they will not even then resort to armed force as against a member of the League of Nations who complies with the award of the arbitrators or the decision of the Executive Council.
The Powers signatory to this Covenant undertake and agree that whenever any dispute or difficulty shall arise between or among them with regard to any questions of the law of nations, with regard to the interpretation of a treaty, as to any fact which would, if established, constitute a breach of international obligation, or as to any alleged damage and the nature and measure of the reparation to be made therefor, if such dispute or difficulty cannot be satisfactorily settled by the ordinary processes of negotiation, to submit the whole subject-matter to arbitration and to carry out in full good faith any award or decision that may be rendered.