GERMAN FINANCE

Dominion, Volume 12, Issue 299, 13 September 1919, Page 7

GERMAN FINANCE

ERZBERGER'S REVIEW OF THE SITUATION

"TERRIBLE BURDENS"

Addressing the National' Assembly at Weimar, the finance Minister, Herr Erzbei'ger, said: "Ono of the first requirements for tho restoration of the lifo of labour is the •establishmenti of orderly finances. Tho first thing to do in reconstruction, therefore, is to secure a fundamental financial reform. State bankruptcy will not snvo us, for State bankruptcy is to-day a people's bankruptcy at home, and doprives Germany of all credit abroad. Germany needs credit, much credit.. I will havo nothing to do with suggestions for the annulment: of war loans or a declaration of general bankruptcy. It, is our hard duty to strain every muscle so that the interest on war loans can be maintained.

"My highest aim is to' establish justice in tho entire taxation system. Income from capital miist be taxed much more heavily thnn income from work. A good 'Finance Minister is tho best. Socialisation Minister. A big pieco of Socialisation has already been carried out. An increase of wages and. a fall in the value of money are good Socialisation. An inheritance tax and a big levy on property are the first inaugural steps. Others will follow. The great and sovereign taxation authority of the future can onlv be the one German Empire, to save which in its unity and solidarity from the war's collapse was, and is, the principal task- of tho present Government.' The preservation of the Empiro was. the price for the signing .of the terribly hard and unjust peace. •

"The German National State must, be able to live and develop. To that end the realm requires a new system of taxntion. Tho German citizen is exposed to three tax creditors; namely, the Empire, the individual State, and the Commune. The' Empire's income must be increased by 900 per cent., and that of the individual States and Communes by perhaps 100 per cent. Such enormous changes require fresh measures. The Enormous. Neods of the Future. . "We must meet the enormous needs of the future. The. Empire's needs are divided henceforth into, first, home, needs; secondly, indemnities. The year's expenditure confronting us will amount to somo 17.500.000,000 marks. Despite all efforts, the maximum amount of the indemnities could not be fixed in th'e Peace Treaty. lam firmly resolved to tread the natli of hard economy. I have, therefore, at onco given out the watchword already circulated by my predecessor that from October 1, 1919, there shall bp no. more items not specified in detail. nor more war funds; that the war finance system shnll ce.ise, and. that the •regular Budget system must be returned to. The first guiding principle is that there must be iio more unproductive expenditure. .The gradual abolition of unemployment grants must, therefore, be faced.. , , ~ , "How are the full requirements, which mnv be estimated at somo 25,000,000,000 marks for the Empire and the now States and Communes, to be covered.'' The, current taxation revenues , of the Emnire before the. war amounted to nearlv 2.000.000.000 marks. l'rom 191J to -1918. during the war. new current revenues amounting to 4,000,01)0,000 marks were tapped. There is, furthermore, the single levy, the yield of the war profits tax, together with an additional charge amounting to 5,700,000,000 marko, the lumerial.tax .for 1918, yielding about 2.000,000,000 marks, the new tax, Bills before you, which will bring in another ,1.200,000,000 . niarks. an J also the. single levv revemwrWhifeh .promises' a permanPnt additional saving of 600,000,000 marks, so that there still remains a sum ot over 10.000.000.000 marks to be covered.

Levy on Property and Business Turnover. "The Finance Ministry litis almost completed tlie drafting.of two,. important ■new taxes,.,which.l iuteod to. submit to the House before the Parliamentary re-; cess.- Theseiare: A large single.levy on and a. large tax ou business turnover, but even if these. Bills are passed the money for the payment of the indemnity must be-fdund in another Nay. lu the autumn new Bills, will lie inu'«duced in the National Assembly with the final object of covering .this dehcil. The burdens of taxation will reach an absolutely terrible height. The seventytwo milliards floating debt are. a constant danger. The removal of this debt is one of the most' urgent tasks. ;• . "There are two wiys—either. conversion 'into a funded loan or extinction by; big levies, by taking all the war. piolil* or by a big levy on' property. At the same time, i do not inuulge m any liopo tli'at these two ways together will immediately yield the entire liquid amount of 7:1,000,000,000 marks. It is the duty of propertied peopie not only to bow to State compulsion, but to achieve the inward conviction of the necessity of giving up all' riches, all that is superfluous. Fundamental changes in the system oi taxation will be.speedily submitted to the National Assembly, imd this reform will represent the completion of the whole work."