The Taihape Daily Times. AND WAIMARINO ADVOCATE SATURDAY, NOVEMBER 30, 1918 PARADOXICAL TAXATION.

Taihape Daily Times, 30 November 1918, Page 4

The Taihape Daily Times. AND WAIMARINO ADVOCATE

SATURDAY, NOVEMBER 30, 1918 PARADOXICAL TAXATION.

(With which is mcorprnrated The ‘llihape Pout and Wale-armo News)-

' There are many people who believe ; that Germany and its fellows in crime * will not be compelled by the victori- !► ous Allies to do anything more than > compensate for the loss of property > wilfully, wantonly and otherwise de- >. stroyed during the war. The idea is ■. supported by the thought that Gerc many is so exhausted that its people are incapable of paying anything in the shape of indemnity. This question is of no further immediate con- > cern to New Zealanders than its pos- > siblp relationship with future taxa- > tion ,which Sir Joseph Ward rather l cryptically referred to in his Financial Statement, but the financial history of leading nations does not bear out the suggestion that Germany is * incapable of paying just indemnity for > damage wrought. The abandonment > of military and naval expenditure > alone would enable 4 at least half the >. bewilderingly large annual votes for * those purposes to be devoted to liquidating what ever war bills the Allies may present, and we cannot overlook * i the fact that want of German astute- ■ j ness is disclosing before peace is declared and financial arrangements are submitted that the Provisional Government in Berlin is virtually prepared with '-its banking and credit systerns to exploit whatever markets of \ the world are available. The governj ing Conference carried a resolution unanimously declaring that it is ab- " j solutely necessary that banks and ' other credit institutions, should work on the same, basis, and in the same form as hitherto, to secure supplies of 1 | raw material and credit abroad for the " I German Republic. It was admitted 3 . that only lawlessness would cause 1 German finance to break down. This ; indicates that Germany is not ex- | hausted to the extent some whining i. - . i importunists would have the Allies j believe. Then, it is not Germany •" alone that will be called upon to inj demnify and . compensate; Austria, Hungary and Bulgaria are great 1 . wealth producing countries, and Turkey has proved of almost inestimable I value to the Prussian Military Autol crats as a source of food and of raw ) material. Therefore, there is a quar- ) tet or quintet of companions in vil- ) lainy who must be mulcted in heavy ) costs, in fines and damages that will ) settle and subdue their war ardour ) for at least a century into the future. ) German statesmen were chagrined and ) disgusted in 1873 to realise they had ) blundered most stupidly; that they ) had shown their ignorance in estimat- ) ing what a defeated country is able to ) pay by way of indemnity for war ) costs. The German Government of ) that day believed they had crippled ) France for a very long period, but the i German army of bailiffs in Paris were I paid off and sent home in the short I space' 1 of three years; it was a revelai tion to the world, and it provided ; evidence that is not likely to be lost i sight of on the present auspicious iocI casion by the Allies. It is contended j that. Germany will be boycotted to ! some degree and that markets hither- ! to enjoyed will not be available, and 1 that while German trade may be considerable it can have no comparison to .the trade of pre-Avar days. No one can very well deny that, but neither has Germany the men and factories available for any greater scheme of trade and commerce exploitation than markets will permit. It must not be forgotten that Germany preferred tio grow rich by manufactures and exploitation of foreign markets, as it was an adjunct, and part of the grand scheme for' conquest of the world. There will be a return in Germany to primary production; more dependence will be placed on' what is wrested from the soil, than what can be taken by trading from nations they thought to conquer and enslave. The huge sums hitherto spent on the army and navy will be available for peaceful pursuits. Before the Franco-Prussian : War the army vote alone was twenty | millions annually, to say nothing of the huge naval votes, which, combined j have in later years increased to over one hundred millions annually; in fact it is not definitely known what the full army and navy bill did total annually. The greatest optimists in (our midst fell far below the mark in estimating the thoroughness and completeness of the victory gained. Germany and its partners are so completely conquered and exhausted of military energy that war in those countries from, the present is virtually unthinkable. It is probable that

the Allies will not only have armies of occupation in erstwhile enemy cit- j ies, but the main channels of revenue will be taken possession of: no trust j will be placed in German whine and importunity; the financial washing-up time has arrived and there will be a hard, yet humane, bargain driven by the Allies. There is no question about the huge riches-producing capacity of t all the conquered countries, and there ! seems no reason why there should be any departure, even in the slightest degree, from the international custom of compelling the losers, and, in this case, the criminals, from paying the costs of war with adequate compensation for all destruction wrought. If New Zealand receives no indemnity it will not be because the conquered nations are incapable of paying it. There is " difficulty in understanding Sir Joseph Ward's statements under the headings of "Future Taxation" and "Restoration of Peace." He points out that it is only within the next twelve months that this country can learn its full liability in connection with the war. It is beyond denial or question that debt figures will loom very much larger than they do now*, and yet by some scheme of financial legerdemain taxation may be reduced. In twelve months time we shall know the full amount required annually for j interest, sinking fund, pensions, and other war costs, and then the Minister states, "Judging from present indications, and from information obtained during my recent visit to England, I do not think I can be accused of being unduly optimistic if I say that the prosperity of the country is to be adversely affected after the war." Not adversely affected with a load of taxation that must be thirty per cent, higher than it is with the partial load now being carried? The Minister further states, "And. that in consequence (in consequence of what?) it will then be possible, by a review of our financial position, to reduce in some measure the heavy taxation cheerfully borne by the taxpayers." Here is a financial paradox; in tw r elve months time the taxpayers are to learn the full amount of the country's responsibilities, admittedly greatly in excess of what they are. to-day ; and yet the present heavy taxation is to be reduced. Evidently Sir Joseph Ward learned something when he - was in England recently.