The Daily News. TUESDAY, OCTOBER 23, 1917. GERMANY'S WAR BILL.

Taranaki Daily News, 23 October 1917, Page 4

The Daily News. TUESDAY, OCTOBER 23, 1917. GERMANY'S WAR BILL.

Mr. C. W. Guilleband, of London, his rendered considerable Bervice by summarising the deliverances of eminent German financiers on the financial position which the war has created in Germany. He epitomises the Tesults of 'hift investigations in the last issue of the Economic Journal. The digest furnishes interesting reading, and gives assurance of a monetary strain upon the Hun which must be a mighty factor not only in accomplishing his military overthrow, but also in making his military reliability- • tion exceedingly difficult. 'Down to May, 1917, Germany had raised six 5 per cent, war 'nans, totalling £3,010.80/),000. Adding ciher loan obligations the total is estimated at £3,500,000,000. The annual interest bill on this sum is £175,000.000, and if. redemption be provided for at the rate of 1 per cent, of the capital the annual payment required for interest and sinking fund will be £218,000,000. If the war had ended at the close of the third year of hostilities, pensions would have absorbed at least £100,000,000 of the annual revenue. If j the army and navy are to be put again on the pre-war footing of strength, there will be required for some years after peace an annual expenditure of from £100,000,000 to £150,000,000. Germany's vast accumulations of military stores have been depleted. The indirect losses : of the war, which will become a charge upon the Imperial Exchequer, are given in considerable detail in the Kolnisclie Zeitung, and they are estimated to" bring the total sum of annual expenditure which the German Empire will have to ! ! meet out of taxation to £8.50,000,003. It is hoped that some £200.000,000 of this recurrent expenditure may be provided for by loan. Grave fears, however, ore entertained of the possibility of heavy borrowing by the Imperial Government for the first few years of peace. "Hence, immediately after the war, tile annual expenditure of the Empire to lie met out of taxation will amount to at least £650,000,000, or to £950,000,000 if it is found impracticable to raise £200,000,000 by loan." But the tale of Germany's war cost is not yet fully told. Germany is a federal Empire, and the constituent States 'have large taxing powers to meet some of the war charges. "Separation allowances and other forms of war relief are paid by the local authorities, which are empowered to recover a certain proportion—as a rule not more than about 4 per cent. —from the Empire." The municipalities also bear a burden of war coat. During the first 31 months of fighting thle Prussian town governing bodies spent "mjore than £125,000,000 in war relief." The war cost, of course, increases day by day, and the seventh great war loan is now being raised. Now, it is one thing to state tlie magnitude of a financial burden; it is quite another thing to state the relation of a financial burden to financial resources. Significance as to Germany's

j j o.sition lies in the latter statement. It j liie German Chancellor has an abundant i j source of wealth to draw upon and an r adequate machinery for the purpose, I even an annual expenditure of £850,000,'OjO need not appal him. But it is iust

litre where the difficulty arises. This yearly liability is a liability of the Federal Reichstag, and the taxing powers of iliis body are circumscribed. iLT'p to the outbreak of war the privilege of direct taxation was claimed by the individual Slates, leaving to the Imperial Government the boul weapon of indirect taxation. The Government have always great I trouble in enlarging their revenue, because of the States' jealous fear of encroachment. The Empire lias ever had difficulty in financing its normal expenditure. "In 1909 the most violent parliamentary and political struggles, which threatened the whole fabric of the Empire, raged round new tax proposals for an additional £25,000,000." It was regarded as a great financial feat when, in 1913, £50,000,000 was raised for military and naval purposes. The normal revenue in peace times ranges between £150,000,000 to £200,000,000 £ year. How is an empire going to rafse £050,000,000 to £850,000,000 in addition when the raising of an extra £25,000,000 or £50,000,000 has generally precipitated a political crisis '! The financial position of the United Kingdom furnishes a great and pleasing contrast. Down to March 31,1917, the total national expenditure during the war amounted to £4,318,000,000, but of this sum £970,000,000 represented advances to Allies and the Oversea Dominions. The next expenditure was, therefore, less than that of Germany. When we examine taxing resources we see the immense superiority of Great Britain. Sile has paid £1,137,000,000 of war cost out of revenue; Germany, on the most liberal estimate, has not paid more than £550,000,000, or legs than half. On March 31, 1'917, the net National debt of the United Kingdom stood at £2,884,000,000, which for interest and sinking fund will require an annual revenue of £153,700,000. The total of yearly war charges up to the date mentioned is given at £356,700,000. Now, the revenue, apart from loans, was in IM6 £575,428,000. Deducting the proceeds of the Excess Profits Duty—namely, £157,000,000 —a permanent revenue of £416,108,000 remains. This' would meet the after-war annual expenditure (including the normal peace expenditure) and leave a surplus of £59,000,000. Of course tliis result rests on the assumption that all the war taxes except the Excess Profits Duty are continued. But even then it shows the ability of Great Britain to sustain all war charges out of revenue in the years succeeding peace—an ability which is by no means revealed by the German position. "In Germany it is far otherwise; every day sees her plunged more firmly into a morass of hopeless financial sin, barrassment. Either national bankluptey or the confiscation of property by means of taxation on a scale hitherto unknown confronts the German people after the war. Those amongst them who have seen this shudder and avert their gaze, and whisper despairingly the. word "Indemnities."