Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1914-12-17
REPUBLIC IN
FLOURISH|NC STATE
Mountain Kingdom Is Refuge
for Oppressed Foreigners
Germans Invest Much.
From the London Times.

From the London Times.
Just as Switzerland used formerly to
be a refuge for foreign exlles and for
lands. SO is h now tending to become
a refuge for foreign capital, especially
for foreign capital which is oppressed
and prosecuted by a war tax heavier
than 1t wishes to pay. This tendency
has of late been a~ccentuated. hot only
by the introduction of the German wax
tax. but also by the threat of the in
PRODUCTION of an income tax into
France n by the increased income
tax imposed in England.
AT the time of the Introduction of the
war tax n Germany Swiss bankers
banks and to important manufacturing
firms calling their attention to the ad-
Vantages of investing money In Switz-
erland. They also advertised in the
leading German newspapers pointing
out the security of capital in Swiss
banks and it's freedom from govern
ment molestation or other interfer-
ence. Whether as a result of their eff
forts or not, a great e Of German
capital has undoubtedly found it's way
during the last year to Switzerland, so
much so that the matter recently came
up for discussion before a committee
Of the Prussian Herrenhaus.
-SoGtuA y war TAX
1t was ELECTED in evidence, for in
stance, that one important German firm
in the Rhine provinces had established
an estate bank in Switzerland with a
capital of E750.QQQ thus deriving the
government and municipalities Of a
considerable amount of taxation. AL
together 10 different financial under
takings were said to have been recently
n in Switzerland with German
capital, and all of them in the endeavor
to evade the wal tax. Naturally the
Prussian tax commissioners are at
tempting to devise some means either
of preventing the exit of German cap
ital to Switzerland-which would
scarcely be possible-or of taxing 1t
after it has been transferred thither.
A Recent Financial Development.
The Importance of Switzerland's po-
sltion in international European
nance is of recent growth. It's origin
may be traced back to the year 1907,
when enlightened opinion succeeded in
getting the better Of the cantonal jeaI-
ousies which had so long acted as a
drag on the country's financial stand
ing. In that year a law was passed
depriving h cantons of the right to
issue notes n comforting this right
upon n bank. the national bank, Gre
ated in 1907. Previously 80 Swiss banks
had been entitled to issue notes and
~ = ~ lSo 1lO VI
and no confidence in notes issued by
all these petty little local banking in
situations, whose crcfit. moreover, was
not always altoget' + sound. Since
Swiss credit has been established part
ly on the national bank, with the sole
right of issuing notes, and partly on
the cantonal banks with the guaran-
tee of the canton whose name they
bear behind them), 1t no longer depends
upon the good will of the Bank of
GRANGE or of any other bank; and the
policy of the Swiss National bank Is so
directed as to steer a middle course be-
tween France and Germany. thus win
ming the confidence of both countries.
Earlier Transfers of Capital.
The idea that Switzerland ought to
%endeavor to invest capital abroad in
order not to allow her home money
market to be glutted is far from new.
AS long ago as 1856 the bank of Leu &
Co, still a we'll known Swiss bank, was
established for the purpose of finding
investments abroad for Swiss capital
at a higher rate Of interest than that
obtained in Switzerland. About 70
years later, when Switzerland's neu-
trality had been guaranteed. capital be-
gan of its own accord to flow toward
the republic. seeking a safe investment
there. AT first it was chiefly French
capital which turned to Switzerland,
for French ~financiers took into consid-
GRAFTON the fact that only a small pro-
portion of Swiss government and can
tonal loans could properly BIS classed
as unproductively expended Con the
army, for i~nstance). Thus 1t came
about that a large amount of French
capital was sunk In Swiss railways-in
federal railway 3112 per cent stock and
in 4 per cent Jura-Simplon stock. for
example.
Swiss Water Power.
As time went On German capital be-
gan to compete for investment in Swift.
zerland and to get a foothold there.
Thus the Allegemeine EIektrizitatsge-
sellschaft and other great German
firms acquired q position in the coun-
try. and the fact that number of Swiss
manufacturers were SO anxious for
rapid development of electric power in
Switzerland, and that the country had
no coal supply of her own worth mem
tioning. greatly facilitated matters for
German electrical supply companies.
Switzerland, moreover, was even then
keenly conscious Of the Difficulty Of
procuring a sufficient supply OF coal
whenever a coal miners strike sholld
occur In Belgium. Germany. or other
coal producing lands. Now she is ever
more alive to the danger OF allowing
any foreign power. be it Germany or
France. to exploit her water power.
and the Swiss Federal RAILWAYS ara
consequently acquiring everywher. the
right to utilize the water power for the
eventual identification of their system.