The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-07-10
GERMANY NEARING
ECONOMIC EXHAUSTION
1phael Georges Levy Writes Interestingly of Trade and In
dustral shrinkages Foreshadowing Financial Down
fall-Bond Issues Made Basis of Germany
Getting Big War Indemnity.

These take the form Of short-term
bills or consolidated funds either
payable at long date or perpetual,
In Sc otember. 1914. the empire is
sued $3.50, 5000 OF per cent bonds
at 81 i-2, payable from 1919 to 1920.
and also invited the subscription of an
unlimited amount OF per cent con-
suls not repaya BILE before October !,
1924. This latter form OF money-rais-
ing was the one subsequently adopted
/ by all bellgerents. \ second German
loan, foated in February. 1915. gave
subscribers the alternative OF 5 per
I cent treasury bills maturing 1912-22
or consols similar TO those of 1914.
The third loan was issued in October.
1915: the fourth in April, 1915, and the
fifth in October. 1915. According to
German figures, these loans yielded
respectively $1,000, 100000, 81 100000
ooo $4,000 900, 900 and s2,76o. 600. 600
for each Of the 1915 issues. Of total
for the FIVE of sl1.750, 10000
How Germany Gets Money.
/ The sixth German loan was made in
March last. ; per cent consols at 90
+ lnpayahle before 1924, and IL per
! cent treasury bonds at IS being Of
Tered The bonds are repayable from
January !. 1918. by half-yearlv draw
ings at 10 per cent and one-twen-
tieth of the total subscribed is to be
thus to be paid off each year From
July, 1927, that treasury will have the
right 10 reimburse all outsta nding
bonds 81 par, but at the same time IA
cihty is given to holders 10 exchange
their Z .i-2 per. cent bonds into per
cent bort s 10 ne paid off by drawings
a. lis 10 the extent OF one-twentieth
OF the remaining total every year.
Ten years later in 1897 the balance
Of the outstanding bonds can be paid
off a par. or II holders go wish. con-
verted into 3 - per cents repayahle
by drawings at 12o 10 the extent of
one-twe itteth yearly The IDEA is to
compensate the lowering Of the inter-
est rate ny raising the price Of reim-
bursement The outstand IL per
cent bonds cannot he paid off before
+ af1 when the loan. including unCon-
verted bonds Will ne completely lqui-
dated
In order 70 stimulate subscriptions
the German newspapers published
charts claiming that Germany and
her allies had spent only s25,-
500 600 600 on the war. while their
haa, 900 400. The per capita burden
+" Germany WAS put ~ s232. against
1897 20 for France and $4o2 for Eng
land IT vas also claimed that where
as Germany had expended only 5s
pr cent Of her national revenue in
war costs Great Britain had devoted
81 per cent for the same purpose.
Tuin, If No Indemnity.
II ras. noted that the prospectus
o. the xth German loan spoke with
}fss confidence than preceding pros
pectuscs nj obtaining a war indem-
nifty for the repayment Of war loans
f"t Herr Heyf brand, chief OF the
Conservative parts, has declared that
the tmI ire will ne ruined unless
u 80 G. re- ar tot
subscription lists subsequently pub
Hshed showed that the number OF sub
s~rihers had diminished while NUM-
ripalities. savings banks and diverse
state jnsttutonS had increased their
applications
With regard to war taxation. We
find that the ffst fiscal measures
Brought about ~ the conflict con-
sisted IN the raising OF the taxes de-
creed by the Communes tdistricts)
AT The beginning Of 1915, In Deem
her If the same wear companies and
trading concerns were compelled TO
carry 10 special reserve so per cent
Of the extra profits they had made
. since the opening Of the war This
Vas net taxattan. hat g prepare tfata
T.. failure lmposis. Special measures
verc taken with regard to the i'm
parial bank; In addition TO the 30 per
cent reHerve Of war profits. il was
compelled 20 make special contrihu-
hon TO the treasury 10 Compen safe
70. Tho suppression Of the : per cant
tax which by the terms Of the bank 5
charter, Is imposed on bank notes is
sued in excess Of the legally author
izcd aggregate.
In 1915 the empire introduced new
taxes and raised existing ones The
law of June lo 1915. increased the
duties on all forms OF tobacco: II in
4 ,f.,,~
metre the impost on soil planted with
tobacco. ana iaaddition to raising the
cigarette duty. imposed n super-taX
IN the retail trade A law OF June
IL 1916 increased the stamp charges
on bills Of ladng and other transpor-
tation documents, II also increased
postal and telegraph fees Finally. a
/ law OF June 81, 1915. established
war impost on fortunes.
Taxing Fortunes.
This latter tax requires special men
tior II was first inaugurated-un
doubtedly In view of a great mpend-
Ing con4ct--in July. 1918, when It
was decided that the basis of the tax
should be the taxpayers fortune on
January !. 1914. II was decided that
this total should be compared with the
total existing on December 81. 1915,
and the tax imposed on the increment.
~ any. The law provided for collec-
ton Of the tax in the same way every
succeeding three years, II Is on a
sliding scale Of from rs to so per
cent A super-tax Of from 10 TO
per cent hits fortunes of over S25,-
600, but the maximum super-tax OF
per cent only applies TO fortunes of
more than s25o0.0oo
The law OF June 81. 1915. confirmed
these provisions 1t also provided for
the deduction from the total fortune
exrting at the end Of 1915 of legacies,
insurance payments. donations re-
ceived. and sums received from the
sale Of property or stocks IN foreign
countries. On The other hand, Items
to be added 70 the fortune at the end
OF 1915 were sums paid out as dona-
tons foreign Investments and money
used fot buying works OF art, Jewels
ana precious metals.
Tht tax is az follows. Five per cent
on the first 50, 500 increase in fortune
for the threc-year term. rising gradu-
ally 70 so per cent this latter figure
being applied to inCrements OF more
than $4,000
/. Com nsnies are Hahia N a tay an