The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1918-03-06
IS GERMAN NATION
NEAR FINANCIAL RUIN?
Debt Has Passed the 100 600 900 Mark Point Once
Admitted to Be Fatal-Small Hope of Indemnities
From Conquered Nations

expected of them. Among these, III the
first place. is the tax on war profits,
which has 80 far produced. according
to reports, an income of 5,000000,OO
marks.
If this were 5000, 100000 marks a
year there would be no question about
Germany 8 meeting her interest out of
taxation, but evidence indicates that |
it must have meant 5,000,000,000 in |
three years. For ever since the first |
wear of the war--ever since, indeed, It |
became evident that the dream of an
early and complete victory with |
humping indemnities' must at least |
be deferred-it has been generally held
that much of the interest was being
met from new loans. And while this
tax on war profits is very drastic-if a
man has more wealth than he had when
the war began, the difference is re-
garded as war profits and taxed ac
cordinglv-it does not seem to have
been anywhere nearly sufficient
When Garet Garrett was in Ger
| many as special economic and financial
correspondent III the Winter of 1856,
| it was matter of common belief, or
knowledge that much of the interest on
| each loan was being met by new loans.
A year later, when Mr.. Davis was III
| Berlin, Germans denied such a state
ment vigorously, but the impression
persisted. And a dispatch from Copen
hagen last October said that the Ger
man government was considering in
| creased measures of taxation, since
interest on war loans issued 80 far had
been met in part from the proceeds of
loans
The financial theory on which Ger
many went TO war and which was held
during the early days of victory
which doubtless is still held BY many
Germans-was expressed by an article
by Mr.. Garrett in January, 1916. Ger
man economists, - he said, ''admit that
they are using up their capital, but
they expect to get il back on the CON
clusion of a victorious peace, either in
money indemnities. commercial conces-
sions, or both. The idea of obtaining
large money indemnities in the con
ditions of peace is prominent, not to
say paramount, in Germany S financial
calculations.
The question as to how money indem
mites could be obtained from countries
exhausted by the war was already cur
rent, and an alternative was suggested
to the correspondent by an unnamed fin
ancier whose description answers Il
: that of DR. Bernhard Dernburg H
indicated that France, for instance
might be compelled to surrender t
Germany bonds of neutral countries, OF
+ of heiligercnts whose securities might
appear to be good investment, whiel
) were held by her citizens. These citi
zens in turn were 10 be compensated
. by French government bonds. whicl
! France might meet as best she could
Q The idea of an indemnity from
+ France, about which Germans coul,
talk before Eerdun, now seems some
+ what fantastic. But an excellent ex
ample of the double program of none,
e lindemnities and commercial concession
z IL seen in the terms made to Russia
5 fortnight ago, which Germany now ma
:, or may not permit the Bolsheviki to ac
7 ccpt. This provided for a money in
/ demnitv variously stated at 5000. 00o
/ 900 aud 3,000.00o,0o0 rubles- to b
paid in gold-which, at the norma
p rate. would be respectively about Il
y $4,000 900 and $500, 100000 mark
d This would not be much of a relief
/ the German financial burden, even
g the Bolsheyiki could pay it. CONNER
IS cial relations with both Russia and tn
l. Ukraine on terms extremely favorabl
- to Germany and her allies were ais
features of the treaties.
$ Barring a wholly unlikely catastr'
q phc, therefore, it does not seem likcl
RI that Germany will be able to get ri
II of any appreciate portion of her del
1t by indemnities. Mr.. Garrett was tol
'e that it would be reduced after the Wa
h by heavy taxation of the rich, includin
&c an almost prohibitive tax on war pro
n lis. But this tax, apparently, is a
$ ready i'll force, and German author
r ties admit that the payment of pra
~ ticallv all the obligations has bee
IS postponed until peace times. 1t Wi
re take German industry and CONNER,
y. a long while 10 recover, and pending +
r. coycry 1t is likely that it will still !
It, necessary TO take the interest on IL
Il debts, to say nothing OF possible pa
p ment on principal, from the nation
Of capital and not from its annual i
5 crease.
This progress, OF course. can be co
al tinued indefinitely by a self-containc
ed nation; the transference of wealth fro
eft one form to another, from private pro
n erty of various sorts to governme
rs credits, and thence to shells. uniform
vs. and food for soldiers, involves questio
ID, of physical and not of financial pos
k; bility. But when the war is over, VIII,
as the spur of immediate and compellil