Omaha daily bee., 1919-03-24
Germany and Her War Debt
BROOKLYN Eagle.

estimates are heard of the amount of repara-
ton which will be paid the allies and probably
apportioned the various associated powers. At
the same time come rumors of Germany's bank
ruptcy
DR.. Schiller, German minister of finance,
speaking before the national assembly at Wei
mar, said that the nine internal German war
loans amounted to 16l billion marks or ap-
proximatey $35000000000. There was no ques-
ton, he said. of annulling the war loans or OF
selling savings of cash in banks to pay this sum.
Instead, he said, it would be paid by taxes in
keeping with the economic situation. Touching
briefly upon this significant phrase, lin keeping
with the economic situation he said that the
war program of Germany had been traught with
unfortunate and desperate financial and econom-
ic measures which had brought the nation near
to financial disntegration. Accordingly he asked
the assembly for credit of q, 300 100000 marks,
the largest loan so far, to help get the nation on
its feet. Thus Germany has promised to pay its
people this tremendous sum OF money and has
asked for even more credit while the allied bill
has not yet arrived
Up until 1874 Germany had no real national
debt. In 1905 she owed SS75000000, sum quite
small as compared with the debts of other
European nations. In 1908, when she foated
loans of quarter of billion dollars and then
1924 millions, England began to distrust her
financial state. Expenses increased and large
loans were foated in 1910 and 1912 SO that in
1913, while German commerce was progressing
on large scale her financial state was not Of
the best.
By April, 1917, the German gold reserve had
dropped to point where it was scarcely able
to cover internal requirements. Her credit had
also deprecated to more than 81 per cent below
par on the marks People began to hoard
victory made the Germans believe they could
pay their internal debts by indemnities forced
upon conquered nations. As the time passed.
however, these hopes were abandoned. Gen
orally speaking, the annual service of the loans
by the autumn of 1918 had reached a point
where it was double the amount of the empire
and the federated states.
The end of the war, found Germany with re-
serves of little more than quarter OF a billion
marks in gold and with debt which needed
190O0,000,0O0 marks yearly to pay the interest
Internal revolution gave her new problems,
abandonment OF work, high wages, strikes and
so on. Military defeat put her in position
where she was entirely boycotted from foreign
trade.
While the loss of the Alsace coal and ore
fields is important and may hold up production
within Germany, the really vital point in the
present situation is the blockade. If Germany
cannot trade or sell her products, there will be
no production. If there is no production, there
will be no money to pay the reparation due the
allies. ...
financial bankruptcy, how can she possibly pay
the debts? VIII
A writer in the London Post says:
81 am aware that international financers and
hyphenated Britons trying to convince our
rulers that Germany is bled white and cannot
pay but this argument is on a par with the
reasoning of the same financers that the war
could not last three months. These cosmopol-
tan millionaires do not want Germany to suffer,
because they think their interests will suffer
with her; but the facts are that almost the
whole of Germany's war expenditure has been
within the confines of the German empire, and
has merely gone out of one German pocket into
another German purse, and that Germany's
coal fields are at the lowest German valuation,
worth 9170,O0O,000,000, her potash 100000,
100000 to which you can add her railways,
docks, canals and all the other great assets of
the German empire.
"She can pay the whole of the allies cost of
the war ten times over, and at the end of the
war she is the European belligerent which has
lost least of its wealth. To fail to exact the net
cost of the would mean lifelong taxation in
the redemption of our loans and the paralysis
of industry, and since we have got the Germans
beat, it would be insult to dead and
crime against our children to fail to exact the
cost of world defense to the uttermost farthing"
There is no doubt that certain resources in
Germany are extremely valuable, but there is
one great trouble with this method of payment.
Do the allied nations or the allied financiers
wish to take German estates and properties as
payment?
OHqueStlOlidDly, HldHy people III GERMANY
have amassed fortunes out of the war. The
present government of Germany has dsavowed
conhscation so that the properties cannot be
taken away from these people However, direct
taxes, heavy capital levies, income taxes and
inheritance taxes will force these people to dis
gorge This money itself will be sufficient to
pay some debts.
AS for the rank and file of the people, they
will be able to pay taxes up to certain limit.
Most OF these people bought issues of the first
five war loans with their own money and in
many cases used up their money. Then the
government said they could loan per cent of
their bonds back to buy new bonds of new
issues Thus their cash and capital is tied up in
bonds which have little chance of being re-
deemed for many years to come. The economic
and industrial condition of Germany also puts
these people in place where they are hardly
able to fit into the industrial scheme.
Americas delegates at the peace conference
believe that in order to allow Germany to pay
the debts, the blockade must be lifted and she
must be allowed to trade within limits set by
the allies. If industry is put on its feet again
the Germans will be able to pay taxes; only then
will they be able to live without outside help.
Ii commerce and trade are re-established the
gold resources will rise. The Germans will, in
fact, be working for the allies. Allow Germany
to get her share of materials, allow her to
produce goods and cash. allow her to have mar
kets to sell her goods and to buy other goods,
say the Germans, and she will be able to pay
her debt