The New York herald., 1920-12-04
NEW GERMAN LOAN
TO AVERT DISASTER
Forced Borrowing Of Twenty
Billion Marks Likely to
aero-.e Law.
FOR REDUCING INITIATION
Belief Revenue Will Carry
Country Until New Taxes
Come In.
2eco-.e aaN
By RAYMOND SWING.

Special cable TO TIE New YoRK HIRALp
Copyright, 1920. bv THE New YORK HERALD.
New York Herald Bureau.
Berlin, Dec. 3.
The German public, which has been
afflicted regularly this year with threats
of impending financial catastrophe, had
y sho~lS when President Hayenste!n
of the Government Reichsbank energeti-
cally demanded immediate assessment OF
forced loan of 10000. 100000 marks az
the only way of averting "a nearly in
conceivable calamity"
1t is announced that the Finance Min
lister, DR.. Wirth, will try TO bring the
Cabinet around to Havenstein's pro-
gramme, and the general unpopularity OF
Erzberger's famous emergency property
tax makes II appear possible that the
forced loan will be rushed through the
Reichstag before Christmas
This would not be the first loan of the
kind. Holland raised one during the
war and Denmark is now doing so.
President Havenstein would have the
revenue from the loan used exclusively
to reduce initiation and while the sum
of twenty billions is admitted to sbe in
significant in the face of floating debt
of close to $50 900, 90 20, 900 marks 1t is
believed by its advocates that 1t will tide
Germany over until new taxes come In
and the Government trims the budget to
this increased income.
1t is argued that the key to the situa-
ton, however. lies with the Allies. r.
the Germans endeavor to escape bank
ruptcy by assessing n forced loan OF
twenty billions, prominent Reichstag
leader told the correspondent of THE
NEW YORK HERALD It was imperative
that the Allies should not force bank
ruptcy with the cost of the army of oc-
cupation. These expenses, estimated at
the beginning of the year at between fif-
teen and twenty billions of marks, have
now risen about forty because of the
fall of the German exchange rate.
Herr Erzberger's emergency property
tax was estimated to yield $4,000. 600, 900
marks over period of thirty years but
not more than three billions in given
year. This amount not only fails to
meet the present crisis, but il is re-
garded as working a great hardship,
especially on industry. 1t taxed the
property owner for thirty years on the
basis of his wealth day, without talk
ing the possibility of future changes into
consideration. and also making no dis
tinction between general property and
capital which the owner had invested in
his own enterprise.
President Havenstein's plan is to force
a loan of 20 per cent. on the capital the
taxpayer has invested in his own in
dustry His own working capital would
be rated at four-fifths its face value.
The loan could be paid in war bonds by
those holding the bonds they originally
bought Exemption might be granted
from the emergency property tax TO the
amount of money now loaned If
man worth a million marks had one-half
invested in his own industry he would
have to lend the Government ~ per
cent. of his own industrial investment
rated at four-fifths its face value, or
$4,000 marks, and then 25 per cent. OF
the remaining half million marks, or
125. 900, giving a total of 175,000 marks
His assessment under the Err |erger
emergency property tax woud be 100000
marks. so he would still have a balance
of CO, 900 to pay over a period of thirty
years
There was no unusual reaction in the
Stock Exchange following the Haven
stein statement.