The Hartford republican. (Hartford, Ky.) 18??-1926, 1921-09-16
EUROPEAN FINANCE IS
PUzzLING STATESMEN
Reputation OF Enormous
War Debt Is Said To Be
Grave Possibility.

The debt-burdened nations of Eu.
rope have come out of the war fac.
ing the unpleasant choice between
confiscation on the one hand and pay
ment in deprecated currency on the
other. Neither prospect is pleasant,
we read i'm the Straus Investors Mag
azine, especially since the latter
amounts to partial reputation" But
the writer in this financial publica-
tiun thinks that confiscation is the
greater of the two evils and hopes
that Germany will be the only nation
forced to resort to it. For, he de-
clares, the threat of confiscatiOn of
private wealth is second only to the
threat of war itself in demoralizing
business men generally and discour-
aging those whose practise of thrift
and industry and whose efforts must
be depended upon to KEEP the econom-
ic machine in motion" Today, we
read:
This specter of confiscation is no
longer merely a threat but is in Ger
many an actual fact. The Cabinet
which put its signature to the Repara-
lions Agreement has determined upon
a policy which amounts to a levy of
200 upon private capital. In the
case of capital invested i'm business
concerns-commer and industrial
enterprise, including banks-the
state will claim a mortgage amount
ing to 2Og6 participation in the in
vested capital of the corporation or
business. These mortgages will be
sold by the state in foreign countries
as part of the reparatiOn payments.
In the case of real estate. each
property will be assessed at pre-war
value, and this valuation will be con-
verified into the present standard of
paper marks at the rate of one gold
mark to fifteen paper marks. The
resultant capitalization will be taken
as the basis for a 300 mortgage
against the property, which will be
held by the state.
This proposal, however it may be
camouflaged by the present Cabinet
in terms of participation mortgages
represents in effect an actual confis-
.,.,o., ,,riyatC nrnnnrt
The fact that this was absolutely
necessary for Germany in order to
meet her reparation payments does
not make it any easier for German bu-
siness men, nor is it particularly re-
assuring to other European countries
which face financial problem al
most as hard as Germany's. In fact,
the question of state confiscation is
receiving a great deal of serious
thought in Europe and is regarded
even in England-as at least pres
ent possibility. English financial
periodicals contain considerable com
ment on the question"
: But however much he dislikes the
idea of confiscation, the writer finds
ii hard to see how the nations are
going to pay their enormous debts by
any other means" As he continues
Germany, of course, is in the
worst condition. She has already
resorted to the capital levy. OF the
great powers, France probably comes
next to Germany in the matter of
load of debt which seems impossible
TO meet. The total French debt, at
present. is said to be nearly $4,000
OOO, 900 counting francs at the nor
NAL rate of exchange. From this
may be subtracted whatever amounts
France can secure from Germany on
the indemnity and reparations pay b
ments. At the most, however the
amount which Grmany will pay to
France on the sliding reparatiOn
scale, will amount to between 6 and
10 billion dollars. 1t is probable
that, even allowing for the best
France can expect from Germany her
debt will remain in the neighborhood
of S4O,OOO,O0O,OOO. To pay interes}
on this, $2.OOO,OOO,OO0 a year will be
required. France cannot raise 81
O0O. 100000 a year for this purpose
by her present methods of taxation
Her total national income is at pres
ent not much more than SlOO"O,-
OOO. 900 year. France is not now
even attempting to pay the interest
on her entire debt and is meeting
current obligations by further borr
rowings. Of which 100000 900 has
recently been fllatcd'in this country
III Wow of these hard facts it is dii-
f!ollt to see how H:anra can pay the
Gormous debt which she owes with
Out resortiug to some form OF oonfiS-
ca,.on OF private wealth. F
"The condition Of Italy is perhaps
somewhat more favorable than that