Evening star., 1922-09-04

ernment expenses will increase, 1t
doesn't matter much what they write
down. Whatever It is. they write
similar amount opposite under "reve-
nues" and eXclaim. See, we have bal
anced our ordinary budget. Our def
Surplus ShOwn-"On Paper"
Thus last years ordinary budget
showed a surplus of 2,OO0,0 900 paper
marks This years prospective budget
shows a surplus Of $4,000. .00O, ,000-on
paper. that is. The taxes to cover
last years expenditures aren't all
in yet. Some Of them may go sighteeing
in Switzerland or Holland. Anyway, it
is the German custom to balance the
ordinary budget and write the word
deficit over reparations. Then. if in
the final accounting the ordinary budget
is found not to have balanced, the Ger.
mans can say: You see. our estimates
were all upset. because the market fell.
due to our printing money to meet the
reparationS demands"
Is all this, as the French claim. fraud
ulent bankruptcy? Not necessarily. No
government could make a decent budget
under the insecure circumstances which
prevail in Germany. l suspect that the
Germans, knowing it is no use trying,
simply don't try very hard. They merely
use their ordinary" balance and their
extraordinary" deficit for propaganda
purposes and get what little there is to
be got out of q bad job.
For instance. one of the several bud
get estimates for 1922 went like this:
Ordinary budget 77,000,0O0.000 paper
marks: extraordinary reparations bud
get. $4,000. 100000; total, 26o,0O0,e0O,-
900, with revenues 95,000,600.000. We
have balanced our own budget out OF
taxation. Do you want US 70 prlnI
paper money for your 1Ss,O00,0Oo,oo0
and bring the whole European hnanclal
system down in a crash?"
This particular deficit of 10, 100000
900 paper marks had few months
earlier stood at 10000. 100000. Inc
French protested at the t0,OOO.0O0.0O0,
whereupon the obliging Germans, Win
a few simple and well chosen strokes
of the pen, knocked a score or two bill
lions off the deficit and asked for loan.
Consumption Exceeds Production.
There is no enlightenment to be
gained from such Alice-in w onderland
mathematics. The essential fact Is
that Germany as nation (WhateVer
may be the situation of few OF her
industrials) has an excess OF imports
over exports, and therefore has no
funds out of which to pay reparatiqns.
The evidence goes even> to show that
Germany has an excess OF consump-
ton over production. The crash. II II
comes. will not come from govern
ment finance as such, but from eco
nomic exhaustion.
The great fear of the Germans, and
/ believe a sincere fear. is that Ger
many Is being sold out" In the
popular mind this means that foreign
ers come and buy German goods
cheaply, leaving nothing in'the stores
for the Germans. But the economists
her capital The printing of paper
money is a symptom. or rather
symbol, of this unhealthy process. but
the fact Of Germany's eating up Its
substance is often very real.
A shopkeeper buys certain goods for
100 marks and sells them for 12O
marks But when he comes to replace
his stock he finds it costs $50 marks
He can no longer finance himself. He
must borrow. II he repeats this proc
ess Indefinitely he finds himself load
ed with bank obligations. with his
the modest 10 per cent which he took
as his profit did not even pay his
upkeep The profits which he drew
from the business to feed himself were
really drawn from his capital.
Repairs Cost Years Rent.
The house owner who rents his
apartment house at the fixed govern
ment rate of one-tenth of its real
value finds that simple repairs would
cost MIN d year rent Ale uoSs iIoe
make the repairs. The property de-
seriorates. He has been living off his
capital
The factory owner has been selling
goods at a profit, oufxof which he sets
aside a sum for the replacement of
his machinery, which wears out every
ten years. He carefully puts 10 per
cent of the value Of the machine in
the bank each year for replacement.
But at the rate the mark is depre-
ciating this sum would represent in