The New York herald., 1922-01-29
Wants international Repa-
ration Loan Fl0ated and
Will Increase Taxation.
OUTLINES FULL POLICY
Chides Allies for Putting PO-
litical Necessity Before Eco
nomic and Financial.

BERLIN, Jan. 2S (Associated Press).
The German note to the Reparations
Commission in response to the COM
missions demand for explanations of
Germany's alleged inability to meet
her obligations for Ianuary and Feb
ruary requests that Germany be re-
lieved of all cash payments in 1922. It
also asks for general reduction in
cash payments and increase in pay
ments in kind.
The note suggests that the Allies
take measures to restore Germanys
internal and external credit, and there
by facilitate the floating Of a big in
ternaGonal reparation loan. It an
nounces that Germany will raise an
internal loan in 1922 Independently Of
the forced loan in order to reduce the
floating debt.
New German Taxes.
1t is pointed out in the note that the
allied experts at the Brussels conference
In 1890 recognized that German direct
taxation was incapable CT further aug
Inentation. but that nevertheless bills
were now before the Reichstag to pro-
vide further increases in property tax,
as well as taxes on capital and corpora
tions. The turnover tax will be in
creased from 1is per cent. to per
cent and the coal tax from 20 to 40 per
cent.
\ The burdens on production and con-
;<r~ x.fff t, mi. In, ad
dition, the increased customs dues will
be collected on a gold basis. The entire
burden imposed on consumption. il IL
asserted. Ia at least equal to that in
other countries.
In explanation of Germanys financial
position the note states that energetic
measures will be taken against the re-
movsl OF capital abroad, and the evasion
OF taxation. such as the abolition Of the
obligation to secrecy imposed on banks
and control over the ownership of securi-
ties deposited with banks. It explains
that the railway rates, compared with
pre-war conditions. had been increased
nineteen fold for passengers and thirty
two fold for freight: the postal and
telephone rates were increased twenty
one fold.
The food subsidies for 1922 will
amount 10 only 1,000. .oo0, 900 paper
marks, az compared with 2.250.oo0,0 900
previously. The price of bread will
shortly be increased by 40 per cent. A
system of insurance for the unem-
ployed at the expense OF employers and
employees will be introduced to replace
the existing relief system.
IL. en-.~ Ng~--- A. n
The ordinary budget shows. with a rev.
cnue of 103.200, 100000 marks and ez-
penses of $500, 900. 900 marks, a sur
plus OF 1s.5oo. 900. 900 available for rep
aration payments. With the object OF
reducing the floating debt Tie Govern
ment will raise an internal loan this
year apart from the compulsory loan
already agreed upon The compulsory
loan will be non-recurring and Is in
tended TO finance increasing paper cir
culation.
It Ia absolutely necessary, IL the mat
ter IS viewed from an economic stand
point, the note continues. that Germany
should at least for 1922 be relieved OF
all cash payments on account Of repara-
tions.
The German Government recognizes
that economic and financial considera-
tions must yield TO political necessities.
IL refers TO the figures taken into con-
sjderation at Cannes by the Allies,
namely. s2o.0o0.oC0 gold marks in cash
and i.t5o. 10000 gold marks IN kind, and
requests a reduction in the cash pay
,nents, increasing. if necessary, the pay
nents in kind.
II also proposes that the costs or oc-
cupation should be credited TO the total
sum In cash and kind paid in 1929 and
that the other obligations in foreign
currency arising from the peace trcaty,