Evening star., 1922-08-18
Rate by Mail-Payable in Advance
MARYLAND and Virginia.
All Other State.
Taxation by Imitation.

One of the most frequent complaints
of the French and British against
Germany has been that the German
government has failed or refused to
levy taxes as high as those imposed IN
those countries. That this complaint
was unjustified is attested by the point
of low value which has been reached
by the German mark. The govern
ment at Berlin, lacking courage or
ability to levy and collect directly
from the people taxes sufficient Tor It's
needs, sought to do 1t indirectly
through imitation of the currency. NO"
the inevitable consequences of trying
to get something for nothing have ar
rived.
Imitation now has been carried TO
point where the quantitative theory OF
money has been upset. and there mas
been reached that stage which econ
ornists describe as the increased
velocity of circulation. In simple
language this means that in order at
stated intervals to take through IN
fation a specific amount of real wealth
from the people each succeeding issue
of currency must be in larger ratio
10 the whole volume of currency IN
circulation II at the beginning an IN
crease of 10 per cent in the volume OF
currency is sufficient to collect GER
tain amount of wealth from the peo-
pie the time is bound to come Hhen an
yI-i1 In
sary to collect the same amount OF
wealth. Progressively, the time Will
arrive when no amount of new cur
rency will serve to take real wealth
from the people. because the currency
will be so nearly valueless that the
people will refuse to use it. Russia
and Austria already have about ar
rived at that point. and Germany is
on the way.
This subject may be only of aca-
demic interest to the present genera
ton Of Americans. who never have
known a time when one dollar was
not Just as good as any other dollar,
paper dollar, whether of Treasury or
hank issue, buying just as much as
dollar in gold. But We ought to have
an understanding Of the question if we
are going to try to understand the be-
wildering difficulties which beset the
statesmen and financiers OF Europe.
The countries of central and eastern
Europe are caught in a vicious circle
Of imitation. Unless they stop it will
whirl them inevitably to ruin, and
they do not know how to stop.
The figures themselves run into
dizzy totals. Up to June of this year
the German government had issued
17s billion paper marks, and it re-
quired ninety paper marks to equal in
value one gold mark. Since then the
volume has been greatly increased,
and it now requires more than 200
paper marks to equal one gold mark.
Up to the same month the Austrian
government had issued 40 billion pa
per crowns, and it required $3.50 paper
crowns to equal in value one gold
crown. But the ultimate in debase-
ment is reached when we come to
Russia. The latest figures available
are for May of this year. up to which
time the soviet government had issued
145,635 billion paper rubles, which at
the pre-war value of the ruble would
be equal to s72,s1s, ,Ooo, 100000, or 1900
times the entire estimated wealth of
Russia At that time it required $780,
900 paper rubles to equal in value one
gold ruble. Now the value of the
paper ruble in terms of gold is so in
finitesimal that figures will hardly ex-
press it.
Americans. perhaps, do not appre-
ciate the losses they have suffered be-
cause Russia and Austria are in their
present conditions, but if Germany is
permitted to go on until it reaches the
condition of Russia and Austria
Americans will feel it, for it will be
cataclysm that will shake the civilized
world to it's foundations. Our stake in
the game is a tremendous one. and we
cannot watch the play unmoved.