The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-03-30

fore, attempts 10 use approximately
THAT portion OF the German assets
which would 60 TO the German gov
eminent instead OF its ofttsens. Cop
les OF the German tax law have been
received here and have been care
fully studied. There is nothing IN
America comparable TO it the
Germans are actually taxing CAPT
tai and are applying such percen-
tages as TO make it possible for
them TO take away from. the Ger
man owners the largest part of any
property returned to them by the
American government. The theory
back of the anti-confiscation policy
of the United States government al
ways has been that individuals
should not be made to suffer for
the acts of war of their government
| but if the United States were to re-
turn tomorrow without condition
all of the property seized from Ger
mans, the allied government and
citizens Of allied countries would
/ Immediately be benefited whilst.
! German owners would be hurt as
would American citizens whose
claims against Germany are likely
to remain unpaid indefinitely so
far as Germany is concerned.
Working Is Unique.
The working of the German tax
law is unique. All the property or
copital brought into Germany is
subject to two separate taxes, one
an empire need tax" which goes
to pay allied reparations and the
other general capital tax for gov
eminent expenses. In one case
the value of the mark is taken at
Is marks to the dollar as Of July,
1919, and in the other 40 marks to
the dollar as of December, 1919.
To explain actually how the sys.
TEN works, it may be supposed for
instance that $4,000 worth of Ger
man property was seized by the
American government and held dur
| ing the war. The difference be-
tween $4,000 value at 90 marks TO
the dollar or 10000 marks and
$4,000 value today at the present
rate of exchange which is 800
marks to the dollar, or 100000
marks, would be 2,S70,000 marks.
Now examine the tax schedule of
the Germans under the first tax
| 600 marks are to be given the Ger
man government as the tax rate is
100 per cent This would mean that
the German owner would be entitled
to keep only 100000 marks or at the
present rate of exchange of 300
marks to the dollar, he would have
approximately s433 out of the orig
inal $4,000. This absurd conclus-
ion is admitted by German officials
some of whom have discussed the
situation with the United States
Government
Could Change Statutes.
The Germans say they could
change their tax laws but they
could not, of course, make them ap-
ply to all German property and
could hardly change the severe
rates of exchange so that in the end
the bulk of the property held IN
Tmerica would find its way into the
hands of the German government
and be used for its expenses or be
paid in reparations to the allies.
There is, moreover, another phase
of the matter. American claimants
against Germany realize that the
German government will not soon
pay them and unless the United
States treasury is to be asked to pay
claims which Germany herself
should pay, the only tangible assets
which can be used at all to pay the
claims are embraced in the Ger
man property held in America. The
American government knows that
to pursue a general policy of ap-
plying the equivalent of the Ger
man tax laws on this side of the
Atlantic would mean hardship on
many small owners So the alien
property custodian has suggested
that division could be made on the
basis of estates or trusts valued at
$4,000 or under. The official fig
ures show that there are epproxi-
mately 29,606 trusts valued under
$4,000. This is SO per cent of all
the trusts held by the American
government. The remaining per
cent are about 1000 in all but they
represent a total value of S296, OOO.-
600 as against 100000 which is !
spread out among $4,000, owners.
Miller Proposal Good.
The policy proposed by Colonel !
Miller would on the one hand allie !
NieIIS inc suffering VI lue G6Fmdn
owners who have small estates tied
up and would confine the American
governments action only to 1000 I
estates. By establishing a quasi !
government corporation the Ger
man owners of even these 1000 es-
tates would not permanently be de-
prived of their property for they
would be given a portion of their !
estates back tand the remainder |
would be converted into stocks or
bonds in the new credit corpora
ton, out of the profits of which it
is estimated American claims |
against Germany could easily be |
paid. 1t would take some years to |
reap enough profit to pay all the |
claims but the American treasury
could anticipate the profits of the /
corporation by paying claims in ad- |
vance.
The exact amount of the Ameri- |
can claims against Germany will |
not be known until the American |
German claims commission, soon to |
be set up by treaty with Germany, |
gets into operation. 1t is estimated |
that the sum will not amount to |
more than 200,000,000 though no.
body knows except from historical |