The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-04-09
Harris & Ewing.


amount to more than 10 per cent.
The distinction is between the tax
payers capacity to pay in Germany
and Germany's capacity to pay the
Allies.
"Our system provides for proper
charge upon the German taxpayers
and a corresponding deposit of gold
marks to the Allies account and
then secures maximum conversion
of these mark deposits into foreign
currencies which actual capacity OF
exchange position at any given time
renders possible.
Normal Resources for Payments.
with these principles in mind
we recommend that Germany should
make payment from the following
sources:
"A-From her ordinary budget.
B-From railway bonds and trans
port tax. C-E'rom industrial de-
bentures.
ITO recommend what payments
Geramny can make from her ordi-
nary budget and from what dates,
is in effect to answer the first OF
two specific questions put to US,
namely, how to balance the German
budget. We do not consider that
an external loan is needed as in
the case of Austria and Hungary
to be devoted specifically to meet
ing ordinary deficits during the
transition period.
External money is indeed en- es'
sential part of our scheme; III part,
| for the establishment of a new bank
of issue; in part, to prevent inter
| ruption of deliveries in kind during
| the transition periods and essentially
to create the confidence upon which
| the whole success of the scheme
| depends. But We do not propose
| it should be confined or devoted
I specially to meeting deficits on ordi'
| nary expenditure, even during the
transition period. On the contrary
We think that, from the beginning
| internal resources should meet in
ternal ordinary expenditure, and at
very early date should suffice In
| addition to make a substantial con
| tribution toward the external debt
| In the first year, 1924-25. we con
slider that the ordinary budget may
| balance. Even If there is deficit
we are confident it should not be
| such as to endanger the stability
| of the currency and that at worst
| the government can meet it by in
creases of existing taxation, further
emergency taxes and internal loans
Budget Data Lacking.
ION passing to the budget for
1856, it is obvious existing data
are insufficient for precise judg.
ment. On it's detailed prospects
certain general conclusions are
however, possible. On the revenue
side, the lapse of q whole year OF
currency stability and REIMBURSEMENT
should of itself increase receipts
The period of recuperation will not
be long enough completely to re-
store the yield of income tax but
| there will at least be gold mark
profits of 1924-25 on which to
frame a reasonable assessment
Consumption taxes should directly
be affected by the returning pros
perity.
"It may be hoped with some de-
gree of confidence that expenditure
on unemployment will exhibit no
| table decreases. The expenditure
! on army is capable of reduction
An automatic decrease will make
itself felt in pension charge. Some
| increase of expenditure must there
| fore be expected. Our opinion, how
ever, is that growth in receipts
| should be more than sufficient to
| counterbalance any increase in eX
| penditure.
eve are clearly Of the view that
| il the two years are taken to-
gether, receipts should be sufficient
| to cover ordinary expenditures, and
we do not exclude the possibility
| of a small surplus. On the other
hand. it cannot be stated with Ger
| tainty that inclusion of compulsory
liability for peace treaty charges
will not destroy the whole balance
and it is obviously vital that the
mistake should not be made of fix
! ing as the first payment during
recovery, sum which circum
stances may not justify. The
| stability of future reparation pay
ments and German credit in gen
eral might thus be endangered.
"There is another factor that must
be taken into account for the sue
.cessful operation of the scheme fol
dealing with railways, to which we
shall refer later. 1t is necessary
that the proceeds of the transport
tax. to the extent Of 25O,O00,0o!
gold marks per annum, should bt
withdrawn from the revenue side
of the budget devoted to the pay
ment of treaty charges. On thu
other hand, that scheme also pro
vides for the sale by the railway
company Of preference shares t.
the nominal value Of two millardi
gold marks, one-quarter Of the pro
ceeds accruing to the profit of thu
German budget and the balanc'
providing for past and future capita
expenditure Of the railways.
/. Plan for Railways
For the successful execution Of
the railway scheme, we attach
great importance to the sale tc
the public of these preference
shares and we feel justified is as
Stunning that before the end of the
year 1925.26 the German govern
ment will be in effective possession