Evening star., 1939-03-25
Empire Cost Forces
Reich 10 Mortgage
Future in Payment
Unique Borrowing Plan,
Conserving Cash,
Is Instituted

Conserving Cash,
Is Instituted
BACKGROUND
Germanys acquisitions the past
year, ,Dtfle bloodless. haze been
henDy drain on finances Army
has been periodically mobtlized
and set In motion, particularly in
seizure OF Austria year ago, in
dtsnemberment OF Czecho-Slo-
Ddkia last tall, and in recent
annexation OF Bohemia and
Mornpid.
BY the Associated Press.
BERLIN, March 25.-Germany,
with unique plan of borrowing on
the future, gave urgent attention
today to paying for year Of con-
quests without battle.
Chancellor Hitler himself was
resting from the strenuous activity
he underwent the past 10 days.
AS one German phrased it, build
ing of the Hitler empire-by acquisi-
ton since last March of Austria,
Sudetenland, Bohemia. Moravia and
Memelland, the fathering Of Slo-
vakia and the far-reaching Ru-
manian economic treaty-put great
problems" before those who shape
Germany's financial policy.
THE problems will still grow" it
was added
Army Secret Of Achievements.
The secret of Hitler's achieve
ments during the last year was the
might of his tremendous army. The
army-and to a lesser degree the
great public building projects to
keep the people at work-also Is at
bottom of the strain on the nations
finances.
The Berliner Boersenzeitung
which is close to the war ministry
said that Germany's rearmament
cost mot only an almost super r-hu-
man outlay of strength and mate
rial but also of financial means"
With burdens increasing daily, the
government flnanciers have mobil-
lied tax on income of the future.
The scheme evolved yesterday, in
order to release cash, provided for
payment Of all national, state,
municipal postal service, national
railway and highway orders on a
60-40 basis-60 per cent in cash and
40 per cent in non-interest-beari
"tax credit" bills.
The bills are to be used to nav
on future taxes-one type of draft
after seven months. the other after
three years. The possibility exists
that tax collectors may find them
selves flooded with paper revenue
instead of cash.
Fritz Reinhardt, state secretary in
the finance ministry, estimated that
on every billion marks ($400 900 ,O00)
expended by the country to renew
equipment under this plan approxi-
mately 100000 marks would be
set free in the current year alone.
American bankers here described
the new plan as "inf1ationary" in
effect. or at least an enormous credit
expansion. The Nazis turned to the
scheme Hitler's predecessor as chan
cellor. Franz Won Papen. introduced
in 1882 as an emergency order to
help carry the unemployment relief
burden.
Deutsche Allegmeine Zeitung ex-
planned that the plan was rooted
in belief in the Fuehrer, German
success and permanence and con-
solidation of this success"
1t calls for confidence by "tax
credit" bill holders, that they will
be able to discharge taxes with
paper even after decades, the news
papers said.
THAT presupposes." it contained,
"a high political feeling of respon-
sibility by the contractor. belief
In lasting strength and security of
a Reich which has grown great
and lively consciousness of COM
mon fate of all being in one boat
economically and in the great COM
munity of the taxpayer
Then, the newspaper suggested
that the state leadership was en-.
titled to demand this trust after
the events of the last two weeks.
Reinhardt, in explaining the new
financial scheme. said that the con-
ditions for financing great National
Socialist tasks was "the strictest.
economy in the public administra-
ton and honorable and punctual
fulfilment of tax obligations by all
citizens"
New Levy on Incomes.
A new levy assessed a 80 per cent
tax on any increase of incomes III
1888 over those of 1897. Persons
earning 5000 marks (s1 ,200) or less
are exempt.
Germany showed further results
In its drive to build up economic re-
1ations with continental countries
after opening the way to extensive
bartering with the vast Southeast
through the Rumanian trade treaty
An agreement was reached on
trade between Germany and the
Belgian-Luxemburg customs union
but no details were released.
At the same time it was an
nounced that Lithuania was eager
to take up economic negotiations
with Germany as soon after Easter
as possible on the basis of the treaty