Bay of Plenty Times. MONDAY, SEPTEMBER 26th, 1932. VON PAPEN'S PLAN.

Bay of Plenty Times, Volume LXI, Issue 10924, 26 September 1932, Page 2

Bay of Plenty Times. MONDAY, SEPTEMBER 26th, 1932. VON PAPEN'S PLAN.

Notwithstanding ■ the political chaos in Germany, Dr Von Papen intends to proceed with his economic programme, and in this he has the support of President Hindenburg, While Germany is politically disturbed, the recovery of Europe will bo deferred and the Danubiau States will be the sufferers.

In Germany at the end of June unemployed numbered 5,568,000. The highest number, 6.1 28.000. was recorded at the end of February. Another winter is approaching and with a view to preventing the unemployed figures mounting as they did last winter, the German Chancellor has proposed a bold scheme. For the time being taxation which is held to hinder industry, comprising the turnover tax which is similar to the sales tax, property tax, and transportation tax, amounting to £75.000,000 collectable between November next and the following November, are' to be, in a manner of speaking, postponed. On payment of the taxes being made, the taxpayer will receive a certificate of payment, and on presenting that to the Reichbank will have the right to an advance equal to the amount of the taxation paid.

The money so advanced must be used for developing and extending business. Repayment is to be made over a period of four years commencing in 1934. That is the evidence that the taxation has not been remitted, but has been postponed. Further, industry is to be lent £2O a year for each new worker employed to an amount up to £35,000,000. In all, £110,000,000 will be advanced to industry from the liquid resources of the Reichsbank, that is from floating capital, which owners decline at present to invest permanently in enterprise, but which will now be lent temporarily to enterprise with a Government guarantee.

By the means set out it is obviously hoped to increase the purchasing power of the community, especially among those whose purchasing power at present, is low. Then it is hoped that with increased trade and production which the loans would have stimulated, there will remain, when they come to be repaid, some permanent addition to the purchasing power of the country, and so a permanent addition to employment. The Chancellor thinks that deflation must be brought to an end. He is opposed to “managed currency” experiments. The inflation experienced in the last decade is too recent for the German people. The guaranteed loan supplies the taxpayers temporarily with what they have had to pay in taxation.

' The test will come when repayment has to be made. If the plan has not fulfilled the hope desired of it, either there will be inflation so as to continue employment, or if that course is not pursued, deflation will follow, with consequent increase in unemployment. The German Government has already a very large financial interest in the industry of the Republic. For some time past there has been, a vast clearing out process, a sweeping away of book capital for which there were no tangible assets. In the process millions of shareholders have suffered heavy losses. The industries appealed to the Government for financial help. What could be done by more or less masked subvention was done. So the Reich obtained, if not a controlling interest, at least a very influential position in banking, in the shipping, in the iron and steel, and several other industries. The Reich Ministry of nance recently published a statement which shows that on April 1 of this year the Reich had but RM. 889,500,000 to private undertakings including RM. 237,000,000 to agriculturists, and that up to the same date the Reich had undertaken guarantee obligations to the extent of RM. 1,563,000,000. In addition to these loans the Reich had allocated pure subventions during the present year- to the amount of RM. 145,000,000 for agriculturists, and RM. 41,000,000 for industry and trade.