GERMAN REPARATIONS AND TAXATION.

Dunstan Times, Issue 3140, 23 October 1922, Page 7

GERMAN REPARATIONS AND TAXATION.

(By Mercuriue.) Prior to the date (3rd) of August last! on which Sir Robert Home, the Chancellor of the British Exchequer, made his speech in the House of Commons the world was quite in the dark at? to what Germany had paid as reparations to the Allies. The Reparations Commission (not the Versailles Treaty) had fixed the amount to he- paid at six thousand six hundred millions, and oi that amount Germany had paid, Sir Robert Homo said, only £415,000,000. Of this amount £77,000,000 had been paid in cash and £30.000,000 in Gorman paper mark*, or £\O7,QOQ,OOQ sterling. The ships, coal, and payments in kind totalled 1 £160,000.000. Sir Robert Home did not say so, but it may be remarked that Britain received much the largest proportion of the whips handed over by Germany, and these were sold bv Britain to private trading concerns, tiie Union Company of New Zealand being one of the purchasers. A German- ; built steamer can easily be picked o'ut from those built in Britain. Several, of these steamers have visited the port oi Onmartl. Poland. Danzig, and Czechoslovakia received the German property held in these countries, the value being estimated at £125,000.000. Then the value of the Saar mines, which went to France, is given as £23,000,000. Out of the total sum of £415,000,000 Britain lias, received £56,000,000. not wholly in cash, be it remembered, but in ships, cash and property. Practically the whole of this fifty-two million*. has gone in the cost of maintaining the army erf occupation, so. that Germany's debt to Britain has not been reduced. inasmuch as Germany has to pay for. the maintenance of the army of occupation; therefore, the payments made by Germany have had little material effect on the reduction of the reparations so far as Germany herself is concerned. Out of this £56,000,000 Mr Massey received from the British Government the sum of £500,000 as payment for the maintenance of the Dominion's troops while they were in German territory, and the other dominions received 1 a proportionate amount. We may thus summarise the position as equivalent to a draw, if Britain alone k 1 taken into account, •for she has practically received nothing in reduction <ri the debt that Germany owes her. If Germany can do no better than this in future Britain's share of the reparations will be carried forward as l a debit against Germany till the millennium overtakes the 'world, when it may reasonably he assumed it will bt u wiped off the slate. France and Belgium have received more than Britain. hiA they made an appeal in forma, paupers, and were granted a larger proportion than their equal share of what was paid, and besides they were allowed' priority of payment tip to a certain extent. France wall not tax herself, and thai, is the reason why her taxation per head of the population is about half that o'f Britain. Those who take the trouble to read this note will understand why Britain is getting tired el' France's incessant appeals to spur up the jaded Gorman quadruped that carries that country's debts. France and Belgium have no unemployed, because they are not taxiiur themselves. while Britain, because of the enormous load her people are carrying, cannot find employment for all hen- workers, titer,' being 1,300,000 who have to depend on Government doles 'for an existence. There is no such condition of affairs in France, although what she will do now that Germany cannot or will not pay is a matter of some concern to her. France made up. her mind to live on, the German reparations, and Germany cannot pay: therefore France asks Britain to join with her in marching their armies into Germany in an attempt to take blood out of a stone. Britain will not agree, and France arches her back, and tells the world she is being badly treated, overlooking the fact that Britain is being worse treated by France. During the Avar Germany used up every available asset, internal and external, and when the war ended she could not I arrow either internally or externally. A group of financiers, American and European.-v'sited Germany for the purpose of "ascertaining whether if would, bo safo to invest their capital in a, German lean. They discovered that it would not, and reported accordingly. Germany is thus like .Mohamet's coffin, hung up between heaven and 1 earth, with no power to ascend higher or come down lower. When Germany could not borrow from friend or foe she plunged into the printing trade, and issued paper marks by the shinload, and kept on issuing them till the ships threatened to sink. The mark has now a value about equal to the figure. 0, and those with most of them are the poorer for •the load they carry, ft may almost bo said that the more they have the poorer tin v are. And vet the C4I/5,000,000 that Germany has paid as reparations is only about equal to the paper marks she has sold to her former enemies, who, for all practical putrposesi. have paid Germany's debt to themselves with their own money. I.s this cleverness on the part, of Germany, or sfupdity fin the part of the speculators ! J Some neople sav it is both. But Mr Lloyd George says it is not intended to allow Germany to escape from the payment of all she can pay, and in carrying out this purpose it would l»e disastrous to underestimate Germany's capacity. Supposing, he says, one estimates her capacity to pay at 1000 million or 1500 millilon pound's, what would happen when Germany has practically wiped out her national debt. The fall of the mark may not have had a very desirable effect upon German trade, but it has undoubtedly wiped out. her national debt. Mr Lloyd George means Germany's internal debt--the debt she incurred' prior to and during the war. Sin-. would then have only tiie 1000 million or 1500 million pounds to pay. with every equipment for doing a great trade. Germany has not taxed her people, but she has bled them all the same. She has showered, an avalanche of marks upon them at very nearly their face value ami in that way she has paid her debts at tiie expense largely of her working people who have to accept these marks in exchange foi their labor or the debts due them. Germany's trouble is that no one outside the country will accept her paper murky and .die has no other doseri\plion of money to pay with. The readers of this note will thus understand the reason for Germany's failure to pay the) reparations. .Mr Masscy is extremely chary of imitai.ng 31 r Lloyd George in his dei la.ration that Britain is I he heavies! taxed oountry in the world. Me is quili* content to allow Mr Lloyd George the supreme satisfaction ol being able to ward off the appeals of impoverished Europe for financial assistance by means of the statement thai a country that is taxed to the extent of Britain could' not bo expected to a.ssr.-t coun- | fries that are -taxed to only half the amount or less. When an appcaj was made to the Tinted Stales lor relief In Prance and other nation:, the reply was that the only relief she could suggest was that tiie appellants should' tax themselves higher, reduce their armaments and work harder. If they all did these 'things, there would he Id He necessity for banging on to the skeleton of the German reparations lor a

lift over till© stile. But Britain is not the highest taxed country in the world, fjhe is heavily taxed ; there is no doubt about that; hut Mr Lloyd George s statement is not quite correct, as the writer will show by the oflicia! figures. New Zealand leads with CIS 9s per head of the population; Britain comes next with L' 17 2s. '1 nose figures are for the vear 1921. If the Maoris are included' Now Zealand’s taxation innhead is £l7 Ms 4d. In 191 2 the taxation of the Dominion was Co 3s lOd. It does not require a dive into the 1 legerdemain associated with figures to arrive at the conclusion that the dillereuee hetween the two sets ol hgures is not wholly due to the war, hut to the reign of extravagance that set in with the war. and that has continued lor four years following its termination. I here is no use blinking the potent fact that, hut for the slump that set in a couple ol vears ago, a slump that rendered it impossible for producers and companies to pay their-way. the Government would have gone on taxing and spending with a zeal that would have done credit to a Turk, who spends everything and pavs no one. New Zealand, like Britain. intends to pay its way, and that ‘.s tits reason why the taxation is so high in both countries. But Britain s doiim something to reduce its taxation, and "New Zealand is also doing something in the same direction. 1c was absolutely necessary that they should do so. for the declivity that leads to ruin lay in front of them. Both have had to' tackle the great questions of wages and the reduction ot unnecessary staffs, with all their accompanying strikes and threatened strikes. The position had to be faced, for it is better that the individual should suffer hardship than that the whole country should he brought to ruin. New Zealand’s income tax in its various forms is the highest in the world, and imposes a burden that nothing can stagger tinder for any lengthened period. .Let us now see what other countries have to pay per head of their pouplations. In France the taxation is C 9 12s per head. . I'nited States C 7 (5s (3d. Belgium Co Ills. Italy C2 10s, while the German pays only 13s. It may puzzle the readers of this column why the German pays so little in taxation when he owes the Allies (3,(500 million pounds as indemnities. The answer may he found in the statement of Mr Lloyd George that the German mark has taken th ’ place of the Gcrimrn loans raised before and during the war. so that no interest is now payable on borrowed money. There is no money in Germany to borrow. The German metal mark is vail lie for a shiiling, hut outside Germany the paper mark can he p lire has ed at about -10 for a penny, and is dear al Ihe price. Germany is really not bankrupt, but she has no ready cash and no credits. The absence of ready cash docs not, of itself, mean that she 's financially in extremis, for Germany ,s worth infinitely more than the (5.000 million pounds that she owes the Allies no. reparations, hut the Allies turn their noses up at paper marks, and German trade is not, equal to filling the void. She cannot borrow or obtain credds. and therefore cannot pay. Tho New Zealand Government is not as well off perhaps, hut it can borrow. and there is always a market for our products. L'd ns hope that in his desperation Mr Massey will t-irenuonsly avoid the fss'ue of paper marks. Germany has tried them. aye. even in hales, and dumped at that, and she is now sitting, like the patriarch Job, in sackcloth and ashes, wondering what will happen next. Germany, like the Sphinx, is a mystery. She dobs not know how rich she is in her alumd-Mice of paper money, which flutters round as a legal tender in Germany, nor how poor she is when she endeavors to palm her paper off