THE COLONIST. Published Every Morning. Monday April 5, 1909. GERMANY'S FINANCIAL POSITION.

Colonist, Volume LI, Issue 12505, 5 April 1909, Page 2

THE COLONIST. Published Every Morning. Monday April 5, 1909. GERMANY'S FINANCIAL POSITION.

At the present time when Germany is launching out upon an extraordinarily large shipbuilding programme, a study -of. her" financial position is of mterest. especially as it tends to show -that some very tangible, motive must " underlie the construction of a fleef of dreadnoughts.

There appeared a short time, ago, in a German review, an article from tKe pen of no less an. authority than the .Imperial Minister'' of Finance, Herr llcinhold Sydow ( wherein lie made., a strong. appeal for the setting in. order of the empire's finances . The matter, he said, must be solved, and ' solved immediately, since the. postponement could but make the solution more difficult. "I feel confident j" he continued, "that the recognition _ of thisneed will appeal in its full seriousness to the nation and to the national Parliament. It seems to be scarcely conceivable that the welfare, perhaps the stability of the German Empire', created and welded together at the cost of so much work, idealism, self-sacrifice, and blood, should be exposed to risk because the German^peoplo, in spite of its increasing^ prosperity, rouse, to provide the means necessary- for the empire's .preservation." Germany's deficit in 1906 was twenty-eight million marks. In 1907 it had jjrown to. over forty-one millions, and the expected deficit for the last financial year- was seventy-five millions. Meanwhile the national debt has been progressing apace. Amount-^ ing thirty "years ago to only ?2 million marks, it .now stands at the sum of four and a quarter billions, and i authorised expenditure during the next five years will demand -a billion more. Besides this, there is a floating debt, in-' short-termed treasury bonds, for which the last budget required 475. million marks.- Herr Sydow saj's that the condition of the money market in^ late years has brought abdut a constant rise in the rate of interest on government securities, which, fit the same , time, have declined in price. Not only this, but countries poorer than Germany show better figures in respect to loans and interest ; -take Italy for example. 'Her 3} per cent bonds stand at 104.5 ) but Germany's only iat 92.25. And strange to say, the country's finances have been going" from bad to worse during a period of peace, whe.i German commerce and iridustry have developed .quite; extraordinarily, when, the state of agriculI ture has -been healthy when , the 1 prosperity of the individuarhas^risenV and when, in fact, all ranks ..of the population have attained a higher sc-lo of comfort and prosperity than thoy over enjoyed before. Min-i-^T livs down four broad, principles upon which the badly needed finance reforms should be based. Equalisation of ; expenditure and • revenue he admits to be self-evident; he advocates that the flooding of the money market with :great quantities of shortterm treasury bonds be stopped; he calls for a readjustment of- the financial relations between the empire and its several states, some of whose'contributions towards imperial expenses are -" deferred "; Se desires that the borrowing policy be completely changed. Herr Sydow admits that to some extent borrowing must be "resorted to, so that the presenb generation may not have to -pay too Jieayily for certain benefits now being prepared for the next } such as widening the canal between the North Sea and the Baltio, building up the .fleet, and strengthening the fortifications '. But there remain regular current outlays' to- be^ dealt with which must be met. from, year to j'ear, first and foremost among tfienV those incurred' for, ; "national defence. How economies must be effected, it is difficult to imagine. In the first place the government has decided to increase the salaries and house allowances of its civil officials. Next, Parliament is demanding Higher pay for the country's soldiers and sailors. A law has been parsed reducing the duty on sugar. Arlar^e cum must be .set apart toward 4ebtr

cancellation. The imperial fund which ' -helps the maintenance of the national oid-age-and-disability- pension scheme will bo exhausted in 1912. and must then be replenished. Certain methods of revenue production are very unpopular, and will probably have to be given up, like the tax on railway tickets, for instance. And then there is tho constant bug-bear of the said " deferred." contributions of the sundry federated states to the imperial exchequer, which for the years 1906, to 1909 may be estimated at 180,00p,000 marks. Altogether, declares ithis authority, so far from any hope- of economies existing, the question will arise how to -provide half a billion marks annually for- the next five years.