emergency currency on a gold mark basis, to be covered by gold loan certificates of large denominations. Owing to the scarcity of the latter, the authorities issuing Notgeld were given permission to provide cover in the form of 6 per cent. Treasury Bonds expressed in dollars and gold marks, specially created for this purpose by the Decree of the 20th October, 1923. These bonds fall due on the 1st December, 1932, and are redeemable at par in German currency on a gold basis. The total amount of Notgeld thus secured (exclusive of the Notgeld issued by the railways and to which we will refer later) stood at 110 million gold marks on the 31st January, 1924. This Notgeld is to be gradually withdrawn from circulation against redemption in loan bonds or German currency. Redemption was to begin on the 15th January, 1924, and it is hoped that the full amount will have been called in not later than the 1st April, 1924. 5. Treasury Bonds and Interim Bonds issued by the States. Certain States issued fixed value loans, some of the certificates for which were of such small denominations that they still serve as instruments of payment. The total value of these bonds amounts to about 50 million gold marks. Attempts are being made to recall these small denominations by converting them into larger denominations. 66 6. Certificates issued by the Banks of Hamburg and Schleswig-Holstein.-Two banks, the Hamburger Bank von 1923 A.G. and the Schleswig-Holsteinische Goldgirobank A.G. were authorised, by the Reich Minister of Finance, to deliver, in exchange for currencies, discount certificates (Verrechnungscheine) which still serve as instruments of payment. It is the intention of the German Government to dispense with these gold certificates as soon as a gold currency has been reinstated. The Hamburger Bank issued certificates to the amount of 25 million gold marks. No particulars are available regarding the amount issued by the Schleswig Holsteinische Goldgirobank, but the figure is inconsiderable. 7. Notgeld issued by the Railways.-In order to cover their deficit, the German railways were authorised to issue, in addition to the paper mark Notgeld referred to above, Notgeld having stable value to the amount of 200 million gold marks. Ten millions of this issue were secured by gold loan bonds, as explained above, the remaining 190 millions being secured by 6 per cent. Treasury Bonds, as already stated. The Notgeld issued by the railways amounted to 131.9 millions on the 31st January, 1924. This emergency currency is to be withdrawn from circulation by means of a loan to be issued later by the railways. Table of Instruments of Payment in Circulation in Germany in January 1924. Approximate value (7) I.-Instruments of payment expressed in in Millions of Gold paper marks: 1. Reichsbank notes (as per return 2. Notes of the four private banks of issue ... II. Instruments of payment expressed in 1. Rentenmarks (as per Renten- ... Marks. 483.7 0.1 56.0 1.4 132.0 27.6 700-8 1,374.0 210.0 486.0 110.0 50.0 35.0 131.9 2,396.9 158.0 3.255.7 (7) Calculated on the basis of 1 G.M. = 1 billion P.M. Note. This total does not include the foreign currencies at present in Germany which, according to the estimate made. by the Second Committee of Experts, would amount to 1,200 million gold marks, a figure which has been confirmed by a German authoritative source. Annex No. 8 to the Report of the First Committee of Experts. Provisional Survey of the Budget for 1924. The figures of this table can only serve as a preliminary estimate and are given with all reserve. This estimate of the revenues assumes complete restoration of economic unity between occupied and unoccupied territory, renewed administrative and fiscal supremacy in occupied territory on the part of the Reich and the component States, that the taxes to be levied according to the general laws of the Reich and the States are once more directed into their Treasuries. II.-Execution of the Treaty of Versailles. Annex No. 9 to the Report of the First Committee of Experts. COMPARATIVE POSITION OF DIFFERENT INCOMES DRAWN FROM DIVIDENDS IN THE YEARS 1920-21, 1923-24 AND 1924-25. Question submitted to the German Government by the First Committee of Experts. Assume four men with incomes in G.M. 15,000. 100,000. 500,000. 1,000,000. (a.) Wholly from dividends of German industrial companies. (b.) One-half from German and one-half from foreign companies. What amount of income tax (or its substitutes), plus capital tax, will be payable on the scales for 1920-21, 1924-25 respectively? Reply of the German Government. For the following reasons it is impossible to make reliable estimates of the kind desired: (1.) Because the fiscal burden for 1920-21 cannot be calculated owing to the influence of the depreciation of the currency. (2. Because no assessment exists for 1923 based on sliding-scale rates for that year; indeed, for 1923 prepayments and payments of balance were collected which were regularly calculated on a coefficient of the 1922 taxes and were therefore not entirely immune from the influence of the depreciation of the currency. (3.) Because no income tax levied on a sliding scale exists so far for 1924; the prepayments for 1924 are collected more according to external standards; the actual income for 1924 will not be assessed until 1925, when it will be based upon a tariff which will be determined by law in the course of the year 1924. Particulars concerning the form of the taxes will be found in the memorandum transmitted (see for 1920-21, the English text, pages 81, 96, the French text, pages 81, 97; for 1923-24, English text, pages 83-84, 96, French text, pages 84, 97). Reference should be made to the statement concerning the budget estimates of the wages tax and the prepayments on the income and corporation taxes for 1924 transmitted as V a II 1480, of the 16th February, 1924. It should further be pointed out that income from dividends to the amount mentioned existed in Germany before the war to a limited extent only and is unlikely to be found after 1922, owing to economic developments during the period of depreciation of the currency. As early as 1920, there were only six taxpayers in Germany who had an income from investments of from 3 to 10 million paper marks, that is, from 200,000 to 667,000 gold marks and 66 with an income from investments of from 1 to 3 million paper marks, that is about 67,000 to 200,000 gold marks. From about the middle of 1922 income from investments had practically disappeared. In view of the circumstances mentioned above, any estimates are attended with exceptional difficulties. An attempt is made below to employ available bases for valuation as required in the Questionnaire. |