Correspondence
A LETTER FROM GERMANY.
THE EMERGENCY REGULATIONS : THEIR CAUSE AND CON- SEQUENCES.
[To the Editor of the SPECTATOR.]
Sin,—At the moment two things are in the forefront of every man's mind over here—the coming elections and the emergency regulations of the Government. There is no doubt that this time the elections will be heated. But in order to avoid their becoming unseemly, the Government has issued a special edict : " Anyone found carrying anything in the nature of a cudgel or a dagger is to be imprisoned for a period not exceeding one year, whilst anyone who appears with others in a public place for any political purpose carrying arms is to be punished by at least three months' imprisonment" This latter provision is particularly directed against the appearance under arms of political societies.
I shall not detain you with a description of the constitution of the parties and their election programmes. Much here is still obscure. Far more important than the disposition of the parties is the question : " What is the meaning of this election ? " The Democratic Minister, Dr. Dietrich, put it pointedly, when he said just before the dissolution of the Reichstag : " The question at issue is, whether the Germans are a collection of men representing their own interests, or a nation." And this is in fact the case.
The confficts which led to the dissolution were mainly connected with the unemployment insurance. As matters stand, the State has already pledged itself to pay an additional 685 million marks (about 584,000,000) over and above the contributions of employers and employees. This sum does not allow for an increase in the number of unemployed, although such an increase is considered probable. The communes have to spend 365 millions (about X18,000,000) per year for those people who are no longer entitled to unem- ployment benefit. This was a case where a national com- promise might have been made, but unfortunately it was not arrived at. The employers, who mainly represent private capitalist views, refused to pay higher taxes in order to assist the unemployment insurance funds and demanded restrictions in the benefits paid, as well as the abolition of certain abuses which they claimed to see in the administra- tion of the funds. The employees, mainly Socialists, resented any limitation in the benefit and proclaimed the duty of the State to care unrestrictedly for its unemployed. As Dr. -Dietrich said on another occasion : " The Reichstag has been dissolved because the Left would not concede the force of economic facts and the Right did not realize that the majority of the people consisted of workpeople and employees." In other words, because neither side would sink its private interests.
The dissolution of the Reichstag forced the Government to make use of the famous paragraph 48 of the Constitution granting certain privileges to the President in a crisis, and to combine with the President in framing certain emergency regulations to balance the budget. As these regulations are already playing an important part in the elections and will play an important part in the debates of the next Reich- stag, when it is elected, I shall summarize them here shortly.
Three groups of taxes will help to balance the budget. The so-called Reichshilfe," an increase in income tax and a tax on the unmarried. The " Reiclishilfe " imposes an increase in tax of 2.5 per cent. on the income of all State officials (who in Germany include clergy, schoolmasters, judges, as well as the usual type of State servant). This measure is not very popular with the State servants, who say that the business man can free portions of his income from taxation by means of writing off, &c., whereas the salaries of Government officials are taxed at the source. The tax of 60 per cent on the salaries of the Supervisory Councils of shareholding companies is a sop to small tax- payers, for it will not bring in much, whereas an increase of 5 per cent. in the income tax of those receiving more than 8,000 marks (1400) per year meets with more widespread approval. By taxing such of her unmarried as have no dependents, Germany joins the increasing number of States who are discouraging the bachelor. Not only the State budget proved insufficient, but that, of many communes has also failed to meet the expenditure. So the emergency regulations grant the communes immediate facilities for improving their financial status by levying a citizen tax and a communal beer tax. The citizen tax will affect every grown-up man and woman. It begins with 3 marks per year for those not entitled to pay income tax and rises up to an extra 1,000 marks for the higher incomes. The main purposes of these taxes is, first, to assist the communes in their heavy expenditure on social relief work, and, secondly, to enlist the interest of those classes who do not pay mcome tax in the financial programmes of the communes.
In the vexed question of unemployment insurance, the emergency regulations have endeavoured to find the com- promise which the Reichstag failed to find. The contribution is raised to 4i per cent. of the income, whilst economies of about 100,000,000 marks (15,000,000) are to be effected in the administration of benefits by such a measure as grading the amount of the " dole " according to the length of time for which contributions have been paid. In the event of a further increase in expenditure, the State pledges itself to contribute not more than half, and the remainder has to be raised by an increase in contributions or a decrease in doles.
The much-discussed question of health insurance has also been included in the emergency regulations. Here, too, the insured had demanded small contributions and large benefits, and a selfish use of the benefits has at times given rise to serious abuses. Up till now medical treatment and medicines have been given entirely free of cost. Now the insured person is to be asked to fill a form costing a few pence before treatment and to pay a small contribution towards the medicine. These measures are to have an educative force and are to prevent a constant running to the doctor, when there is no actual need for it.
The last section of the regulations is intended as a safeguard against the fixing of too high prices by the cartels. Here the State retains for itself the right to interfere and to regulate prices, possibly even by removing for a time the duty on imported articles, when their cost of production at home seems not to justify a high price.
The deficit on this year's budget is estimated at 760,000.000 marks—of this the Cabinet proposes to raise 626,000,000 marks by the above-mentioned measures and 134,000,000 marks by general economies. Will the account balance ? Qui vivra, verra.—I am, Sir, &c.,
YOUR CORRESPONDENT IN FRANKFURT.
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