The Reich's Finances Dr. Schacht's successors have now produced the
fiscal plan by which the immense expenditure demanded by the Reich's political adventures is to be financed. In essence the plan is simple. The Reich has exhausted the possibilities of internal borrowing; and it is also necessary to leave some opportunities open for private industry to raise capital. Thus the Reich is driven to pledge future income to cover its current expenses. Government contractors will in future be paid, as to 4o per cent. of their accounts, in certificates which may be used to pay future taxes. The certificates are of two kinds; the first, which are transferable, carry no interest and mature in 7 months; the second, untransferable, mature in 37 months and bear 4 per cent. simple interest. The losses which the Reich will suffer in tax revenue will be covered by a super-tax on the excess of one year's income over the preceding years. Inflationary though the plan is, it would be mistaken to infer that the Reich' finances are likely to break down. Rather the Reich expects that, given the success of its plans in foreign politics, its future income will easily be large enough to redeem the pledges now given. Only political failure would involve economic crisis ; and the burden of indebtedness now assumed makes it all the more necessary for the Reich to carry out its plans for foreign expansion in the near future.
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