642 



The Review of Reviews. 



GERMANY AND HER FINANCES. 



'I'wo Views. 

 With the introduction of the German Defence Bills 

 the attention of the world is again drawn to the finan- 

 cial position of the German Empire. On this subject 

 the Deutsche Revue for May publishes an important, 

 but ver}^ technical, article by Herr Adolf Wcrmuth, the 

 late Minister of Finance, written probably before the 

 proposals of Herr Kiihn, his successor, were made 

 known. It is a severe criticism of the policy of the 

 Government. 



THE LATE GERMAN MINISTER OF FINANCE. 



He begins by e.xplaining that since he has quitted 

 office he sees no reason why at so important a moment 

 he should not be able to express his opinions candidly 

 without doing harm to anyone. While he was in office 

 he had made it his concern to endeavour to place on a 

 sound basis the Imperial finances, and though he had 

 not cjuite completed this work, he felt himself com- 



eould have been completed in 191 2, and just for this 

 very reason it would have been well to hesitate before 

 interfering with the revenue of this year for additional 

 outlay on armaments. In 1913 the Treasury, he con- 

 tinues, will need an extra sum equal to about nine 

 millions sterling, and in 1914 a sum equal to ten 

 millions sterling. He does not see how the money can 

 be procured from new taxes, so that the Government 

 will be compelled to borrow, and the finances will fall 

 back into the old muddle. 



He discusses the possible sources from which new 

 revenue might be obtained, and concludes that, after 

 all, the inheritance duties may yet have to bepa.ssed. 



A French View of the Crisis of 1911. 



A second article on the finances of Germany appears 

 in the mid-May number of the Revue de Paris, but the 

 writer, M. Leon Poinsard, confines himself to the crisis 

 in the autumn of 191 1, showing the serious extent of 

 the effects of it, though it was only of short duration. 



Vir iWultrc jMoli.] 

 "My Imperial thanks, O Kriitke, to you and lo your ofiicmls 

 for tlie fine surplus you give me." 



pelled to retire owing to the refusal of the Governments 

 of the Confederate States to sanction the inheritance 

 duties, which would have supplied him with some of 

 the wherewithal to meet the expenditure entailed by 

 the increase in the navy desired by Admiral Tirpitz. 



A decade of debts. 

 He passes in review the finances of the Empire from 

 1900 onwards, and shows how the difTicuities and 

 experiences of the first decade of the present century 

 ' should suffice to teach what methods to a\-oid in future. 

 He lays down the principle that the undertakings of the 

 l'".mpirc should not exceed its revenue. He describes the 

 policy of this period as one of debts, culminating in 

 1909-10 in a great loan, a worthy coping-stone for the 

 debt which had been accumulating since 1900. He 

 refers to the financial reforms of 1909, and points out 

 what will be the effect of the new armament proposals 

 on the soundness of Imperial finance. Even without 

 this new charge it seems anything but certain that tiie 

 work of establishing the finances on a solid footing 



' Father, can you not buy for us, out of the Imperial thanks, 

 something to tat ? " 



The vast economic edifice constructed by the 

 Germans in half a century, he says, is suffering from 

 the haste displayed by the builders. It has weak 

 parts. The crisis of 191 1, for instance, was facilitated 

 and aggravated by the lack of financial organisation 

 in the country. One cause emphasised is the necessity 

 of calling in foreign capital lo develop the industries 

 of the country, and ha\ing to pay out of it the interest 

 on this capital. This, he says, brings about a periodicttl 

 draining of the money market. 



BLACK SATLRDAV. 



When the panic occurred in .September it was at 

 first onlv partial, but it was at once found necessary 

 for the kcichsbank to inteivcne. not in favour of the 

 Savings Hanks alone. By September 8 the false news 

 spread during the week had reached the most distant 

 parts of the Empire, and the Reichsbank's most ener- 

 getic .support was necessary lo prevent disaster. And 

 the cause of such a crisis ? Insecurity following a 

 political agitation, imprudently and blindly provoked, 



