Of the many interesting estimates of the length of time Herr Hitler can hold out against the economic blockade of the Allies, probably the most important one is contained in an American survey of Germany's position which it is claimed is authoritative. One American writer comes to the conclusion that Herr Hitler cannot continue to fight for more than a year if he is hard pressed, and forced to use up his materials quickly; he might last two if his adversaries are content merely to maintain the blockade, and let him waste his strength slowly; and he might be able {o last for three years if he can obtain those supplies from Russia, Rumania and Sweden in increased quantities, which seems, in view of all that has transpired recently, to be extremely unlikely. It is unwise to endeavour from such an estimate to guess how long the war will last, but it is reasonable to suppose that, unless a very drastic change comes over the situation, Herr Hitler's threat to carry on the war for ten years, if necessary, was nothing but an empty piece of bombast. In attempting to assess the amount of war materials, and food which have been accumulated by Germany, it must be remembered that the ordinary flow of trade during peace times permits of no great degree of secrecy, and it is possible within comparatively accurate limits to ascertain what Germany has purchased abroad over a number of years, and with a lesser degree of certainty to arrive at some estimate of the amount of such goods which have already been consumed. Roughly the situation was at the commencement of hostilities that Herr Hitler had a surplus of coal, potash, and beet sugar, a sufficiency of potatoes, and compared with peace time needs, which are greatly increased in times of war, deficiencies in oil, rubber, timber, iron, and wheat, with a complete lack of copper, cotton, wool, certain essential metals, and tobacco. The signif. cance of all this is greatly enhanced when it is remembered that by reason' of the attempt during the last two years to establish complete autarchy the German people, from the point of view of food, have been passing through the dress rehearsal to misery, and there can be no question about it that malnutrition cannot harden the human constitution against increasing hunger.
Studying the list of deficiencies, it may be pointed out that, with regard to oil, synthetic production from coal will supply one-third of Herr Hitler's normal peace requirements. Germany's own output of natural oil is small in the extreme. Much has been obtained from Rumania, but production in that country is declining and much of it controlled by Allied interests. It has already been pointed out that any German attempt to seize the Rumanian oilfields would lead to their immediate destruction, so it is not likely that Herr Hitler would endeavour to enforce production by any hostile action which would lead to his being deprived of the supplies he is already receiving. There is still Russia to be looked to, but her demands upon ier own supplies are increasing, and there is very little chance of Herr Hitler being able to increase his supplies from that source. In connection with iron, Herr Hitler's position is not quite so unfavourable. German mines supply about one-quarter of the country's needs, that proportion will probably be raised to about 35 per cent. when Marshal Goerings iron works, dealing with low grade ore, are fully in operation. For the rest Germany must depend upon Sweden, and short of successful Allied naval action it would seem that this source of supply will remain open to him. Coal production is about twenty-five per cent. above normal requirements. In nickel, tin, and manganese Herr Hitler has only the stores he has accumulated, all further supplies being cut off by Allied action. The production of synthetic rubber last year was under 40,000 tons. The remainder, some 180,000 tons had to be imported, and the advent of war definitely cuts off supply. In timber, despite the forest acquisitions in Austria, Bohemia, and now Poland, Herr Hitler is not completely self-sufficient, though here again he may be able to bring supplies up to the required level by importations from Sweden. Food has been stored up, but the process has been hindered by the shortage of agricultural labour, which may now be remedied by the use of Polish war prisoners. Self-sufficiency, however, is only about 83 per cent. This year's harvests are in and there appear to be fair supplies of grain and meat at any rate for the coming winter. The institution of the rationing stem before the war started clearly indicates Herr Hitler's uneasiness on the score of food. The fat shortage is acute, and the people will have to do without coffee and tobacco, ersatz products being used to fill the bill.
It has already been pointed out in these columns that the economic assistance forthcoming from Russia will for some considerable time have no very appreciable effect in relieving Germany's needs. Russia at the moment cannot spare íhe raw materials which Herr Hitler needs, while àt the same time Germany's industry is in no position to supply the goods in exchange for which those raw materials, if they could be, would be obtained. Russia has plenty of timber, but cannot yet cut enough to fill her own needs. Oil iron ore, manganese and grain cannot yet be spared because production does not Russia's own requirements, while the German inability to provide industrial goods for barter cannot be remedied by payment New Fangled Ideas in currency. Germany has very little exchange. Russia has already large quantities of blocked marks piled up in Berlin in connection with her last trade agreement with Germany. They cannot be liquidated until Germany's industry can turn out goods which Russia needs, and to all intents and purposes those funds are locked up until the advent of peace makes a reorientation of Germany's industrial policy a possibility. The experiences of the last war amply proved that any attempt to estimate a time limit for the war from these data will in all probability turn out to be fallacious. No attempt is being made to do so here, though it is argued that upon any review of Germany's economic position it is clearly demonstrated that she has entered this present war in an infinitely worse state of preparedness than she embarked upon the last. It is yet to be shown that any of Herr Hitler's military or political achievements can do much to improve the situation in the near future, while even German experts are reported to realize that one of the first steps necessary to make whatever supplies, which may eventually come from Russia, available will be the remodelling of transport facilities between Germany and Russia a task which cannot be accomplished in the twinkling of an eye, Hongkong's Income Tax Tue introduction of the income tax into Hongkong will be watched with considerable interest because of the fact that when a similar {ax was introduced in the Straits Settlements it had eventually to be abandoned because of the difficulties in collecting it. The general provisions of the legislation regarding this new tax are amply covered by the Financial Secretary's speech before the Legislative Council:—
The standard rate of 10 per cent. will be charged on all company profits. payments of interest, etc. and on all income im respect of Which the recipient has made no claim to personal and family allowances; but the man who makes such a claim will pay at 10 per cent, only on the balance of his income after deducting his allowances and after paying at half rate, 5 per cent. on the first part of his taxable income.
The allowances Government has provisionally in mind are earned income allowance one-tenth of earned income up to $15,000; personal allow ance, $1,350 for a wife; children, $1,000 for the first child and $600 for each subsequent child. The 5 per cent. rate deducting allowances.
Under this scheme, the exemption limit would be $1800 per annum for unearned income and $2,000 for earned income; and a married man with two children would be exempt up to $5,280 per annum and would only pay the full rate of 10 per cent. on income in excess of $8,600 per annum. The following are random examples of the tax payable by such a man on various incomes, ignoring a possible surtax on the highest incomes, a matter which is still receiving the consideration of Government.
£400 per annum, $50.
£150 per annum, $455.
£1,260 per annum, $1,225.
The tax does not appear-to be severe in its application to the modest salaried man, and no heavy burden is imposed upon the taxpayer. It was further explained that it was originally intended to have had an expert investigation of the administrative difficulties it was expected would be met, but circumstances have now rendered it impossible to secure the services of an expert and the Hongkong Government, having te choose between waiting for the end of the war, or going ahead with the proposal immediately, decided that the urgency of the need which had to be met required that the income tax should be instituted as soon as possible. Preliminary difficulties may be experienced and the manner of collection may give rise to some criticism, but the fact that the Government is determined to make collection effective will probably mean in the long run that difficulties will be surmounted, and the scheme made a complete success.
Text read from the printed page and cleaned; old type leaves the occasional error.