asked the Chancellor of the Exchequer whether, since the fall in the value of the mark from 6d. at the time of the Armistice to less than ¼d. has had the effect of enormously reducing the real amount of taxation paid to-day by the successful German trader, who is paying taxation not at the rate of 38 per cent, of his profits as laid down but at the rate of 12 per cent, only, while the taxation borne by fixed incomes in Germany is proportionately the more crushing; and is this being taken into consideration in fixing the amount which Germany can pay?
I am unable to verify the percentages quoted by my hon. and gallant Friend, but I entirely agree with him that depreciation of the currency is a form of taxation which crushes that part of the community which depends on fixed incomes while letting off the trader (so long as the process of inflation can be continued) much too lightly. The Reparation Commission is giving full consideration to this aspect of the problem of German taxation in assessing Germany's capacity to pay.