13.1% of the total costs were financed out of ‘recurring revenues’ i.e., taxes.
Of the remaining costs, 24.8% were paid as ‘floating debt’ i.e., by printing
money, while 62.1% were state bonds signed by German citizens. German
fiscal policy was characterized by the ‘kid-glove’ treatment of company profits
and personal income.
76 The war profits taxes that were introduced were
inadequate, for not only were they applied too late, but being applicable only
to changes in income and profit, they exempted by their very nature large
profits and incomes insofar as these had been the same as they were in
peacetime. Moreover, the manner in which they were levied and collected
afforded the profiteers ample opportunity to conceal their gains and Mayer
would have made best use of this to minimise Haber’s tax liability. In contrast, Great Britain
76 paid 28% of her total costs out of its recurring revenues.
The standard UK income tax rate was doubled from *6% to 12% in the
first war budget of 1914, and was then raised progressively, in a fairly linear
fashion throughout the war, finally reaching 30% in 1918/1919. Combined
with super-tax, this meant that higher incomes were eventually taxed at a rate
rather more than 50%.
If Haber’s tax liabilities
77 were roughly in step with German recurring
revenues over the period, say *15%, then the net value of Haber’s income
from 1915 to 1917 was around 2,218,500 Marks. At a contract agreement
with Le Rossignol of 40% this would amount to a gross payment to Robert of
887,400 Marks, which at a nominal (pre-war) exchange rate of *1000
Marks:50 BPS, amounts to *£44,000. If Robert subsequently paid ‘top end’
tax in the UK at 30% to 50%, his net income for the period is estimated to be
somewhere in the region of £22,000–£30,000. Now there are so many other
ways to approach this estimate and each one would employ a similar ‘dog’s
breakfast’ of logical and financial analysis, but it is hard to avoid the conclusion that, over the period 1915–1917 alone, Robert’s entitlement must
have amounted to thousands, if not tens of thousands, of pounds. What
arrangement(s) Robert made to transfer monies from Germany,
78 and to
accommodate the swingeing British income tax rates is of course entirely
private. And alongside the effect of later German hyperinflation on his
entitlement there also remains a ‘fly in the financial ointment’. In conversation with Jaenicke in 1959 (Chap. 18), Robert declared that ‘the Badische
made hundreds of millions and Haber only got a little bit …’. ‘A little bit’?
Was Haber telling Robert the truth about his royalties? Did Robert receive
what he was entitled to? The answer to the first question seems to be an
emphatic, yes. In conversation with Chirnside in 1976 (Chap. 18), Robert
said of Haber, that he was ‘a nice man and a kind one … and he played fair
by me’. But as for the second question, Robert also told Chirnside that he
306
D. Sheppard
Of the remaining costs, 24.8% were paid as ‘floating debt’ i.e., by printing
money, while 62.1% were state bonds signed by German citizens. German
fiscal policy was characterized by the ‘kid-glove’ treatment of company profits
and personal income.
76 The war profits taxes that were introduced were
inadequate, for not only were they applied too late, but being applicable only
to changes in income and profit, they exempted by their very nature large
profits and incomes insofar as these had been the same as they were in
peacetime. Moreover, the manner in which they were levied and collected
afforded the profiteers ample opportunity to conceal their gains and Mayer
would have made best use of this to minimise Haber’s tax liability. In contrast, Great Britain
76 paid 28% of her total costs out of its recurring revenues.
The standard UK income tax rate was doubled from *6% to 12% in the
first war budget of 1914, and was then raised progressively, in a fairly linear
fashion throughout the war, finally reaching 30% in 1918/1919. Combined
with super-tax, this meant that higher incomes were eventually taxed at a rate
rather more than 50%.
If Haber’s tax liabilities
77 were roughly in step with German recurring
revenues over the period, say *15%, then the net value of Haber’s income
from 1915 to 1917 was around 2,218,500 Marks. At a contract agreement
with Le Rossignol of 40% this would amount to a gross payment to Robert of
887,400 Marks, which at a nominal (pre-war) exchange rate of *1000
Marks:50 BPS, amounts to *£44,000. If Robert subsequently paid ‘top end’
tax in the UK at 30% to 50%, his net income for the period is estimated to be
somewhere in the region of £22,000–£30,000. Now there are so many other
ways to approach this estimate and each one would employ a similar ‘dog’s
breakfast’ of logical and financial analysis, but it is hard to avoid the conclusion that, over the period 1915–1917 alone, Robert’s entitlement must
have amounted to thousands, if not tens of thousands, of pounds. What
arrangement(s) Robert made to transfer monies from Germany,
78 and to
accommodate the swingeing British income tax rates is of course entirely
private. And alongside the effect of later German hyperinflation on his
entitlement there also remains a ‘fly in the financial ointment’. In conversation with Jaenicke in 1959 (Chap. 18), Robert declared that ‘the Badische
made hundreds of millions and Haber only got a little bit …’. ‘A little bit’?
Was Haber telling Robert the truth about his royalties? Did Robert receive
what he was entitled to? The answer to the first question seems to be an
emphatic, yes. In conversation with Chirnside in 1976 (Chap. 18), Robert
said of Haber, that he was ‘a nice man and a kind one … and he played fair
by me’. But as for the second question, Robert also told Chirnside that he
306
D. Sheppard