Nation on the Move

West Germany last week began dispersing some of the rewards of its astonishing economic comeback. With a bulging treasury and credits piling up in every continent, pfennig-pinching Finance Minister Fritz Shaeffer announced sweeping tax reductions that will enable Germans themselves to buy more of the Volkswagen, cameras and other good things that their factories are exporting to every nook & cranny of the Western world. A staunch free-enterpriser, Shaeffer believes that a capitalist economy should be kind to capitalists. His tax cuts especially gave relief to 1) heavy industry (corporation taxes were reduced from 60% to 45%*) and 2) West Germany's crop of postwar millionaires (taxes on incomes over $600,000 a year were slashed from a maximum of 80% to 55%). But he also cut taxes of the low-income worker up to 41%.

"These reductions," said Shaeffer, "have as their aim the encouragement of business initiative." To make up his losses in revenue, he assumed that West German production would jump another 5% in 1954-55. No other nation in Europe, and few anywhere, looks forward to even half that much improvement. But Shaffer grounded his confidence on German hard work, and the unstinting drive to extend German markets and German influence around the world. The importance attached to the campaign was dramatized last week by the two biggest men in the Bonn government:

P: Chancellor Konrad Adenauer flew off on a state tour through Greece and Turkey. Adenauer did not have to talk trade, for German locomotives and engineering goods are already flooding both countries at such a rate that Greece owes West Germany $26 million, Turkey $8,000,000. But in Greece, where he met with gallant old (70) anti-Nazi Field Marshal Alexander Papagos, the 76-year-old Chancellor hopes to erase some of the bitterness left by the Nazi occupation and to convince Greece that West Germany can be a good partner. In Turkey, where Germans are popular, he expects to cement a "long-term partnership" that will help German salesmen--and eventually German diplomats--in the Moslem world.

P: Economics Minister Ludwig Erhard, more directly concerned with Germany's order books, opened a massive trade fair in Frankfurt with a message to thousands of foreign visitors. "The German people," said he, "must not be blamed for the fact that they work harder than others. It is narrow-minded for the rest of the world to fear German competition."

This week Erhard departed for a grand business-seeking excursion to South America, where already German competition is hustling Britons and Americans out of juicy business deals. Several South American countries are already in debt to their German suppliers, but Erhard is not concerned about getting paid promptly. "We Germans," said one of his aides, "are thinking in terms of ten to 25 years."

* The U.S. rate: 52%.

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