Rising Beside the Wall

While West Germany's economic miracle is simmering down, the economy of West Berlin is heating up. As the 14th annual West German Industrial Exposition closed in Berlin last week, new investments were moving in from several sources. General Motors is completing a new plant to make parts for its Opel subsidiary, joining such other U.S. industries in Berlin as Otis Elevator and Yale & Towne. Two German textile firms are also building factories there, with a total investment of $51 million. West Berlin's Deutsche Industrie Bank has announced that its loans for industry have been running at twice the rate of last year. The city's total output for 1963 is forecast at $3.6 billion--up 4%.

Berlin's growth has been insured by elaborate and artificial economic concessions that make going to the Wall an attractive business proposition. Corporate income taxes are 20% lower in Berlin than in West Germany, and personal income taxes 30% lower. Half a dozen other business taxes are trimmed or eliminated in Berlin, while depreciation write-offs up to 75% in the first year are permitted on new equipment. West Germans who lend money for industry or housing there can knock 10% to 20% of the amount directly off their income taxes. And to woo younger settlers, Berlin offers a unique family bonus: at marriage every couple gets a $750, 15-year loan that is reduced by 25% with the birth of each child.

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