The amount of deficits of the budget since 1928 increases after the budget 1935/36 to 5-6 millions RM. This total deficit is already financed at the present time by short term credits of the money market. It therefore reduces in advance the possibilities of utilization of the public market for the armament. The Minister of Finance correctly points out at the defense of the budget: As a permanent yearly deficit * * * is an impossibility; as we cannot figure with security with increased tax revenues in amount balancing the deficit and any other previous debits, as on the other hand a balanced budget is the only secure basis for the impending great task of military policy, for all these reasons we have to put in motion a fundamental and conscious budget policy which solves the problem of armament financing by organic and planned reduction of other expenditures not only from the point of receipt, but also from the point of expenditure, e.g., by saving.

How urgent this question is, can be deducted from the following, that a large amount of task has been started by the state and party and which is now in process, all of which are not covered by the budget, but from contributions and credits, which have to be raised by industry in addition to the regular taxes. The existing of various budgets side by side, which serve more or less public tasks, is the greatest impediment for gaining a clear view over the possibilities of financing the armaments. A whole number of ministries and various branches of the party have their own budgets, and for this reason have possibilities of incomes and expenses, though based on the sovereignty of finance of the state, but not subject to the control of the Minister of Finance and therefore also not subject to the control of the cabinet. Just as on the sphere of politics the much too far reaching delegation of legislative powers to individuals brought about various states within the states, exactly in the same way the condition of various branches of state and party, working side by side and against each other, has a devastating effect on the possibility of financing. If on this territory concentration and unified control is not introduced very soon, the solution of the already impossible task of armament financing is endangered.

We have the following tasks:

(1) A deputy is entrusted finding all sources and revenues, which have its origin in contributions to the Federal government, to the state and party and in profits of public and party enterprises.

(2) Furthermore experts, entrusted by the Fuehrer, have to examine, how these amounts were used and which of these amounts can in the future be withdrawn from their previous purpose.

(3) The same experts have to examine the investments of all public and party organizations, to which extent this property can be used for the purpose of armament financing.

(4) The federal ministry of finances is to be entrusted to examine the possibilities of increased revenues by way of new taxes or increasing of existing taxes.

The up-to-date financing of armaments by the Reichsbank under existing political conditions was a necessity and the political success proved the correctness of this action. The other possibilities of armament financing have to be started now under any circumstances. For this purpose all absolutely non-essential expenditures for other purposes have not to take place and the total financial strength of Germany, limited as it is, has to be concentrated for the one purpose of armament financing. Whether the problem of financing, as outlined in program, succeeds, remains to be seen, but without such concentration it will fail with absolute certainty.

TRANSLATION OF DOCUMENT 1183-PS

COPY
The Commissioner for the Four Year Plan
Department Arbeitseinsatz
Berlin SW 11, Saarlandstr. 96, 29 Jan 1942
V a 552/27
Express Letter!
To:—