Economic Development in Denmark Before and During the World War/Effect of Recent Fiscal Measures

Effect of Recent Fiscal Measures

The effect of these measures on the finances of the state will appear from some figures. In the fiscal year 1910-1911 the current revenues of the state totalled 91,000,000 kroner. In 1913-1914, or immediately before the World War, they totalled 124,000,000 kroner. During the war they swelled to such a degree that in 1917-1918 they had reached 375,000,000 kroner. The income and property taxes, which seven years before had yielded 12,000,000 kroner, now yielded 239,000,000 kroner, or nearly two-thirds of the total revenues. In 1910-1911 the taxes on commercial transactions and the inheritance tax brought in 9,000,000 kroner, and in 1917-1918 they brought in 40,000,000 kroner, of which 19,500,000 accrued from the stamp-tax and 13,000,000 from exchange duties. During the same period consumption duties rose from 46,000,000 to 71,000,000 kroner, of which duty on gin brought in 18,000,000 as against 4,000,000 in earlier years; the duty on beer, 11,000,000 as against 6,000,000. Meanwhile, the customs duties yielded during the war conditions so adverse to commerce only 30,000,000 kroner, as against a previous 32,500,000 kroner. A falling off of income is found in government enterprises, as in the state railways, which showed a deficit of 10,000,000 kroner in 1917-1918, against a surplus of 5,000,000 kroner in 1910-1911. The large incomes during the war did not prevent a great increase in the national debt, which was nearly doubled between March 31, 1911, and March 31, 1918. On the latter date it was 603,000,000 kroner, an amount which, however, a wealthy country such as Denmark can easily carry, and which is very small in comparison with the debts weighing upon the belligerent countries.

It is especially in the budgets of the Secretary of the Home Office and the Secretary for the Defence that we find the very large expenses corresponding to these figures. In 1910-1911 the expenditures of the War Office were about 20,000,000 kroner, of which between 4,000,000 and 5,000,000 were for fortifications, buildings, etc. In 1917-1918 they had increased to 86,000,000 kroner, of which 68,000,000 were for the measures of safety on account of the war. For the Navy Office, the expenses rose from 9,000,000 to 26,000,000 kroner, of which 17,000,000 were for measures of safety. The budget of the Home Office increased from 13,000,000 kroner in 1910-1911 to 124,000,000 kroner in 1917-1918; of the latter sum 18,500,000 kroner were used for purchase of corn and flour; 2,900,000 kroner for subsidies for importing maize; 1,300,000 kroner for the production of yeast; 4,200,000 kroner as compensation to the rye and wheat growers for grain surrendered. Butter producers received a subsidy of 13,900,000 kroner, a sum which will be much greater in the coming financial year. The reduction to the people of the price of milk cost the state 8,000,000 kroner, and the slaughter-houses received 13,100,000 kroner for the slaughtering of hogs for the home market. As some small compensation for these extraordinary expenses, there is a surplus from fuel of upwards of 1,000,000 kroner, and a penalty on farmers for insufficient deliveries of grain of 800,000 kroner. The relief funds received a grant of 3,300,000 kroner; aid to the unemployed amounted to 14,900,000 kroner; while the municipalities received from the state 19,200,000 kroner pursuant to the laws passed to alleviate the high cost of living. Of course, the cost of the whole rationing system and of the numerous councils was not small. Besides 900,000 kroner for the administration of grain supplies, more than 500,000 kroner was spent on price-regulating boards, councils, and committees, and 760,000 kroner on food-cards. To all this, finally, must be added from the accounts of the Finance Department the increase in salaries of functionaries to make up for the high war prices, amounting to upwards of 30,000,000 kroner.