“We must conduct affairs in such a way,” says the official German secret report, published in the 1914 Yellow Book and dated March 19, 1913, the day after the army bill of that year was passed, “that, under the weighty pressure of powerful armaments, enormous sacrifices, and a strained political situation, an outbreak of hostilities would be looked upon as a deliverance, because, like the war of 1870, it would be followed by several decades of peace and prosperity.” The new financial burdens were indeed heavy, even for a nation which, like the German, was visibly growing richer and richer. The expenditure involved in the new army bill was of two kinds. The one, amounting to some £50,000,000, graduated over a period of three years, would not be renewed; the other represented a permanent annual disbursement, estimated at £24,510,000 until 1915, and £11,600,000 after that date. Where were these vast sums to be found in a country already overburdened with taxation? The Imperial Treasury had no more than £5,000,000 left over from the receipts of preceding years. The Chancellor could not resort to fresh taxes on food and drink. Moreover his hands were tied by a motion, put forward by Herr Bassermann and Herr Erzberger in the previous year, and passed by the Reichstag. This motion bound the Government to frame, before March 31, 1913, a scheme of taxation on property, in other words on wealth. “But a general Imperial tax on property,” the Finance Minister, Herr Kühn, had declared in the course of the debate, “would have been an encroachment upon the financial sovereign rights of the federated States, and the Imperial Government could not enter upon this path without injuring the federal character of the Empire.” It must not be forgotten that Prussia, being the most important of the federated States, would have been the first to suffer from a blow directed at her fiscal independence. An internal loan of £50,000,000 was not feasible, in view of the state of the market, in which even the most promising loans of German municipalities found great difficulty in getting placed. It was out of the question, on the other hand, to appeal to the foreign investor. He would not have lent a penny for the increase of German armaments, which were already causing a great deal of anxiety abroad. The Finance Minister thought he had solved the problem by submitting to the approval of the Reichstag a large batch of finance measures of the most varied type.