The Ambassador in Germany (Sackett) to the Acting Secretary of State
[Received July 19—noon.]
137. Presidential decree issued late evening July 19 against the flight of capital and tax evasion contains three paragraphs.
- The obligation is put upon all persons to offer to the Reichsbank all foreign media of payment; the same to foreign securities purchased subsequent to July 12. Exceptions are made for the legitimate needs of importers. Violations of this decree are subject to imprisonment and heavy fines.
- Provides for tax amnesty to persons now declaring taxable property which they had previously failed to declare. For this purpose, supplementary tax declarations may be entertained made up to July 31, 1931. Failure to declare previous tax evasions subject to severe punishment and heavy fines.
- Deals with tax supervision and provides that persons hitherto not obliged to keep books and who have a certain income must hereafter keep books. The investigation of the books of stock companies, et cetera, may extend to the investigation of employees of the respective organizations.
Presidential decree issued July 18th provides for the payment of an additional passport fee for foreign travel. Decree effective July 22 and expires October 1st, 1931.
The governmental regulation, issued late July 18th provided for the further relaxation of the bank holiday regulations and resumption [Page 283] of limited bank payments, is regarded as the first step toward the restoration of normal banking conditions. In substance the decree regulates payments by banks from July 20th to July 23rd inclusive. On these 4 days banks may pay to depositors no more than 5 percent of deposited amount, and in no case more than 100 marks. Payments on savings banks deposits are limited to 20 marks, on letters of credit to 100 marks. Payments may now also be made to meet freight charges. With respect to all other payments these 4 days are regarded as legal bank holidays. Drafts may not be protested from July 22nd to July 24th. Failure to meet obligations due to above restrictions furnishes no basis for legal claims. The Postoffice, Reichsbank and Gold Discount Bank are not subject to these restrictions.