Seite - 579 - in THE FIRST WORLD WAR - and the End of the Habsburg Monarchy, 1914 – 1918

The Raging of the Banknote Presses 579 An increasing amount of money came into circulation  – and less and less was availa- ble. This applied to individuals as well as to the state. And the demands made by the Imperial and Royal War Ministry for mobilisation credits came with never-ending regularity : March 1916 : 1.353 billion kronen April 1916 : 1.281 billion kronen May 1916 : 1.332 billion kronen June 1916 : 1.357 billion kronen July 1916 : 1.340 billion kronen, and so on. Then came the money claimed separately for the war machine, which totalled 15 (and more) million kronen every month for the operation of the High Seas Fleet and the Danube Flotilla, as well as other monthly contributions for the construction of new submarines and torpedo boat destroyers. The total military costs also included the monthly purchasing requirement for horses, which amounted to around 10 million kronen, as well as carts and feed. Finally, the Foreign Ministry made demands for money, which could not be refused, for the support of the family members living abroad of Austrian soldiers (10 million), to support Austrian prisoners of war, alleviate the plight of refugees, and so on. The banknote presses were ceaselessly at work. Now, thoughts also naturally turned in Austria-Hungary to the option of raising taxes. However, it was precisely here that the Habsburg Monarchy behaved contrary to what one might have expected. The instrument of tax increases was implemented only very sparingly, and rather as an exception. Only in April 1916 did a really incisive tax measure take effect as a result of the introduction of the war profits tax. This primarily affected share and joint stock companies, associations and limited liability companies. The incomes that had increased as a result of the war were also taxed at a rate of be- tween 10 and 60 per cent.1349 The war profits tax applied retroactively to 1914, which meant that in mid-1916, all the companies affected had to make large tax repayments. However, the tax debt could be made good by subscribing to war bonds. This was a not insignificant factor in terms of the success of the fourth and fifth war bonds. It is probably true that large companies also succeeded in avoiding the war profits tax and hiding their profits in the balance sheets. However, this is an insufficient explanation for the only modest amounts that this tax was able to raise. The low tax revenues were in stark contrast to what was done in Great Britain, for example, in the wake of the war-related financial measures. In Great Britain, income tax alone increased five-fold during the course of the war, and the British covered a quarter of their war expenses from ongoing revenues.1350 In Austria, an increase in in- come could in fact only be gained from consumption taxes. Spirits, beer, wine and meat