Felix Somary: Intervention on Land Charges and Financing

Felix Somary’s stenographic intervention, identified as pages 102–103 of published committee proceedings, defends mechanisms for implementing a one-time wealth levy. The documented original work dates to 1918; the publication year of the supplied version remains unknown. Responding to objections from Geheimrat Struy and Professor Loy, Somary moves from property valuation to the ranking of public claims against land, then to financing payment by businesses. His central concern is to make the levy collectible without elaborate administrative machinery or state participation in individual enterprises.

Struy’s objection concerns the intrusion into private property involved in allowing the Reich either to take over land or to register the assessment against it as a Grundschuld, a land charge. Somary justifies the takeover option chiefly through its effect on valuation:

Ich habe diese Alternative in erster Linie deshalb gefordert, weil die Drohung mit der eventuellen Übernahme des Grundbesitzes durch das Reich die sicherste Garantie für eine richtige Angabe des Grundbesitzvermögens bietet.

English translation: I called for this alternative primarily because the threat of the possible takeover of landed property by the Reich offers the surest guarantee of an accurate declaration of landed wealth.

The threatened acquisition makes the owner’s declared value consequential: someone who may have to surrender the property has an incentive to state its actual worth. Somary thus presents a potentially coercive power as a substitute for complicated and possibly unreliable official verification. He answers the property-rights objection by stressing fiscal effectiveness, rather than by developing a general justification of expropriation.

Where payment takes the form of a land charge, he insists on the Reich’s priority:

Was die Wahl der andern Alternative betrifft, die Ausfertigung der Grundschuld, so bin ich der Meinung, daß für das Reich die erste Stelle allein in Frage kommen kann.

English translation: As regards the choice of the other alternative, the issuance of the land charge, I am of the opinion that only first priority can be considered for the Reich.

A public claim ranked behind an eighth or ninth mortgage would, he argues, require an unmanageable administrative apparatus. Priority transfers some risk to existing mortgage creditors, but Somary treats that displacement as tolerable. His examples distinguish prewar valuation from contemporary property values: a second mortgage extending formerly to 70 percent of peacetime value would now extend to 76 percent, while a fourth mortgage would move from 90 to 92 percent. After four years of war, he considers these changes insufficient grounds for complaint; the latter two percentage points would not alone determine the creditor’s fate at auction. The argument rests on the relative significance of the additional exposure, not on a claim that creditors remain unaffected.

Answering Loy, Somary maintains that immediate collection is practicable for most classes of wealth, referring to an earlier report whose full argument is not reproduced here. For industrial businesses outside joint-stock or limited-liability forms, he proposes capitalization through bonds. Examples from domestic individual enterprises, American trusts, and Austrian banking arrangements establish that such instruments already exist. Their redemption should take twenty or twenty-five years, not fifty or more. This distinguishes immediate payment of the levy from the longer repayment schedule of the debt used to finance it.

Somary permits instalments for business-value assets, naming publishing enterprises and newspapers, and says he would prefer to exempt the commercial middle stratum altogether. He treats these qualifications as relatively minor exceptions. His concluding boundary is emphatic:

Die Beteiligung des Reiches an den einzelnen Unternehmungen habe ich im Gegensatz zu einer Reihe meiner Vorredner durchaus abgelehnt.

English translation: In contrast to a number of previous speakers, I have categorically rejected participation by the Reich in individual enterprises.

The intervention’s distinctive position combines strong public collection powers with opposition to public ownership stakes, particularly in medium-sized businesses. Somary seeks financing arrangements that make such participation unnecessary. Its relevance lies in this separation of fiscal coercion from enterprise control: valuation incentives, senior security, and private borrowing are intended to secure a substantial levy without turning the Reich into a business partner.