Felix Somary: Discussion Intervention on Non-Mobilizable Assets

This stenographic intervention, originally part of committee proceedings in 1918, addresses Professor Loh’s question about assets that cannot readily be made liquid. Somary’s central move is to distinguish businesses whose wealth can be mobilized through financial instruments from those for which immediate payment of a wealth levy would encounter practical difficulties. He proposes a narrow exception for installment payment, rather than treating all business assets as equally illiquid.

For industry, the solution is institutional: an industrial bank should issue bonds secured ahead of other claims and legally eligible for investment of wards’ funds.

Ich schlage vor, der Industriebank das Recht einzuräumen, Obligationen auszugeben und diese mit Mündelsicherheit auszustatten, da die Obligationen an erster Stelle vor allen andern Lasten sichergestellt werden; derartige industrielle Teilschuldverschreibungen genießen Mündelsicherheit in Österreich, und es hat sich bisher dort kein Anlaß zur Klage ergeben.

English translation: I propose granting the industrial bank the right to issue bonds and making these eligible for investment of wards’ funds, since the bonds would be secured in first priority ahead of all other encumbrances; industrial bonds of this kind enjoy that eligibility in Austria, and so far no grounds for complaint have arisen there.

Somary supports the proposal through Austrian precedent. He also argues that Prussia’s previously stricter standard for such investments has changed fundamentally during the war. Legal protection is thus presented as adaptable, not as an insuperable obstacle to mobilizing industrial wealth.

He then narrows the residual problem. Commercial businesses are, with negligible exceptions, already liquid; industry has been discussed separately. Publishing businesses, small trading concerns without liquid capital, retail businesses, cafés, and restaurants constitute the remaining category of business assets. For these, he allows payment over several years because capitalization would present difficulties.

Two safeguards qualify that concession. At the proprietor’s request, the customary capitalization method must be applied: for a publishing or newspaper business, average earnings over recent years would be multiplied by five to establish the levy’s assessment base. Alternatively, a sale within five years after the conclusion of peace would retrospectively bring the proceeds within the levy.

Trifft keiner der beiden Fälle zu, dann wäre die Vermögensabgabe zu stunden, und das ist der einzige Fall, bei dem ich die Zahlung in Raten vorgesehen habe.

English translation: If neither of the two cases applies, payment of the wealth levy would be deferred, and this is the only case for which I have provided for payment in installments.

The intervention’s significance lies in this conditional treatment of illiquidity. Difficulty in capitalization justifies postponement, but does not exempt business wealth from taxation. Somary combines secured borrowing, conventional earnings valuation, and subsequent sale proceeds to limit the circumstances in which immediate collection must yield to installments.