Taxation in the German Marshall Islands
by Dirk H.R. Spennemann

The German government desired to make its colonies pay. Taxation was one of the means to ensure that citizens and subjects contributed to the operation of a colony. The easiest way to asses a head tax which was also beneficial from a commercial sense, was to levy the head tax in the form of copra. When the German administration first mooted the levy of a head tax of $ 1/3 per head in 1886, many of the irooj agreed that such a levy would be fair. This sentiment was most likely a self-serving one as the chiefs were to act as tax collectors and thus would be likely to receive a share. In fact, the irooj used to collect as share of $2 per ton of copra sold to traders as early as the 1870s.

However, in view of the uncertainties surrounding the actual number of people on an atoll it was not possible to levy individual taxes. Given the complex pattern of land ownership and usufruct rights, this would have also been very impractical and possibly inequitable. Thus it was desirable to define tax collection districts and set tax targets for each of the districts.

Given the climatic conditions, the southern atolls were more productive and thus yielded more copra, which with a higher population , could also be harvested by more hands. Overall the data as represented in the available records and files are patchy, with the earlier annual reports providing more detail than later documents. The table below compiles the copra returns for the Marshall Islands for the period 1888 to 1898 arranged by taxation districts . The average annual return for the period was 4,138,598 pounds.

Annual copra production (in pounds) per taxation district
 JaluitEbonAilinglaplap [1]Namorik etc [2]MiliMajuroArnoNorth Ratak [3]Mejit
1888/89301458508203179657987013018352943854379331234215985
1889/9024216282193228906442924246590386970378085818261036460
1890/91 
1891/9248041455949136669125377334575752722054297020918846934
1892/9341672651792253741834165633922956829074425517966655578
1893/9447121481254745998844400429653949146181045546875599018
1894/95506000701426567050328000596707605617642000509000120000
1895/96410000671800690000342000482700599300925500630000156000
1896/97616000737750588000362500390600618300587400325000136000
1897/9855850078060075730023560057100055650093070058630090000
1898/99571600783850524900361500621800444200747700542200120400
Average45740768955249600731969844120755749871497737561486638
Notes: [1] includes Kwajalein, Ujae, Lae and Lib; [2] Namorik, Wotho, Rongerik, Rongelap, Ailinginae, Bikini, Jabwat, Namu; [3] Aur, Maloelap, Wotje, Ailuk and Uterik.

 

In 1886 the German Colonial administration levied an annual copra tax of 360,000 pounds on the whole of the Marshall Islands. The German administration used, where possible, traditional boundaries for the delineation of their tax districts. The irooj were ordered to collect the copra, and were given 1 / 3 of the collected tax. Making the irooj responsible for the collection of copra tax in their districts certainly enshrined the power of the named irooj, but also tied the chiefs to the German administration.

Taxation districts in the Marshall Islands and the annual tax levied
(in English lb copra). Draft levy shown in italics
Atoll1886Collected by189818991912
Jaluit22,500Litokwa30,00040,00021,900
Ebon50,000Nelu60,00060,00076,650
Ailinglaplap, etc. 1)27,500Kabua40,00050,000109,500
Namorik etc. 2)27,500Loiak25,00025,00054,750
Mili40,000Langenat40,00040,00019,710
The eastern part of Majuro
The western part of Majuro
25,000
25,000
Jiberik
Kaibuke
50,00050,00054,750
The eastern part of Arno
The western part of Arno
25,000
25,000
Langejeri
Ujilong
50,00060,00054,750
Maloelap, etc. 3)22,500Murjel25,00040,00087,600
Mejit10,000Lajej10,00010,00010,950
Nauru60,000n/a30,00035,000?
Total360,000360,000410,000490,560+
Notes: (1) includes Kwajalein, Ujae, Lae and Lib; (2) Namorik Wotho, Rongerik, Rongelap, Ailiginae, Bikini, Jabwat, Namu; (3) Aur, Maloelap, Wotje, Ailuk and Uterik.

 

The German government put its priorities first and demanded that tax copra be cut before copra could be cut for personal needs. But even from the copra remaining the irooj took a share. On one occasion the German government had to intervene and direct irooj Kaibuki of Majuro that the irooj's share of copra was only to be cut from January to June and that the rest of the year the people could cut copra for themselves and sell it for their own profit.

The German payments to the chiefs resulted in the development of modern "custom." As determined by the Trust Territory courts, the irooj's copra-share was 6% and that of the alap and dri-jerbal combined 94% (Cf. case Loeak v. Bulele , 7 Trust Territory Reports, Page 504). In 1952 the copra share of the irooj on Arno Atoll was fixed to be ¢1 per pound, while the alap's share was ¢0.4 per pound, leaving, after deduction of shipping costs, only ¢1.4 per pound for the ri-jerbal.

In 1898 a comparative assessment of the copra tax return was carried out for the various districts. It was noted that the returns were uneven in percentage terms. Table 1-8 shows the tax burden for each atoll expressed as a percentage of its total copra production. To address these imbalances, the administration suggested a revaluation of the levy for a number of atolls, which occurred. While the total tax revenue was left unaltered the new rates mainly benefited Nauru where the tax was halved. A further reassessment for 1899, which also saw an increase in the overall tax burden, was not carried out.

Copra tax levy expressed in % of annual copra production per taxation district
 JaluitEbonAiling-laplap 1Namorik etc 2MiliMajuroArnoNorth Ratak 3Mejit
Tax levy300005000027500275004000050000500002250010000
1888/899.959.8415.3127.8613.2516.9811.4218.23167.08
1889/9012.396.089.516.418.595.756.4012.3227.43
1890/91
1891/926.248.947.5o10.8411.579.489.2110.7621.31
1892/937.209.655.128.0511.798.806.7212.5217.99
1893/946.376.155.986.1913.4910.176.174.8010.10
1894/955.937.134.858.386.708.267.794.428.33
1895/967.327.443.998.048.298.345.43.576.41
1896/974.876.784.687.5910.248.098.516.927.35
1897/985.376.413.6311.677.018.985.373.8411.11
1898/995.256.385.247.616.4311.266.694.158.31
Average6.567.255.548.6o9.078.976.995.9911.54
Notes: (1) includes Kwajalein, Ujae, Namu, Lae and Lib; (2) Namorik and the rest of the Ralik Chain (3) Aur, Maloelap, Wotje, Ailuk and Uterik;

 

In 1912 the taxation rate was reassessed once more. Again adjustments were made, most markedly the reduction in tax burden on Jaluit and Mili, with a dramatic rise in the tax burden on the central and northern atolls. This reflects the increased production in these areas.

While this was merely an adjustment to keep up with the changes in production, in the same year the German administration moved to dramatically change the taxation base of the Islands Territory of the Caroline, Palau and Mariana Islands. The new tax system was to be based on direct taxes on income and property as well as payment for government activities through stamp duty. The Vice-Governor in Pohnpei, Dr. Kersting, proposed a uniform head tax of RMk 20.00 which was opposed by the Station chief Merz who argued that the tax burden could reach up to 295% of the copra production of an atoll as in the case of Bikini. As Merz argued, these figures also did not include the irooj's share of copra. The table below sets out the actual tax burden in 1912, together with figures on the size of the taxable population and the current individual tax burden expressed in RMk. If Kersting's proposal had been implemented, the tax burden for most Marshallese would have risen between 30% and 60%. Beneficiaries would have been the residents of Ebon and Namorik, who would have seen a reduction in tax.

Taxation rate per taxable individual 1912
Atoll Copra Tax Levy (kg) Percent of Production Taxable Population Percent of Population lb per Person Pers. tax (RMk)
Jaluit 10,000 6.72 360 36.18 55.56 5.56
Ebon 35,000 8.12 260 38.92 269.23 26.92
Namorik 25,000 9.20 158 30.98 316.46 31.65
Rest of Ralik 1 50,000 7.26 639 39.64 156.49 15.65
Mili 9,000 12.39 159 32.99 113.21 11.32
Majuro 25,000 8.19 429 30.28 116.55 11.66
Arno 25,000 6.65 515 40.05 97.09 9.71
Mejit 5,000 5.63 177 45.62 56.50 5.65
Rest of Ratak 2 40,000 6.12 507 36.79 157.79 15.78
Total/Average 3 224,000 7.81 356 36.83 148.76 14.88
[1] Ailinglaplap, Kwajalein, Ujae, Namu, Lae, Lib, Ailinginae, Rongelap, Rongerik, Bikini, Wotho. [2] Maloelap, Wotje, Ailuk, Aur, Taka, Erikup and Uterik. [3] Calculated as average of the individual atoll results.-- NOTE the apparent differences between the tax levy in this table compared with table 1-7 is caused by the fact that in this table the figures are expressed in kg, while in table 1-7 the unit of measure is British pounds.

 

Sources:
Copra production data compiled from: Brandeis, Eugen (1892) Jahresbericht betreffend das Schutzgebiet der Marshall Inseln. Deutsches Kolonialblatt 3, 332-336.--Irmer, Georg (1894) Jahresbericht des Landeshauptmannes auf Jaluit 1. April 1893 bis 31. März 1894. In Acta betreffend Jahresschriften Allgemeinen Inhaltes auf den Marshall Inseln vom November 1894 bis Oktober 1900. Auswärtiges Amt Kolonial-Amt Avii Denkschriften in Bd. 2. N° 6525. National Library of Australia, Canberra. Microfilm G8600.--Irmer, Georg (1895a) Jahresbericht des Landeshauptmannes auf Jaluit 1. April 1894 bis 31. März 1895. In Acta betreffend Jahresschriften Allgemeinen Inhaltes auf den Marshall Inseln vom November 1894 bis Oktober 1900. Auswärtiges Amt Kolonial-Amt Avii Denkschriften in Bd. 2. N° 6525. National Library of Australia, Canberra. Microfilm G8600.--Irmer, Georg (1896) Jahresbericht des Landeshauptmannes auf Jaluit 1. April 1895 bis 31. März 1896. In Acta betreffend Jahresschriften Allgemeinen Inhaltes auf den Marshall Inseln vom November 1894 bis Oktober 1900. Auswärtiges Amt Kolonial-Amt Avii Denkschriften in Bd. 2. N° 6525. National Library of Australia, Canberra. Microfilm G8600.--Irmer, Georg (1897) Jahresbericht des Landeshauptmannes auf Jaluit 1. April 1896 bis 31. März 1897. In Acta betreffend Jahresschriften Allgemeinen Inhaltes auf den Marshall Inseln vom November 1894 bis Oktober 1900. Auswärtiges Amt Kolonial-Amt Avii Denkschriften in Bd. 2. N° 6525. National Library of Australia, Canberra. Microfilm G8600.--Senfft, Arno (1898) Jahresbericht des Landeshauptmannes auf Jaluit 1. April 1897 bis 31. März 1898. In Acta betreffend Jahresschriften Allgemeinen Inhaltes auf den Marshall Inseln vom November 1894 bis Oktober 1900. Auswärtiges Amt Kolonial-Amt Avii Denkschriften in Bd. 2. N° 6525. National Library of Australia, Canberra. Microfilm G8600.--Wolfgang Treue (1940). Der Erwerb und die Verwaltung der Marshall Inseln. Ein Beitrag zur Geschichte der Jaluit Gesellschaft. PhD . Berlin



Bibliographic citation for this document

Spennemann, Dirk H.R. (2000). Taxation in the German Marshall Islands
URL: http:/marshall.csu.edu.au/Marshalls/html/History_Varia/taxation.html

CONTACT:
Dirk H.R. Spennemann, Institute of Land, Water and Society, Charles Sturt University, P.O.Box 789, Albury NSW 2640, Australia.
e-mail: dspennemann@csu.edu.au


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