Progress of Reconstruction
Of the national states into which the Austro-Hungarian Empire resolved itself last fall the one that has made the most startling progress is the Czechoslovak Republic. The Jugoslavs have on hand a most bitter quarrel with the Italians and in addition have not succeeded in eliminating altogether the old jealousy between the Serb and the Croat, which brings endless complications into their internal politics. The Roumanians of Hungary have not yet settled clearly their relation to the Roumanian kingdom which is economically in a terrible condition after two years of German exploitation. The Poles of Galicia are waging war against Ukrainians of Galicia for the possession of Lemberg and the oil region to the south of it. On account of the many wars carried on by the Poles on nearly all sides their government could spare but little time and money for internal reconstruction problems; and as to the Ukrainians, they do not themselves know, whether they will form a Western Ukrainian republic, or join the Russian Ukraine as one independent republic, or whether they will not in the end form a Ukrainian state in a federal Russian republic. The Germans of Austria have a republic of their own, but they would like to know, whether they will be permitted to merge it in Germany or whether they must drag out their own separate existence as a state which lacks nearly all that a state needs in order to live; they do not even have enough money to pay the expenses of their peace delegation in Paris. Magyar bolshevism is nothing but a confession of their total material and spiritual bankruptcy. And even the Italians have trouble with the districts captured by them from Austria, for plebiscite taken by villages in Gorizia and Istria—territories claimed as Italian beyond all doubt—has resulted in overwhelming majorities for Jugoslav rule.
In comparison with all these fractions of the former empire the lot of the Czechoslovak Republic has been almost enviable. For while the people are hungry, and while Germans on three sides prepare plots against the integrity of the republic, and while at home socialists and agrarians and citizens’ party fight each other with great vehemence in the respective party organs, yet at the same time conditions are growing normal every day, people are getting more to eat, and order is being brought into the finances of the state.
The radical measures of Minister Rašín have already demonstrated their wisdom. No reconstruction was possible, as long as the value of Czechoslovak money depended upon the speed with which the presses of the Austro-Hungarian Bank in Vienna were turning out new crowns. But the stamping of money circulating within the jurisdiction of Masaryk’s government and retaining half of it as a forced loan raised the value of the Czechoslovak crown far above the Austrian crown. On April 24 Czechoslovak crowns cost 30.30 francs in Zurich, while Vienna exchange could be bought for 18.50; in other words 60 Czech crowns equaled 100 Austrian crowns. The effect of the better rate could be felt at home by the consumer. American lard was sold at Prague for 24 cr. a kilogram (about 70 cents a pound), whereas people in Vienna had to pay 40 cr.
Separation of Czechoslovak from Austrian currency was but a part of Rašín’s plan. It included registration of all property as a preliminary to the imposition of a heavy capital tax. All through April and May the newspapers were filled with fresh official notices telling the citizens, where to report their bank accounts, where to register their Austrian war bonds, where to subscribe to the gold loan. As soon as it is ascertained, how much taxable property there is in the republic, Rašín will come to the National Assembly with his bouquet of taxes, and by one single radical operation he expects to cure the financial malady of the state.
Compare the sound financing of the Czechoslovaks with the crazy finance of the Budapest bolsheviks. After Bela Kuhn came to the helm in Budapest, he followed the example of his master Lenine and decided to flood the country with banknotes. Unfortunately he had no plates and presses, and so he requested the Austro-Hungarian bank in Vienna to print five billion crowns, using the old plates with new Magyar text. The Vienna government, however, refused to sanction this deal, until the Reds returned 1800 million crowns which they found in the vaults of the Hungarian branches of the Austro-Hungarian bank
