Budget, War and Election
On May 14th Minister Rasin laid the first budget of the Czechoslovak Republic before the National Assembly. As was to be expected, the budget showed a big deficit, and yet there are many encouraging features about it, proving that sound financial principles are being applied in the public administration.
The ordinary expenditures are figured at 2,124,000 ,000 crowns, and ordinary receipts at 2,306,000,000. That gives promise that with the return of normal conditions the state will be solvent. But the heritage of five years of war makes necessary special expenses, exceeding for the year 1919 the ordinary expenditures. Dr. Rašín estimates the extraordinary outgo at 3,829,000,000 crowns, whereas special receipts to cover this immense sum are expected to bring in only 505,000,000 crowns. Thus there is a deficit in the special budget of 3,324,000,000, as against the small surplus of 182,000,000 in the regular budget.
The greatest burden is caused by the virtual continuation of the state of war. The defense of the frontiers against the Magyars, the support of the Czechoslovak army in Siberia which cannot be withdrawn by reason oi the complexity of the Russian situation, and guarding oi the long boundary against Germany and Austria make it necessary to keep under arms a force of 370,000 men. That means a serious financial burden to a small nation oi 13 million people. The Czechoslovaks hate militarism and hope to be able to reduce their army to 60,000 men, when restoration of normal conditions shall have removed dangers to their independence; Rasin hoped that the sum of 216 million crowns, included in the regular budget would then be sufficient for the support of the army. But in the special budget 460 million must be provided for the extraordinary military efforts.
Even more burdensome is the appropriation of 1,200 million for financial assistance not only to the families of actual Czechoslovak soldiers, but also to demobilized soldiers of the former Austro-Hungarian army who are either sick or invalided or unable to find work. A similar item is the appropriation of 220 million to enable the minister of food supply to sell imported flour and fats to the people at prices within the reach of the poor and middle classes. Then there are special allowances to all state employees and railroad workers to supplement their ordinary salaries which are quite inadequate to buy the necessaries of life.
To cover the deficit it will be necessary to resort to an internal loan, but a large proportion of the deficiency will be defrayed by new taxes. The minister of finance proposes the following series:
A tax on interest paid on bank deposits, amounting to six per cent; an additional progressive supplement to the land tax, a tax on all commercial transactions, a special tax for the registration of foreign companies, a stamp duty on foreign securities and on all leases. The yield of all these taxes is estimated at 250 million crowns. It will also be necessary to impose a tax of 20% on the coal output with an estimated yield of 250 million, to increase the duties on alcoholic beverages by about 106 million, and to lay a 15% tax on railroad transportation which will bring in about 150 million. In addition it is proposed to raise passenger and freight rates to take care of the deficit of the state railroads.
Much criticism was encountered by Rašín after his budget was placed before the National Assembly for discussion. Like every finance minister he is unpopular, because he is obliged to turn down many requests for appropriations on the ground that he cannot find the necessary money. He ought to be called the watchdog of the Czechoslovak treasury. On top of that came the growing dissatisfaction with the coalition government of all parties. In theory the most desirable arrangement, in practice a ministry composed of leaders of contending parties becomes a government without a policy and without authority. Party strife has grown very bitter in the Czechoslovak Republic since the enthusiastic establishment of free government. Every newspaper is a party organ, and in view of the approaching municipal elections eachc journalist sought to make capital for his own party by criticising the acts of those administrative departments which were controlled by ministers of hostile parties. In the cabinet itself there must have been many recriminations and stormy scenes
