Minister of Commerce Reviews Situation
In a recent interview minister of commerce Dr. Heidler reviewed briefly the economic life of the Czechoslovak Republic during the first year of its existence. He said:
Our economic life still bears the effects of the war. Even though our territory was not the scene of war operations, the indirect effects were very serious. In the first place they involved the complete exhaustion of all means of production, due to the determination of the Central Powers to win the war at any cost. Our agriculture, deprived of the necessary fertilizers, vainly looked around for means to increase the crops. The calamity was increased by requisitions of cattle for the army. Mining of coal was totally neglected from the technical point of view, as all work was done with a view to immediate necessities and no regard was paid to future needs. Manufactures were made exclusively subservient to war purposes and the needs of the citizens were completely ignored. In so far as manufacturing needed raw materials from overseas, which applies especially to textile industries, there was nothing left for it but to use substitutes, principally paper. Being totally cut off from the world and unable to export our own commodities, we suffered serious losses, we lost all touch with our markets. Visible and hidden supplies were pretty nearly exhausted and everywhere there was a lack of the most elementary necessities of life. Real values were displaced by a flood of banknotes whose circulation throughout Austria increased at a terrific rate every month.
In the midst of this complete economic chaos our republic came into being. Politically we belonged to the coalition of victors, but from the economic side we were badly hit by the downfall of nations to which we had been tied by the force of bayonets. It is evident that under such circumstances reconstruction of our economic life was a great problem, especially in view of the fact that even after the overthrow of Austrian rule we were surrounded by a circle of enemies against which the blockade was in full effect. And yet by strenuous activity we managed to improve greatly this desperate position. With the help of the Allies we overcame the imminent catastrophe of starvation. Although the food ration of the people in spring and summer was far below what we hoped for, when fighting ceased, we managed to live and live better than during the war years.
The crops this year were good, so that the people get now a more generous allowance of food. Condition of the sugar beet crop is very promising; when we consider the startling decrease in the world’s production of sugar which amounts to 5 million metric tons, it will appear that we are the only European country which can supply any considerable part of the deficiency. Our former most dangerous competitors have become our best customers. I believe that I do not exaggerate, when I estimate our sugar surplus available for export in 1919—20 at half a billion Swiss francs. Hops also made a fine showing this year and we shall be able to export five sixths of the crop. As far as lumber is concerned, we can export as much as we can find transportation for; our woods and saw mills have lumber ready for shipment worth also at least half a billion Swiss francs. Only the lack of railroad rolling stock prevents our sup plying the world market. Our china and glass industry which enjoys world-wide reputation is re-establishing connections with old customers and finding new markets. Other branches of our industry are waking up, such as the wine industry; cotton mills are now operating so that domestic needs are by this time supplied. In the first six months of our freedom we had to import all the clothing material, but since the reopening of cotton mills the unheard of prices of clothes came down to the price level of the world market.
Our position with regard to coal is not very favorable, but yet better than that of many other countries. According to Hoover’s recent statement our production equals 78% of the 1913 production, while England has reached only 62% of its normal output. If one takes into consideration the damage which the unregulated war exploitation of the mines caused, it becomes evident that much credit should be given to our coal miners and their devotion to the new state. It is only proper to emphasize that in 1919 we had no strikes or disorders in our coal mining districts, because Czech miners realized that the fate of the republic was in their hands. The difficulty in supplying the domestic needs is due to orders of Allied missions which compel us to supply tremendous quantities to neighboring states.
The most difficult problem in the whole reconstruction of our commerce and industry is currency. We feel the effects of enourmous inflation of banknotes. Their circulation in the territories of our Republic is seven times greater than before the war, although in the other states which sprang up out of the ruins of Austria-Hungary this condition is still more marked. By breaking off all connection with the Austro-Hungarian Bank immediately after our declaration of independence we prevented further flooding of our country with its depreciated notes. Now the trouble is not merely that our crown is depreciated, but that the currency of our neighbors is still more depreciated. Our
