The Czechoslovak Review/Volume 3/Progress of Reconstruction

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 and confiscated. This was something that the Budapest government could not do, until they got the new money, and so deadlock resulted. Bela Kuhn tried to get his money by a direct deal with the workers of the Vienna bank presses by promising to supply them with food, while engaged on this order for him. Among other things they were to get seven oxen a week from Hungary. But Chancellor Renner had sufficient authority to stop this deal.

It may be imagined that the Czechoslovak financial officers feel nervous, as long as their currency consists of the old Austrian crowns with merely a distinguishing stamp, easily imitated. Rašín announces that entirely new money is now being printed and will be in circulation on June 15.

Great attention is devoted to export; syndicates have been organized by the government to buy raw materials for the factories of the members and to launch a selling campaign abroad for their finished products. The great problem of Czechoslovak industry, at present, in addition to that of raw material, is one of markets. States to the east and south of the republic will gladly take all the manufactured goods that the Czechs have for sale, but the currency of these countries is so depreciated that it will buy little of food and materials in the western states. A syndicate of Prague banks is now negotiating for a large loan from American banks to finance the purchase of cotton. The loan will be guaranteed by the Czechoslovak government and its proceeds will be turned over to the Cotton Spinners Association for distribution to members.

There is great improvement in the production of coal, as coal miners were the first to receive a large share of the American food. It is stated that if there were enough railroad cars, the supply of coal would be equal to the normal.

But the main improvement in the situation is due to the ever increasing quantities of food rushed to the Czechoslovak Republic both from the south and from the north. During February and March the only port through which supplies came to Bohemia was Trieste. After General Pellé came to Prague as representative of Marshal Foch and as chief of the Czechoslovak general staff, he made representations to his superior and to the Allied armistice commission with a view to increasing the import of eatables into Czechoslovakia. It was due to General Pellé that Germany had to undertake, in connection with the partial lifting of the blockade, to transport food to Bohemia by the Elbe and to assign sufficient boats to this work to take care of 1200 tons a day. Czech representatives are now stationed at Hamburg to supervise the loading of 30 river boats; these boats proceed up the Elbe and are unloaded in Ústí, Roudnice, Mělník and Prague. One of the first shipments reaching Bohemia by this new route consisted of 100 tons of cocoa, and 200 tons of condensed milk, a gift of the American Red Cross to the suffering children.

From late reports it appears that in spite of the opening of the Elbe far more food still reaches Prague over the railroad from Trieste than by boat from Hamburg. On April 1 there were loaded in Hamburg 1000 tons of wheat flour; on April 6 three ships arrived in Hamburg with 12,000 tons of flour for the Czechoslovak Republic, and on April 15 three more ships. Up to April 16 the imports of American white flour amounted to 344,571 quintals, of which amount 334,613 came from Trieste and 9968 from Hamburg. On April 21 the total was 401,602, and on May 1 461,594 quintals.

The fact that people had more to eat tended to modify partisan bitterness. Even though municipal elections were coming near, there was not so much extremist talk, as during the hard months of February and March. The first of May passed without any disturbances. The day had been declared national holiday, as Labor Day is in the United States, and all parties and all classes participated in the celebrations. At the congress of the social democratic party, held in Prague on April 26 and 27, devotion to the republic and to the president was voiced unanimously, and while the party in the interest of internal harmony did not take any action to suppress bolshevist tendencies in some of its local organizations, it was plain that an overwhelming majority were opposed to anything savoring of violence and relied on parliamentary methods. Municipal elections which are due June 15 will constitute the first test of strength between the various parties. But whatever the result, the coalition government will continue in power, until there are elections to the constituent assembly and a government is formed out of the majority parties.