The Czechoslovak Review/Volume 4/Position of Czechoslovakia
THE CZECHOSLOVAK REVIEW | ||
E. F. Prantner, Editor and Publisher | ||
Entered as second class matter April 30, 1917 at the Post Office of Chicago, Ill., under act of Congress of March 3, 1879. | ||
| 20 Cents a Copy | To Foreign Coutries $2.25 | $2.00 Per Year |
| Vol. IV | DECEMBER, 1920 | No. 12. |
Position of Czechoslovakia
Within the past eighteen months American investors have purchased millions and millions of marks of German municipal bonds and other securities for the obvious purpose of profiting by the unprecedented situation in foreign exchange. How many of them have taken the trouble to compare the financial and commercial position of Germany with that of her new neighbor to the South? Very few, evidently, or we should have had an American demand for Czechoslovak bonds that would have exhausted the available supply at moderate prices in short order.
The reason this has not happened is apparent to anyone who has discussed Czechoslovakia with the average American who has for one reason or another made a special study of European commercial geography. I have heard reasonably well-informed business men ask whether Czechoslovakia was formerly a part of Austria-Hungary or of the German Empire and admit that, while they had read a good deal in the newspapers about Czechoslovakia and Jugo Slavia, they never could remember which was which. I have seen a letter from the United States addressed to “Prague, Hungary, Austria”.
No wonder then that an American studying the new map of Europe is surprised to find Czechoslovakia almost as large as Austria and Hungary combined. No wonder that American capital is only beginning to find its way into this new country, inhabited though it is, by old friends.
Having for some time been impressed with the possibilities for profit by investment in Czechoslovakia at prevailing rates of exchange, I determined several months ago to visit the country and study conditions there at first hand to confirm, so far as possible, the favorable opinion formed by a study of the available statistics regarding resources and productions.
In any consideration of the economic position of a nation, its agriculture must be given first place. This would seem to be particularly true today when the people of the entire world, because of the Great War, have been concentrating so large a part of their energy on the development of industry, necessarily to some extent at the expense of the farms. We have seen negro laborers deserting the cotton plantations of the South for the factories of Cleveland or Chicago and farm workers from Northern Connecticut move to Bridgeport, and we have seen plants manufacturing everything from automobiles to shoe laces, doubling and trebling their capacity without perhaps realizing that this same migration of labor and expansion of industry have been practically world-wide phenomena. If, as a reaction from this unbalanced situation, we find farm products stubbornly maintaining the high cost of living while the prices of manufactured commodities are cut right and left, it should occasion no surprise and the economic strength of a nation which raises its own supply of food-stuffs should be obvious.
The position of Czechoslovakia in this respect is well illustrated by pre-war statistics. With only 25% of the area of Austria, in 1913 Bohemia and Moravia produced 90% of the sugar beets, 75% of the hops, 59% of the flax, 63% of the barley and a considerable proportion of all other important farm products. In Bohemia 51% of the soil is under cultivation compared with 47% in Germany and 44% in France. Having this in mind it is no surprise to a visitor to Czechoslovakia today to find cultivated fields covering every square foot of available plateau land as far as the eye can see in any direction from the train. The neatness of farmhouses and yards and the evidences of intensive cultivation fully equal to the best in Western Europe are impressive indications of the prosperity of the country-side.
One agricultural product, beet sugar, is of such importance that it deserves special comment. Czechoslovakia’s production of this staple commodity is, in Europe, second only to that of Germany which means that in view of her smaller population and consequent smaller home consumption, she is the only country in Europe having a large surplus of sugar available for export. Despite the drop in price of this commodity from the absurdly high prices of last Spring, there is ample reason to believe that a world shortage still actually exists and that judged from a pre-war standard, the price of sugar will continue high for several years at least. The exportable surplus production of Czechoslovakia should be a valuable liquid asset during this period that is not possessed by any other country in Europe and the good crop of the present year is, of course, particularly timely.
Important as it is, agriculture is by no means the sole resource to consider in connection with the present economic situation of a nation. Mineral resources are extremely important and what has been said regarding the strength of a country which provides its own raw materials and fuel. Again we find that Czechoslovakia has more than her share as, before the war, Bohemia and Moravia produced 74% of the lignite, 43% of the coal and 45% of the iron ore of Austria’s total output as well as 59% of the graphite and all the gold, silver, tin and radium. Even salt, one of the few minerals not found in these provinces, is produced in Russinia. The importance of this mineral wealth today is impressed upon the traveller who finds German factories burning wood to such an extent that the forest reserves of that country must be being rapidly depleted.
With such resources and with an intelligent and industrious population it is no wonder that manufacturing is well developed and covers an almost infinite variety of products. The Škoda Works, constituting one of the greatest steel plants in the world, are of course well known in the United States and many products ranging from Bohemian glass to Pilsener beer are famous all over the world for their quality. Nevertheless it is a surprise for an American to discover the extent of the textile industry of Brno or the porcelain industry of Western Bohemia and it is equally surprising to find a range of other manufactures from matches to automobiles and from surgical instruments to wooden toys.
In addition to the agricultural, mineral and industrial resources of Czechoslovakia, mention should be made of the great areas of woodlands which form the basis for an important paper and paper products industry and of the famous watering resorts, including Carlsbad and Marienbad, which should annually attract thousands of visitors and result in the expenditure within the country of a considerable sum of foreign money. Although I have not seen any of these resorts since before the war, I understand they are as attractive as ever and are already prepared for a record-breaking rush of visitors during the coming year.
It is apparent that Czechoslovakia is capable of producing practically all her own requirements and of exporting various commodities to an increasing extent as time goes on. Compare this situation with that of another European inland republic, Switzerland, which is obliged to import most of its fuel and most of its food supply and which depends largely, to pay for these necessities, upon exports of embroideries, watches, cheese and chocolate. Does anyone believe that the Czechoslovakia crown will long remain under 10% of its nominal dollar value while Swiss francs are selling for about 75% of par?
That the impression of what Czechoslovakia should be able to accomplish in the way of foreign trade is alredy being confirmed by results is evidenced by the United States Department of Commerce reports. For the nine months ended September 30th, 1920, only three countries in Europe had a favorable balance of trade with this country. Czechoslovakia being one of the three. For the month of August Czechoslovakia sold us six times the value of her purchases from us and for September this ratio was nearly nine to one.
It must not be thought from this that all difficulties resulting from the war have been overcome and that the future is all plain sailing. Although the government budget already indicates an approximate balance between receipts and expenditures, further economies and continued high taxes will be necessary to accomplish the deflation of currency that is desirable. The political situation in Slovakia is one that will require the most careful handling. In Bohemia and Moravia, the relations between the Czech majority and the German minority will call for the greatest tact and mutual consideration. External politics must be the subject of painstaking diplomacy. Fortunately, for the most part, all these questions seem to be receiving the attention of the best brains of the nation. There is, of course, no question of the capacity of the people for self government and the popular interest in politics is astonishing to a foreigner. At one entertainment, which I attended, about three quarters of the program was given over to satirical monologues of a political nature.
Let us hope that the development of Czechoslovakia will continue to be guided through the channels of sound economics and peaceful foreign relations. This granted, her position as one of the commercial powers of a new Europe will be assured.
- ↑ Mr. White is Vice-President of J. G. White & Co., Inc., Investment Bankers.
This work is in the public domain in the United States because it was published in 1920, before the cutoff of January 1, 1930.
The longest-living author of this work died in 1976, so this work is in the public domain in countries and areas where the copyright term is the author's life plus 48 years or less. This work may be in the public domain in countries and areas with longer native copyright terms that apply the rule of the shorter term to foreign works.
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