The Czechoslovak Review/Volume 4/The Month in Czechoslovakia (1)

THE CZECHOSLOVAK REVIEW OFFICIAL ORGAN OF THE CZECHOSLOVAK NATIONAL COUNCIL OF AMERICA
Jaroslav F. Smetanka, Editor. Published Monthly by the Bohemian Review Co., 2324 S. Central Park Ave., Chicago, Ill.
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 Countries $2.25	$2.00 Per Year
Vol. IV	JANUARY, 1920	No. 1.

 

The Month in Czechoslovakia

The year 1920 has come upon the Czechoslovak Republic, while it is still laboring under the severe effects of the war. Coal is scarce, food is still distributed by cards and strictly limited, all imported articles sell at terrific prices, there is a lack of housing in most of the cities. People grumble and put the blame on the capitalists or the socialists or the government in general. But after all, conditions in Czechoslovakia are so much better than in the neighboring countries. There is Poland to the east of the Czechoslovaks. Poland has been at war on almost all frontiers from the first day of its independence down to the present day; its army is exhausted and almost barefooted, its debt has grown beyond computation, its currency which was originally far more valuable than Czechoslovak currency is now worth not much over a half of what the other is quoted at; the government is not so well organized and the various districts of which the country is composed have not coalesced as readily as is the case in Czechoslovakia. The difference between the political and economic progress of Poland and Czechoslovakia is enormous, but still more striking is the contrast between the Czechoslovak Republic and the two miserable countries to the south of it, Austria and Hungary. Austria which once aspired to rule the world now contests with Armenia for the distinction of the world’s principal mendicant. It has thrown all pride to the winds and begs openly for charity as a nation. It should, however, be remembered, that it is not really Austria which is hungry and in desperate straits, hut only the city of Vienna; the four million country people of the Austrian Alpine provinces keep what food they have and let Vienna go begging for the alms of strangers. Compared with Czechoslovakia, Austria has money to burn, for the old Austro-Hungarian Bank keeps printing hundreds of million of crowns a week; but without Bohemian coal and without Bohemian food all Vienna would starve long before charitable America could come to its assistance. As for Hungary, it had to endure for six months the rule of that vain and egotistic demagogue Count Michael Karolyi, then the rule of Bela Kuhn whose bolshevism cost the country more than four years of war, then a period of Roumanian occupation during which Hungary was looted in a very thorough manner, and now a spasm of monarchistic reaction with a program of vengeance, wholesale executions and imperialism. And even as against Germany Bohemia is much better off, for among the Czechoslovaks the sentiment of patriotism has not suffered a diminution, the country has comparatively greater natural resources than crippled Germany and is less burdened with debts and foreign obligations. Even the comparison with Italy, Roumania or Jugoslavia would be greatly to the advantage of the Czechoslovak Republic, to say nothing of Russia and the new Baltic states.

And so the Czechoslovaks enter upon the New Year with confidence, even though life is still difficult for the great mass of the people. The worst is behind them. The political situation of the country is in comparison with the rest of Europe excellent, and the economic situation has greatly improved and is daily growing better.

 

Cabinet crisis appeared on the political horizon at the end of November. The present government of Vlastimil Tusar is based on a coalition of the social democrats, the Czechoslovak socialists with whom the small progressive party co-operates, the republicans (farmers’ party) and the Slo- vaks; national democrats and the people’s party (Catholic) are in opposition. A year ago it appeared most likely that the two principal socialist parties would coalesce, but instead they have grown further apart. The social democratic party professes devotion to Marxism and contains elements that differ widely from each other in their plans for the application of the Marxist program; one might say that in this party are found people who in Germany would be found in three camps—the majority socialist, the minority socialist and the communist. The Czechoslovak socialist party do not believe in Marx, look upon socialization as a gradual process and are pervaded by a spirit of intense patriotism. Each party has its own trade unions, but the social democrats are stronger, having been longer in the field. For some time past the national socialists have been charging the social democrats with intimidation, in that in many places workmen of the younger party were treated as scabs and driven from work, unless they agreed to join the social democratic labor union. In the middle of November the executive committee of the Czechoslovak socialists called upon the government to submit to the National Assembly a bill making intimidation of this sort criminal and in fact enacting what we would call here “open shop.” The social democrats refused to comply, and early in December the four representatives of the Czechoslovak socialist party in the cabinet submitted their resignation. A general convention of the party was held in Prague on December 7, attended by 450 delegates which adopted an uncompromising attitude. It looked, as if there were no way out except through a new combination of parties which it would have been very difficult to secure, but through President Masaryk’s mediation a compromise was effected. Dr. Winter, minister of social welfare, acting for the social democrats, and Dr. Veselý, minister of justice, acting for the national socialists, were entrusted with the drafting of a bill which would effectually protect the right of workers to form their own trade unions without being blacklisted. It seems certain now that the present cabinet will remain in power until the elections to the parliament are over. They have been delayed for many reasons, but the government has definitely promised to have everything ready for the holding of elections before the end of February.

The committee on constitution of the National Assembly has been working for several months on the draft of the permanent constitution for the Czechoslovak Republic. The result of its labors has not yet been laid before the Assembly, but it is known that in spite of determined opposition the draft provides for a second chamber or senate, elected by universal franchise with a higher age qualification than for the lower house. One of the questions which arouses strong interest is local autonomy; shall the historical subdivision into Bohemia, Moravia, Silesia and Slovakia be retained, or shall the republic be divided for administrative and local government purposes into districts with about half a million population each? The second plan seems to promise more efficiency of administration, but there exists strong sentiment in favor of the retention of the old provinces, particularly in Slovakia. At the same time all parties agree on the necessity of abolishing the dual system of law which was inherited from the dual empire. In the Bohemian lands with 10 million people the old Austrian laws are in effect, except in so far as they have been set aside by the new legislation; in Slovakia with three million people the Hungarian laws prevail, except as modified; the autonomous province of Rusinia with some 600,000 people is also governed by Hungarian laws. On December 6 President Masaryk appointed Dr. Milan Hodža, a Slovak leader, to be the chief of a new ministry, temporary in character, which is charged with the duty of unifying the laws and the administrative practice of the entire republic.

 

Party feeling runs much higher in Czechoslovakia, than in the United States. Each party has its own daily paper in Prague, with other daily and weekly organs in the provinces, and a merry war goes on between them, each blaming the other for the ills of the republic. Even the organs of parties that form the government coalition frequently attack each other. But underneath the strong partisanship there exists everywhere a much stronger feeling patriotism; the interests of the country go before party advantage, at least in all important matters. The best proof of it is the fact that measures introduced by the government, whether it be the ratification of the peace treaty or new taxes or social
Old Town Square of Prague with Týn Church. legislation, are approved unanimously by the National Assembly. For the good of the common country the socialists are willing to defer the radical changes which their program calls for, while the bourgeois parties vote for all measures designed to improve the condition of the workingmen. There may be radical talk and loud threats, but compromise always prevails in the end.

 

What is true of political life applies also to industrial life. There have been very few strikes in the Czechoslovak Republic during the first year of its existence, and not one big strike. In November there was a strike of foremen and office employees of the steel shops, for in Bohemia, just as in America, a mechanic or laborer is better off than foreman or clerk; but after a few days the strikers went back to work, when the government promised to take up their grievances. The tradesmen closed their shops on November 27 for half a day as a protest against too much government regulation and against favoritism shown to co-operative consumers’ societies of the workingmen. There was also a local flare up in brown coal mines near Most which subsided in three days. As against that coal miners all over the Republic held meetings in which they pledged themselves to work seven days a week, until the coal shortage was over. There is a decided increase apparent in coal production and railroad cars have been obtained from Germany. Minister of Public Works Hampl states that the distress would be almost over early in January. The coal situation was one of the principal reasons for the decision of the government, approved by the National Assembly, to buy out the remaining private railroads of the republic which are in the main coal roads; their total length is 1204 kilometers.

 

Everyone follows with interest and some anxiety the development of events in Hungary. One would think that the Magyars had enough troubles at home, after what they have gone through during the past year, to have any aggressive designs. But the fact is that the present government of premier Huszar pursues the same policy as Karolyi and the bolsheviks, namely restoring Magyar rule over the entire areca of the former kingdom of Hungary. While Huszar is publicly making professions of peacefulness and submission, Horthy, the former commander of the Austro-Hungarian navy, is strengthening his army and posting it on the Slovak boundary. Billboards in hungry Budapest are again covered with chauvinistic appeals to fight for an integral Hungary, and an active propaganda is carried on abroad pretending that the liberated races of former Hungary clamor to be put back under Magyar rule. Bolshevik agitators are released from prison, when they promise to go to Slovakia or Transylvania to make trouble, and Magyar squires in these provinces conspire with the monarchists of Budapest for the restoration of Hapsburg rule or at least of monarchy in some form over the whole former kingdom. There is quite a contrast between Austria and Hungary in this respect; Austria knows it has been licked, but the Magyars have not yet realized that instead of disposing of the armed forces of an empire with fifty million people their strength is limited to the resources of a bankrupt, beggared little country of scarcely eight million people. The Czechoslovaks are not afraid of the military prowess of the Magyars, but they deplore the fact that the existence of a warlike neighbor on the south will make necessary the spending of more money on their military establishment. Unless there is an effective League of Nations in existence, the Czechoslovak Republic will have to be prepared to defend in the field against the Magyars the territory awarded to it by the Peace Conference.

 

National Assembly was asked in December to grant additional money to the government, to cover a deficiency in the budget for 1919. Like practically every European country, the Czechoslovak Republic is faced with a big deficit. The regular budget approved in May showed a small surplus as between ordinary revenues and expenditures, but extraordinary outlay brought about a deficiency of 3901 million crowns. Now the government came with a statement of 807 million of additional revenue and 1901 million of additional expense. Thus the total deficiency for 1919 is increased to almost five billion crowns. The new deficiency not foreseen at the time of the preparation of the regular budget was caused by the inroad of Magyar bolsheviks to Slovakia and by a considerable increase of salaries of all state officials and employees which the continued rise in prices made necessary in autumn. The government is trying to secure a balance in the state finances by laying on new taxes and by internal loan. Thus there was recently imposed a tax of 12 crowns on each liter (less than a quart) of alcohol, both as a measure of revenue and as a means of furthering temperance; the tax on alcohol fit only for industrial uses is only 20 hellers a liter. Incidentally the cabled report which was published here in November to the effect that prohibition would be introduced in Bohemia lacked all other foundation except this fact of higher taxation. A heavy tax was also imposed in December on all sales to be in effect for four years; this is a consumption tax which will be a special hardship on the poorer classes, yet it was approved by all the parties with the exception of the Catholics, because both the socialists and the bourgeois considered it a necessity of the state. A special tax on property is being prepared which will cut deep into the gains made during the war. It should be noted that Czechoslovakia does not attempt to get rid of its financial difficulties by issuing paper money; it has actually reduced the circulation of fiat Money since the armistice. The republic, however, has been offering for sale since September treasury certificates, payable in four and five years, bearing four percent interest, at the subscription price of 98 and 97½ respectively. Up to November 25 the people bought 1007 millions of these obligaions.

 

The continued low price of the Czechoslovak crown is a serious drawback to foreign commerce, and to the entire economic life of the republic. Cotton has become prohibitive in price, and cotton mills and other factories depending on foreign raw materials are working only part time. The syndicate of cotton manufacturers succeeded in obtaining 50,000 bales of cotton through the Guaranty Trust Company of New York, to be delivered in monthly installments of 5000 bales; and they are negotiating for 40,000 additional bales. But all that is barely enough for domestic consumption and leaves hardly anything for export, as the prewar consumption of cotton in the Bohemian mills was 600,000 bales. The foreign trade of the Czechoslovak Republic for the first half of 1919 had a large favorable balance, but the difficulty is that the export goes in the same direction, as before the war, principally to the south and east, to countries with depreciated currencies, while the imports come from the west and must be paid for in sound exchange. Thus imports from Austria were 355 mill. and exports to Austria 796; the figures for Poland were 19 and 79 mill. respectively, Jugoslavia 50 and 52, Germany 194 and 127, Switzerland 156 and 26, France 12 and 27, England 21 and 1, and United States 13 as against 1 mill. crowns. The total exports from Czechoslovakia were 1,288,722,920 crowns, total imports 1,071,022,250.

 

Restrictions on foreign trade are being gradually removed; the functions of the Foreign Exchange Central have been turned over to the banking office of the ministry of finance and transactions in foreign money have been freed from the strict control of the government. An exporter may now sell his wares abroad for crowns, thus creating a market for Czechoslovak money. Syndicates controlling various branches of the industry are being dissolved one by one. The list of products which may be imported or exported without special license has been lengthened. There is a leaning toward free trade, as Czechoslovakia is decidedly an exporting state; railroad rates on export goods have been reduced. An agreement was reached with Germany which provides for free transit of Czechoslovak goods through Germany, permits importation into Germany of various commodities, and trades German railroad cars for Bohemian brown coal. With Italy lumber is bartered for food products, and even with Hungary trade has been renewed, the Czechoslovaks sending all sorts of manufactures for wool, hides, iron ore, cattle, horses, sheep, corn; but unfortunately Hungary has not enough to offer for what it needs and its currency is of no value at all. The large crop of hops was sold abroad on excellent terms and there is, of course, good market for all the sugar produced; the milder weather of November made possible the harvesting of sugar beets which remained in the ground at the time of the freeze up at the end of October, but some part of the potato crop was lost. Banks are still increasing their capital; Živnostenská Bank, the largest Bohemian bank, increased its shares from 160 to 240 million crowns, and its reserve funds amount to 65 mill. additional; Central Bank of Bohemian Savings banks raised its capital from 35 to 70 mill., Land Bank from 25 to 40, Slovak Bank of Ružomberk from 20 to 30, Czech Bank from 20 to 30, Economic Credit Bank from 14 to 20, Bank of Brno from 10 to 20; even the socialist party is opening a bank of its own. The state, too, plans the formation of a governmental bank, like the banks of issue of England, France and Germany, and in the meantime has established a consortium of the principal Prague banks to act as the fiscal agent of the government.