Page:The Czechoslovak Review, vol4, 1920.pdf/15

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