Page:The Czechoslovak Review, vol4, 1920.pdf/262

Before the war Germany dominated the commerce of the world through long term trade credits. England controlled her share by accepting long term paper in settlement and discounting it in Germany. Both countries marketed raw and finished materials on exactly the same basis. The Germanic banking system was developed to absorb such commercial tokens with the ultimate view to economically rule the world.

Since the opening of the World War trade relations have undergone signal changes. European sources were abruptly drained and American sources came to the front. Likewise, sales terms exacted from European buyers were made to conform to the exigency of the times. To secure goods the purchaser was forced to pay any price named by the seller and funds in full had to accompany the order. It was a period, rather a revelry, of cash over the counter selling. All during the war, and practically since, this order of things continues.

The war is ended. Europe is returning, by degrees, to normal conditions. Production is gradually being resumed. Economically, to function properly, Europe urgently needs raw materials.

In America, particularly in the United States, production for European export has been curtailed because there is less demand. Foreign born workers are deserting the new world for the old countries under numerous pretexts. Shortage of labor is fast becoming acute. But the supplies of raw materials and the demand for them from abroad has not abated.

Europe is not sufficiently stocked with gold to justify its exportation to pay cash for raw materials. However, Europe is well equipped with skilled labor and mechanical appliances to convert large quantities of raw materials into finished articles. America is top-heavy with raw materials and the only economically sound course for it to follow is, to sell Europe its surplus on acceptable credit, taking payment in finished goods. To change Europe from a producing community into a strictly consuming people, at one stroke, is impossible and economically falacious.

Universally it is conceded that Czechoslovakia is, in every respect, far better off than any Central European state. It is not loaded up or burdened with excessive obligations. It is well balanced as regards agriculture, industry and professions—37%, 40% and 23% respectively. Its natural resources are extensive. Its agriculture is scientific, labor skilled and efficient, and, its professional men excellent. Fields are fertile and productive while its industrial machinery is of the latest designs. The value of these visible and actual resources, exclusive of the potential possibilities, is far in excess of any obligation the republic may incur. Politically it is healthy, for, practically, but one regime, that of President Masaryk, has been in power since the inception of the state.

Studying the monthly records of imports at the Port of New York one is forcibly impressed with the steady increase of goods entered at this gateway as originating in Czechoslovakia. The only conclusion to be deduced is, that the republic is producing in greater volume and consequently enabled to export more.

The “Brooklyn Daily Eagle” notes that the exchange value of the Czechoslovak crown, in New York, has risen to 3 cents from a (January 1920) low of .9 cent and attributes the appreciation to a “discounting of one big development and several newborn hopes.” The “big development” refers to the formation of the “Anglo-Danubian Association” and the “newborn hopes” are purchasers or Cs. crowns for investment or speculation, and, the placing of Czechoslovak securities in the local market. Unquestionably these elements have served to enhance the value of the Cs. crown, yet this high authority has overlooked one outstanding feature which, probably, has contributed more than any other factor—increased production. In many industrial lines production has been resumed while in others it has been increased. Certainly greater producton must result in greater exports and consequent creation of foreign credits.

Like all nations participating in the war, Czechoslovakia finds her expenditures exceeding her income. The 1920 budget deficit is about one-half of the 1919 deficit.