Page:The Czechoslovak Review, vol4, 1920.pdf/288

One of the most serious burdens, which at the present moment, encumber the state, are the immense contributions toward reducing prices of food-stuffs bought in foreign countries. Under most unfavorable exchange conditions of our currency we are forced to purchase the deficiency of our foods at exorbitant prices. The flour thus secured would have to be sold excessively high in order that the state might be reinbursed. It is easily comprehended that it is impossible to ask such prices from people of small means, who form the mass of our population, particularly when the prices paid for domestic flour are so disproportionately low. Our agriculturists point to the prices of foreign flour, and base their demands on these prices translating such values into our money at the rate of exchange prevailing in the world’s markets.

In foreign countries the exchange rate of our crown is unhealthy, because is does not correspond with the living conditions within and without our state. The high prices of imported foods are due, primarily, to this unfavorable exchange position of our crown in the same way as the increased costs of all our imports find root therein.

But this selfsame unfavorable exchange condition creates for every export immense gains, much larger than could be realized through domestic sales, because the exchange value of the crown does not answer to the domestic cost of production. The result is that private exporters increase even the domestic prices and desire to export everything, thereby increasing the costs of commodities in domestic markets, which prices conform to the foreign exchange rate of the crown. The astonishing rise in the cost of lumber and its reservations for domestic uses has its only cause in this unfavorable low exchange rate of the crown.

Under such conditions, on the one hand unheard of profits resulting from exports flow into the pockets of private exporters, while on the other hand the state must contribute to the purchase of foods bought in foreign countries. If it is in the interest of an early balance of the state’s budget—that these contributions should end—and it is not intended that the state should sell foreign flour at its high cost, but the thought occurs that export profits should be made available to meet the deficiency of import losses, because, the first as well as the second condition arise from the same source—the unhealthy exchange position of the crown.

From this it is apparent that between stabilizing state finances and (among others) the organization of our foreign trade there is a very close relation, and if it is absolutely necessary that the contributions toward reducing prices of foods should disappear from the state budget, it is equally vital to undertake such reorganization of our foreign trade, which will make this possible.

There are various technical paths which lead to this goal, but all are not equally practical. The “Central Office for the Control of Foreign Exchange” was certainly theoretically organized correctly, but its success was defeated because it administratively could not compel the public to hand in currency, with the inevitable result that beside this office there flourished an outside wholesale market for currencies and exchanges. Thus even the absorption of export profits is met with technical difficulties. The state must simplify its task as much as possible.

I think particularly of this, that the state must not, in its desire for complete-