Library of Che Theological Seminary PRINCETON + NEW JERSEY 0.1 625 0.9 766 122 CZECHOSLOVAKIA 1921 Imports Exports (million (million Czecho- Czecho- (million slovak (million slovak quintals) crowns) quintals) crowns) Ferma ny vo asicce aaulereuan los 18.9 5,862 36.2 3,061 ACISUTIA Su. cote eee eats ne 1,983 33.4 7,935 PTTL aN Vid olen 5 ee Oe cs 2.5 926 13.3 3,066 United Statesit cic icon. 3.8 4,547 0.2 771 GATICE GS Paseo wits Solensaee ae 0.3 638 ele, 1307, Polanda conc On save ont 1.4 384 3.6 1,424 Tea Pre ane che Bastin pie 0.8 733 1.4 921 Holand etic at merece 0.9 1,106 0.8 567 Belgium and Luxemburg 0.4 447 0.3 204 United Kingdom ........ 0.9 1,342 1.5 2,104 Riuianiag ee cu are otek 0.9 482 0.8 1,175 Virrnslavigni sat case cate 0.6 367 123 2,008 Switzerland et. este tiwes 0.06 316 0.8 520 The largest turnover is shown in the trade with Germany and Austria, and with the States which were formerly part of Austria-Hungary. In trade with Germany, Czechoslovakia has an unfavorable balance due largely to the imports of iron ware, machines, electro-technical articles, chemicals, dyes, drugs, tex- tiles, etc. On the other hand, there is a large favorable balance with Austria resulting from the exports of coal, sugar, textiles, glass, porcelain, etc., largely for re-export. The large unfavorable balance in the trade with America is caused by the purchase of raw mate- rials and foodstuffs. The difference is made up by exports to other countries. BY QUANTITIES THE CZECHOSLOVAK FOREIGN TRADE WAS DISTRIBUTED AS FOLLOWS: (per cent) Imports Exports | TO2O0 se 1O2T ) sIG22 1920), TQo2t 1922 Raw. cmatetials a nc.) sinus 78.8 78.5 74.0 80.4 82.6 81.0 Semi-manufactured goods 7.3 6.2 II.I 8.0 7.7 ae Mantfacttires))) 0.05 cus us 03:0/715-3 9114.0 11.6 | {10:37 7.e3 FOREIGN TRADE 123 ACCORDING TO VALUE: RAW Materials 1. vse asc ss BZ 5ST. Bal 10.8 14.3 I9Q.1 Semi-manufactured goods. 14.3 12.3 13.3 16.07710:359,17.0 NANULACUTES aay ce bic des 41.5 34.0 29.6 78.3 75.4 63.9 The distribution of the imports and exports of mer- chandise according to the branches of production is shown in the following table: (per cent) Imports Experts Agricultural and forest products.............. 10.2 10.7 Products of the mines and foundries........... 68.6 69.7 ATOMS ria LOONCES iG Gauche citi ca eHininiee eres 21.2 19.6 These figures have been calculated according to weight. All these statistics show that Czechoslovakia is a country of intensive agricultural and industrial produc- tion and, to a large extent, an exporting country. The high standard of living makes necessary the importa- tion of large quantities of foreign goods, particularly raw materials and foodstuffs. The geographical situation of Czechoslovakia in the center of Europe and the fact that the country had been a part of the customs union of Austria-Hun- gary explain why the trade with foreign countries has not developed in all branches on an independent basis. Prague formerly had an important wholesale trade in coffee and colonial produce but in the customs union of Austria-Hungary this trade was directed to Trieste through differential duties. This trade is now de- veloping very promisingly. One branch of the textile industry purchases cotton and wool directly on the foreign exchanges. Smaller establishments make their purchases in Bremen. That explains why the American statistics, for example, do 724. CZECHOSLOVAKIA not show the total exports of cotton to Czechoslovakia. Metals and other raw materials are in general pur- chased through wholesale houses (in Berlin, Frankfort, Hamburg). The great American firms furnish daily quotations on copper only to the larger commercial centers of Europe. In many other branches the small concerns prefer to buy in smaller quantities from Ger- man wholesale houses as they can easily calculate the purchasing price and cost of transportation. Many exporting industries have their own selling organiza- tions, as the sugar, malt, alcohol, and enamel ware industries. Large establishments dealing in glass, porcelain, chemicals, and textile products, have their own connections and representatives abroad. The ex- port trade of Jablonec negotiates the exports of its products directly to all parts of the world. Several makes of agricultural implements, plows and sowing machines, were popular before the war throughout the Balkans, Russia, and Siberia. Several large estab- lishments of this kind have now formed a united sell- ing organization affiliated with the engineering indus- try. The iron industry which previously had been in a cartel with the Austrian iron industry now has an independent sales organization. Sometimes foreign buyers come directly to the place of production, as, for instance, in the case of the Zatec hops. In some cases the producers sell the goods to German exporters, especially in Berlin and Hamburg, hops in Nuremberg, etc. The Czechoslovak industry makes large export and import transactions at the Leipzig fair. The textile industries of cotton and silk have their own sales branches and warehouses in Vienna and direct FOREIGN TRADE 125 the shipments to the Balkan countries from that city. It has been the aim, during the last years, to establish our own wholesale houses and to make direct connections in import and export. For the dissemina- tion of trade information and the promotion of direct trade connection, sample fairs have been organized on a larger scale in Prague, in Liberec (here the textile trade is largely represented) and in Bratislava. The Prague Sample Fairs which have been held so far have attracted large numbers of visitors, especially from Yugoslavia and Rumania. For commercial pur- poses the waterways are also being used, namely the Labe (Elbe) for transportation to Hamburg, and the Danube. The port of Bratislava on the Danube is rapidly becoming a distributing center for trade with the Balkans. The Danube may in the future become an important highway for the importation of grain. Swedish ore for the ironworks in Ostrava- Karvin is transported by way of the Odra (Oder) to the transfer point of Kozli (Kosel). The imports by water amount to about 17 per cent and the exports to 13 per cent of the total trade by weight. The greater part of water-borne traffic is directed by way of the Labe. Recent statistics show that the Czechoslovak exports to the western countries are steadily increasing. The chief articles of this increasing trade are sugar, timber, glass, porcelain, malt, paper, matches, and machinery. The trade with Hungary, Poland, Rumania and Yugo- slavia has temporarily declined because of the appreci- ation of the Czechoslovak crown. The exports of 126 CZECHOSLOVAKIA Czechoslovak products to the western countries have stimulated also the imports from that part of Europe, as, for example, from France, Netherlands and Switz- erland. It appears also that the other succession States of former Austria-Hungary are endeavoring to build up their own industries as their home market, protected by high duties, offers favorable opportunities. The Czechoslovak industries, producing largely for export, will doubtless seek to meet the new conditions by im- proving the quality of their products and by greater specialization. IX THE COMMERCIAL POLICY AND THE TARIFF Dr. Fr. PeroutKa, Division CHIEF IN THE MINISTRY OF CoM MERCE As soon as the new State had been established, Octo- ber 28, 1918, the transit of goods across the new frontiers of the Czechoslovak Republic was subjected to control, though Czechoslovakia was not organized as an independent customs territory until the passage of the law of February 20, 1919, defining the customs territory and providing for the collection of duties. The old customs frontier was retained as against Germany, while a new frontier line was gradually de- veloped as against Austria, Hungary, and Poland. Un- der the law of February 20, 1919, duties were to be levied also on goods coming from the other territories of the former Austria-Hungary which had in the past formed a single customs territory with Czecho- slovakia. The old organization of the customs service, based on the experience of many decades, was re- tained. The duties on goods imported into Czechoslovakia were to be paid in gold, at the old rates fixed by the autonomous tariff of 1906. However, under the law of February 20, 1919, the Minister of Finance was 127 128 CZECHOSLOVAKIA authorized, with the consent of the Ministers of Com- merce and of Agriculture, temporarily to reduce or abolish duties on certain classes of necessaries. The goods which were subsequently placed on the free list included grain, flour, seeds, cattle, animal products, fats, and various raw materials, such as minerals, carving materials, tanning materials, gums and resins, crude mineral oils, etc. The old prewar rates were retained for semi-manufactured articles and certain other needed commodities. In the case of other goods the prewar rates were increased by an exchange surtax amounting to 200 per cent, excepting only articles of luxury (the duties on which the Minister of Finance might have collected in francs) for which the surtax was fixed at 220 per cent. Inasmuch as the currency of Czechoslo- vakia then naturally stood far below its gold parity and its exchange value declined still further in the course of the years 1919 and 1920, it will be easily seen that, in comparison with prewar conditions, tariff pro- tection had been largely reduced. In those days, however, all imports and exports were partially and still are controlled through a system of permits. No goods could cross the frontier except under a special permit issued by the Czechoslovak Im- port and Export Commission organized under an ordinance of the Ministry of Commerce of November 22, 1918. In the early days following the armistice the new State, like the rest of central Europe, was almost bare of foodstuffs, raw materials, and other commodities. By prohibition against exportation sufficient supplies of necessaries were to be assured to the people. Hence COMMERCIAL POLICY AND TARIFF 129 the Commission would forbid the exportation of food- stuffs and raw materials, control the exportation of coal, and permit the exportation of other goods only in case the people were assured a sufficient supply at reasonable prices. The imports were likewise regu- lated; the Commission would, for example, seek to restrain the importation of oranges, wines, and other luxuries, as weil as of goods which were already ob- tainable in the domestic market. These measures were intended also to protect the currency. In addi- tion to the Import and Export Commission, a Central Exchange Bureau was established. The exporters were required to turn over to the Bureau all foreign ex- change obtained for goods sold abroad, and the Bu- reau would reassign such exchange for the purchase of foodstuffs and important raw materials or such other goods for which import permits could be obtained. The authority of the Import and Export Commis- sion was somewhat modified in the course of time. By an ordinance of February 26, 1919, some of its rights and duties were transferred to industrial syndi- cates. The intention was to permit the several branches of industry and trade to manage their own affairs. It seemed also that such associations would be in a better position than individual firms when purchasing raw materials abroad or selling domestic goods or supply- ing materials and machinery for the devastated regions, since in such cases the financing would be beyond the means of individual firms or corporations. It soon became evident, however, that if trade was to be thus controlled at all. an impartial Government bureau should be given preference over groups of interested 130 CZECHOSLOVAKIA parties that might have to pass on applications of their competitors. Asa matter of fact, no large transactions were ever effected for the joint account of the syndi- cates. In a few cases, in addition to the syndicates which possessed official authority, special associations were organized, as, for example, for the purchase of cotton, of fats for the manufacture of soap, and for the importation of mineral oils. Such transactions, however, caused considerable difficulties to both in- dustry and the State later on, as the distribution and liquidation of the stocks so purchased had to be carried out at a time when the world prices had already fallen while the exchange value of the Czechoslovak crown had risen. The syndicates were consequently divested of their official authority, and the control of the foreign trade was reorganized and intrusted to a special Foreign Trade Bureau established under the law of June 24, 1920. The Bureau revised the sys- tem of permits, issued lists of goods which might be exported freely, adopted more liberal rules for the granting of import permits, and co-operated in the modification of the control of foreign exchange. Foreign trade continues under partial control, at the time of writing. The control is criticized by many as troublesome, but it has been demanded by producers in many cases and by consumers in others. It was found to be necessary particularly in 1919 and 1920 when Czechoslovak exchange was falling, and it was necessary to protect the crown against further depreciation through payments for unprofitable im- ports and to prevent a precipitate selling out of the domestic stocks for the sake of the delusive profits to COMMERCIAL POLICY AND TARIFF = 131 be made on exchange. The State made an attempt to obtain for the Treasury a part of the exchange profits by imposing export duties on hops, malt, lumber, spirits, etc. The proceeds were disappointing, how- ever. It has also been charged that State control of the sugar exports had made it impossible for the trade to take advantage of the high prices of sugar in the world market. If the control of imports is to be judged fairly the low rates of duties must be taken into consider- ation. In the system originally adopted in Czecho- slovakia low import duties were combined with the restriction of imports by permits. Domestic produc- tion was to be protected by prohibitions against im- portation. When importation was to be permitted for any special reason it would have been inconsistent, under the existing economic conditions, to place on the consumer an additional burden in the form of high import duties. That the system of trade control has been main- tained in Czechoslovakia so long has been largely due to the existence of similar conditions in the neigh- boring States. In Germany, under the so-called “Planwirtschaft,’ a complicated system of import and export control was elaborated which made similar measures necessary in Czechoslovakia also. Austria likewise made use of import and export prohibition. In Hungary a similar system of control has recently been reinforced by strict provisions relating to for- eign exchange. Switzerland also considers the regu- lation of imports as indispensable in certain lines. Rumania and Yugoslavia have passed through many 132 CZECHOSLEOVARTA and varied phases of a similar system. The original causes leading to the adoption of the system have largely disappeared both in Czechoslovakia and in the neighboring countries, but the system has been of good service to Czechslovak industry, particularly so in times of sudden fluctuations of exchange (collapse of the German mark, for example) when odious anti- dumping laws might otherwise have been necessary. The question of trade control was considered by the delegates of the succession States at the Portorose conference toward the end of 1921, and the removal of trade restrictions was recommended under certain conditions which have not been fulfilled, however. The Czechoslovak Government showed its willingness to suppress that system when it abolished the inde- pendent Foreign Trade Bureau by the law of Jan- uary 19, 1922. The work of the Bureau, reduced to about one-fourth of its former extent, was transferred to a division of the Ministry of Commerce. This system of foreign trade control in Central European States explains why the earliest Czecho- slovak treaties with other States were “compensatiort’ treaties providing for the exchange of specified goods. By the treaty with Austria of March 12, 1919, Czecho- slovakia obtained freedom of transit to and from the port of Trieste, and the liquidation of various war supplies remaining in Vienna, such as metals, hides, textiles and demobilization materials, as well as sup- plies of certain industrial materials found in Austria in abundance, such as magnesite for the metal indus- try and tanning materials for the leather industry. In return, Czechoslovakia agreed to supply Austria with COMMERCIAL POLICY AND TARIFF 133 coal and that at a time when, under the postwar dis- organization of mining, the Czechoslovak industries themselves were suffering from a shortage of coal. Austria was also to receive a large quantity of Czecho- slovak sugar at the price of 3.20 Cz. crowns per kilo- gram for household use and 5.40 Cz. crowns per kilo- gram for industrial uses, and the sugar was delivered at a time when the world price had risen to 20-30 Cz. crowns per kilogram. The treaties with Poland and Rumania secured to Czechoslovakia supplies of crude and refined mineral oils in return for metal wares, machinery, and other industrial products. The treaty with Yugoslavia was to secure to Czechoslovakia sup- plies of grain and cattle in return for sugar and in- dustrial products of various kinds. In the early times, however, trade with these countries suffered greatly from the difficulties of transportation; in 1920, for example, it was cheaper to bring grain and flour to Czechoslovakia from America than from these nearby States. The earliest Czechoslovak treaties with Germany provided for the delivery of Czechoslovak lignite to Germany in return for coal, and for the removal of certain import and export prohibitions by both parties. The general commercial treaty with Germany, signed June 29, 1920, at Prague, provides for the most- favored-nation treatment in matters of trade as well as in regard to the carrying on of industry or trade by the citizens of either State in the territory of the other. The treaty also modifies various import and export restrictions of both countries. The Czechoslovak import restrictions were further 134 CZECHOSLOVAKIA relaxed by treaties with the western States, notedly with France and Italy. The treaty of November 25, 1920, permitted the importation from France of large quantities of wine, silks, woolen fabrics, cloth- ing and millinery articles, rubber and leather goods, automobiles, toilet soaps, and perfumeries, and made free the importation of numerous articles of produce, raw materials, metal and chemical goods. In return, France would apply the rates of its minimum tariff to certain Czechoslovak goods or reduce the rates of the general tariff. The treaty with Italy, concluded March 23, 1921, authorized the importation of cer- tain quantities of automobiles, tires, rubber goods, soaps, silks, hats, wine, oranges, lemons, figs, and other products, from Italy. In return, Czechoslovakia obtained the most-favored-nation treatment in mat- ters of the tariff and a modification of certain import restrictions then in force in Italy. In all other re- spects the treaties with France and Italy as well as the treaty of April 23, 1921, with Rumania, the treaty of October 20, 1921, with Poland, and the treaty of October 7, 1922, with Latvia, follow the tenor and the methods of prewar treaties. The Czechoslovak treaty of November 19, 1921, with Spain resembles the treaties with France and Italy. Neither the commercial treaties mentioned above nor the negotiations carried on with the United King- dom, Belgium, the Netherlands, Denmark, Greece, Portugal, and Japan, contain any special provisions affecting the Czechoslovak tariff rates. The Czecho- slovak tariff thus remains an autonomous tariff. The most-favored-nation clause contained in all the treaties COMMERCIAL POLICY AND TARIFF = 135 will, therefore, remain inoperative for some time as regards import duties. It is easy to see why negoti- ations in regard to rates have not been commenced.. Owing to the fluctuations of exchange, the tariff rates of the neighboring countries of Germany, Austria, Poland, and Hungary, whose trade relations with Czechoslovakia are very active, are even less stable than those of Czechoslovakia. In the treaties with France and Italy which, under other conditions, might have affected the tariff rates, the interest was centered in import permits. Other States, such as the Neth- erlands, Belgium, Denmark, or the United Kingdom, have no reasons to give up their tariff autonomy in treaties with other States and consequently are not concerned about tariff rates. The rates of the autonomous tariff of Czechoslo- vakia were revised several times in 1920 and 1921. By the ordinance of May 21, 1921, the system of exchange surtaxes, modelled on the French postwar tariff, was adopted. The rate of duty is established by multiplying the basic (nominal) rate with the proper coefficient. Varying coefficients were assigned to the several items of the tariff. Articles of luxury and articles specially protected were given co-efficients 10 to 16. Semi-manufactured articles and goods with lower protection received the coefficient of 7. Where importation of goods was to be made easier, the co- efficients were I to 5. When Czechoslovak exchange began to improve toward the end of 1921 while the German mark was falling it became necessary to revise the tariff rates for the protection of Czechoslovak industry against the 136 CZECHOSLOVAKIA competition of Germany and other neighboring States with depreciated currencies. The revision was carried out by the ordinance of December 18, 1921, going into effect January I, 1922. The coefficients for manu- factured goods averaged Io to 15, increasing to 20 to 30 in a few cases of goods specially protected. In the first half of 1922 when the Czechoslovak crown was quoted in Zurich at about 10 centimes or nearly one- tenth of its prewar value, the protection of Czechoslo- vak industry was increased by the revision one-half or even doubled (in rare cases, trebled) as compared with prewar rates. A new upward movement of the Czechoslovak crown commencing in July, 1922, raised its value in Zurich to 18 centimes in October of 1922. By that time the German mark had fallen in value to 0.01 Cz. crown. The effect of those violent changes was two- fold. Czechoslovakia was enabled to purchase raw materials abroad at a lower cost, e. g., cotton, wool, copper, hides, rubber, as well as cereals, flour, cattle, and meats. On the other hand, the level of prices pre- vailing in Czechoslovakia until the summer of 1921 was abnormally high, particularly in comparison with the prices in Germany and Austria. The consumers were clamoring for lower prices while the producers were still afraid of German competition during the period of transition. However, the upward course of the crown brought about an energetic movement for the lowering of prices in Czechoslovakia, and the move- ment was supported by the Government through the reduction of certain taxes (such as the taxes on coal and coke) which had contributed to increase the cost COMMERCIAL POLICY AND TARIFF = 137 of production. In new negotiations between the manu- facturers and organized labor wages were reduced 20 to 30 per cent; the new wage agreement concluded with the coal miners in October of 1922 particularly was expected to produce far reaching results. The prices were likewise to be lowered by a reduction of tariff rates announced by the Government in a proclamation issued September 9, 1922. The new revision of tariff co-efficients prepared in agreement with the Chambers of Commerce and Industry will reduce the import duties in many cases by as much as one-fourth. Czecho- slovakia, it would seem, will thus be the first State to adopt, in its tariff policy, a course that is a direct opposite of the course followed in recent years by nearly all the countries of the world. In the tariff policy of Czechoslovakia there still re- mains one problem which demands solution. As a re- sult of the war and the difficulties of obtaining supplies after the armistice the import duties on grain and flour have been suspended and the duties on cattle, meats and fats reduced to a minimum. Czechoslovakia, however, has a large and progressive agricultural pop- ulation which now demands protection for its produce as a matter of natural right. It is easy to understand the clamor for grain duties at a time when the world prices of grain have declined so markedly between April and October of 1922 while the purchasing power of the crown abroad has nearly doubled. The solu- tion of this problem has been deferred until the next session of Parliament when the new autonomous tariff is to be considered. XxX RAILWAYS Dr. VActAv Burcer, LATE MINISTER OF RAILWAYS In Czechoslovakia the railways are owned partly by the State and partly by private corporations, and are operated, for the most part, by the State. The length of the lines open for traffic at the end of Ig21 is shown in the following table (in kilometers) : Operated by Operated by State foreign States : ? Ne => ob xian) 2 E Equipped with Bey 83 20 ly ee bp oS Hh v oO Hoo © oO ano) Oe = fs FE Bt Nel 4B e Se a aban <5 ont Bea Bs OS Ue GOs best ol aber Cameras Steam locomotives 7,792 3,826 1,150 41 5 O07 12,013 Electric locomotives... 51 98 A 150 The State railways are directed by the Ministry of Railways and managed by seven district bureaus of the State Railway Adminstration. The Ministry of Railways is invested with absolute power to direct all railway traffic and to control the adminstration of the State railways as well as of the private lines. The Ministry is divided into 7 sections: (1) Minister’s Office, (2) Judicial and Administrative, (3) Financial, (4) Commercial, (5) Construction, (6) Machinery and Shops, (7) Traffic. The district bureaus are located in Prague, Plzen, Hradec Kralové, Brno, Olomouc, Bratislava and Kosice. Under the direction of the 138 RAILWAYS 130 Ministry of Railways and in accordance with its plans and rules, these bureaus have charge of the local admin- istration of all railway lines within their territories. They are responsible for the security, order and regu- larity of traffic. At the head of each bureau is a director with one or two assistant directors. The mileage of the railways in the several districts is shown below: District bureau: Length of line IPraguGuvy ess 1s tc.0c8s 1,895 km. or 1,178 miles PISO ets ie ae sale wee 2,027-km.. or 1,260 miles Piradecantal cess. 2,014 km. or 1,251 miles BENOie ee aes caine es 1,256 km. or 781 miles IGMHOUNCH. een nears wet 1,741 km. or 1,081 miles BEATISIAVA Ey sishe wires 2,147 km. or 1,334 miles KROMCES a vie ae roe ce 1,614 km. or 1,003 miles (including Kosice-Bohumin line.) The total length of State and private lines operated by the State is 12,694 km, out of which 953 km are double-tracked. Railway stations operating local traffic directly, and the construction and other services, are under the juris- diction of the district bureaus. The following table shows the number of these offices: s ed On Ube se Eto arte wis Ss Eo vaery & 3 a6 < a 2 vom.) a3 =o E a o 3 ss i o 59 so 8 Sy daft i I 2 = 3 es so 32 £3 = ~ * AS COB ee as = ai = P&ague ica es 4 17 II 384 3 I 3 AZO soso. pene 5 14 ¢ 333 4 I I Hradec Kral.. 3 20 9 387 3 2 2 BER AIC s Gace iets a 12 7 322 I I I UOMOUC -.6. 05 s 17 5 228 3 I 3 Bratislava: <0. 17 2 304 I I 2 BROSTICE os ss . 6 2 8I I I I tal cot. 14 103 46 2,040 16 8 13 140 CZECHOSLOVAKIA The chief private railways in the Czechoslovak Re- public are: 1. The Usti-Teplice Railway......... 253 km. or 157 miles 2. The, Bustehrad; Railway... e.v... ss 422 km. or 263 miles 3. Local ratlwaysey cree ee ne 203 km. or 182 miles Total private railways (with the excep- tion of the KoSice-Bohumin line)... 968 km. or 602 miles Lines. with? double; tracks.) 2 sian. 441 km. or 274 miles The Kosice-Bohumin Railway and most of the local railways are under the State Administration. The Czechoslovak Railways are, with some excep- tions, steam railways of a normal gauge of 1,435 mm. The characteristic standards of line construction as to weight of rail, grades, and curves are as follows: Smallest Weight radius Steepest of rail of curve grade kg. per Railway line: (meters) (1:1000) 1 meter Cheb-Plzen-Praha-C. Tfebova-Olomouc- Bohumin-Zilina-Kosice 1. bass a kes ak 300 II 35.6 Podmokly-Praha-C. Budéjovice-H. DVOPIStEAUL aie canine Li tone 300 II 35.6 C. Tfebova-Brno-Bfeclava-Bratislava .. 230 7.9 35.6 Bratisiava-Zilinawe, eu ees ee ee oe 300 7.5 42.8 Brateslava-Parkane Nana ood sae ew 600 4 42.8 Pizen-Brodhnnlas tack Otek eien Cee te 350 10 35.6 Fizen-Duchtov7 ce ane ecto 250 13 35.6 Plizen--C. Budéjovice-Cmunt ........... 300 II Ras Praha- Most hoi suas ance pee eens 250 16.7 35.6 Leplce-LOdMOK bah, BE iic ads eee es 200 20 35.6 I OUunY-ZLGice-ELotivitt)) ut ugheaisetiitee. 250 15.5 35.6 Praha-Hradec Kraal.-Mezilesi ......... 250 15.5 25.6 Praha-Vsetaty-Rumburk))e.... eae: 280 17 35.6 SatOveDecin: qeteer tat aie nae eee lee 250 IO 35.6 ChocefisMeZIMOStt i: cy veeusis ciate os 284 14.3 35.6 DINO ELOLO Ve ate ee teehee eee ae 400 6.7 35.6 WlomoticeOpavar.:.7. cies decane wees 225 17 35.6 Brno-V lary ‘Pass-Lepla/ ae ieccus eae 250 16 33 Bratislavas Comatose ae ee 250 5 23.6 Otherv nes povsra dt aie dass aoe nese 180 25 35.6 RAILWAYS I4I The table shows that the Czechoslovak lines are not of a uniform type. This is explained by the origin of the system which has been formed gradually by the acquisition of various private lines. The Czechoslovak administration plans in time to strengthen the perma- nent way and the bridges to such a degree as to increase the maximum admissible wheel load of locomotives, which is at present only 14.5 tons, to 20 tons for the trunk lines and to 16 tons for the secondary lines. It plans to increase the maximum. speed of trains which now varies between 80 and 90 km, and on the Slovak lines only 60 or 70 km per hour, to 120 km per hour. About 5,000 km of rails will have to be rein- forced, and at least 310 km of rails will have to be renewed annually in order to increase the speed of trains on lines of international traffic to 100-120 km. THE CONDITION OF THE LINES AFTER THE WAR. | The railways of Czechoslovakia—with the exception of some lines in the eastern part of Slovakia and Carpathian Russia—were not damaged by military operations during the war; it was only the invasion of the Magyar bolshevik troops into Slovak territory in the year 1919 that caused considerable damage. The railways suffered, however, during the war by the insufficient maintenance of the lines when all sections of the railway system were unusually overtaxed. Under the Austrian and Hungarian administration little at- tention was paid to the needs of the Czechoslovak territories, and nothing was done to improve the means of communication between Slovakia in the east and Bohemia in the west. After the Revolution it be- came necessary to equip the lines for the traffic from 142 CZECHOSLOVAKIA east to west along the long axis of the Republic. As there were comparatively few railways running in that direction and, moreover, those were of weak construc- tion, it was necessary to reinforce and supplement the - existing lines. In order to secure the communication between Prague, the capital, and Bratislava, the most important river port of the Czechoslovak Republic on the Danube, the Breclava-Bratislava line had to be strengthened and double-tracked. The second tracks of the lines Ceska Trebova-Olomouc, Prague-Plzen, as well as the second tracks of other lines in Bohemia are being constructed to a total length of 112 km. By the readjustment of frontiers, particularly in Slovakia, some lines have been cut off from the railway system. By the construction of the connecting line near Banrieve the separated lines in the district of emer have again been connected with the system. The connection with the Ruthenian territory has been im- proved by the construction of the Banovce-Vajany line (19 km), finished in October 1920. On the Czecho-Austrian and Czecho-Hungarian fron- tiers there are more than 30 transit stations fitted out very inadequately. These stations are to be fitted out gradually for their new duties. By various provisional constructions the first difficulty has been to a great extent overcome and the definite construction of those stations is now in progress. Beside the above-mentioned urgent works it was also necessary to prepare a program of systematic improvement and extension of the railway system. By the law or March 30, 1920, the National Assembly RAILWAYS 143 adopted a progam for several years and provided 6% billion crowns for railway construction. Under this program a direct communication between the eastern and the western parts of the Republic will be accomplished by a new line running from Veseli on the Morava River through the center of Slovakia to Kosice-Uzhorod-Mukac-Hust. The Czechoslovak rail- way system will be adapted to the new traffic require- ments and will be equipped in such a way as to meet the needs of the expected economic development of the country in the future. The program contemplates the construction of 15 new lines of a total length of 568 km, including 389 km of line in Slovakia and 115 km of connecting lines between Slovakia and the other provinces of the Republic. In addition, second tracks will be laid on many other lines, and after the completion of this program 16 per cent of the lines in the Republic will be double-tracked. All stations of any importance will be properly recon- structed and fitted out for intensive traffic. At impor- tant centers of traffic, especially at Prague, Ces, Tre- bova, Brno, Plzen, Ces. Budéjovice, Hradec Kralové, Breclava, Bratislava and Kosice adequate switching yards and sorting depots will be constructed. The preparatory work has so far advanced that it will be possible to begin the construction of all lines in a very short time. For the management of these new con- structions three technical departments have been estab- lished, at Myjava, Handlova, and Zvolen. A special department studies the problem of the re- construction of the Prague railway stations. The prin- cipal problems are: the separation of the passenger from 144 CZECHOSLOVAKIA the freight traffic, the separation of the freight traffic from the service of making up trains, and of the local from the through traffic. In Prague the Wilson Station will be used for the passenger through traffic, and the Masaryk Station for the local traffic. A new switching yard is planned for the making up of passenger trains in both central sta- tions, and a new central freight depot for the freight service. All suburban stations of Prague which are to be adapted for the metropolitan traffic by separating the passenger from the freight traffic will be connected with the switching yards by lines serving the local freight traffic. To prevent intersection of the through freight traffic with the local freight traffic and to divert the through freight traffic form the center of Prague new local con- nections will be established. The through freights will encircle Prague over the new belt railway lines. The general projects elaborated on those principles by the research department mentioned above are now being considered by a commission on which all the interested parties are represented. In studying these problems due note is taken of the projected electrification of all rail- way lines in the environs of Prague within a radius of about 50 km. This problem is to be solved in connec- tion with the electrification of the country which will be accomplished partly by the development of water power and partly by the use of coal. The construction of local lines to supplement the rail- way lines has been decreed by the law of June 27, 19109, in force January I, 1922. Under this law investiga- RAILWAYS 145 tions have been made in 130 cases regarding lines of a total length of about 3,000 km, and a program for the construction of local railways in the Czechoslovak Re- public will be worked out on the basis of these re- searches. CARS Under article 318 of the Peace Treaty of St. Germain the rolling stock of the Austrian railways was to be dis- tributed by the Reparation Commission in Vienna under the presidency of Sir Francis Dent. This Com- mission has not yet finished. its work. The number of cars in the territory of the Czecho- slovak Republic is much less than the number which would belong to the Czechslovak Republic occording to the conditions of traffic during the war. After the Revolution, the rolling stock of Czechoslovakia was short more than 1,890 locomotives and more than 65,000 cars. Since that time the Administration of the State railways has enlarged its rolling stock by the construction of new locomotives and cars, and has for this purpose placed considerable orders both with domestic and foreign manufacturers. Czechoslovakia obtained 92 locomotives out of the number delivered to the United States of America by Germany, in accordance with the conditions of the armistice. More than 200 locomotives have been de- livered by domestic and foreign manufacturers, and more than 300 have ultimately been acquired in the distribution under the Peace Treaty, or from other sources. 146 CZECHOSLOVAKIA The number of locomotives on the main lines in Czechoslovakia is shown in the following table: Express and passenger Freight train train Smaller locomotives locomotives locomotives Total Czechoslovak State railways 939 1,918 770 3,627 KoSice-Bohumin railway ... 40 176 7 273 Bustehrad ‘railway! 0)... 3s 60 154 23 237 Usti-Teplice railway ....... 25 113 5 143 The number of locomotives is insufficient for the present demands of traffic, and the needs of traffic will greatly increase with the economic development of the country. Czechoslovakia expects a consider- able share from the division of the rolling stock of former Austria-Hungary, but in the meantime, continues to enlarge its own stock of locomotives by other means. The number of cars in Czechoslovakia according to the census of September 12, 1920, was as follows: oe as} a 5) 3 n % 3 3 HEUER Ch Marah: faint iichaan y > pepe Dae 5 “a S SV ae ee ioe Barareh Wh vB ie £ fu oO ne Ws Oo ie) Ho Oo Cars of former Austrian railways (St. B.).... 5,407 1,591 5,575 20,689 7,703 33,967 40,965 Cars of former Hungarian railways (M.A.V.)... 708 214, 1,926 8,201 1,147 11,374 12,286 Czechoslovak cars (CSD) 1,077 325 8,834 10,822 796 20,452 21,854 Cars of private Czecho- slovak railways ...... KE: 260 1,348 15,325 1,422 18,095 19,087 Foreign’: cars @..03.eeess 165 S32, 140./4.'9,282 464 11,885 12,058 ‘Latal ¥ivacaaaies cme os 8,089 2,398 19,823 64,408 11,532 95,763 106,250 Since that census the number of the cars of the Czechoslovak State railways, constructed in domestic factories and marked C. S. D., has increased to 30,000. RAILWAYS 147 THE MAINTENANCE OF ROLLING STOCK After the great war the proportion of locomotives under repair was unusually large (40 per cent against 18 per cent in prewar time). However, with the aid of private industry, and especially by intensive work and the enlargement of our own railway shops, it was possi- ble by the 1st of July, 1921, to reduce the proportion of locomotives under repair to less than 20 per cent. The maintenance of cars has also improved con- siderably. At the beginning of 1919 the proportion of passenger cars under repair was 33 per cent, and of freight cars, 14 per cent. At the end of 1920 this percentage decreased to 14.4 for the passenger cars and 7.8 for the freight cars. In the ten main shops with 10,000 workmen and the 16 locomotive shops with 4,300 workmen, there were repaired : In the first In 1920 half of 1921 a. Locomotives: PRCA VVRTEDAIUS Weta aie nts eta acd ceeets 645 *352 WWitestibaata Cars bec ey Gowns ge deen me RY 4 1,797 923 PASHEPL ED AILS beech aaieie ta bie eh vein tao atl tate 18,673 10,765 Total locomotives repaired............ 21,115 12,040 b. Passenger, service and postal cars: HeAVVPrepaits iirc i fee ath elahale & tiayetets 3,305 3,014 Meditittetepairs tosis us ota, eileen 5,370 4,955 LAGHTATePAIT Sree wee alec sack aches tee 48,949 27,292 Total passenger, etc., cars repaired..... 57,024 36,261 c. Freight cars: Heavverepairgae ee ic ierits oe aes 15,164 II,097 Medtunis repairs er nc ee eae eee ae a 19,915 24,224 Light repainae sae cece Ve sete cues 288,895 131,013 Total freight cars repaired............ 323,874 166,334 *Incl. Kos-Boh. railway. 148 CZECHOSLOVAKIA These figures show that the efficiency of the repair shops has improved. Nevertheless, the present capacity of the shops is not adequate for the number of cars which the Czechoslovak State railways will place in service in the near future. It will, therefore, be neces- sary to build three new main shops for the repairing of cars and to equip the locomotive shops for all light and medium repairs. The enlargement of thé shops was already provided for in the construction and investment program under the law of March 30, 1920. By the intensive work done in the railway shops of the Czechoslovak Republic the rolling stock of the former Austrian and Hungarian State railways was kept in condition for service, and railway traffic in central Europe was saved from dis- organization and a possible collapse. PASSENGER TRAFFIC After the war is was necessary to adapt the pas- senger and the freight traffic to the requirements of the liberated country. By the time-table of June 1920 the internal traffic was essentially improved, especially the connection with Slovakia, and in July I921 a new time-table was introduced closely approaching the normal conditions and meeting the most important needs of the population. The international passenger traffic was also greatly improved. Prague has a direct connection with Paris via South Germany, with Milan and Rome through Munich, with Belgrade and Trieste through Maribor, with Bucharest through Kosice and Kiralyhaza, and with Breslau through Kladsko. The direct communication Berlin-Vienna gover RAILWAYS 149 Décin-Prague necessitates as yet a change of cars at Décin, but this difficulty will soon be removed. The passenger traffic carried at present by the Czechoslovak State railways per 1 km. of line is 104 per cent greater than before the war. The intensity of the passenger traffic in comparison with the Austrian pre- war conditions is indicated in the following table: y 7 =] uO 3S 6 2 be 53 Get SEE Sf go ee “3 8 at os ase ge. ° eos wy OM a oes Se ae eos ge Zi be as as eh As Austrian State railways in TOL Sis ciate eveieruee tik etae 153,518,550 10,968 5,804,066,266 37.81 14,029 Czechoslovak State rail- WAYS JIE UI O10 sts saa «e's 126,463,304 16,731 5,231,868,163 41.37 7,558 Czechoslovak State rail- ; , WAY Sarit 1020 sce melee ss 174,107,907 22,424 6,869,805,389 39.46 7,892 FREIGHT TRAFFIC The development of the freight traffic has suffered from a shortage of cars. Therefore the greatest pos- sible care has been given to the organization of through traffic in order to utilize the cars to the utmost. And we have really succeeded in speeding up considerably the circulation of cars (time reduced from 13 to 10 days) and thus at least to some degree satisfied the needs of commerce and industry. Thus, for example, in 1920 from January to November 105,000 more cars were loaded and transported than in the same period in 1919. In spite of this, the movement of freight is far short of the prewar intensity as will be seen from a comparison of the conditions in 1919 with those of 1913, in the following table: 150 CZECHOSLOVAKIA (in metric tons) Fast freight Parcels Carload lots Total Austrian state rail- ways in’ 1913... 1,140,788 55554,010 79,131,586 85,826,964 Czechoslovak State railways in 1919 326,666 1,643,235 31,582,293 333575194 Czechoslovak State tailways in 1920 351,449 1,767,886 38,128,098 40,248,033 (in ton kilometers) Austrian State rail- ways in I9I3. 148,095,884 809,356,040 11,352,112,402 12,309,564,326 Czechoslovak State railways in 1919 34,765,741 156,552,272 3,272,795,673 3,464,113,086 Czechoslovak State railways in 1920 40,062,484 216,561,724 3,941,392,711 4,198,016,919 (in metric tons) Per1km. Administration Per 1 km. of the line shipments Grand total of the line Austrian State rail- ways in 1913); 's 6,118 7,452,801 93,279,765 6,649 Czechoslovak State railways in Igi9g. 4,177 3,877,004 371234,198 4,660 Czechoslovak State railways in 1920 5,101 4,603,484 44,851,517 5,686 ; ’ (in ton kilometers) Austrian State rail- ways in I1913.... 870,030 1,228,108,352 13,537,072,678 957,712 Czechoslovak State railways in 1919. 451,031 545,416,690 4,009,530,376 522,044 Czechoslovak State railways in 1920. 532,100 659,223,143 4,857,240,062 615,657 Czechoslovakia is the second country in Europe in sugar production (Germany 2.7, Czechoslovakia 1.9, France 0.9, Netherlands 0.3, Belgium 0.3 millions of tons yearly). Consequently the sugar campaign from the end of September to November is a very difficult period for the Czechoslovak railways, the more so, as it is necessary at the same time to supply the cities with foodstuffs and the industries with coal for winter. The following table shows the intensity of the traffic resulting from the movement of the sugar crop: No. of tons carried No. of cars used 1919 1920 I9I9Q 1920 Héets wire y ce cee ta 1,544,421 1,750,462 127,082 125,282 Beets pulp ie en et 871,676 1,087,885 67,661 77,928 Raw sitcareienaet ss 189,699 246,601 14,551 17,450 Totalie. see laa 'etba 022,005,000) 0 2: 060hOAs 209,204 220,660 RAILWAYS 151 The carrying capacity of the cars was increased from 12 to 13.9 tons and the sugar industry supplied 1,000 of its own cars of 20 tons. Owing to a better traffic organization the movement of the sugar crop, which had been attended with some difficulties in 1919, had an entirely normal course in 1920. TARIFFS In the first period after the revolution, in order to avoid violent economic disturbances, it was necessary to keep in force the rules and tariffs of the Austrian and Hungarian State railways, modifying them only with regard to the new situation. A revision of these tariffs is now being considered. For international traffic there was at first no legal basis ; Czechoslovakia, a new State, was not a member of the Berne Convention for the international railway traffic, and the Czechoslovak Republic had declared that it was not a member of the Union of the German railways. Consequently, it was necessary to conclude preliminary tariff agreements with the railway admin- istrations of the neighboring countries. The agree- ments were based on the Berne Convention, with some exceptions as required by the situation created after the war. In 1921 the Czechoslovak Republic formally joined the Berne Convention in the sense of the peace treaty. On the 1oth of March, 1919, the monetary union of the former Austro-Hungarian ter- ritories came to anend. For this reason all the joint tariffs had to be abolished, and temporary agreements had to be negotiated with the neighboring railway administrations of the adjoining countries in order to 152 CZECHOSLOVAKIA make possible direct shipments on a single bill of lading. Tariff agreements for the transportation of passen- gers and goods have been concluded with the follow- ing countries: France, Belgium, England, Germany, Netherlands, Italy, Austria, Yugoslavia, Poland, Ru- mania, and Hungary. Unsettled political, economic and currency condi- tions still make necessary certain special measures concerning import duties and passports at some transit points on the frontier. The situation in this regard is improving, and the respective administrations take care that the inspection is made as quickly as possible with- out trouble for the travelling public. The transpor- tation of goods is regulated by the agreements with Germany, Belgium, Netherlands, Luxemburg, Den- mark, Norway, Poland, Rumania, Yugoslavia, Italy and France. The international relations will be further consoli- dated by commercial agreements. Commercial treaties have already been concluded with several countries. The Czechoslovak railway administration seeks to make arrangements with the foreign administrations for a direct dispatch of goods. Through tariffs have been agreed on for the traffic with Trieste, negotiations for direct tariffs with the ports of the North Sea and the Baltic are in progress. By means of advantageous tariffs the railway admin- istration of Czechoslovakia seeks to promote naviga- tion on the waterways of the Elbe, the Vitava, and the Danube. In the inland traffic, as we mentioned at the begin- RAILWAYS 153 ning, after the Revolution the Austrian tariffs were applied in Bohemia, Moravia and Silesia, the Hun- garian tariffs in Slovakia and Carpathian Ruthenia. On account of the deficit of the Czechoslovak rail- ways, the rates were twice raised in order to achieve at least a partial balance between the value of the goods carried and the rates charged. With regard to the elongated geographical form of the Czechoslovak Republic, it was very important to connect the eastern provinces, Slovakia and Car- pathian Ruthenia, with the Bohemian countries. Spe- cial efforts were made to provide direct railway con- nections with advantageous tariffs and rates for the traffic between the western and the eastern parts of the Republic. Accordingly the rates of the new passenger tariffs are based on a sliding scale, declining in pro- portion to the increase of the distance. The rates of the private railway line of Kosice-Bohumin are calcu- lated in a similar way. For social reasons, the advantages of reduced fares heretofore granted to manual workers for the journey from their homes to their working places has been extended to the intellectual workers also. For a dis- tance of 150 km. all workers are now entitled to a reduction of 74 to 80 per cent from the regular fare. A new method of calculation has likewise been in- troduced in the new tariff for the local transportation of goods on the basis of the total distance between the stations of the Czechoslovak State railways in Bohemia, Moravia, Silesia and Hlucinsko on the one hand and the stations of the Czechoslovak State rail- ways in western and central Slovakia south of Vrutky 154 CZECHOSLOVAKIA and Zilina on the other; the same with regard to all local railways operated by the State in Bohemia, Mo- ravia and Silesia. In Slovakia and Carpathian Ruthenia tariffs already in force in Bohemia, Moravia and Silesia have been introduced so that now the same rates are appled in all Czechoslovak territories. FINANCIAL SITUATION The figures quoted above show the precarious con- dition of the Czechoslovak railways at the time when they were taken over by the new administration, and indicate the efforts necessary to maintain and improve the operation of the railways under the disastrous conditions existing after the war. These conditions naturally reacted on the financial situation of the Czechoslovak railways. The financial depreciation of the former Austrian railways during the war was clearly shown in the fact that the interest earned on the capital invested, which before the war had been 3 per cent, declined to 0.87 per cent for the fiscal year 1914-15, and to 0.17 per cent for 1916-17. In 1917-18 there was a deficit of 110 million crowns, the charges for military transports being calculated as receipts although never paid. Thus the Czechoslovak Republic inherited a network of railways which was a liability rather than an asset. On the other hand it was necessary immediately to undertake expensive constructions and investments, if operation was to be maintained and by degrees raised to a decent level. It was likewise indispensable to in- crease the income of the personnel exhausted by the RAILWAYS 155 war and living under wretched conditions. The Czechoslovak State railway budget is consequently burdened with heavy expenditures which are a direct result of the war, i. e., investments made necessary by the reckless exploitation of the system of railways dur- ing the war, and the increase of the income of the employees. When the extraordinary wear and tear caused by the war has been repaired, and the Czechoslovak rail- way system adapted to the new economic needs, the financial situation of the Czechoslovak State railways may be expected to improve considerably. XI THE POSTAL SERVICE (By THE CZECHOSLOVAK MINISTRY OF Posts AND TELEGRAPHS) Immediately after the proclamation of the independ- ence of Czechoslovakia, the administration of the posts, telegraphs and telephones took steps to organize the service in accordance with the new conditions. This task was not an easy one, for it meant the reorganiza- tion of the old system and the establishment of a new central administration which would have jurisdiction over all the postal, telephone and telegraph communi- cations. By the law of November 13, 1918, a Ministry of Posts and Telegraphs was established. The Ministry has direct control over six district bureaus of posts and telegraphs—in Prague, Pardubice, Brno, Opava, Bratislava and KoSice. The Kosice bureau is in charge of the branch office in Beregsas. The district bureaus have supervision over the postal and tele- graph offices, building offices and of postal bus trans- portation. The postal checking bureau is under the direct supervision of the Ministry. Immediately after its establishment, the Ministry had control over the postal districts of Prague and 156 THE POSTAL SERVICE 157 Brno only; in Silesia and Slovakia the unsettled political situation made it impossible for the Ministry to take over the postal administration immediately. After the situation became more settled the Ministry took over the district bureau of posts and telegraphs in Opava (Silesia) and in January 1919 the postal and telegraph offices in Slovakia. In April 1919 a postal and telegraph district bu- reau was established in Pardubice. The invasion of Slovakia by the Magyar bolsheviks in May 1919 considerably hampered and delayed the reorganization of postal service in Slovakia. However, when the conditions in Slovakia settled down in July 1919, the Ministry established a postal and telegraph district bureau in Bratislava, later also in Kosice. In Decem- ber 1919 a district bureau for the region of Ruthenia was opened in Uzhorod. This Uzhorod bureau has been closed, and a branch bureau opened in Bergsas. When the question of Teschen was settled in 1920 the postal service was organized in that part of Silesia also. From the Prussian postal administration the Czechoslovak administration has taken over the post offices in Hlucinsko, and from Austria the offices in the regions of Valcice and Vitoraz. After the war, the postal authorities had to take energetic measures to avert the threatened disorgani- zation of the postal service, because of the sudden interruption of the old organization of the postal service, the lack of material, and the shortage of trained employees. The first problem was to regain for the postal service the confidence of the public which had been largely lost during the war (since 158 CZECHOSLOVAKIA 1920 the losses of mails have decreased from 0.44 per cent to 0.08 per cent and are still decreasing). It was necessary to improve the organization and extend the service in all directions. For this purpose transporta- tion of mail by aeroplane was established and the automobile transportation was extended. In Austria-Hungary, the transportation of mail by aeroplane was almost unknown. In the summer of 1920, the Czechoslovakak Postal Administration con- cluded an agreement with the French-Rumanian Aerial Transportation Company, and the aerial transporta- tion of mail between Prague, Strasburg and Paris was inaugurated in October, 1920. In January of 1921, the aerial route was extended to Warsaw, and at present a route is in operation also between Vienna and Prague with a connection for Budapest. Later on the service is to be extended to Belgrade and Bucharest. Czechoslovakia is also negotiating with Switzerland in regard to the establishment of an aerial route between Prague, Munich, Zurich and Geneva, with an extension to Lyons and to Spain. Plans for an aerial mail, to be carried by dirigible airships (di- rect connection between Prague and North America, South Africa, the Indies, Australia, and Japan) are under consideration. The French-Rumanian Aerial Company also trans- ports passengers and goods. Before the war Austria had 42 State automobile routes in service, of a total length of 1,586.56 kilo- meters; twenty lines with a total length of 470.06 kilometers were in the present territory of Czecho- slovakia. During the comparativly short time of five THE POSTAL SERVICE 159 years, and notwithstanding the unfavorable- condi- tions existing after the war, the Czechoslovak Postal Administration inaugurated regular automobile transportation of mails and passengers on 98 lines of a total length of 2,102 kilometers. For transportation 170 autobuses are used, and for the carrying of let- ters and parcels 23 light automobiles and 48 trucks are employed. The postal automobile service is ad- ministered by 53 offices; the average number of pas- sengers carried during six months is 1,253,846; the number of packages and personal effects is 53,445; the number of kilometers traveled daily is 6,825. It was naturally in the interest of the state as well as in the interest of commerce and industry that an extensive system of dependable telegraph lines should be built in which Prague would assume a leading posi- tion due to its geographical situation. Notwithstand- ing the lack of material and shortage of skilled work- men, the telegraphic communications within the coun- try have been greatly improved. Thus, for instance, there was formerly only one line between Prague and Bruo, while now there are three direct lines. Other industrial and commercial centers like Prerov and Moravska Ostrava are now connected with Prague by direct lines, and Prerov also has direct communication with Bratislava and Zilina. Besides the building of new lines, steps were taken toward the improvement of the service by the instal- lation of modern appliances, such as the Hughes, Bau- det and Siemens apparatus. For the telegraphic communication with foreign countries, the postal administration has established and 160 CZECHOSLOVAKIA maintains service over direct telegraph lines with France, Prague-Paris: with England, Prague-London ; with Poland, Prague-Warsaw; Prerov-Cracow, Mor- avska Ostravea-Bilsko, Zilina-Cracow, Kosice-Lvov ; with Rumania, Prague-Bucharest, Kosice-Bucharest, Kosice-Cluj, Kosice-Oradeamare; with Yugoslavia, Prague-Belgrade, Prague-Zagreb; with Italy, Prague- Trieste; with Hungary, Prague-Budapest, Brno-Buda- pest, Kosice-Miskolcz; with Austria, Prague-Vienna, Ceské Budéjovice-Vienna, Brno-Vienna, Prerov- Vienna, Bratislava-Vienna, Moravska Ostrava-Vienna, Znojmo-Vienna, Breclava-Vienna, Plzen-Vienna, Kar- lovy Vary-Vienna, Prague-Linz, Ceské Budéjovice- Linz; with Germany, Prague-Berlin, Prague-Dresden, Prague-Leipsig, Prague-Hamburg, Prague-Munich, Karlovy Vary-Berlin, Plzen-Leipzig, Usti nad Labem- Dresden, Liberec-Dresden, Brno-Berlin, Prague- Nuremberg, Karlovy Vary-Hof, Podmokli-Dresden, Liberec-Svitau, Liberec-Goerlitz, Bratislava-Berlin; and with Switzerland, Prague-Zurich. The postal administration intends to build powerful radio-telegraphic stations in several large cities, so as to maintain communication with foreign countries in the case of damage to the telegraphic lines. The first broadcasting stations were built in Prague (Kral. Vinohrady) and in Brno. Both these stations have been in use since January I, 1922. The most powerful station is to be that of Podébrady, with a wave length of about 4,000 meters (the Kosice and Bratislava stations have wave lengths of over 2,000 meters) ; it will be used for communication with western Europe, while the Kosice station is intended for communciation THE POSTAL SERVICE 161 with eastern Europe. In Karlovy Vary there is being built a radio-telegraphic station with a wave length of about 1,100 meters. On the governmental aviation field in Kbely there is being erected a radiographic station for the purposes of aviation only. The transmission of telegrams between Czechoslo- vakia and the United States of America is done over the direct telegraph wires of Prague-Paris (system Baudet) and Prague-London (system Baudet), thence to Brest-Havre, or over the wires of the British or French cable companies (Anglo-American Telegraph Company, Compagnie Francaise des Cables Teélé- graphiques, Commercial Cable Company, Eastern Union Direct United States Cable Company). In conse- quence of these arrangements, cable communication with the United States of America, as compared with the cable service of other States of Central Europe, is a superior one. When the radio-telegraphic service has established connections with the four large trans- atlantic radio-telegraphic stations (French, German, Polish, and British), the transmission of messages will be further improved. The cable then will not be so heavily overladen and a lower rate for the trans- mission of deferred cablegrams, lettergrams, press dispatches, etc., may be introduced. With other distant countries Czechoslovakia communicates largely through the cables of the largest world cable company, the East- ern Telegraph Company. Dispatches to South America are directed via France, but later on may also be directed via Italy, for that country is now laying a cable to South America. During the former régime, there were only a few 162 CZECHOSLOVAKIA direct telephone lines between the important industrial centers of Bohemia and Vienna, and the same may be said about Slovakia and Budapest. There were, how- ever, no direct internal lines connecting Bohemia with Moravia and Slovakia, the establishment of which was one of Czechoslovakia’s first tasks. The telephone service with Austria has been improved as has also the service with Germany. At present Czechoslovakia possesses two direct telephone lines to Berlin, Dresden, Leipzig, and Nuremberg. Décin also has a direct telephone line to Dresden. With Poland telephone communication has also been established. At present other direct lines are being constructed for communication with Germany: Prague-Berlin, Prague - Hamburg, Karlovy Vary-Chemnitz, and Liberec-Goerlitz. A direct line is planned for the connections Prague-Zurich, Prague-Budapest, and Prague-Zagreb. Shortly after its establishment, the Czechoslovak Re- public became a member of the World Postal Union and a party to the International Telegraph Treaty and the International Radio-telegraph Treaty. Owing to successful negotiations with foreign countries in regard to mutual postal regulations, Czechoslovakia is at pres- ent in postal communication with nearly all the coun- tries of the world. In November, 1921, an international radio-telegraph conference was held at Prague which was attended by representatives of all the succession States of Austria- Hungary, and of Germany and Bulgaria. The confer- ence concluded agreements concerning the establishment of direct international telegraphic lines, rates, the main- THE POSTAL SERVICE 163 tenance of lines, the speedy dispatch of telegrams, the settlement of complaints, etc. The postal organization of Czechoslovakia includes a Postal Checking Bureau, established by the law of March 11, 1919 (No. 140 of the Collection of Laws and Regulations). The Bureau is a State institution under the direct supervision of the Ministry of Posts and Telegraphs. Through the post offices the Bureau accepts deposits for the persons or firms who have established accounts with the Bureau, and checks issued by the holders of the accounts are credited to the payees or paid in cash. The post offices throughout the State act as agents of the Bureau; they accept deposits and pay out money on orders of the Bureau. On December 31, 1921, the Postal Checking Bureau held the follow- ing balances in the countries listed: Total Total de- turnover No. of posits (in No. of in 1921 (in depositors millions) transactions millions) Czechoslovak (Czecho- slovak crowns) ..... 63,739 2,390 49,917,198 162,546 Belgium (francs)...... 65,514 715 15,918,409 55,733 Holland (gulden)....... 55,410 138 7,034,528 6,967 Japanatvyeny yen 9. 180,683 37. 36,300,009 2,382 Hungary (Magyar CLOWNS Peart: ae o's 40,475 2,093 7,871,936 147,580 Germany (marks)..... 759,930 10,998 428,163,000 1,192,445 Austria (Austrian CFOWNS )}iperatie ys a. aeoene 177,465 33,803 39,784,677 981,142 Switzerland (francs)... 42,740 12 25,096,230 17,776 The postal administration employs 18,575 clerks of whom 73.8 per cent are Czechs and Slovaks, 24 per cent Germans and 2.2 per cent of other races. The postal administration also employs 18,941 mail carriers, chauffeurs, etc. 164 CZECHOSLOVAKIA At present there are in Czechoslovakia 4,605 post offices and 3,688 telegraph offices. Automobiles mail is carried by 185 autobuses, 23 light automobiles and 48 trucks. For the transportation of mail by railroads there are over 800 mail cars. The volume of mail car- ried daily is over 15,000,000 pieces of letter mail (in- cluding newspapers and printed matter) and over 280,- ooo parcels. The telegraph wires in use measure 126,826 kilo- meters. Telegrams average 256,577 per week and 1,026,307 per month. The length of the interurban telephone wires is 77,- 802 kilometers, the local telephone wires measure 167,- 416 kilometers. There are 1,348 telephone centrals, and 85,717 subscribers. The number of local calls per month averages about 14,000,000, and the long distance calls number over 650,000 per month. The Ministry of Posts and Telegraphs shows the following revenue and expenditure since its establish- ment: From November I, 1918, to December 31, 1918, the revenue amounted to 17,689,800 crowns and the ex- penditure to 15,545,500 crowns. For 1919, the revenue was estimated at 177,937,000 Czechoslovak crowns and the expenditure at 160,284,600 crowns. ‘The actual re- ceipts for I919 were, however, 201,149,000 crowns and the disbursements 187,764,100 crowns. For 1920 the receipts were estimated at 429,801,500 crowns and the expenditure at 420,859,120 crowns. The actual revenue amounted to 528,716,900 crowns and the ex- penditure to 413,140,200 crowns. In 1921 the receipts were estimated at 802,765,100 crowns and the actual THE POSTAL SERVICE 165 revenue was 828,607,100 crowns and the expenditure 1,026,310,300 crowns. For 1922 the preliminary esti- mate of receipts was 962,930,500 crowns, and of the expenditure 871,654,970 crowns. The actual realized revenue amounted to 902,277,474 crowns and the ex- penditure to 869,494,872 crowns. For 1923 the receipts were estimated at 1,162,054,000 crowns, and the ex- penditure at 880,358,000 crowns, and for 1924 the receipts at 1,089,313,000 crowns and the expenditure at 853,292,770 crowns. In the expenditure for 1919 and 1920 the high cost of living bonuses paid to the employees from a fund authorized by the Government were not included. In 1921 the bonuses were included in the budget of the Ministry of Posts and Telegraphs, thus causing a deficit in the budget. In 1922, however, the revenue exceeded the expenditure, although the Ministry continued to pay the bonuses. The receipts of the postal administration would be much higher were it not for the free transportation of a huge volume of official correspondence. The privi- lege of free mail is also extended to municipal and parochial offices, to charitable institutions, chambers of commerce, etc. In Austria before the war, correspond- ence of this kind amounted to one-seventh of all the letters carried through the mails. The postal authori- ties are contemplating a drastic revision of the franking privilege which naturally will bring about a considerable increase in the revenue of the Ministry of Posts and Telegraphs. XII BANKING KAREL KARASEK, DIRECTOR OF THE INDUSTRIAL AND AGRICULTURAL BANK oF BoHEMIA, PRAGUE The old Austro-Hungarian Empire had two eco- nomic centers, Vienna and Budapest, which controlled the economic life of the provinces and which, in conse- quence, became the seat of the largest and most influ- ential banks. The banks themselves favored this economic centralism which was also supported by the Government’s policy of taxation. Just as, after the foundation of the German monarchy, the establishment of the large Berlin banks had led to a concentration of economic activities in Berlin to the detriment of Frank- fort, Dresden and Hamburg, so the big banks of Vienna helped to maintain the controlling influence of Vienna in Austrian economic life, although about 80 per cent of the industries were concentrated in Bohemia and Moravia. Under such circumstances it is not surprising that the first banking institution established in Prague in 1857 should have been a branch of the Vienna Oest. Creditanstaldt fur Handel und Gewerbe. It was only in 1863 that the first independent bank was established in Prague, and that was the Bohemian Discount Bank, established by German bankers and industrialists of 166 BANKING 167 Prague. In 1867 followed the establishment of the Agricultural Credit Bank for Bohemia, among the founders of which were some Czech noblemen. The first bank was to serve the German financiers and busi- ness men, the second was to assist agriculture and the agricultural industries. After the establishment of these two banks the first Czech bank was founded in 1869—The Zivnostenska Banka for Bohemia and Moravia—founded, as its name suggests, to promote the interests of trade and industry. At the end of 1872 there were in Prague nineteen joint-stock banks with an aggregate capital of 44,000,- ooo florins (1 florin=2 prewar Austrian crowns or $0.405 ), but their financial reserves were, in most cases, weak as was proved in May, 1873, when the Vienna crisis broke out, for only four of the Prague banks survived the crisis: the Bohemian Discount Bank, the Agricultural Credit Bank, the Zivnostenska Banka, and the Bohemian Union Bank. Of the provincial banks only two remained, one of which, transferred later to Prague, has become one of the greatest Czech banks. It is the Prague Credit Bank. The crisis of 1873 had brought such enormous losses to financial enterprises and so shaken the confidence of the public that for many years economic life ap- | peared to be almost paralyzed. For twenty-five years not a single new joint-stock bank was established in Prague. The Vienna banks, on the other hand, estab- lished several new branches in Bohemia. In 1877 a branch of the Anglo-Austrian Bank was established, in 1890 one of the Vienna Bank-Verein, and in 1896 a branch of the Landerbank. A larger basis for banking 168 CZECHOSLOVAKIA was created through the development of industry and commerce promoted by the industrial prosperity in 1905 and 1907. In the period of 1898 to 1914, about twenty new joint-stock banks were founded, while the old banks greatly increased their capital. With a few exceptions the new institutions were mostly banks founded by Czechs seeking to counteract the supremacy of German banking, a supremacy due to economic centralism which had benefited Vienna but hampered and retarded the economic development of Bohemia. Down to the end of the last century, the Czech indus- tries remained far behind the German industries, and the energy of the Czech nation in that period was con- centrated mainly in agriculture and trade. The founda- tion, however, was laid for the industrial and commer- cial development which has taken place in the last two decades. The conditions then prevailing found an ex- pression in the development of Czech banking and its relations to the German banks. At the end of the last century the Czechs had but one great bank (the Zivnostenska Banka), while the Germans had two large banks and branches of four Vienna banks. The suprem- acy was, therefore, on the side of Vienna, which con- trolled several of the biggest industrial establishments in the Czech territories. In Slovakia, of course, the controlling interest was in the hands of Budapest; up to the outbreak of the war it was hardly possible to speak of Slovak banking. Of the total bank capital in the Czech territories, only about a fourth was in the hands of Czech banks at the end of the last century. The development of the Czech banks in the last two BANKING 169 decades was therefore an attempt to secure to Czech banking its due place, and the attempt was successful. The war itself contributed to a great extent to the favorable development of Czech banking. The banks in Austria, as a matter of fact, did not suffer through the war; the balance sheets of the banks in Czech terri- tories show that their war losses were insignificant. The inflation and the depreciation of the currency were no doubt the main causes of the comparative prosperity of the banks during the war, for, through the inflation, both industries and banks were enabled to realize con- siderable profits. Bank deposits increased steadily, and the Czech banks in particular profited by the prosperity of the farmers. The Czech peasant is known as intel- ligent and industrious, and his savings made during the war were deposited in Czech banks. So it happened that through the war and through the establishment of the Czechoslovak Republic, Czech banking gained con- siderable advantages over the German banks. In the Czech territories, with the exception of Slo- vakia, there are at present thirty-seven joint-stock banks. Of these ten are in German hands and twenty- seven in Czech hands. These banks have about 25 billion crowns of paid-up capital and deposits. Of this total 10 billion may be credited to German banks and 15 billion to Czech banks, so that the ratio between Czech and German banks which had been 25:75 at the end of the last century has been changed to 60:40. To complete our exposition we now give the balance sheets of fourteen large Czechoslovak banks each with a paid-up capital exceeding 50 million crowns. Four 170 CZECHOSLOVAKIA of these fourteen banks are in German hands: the Bohemian Discount Bank, which has taken over the branches of the Oesterr. Credit-Anstalt; the Bohemian Union Bank; the Bank for Commerce and Industry, which was established through the conversion of the branches of the Oesterr. Landerbank into an inde- pendent bank; and the Bohemian Commercial Bank, which was founded through the consolidation of the branches of the Vienna “Merkur” bank. The paid-up capital, with reserves, in million crowns, is shown in the following table: 1900 1905 I910 1914 1918 1920 1921 1922 Zivnostenska Banka .... 29 36 80°) (.I35r 0360/16 1903 5 ada ado Bohemian Discount Bank. 23 28 28 29 Zi 105, e200 To Bohemian Industrial & Ag- ricuitvutal) Bank wiyuks is ne bs is a ae aie 198 270 Anglo-Czechoslovak Bank. .. ie iy ote Be ae a 167 Moravian Agrarian & In- dustrial (Bank's. 502.3. Bah Bes 8 15 47. 198 192 198 Bank for Commerce & In- CSIR ana as Sik Sales aie, ae Sie! es we ae a)" Se) oka Bohemian Commercial Bk. .. tA <5 me os 58 95) 108 Prague Credit Bank..... 7 9 32 41 BS 11325 14907 wei a7 Gen. Czech B’king Union. .. +; 2% a a es ah 88 Bank of the Czechoslovak 1 BS Fed a) oR el ey ae Pe) ae ae ia as 81 89 Bohemian Agrarian Bank .. te bie 4 13 86 87 87 Bonemianrbank vow. ss care 2 A oe 4 8 22 72 74 75 Moravian Discount Bank. es ee ae ve 38 ei DEPOSITS IN CURRENT AND SAVINGS ACCOUNTS IN MILLION CROWNS ; 1900 1905 I910 1914 1918 1920 1921 1922 Zivnostenska Banka .... 103 125° 248 205° 1,567 4,229)" 4,716 (4,316 Bohemian Discount Bank. 409 71 120 155 392 2,080 2,494 2,383 Bohemian Industrial & Ag- Ticuithral Bank vei cs 42s A aie ite Aa de ol E35 LOOM aaa S Bohemian Union Bank.. og1 122 232 -241 754 1,933 2,394 2,383 Anglo-Czechoslovak Bank. .. oe 27 44.) 458) 1,210) 1,350 estas Bank for Commerce and Tmateteyins yn Pied cep ee $2 ae ae se a ss, 908020. 238 Bohemian Commerecial Bk. .. es te ae so 4a Soran Prague Credit Bank..... 23 32 56 81 340 1,396 1,464 1,410 Gen. Czech B’king Union. di iy ae te <3 a 27 eee of the Czechoslovak CPIOTIS weave et a cieistet ate. ohare ae Aig avs wis ee fa 2 86 Bohemian Agrarian Bank. .. i as 16 469 998 ope stage Bohemian “Bank i>. .).)... sie e's 14 22 76° 305/451 >) S26 Moravian Bank ......... ae + cS a i one (2989 909 BANKING 171 These figures illustrate the development of Czecho- slovak banking since the end of the last century. They show how small the capital of the banks was twenty- two years ago, amounting to only about 400 million crowns; they show further how the capital rapidly in- creased from 1905 to I910 to 1,055 millions, and finally they show the effects of the monetary inflation during and after the war. The capital of the banks increased in the years 1914 to 1918 from 1,338 million crowns to 5,254 millions, increasing approximately four times, the increase nearly corresponding to the depreciation of the crown at home. The depreciation continued, how- ever, and by the end of 1921 the banking capital had increased to 19,467 million crowns, i. e., about fourteen times in comparison with the year 1914. And such was, in fact, the prewar depreciation of the currency at home, 1.e., so many times the cost of living had increased in comparison with prewar times. This is undoubtedly an interesting fact showing the connection between the value of the currency and the nominal amount of banking capital. Having described the development of Czechoslovak banks we shall now investigate their transactions, their enterprise, and their relation to the economic life of the country. In the rich western European countries in- dustry and commerce were established long before the foundation of a banking system; they were the result of a development extending through centuries which needed no banks in its early stages. The banks have not only assisted the economic development—they served commerce and industry and were, at the same time, reservoirs of capital. In Central Europe, however, the 172 CZECHOSLOVAKIA case was, in many instances, quite the reverse. Here the task of the banks was to establish industry and com- merce, to help in the foundation of new industrial con- cerns, to seek the commercial highways of the world, while, at the same time, as in Western Europe, accept- ing deposits from all parts of the country and from all classes of the population. In this way, in Central Europe, in Germany, Austria, Hungary and Italy, the type of a universal bank was founded, a bank doing all-around business and serving comparatively well the economic and financial needs of the population. The Czechoslovak banks, too, are of this general character. The industrial development in the Czecho- slovak territories was slow, for there were few capi- talists. This explains why in Bohemia the industrial and banking development has had a more democratic character than elsewhere. The Czech banks have grown up from small beginnings, all classes of population participating in their foundation, so that the shares of the Czech banks are in the hands of people of all classes. There are really no Czech banks exclusively controlled by big financial groups. Owing to the slow develop- ment of industry in Bohemia there were but few in- dustries with a large capital, and consequently an active participation of the banks in industrial concerns became necessary. This participation took the form of large credits to manufacturers and partly of direct organization of companies which would then take over large private concerns or found new ones. This direct assistance to industry was one of the main activities of the Czechoslovak banks. The following table shows the investment of the funds of the Czechoslovak banks: BANKING 173 ASSETS IN 1922 (in million crowns) Short- Bills Stocks term and and other Banks: loans notes securities Debtors Zivnostenska Banka ....... 369 790.6 110.5 3,176.4 Bohemian Discount Bank.. 150.9 140.9 118.3 2,349.5 Bohemian Industrial & Agri- Cilturalebankieaede eu. 161.5 356.7 154.6 1,870.3 Bohemian Union Bank..... 214.8 216.3 148.7 2,075.7 Anglo-Czechoslovak Bank.. 117.5 ™20.3 155.1 1,080 Moravian Agrarian and In- Cistria toa tara tenes 25.4 38.8 117.9 T1371 Bank of Commerce & Indus- LEVEL rie eet eee ie as III.5 99.5 47.4 F1i0:0 Bohemian Commercial Bank 73.7 38 25 886.8 Prague? Credit) ‘Bank. >... 35.3 297.8 104.6 1,050.8 General Czech Banking Unione ote cctaiic eas ais 136.1 19.7 23.4 743.8 Bank of Czechoslovak Le- RF TEMAS OR ee eR oc oe ey 85.1 2215 34.9 363.6 Bohemian Agrarian Bank... 100.9 25.7 2971.2 840.5 PMohemianvpankivovs se. ces s's 45.7 41.9 71.9 419.5 Moravian Discount Bank... 65.6 46 8.8 249.7 The reserve for current payments includes cash on hand and demand obligations, totaling in excess of 2 billion crowns, and a reserve of negotiable paper which may be rediscounted at the banking office of the Minis- try of Finance. These represent about 25 per cent of the deposits and may be considered a sufficient re- serve. In this connection it should be mentioned that bills of exchange are now fewer than formely, as pay- ments in cash are now more in favor. The banks hold about a billion crowns, partly in Government bonds and partly in industrial bonds, the latter showing the in- fluence of the banks in industrial concerns. The banks hold from 10 to 30 per cent of the capital stock of various companies which, together with the credits 174 CZECHOSLOVAKIA granted, is sufficient for their control. The greatest asset is represented, however, by the debtors holding credits granted to industrial concerns. ‘These credits are often secured by real estate mortgages, bonds, etc. Through these activities the banks control the economic life of the country because they alone are able to grant the credits necessary to industrial enterprises. Besides the general banking business, the Czecho- ~ slovak banks deal also in bonds and other securities, buy and sell foreign exchange, and arrange for payment abroad. All the great banks have connections with foreign banks, especially with the banks in Germany, Yugoslavia, France, Italy, England, and the United States. To show the activities of the Czechoslovak banks it is necessary to show their profits and expenses. These are shown in the table on the following page. Most of the profits are derived from interest, 1.e., from the difference between the interest on deposits and loans. The banks pay at present 4 to 4% per cent in- terest on deposits, but demand 7 and 7% per cent. Moreover, they receive a commission on checking ac- counts, on foreign exchange and similar transactions. Profits made on deals in securities, bonds, etc., are included under the heading of “various profits.” Ex- penses are large so that the net profits of the banks are not extensive. Dividends paid by the banks amount to about 6 to 14 per cent of the paid-up capital. Before the war the highest dividend was about 8 per cent. As nearly all banks pay good dividends the shares. of the banks are in great demand by investors. The banks, as a rule, do not show all their profits, BANKING 178 for they are anxious to build up internal reserves for unforeseen losses, and thus to strengthen the confidence of the public. On the whole, Czechoslovak banking is in a very satisfactory state. The Czechoslovak banks have de- veloped into strong financial institutions fully satisfying the economic needs of an independent State and prom- ising well for the future. As the Czechoslovak Repub- lic is likely to become a creditor of the weaker eastern European countries, the Czchoslovak banks can not but gain in their importance and activities. PROFITS AND LOSSES IN 1G22 (in million crowns) Interest v hae f=| ~~ 2 5 2 Banks: 3 a 2 23 pepe > F 3» aa miele 5 8 Sate Geary are yg oO & q&a Gv AY "od o aie oo & oo fo ral 4 oO > oe <0 & oy} 4 Zivnostenska banka. 216.4 313.7 45 x3 fark) Po 5-3 52.2 Bohemian Discount Bariledeenyertsts ceisler 58 130:2,/ 427.68 527.3. 0) 065.5, ) 45 5 32 Bohemian Industrial & Agricultural Bk. 90.2 153.7 28 13.61) 1 160.6 II.2 32.3 Bohemian Union Bk. 74.5 148.2 41.4 26 82.4 - 22.4 3: Qaes sek Anglo-Czechoslovak Bank ...... Soe eh 87 26.5 Tesh Pas gE 0.7 20.2 Moravian Agric. & Tidises bau bran we tOO.2) 1k 30s te alee 2.805 20.5 2.9 $.4°°) 16.3 Bank for Commerce and LINGustLry mess 04.300 O3c4 it Scs She), eRe 10 0.1 16.2 Bohemian Commer- cial $Bankgper ccs 22.OMn As Sant Isd: 14.1 27.4 2.7 4.4 13-7 Prague Credit Bank. 78.8 116.6 17.2 12 34.9 7.8 2,9! 921.7 Gen. Czech Banking Unioniescanioe sso 44.5 66 15.4 ao, (26,3 7.8 2.1 8.9 Bank of Czechoslo- vak Legions ..... 22 3 ak 8.7 2.5)) “t44 0.6 6.3 5.4 Bohemian Agrarian Bank ........+.- BO FATTO 5.8; 17.0 4.3 9.6 6.5 Bohemian Bank ... 9.4 19.1 7.8 2.6 9.5 2.5 74 6.9 Moravian Discount Bramlesinie ctasieterete ale 14 24.1 4.1 2 6.8 3.3 1.3 5.5 XIII CURRENCY CONDITIONS Dr. VirrpALp MitpscHuH, PROFESSOR AT THE CHARLES UNIVERSITY, PRAGUE I. THE SITUATION AT THE TIME OF THE ESTABLISH- MENT OF THE REPUBLIC The limited financial resources of the former Empire compelled the Government of Austria-Hungary to cover its war expenditure by the issue of bank notes. On July 23, 1914, the total circulation of bank notes in Austria-Hungary had been only 2,129 million crowns; during the war it increased by October 26, 1918, to 30,679 million crowns, an increase of 28,550 million crowns. As the total national income of Austria- Hungary was estimated before the war at 1g billion crowns, it will be seen that the increase of currency during the war amounted to 150 per cent of the total national income and that the money income had there- fore increased to the same extent, although there was no increase in the economic values. As a natural result, the cost of living increased with the income. Exact figures relating to the increase of prices in Austria- Hungary during the war are not available, but it may be safely estimated that at the end of the war the prices were about five times the prewar prices, although, on account of Government control. the prices of some 176 CURRENCY CONDITIONS 177 agricultural products and the rents were kept at the old level. | With the decline in the buying power of the Austrian crown its exchange value also declined. At first the decline was not very marked, for, on October 25, 1918, the Austrian crown was still valued in Zurich at about 44 Swiss centimes. When, however, the old monarchy collapsed and new States arose out of its ruins, with Czeschoslovakia the first among them, the exchange value of the Austro-Hungarian crown declined rapidly, and there were reasons to expect that the decline would continue. That would naturally depress the value of the Austrian war loan bonds. Consequently, the hold- ers of the war bonds endeavored to turn the war loan bonds into cash, as the Austro-Hungarian Bank was bound to make advances on them up to 75 per cent of their nominal value. There was, therefore, an immi- nent danger that the war bonds would soon be turned into bank notes and the evils of monetary inflation increased. There was another dangerous possibility, namely, that the Austro-Hungarian Bank would issue new bank notes for the credit of the various succession States and thus bring about a depreciation of the cur- rency even in those States which did not issue any new notes. Dr. RaSsin, the first Czechoslovak Minister of Finance, hoped at first to check this danger by negotiations with the Austro-Hungarian Bank. When, however, these negotiations failed to bring the desired results (the Austro-Hungarian Bank continued to make advances on the war loan bonds and to print new bank notes), Dr. Rasin decided to take independent measures, He prohibited the branches of the Austro-Hungarian 178 CZECHOSLOVAKIA Bank in Czechoslovak territory to make any further advances on the war bonds; established an independent Czechoslovak postal savings department; refused to recognize the new provisional Austrian twenty-five, two hundred, and ten thousand crown notes; and made preparations for a complete separation of the Czechoslovak from the Austro-Hungarian currency by stamping the notes circulating in the Czechoslovak territory. The stamping of the notes was done in the week of March 3-9, 1919, under the authority of a law passed by the National Assembly on February 25th. In the night of that same day, February 25th, all frontier traffic was stopped until March oth, to prevent the im- portation of new bank notes. Only notes of ten, twenty, fifty, one hundred, and one thousand crowns were stamped, and the one and two-crown bank notes were provisionally left in circulation unstamped. Later on, however, in the fall of 1919, when the Czechoslovak State notes, printed in America, were ready, these one and two-crown bank notes, together with the stamped bank notes, were withdrawn from circulation and ex- changed for Czechoslovak State notes. In this way the separation of the Czechoslovak currency was carried out relatively early and easily. The necessity and timeliness of this action was soon demonstrated by the differences in the movement of the Austrian and the Czechoslovak exchange. At the time of the stamping of the bank notes, Dr. Rasin retained one-half of the bank notes submitted for stamping as an enforced State loan. Some of the amounts thus retained were, however, released later, CURRENCY CONDITIONS 179 so that the sum retained did not exceed 28.69 per cent of the total amount of 7,436 million crowns of stamped notes. For the retained amounts the owners received I per cent State certificates which were to be paid in the coming years out of the revenue derived from the levy on capital and from the tax on the increase of capital during the war, and these measures were intro- duced at the same time. Until then the bank notes thus retained were to be kept in the banking department of the Ministry of Finance and not to be placed in circu- lation. Through these measures Dr. Rasin sought to reduce the amount of the fiduciary circulation in order to place the finances of the State on the regular credit system, so that everything the State needed could be obtained through regular credits granted by the bank of issue, or, as was the case in Czechoslovakia, by the Banking Department of the Ministry of Finance acting provisionally as a bank of issue. As a matter of fact there was at that time such an abundance of paper cur- rency that the banks paid only one per cent interest on deposits, and the object of Dr. Rasin, the reduction of the fiduciary circulation, was fully accomplished by those measures. Il. Tur MoveEMENT OF PRICES By the separation of its currency Czechoslovakia put a stop to monetary inflation, yet in the years 1919 and 1920 prices in Czechoslovakia increased considerably, though not to such an extent as in the neighboring countries. There was an increase of prices not only in the first year after the war, when prices everywhere showed an upward tendency, but also in the second 180 CZECHOSLOVAKIA year after the war, when in England and elsewhere the prices showed a downward tendency. The enormous increase of prices in Czechoslovakia in 1920 is strikingly shown in a comparison of the pre- war index of prices with that of 1920. At the time of writing no official figures as to the increase of prices are available, but reliable data relating to the increase of prices of the principal products have been compiled. Taking 100 as an equivalent of the prices current in the first half of 1914, the prices of the principal articles at the end of 1920 were as follows: Flour 460 (price fixed by the Government), beer 857, sugar 964, fire- wood 1,142, beef 1,190, cowhides 1,675, petroleum 1,786, butter 1,929, coal 2,134, iron 2,682, cotton cloth 4,208. The average of the prices was 1,542, so that the prices in Czechoslovakia had increased 15.5 times over the prewar level, an increase which, in comparison with western European countries, was unusually large. In this connection it is necessary to mention that the prices of some commodities, such as flour, sugar, and rent, were controlled by the Government; otherwise the prices of these articles would have been much higher. In 1921 and 1922 the movement of wholesale prices was as follows (official figures; July, 1914, prices taken at 100): Jan. Feb. March = April May June OZR ae cots TASB iT 400 ET S19 223 nT A2O ge e7O W422 ae er ee ae T0755 1,520 7 1,554 ud AQ tant 7 eee ae July Aug. Sept. Oct. Nov. Dec. LOAI aware icine oe 132505) 0,361 nu T0523) ut Osa aul Oolaenl Ose TO22 ies cin noha Pd0A 7h. 3009) 71a Le Gael OCG met Org 999 It will be observed that the prices reached the highest point at the end of 1920 and began to decline in the CURRENCY CONDITIONS 181 beginning of 1921, and that by July of that year the prices had decreased nearly 20 per cent. But in the second half of 1921 a new increase of prices is to be observed. This increase was, of course, the result of the abolition of the Government control of prices of the principal agricultural products and of the re- establishment of the freedom of the internal trade. The former alone does not explain the great increase of prices, for the withdrawal of Government control ac- counted for 244 points only, while the actual increase between July and December, 1921, was 415 points. In 1922 there was, however, a steady decline of prices which was especially rapid in August of that year. III. INTERNAL FINANCIAL CONDITIONS What was the cause of the downward movement of prices in Czechoslovakia coming so late? Was it mone- tary inflation? Here we may draw attention to the fact that the un- fortunate consequences to which the monetary inflation had led in former Austria-Hungary and in the neigh- boring countries were one of the main reasons for the Czechoslovak Government to take measures to stop further monetary inflation. This was accomplished by the law of April 10, 1919, which provides in section 10 that the total circulation of uncovered notes must be limited to the amount of the notes originally stamped, plus the amount of notes used up to one-half of the total amount of the checking accounts and scrip taken over by the Czechoslovak Republic from the Austro-Hungarian Bank, and the amount of the one and two-crown notes circulating in the Czechoslo- 182 CZECHOSLOV ARTA vak territory. Any further increase of circulation is permitted only if the notes are fully covered by gold and silver, or by discounted bills, advances on stocks and shares, and foreign bills. By this law the mone- tary inflation, it is true, was not completely prevented, for even then the State could again obtain advances in notes at the Banking Office of the Ministry of Finance, but the possibility of inflation was, neverthe- less, reduced to narrow limits by the passage of this law. As a matter of fact, there has never been any monetary inflation in Czechoslovakia. This is proved by the returns of the Czechoslovak Banking Office. According to these returns, the monetary situation in Czechoslovakia developed as follows: (In thousand Czechoslovak crowns) September 15 1920 1921 1922 1923 Notes in cirtulation........ 9,891,346 11,253,828 9,837,009 8,925,099 DISCOUNTS! yaa sine detuastoce ere e 906,273 eee 321,485 585,416 Advances on securities...... 2,249,956 2,516,424 1,559,055 925,351 Foreign bills and balances... 303,949 803,849 1,736,393 2,444,593 Gold and silver holdings... 252,808 593,128 727,665 1,060,763 Unsecured circulation ...... 6,178,360 6,483,270 5,492,411 3,908,976 Legal maximum circulation GE THROES Siete etlate vo chon 3 10,452,454 11,787,438 11,343,835 12,020,145 Note Wresefve? vif: bp oe ve 561,108 533,610 1,506,826 3,095,046 The increase or decrease in the circulation of notes does not depend on the needs of the State, but is af- fected mainly by commerciel needs. IV. ExtTerRNAL Causes AFFECTING THE PRICES It is therefore necessary to inquire whether the causes of the increase or decrease of Czechoslovak prices may be found in external influences, especially in the rate of exchange of the Czechoslovak currency. In the fluctuation of foreign exchange both the in- CURRENCY CONDITIONS 183 crease and the decrease in the rate usually correspond to a contrary movement of prices. In the case of Czechoslovakia the increase of prices until the end of 1921, and the following decrease, correspond first to the decrease and then to the increase in the rate of exchange of the Czechoslovak crown. What were the causes affecting the changes in the rate of exchange of the Czechoslovak crown? Here we may consider, first of all, the fluctuations in the supply of and the demand for the Czechoslovak crowns both of which have their origin in the changes in the trade balance. Was the trade balance of Czechoslo- vakia in the years I9I9-1921I so unfavorable and the demand for foreign currencies so great as to affect the rate of exchange to such an extent, or has Czecho- slovak trade balance in 1922 improved so much as to cause such a great demand for Czechoslovak cur- rency? Nothing of the kind has happened. In 1919 Czechoslovakia had no official statistics of imports and exports, but on the basis of the import and export licenses granted it has been calculated that the imports exceeded the exports by 1,231 million Czechoslovak crowns. The excess of imports was therefore not very great. For 1920 and 1921 official statistics of the Czechoslovak foreign trade have been published, showing that in 1920 the exports exceeded the imports by 4,185 million Czechoslovak crowns and in 1921 by 4,878 million Czechoslovak crowns. In 1922 the foreign trade balance was in favor of Czechoslovakia to the amount of 5,391 million Czechoslovak crowns. It is evident that the great decline of the Czechoslovak crown in the years 1919-1921 could 184 CZECHOSLOVAKIA not have been caused by an unfavorable balance of trade. It appears, therefore, that the causes of the decline of the Czechoslovak crown until the end of 1921, and of the following rise of the Czechoslovak crown, can not be sought in the fluctuations of supply and demand, nor in any other obvious facts, but rather in the changes of the point of view regarding the Czecho- slovak crown. What were the influences affecting that change of foreign opinion? The development of the German mark is, in this respect, highly instructive. Until the end of 1921 we see a surprising similarity in the development of the mark and of the Czecho- slovak crown. Just as the Czechoslovak crown de- clined between May, 1919, and February, 1920, from 25 to 5 Swiss centimes, so also the German mark dropped from 41 centimes on June 28, 1919, to 5.62 on January 26, 1920. An improvement in the crown rate was accompanied by a rise in the rate of exchange of the German mark to 18.60 centimes on May 20, 1920, which again was followed in both cases by a de- crease. The mark stood at 7.70 centimes in the middle of November, 1920. Another small rise to 10.55 occurred in February, 1921, followed however by a new and steady decline which was much greater in the case of the German mark than in the case of the Czecho- slovak crown, so that in August, 1921, the exchange rate of the mark in Zurich was much lower than that of the Czechoslovak crown. The difference between the Czechoslovak crown and the mark increased stead- ily, especially so after November, 1921, when the Czechoslovak crown began to rise while the mark con- CURRENCY CONDITIONS 185 tinued to fall. The similarity in the course of the German mark and the Czechoslovak crown until the fall of 1921 would become still more obvious if it were shown on a diagram. This similarity shows that in both cases, in the development of the mark as well as in the development of the Czechoslovak crown, the same causes were op- erating. The cause affecting the German mark, as is generally known, was the expectation that on account of the reparation payments German currency would steadily depreciate. There was also another contribut- ing factor, namely, the expected monetary inflation on the part of Germany. Czechoslovakia, on the other hand, as a victorious State, was not burdened with reparations and the country was practically free from monetary inflation. But owing to insufficient knowl- edge of the economic resources of Czechoslovakia and to its close economic relations with Germany, the Czechoslovak crown was placed abroad on a level with the German mark. When, however, in the fall of 1921, the mark began to decline rapidly it had become evident that there was no reason to class the Czecho- slovak crown with the mark, and consequently the Czechoslovak crown was valued differently, and its rate of exchange started on an independent course. The circumstances which had existed before, namely, the rich economic resources, the absence of monetary in- flation, a favorable trade balance, etc., were now fully appreciated as justifying the belief that in the future the crown would improve rather than depreciate. The consequence of this just expectation was that the Czechoslovak crown which, as we have seen, had 186 CZECHOSLOVAKIA for a long time been quoted below its purchasing power at home, and was therefore undervalued, now, after its rapid rise in July, 1922, was quoted abroad above its internal buying power, and consequently was over- valued in comparison with other currencies. How far the Czechoslovak crown was undervalued or over- valued can be approximately ascertained by a com- parison of the levels of prices existing in Czechoslo- vakia and abroad at certain periods (October 1920, May 1921, January 1922 and September 1922). The value of the monetary units of the foreign countries, when expressed in Czechoslovak crowns, ought to cor- respond to the ratio of prices if the Czechoslovak crown were neither overvalued nor undervalued. If then the actual exchange value of the foreign monetary unit, as expressed in Czechoslovak crowns, is higher than the value calculated on the basis of prices, then the Czechoslovak crown is undervalued in comparison with the foreign unit; if, however, the value of the foreign unit, as expressed in Czechoslovak crowns, is lower, then the Czechoslovak crown is overvalued. The following table shows how the Czechoslovak crown, compared with the monetary units of other countries in accord with this calculation, was either overvalued (++) or undervalued (—): (Per mille) Oct. 16, May 16, Jan. 16, Sept. 12, 1920 1921 1922 1922 PENG lane ens s cones cote —123 —68 —I3 + 34 Wtited: StAteS ies unta anise —II4 —42 —I + 46 Liale Ge ees ahd wits — 60 —72 —o9 + 61 Germanys comes cone tence — 4 — 7 +63 +145 From this table we can clearly see how greatly the CURRENCY CONDITIONS 187 Czechoslovak crown was undervalued in the second half of 1920 as compared with the monetary units of the western states. In the second half of 1922 this undervaluation of the Czechoslovak crown was turned into a considerable overvaluation. In 1923, however, due to the decline of prices in Czechoslovakia, the rate of exchange of the Czechoslovak crown corresponded fairly well with its buying power at home. V. THE CONSEQUENCES OF UNDERVALUATION AND OVERVALUATION OF THE CURRENCY. Every considerable and lasting undervaluation or overvaluation of the currency must of necesssity have important consequences for the whole economic life of a country, and such has also been the case with Czechoslovakia. When the currency of a country is undervalued, as was the case in Czechoslovakia from the second half of 1919 with slight variations until the end of 1921, it is possible to receive for the ex- ported goods, even if the prices abroad do not rise, more units of the domestic currency. As the wages, the prices of raw materials, and other expenses at home do not change in the beginning at least, the ex- porters obtain a special gain the consequence of which is an increase of production, full employment, improve- ment of the trade balance, and also an improvement in the rate of exchange, if not counterbalanced by other stronger forces. With the increased demand of the manufacturers for raw materials and workmen, the prices of the raw materials and the wages of the workmen increase also and the increased income stimu- lates the demand at home for other goods, and there 188 CZECHOSLOVAKIA are better prospects for other branches of production. These effects are on the whole similar to those produced by monetary inflation. The other side of this state of affairs is, however, that with a depreciated currency the prices of imported goods also increase, and later on the prices of the export goods, too; there is an increase in the cost of living, wages, salaries, and taxes must, of necessity, be increased, and the cost of production rises again and the index of prices goes steadily up. In order to check the increase of the prices, the Govern- ment subsidizes the imports of necessaries, assumes control of production, and eventually also monopolizes the sale of goods. All these consequences were to be observed in Czecho- slovakia. The Czechoslovak exports increased (in 1920 the exports were 69,022,209 quintals, but rose to 97,427,354 quintals in 1921, and to 94,902,625 quintals in 1922) and the trade balance was more and more favorable. The profits of the exporters were propor- tionally high, and the Government sought to obtain a share of them by high export duties, or by control of the exportation of some of the more profitable articles such as sugar, alcohol, malt, etc. The income of the Czechoslovak State from these sources in the years IQIQ, 1920, and 1921, amounted in the case of sugar to over 5 billion Czechoslovak crowns, and in the case of alcohol and malt to over 1 billion crowns. Unem- ployment, in comparison with the western states, was proportionately small. Thus, for instance, according to the figures of the Czechoslovak State Statistical Office, the number of the registered unemployed in the beginning of 192I amounted to 100,000 and varied CURRENCY CONDITIONS 189 between 60,000 and 100,000 for a time. The number of the unemployed amounted to about 3 per cent of the total number of workmen. On the other hand, in the second half of 1919 and in the years 1920 and 1921 the prices went steadily upward, the population depending on salaries and fixed incomes suffered, while the unearned profits of the owners of supplies and of the producers and manufacturers increased. In con- sequence of the increase of the cost of living, the State subsidized the imports of cereals and flour, which again resulted in an increase of taxes and the conse- quent further rise in the cost of living. At the end of Ig2I the causes referred to above brought about a complete change at last, the undervaluation disappeared and was followed shortly afterward, in July, 1922, by an overvaluation of the Czechoslovak crown. What are the consequences of an overvaluation of currency? First of all, the exports diminish, for even if the prices abroad remain the same, the profits as expressed in the home currency decrease considerably even though the labor expenses at home remain the same. The consequence is that the exportation of cer- tain goods becomes impossible and the production there- fore diminishes, the trade balance becomes less favor: able, and that again tends to depress the rate of ex- change. With these consequences unemployment goes hand in hand, there is less demand for workmen and raw materials, wages go down and prices of raw ma- terials decline, the demand for domestic goods also decreases, and the industrial crisis sets in. However, with the improvement in the rate of exchange the im- ported as well as the exported goods become cheaper, 190 CZECHOSLOVAKIA there is a corresponding decrease in the cost of living; salaries, wages, and taxes can be reduced, and the result is the reduction in the cost of production and consequently also in the price of manfactured goods. With the decline of prices, the rate of exchange rises, etc. These consequences also may be observed in Czecho- slovakia at the time of the increase in the rate of ex- change of the Czechoslovak crown. The trade balance became less favorable, unemployment increased, wages were reduced, the prices showed a downward tendency. It is interesting to note that when the prices had gone down so far as to correspond with the rise in the rate of exchange, the exchange showed again an upward tendency. | VI. CONCLUSIONS. The foreign quotations of the Czechoslovak cur- rency fluctuated, as we have seen, from one extreme to another, from a considerable undervaluation to a con- siderable overvaluation. Both of these phenomena pro- duce unfavorable results. The currency conditions are sound only when the currency is neither undervalued nor overvalued and is stabilized. But how is stabiliza- tion to be achieved? It is often assumed that it is sufficient to introduce the gold standard, for in that case the circumstances that would otherwise lead to an increased rate of ex- change (favorable balance of trade, etc.), will result in an influx of gold and the exchange will remain steady, while in the opposite case the factors that would otherwise cause a decline of the exchange, will CURRENCY CONDITIONS IQI be counterbalanced by exports of gold. However, for the introduction, and especially for the maintenance of the gold standard, certain things are indispensable. It is necessary, first of all, to establish an economic and financial balance. In this respect Czechoslovakia, as we have seen, has sought to avoid all monetary infla- tion and has endeavored to balance its income and ex- penditure, and thus to avoid also an inflation in the form of credits. The second condition is an economic and financial balance in those countries with which it is necessary to trade. This, of course, does not de- pend on one country alone, it can be brought about only by international cooperation. Only when these conditions have been fulfilled will it be possible to bring about a complete stabilization of the currency. GOVERNMENT FINANCE Dr. KAREL ENGLIS, PROFESSOR AT MASARYK’S UNIVERSITY IN BrNo, MEMBER OF PARLIAMENT AND FORMER MINISTER OF FINANCE Immediately after the establishment of the Czecho- slovak Republic the Czechoslovak State finances were naturally in a difficult position. The newly established State was confronted by great tasks such as the crea- tion of an army and an administration, the reconstruc- tion of railroads, and the building of new schools; it had to deal with social problems such as the care of the invalids, unemployment, food subsidies, and all this had to be accomplished in a country exhausted by the war. It was only natural that the performance of these great tasks seriously affected the finances of the State. The resulting crisis was complicated by the col- lapse of the financial administration throughout the State, and especially in Slovakia, and became all the more acute because ever since its establishment the State had refused to cover the deficits in its finances by the comfortable method of issuing new notes as was unfortunately the case in the neighboring States. Czechoslovakia, on the contrary, decided to cover its deficits by regular credits only. But the obtaining of credits at home was a matter of considerable difficulty 192 GOVERNMENT FINANCE 193 on account of the general shortage of money. When, immediately after the establishment of the Republic, the first loan, the so-called National Liberty Loan, was issued, there was, of course, an abundance of paper money, a result of the Austrian currency inflation, and in the course of a few days one billion crowns was subscribed, but when, in the spring of 1919, the Czecho- slovak currency had become independent by the stamp- ing of the old Austrian notes circulating in the territory of the new Republic (on which occasion one-half of the privately held notes had been withdrawn from cir- culation and exchanged for I per cent certificates) there soon developed a considerable shortage of money which no doubt was favorable to the exchange value of the crown, but not to the State finances. The following two internal loans issued in 1919 and in the beginning of 1920 brought in about one-half of the yield of the first National Liberty Loan, so that the financial situation in the spring of 1920 became pre- carious. The flour subsidy, amounting to billions, was covered by profits made by the State treasury on the exports of sugar, but for the covering of other large deficits no credits whatever could be found, so that there was a great danger that the Government might not be able to avoid an inflation of the currency. The existing difficulties were increased by the decline of the Czechoslovak crown in the winter of 1919 and 1920. At the time of the establishment of the Czecho- slovak Republic the Austrian crown then still in circu- lation in Czechoslovak territory was valued at 25 Swiss centimes. After the Czechoslovak currency became in- dependent in the spring of 1919, the Czechoslovak 194 CZECHOSLOVAKIA crown rose to 34 Swiss centimes and then gradually de- clined to 4 centimes, a decline which was immediately followed by a rapid increase of prices, wages, salaries, and incomes in general. The general increase of prices made necessary an increase in the salaries of the State employees and Government expenditures grew apace. It became clear to every one that the decline of the crown must be checked as otherwise it would be im- possible to prevent new currency inflation and the sub- sequent collapse of the State finances, as was the case in the neighboring countries. To put a stop to the decline of the crown it was necessary to obtain large internal credits for a time at least until the State finances could be balanced. This task was accomp- lished within a year. In the summer of 1920 the Czechoslovak crown be- gan to rise, and in August, 1920, its value rose to 13 Swiss centimes. For a time the Czechoslovak crown became stabilized at about 10 Swiss centimes and con- tinued to be quoted at that rate until the fall of 1921 when an order for the mobilization of the army was issued, owing to the Magyar attempt at the restoration of the Habsburgs. The Czech crown fell to 6 Swiss centimes. It recovered from, this decline in the spring of 1922, and in the summer of that year almost trebled its value, rising to about 19 Swiss centimes. The general increase of prices and incomes was stopped, and the finances of the State became normalized. The second great task consisted in obtaining suf- ficiently large credits to give the Government time to put the finances of the State in order. We have already explained the difficulties in obtaining credits. GOVERNMENT FINANCE 195 In order to minimize these difficulties the Government consented to accept war loan bonds held by Czecho- slovak citizens and institutions in part payment of sub- scriptions to the new internal loan. It should be men- tioned here that, under the peace treaties, Czechoslo- vakia was not bound to honor the Austrian war loan bonds, but in order to prevent the collapse of some financial institutions, corporations, and individuals, the Government had decided to honor the bonds up to 75 per cent of their nominal value, but only if the bonds were offered as part of a subscription to the new internal loan. Consequently, all those who had war loan bonds of a nominal value of 100 crowns and lent to the State 75 crowns received two State bonds of a nominal value of 75 Czechoslovak crowns each, one replacing the war loan bond and the other representing the cash subscription. Up to the time of writing the new loan has brought in approximately 500 million Czechoslovak crowns and has greatly helped the State to carry on until its finances could be ‘put in order. The budget for the financial year 1921 amounting to approximately 18 billion Czechoslovak crowns of rev- enues and 18 billion crowns of expenditure was already balanced. This was accomplished by extensive savings and, above all, by the passage of a financial law which limited the disbursements of the various ministries and made all expenditure in excess of the budget estimates conditional on the consent of the Parliament. On the other hand, the postal fees and railroad rates were readjusted so as to make the railroads paying estab- lishments. here was also some increase in taxes, especially in the tax on luxuries and coal. The estimates 196 CZECHOSLOVAKIA of expenditure in the budget for 1921 were not ex- ceeded, although the Government employees received bonuses which were not provided for in the budget. But the task of the financial administration was not ended, for not only the finances of the State but also the finances of the autonomous communes and the provinces were in difficulties. Here also the crisis was relieved partly by a law providing for a control of communal finances in order to bring about the desired economies, and partly by a 2 per cent increase in the sales tax, which was allocated to the communes. These measures did not, of course, remove all the difficulties, but progress was made in that direction. In the Budget for 1922, the revenue amounted to 18,884 million and the expenditure to 19,872 million crowns, leaving a deficit of 988 million crowns. The deficit was caused mainly by the inclusion of the un- covered deficits of the provincial administrations in the State expenditure. The State finances suffered somewhat in consequence of the rapid rise of the Czechoslovak crown in the second half of 1922 which will be considered later on. In 1921 the flour subsidy was abolished, for at that time the profits made on the exports of sugar had nearly disappeared on account of the general decline of the price of sugar in the world markets, and there were no internal financial means to continue the sub- sidy. Gradually all the remaining central offices for the distribution of food were liquidated and freedom of internal trade was reestablished. In the budget for 1923 the revenue was estimated at 18,812 million, the expenditure at 19,377 mil- GOVERNMENT FINANCE lion, leaving a deficit of 565 million crowns. 197 The expenditures of the public administration were covered by the ordinary revenues to the proportion of 96 per cent. The budget estimates for 1924 are as follows: President of the Republic..... Chancellery of the President.. National Assembly ........... Supreme Assembly Supreme Bd. Financial Control Contributions to communal and provincial administrations... Pha tleph tote tJ a} Antsts sumeae hie ume ae ep Assistance to orphans, widows, oe eo eee eevee (In Czechoslovak crowns) Expenditure 3,000,000 13,674,618 39,361,443 4,599,619 3,934,425 798,257,000 1,986,1 31,074 ELC TENSIONS) ela cle eka ase 610,050,360 Ministerial Council ........... 157,496,892 Ministry of Foreign Affairs .. 173,234,118 Ministry of National Defence.. 2,299,973,630 Ministry of the Interior...... » 599,750,432 Ministry of Education ....... 845,921,810 Ministry ore imancess.. ace. fs 1,641,080,782 Ministry of Commerce ....... 38,712,753 Ministry of Posts and Tele- TATOO eMart cela ear cc's oicieaiore'e 853,292,770 Ministry of Railways)... oss... 4,174,517,870 Ministry of Agriculture ...... 655,300,342 Ministry cole hUstice |). 2% ass sess 279,881,952 Ministry of Public Works .... 739,024,793 Ministry of Social Welfare.... 786,962,927 Minisiry: OF Supplies... seee: s 18,764,334 Ministry of Public Health..... 159,142,893 Ministry of Unification ....... 1,844,068 Commission on Repatriation... 110,000,000 otal sy ane eee ee +++ 16,993,976,905 Revenue 1,790,542 204,000 24,000 87,509,000 153,102,750 30,030,000 172,519,500 7,201,200 14,193,878 9,077,840,040 48,989,100 1,089,313,000 4,603,237,530 526,476,371 21,214,733 492,541,267 8,700,300 240,000 56,166,230 16,391,293,591 It will be observed that in the budget estimates for 1924 the expenditure has been reduced to 16,944 mil- 198 CZECHOSLOVAKIA lion crowns. This is a reduction of 2,383 million as compared with the preceding year. The special in- vestment budget for the construction of productive public works, such as electric power stations, etc., has been reduced 770 million. The total savings as compared with the preceding year amount to 4,647 mil- lions. The State revenues have decreased to 16,391 millions, the resulting deficit being 603 million, or 44 million greater than in the previous year. The difficulties in the management of the State finances have been caused by the reduction in the coal tax, but the Ministry expects that a reduction in the costs of production will bring about a boom in industry and trade. The expected reductions in the estimated revenue will be made up by a corresponding adjustment of taxation for 1924. In the second half of 1922 the Czechoslovak crown rose to 19 Swiss centimes, declining later to about 16.75 Swiss centimes, a rate at which it has now been practically stablized ever since January, 1923. The cur- rencies of the neighboring States, especially that of Germany, have, on the other hand, sustained a con- tinual decline, so that the mark has been practically abandoned as a means of savings, while the Czecho- slovak crown has been sought as a means of savings on account of its rather increasing value. Asa result of the rapid rise of the Czechoslovak crown an industrial crisis and unemployment set in. In view of this fact the writer does not favor monetary deflation, because it has unfortunate consequences for industrial activity and prosperity. Stabilization of the currency is, in the opinion of the writer, the best financial policy to be pursued. GOVERNMENT FINANCE 199 The public debt of Czechoslovakia contracted in Czechoslovak crowns is estimated at approximately 22 billion. The debt includes nearly 7 billion Czecho- slovak crowns of liabilities incurred in regulating the currency and in taking over the checking accounts of the Austro-Hungarian Bank, and are as follows: 1, Checking accounts of the Austro-Hungarian DT Me ee ee is ie eee Cut Sel ite 6,526,855,144.31 Deeatate moan ke TOteniOale ce eon tas kya ear ees ae 390,579,000.00 3. Scrip taken over from the Austro-Hungarian SCM ee vite oe eee ee ewe eas 6,971,302,114.31 The internal debts of Czechoslovakia are as follows: National viberty.\Loan)'4: per Cents si. ccc eee te os 500,000,000 Beper, Contas TEASULyTN OLES) s v..5 sola elbe bis sigh dale 1,048,054,000 Beas OPTe CON UL rem iUiner sOa ll taiue ee ialsccie einlo eres 540,866,400 RANetECeNL mM ureaSury LV OLES 4 acti ajoins sistas ani otajics' os 915,990,000 Treasury Bonds (issued in exchange for 6 per Senter Treasury, wNOLES) ocoe cael ohaoe hl ioe 1,530,185,000 6 per cent Treasury Notes (to cover war expendi- PUES IMO Vata) reunion or Aseria te ttc tccaty ne ees 677,300,000 Boldwiculotery ..oanwe per cent... oi Seek 60,175,047 Public Services Investment Loan (railways, posts ADU MECIEO ONES Valrico sar ee ace a iaale ts eee a 589,000,000 Fourth State Loan, 3% to 6 per cent............ 3,401,707,736 Currency Loan (to purchase bullion as cover for NOLES.) Bata ers CONE hi welt vies ewe PE ee 250,000,000 Supplementary credit (for purchase of military SOUIMEH LSA NELECON ta is sass ita ales a 322,000,000 ELOUT. LOAN DET ECENC dey Shia dat pie eats att 3,400,000,000 Investment Loan for electrification, 6 per cent... 10,000,000 6 per cents LICASury. NOLES is bcs bce eee ataie ess 1,830,995,500 15,082,274,583 The external indebtedness of Czechoslovakia, taking the Czechoslovak crown at 3 cents, is estimated as follows: 200 CZECHOSLOVAKIA f.british "Governments creditson va eos ate eee 211,575,472 arCzechoslovakiotate, Oath ce an ein eo one 1,033,760,604 3. French Government Credits (for the purchase Of military equipment) soso aes a he tees 229,000,000 for. the: purchase of horses.c 0 s.ien.2 vss ore 36,774,784 for the maintenance of Czechoslovak Army LUNits ADIGA pees chee tee ea es Tecan a eeenets 77,198,728 4. Italian Government Credit (maintenance of Czechoslovak Army units abroad).......... 293,400,000 5. United States of America, credits for food, equipment and maintenance of army in RUBIA Mea teoeee ers a el Ure ohn wat aen et ahs uaere ree a Re aR 2,917,434,688 6. International (Nansen’s) Committee’s Credit (for repatriation of prisoners of war in Russia) 12,876,000 7. Revolution Loan (for maintenance of army Nits AUTOR )avcuutau sie cresc kts e Ktele re etaters ee ecsten ee 1,145,000 POtALH ays Yar ane eon ee a eet te ateter ae aie ae 4,813,165,276 Public debts arising from the Peace Treaties are estimated as follows: 1. Czechoslovak share of Austro-Hungarian pre- Wat, debtsp/ approximately. sc). cites ue eee 5,000,000,000 2. Reparation payments under the Treaty of St. Germain, maximum 750,000,000 gold francs; -ApproximiatelVieueve ess eeetee ane 10,000,000,000 LOCAL Cio ws oer a tea atic wa trate aan maeny 15,000,000,000 In addition, a contingent liability has been incurred by the State through the guaranty of 20 per cent of the international loan to Austria to which Czechoslo- vakia is a party. It will be observed, and it is generally admitted, that the Czechoslovak financial policy has been, on the whole, a wise one. The soundness of Czechoslovak State finances proves this beyond doubt, and it is no exaggeration to say that if a like policy had been pur- sued by other European States the financial reconstruc- tion of Europe would have made a better progress. XV LABOR LEGISLATION Dr. Eucene STERN, Division CHIEF IN THE MINISTRY OF SoclAL WELFARE Czechoslovakia has taken over from Austria-Hun- gary the regulations of the conditions of labor, espe- cially those affecting the labor contract, as they were contained in the civil code. It will be the task of the new State to revise these regulations and to bring them up to date. In the first five years of its existence, Czechoslovakia has enacted a number of laws which have placed the Republic, in the matter of social re- form, among the most advanced States. The Czech nation has always had a tendency toward social reforms. This tendency can be observed in the Hussite movement and in the Church of the Bohemian Brethren as well as in the national renaissance in the beginning of the nineteenth century. In the course of the nineteenth century the Czechoslovak territories were rapidly industrialized; they became the workshop of the former Habsburg Monarchy, but the owners of the industrial plants, mines, iron mills, and landed estates were members of the Austro-German nobility and bourgeoisie, while the workmen were Czechs and Slovaks. Independent Czech industries and commer- cial houses in which not only the workmen but also 201 202 CZECHOSLOVAKIA the owners were Czechs were established only in the latter part of the last century. The headquarters of the great industrial concerns and of the great banks which had their mines, furnaces, and factories in the present Czechoslovak territories were either in Vienna or in Budapest; and in the social struggles the former Austrian and Hungarian Governments were always hostile to the Czech workmen. Thus in both Austria and Hungary the racial question was at the same time a social question also. The Czech workmen in the Germanized districts of Bohemia had to build their own schools. The connection between the racial and the social question was often emphasized in Professor Masaryk’s lectures at the Prague University. He pointed out that the Czech question was above all a social question. Thus it was quite natural that in the newly established State the social question was one of the main preoccupations of the Government and found expression in the steadily expanding social legislation. Other influences affecting the social legislation are to be found in the repercussions of the Russian social revolution and of the collapse of militarist Germany, as well as in the action of the labor members of the Government. Owing to the advanced standard of pop- ular culture, social legislation in Czechoslovakia has proceeded in a peaceful way without any violent up- heavals. It is impossible to give in this short outline a de- tailed account of the social legislation; the writer can point out only some of its chief principles. One of the long-standing demands of the Czech workmen was the eight-hour working day. In 1900 it LABOR LEGISLATION 203 was the present President of the Czechoslovak Repub- lic, T. G. Masaryk, who emphasized the advantages of the eight-hour working day at a meeting of the miners at Kladno. Before the war the eight-hour working day had been established in some of the key industries and in the mines; after the war it was legally estab- lished in most of the European countries. In Czecho- slovakia the law establishing the eight-hour day was passed on December Ig, 1918. This law, dictated by the desire to put an end to the war sufferings, marks a new era in Czechoslovakia’s social legislation. It includes also regulations of night work and the protection of young workmen and work- ing women. The passage of the law was unanimous, both the representatives of labor and the representa- tives of industrial capital and agriculture recog- nizing its necessity. The main features of the Czechoslovak law provid- ing for an eight-hour working day are the following: (a) The maximum working day, under the former Austrian laws, was I1 hours in factories, with one hour allowed for overtime. In mines the working day was limited to 9 hours, with 3 hours for eventual overtime. In agriculture and in commercial estab- lishments there was no limitation of working hours whatever. The new Czechoslovak law limits the working hours to 8 in a day, or 48 in a week, or 192 hours in four weeks, for all categories of labor. The arrangement of the hours is to be determined by agreement be- tween the employers and the employees. In cases of seasonal work, and especially in agriculture and in the 204 CZECHOSLOVAKIA building industry, overtime is allowed on application to the boards of labor. Overtime is to be specially paid for in accordance with agreements made between the employers and employees, and must not exceed two hours a day in not more than 20 weeks, or 240 hours in a year. (b) Pauses in the working hours and Sunday rest. After five hours of continuous work, the employees are entitled to a rest of at least one-quarter of an hour. It is provided further that once a week the employees must have an uninterrupted rest of at least 32 hours. In establishments in which work can be stopped temporarily, such weekly rest should fall on Sunday; for men engaged in processes requiring con- tinuous operation the weekly rest should be so ar- ranged among the employees as to have every third weekly rest fall on Sunday. For women employed in factories, the Sunday rest starts on Saturday at 2 o’clock p. m. Exceptions are made only in such cases where the assistance of women is necessary in continuous work. Persons employed in housework are entitled to a weekly rest of at least 18 hours (preferably on Sunday). (c) Night work. Work at night, that is, from 10 p. m. to 5 a. m., is allowed only in such establishments or public services in which continuous work is neces- sary. In such work only men over 18 years of age are to be employed. The employment of women in night work is not permitted, but may be allowed in exceptional cases, especially when the work is in the general interest of the public, such as work in the hospitals. In such cases the women employed must be over 18 years of age. House servants must not be LABOR LEGISLATION 205 given heavy work in the hours from 9 p. m. to 5 a. m.,, except in emergencies, such as illness in the employ- er’s family, etc. (d) Protection of children and young persons is partially provided for in the measures regulating night work. It is, however, specially stated in the law that children below 14 years of age must not be employed in enterprises organized for profit, such as factories, etc. In housework and agriculture children over ten years of age may be employed in light work and services only. The law prohibits the employment of young men up to 16 years of age and young women up to 18 years of age in heavy work which might be detrimental to their health or their physical development. In.the mines only men over 16 years may be employed. On the whole, the eight-hour day signifies a stabilization of labor conditions and the end of labor conflicts and strikes for shorter hours, abolition of night work, protection of children, etc. PROTECTION OF YOUNG WORKMEN Of great importance is the law of June 17, 1920, reg- ulating the work in the home industries where the employee takes his work home and delivers the fin- ished goods to his employer. This kind of work is known the world over as the sweating system. At- tempts to regulate the working hours in the home industries were made in former Austria, but without any practical results. The importance of this question for Czechoslovakia may be judged by the fact. that in 1898 there were in the Czech territories alone 226,000 workmen employed in the home industries; including 206 CZECHOSLOVAKIA, Slovakia and Carpathian Ruthenia, their number may be estimated at half a million at present. The law provides for the establishment of district and central committees dealing with the various branches of the home industry. Each committee has nine members who are appointed by the Minister of Social Welfare. One-third of the members are selected from among the employers, another third from among the employees, and the rest from neutral ex- perts. These committees act as mediators in all conflicts between the employers and the employees. The committee usually seeks to effect a compromise, and if this is not possible decides the conflict on its own initiative. The decison is binding on both sides, unless they appeal to the central committee. The central committees act as appellate bodies and review the decisions of the district committees. They issue rules regulating wages and working condi- tions of the employees in the home industries. The rules are obligatory on all those employed in the home industries as well as on the employers who have to comply with the conditions prescribed. The law regulating the working conditions in the home industries is one of the first Czechslovak laws which are not confined to the regulation of working hours and the protection of the workmen’s health, but provide also for a minimum wage. DEMOCRATIZATION OF INDUSTRIAL ESTABLISHMENTS After the war the Czechoslovak workmen and their trade unions did not limit their demands to the regu- lation of the working hours and wages, but demanded also the right to be consulted in regard to the hiring LABOR LEGISLATION 207 and dismissal of workmen, and a share in the man- agement and profits of the establishment. This de- mand has had a profound effect on the Czechoslovak social policy. Attempts to satisfy this demand were first made with a partial success in the mining industry. Under the law of February 25, 1920, district and local miners’ councils have been established. The councils are charged with the duty to cooperate in the enforcement of the laws providing for the protection of workmen, to supervise the observance of the wage contracts, to cooperate in the maintenance of discipline in the mines, to act as mediators in conflicts between the employers and employees, and to cooperate in the management of welfare institutions for the employees. The councils are to be consulted in regard to the dis- charge of workmen. They are authorized to submit plans for improvement of the management, and may examine the annual balance sheets of the concern. The miners” council, however, may not interfere directly with the management of the concern, for its function is mainly advisory. Local miners’ councils are to be elected in all mining establishments employing at least 20 workmen. The council is elected by all employees who are citizens of the Republic, over 18 years of age, and have worked for the concern at least three months in a period of two years. Eligible are those who have worked for the establishment at least six months in three years in the mines, are over 24 years of age, and are citizens of the Republic. The management has one technical and one commercial representative on the council who act as advisers. The meetings of the council take 208 CZECHOSLOVAKIA place after the working hours, and the employers may be present. District councils are elected by the local miners’ councils for a period of two years. Their duty is to direct the local councils in the carrying out of the laws regulating the labor conditions, to act as medi- ators in conflicts between the local miners’ councils and the management, to cooperate in the issuing of labor regulations for the entire mining district, in the negotiation of wage contracts, and in the division of the shares of the profits granted by the management to the local council for the benefit of the employees. The law providing for the establishment of local and district miners’ councils has been, supplemented by a law providing for a share of the employees in the management and in the profits of the mines. Every mining concern is bound by law to have proper book- keeping, and to issue an annual balance sheet showing profits or losses. The employees are entitled to a share of 10 per cent of the profits, which is not to be divided among them, however, but to be employed for the general good of the workers. All proceeds received by the local councils go to the district council, which uses them for the support of educational, humanitarian, and other institutions beneficial to the miners. It was only to be expected that after the establish- ment of the local and district miners’ councils the workmen in other industries would seek to have such councils established also, especially as such councils had already been established in both Austria and Germany. The result of this demand was the passage of the law of August I2, 1921, providing for such factory coun- cils. LABOR LEGISLATION 209 These factory councils, however, have nothing in common with those existing in Russia (Soviets), for they are mainly advisory bodies not authorized to in- terfere in the management of the factories. In accord- ance with the law a factory council is, to be elected in all establishments having over 30 permanent employees. The rights and duties of these councils are practically the same as those of the miners’ councils. The main purpose of the councils, however, is to bring the workmen in touch with the management; hence the councils are authorized by the law to submit plans for better, or more economical, or more practical management, and the employer is bound to consult them about the submitted plans. The employer is also ex- pected to give the council an account of the financial condition and the prospects of the concern, and in establishments having at least 300 employees the coun- cil is entitled to demand a copy of the annual balance sheet. Conflicts between the council and the manage- ment are decided by a special committee, with the dis- trict judge acting as chairman. Elections to these councils are governed by regula- tions similar to those provided for miners’ councils. The council is elected for a period of one year, and all those who have been employed in the concern for at least one year are eligible. Such are the main provisions of this law which marks a new era of democratic social policy, and intro- duces a new regulation of the wage system. In this peaceful way of social reforms, Czechoslovakia hopes to avoid violent social upheavals and to bring about social justice and peace. XVI SOCIAL WELFARE POLICY, AS SHOWN IN THE ASSISTANCE’ TO THE UNEMPLOYED, ‘THE CARE FOR THE WAR SUFFERERS, AND SOCIAL INSURANCE Dr. JAN BraAzsec, COUNCILLOR OF THE MINISTRY OF SoclAL WELFARE The independent State of Czechoslovakia was re- established at a time when the war fronts of the Central Powers had collapsed. The collapse brought about serious economic and social changes. It released a large mass of soldiers for whom employment could not be found at once, as the industries which had been work- ing to supply the needs of the army now had to abandon that work and the shortage of raw materials made an early resumption of work for the needs of peace impossible. There were large numbers of sick and wounded sol- diers in the hospitals and out of them, and large numbers of widows and orphaned children of soldiers who had fallen in battle or died of disease, or had disappeared. These conditions determined the first social welfare measures of the Government as regards aid from the funds of the State. As early at December Io, 1918, a law granting Government aid to the unemployed 210 SOCIAL WELFARE POLICY 211 was passed by the National Assembly; a general law providing assistance to war sufferers was passed April 8, 1919. Social insurance is the third factor in the aid to persons lacking economic independence. In this article the historical development of these three factors in the Czechoslovak Republic will be briefly sketched in this order: 1. Government aid to the unemployed. 2. Care for the war sufferers. 3. Social insurance. I. Amp To THE UNEMPLOYED Under the law of December I0, 1918, aid was ex- tended to demobilized soldiers and to persons who had been employed during the war and had to be insured against sickness (chiefly persons employed in industry and commerce). Benefits were paid at the rate of 4 crowns a day, occasionally at the sick-benefit rate (not exceeding 6 crowns a day) ; an additional payment of I crown a day was made for each dependent member of the household. The aggregate payment, including the family bonus, was not to exceed I0 crowns a day. The authority to grant benefits was vested in the so-called Demobilization Committees. Each county had its own Committee composed of an equal number of employers and employees. ‘The applicant had to produce proof that he had made an unsuccessful appli- cation for work at a public employment bureau; he was bound to renew such application twice a week and to accept any suitable work assigned to him. As the benefits thus granted were not directly productive economically, it was provided later by the 212 CZECHOSLOVAKIA, law of October 17, 1919, that the county authorities might order the municipal corporations, the communes in particular, to undertake public works as an emer- gency measure to give work to the unemployed. The State would refund to the contractor two-thirds of the wages of such persons, not to exceed 6 crowns a day per worker. The power to allow benefits was trans- ferred from the Demobilization Committees to the county authorities. Refunds to employers represent a third method of aid to the unemployed. In order to prevent the dis- missal of workers when production is stagnant the State refunds a certain proportion of the wages paid (say 70 per cent) to those employers who keep their workers employed. The present legal status of the unemployed is based on the law of August I2, 1921, which provides a benefit of 8 crowns a day, increasing to 10 crowns in larger towns, and family bonuses of 2 crowns for the wife and 1 crown for each child under 14, the total payment not to exceed 16 crowns or, in larger towns, 18 crowns a day. The benefits are payable for six months, in exceptional cases for a year. It should be noted that workers idle as the result of a strike or lockout are not entitled to benefits, and that, in cases of reciprocity, benefits are paid also to citi- zens of other States. The extent of Government aid to the unemployed may be judged from these figures: In I919 more than 250 million crowns was paid out in benefits; in 1921 only 80 million crowns. The present system of payments is to continue in SOCIAL WELFARE POLICY 213 force until the end of 1922 at the latest. It will then be succeeded by the Ghent system under the law of July 19, 1921. The unemployment doles will then be paid through labor organizations, the State con- tributing, in principle, only as much as those organi- zations themselves. II. CARE FOR THE WAR SUFFERERS From the very beginning the Czechoslovak Govern- ment has recognized the principle that a systematic care for the war sufferers can only be undertaken by the State itself even if the private assistance of in- dividuals and charitable organizations is not excluded. The law of April 8, 1919, declared the chief obli- gations of the State in its care for the war invalids to be the following: To continue the medical and surgi- cal treatment of the sick or wounded soldiers until their complete recovery; to provide them with pros- theses and orthopedic apparatus when necessary; to educate the invalids for a suitable trade or calling according to their personal qualifications; to place them in a situation where they may successfully pur- sue their chosen trade or calling; to aid them financially in case of need and grant them regular allotments of money; to aid the dependent survivors of dead or missing soldiers. As the first step the county authorities carried out a census of war invalids residing in the country (ex- cepting salaried men and non-commissioned officers who, as professional soldiers, are under the juridic- tion and care of the Ministry of National’ Defense). A like census of war invalids resident abroad was 214 CZECHOSLOVAKIA carried out by representatives of the Czechoslovak Government in foreign countries. The proportionate reduction of the invalids’ earning capacity was then ascertained through examinations by special mixed commissions. Financial aid was granted to invalids for the pur- chase of machines and tools needed in their chosen trades, for the equipment of workshops and, in ex- ceptional cases, also, for the furnishing of homes. The blind were provided with small homesteads—a home with a garden and a field where the invalid might live and partly earn his living. Some of the blind were placed in the tobacco stores as agents of the tobacco monopoly. As the conditions in many trades are He ae for cooperative undertakings the Government aided the organization of cooperative societies of invalids for the manufacture of footwear, orthopedic apparatus, clothing, saddlery goods, etc. The societies would receive subsidies or non-interest bearing loans and would be aided to obtain raw materials and secure a share of Government orders. After special provincial veterans’ bureaus had been established at Prague (for Bohemia), Brno (for Moravia and Silesia), and Bratislava (for Slovakia and Carpathian Russia), the law of February 20, 1920, was passed providing for regular allotments of money to war sufferers. The basic allotments were moderate. An invalid, for example, whose earning capacity had been reduced at least 85 per cent would receive 1,800 crowns; a widow, 600 crowns; orphans, 300 crowns for the first child and 252 crowns for SOCTAL, WELFARE POLICY 215 each of the others; parents, 300 crowns. The allot- ment would thus suffice for the absolute necessaries only, the veteran being required, so far as able, to obtain additional means by his own work. From this point of view all persons having an independent an- nual income of more than 4,000 crowns or earning more than 8,000 crowns by working for others were excluded from the benefits of the law, and allotments were to be granted only to invalids whose earning capacity had been reduced at least 20 per cent. In the case of sickness the invalids, under certain conditions, are to receive medical assistance and medi- cines. When an invalid is being treated at a sana- torium at Government expense one-half of his allot- ment is paid to his family. The allotment may, under certain conditions, be capitalized in part or in full and converted into a lump sum so that the invalid may obtain sufficient means to engage in trade or business. Widows unable to work and widows over 55 years of age were to receive an additional benefit of 120 crowns a year; in case of remarriage they were to receive a lump sum. Orphans were to receive allot- ments until they reached the 16th year of age. The allotments were increased 50 per cent to orphans who had lost both parents or were neglected by their mother. By the law of January 25, 1922, the basic allot- ment to invalids whose earning capacity had been re- duced at least 55 per cent was fixed at 2,400 crowns representing an increase of 600 crowns in the allot- ment to a total invalid. The minimum income exclud- ing the invalid from the benefits of the law was raised 216 CZECHOSLOVAKIA to 6,000 crowns; the allotment to widows whose earning capacity had been reduced at least 50 per cent or who had to provide for at least two minor children was increased to 900 crowns. The allotment to orphans was increased to 400 crowns a year and was to be paid to them until they completed their 18th year. The allotment to parents was likewise raised to 400 crowns, and the regula- tions concerning medical inspection and the granting of allotments were revised. An additional 50 per cent cost-of-living bonus is at present paid with all allotments. The extent of Government aid to war sufferers may best be judged from the fact that in the Czechoslovak Republic there are now about 170,000 war invalids, 110,000 widows, 180,000 orphans and 65,000 fathers and mothers of soldiers who have fallen in battle, died of disease, or are missing. In the budget for 1922 the expenditure for aid to the war sufferers is estimated at 500 million crowns. III. Socrat INSURANCE Social insurance, in principle, means the compulsory insurance of persons economically dependent against certain harmful social phenomena, particularly against sickness, injury, invalidity, and old age. At the time the independent State of Czechoslovakia was reestablished social insurance in the country was represented chiefly by the insurance of industrial work- ers against sickness and injury, the pension insurance of the higher classes of private salaried employees, and the inadequate insurance of miners. SOCIAL WELFARE POLICY 217 Attempts had been made in the old Austrian Em- pire to work out a complete system of workmen’s in- surance by the institution of insurance against invalidity and old age and later of a general social insurance, that is, a system that would protect not only dependent persons working for others but also certain classes of persons working independently, such as small busi- ness men and small farmers. It was the first task of our State to revise the existing elements of social insurance and adapt them to the changed conditions, and also to unify the divergent legal provisions, for heretofore the old Austrian laws were in force in Bohemia, Moravia and Silesia while the old Hungarian laws prevailed in Slovakia and Carpathian Russia. In the department of insurance against sickness the law of May 15, 1919, made compulsory the insurance of all persons performing labor or service on the basis of a contract of labor, service, or apprenticeship, as their chief and permanent occupation; all agricultural wage workers were thus included in the scope of the law. The law also simplified the organization of sickness insurance by abolishing the small sick-benefit funds connected with individual establishments or societies and creating strong county funds. The law of December 22, 1920, extended the term for which sick benefits might be granted to one year, at the same time increasing such benefits in accord with the readjustment of wage classes with higher earnings. Women in childbed were allowed sick benefits for 218 CZECHOSLOVAKIA six weeks before and six weeks after childbirth; com- pulsory insurance of family members was introduced, and the compensation for funeral expenses increased. One-half of the insurance premium is to be paid by the person insured and one-half by the employer. The workers formerly paid two-thirds. The maximum wage used as a basis for the calcu- lation of benefits in the case of injury was raised to 6,000 crowns by amendments to the law regulating insurance against injury, adopted April 10 and October 29, 1919, and later to 12,000 crowns by the law of August 12, 1921, taking effect retroactively from Jan- uary I, 1921. The benefits payable to the injured workers or their survivors were supplemented by cost- of-living bonuses. The premiums for this class of insurance are paid by the employers exclusively. The benefits payable by the fraternal funds of the miners were increased in a similar way by the law of October 29, I919Q. An amendment to the pension law adopted february 5, 1920, effected an increase of pensions through reclassification (wage classes up to 9,000 crowns). Compulsory pension insurance was extended, among other new classes, to the employees of commercial houses. The law also introduced preventive medical care, and collated the scattered provisions of the various acts then in force. The pensions were supplemented by cost-of-living bonuses for the years 1920-22, the latest enactment being dated December 21, 1921. The preliminary researches necessary for the work- ing out of a complete system of social insurance have SOCIAL WELFARE POLICY 219 been entrusted to a special committee of experts in the Ministry of Social Welfare. The committee has adopted the following general principles: Owing to fiscal reasons social insurance alone is to be maintained, a general system of national insurance not being feasible. For those same reasons the intro- duction of unemployment insurance must be postponed for the present and the Ghent system subsituted. In addition to the insurance of wage workers a plan is to be worked out for the insurance of certain classes of independent workers (small business men, small farmers). In all branches of social insurance for persons working for others the obligation to be in- sured shall be determined, so far as possible, by a uniform standard. The autonomy of the insurance funds is to be emphasized; a restriction of direct elec- tions, however, would seem desirable in the interest of a stable administration of the funds. An adequate control of the funds by the State is likewise desirable. No decisions have been made thus far as to the method of such Government control, or the quotas to be contributed by the insured and by the employers, respectively, as the committee awaits the final results of the census of February 15, 1921, particularly as regards the distribution of the population according to age, marital condition, and occupation. By the law of December 21, 1921, the amount of 130 million crowns was appropriated for the purposes of social insurance for the period of transition which will require substantial contributions on the part of the State. | XVII CHILD WELFARE Dr. JAROSLAV JANOvVSKY, SECRETARY IN THE MINISTRY OF SOcIAL WELFARE The Czechoslovak Republic is one of the succession States of the former Austro-Hungarian Monarchy. That explains why the organization of child welfare institutions in the Republic is substantially a continu- ation of the legal status established by the laws for- merly in force in Austria-Hungary. In this depart- ment of public administration, as in others, the laws of former Austria are still largely in force in Bohemia, Moravia, and Silesia, while the laws of former Hun- gary prevail in Slovakia and Carpathian Russia. A comprehensive general law for the protection of chil- dren, such as England, France and Belgium have enacted, is not to be found among the statutes of either Austria or Hungary. Provisions for the pro- tection of children in our country have been incorpo- rated gradually in the laws regulating the various departments of public life. The historical develop- ment of child welfare policies, and of the policy of social welfare in general, can be clearly traced in these successive Acts. As the idea gained ground that the protection of the destitute or dependent mem- 220 CHILD WELFARE 221 bers of society was not the domain of charity alone but a direct duty of the State, the original scanty provisions of the family law and the law of guardian- ship—the earliest legal measures for the protection of children—were gradually supplemented by new en- actments. The social protection of children thus passed from the confines of private law into various depart- ments of public law, as the municipal corporations, the communes, and likewise the counties, the Provinces, and lastly the State itself, were now charged with the duty at public expense to maintain and educate chil- dren dependent on public aid. From this point of view it may be said that the foundation for the public care of children in Bohemia, Moravia, and Silesia, the historic countries of the Bohemian State, was laid by the general Civil Code of 1811. The code granted to children a legal right to demand maintenance and education from their par- ents or other relatives, and charged the courts with duty to enforce that right and, when necessary, to make suitable provisions for the education of the children. The various provisions of the Civil Code, and, in particular, those authorizing the courts to make suit- able provisions for neglected children, naturally can be carried out only when certain institutions for the protection of children have been provided and the necessary funds are available. The latter needs have been taken care of by a series of laws including the general laws for the relief of the poor, the law of domicil of 1863 and its amendments of 1896, and the provincial Poor Law of Bohemia of 1868. By 222 CZECHOSLOVAKIA these laws the public care of the children is regulated — in connection with the public relief of the poor, the practical application of the various provisions being entrusted to the self-governing administrative bodies, that is, the communes, the counties, and the Provinces. The counties and the Provinces are to contribute only in case the funds of the communes, or the counties, respectively, are insufficient for the performance of the duties entrusted to them under the Poor Laws. Under the Poor Laws of Bohemia the communes are bound to provide not only maintenance but also edu- cation for the children of the paupers domiciled therein; they are the chief factors responsible for the welfare of the children. Certain reforms contemplated in this connection will be discussed in the concluding part of this chapter dealing with poor relief. Certain provincial laws regulating various special departments of child welfare under the authority of the Provinces cannot be noticed at length in this brief review. Two of the older laws still in force, which deserve a special mention, are the laws relating to work- houses and reformatories. These laws make it a duty of the several Provinces to establish and maintain reformatories and houses of correction for neglected children under 18 years of age, particularly for de- linquent youths. The definition of neglected children as found in these laws is somewhat narrow, however. The Czechoslovak Ministry of Social Welfare has, therefore, prepared the draft of a law concerning protective education in which the educational provisions intended to safeguard the morals of the children are placed on a much broader and more solid basis. Under CHD Wi BAT Te 223 this bill a neglected minor below 18 years of age may, on an order of the judge of probate, receive education in a suitable institution or be placed with a private family, and the judge may issue such orders with or without the consent of the parents or legal representa- tives of the neglected children. As a companion measure to this bill the Czecho- slovak Ministry of Justice is preparing a reform of criminal jurisprudence in relation to juvenile delin- quents. The criminal responsibility of minors is to begin only after they have reached the age of fourteen, and protective education or supervision may, in the case of youthful offenders, be substituted for punish- ment whenever the criminal judge shall deem such arrangement proper and sufficient. Among the new child welfare laws which have been enacted since the organization of the Czechoslovak Ministry of Social Welfare special mention should be made of the law regulating child labor in connection with the general protection of wageworkers, and the law of June 30, 1919, for the protection of illegiti- mate children and children under the care of strangers. By the latter law public supervision has been extended to all children below 14 years of age living outside of their own family, and all illegitimate children. An intensive development of child welfare legisla- tion is to be expected when the public administration has been reorganized in accordance with the provisions of the Czechoslovak Constitution. The territory of the State is to be divided into 21 administrative dis- tricts, each of which will be sufficiently equipped, both financially. and administratively, to perform its 224 CZECHOSLOVAKIA social welfare duties. The districts will, in case of need, receive subsidies from the State Treasury. Such is to be the general solution of the question of funds which often determines the success or failure of all social welfare laws. The reorganization of the public administration in Czechoslovakia will make possible the fulfilment of another condition on which the success of child welfare institutions and laws may depend—the unification of legal and administrative procedure. In Slovakia and Carpathian Russia where the laws of former Hun- gary are in force the organization of the public care of children is somewhat different. In those Provinces the judicial supervision in matters of guardianship and tutelage has been entrusted to administrative organs, the orphans’ tribunals, so-called, consisting of both official and lay members. The organization of poor relief is substantially the same as in the Bohemian countries; the communes may demand the aid of the larger administrative units (counties) in case their own funds are insufficient to assist the needy. In those territories children may be placed in State insti- tutions or with private families, under the laws VIII and XXI of the year 1901. It will be seen from the above that the Czechoslovak Administration considers it as its first duty to corre- late the legal provisions for the protection of chil- dren, now scattered among the various departments of public and private law, and gradually to supplement them with new laws so as to place the public care of the children on a solid legal basis. At the same time, however, the Administration intends to conserve CHILD WELFARE 225 and develop the organization of private charities. In opposition to the idea of an exclusive State care of the children (a State monopoly of child welfare, so to speak) the Government has accepted the view that a rational care of the children requires the cooperation of official and voluntary agencies. With that purpose in view the Government has reorganized the existing charitable corporations which have reached a high degree of development (particularly the so-called provincial and county Child Welfare Commissions) so that they now embrace all institutions of this kind within their territorial jurisdiction. These corpo- rations now act as advisers to public officials and occasionally assist in the execution of official decrees. RELIEF OF THE PooR The public relief of the poor in Czechoslovakia is based on the (imperial) law of domicil of 1863, as amended in 1896, and the provincial Poor Law of 1868 for Bohemia. Under these laws the communes are charged with the duty to maintain the local poor. It is a characteristic principle of the poor laws of Czechoslovakia that the claim for relief can be asserted against the community of the pauper’s domicil only. The commune is accordingly bound, in principle, to support only those paupers who: (1) are domiciled therein; and (2) have no legal claim for maintenance against other persons and are not supported by a charitable society or institution; and (3) are unable to earn a living but will accept such employment as their home commune may offer them. The law recognizes the following forms of poor 226 CZECHOSLOVAKIA relief (a) the maintenance of persons unable to work; (b) the care of the sick; (c) the payment of funeral expenses; (d) the maintenance and education of chil- dren. The details of the organization of poor relief in the commune as well as the administration of the funds set aside for that purpose are left by the law to the discretion of the autonomous communal boards. Where the funds of the commune are insufficient the higher units of the public administration, the coun- ties or the Province are to aid. It is natural that after fifty years of operation the system of public relief of the poor in Czechoslovakia is in need of some reforms. It should be noted that the poor laws now in force were the result of social and economic conditions much more simple than those since produced by the rapid march of industrialization which has compelled a large majority of the citizens to earn their living outside the limits of the communes of their domicil. As a result the burden of poor relief is very unevenly distributed among the various com- munes. Thus the small communes in the less fertile regions where a large majority of the inhabitants can not make a living are much more burdened than others when they have to take care of their citizens who have emigrated to the industrial centers, or to maintain their children who may be total strangers to the resi- dents. To remedy this inequality it is provided by the amendment of I919 to the Communal Code that the communes are to be relieved of those burdensome duties, and the obligation to maintain the poor is to be placed on the higher administrative units or on the State. XVIII THE HOUSING QUESTION Dr. Hynek Kusista, Division CHIEF IN THE MINISTRY OF SociAL WELFARE In the Czechoslovak Republic legislation dealing with the housing question is based on the housing laws of former Austria. In the Empire the State’s interest in housing was chiefly fiscal, as evidenced by the high tax on rents. The first law designed expressly to improve the housing conditions—but only those of laborers—was the law of 1892 concerning sanitary and low-priced dwellings for workmen which was enacted for ten years, and re-enacted in 1902 for twenty years more. ‘The first and only law of Austria which pro- vided financial assistance to the builders of dwelling- houses was the law of 1910 establishing a State hous- ing fund to promote the construction of small houses for people of moderate means, regardless of their occu- pation. The fund was to be used in part to guarantee mortgage loans granted to building societies or the communes and in part for direct building loans at low rates of interest. The advantages of this law were made use of mostly in the Czech territories where the cooperative idea was already firmly rooted especially among the workmen. Since 1908 there had existed in Austria a limited housing fund for the granting of 227 228 CZECHOSLOVAKIA direct loans for the buildingy of homes for Government employees. The expansion of building activities, especially on the part of the building societies, was promoted in no small measure by two laws of 1911 which offered spe- cial relief from taxation to the builders of small houses and effective relief from other taxes and assessments to building societies. During the World War, Austrian housing legislation was confined to a decree known as “Tenants’ Protective Decree’? and an ordinance de- signed to prevent reduction in the number of dwellings. The Hungarian housing laws, excepting the provisions for the protection of the tenants, were never very effec- tive in the districts of Slovakia and Carpathian Ruthenia. Czechoslovak housing legislation can be divided into three groups: The first contains ordinances and laws for the protection of the tenants; the second, the ex- traordinary housing provisions; and the third contains the laws for the promotion of building activity. I. LAw FOR THE PROTECTION OF TENANTS The chief purpose of the ordinances and laws of this group was to limit the right of the owner to terminate a lease; then to restrict the right of the landlord to raise the rent of the old or the new tenant. The lease could be cancelled only for reasons stated in the ordi- nance. The rent could be increased only in the measure allowed by the ordinance. The guiding principle of the older provisions was that the net profits accruing from the rent should not be less than the profit received be- fore the passage of the Rent Act. By the law of 1920, THE HOUSING QUESTION 229 the landlord received the right to pass on to the tenants all the expenses of repairing the house and keeping it in good order. The general increase of rents allowed by the new law is intended to compensate the landlord at least in part for the depreciation of the money. However, the old Rent Act also contained special provisions in favor of the landlords which worked, indirectly, of course, for: the good of the tenants, too. Such were the provisions prohibiting an increase in the rate of interest charges on mortgage loans on rented houses. The loss suffered by the landlords through the general abrogation of the pro- visions mentioned above is balanced in the new law in, such a way that the landlord can in certain cases com-, pensate himself at the expense of the tenants. Further- more, the new provisions of the Rent Act contain ar-' ticles aimed against an improper sale of dwellings. The Rent Act originally applied only to small dwellings and stores, but was later extended to other dwellings and from 1920 to all rented rooms, commercial rooms, offices, meeting places, etc. Hotels and new buildings, 1.e., houses built after the passage of the first Rent Act, have been excluded from the “tenants’ protection” from the very beginning. By later provisions, railway-owned properties and stores in the renowned Czech resorts have also been excluded from the “‘tenants’ protection.” Leases can be terminated for weighty reasons only and with the consent of the court. The law states eleven reasons for which the court must give judgment for possession. ‘The lease may be terminated at once without an order of ouster if the tenant commits waste causing considerable loss 230 CZECHOSLOVAKIA to the owner, or if the house has to be rebuilt on orders of the commissioner of buildings. The basis for calculating the increase of the rent is the rate in force on the 1st of August, 1914, or that of the first lease after that date, the so-called “basic rent.’ The law of 1920 allowed an increase of 20 per cent in the basic rent. By the present law a general increase up to 60 per cent is allowed. The increase is graduated according to the size and the use of the rooms. For new tenants the regular increase is higher than for the old lessees. Besides this general increase in the rate which is not conditional on the permission of the court, the law further permits the landlords to raise the rent for any one of four special reasons: (1) increase in taxes; (2) increase in the expense of man- agement and upkeep; (3) increase in the interest or other payments on mortgage debts; and (4) increase in the expenses for temporary or extraordinary repairs or restoration of the house. The consent of the court to the raising of the rent is required only in case the owner cannot agree on the rate with the tenant. The court decides whether, or in what measure, the increase of the rent is permissible, and, on investigation, will lower or raise the rent. The consequence of the pro- visions regulating the increase of rents is that the owners gradually improve their houses at the expense of the tenants. The sub-tenant enjoys the same protection as the tenant against dispossession, and a stronger one against the increase in rent. The regulations relating to the termination of leases have had the desired results, but not so the regulations dealing with the increase of rents. THE HOUSING QUESTION 231 Their effectiveness depends on the cooperation of the tenants or subtenants, and consequently they cannot be effective when the tenant or subtenant fails to avail himself of them. From the point of view of the gen- eral welfare the effect of the ‘tenants’ protection” has been, on the whole, beneficial. It is now the policy of the Government, however, to limit such protection to the most urgent cases only. The legislature as well as the Government are agreed that the owners of houses must be freed from the restrictions imposed on them under the extraordinary conditions prevailing during and after the war. II. Tue ExTRAORDINARY HousInG PROVISIONS It was foreseen that, in consequence of the World War, there would be a general shortage of housing accommodations during the war, and there were no means for making proper preparations to prevent such a, calamity. The end of the war was sudden, demobi- lization was carried out speedily, and the demands of the public administration of the new State caused a considerable shifting of the population. During this general movement of the population there was in some towns such a shortage of housing accommodations that extraordinary measures had to be taken to prevent the destruction of public order. Meanwhile such measures had to be applied by which the most economical use could be effected of all rooms in buildings already standing which were suitable for dwellings. By the ordinance of January 22, 1919, and later by the act of October 30, 1919, municipalities suffering from a con- siderable shortage of housing accommodations were 232 CZECHOSLOVAKIA authorized to take over unused rooms for the housing of persons whose stay in the community was necessary for the public welfare, or who were domiciled there. Under these provisions unoccupied residences were taken over and used as dwellings, or for storage, com- mercial, manufacturing, farming, or studio purposes. When a person had more than one dwelling, the one which he did not use was taken over for occupation. Beside this, parts of large dwellings were also taken over in some cases. The municipalities were not al- lowed, however, to take over rooms used for educa- tional purposes or in which artistic or other valuable collections were displayed, or rooms of artistic or his- torical value. The owners whose rooms had been taken over were compensated to the full amount of the rent. In accordance with these legal provisions tenants gladly rented such rooms which could be taken over as dwell- ings. In this way the housing accommodations were considerably enlarged. In Prague and its suburbs alone the number of dwellings thus acquired approximated 5,000. The number of the available rooms was ex- hausted very soon, however. The law providing for the taking over of unused rooms expired June 30, 1921, by limitation; by that time the foundations had been laid by special laws for the development of building activity. The laws limiting the freedom of migration, namely, those of April 1, 1919, and of March 17, 1921, pursued the same aims as the law providing for the taking over of unused rooms by the muncipalities. In some towns where the shortage of housing accommodations was acute and the increase of population unusually THE HOUSING QUESTION 233 large, only such persons were allowed to move in, up to the end of 1922, as were obliged to live there because of their profession, while other people could settle there only after having obtained official permission. The act of July 11, 1922, forbids the combination of two or more dwellings, hitherto separate, into one; for- bids the possession of two or more dwellings; empow- ers the district authorities to compel the house-owner to rent rooms hitherto unrented which are suitable for dwellings; and provides that rooms may not be used for other than dwelling purposes save under an official permit. The law gives to the municipalities the right to control leases. The chapter of the law providing for dwellings for Government and railroad employees is of special importance. III. LAws For THE PROMOTION OF BUILDING ACTIVITY After the World War, the building industries in Czechoslovakia were in a very unfavorable situation. As early as the beginning of 1919, the building costs were on, the average four times higher than before the war, and at the end of 1919, ten times higher, while the income from the old houses as well as the new ones was, owing to the provisions of the Rent Act, al- most on the same level as before the war. Building en- terprises became the most unprofitable and unsafe. It was clear from the very beginning that building activity could not progress without public help. The Govern. ment therefore decided to grant financial assistance 1:. the form of loan guaranty to building enterprises. BP, the Act of May 23, 1919, and later by the Act of Febr: » ary 20, 1920, the amounts of 5 and then 25 million 234 CZECHOSLOVAKIA crowns were set aside for buildings to be erected in I9I9 or 1920. The money was to be used chiefly in aid of building societies in the form of Government guarantee of loans secured by a second mortgage on the house. The Government bound itself to the creditor of the guaranteed loan to pay the interest and amortiza- tion charges on the loan, if the rent of the house should not be sufficient. The Government, however, reserved for itself the control of the rent. The net result of both these laws was on the whole very slight. Demands made especially by the building organizations for Gov- ernment assistance to private building enterprises were met by the Act of March 19, 1920, which allotted 250 million crowns in the form of subsidies for the erection of houses with accommodations for at least four fami- lies. The subsidy amounted to 40 per cent of the build- ing costs. But this law failed also owing to the diffi- culties in getting the remaining 60 per cent not covered by the Government subsidy, and to the continual in- crease of the building costs in 1920. Government assistance to building enterprises was not limited, however, to financial support only. Thus the laws providing relief for larger towns, passed in April and May, 1919, prescribed more economical and therefore less costly ways of building. By the Act of March 30, 1920, a total exemption from the house tax, rent tax and all surtaxes was granted to all new build- ings erected by municipal corporations for a term of 20 years, and if the building had at least four dwellings, a permanent reduction amounting to one-fifth of the tax for the entire life of the house. The building activity of the communes and societies was stimulated THE HOUSING QUESTION 235 by the Act of December 17, 1919, providing for the taking over of land for the erection of dwelling houses or public buildings. The activity of building enter- prises was also quickened by various administrative orders and decrees especially by a reduction of railroad transportation rates for building materials, by a low- ering of the prices of lumber, and by the control of the prices of other building materials, etc. However, in spite of all these laws and provisions for its promo- tion, the building activity did not keep pace with the shortage of housing accommodation and the need of keeping the building trades employed. In 1920 the cost of building was 16 times higher than before the war. The cause was, in the first place, the rise in the cost of living, the increase in wages, and the higher prices of building materials. The increase was caused in part by inefficiency in the production of building ma- terials. The housing problem became so serious that the Government and the legislative bodies had to seek new ways for its solution. Two laws were passed: The law of March 3, 1921, and that of March 11, 1921, to stimulate building activity. The first law offered tax exemption to the builders of dwelling houses. In- dividuals paying the income tax or companies paying the profit tax were allowed to deduct 70 per cent of the construction costs of the new building from the basic taxable amount. Large industrial concerns took advantage of these savings on taxes in the building of new dwelling houses. The law of March 11, 1921, sup- plemented by the law of January 27, 1922, extended the right to acquire land under eminent domain to all builders of dwelling houses or business buildings. 236 CZECHOSLOVAKIA The compensation for the land so acquired was to be based on the actual value of the land. The administra- tive officials directed the procedure for the acquisition of the land and determined the compensation to be paid. Arbitration courts were established for the settlement of wage disputes and other controversies in the build- ing industry arising from the labor contracts, and for the regulation of the working conditions, especially in extraordinary cases not contemplated by the labor con- tracts. The employers were not allowed to dismiss workmen and the employees as well as their organiza- tions were forbidden to strike while the court of arbi- tration was considering the matter in dispute. These regulations of the building industry were intended to stabilize wages and the working conditions. In a sim- ilar way the law provided for the establishment of price boards which were to fix the prices of building mate- rials in order to put a stop to the continuous increases and work toward the stabilization of prices. The law of 1921 empowered the Government to obtain for the promotion of building activity the amount of one bil- lion crowns by a lottery loan and to provide for the best employment of the proceeds. The Government was specially authorized to make use of 50,000,000 crowns from the proceeds of the lottery loan for the building of houses for Government employees. As regards the financial assistance to be granted to building enterprises, the law enumerates six different kinds of such assistance: The guaranty of a loan; Gov- ernment contribution toward the interest and amorti- zation of the loan (in five years from 4 to 2.5 per cent of the building costs); the combination of the Gov- THE HOUSING QUESTION 237 ernment guaranty with a direct loan for the completion of the buildings started in 1919 and 1920 by munici- palities or cooperative societies; finally, a contribution of 60 per cent of building costs, partly for temporary buildings, partly for buildings being put in order for occupancy, and partly for building space hitherto unoc- cupied. Houses with small apartments measuring at the most 80m? of floor space will be exempt from the property tax and all other surtaxes for 50 years, other buildings for 20 years. In accordance with the law, assistance may be given to any builder and particularly to private persons. Until the end of August, 1922, assistance had been granted to the builders of 767 apartment houses with 6,814 apartments, and of 5,489 private houses with 6,342 dwellings, estimated to cost 1,197,387,058 crowns. At the end of 1921 there were completed and occupied 510 apartment houses with 6,788 apartments and 15,251 rooms, and 2,099 private houses with 2,579 dwellings of 6,640 rooms, with a building cost of 713,264,950 crowns. Besides that, at the end of 1921, there were in the process of construc- tion 220 apartment houses with 2,344 apartments of 5,083 rooms and 2,093 private houses with 2,480 dwell- ings of 7,131 rooms, estimated to cost 490,814,160 crowns. In 1922 the construction was begun of 349 apart- ment houses with 3,162 apartments and 3,013 private houses with 3,407 dwellings, estimated to cost 575,- 962,037 crowns. At the end of 1922 the guaranteed loans on buildings already completed or in process of construction aggregated 1I,390,000,000 crowns. The annual financial burden to the State from the guaran- 238 CZECHOSLOVAKIA tees amounts to about 100,000,000 crowns. By this contribution the Government has succeeded in mobi- lizing financial means amounting to more than 1,780 million crowns. Financial assistance to the building enterprises will decrease as the cost of building de- creases. At the end of the 1922 building season the building costs were only eight times as high as before the war. It is expected that the continual decrease in the building costs will induce an extensive building activ- ity even without Government support. The Govern- ment has not only promoted the building activity by its assistance to the municipalities, the building societies and private persons, but has also built houses for its own employees. Thus far the Government has built 118 apartment houses with 1,094 apartments and one dormitory with 118 beds at a cost of 152,371,000 crowns. Work has been commenced on the building of II4 apartment houses with 1146 apartments, to cost 120,000,000 crowns. These figures, however, do not include the houses and dwellings which some of the branches of the public administration, especially the railroad and the financial administration, have built for their employees. In promoting the building activity as well as in build- ing houses on its own account, the Government has al- ways insisted that the new dwellings should offer all the comforts and conveniences provided by the modern art of the builder. XIX CRIME Dr, Aucust MImICKA, PRoFESsoR AT THE CHARLES UNIVERSITY, PRAGUE In order to form a correct idea of the relative fre- quency of crime in the territories now forming the Czechoslovak Republic, it 1s necessary to investigate the conditions which existed there before and during the war and then to study the situation after the war. Such a study obviously must be based on reliable statistical data. The State Statistical Bureau has col- lected statistics only for the Czech territories (Bohemia, Moravia and Silecia); the data for Slovakia and Ruthenia have not yet been compiled. According to the official census of February 15, 1921, the Czech territories exclusive of Slovakia and Carpathian Ru- thenia had a population of 10,005,734. Experience has demonstrated that after the outbreak of a war crime usually shows a decreasing tendency. That was the case in the Czech territories as early as 1914, although only a few months of that year had been taken up by the war. Table I shows a decrease in criminal cases (felonies and misdemeanors) from 32,043 in 1912 and 34,465 in 1913 to 33,154 in I914 and to 26,595 in 1915. ‘There is also a corresponding decrease in the number of persons indicted and con- 230 240 CZECHOSLOVAKIA victed. In 1912 there were 14,348 indicted of whom 11,281 were convicted (of these 8,054 of felony) ; in 1914 there were only 13,003 indictments and 9,776 con- victions (6,678 of felony) ; and in 1915 there were but 11,541 indictments and 8,177 convictions (6,362 of felony). In petty offenses a similar decrease is to be observed in the years 1914 and 1915 as shown in table IT. I. PROCEEDINGS IN COURTS OF FIRST INSTANCE $ 2 2 8 2S a] © o ° = v4 x = au antes ae: is ° oe 3 £ = sy og e § S 68 8 S53 SES > ZA Zs heey ae Zow BOLO Mla ese 32,043 82,210 14,348 11,281 7,014 Tes tase Gee 34,465 86,652 14,873 11,837 8,054 TDLA ees 33,154 79,214 13,003 9,776 6,678 FOTS ce ee eats 26,593 76,028 11,541 8,177 6,362 WIGS Meine cae 27,704 84,287 12,289 8,581 6,124 OLAS Potcuiee as 40,691 130,461 17,470 11,876 8,903 TOIB ie eee 49,517 187,449. 25,153 16,673 13,509 TOIGT. Sey cons 60,166 220,349 33,004 20,776 17,253 1OZO ee ah eras 96,959 253,710 50,204 32,991 26,640 II. PROCEEDINGS IN THE COUNTY COURTS No. of cases Total No. prosecuted by No. of persons Year of cases private parties convicted LOLS ate wee 326,017 83,391 150,191 LOLS 334,011 84,409 153,064 TOT ATO aie 206,171 67,111 136,725 TODS rie ae: 269,866 54,504 120,700 TOLG tye 245,328 32,625 109,699 TQP7 We es 261,717 36,360 II1I,066 TOURS eis en 215,742 42,785 86,677 TOTO eee eee 268,463 62,904 110,213 IOZOR ore 295,722 75,204 133,027 CRIME 241 Many criminologists and sociologists who have studied the relation between war and crime have tried to explain the interesting fact that the outbreak of war is usually followed by a decrease of crime. It might be expected that in a war when economic values and even human life are considered of little importance, crime would increase rather than decrease. The decrease of crime in war as shown by official statistics, is often explained, especially by German writers, by the assump- tion that war has an ennobling influence on man, as it turns all thoughts and efforts of the citizens to the noble struggle for the victory of the fatherland. In the “Zeitschrift fuer die gesamte Strafrechtswirt- schaft” (vol. 43, page 402), Professor Hippel explains the decrease in the number of persons convicted of crime in Germany in 1914 as follows: ‘The decrease is explained by the five months of war. It shows a vigorous people inarms. The men fit for military serv- ice are at the front, while discipline and order rule at home.”’ However, such an explanation will not hold good for the territories inhabited by Czechoslovaks who felt no enthusiasm for the war. To me such an explanation of the decrease in crime seems rather idealistic: I think that we must look for a more sober explanation. Large numbers of men of the- age which, in normal times, furnishes the greatest number of criminals, are called to arms and thus forced into a life which affords far less opportunity for the commission of criminal of- fenses. When, however, offenses are committed, they do not appear in the official statistics because they are punished by military courts and consequently are not 242 CZECHOSLOVAKIA included in the official statistics of crime. Moreover, criminals under indictment are also called to the colors, and judges, too, must join their regiments. Thus many trials have to be deferred. The fact that an offense has been committed is therefore not shown in the statistics for the year in which it has been committed, but only in the statistics of some later year. The decrease in the first two war years was followed by a marked increase in crime. This increase became evident as early as 1916, when there were 27,704 cases, 12,289 indictments and 8,581 convictions (6,124 of crime). In the following years the increase was still greater: In 1917 there were 11,876 convictions (8,903 of crime), in 1918 16,873 convictions (13,509 of crime). As can be seen from these figures, the number of offenses committed in the years 1919 and 1920 was much larger than in the prewar years. This larger postwar increase of crime in the Czech territories, especially after the Revolution of 1918, would have to be considered a serious menace if the abnormal postwar conditions were not taken into ac- count. There are certain general causes which are re- sponsible for the increase of crime after every war, and which have doubtless brought about an increase in crime in other countries also. These causes are naturally the more effective the longer the war has lasted. The de- moralizing effects of the war both at the front and at home, the low passions unleashed by the war, and the general decline in the valuation of human life are chiefly responsible for the increase in crime. In the victorious countries, too, we may observe a spiritual exaltation which sometimes reaches the stage of frenzy and, when CRIME 243 stimulated by alcohol, frequently finds expression in deeds of violence. It is a well-known fact that after the Franco-Prussian war of 1870-71, the number of crimes against the person and crimes of violence in gen- eral increased considerably in Germany. Any conclusions in this direction, with regard to the present, can be made only on the basis of a detailed classification of the total number of crimes and offenses. The publication of the State Bureau of Statistics con- tains, however, only a partial classification, that is, only a classification of those penal offenses which are included in Tables III (crimes) and IV (petty of- fenses). (See page 244.) Those committing two or more delicts are counted for each offense. If we divide the crimes included in Table IIT into two major groups, one consisting of crimes against the per- son (crimes against chastity, murder, infanticide, man- slaughter, and mayhem) and the other of crimes against property (arson, larceny, embezzlement, robbery, and fraud), we see at once that the offenses of the first group show, in some cases, a remarkable decrease as compared with the number of cases before the war, especially in the case of mayhem, of which there were 933 and 846 cases in the years 1912 and 1913, but only 208 and 328 in 1919 and 1920. In the case of crimes against property, however, with the exception of arson, a marked increase is to be noted. The greatest increase is in the case of larceny and receiving stolen goods. The causes of this increase are to be found in the demoralization of the people by the long war and the economic crisis and unemployment. CZECHOSLOVAKIA 244 ZQe VI oe ov ess‘ri cL QV vgZ‘Z Lz or SQg‘C1 If 09 VIO‘IzZ 6g 611 vrVee ISI gzI ozS‘6V fie VSI brg‘ZVv S6z LEI 999‘RV cle oSI AQueise A ssouud =s-: BulJapueg yy sulssoq yung LoL fz Eat Lo1 SVI SLI OIz gSz 1€z SiZt Egz‘e gbo‘e bgz‘z eect ofe‘t S06 QvI YeVy spoos usjo}3s jo surAng LEE’ zS‘z 600‘ 69 ‘z Liz‘¢ 60L‘¢ 6L0‘S VEQ‘S vgz‘g pneiy 399°I gSS‘I 19z‘I II19Q‘I eSZ‘1 V10‘7 zo ‘z vog‘z 196‘z yuoUL -9[Zzaquiqy €oe‘gS vze‘orv 813°9r 692‘9S Vog‘6e Lov‘ge ESZ‘Ze S£S‘9e oVs‘Ze Ayotpduros 29 Ausoiry Ajog Coev1 620‘6 6LZ‘S €£6‘9 £59‘6 ofz‘e1 16E‘CE £09‘Qz £66‘9z Aia}}eqG 2 }yNessy SHSNAHAHO ALLAd AO SLYUNOD ALNNOD HHL Ad GHLOIANOD SNOSUHd AO MAAEWNAN ‘AI 6g9f'1z CoZ‘V1 VOI‘II Loo‘Z 110'V Lz6‘e vov‘z oSZ‘z eoS‘z pnesy Aseysing yuswe;z Aussie Z£SO'T>--1t7 898 48 £16 IZ zS9Q VI £9S VI 6¢S Qe 169 gv 1zZ 6£ Q6Z Qt pue A£19qq0y -zoqur7y post GI €1 os 14 Qz 6z 6£ ve Iv uosiy gece Qoz cer SzI OgI 7Sz 099 9rg £6 92 Qz 6 ¢€ Vz Iz oS ee LY SI 9 zs II OI SI 61 ¢ ¢ wey J3}y4SNe[Ss spror -ACIN -ueyl -JUesUT ov 11z of 36 gr S9 II Lol QI g61 LZ Llz 3 9 QIPv Qz QIv gt evry Jopinyy Aiy4sey9 ysulese souwlig org‘9z ETAT KS | 60S‘E1 £06‘g vz1‘9 zget‘9 3499 vSo'g vi6'Z TROL AWNIYD JO GCHLOIANOD SNOSUAd AO UAAIWAN ‘III eeeeee-sveee eS OCGL ‘6101 ee *QI6I oe £IOT ee *QI6I “S161 cae VTre ‘£161 yon fed | ea . ° fo) = oO’ = N _ O* H CRIME 245 These causes have doubtless brought about an increase in offenses against property in other countries also. But they alone cannot explain the large increase in theft after the war in the Czechoslovak territories as compared with the number of thefts before the war. Here the explanation lies in a peculiar modification of the criminal law. Under the law, the value of the stolen goods determines the nature of the offense, whether it is a felony or merely a misdemeanor. If the value of the stolen article is over 200 crowns, or if the act is done under certain aggravating circumstances de- fined by the law, in which case the value may be only over 50 crowns, the offense is classed as grand larceny. With the decrease in the value of the Czechoslovak crown the prices of commodities have increased many times, but the law defining the difference between grand and petty larceny has not been changed. That ex- plains the large increase during the years 1919 and 1920, when the number of the cases of grand larceny was almost eight times as great (21,389) as in I9QI3 (2,750), while the number of petty thefts was less than twice as large as in 1913 (56,303 against 38,575). Austria-Hungary had passed strict laws to stop war profiteering. After the war the penalties had to be made more severe as the offenses were on the increase. This was accomplished by special statutes (Law of October 17, 1919, Nos. 567-568 of the Collection of Laws and Government Decrees, and Law of March 18, 1921, No. 129) modifying not only the substantive law (increase of penalties, exclusion of extraordinary leniency or conditional conviction, possibility of con- fiscation of property, hard labor), but also the rules of 246 CZECHOSLOVAKIA procedure. For the prosecution of war profiteers spe- cial tribunals were established consisting of professional and lay judges, the latter being selected from a list of persons submitted by trade unions, or by organiza- tions of different groups of producers and consumers. This was done in order to place the prosecution of the war profiteers in the hands of the people themselves. This arrangement has not been very satisfactory in practice. The lay judges especially have been criticized for having no interest in the prosecution, or showing partiality in their decisions, or hampering the adminis- tration of justice by non-attendance at trials. Thus these special courts have failed to win the confidence of the public; the producers and the merchants complain of unjustifiable persecution, while the consumers charge the courts with being too lenient in prosecuting the war profiteers. According to the statistics compiled by the Ministry of Justice for the Czech territories (Bohemia, Moravia and Silesia) 100 complaints of war profiteering crimes were filed in 1921, and about 7,400 complaints of mis- demeanors, 23,000 complaints of petty offenses punish- able summarily by the courts and about 16,000 com- plaints of petty offenses punishable by administrative authorities. Only 18 of the criminal profiteers were in- dicted for a felony, and 3,500 for a misdemeanor, but less than 50 per cent of the offenders were convicted. Summary convictions for petty offenses of profiteering numbered only a little more than 3,000. The small number of 18 indictments for felony shows that the law did not reach the big profiteers but only their petty imitators, against whom it was easy to obtain CRIME 247 evidence. The decreasing number of complaints in cases of war profiteering, as well as of convictions as compared with acquittals, shows that with the return of normal economic conditions and the restoration of competition the laws against war profiteering are grad- ually losing their importance. Modification of these laws is being considered, and the time of their repeal is not far off. The young Republic had to protect its citizens not only against wild speculation in necessaries, but also against the illegal exportation of goods needed at home. A law against clandestine exports was passed in March 18, 1920 (No. 188 of the Collection of Laws and Government Decrees) ; in point of severity it may be compared with the laws against war profiteering. To safeguard the confidence of the public in the currency, the Parliament passed a new law providing for the punishment of persons guilty of counterfeiting money or securities (Law of May 22, 1919, No. 269 of the Collection of Laws and Governmental Decrees). The obsolete criminal laws of former Austria require an early revision. A revision is also necessary to pro- vide a uniform code of law for the Republic, for the old Hungarian laws are still in force in Slovakia and Carpathian Ruthenia. By various measures the Gov- ernment has endeavored to modernize the penal system and to establish new institutions for the reformation of the criminals. Thus, by the Law of October 17, 1919 (No. 564 of the Collection of Laws and Gov- ernmental Decrees) a probation system was introduced and conditionai suspension of the sentence was author- ized. 248 CZECHOSLOVAKIA The Government also intends to establish juvenile courts modeled on those originated in the United States of America which have been adopted by many European countries. A thoroughgoing reform of the penal code which will establish a modern and uniform system of crim- inal jurisprudence throughout the Republic is now in the process of preparation. INDEX Agriculture Agriculture production, grains, — climate, 12 TIO“ TTY —crops, 20 ——land reform and, 49 ——renting system, 48 ——malt products, 113 — education, 18, 19 —— prices, disparity of — economic conditions, 13, 14 ———world, 30 —— cooperation, 17 enor ery eA SALON be ——credit, 17 — — statistics, 22-27 —— depression, 30, 31 —— value of, 28, 20, 30, 31 — —Jland ownership, 13, 16, 43, —soil, 12 44, 45, 46 —-—crops, 12 ———rent and, 48 —— improvement, 13 ——w—tenant and, 47, 48 — war and, 30 —— market, 14, 15, 30, 31 —-— labor shortage, 30 —— organization, 17, 18 ——— money depression, 30 ——self-help, 17, 18 — water power in, 81, 82 ——tariff, 16 Area —— wages, I5 — arable land, 19 — industries, 20, 21 — coal, 67, 88 — division of ——yield in, . ———prewar, 22-27 cy af ere 73, 43) 44 i eae eta t0ne Sly ELD) Witenes early history 7 8 TTEMit2 fice —land (see also Land) a Aco hi PP oe ate ownership, 39, 40 memset! , —§in miles, 1 Le Sie Ae — State control, 54 ——w—and emigration, 46 Banking, 166-175 ——w— and tenant class, 47 Banks — population (see under Popu- _ assets, 173 lation) — character of, 172 — production, I2-32 — development ——area, \19 ——crisis of 1873, 167 —-— depression, postwar, 30, 31 ——deposits, 170 — — fertilizers, 30, 31, 106 —-—eeconomic centralism, 166, —— foreign trade and, 31, 110, 168 III —w— history, 166, 167 249 250 Banks, development, industrial prosperity and, 168 ——present conditions, 169 ——war and, 169 —economic life and, 171, 172, 174 —losses, 175 — profits, 174, 175 — transactions — —bonds, 174 ——credits, 172, 174 —— investments, 173 —-—reserve, 173 —— securities, 174 Bohemia — area, 2 —-births, 4, 5 — deaths, 4, 5 — marriages, 4, 5 —population, 2, 3 (see also under Population) —— emigration, 6 —race in, 9 Child Welfare (see under So- cial Welfare, Child) Civil Code (see under Social Welfare, Child) Climate (see under Agricul- ture) Coal, 67-75 — area, 67, 68, 69 — fields —-— location, 71 —-—and water power, 80, 82 —export, 71-75 — import, 74, 75 — industry —-employment, 69, 70 —and lignite, 67, 68, 69 — quality of, 71, 73 — output, 69, 70, 71 Commercial policy (see under Policy) Cooperation (see under Popu- lation, Agricultural) CZECHOSLOVAKIA Co6éperative bakeries, 101 Crime, 239-248 — classification, 243, 244 — decrease ——causes, 241 ——war and, 239, 240 — increase —— causes, 242, 243, 245 —— postwar, 242 —-—war profiteering, 246 — legislation —— counterfeiting, 247 —+—,crlme increase and, 245 —— juvenile courts, 248 —— revision, 247, 248 ——war profiteering, 246, 247 Currency, 176-191 (see also under Money; Finance) — circulation — — fiduciary, reduction of, 179 —— limitation of, 181, 182 — conditions —-— internal, 181 —-— postwar, 176, 177 — — reorganization, 177, 178 — exchange rate, 183, 184, 185, 186 —over-valuation, 186, 187 ——results, 189, I90 — prices ——decline, 181 —-—- external causes affecting, LO2heras —-—- increase, 170, 180 — —— Government control, 180 — stabilization of, 190, 191, 198 — stamped notes, 178 —— State certificates, 179 —-— State loan, 178 —under-valuation, 186, 187 ——results, 187, 188, 189 Customs (see under Policy, Customs) Czechoslovak —emigration, 46 —race, 7, 8 — — foreign, 8, 9 INDEX Czechoslovak race, dynasty and, 45 —— industry and, 89 —— migration, 8 —religion, 9, 10, II — Republic — — agricultural 28 —— divorce law, 5 ——economic policy, 32 —e— education, 18, 19 —-— formation of, I —— geographical situation —e— — and foreign trade, 123 —— land —~«—— arable, I9 —-—-— ownership, 43, 44, 45 —-—--— land control act, 51, 52, 53 —-—-——- tenant class, 47 —— population, 2, 28 ———decrease, 3 —— — increase, 3 —-—-— movement, 4 —— production, 12-19 — —— agricultural, 19-32, 123 ———coal, 67-75 —-—w—depression, 30, 31 ——— foreign trade, 31 ——— forestry, 33-42 ——— industrial, 123 ——— prices, 30, 31 ———value, 28-31 —— self-help, agrarian organ- ization, 17, 18 PG TERY wealth, 20, 38, 39, 40, 67- 75, 76 (see also under Industry) Hapsburg independence, Divorce law, 5 Economic conditions — banking (see under Banks) — coal —— export, 7I, 72, 73 —— import, 74 — cooperation, 17 251 Economic conditions, credit, 17 —education and, 18, 19 —land ownership, 13, 16, 43, 44, 45, 46, 63 ——rent, 48 ——tenant class, 47, 48 —land reform, 43-66 ——credit system and, 60, 61 —— results of, 63, 64, 65, 66 — markets, 14, I5 — postal service, prewar, 13 — postwar, 30, 3I —railways, prewar, 13 —tariff, 16 (see also under Policy, Customs) — telegraph, prewar, 13 — water-power and, 81 — waterways, 14, 16 Education —agrarian, 18, I9 — forestry, 19, 41 Electricity (see under Water Power ) Emigration, 6 —land ownership and, 46 Export — coal, 71, 72, 73, OI, I14 — Commission, and Import, 128, 129 — expansion, 120 — foreign trade control, 131, 132 — increasing, 125 — manufactures, 95, 96, 122, 123 — minerals, 91, 92, 96 — permit system, 128, I29, 130 — products —— agricultural, 110, III, I12, 123 —— chemical, 118 — —electrotechnical, 114, II5 — -— forestry, 39, 91 — — industrial, 109, TII0, ——w— alcohol, 97, 98, 112 ——— beer, 99, 113 ——w— ceramics, 102, 117 ——-— chocolate, 99 130, 123 252 Export products, industrial, ex- plosives, 107 ——— flour, IOI — —— glass, 112, 116 ——— leather goods, 108 ———malt, 99, 113 —-—+«— mineral water, I13 ——— sugar, 96, II2 ———textiles, 109, I16 —— paper, 104, 117 ——-—-graphic art, 105, 118 ———printed goods, 106, 118 —— wax, 107 —-— wood, 103, 104 — — — furniture, 103 ———barrels, 103 —raw materials, 91, 122, 123 —sales organization, 124 — semi-manufactures, 122, 123 —timber, 39, 114 Finance (Government), 192-200 — budget of 1921, 195 ——of 1922, 196 ——of 1923, 106 sae Ob 1024; 107 —of communes, 196 —credits and, 194 —-— Austrian war loan and, 195 —crisis, 192 — liabilities, 199, 200 —loans, 193 — public debt, 199 — taxes, 195 —value fluctuations and, 1093, 194, 198 Fisheries, 22 Foreign Trade, also Export) —balance, 119, 120, 183 — Bureau, 130 — control, 130, 131, 132 —-—jin neighboring states, 131 — development, 119 — geographical situation and, 123 — politics and, 120 II0-126 (see CZECHOSLOVAKIA Foreign Trade, rate of exchange and, 135, 136, 183 —sales organization and, 124, 125 — syndicates, 129, 130 —transportation, 125, 132 — — difficulties, 120 Forestry — administration, 35, 36, 37, 38, 40, 41 — — afforestation, 41 ——seed selection, 41 —-— State control, 59 ——yield and, 35-38 —industries, 39 — production ——herbs, 39 ——seeds, 39 ——tannin, 39 — — timber ——w— consumption, 38, i14 “Sarre CX DORL, 38, 39, 114 —— value of, 28, 29 —reform, 40, 41, 42 —schools, 18, 41 Forests —accessibility, 36 —area, 33 — coniferous, 34 — deciduous, 34, 35 — foreign species, 35 — growth —w—dannual, 36, 37 —— management and, 36 —— soil and, 36 — low, 34 —medium, 34 — mixed, 34, 35 — State ownership, 39, 40, 59 — yield, 35, 36, 37; 38, 39 Glass (see under Industry) Hapsburg dynasty — Czech emigration and, 46 —-—race and, 45 INDEX Hapsburg dynasty, latifundia and, 44, 45 Housing, 227-238 — legislation, 227 ——development, 227, 228 ——extraordinary provisions, 231, 232, 233 —— promotion of building ——-— appropriation, 236 ——— economy, 234, 235, 236, Zot ; —— — financial assistance, 233, 234, 235, 230 ——results, 237, 238 Husnik, Jacob, 105 Import — Commission, and Export, 128, 129 —exchange rate and, 136 — foreign trade control, Pareies — manufactures, 96, 122, 123 —permit system, 128, 129, 130 — products —— agricultural, 113, 123 —-— industrial, 106, 109, 113, ise LLS tLt0, 123 —raw materials, 9I, 107, II0, 1133-1101 22, vl23 —— purchase of, 123, 124, 136 —semi-manufactures, 122, 123 Indemnity bank, 58 Industry, 89-109 — agricultural, 21-32 —animal, 20 — bakeries, codperative, I01 — brewing, 96, 98, 99 —-—mmachinery, 94 — chemical, 106, 107, 118 —coal (see also Coal) —— employment, 69, 70 — — export, 71, 72, 73, OI ——-— import, 74 —— wages and, 75 —dairy products, 99 — depression, postwar, 30, 31 130, 253 Industry, distilling, 96, 97, 98 —electrotechnical, 94, 95, 115 — engineering, 94 — exports —— manufactures, 95, 96 —-—raw materials, 91 — fisheries, 21, 22 — food products, 99, 100, 101 — forestry, 39 —glass, IOI, 102, 116, 117 — graphic art, 105, 118 —hat, 108 — historical conditions, 89, 90 —leather, 107, 108, 117 — malt, 99 —manufacturing, 94, 95, IOI, 102, $03, 105, 107,/116) 117, 118 — materials, raw, 91 — milling, I00, Io — mineral, 91, 92, 93 — paper, 103, 117, 118 _—-— history, 104 —— output, 104 —— products, 105, 118 — peasant emancipation and, 90 — power plants, 96 — printing, 105, 106, 118 — resources, natural, 90, 9I, 92, 3 — sugar refining, 96, 97, I12 — textile, 108, 109, 116 — water-power in, 76-88, 95 — weaving, 108 — wood, 103 —— pulp, 104 — yield, prewar in, 22-27, 98 Klié, Karel, 105 Krizik, Frant., 78 Labor — in industry, 94 ——coal, 69, 70 — legislation, 201-209 —— child-, 205 —— eight-hour day, 203, 204 254 Labor legislation, factory coun- cils, 209 — — in home industries, 205, 206 ——w— mediation committees, 206 —-— mining, 207, 208 ——w— councils, 208 — — — profit-sharing, 208 ——night work, 204 —w—unemployed, Government aId 210) 21122 7213 —— for women, 204 —-—for young persons, 205 — shortage, 30 — wages, and commercial pol- icy, 137 Land — Control Act, 51-55 —— office, 51, 57 — — — duties, 62, 63 ——-— functions, 52, 53, 57 — —— Supreme Administrative Court and, 57 — Hapsburg dynasty and, 44, 45 — ownership, 43, 44, 45 —-—land control act and, 50, 51, 52 —— migration and, 46 ——tenant class, 47, 48 —reform, 43-66 —— allotment, 58, 59, 60, 64, 6 5 ——credit and, 60, 61 —w— forced leases, 64 —w—land control act, 51-55 ———compensations, 55, 56, 57, 53 —— — expropriations, 52-56 ——land values and, 55, 56 —-—-principles, 50 —-—reasons for, 43, 44, 45, 46 ——-—economic, 48, 49 ——— social, 50 ——results, 63, 66 Latifundia — expropriation of, 56 — origin of, 44 CZECHOSLOVAKIA Law — compensation, 65 — divorce, 5 —of entail, 44 —land control Land) Lignite (see under Coal) (see under Market conditions, 14, 15, 30, 31 (see also under Agricul- ture ) Masaryk, T. G., 202, 203 Money, 30, 31 (see also under Currency) —depression, 30, 120, 128, 130 —and foreign trade, 120, 121, 127,2120,.130,0036 — protection, 129, 130 Moravia —area, 2 — births, 4, 5 — deaths, 4, 5 — marriage, 4, 5 — population, 2, 3 —— emigration, 6 —race in, 4 Policy — commercial —— foreign trade control, 130, E31; 142 —— railway tariff and, 152 ——treaties, 152 ———compensation, 132, 133, 134, 135 — customs —— agriculture and, I 37 —-— autonomous | tariff, 135, 136 —— free list, 128 —-— frontier lines, 127 —w— money rates, 127, 128, 135 ——permits, 128, I29, 130 —— protective tariff, 16 ——railway tariff, 151, 152 134, INDEX Policy, financial (see under Finance) —social welfare (see under Social) Population — agricultural, 15 —— cooperation of, 17, 18 ——credit system in, 17 ——organization of, 17, 18 — decrease, 3, I5 —density, 2 — distribution, 2, 6, 7, 9, 10, ITI, 28 — growth of, 3 —w—jin industrial centers, 3, 15 — movement of, 4, 5, 28 ——emigration and, 6 ———land ownership and, 46 Postal Service, 156-165 — administration, 163, 164, 165 — Checking Bureau, 163 — mail ——air, 158 —— automobile, 158, 159, 164 —— franking privilege, 165 —w—rail, 164 — organizaton, 156, 157, 158 — prewar, 13 —telegraph, 13, 159, 164 ——cable, 160, 161 —-— foreign, 160 —telephone, 162, 164 ——long distance, 162 ——treaties, 162 Printing (see under Industry) Railways, 138-155 — administration, 138, 139, 140 — condition of, postwar, I41 — electrification, 144 — fares, 153 — finance, 154, 155 — improvement, 142, 143 —miles, 138, 139, 143 — Ministry of, 138, 139 — operation, 138 —ownership, 138, 139, 140 255 Railways, prewar, 13 —rolling stock, 145, 146, 147, 148 —tariff, 151 —-—agreements, I5I, 152 —— inland traffic and, 153 — traffic — — freight, I51 ——local, 139, 144, 145 —— passenger, 148, 149 ——regulation, 143, 144 —type, 140, I41 Rasingn Dr (577.178 Reform — forestry, 40, 41, 42 —land, 43-66 —-—emigration and, 45, 46 —-—jincreased production and, 144, 149, 150, 49 ——land values and, 55, 56 —w—principles of, 50 —-—reasons for, 43-46 ——results, 63, 64, 65, 66 —— State control, 51, 52 Religion, 9, I0, II Republic (see under Czecho- slovak) Roads, 13 Ruthenia, 2, 3, 4, 5, 6, 9 Silesia, 2, 3, 4, 5, 6, 9 Slovakia, 2, 3, 4, 5, 6, 9 Social — legislation —w— influences affecting, 202 — welfare ——child, 220-226 ——housing (see Housing) ——j insurance, 211, 216, 217, 218, 219 —— Ministry, 219 —— policy, 210-226 ——poor relief, 225, 226 ——unemployed and, 210, 211, 212, 213 201, 256 Social welfare, war sufferers, 211, 213, 214, 215, 216 Soil (see under Agriculture) State —and agriculture, 16, 29 — control —— foreign trade, 132 ——land reform, 43-66 . —— water-power, 86, 88 — ownership — — forests, 39, 40, 59 — —railways, partial, 138 Supreme Administrative Court —land reform and, 57 130,083, Tariff (see under Policy, Cus- toms ) — railway (see under Railways) Telegraph (see under Postal Service) Telephone (see under Postal Service) Tenant —land control and, 51, 52, 53 CZECHOSLOVAKIA Tenant, land ownership and, 47 —renting system, 48 Vilim, J., 105 Water Power, 76-88 — in agriculture, 81, 82 — annual flow, 77 —canals, 77, 78, 83 —control, 86, 87, 88 —current, 87 — development rights, 84 — distribution, 80, 81, 82, 83 — fuel supply and, 80, 82 — geological formations and, 80, 81, 82, 83 —hydroelectric plants, 77, 78, 79, 83, 85 —in industry, 77, 79 — main source, 78, 79 — potential, 85 —and railways, 144 —rainfall and, 76 — reservoirs, 80, 81, 82, 83 Waterways, 14, 76, 77, 78 —in foreign trade, 125 Date Due Le MAR . a