# The Czechoslovak Review/Volume 3/Minister of Commerce Reviews Situation

Minister of Commerce Reviews Situation
In a recent interview minister of commerce Dr. Heidler reviewed briefly the economic life of the Czechoslovak Republic during the first year of its existence. He said:
Our economic life still bears the effects of the war. Even though our territory was not the scene of war operations, the indirect effects were very serious. In the first place they involved the complete exhaustion of all means of production, due to the determination of the Central Powers to win the war at any cost. Our agriculture, deprived of the necessary fertilizers, vainly looked around for means to increase the crops. The calamity was increased by requisitions of cattle for the army. Mining of coal was totally neglected from the technical point of view, as all work was done with a view to immediate necessities and no regard was paid to future needs. Manufactures were made exclusively subservient to war purposes and the needs of the citizens were completely ignored. In so far as manufacturing needed raw materials from overseas, which applies especially to textile industries, there was nothing left for it but to use substitutes, principally paper. Being totally cut off from the world and unable to export our own commodities, we suffered serious losses, we lost all touch with our markets. Visible and hidden supplies were pretty nearly exhausted and everywhere there was a lack of the most elementary necessities of life. Real values were displaced by a flood of banknotes whose circulation throughout Austria increased at a terrific rate every month.
In the midst of this complete economic chaos our republic came into being. Politically we belonged to the coalition of victors, but from the economic side we were badly hit by the downfall of nations to which we had been tied by the force of bayonets. It is evident that under such circumstances reconstruction of our economic life was a great problem, especially in view of the fact that even after the overthrow of Austrian rule we were surrounded by a circle of enemies against which the blockade was in full effect. And yet by strenuous activity we managed to improve greatly this desperate position. With the help of the Allies we overcame the imminent catastrophe of starvation. Although the food ration of the people in spring and summer was far below what we hoped for, when fighting ceased, we managed to live and live better than during the war years.
The crops this year were good, so that the people get now a more generous allowance of food. Condition of the sugar beet crop is very promising; when we consider the startling decrease in the world’s production of sugar which amounts to 5 million metric tons, it will appear that we are the only European country which can supply any considerable part of the deficiency. Our former most dangerous competitors have become our best customers. I believe that I do not exaggerate, when I estimate our sugar surplus available for export in 1919—20 at half a billion Swiss francs. Hops also made a fine showing this year and we shall be able to export five sixths of the crop. As far as lumber is concerned, we can export as much as we can find transportation for; our woods and saw mills have lumber ready for shipment worth also at least half a billion Swiss francs. Only the lack of railroad rolling stock prevents our sup plying the world market. Our china and glass industry which enjoys world-wide reputation is re-establishing connections with old customers and finding new markets. Other branches of our industry are waking up, such as the wine industry; cotton mills are now operating so that domestic needs are by this time supplied. In the first six months of our freedom we had to import all the clothing material, but since the reopening of cotton mills the unheard of prices of clothes came down to the price level of the world market.
Our position with regard to coal is not very favorable, but yet better than that of many other countries. According to Hoover’s recent statement our production equals 78% of the 1913 production, while England has reached only 62% of its normal output. If one takes into consideration the damage which the unregulated war exploitation of the mines caused, it becomes evident that much credit should be given to our coal miners and their devotion to the new state. It is only proper to emphasize that in 1919 we had no strikes or disorders in our coal mining districts, because Czech miners realized that the fate of the republic was in their hands. The difficulty in supplying the domestic needs is due to orders of Allied missions which compel us to supply tremendous quantities to neighboring states.
The most difficult problem in the whole reconstruction of our commerce and industry is currency. We feel the effects of enourmous inflation of banknotes. Their circulation in the territories of our Republic is seven times greater than before the war, although in the other states which sprang up out of the ruins of Austria-Hungary this condition is still more marked. By breaking off all connection with the Austro-Hungarian Bank immediately after our declaration of independence we prevented further flooding of our country with its depreciated notes. Now the trouble is not merely that our crown is depreciated, but that the currency of our neighbors is still more depreciated. Our ​state contains 75% of the industrial life of the former empire, and our natural market is found in the lands that were formerly provinces of Austria-Hungary.
Here is our great financial problem. We must pay for needed raw materials in western European and American exchange, while we sell our product for the most part to the East, and we cannot buy dollars and francs with Polish or Magyar money. When this problem is solved, we shall be able to import raw materials freely and there will not be such violent fluctuations in the value of our money.
The second difficulty consists in insufficient communications. Our railroads, used for four years and a half exclusively with a view to military emergencies, are run down and there is danger of a complete break down. A large part of the rolling stock came into the hands of the Allied armies after the defeat of the Central Powers; what was left was in bad condition. We worked with great zeal to overcome this trouble, and the Republic .spent 100 million crowns for new cars and locomotives and for repairs. That we did not labor in vain will be admitted by everyone who has passed over our railroads and the railroads of the other countries of former empire. But even hardest work and greatest financial sacrifices will have to continue for a long time, before the railroad catastrophe is fully obliterated.
Even now the progress is striking, but it will be at least a year, before our railroads can take care of the necessary traffic. In addition to repairing old cars we build 1000 new cars every month. Boats are running on the Elbe and we are ready to start water transportation on the Danube, as soon as the Magyar political problem is out of the way.
There is one thing of which the Czechoslovak Republic may justly be proud: we did not resort to the printing of additional paper money, as all the other new states have done. The needs of the state were provided for by taxes and internal loans, and we even succeeded in taking out of circulation two billion crowns without any untoward effects.
I am not a natural optimist and I realize fully, what a lot of troubles we have still ahead of us. I merely tried to give you an outline of the problems which we have to deal with, when we gained independence. We lost no time, tackled the difficulties and have greatly improved our situation. I am not anxious to get everything righted at once, for that would be surely followed by a reaction which would be dangerous for our weak organization. But hard work will bring the republic back to normal life. Since we are to a very large extent an industrial state, reconstructions with us a much more complicated problem than with the purely agricultural countries of eastern Europe. And yet we are today far better off than they.
This work is in the public domain in the United States because it was published before January 1, 1929.
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