The New York herald., 1921-10-23
FINANCES |
Alta VERY Low EDB'
Failure Of Hegedus Policy
Shows Need of Acting
With Border States.
INTEREST Is IDENTICAL
Finance Minister Had Good
Programme, but Failed to
Carry 1t Out.

Special Correspondence to THE New YORK
HERALD.
BUDAPEST, Oct. 1.-The fall of Ro-
land Hegedus. Finance Minister in
Hungary since last December, ends
the most gallant attempt to restore a
nations fiscal integrity which has been
made by any Minister in Central Flu
rope since the war. During the last
few days Mr.. Hesedus has thrice Of
fered his resignation, and at last it
has been accepted, and we hear that
he is going to a sanitartum In Austria
to recuperate his shattered health. lis
unasked for resignation is signal ad-
mission Of defeat, because Mr.. Hege-
dus could only be defeated when lis
own judgment admitted failure. From
the day he took Office he has been one
of the most hated and criticised men
In Hungary. His enemies have been
powerful and legion. But he has
backed his scheme with force, wit,
good humor and almost brazen self
possession. Others have urged his
resignation long since, but he has de-
fed them. II Mr. Hegedus still be-
lieved in his symphonies" he would
have had to be thrown out OF office
before he relinquished 1t.
What has happened? Simply that the
failure of Mr.. Hegedus's policy demon
strates once and for all that none of the
Central and Southeast European coun-
/ IN <o nall
out of the Quicksand into which all
are sinking. Mr.. Hegedus took up the
challenge Of the Entente. to cut down
on expenses, to stop imitation. to practise
economy. He left his position as
director Of a prominent bank to become
Minister Of Finance Of his own will and
to execute a programme of his own de-
sign. Political considerations. to be
sure, forced him to modify some OF the
rigors of his first programme. He was
all for dismissIng bureaucrats right and
left he was all for cutting down the
budget to an irreducible minimum--and
his minimum was pretty low. He wanted
to get rid Of soldiers and clerks. and
stenographers and official automobiles.
| He did get rid Of some of them, but Mr..
Hegedus was not an absolute monarch,
and somehow the items which he cut
| of military expenditures found their
| way to other lists. Nevertheless, Mr..
Hegedus accomplished In q measure.
during his eight months of off1ce, those
things which he outlined in his original
programme.
stops Printing Money.
He stopped the printing presses. He
got money into the national treasury,
not by borrowing 1t or by making 1t,
but by recalling 1t out of the pockets OF
the people by q perfectly ruthless system
Of taxation. He came right out in meet
Ing and told the people that they could
either go on diving In a roseate dream
which would one day collapse utterly
or they could face the music and pony
up. He separated the Austrian banking
system from the Hungarian. He de-
signed q budget in which ends met more
or less. At any rate 1t was an attempt
at a public balance sheet. In other
words he did most of the things which
the Ter Meulen League OF Nations
credit scheme recommends that Austria
do as a condition of obtaining credits
and which Austria isn't doing. AS
result the Hungarian krone improved
with astonishing rapidity. In six months
1. rose from to 2.20 in Furthermore
than double its value. while other cur
depreciating. BY all the laws 1t should,
one would have thought, go on improv-
ing. Ard then suddenly II didn't. 1t
slid and slid and slid--and to-day 1t
Is at 4, considerably below tho level
where It stood a year ago.
What caused its retrogression Is q
problem for moro skilful economists
than the writer. The facts are that in
Zurich the wavering and falling OF tho
Austrian money-which ought to fall. be-
cause day by day the State incurs new
debts and produces more paper-eeemed
inevitably to affect the Hungarian. The
manipulations Of Central Europe's thou
sands OF speculators, from the highest
banker to the lowest "schlber," were be-
yond Mr.. Hegedus's control.
II IL true that Mr.. Hegedus struck
many snags at home. He struck one
when he came to tax the peasants, whose
property was not so available as that OF
the industries. His tax load fell with
colossal burden upon the small busi-
ness man, who curses him to-day. His
position was constantly threatened, po-
litically. by the left wing Of the Christian
nationalist reaction. who were by very
nature opposed to the man who styled
himself "the only Liberal in the Cabi-
net" But these facts alone could not
account for the complete retrogression In
the national money. since a large part Of
his plan actually became embodied in
policy.
|. In a weary epeech-his last speech
before Parliament this man, who has
been the optirnist and laughter maker of
the Government during his incumben-
cy as Minister. himself acknowledged
wherein lay the failure of his policy.
mot In the system 1t Is the right sys-
tenn" he reiterated. But Il Is a system
for Central Europe-all OF it--and not
for any one State"
Finances Deplorable.
The state IN which the Hegedus fall
ure finds Hungary n as follows. Her
national finances are IN q depiorable
condition. Before The harvest Hun
gary's krone stood at 220. Mr.. Hege-
ius estimated that after the harvest it
would stand at g. He based his budget
on a seemingly conservative estimate OF