The New York herald., 1921-01-02
LOW EXCHANGE NO
SEVERE BLOW TO
AUSTRIAN TRADE
Permits Foreigners to Buy
Cheaply and Thus Aids
Exports Abroad.
ADDS TO COST OF LIVING
This Results in Demand for
More Wages and SO Creates
Vicious Circle.

Special Correspondence TO THE New York
HERALD.
Copyright, 1891, by TIE New York HERALD.
VIENNA, Dec. 15.-The value of the
Austrian crown decreases almost daily.
The lowest point hitherto recorded was
reached when the price of the dollar
rose to $50 crowns against 200 In June.
This remarkable and alarming develop
ment Is partly due to the fact that the
Austrian supply Of foreign currencies
on the market Is nearly exhausted and
far from sufficient to meet the lively
demand. Neither the "Devisenzentrale"
nor the private buyers can get the sums
they want and both are forced to drive
UP the prices to obtain what little ready
money there Is.
The danger has been Increased by the
tendency Of the public to hoard up for
eign money because it prefers the guar
antee of more prosperous Governments
than the Austrian. The loss Of inter-
est to savers is amply compensated by
the fact that these hidden treasurers
are out of the reach of the tax collector
In addition, every one able to do so
leaves his foreign money in foreign
banks instead of having 1t transmitted
to Austria.
1t Is impossible to say how long this
extreme decline of the Austrian crown
can continue. Much will depend upon
the measures to be taken by the Repara-
tion Commission. but it is by no means
sure whether even this influential body
will be able to bring about change
soon.
Helps Export Orders.
AS things stand at present all pro-
ducers in Austria have direct interest
In the low exchange rate. which enables
them to work for export In spite of the
arithmetically high wages and the un-
favorable conditions Last summer,
when the crown was higher, industry
and trade suffered from the loss of ex-
port orders.
The costs of production were such that
they swallowed up the profit and led.
after short spell of brisk export. the
so-called "Ausverkauf." to an almost
complete standstill that forced many an
Industrial establishment to work part
time or close down altogether. IT is
therefore comprehensible that the pro-
duccrs prefer the low value of the crown
and that the bankers are Inclined to back
them. Even the Government Is not quite
sure which policy to follow. 1t has the
greatest interest in keeping down the
number OF unemployed for political as
we'll as for social considera tions. A lively
export means decrease OF unemploy-
ment and Vienna has only about 0,000
unemployed at present On the other
hand all nccessaries of life. especially
foodstuffs. which have to be bought
abroad have become excessively dear and
are under present circumstances some
times unprocurable.
In Vicious Circle.
And here commences the vicious cir
Gle by which the whole economic sys-
tenn of Austria Is surrounded; the high
er prices for the necessar ries of life lead
to new demands of higher wages. If
these higher wages are granted they re-
act upon the price OF production and
lead to new period of stagnation.
This could only be overcome. II is be-
lieved. by systematic credits which
would enable the countries with money
Of high value to trade with Austria
without regard TO exchange until a
sounder footing were furnished There
is already beginning in that direction.
but the system has not yet been worked
out sufficiently, partly because the En-
tente has not yet taken any decisive
steps and partly because private for
eign capitalists have been conservative
and uninclined to take risks. II Is
thought likely in financial circles here
that the business staEnation in the
countries with high values will bring
about a change to Austria's benefit. 1t
Is pointed out that England has done
well In times past by far reaching and
sometimes complicated scheme OF cred-
its to other countries which would never
have been able TO buy English raw ma
terials and manufacturers for cash. But
in the meantime the depreciation OF the
crown means a new era OF extreme
hardship to the great majority OF the
Austrian population.