Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-07-04
TWO BROKEN NATIONS STEADIED
BY LEAGUE OF NATIONS AGENTS
jeremiah Smiths Feat in Hungary Duplicated in Aus.
tria by DIR. Alfred Zimmermann-Both
Countries Still Face Difficulties.
BY FREDERIC WILLIAM VILE.

BY FREDERIC WILLIAM VILE.
Two names-the good TeutonIc
Zimmerman and the famous Anglo.
Saxon Smith-are destined to stand
out in European history henceforward
amid the glory hitherto reserved for
soldiers and statesmen. Or. Alfred
Zimmerman. Dutchman, former bur
gomaster Of Rotterdam, and Jeremiah
Smith, American. lawyer. Of Boston.
have accomplished the miracle Of put
ting broken, bankrupt Austria and
Hungary, respectively. on their feet.
The worlds attention has been
drawn to their achievement by the
action OF Smith in renouncing honors
and honorarfum at the hands OF Hun
gary He proclaimed. In a message
that electrified two hemispheres, that
he feels amply repaid for his work or
the last two years at Budapest by the
realization that he has helped to give
a once strong and still proud Euro
pean nation a fresh start along the
road to national greatness.
The League Of Nations, under
whose auspices DR.. Zimmerman and
Mr.. Smith functioned, set June so,
1925, as the date by which, respective
". the economic houses Of Austria
and Hungary were to be put In order.
Zimmerman was assigned three
years for his Job. Smith was set TO
work in the. Spring OF 1924 and al,
rected to be done by July !, 1925. Both
men carried out orders. and the
leagues financial control Of the two
realms once ruled by the Hapsburgs
is now at an end. Their budgets are
balanced. They have SURPRISES. in
stead of deficits, in their national
treasures. They have been ridden OF
inherited bureaucratic systems that
fattened on government pay rolls ana
ate up taxpayers money unheces
sarily. The civil service in both Aus
tria and Hungary has been cut to the
bone.
Some Troubles Remain.
Neither DR., Zimmerman nor MI.
Smith leaves the post which ne mas
been filling with a record OF having
annihilated all and sundry or the
woes which beset the countries or the
old dual monarchy. What the league
commissioners; general did was 70
bring about convalescence, rather
than a cure They found the Austrian
and Hungarian nations ana govern ~,
ments suffering from economic Ill
ness that was rapidly becoming
chronic and threatening to be fataI.
What Zimmerman and Smith &C
complished was to put them through
a course of treatment that now makes
their recovery fairly certain-provloeo
the patients themselves adhere 70 the
economic diet to which they nave
been subjected during the league
guardianship.
Smiths story in Hungary is a ro-
nance in international economics. Al
the beginning Of 1928 Hungary, In
desire to raise foreign loans on the
security of certain OF her revenues
approached the reparation comnls-
sion in order to secure the necessary
release of liens on certain Of her as
sets and revenues, and had ut the
same time expressed the desire that
the League of Nations be asked to
draw up a plan OF financial recon
struction. On September 20 Rumanla,
the Serb.Croat-Slovene state and
Czechoslovakia requested tho councli
Of the league to authorize the imam
ciaI and economic committee to under
take at once without further author
ization any preparatory work neces'
sary for the reconstruction or hun
gary in the event Of such request
from the reparation commission. the
reparation commission on october II
passed the necessary resolution.
Loan Aided Reconstruction.
AS the principal item in the recon
struction scheme, a loan Of 100000. 900
gold crowns was provided, to be sc.
cured by specific Hungarian revenues,
to cover the deficit till June. 1925, so
that imitation might be stopped with
out waiting till the budget balance.
Reconstruction operations were placed
| under a commissioner general ap-
pointed by, and solely responsible to,
the council of the league, for the
purpose of insuring the due execu.
ton Of the whole program. The
commissioner general was assigned
the further task Of seeing that salts
| factory political relations were estab.
lished between Hungary and her
| neighbors. He also was instructed to
carry out suitable arrangements with
regard to Hungary's external obliga-
tons, particularly relief credits and
reparation.
! jeremiah Smith, as commissioner
general Of the League Of Nations for
| Hungary, assumed his duties on May
1, 1924. The foreign loan was placed
In June on the American, italian,
Swiss, Swedish, Dutch, Czechoslovak
and Hungarian markets The new
| bank of issue opened on June "a. The
|
balancing the budget by June 80, 1925.
Smith had been in charge at Budapest
for barely six months in 1924 when
the budget showed a surplus. 1t has
shown one ever since. 1t was bal
anced a year and a half earlier than
the schedule. OF the 250,000,000 gold
crowns supplied by the international
loan for reconstruction needs 40 per
cent. or 100,000,000 crowns, remains
untouched-in itself a record probably
without parallel in the annals of
European government finances.
Customs Receipts Reduced.
Smith astonished the natives in
Hungarian government circles early
during his regime by declaring that
customs receipts were too high. He
brought about the negotiation Of com
mercial treaties with neighboring
states, which had the expected result
of reducing income from customs re
ceipts. At the end of Smiths frs,
year the pledged revenues were yield
ing income above expectations. The
next thing the American commits
sioner tackled was the reduction IN