Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-08
FRIENDSHIP BEST-SALARY
FOR GOVERNMENT MAKER.
Jeremiah Smith, Who Refused 100000
Check From Hungary, Is Repair
Expert" for Nations of World.

It provided, first, for a stabilized cur
rency; second. for a new bank of issue
to control the curre5cS: third, for bal
anced national budget, 70 be established
by June 30, 1926; fourth. for an interra-
tional loan to Hungary to aid in her re-
Mobilization, based on the revenue from
customs duties, tobacco. salt and sugar,
and, fifth, for supervision of the whole
program by high commissioner repre-
senting the League.
Plan Had to Be "SOld."
Three preliminary steps were essential.
Hungary had to be induced to agree to
the plan. The powers, great and small,
including Hungary's close neighborS.
whose territories had belonged In whole
or in part to her-Czechoslova Ru-
mania and Jugoslavia-had to be willing
not only to give their formal approval
but to cooperate for the success Of the
plan. And the allies had to agree to
forego their first claims, set up by the
peace treaties, upon Hungary's national
income, in order to make feasible the
international loan needed for her relief
since neither European nor American
bankers would lend money for her use
| II other claims we're to come ahead Of
theirs as soon as she developed any ca
| pacity to pay interest and principal.
| The agreement of both Hungary and
the interested nations was secured. The
Preparations Commission was persuaded
to waive the priority of allied claims
against Hungary for payment of war
damages. So the way was opened to
float the proposed relief loan and put
the plan In operation.
From the start 1t had been obvious
that the Hungarians demanded a neu-
trail commissioner. A representative Of
any of the European powers would face
| prejudice and suspicion, making 1t prac-
tically impossible to work. An Ameri-
can was indicated, and the choice fell
on jeremiah Smith. He was nominated
as high commissioner for Hungary on
April 6. 1924, and formally appointed by
the Council of the League Of Nations
on April 8. In one week he turned over
his legal affairs to others to carry on
and set out for his new post, reaching
Budapest on May /.
No sweetly inspiring task confronted
him. He was in the position of receiver
for a falling nation, responsible for
making 1t going concern. His powers
were those Of a dictator, for he was to
regulate national expenditure, and the
man who pulls the purse strings runs
the state. No foreign dictator, particu-
larry financial dictator, can easily be
very popular. Furthermore, the old
hereditary mobiles of Hungary thought
they saw in this envoy from republican
America a menace to the return Of
monarchism. which they desired.
Schemers Impeded Program.
The nation was being run under the
regency of Admiral Horthy, which has
prevailed since, although it is designed
as an Intermediary regime to last until
the re-establishment Of a monarchy.
Former court circles were torn by feuds
and intrigues Of ambitious rival groups.
| Foremost among these were two-the
adherents of Princess Zita. wife of the
Inflated Emperor Carl whose son Otto
was urged as successor to the HapSburg
throne, and the supporters of the Dow
ager Isabella, advancing the claims of
the Archduke Albert of the house of
Croy. The schemes and the plots of
these two noblewomen and their follow
ers and hangers-on impeded Mr.. Smiths
progress. To them he was about as
welcome. at first. as Bolshevik f1nan-
cial adviser would be in Washington.
On one Of the rare occasions after his
return when he spoke about his expert
enceS-at a dinner gathering of leaders
of New York's financial, industrial and
legal world--he referred humorously to
these embarrassmentS. ..
THE trouble an American has In
learning about Hungary he remarked,
1
the iron crown of st. Stephen and why
Hungary can't really prosper again until
a king is crowned with it once more as
ruler of all the traditional Hungarian
| lands.'
Mr.. Smith proceeded on the assump-
ton that, even If the Hungarian mon
archists could not be entirely satisfied,
at least the Hungarian people As q
whole could be little better OF, even
without q coronation and without some
of their former territories now held by
their neighbors. At the start he COM
manded confidence and began to win
liking by his direct and simple way of
going about his business. A palace was
tentatively set aside for him and his
staff. He announced Immediately that
ne would have no royal residence, nor
yet any sumptuous suite in an expen-
sive hotel. If it was to be his job to
cut down the cost of running the coln-
try. he was not going to start by SPEND
ing money unnecessarily on himself.
The HungarianS appreciated that.
Protests Greeted Retrenchments.
With, the obstacle of compulsory repa-
ration payments out of the way and
Mr.. Smith at his post, the international
relief loan was definitely launched In
May and successfully hoated that Sum-
| mer.
This put in his hands the sum Of $780,
900, 000,' with power to issue cash to the
Hungarian government for its needs.
| The authorities had to turn to him for
everything they desired for in addition
to holding this sum in reserve he also
| controlled the collection and spending
OF state revenues.
When he took charge the taxes did
not meet the national budget-partIy
because the value Of the paper currency
had fallen so low and partly because
appropriations and expenditures were
excessive. Three-flfths of all the pub
lie revenues were not enough to meet
the pay roll Of the SwarmS Of civil serv-
ants. Mr., Smith set himself to the
task of cutting down the STATS Of public
employees. He investigated the actual
necessities for service; and then came
slasheS In the lists of government and
police ofncials and of the assistants of
the coal, refugee and other boards and
commissions.
HowlS and walls arose in various quar-
tiers and real hardShips had to be met
and overcome. But the tax-burdened
people applauded and probably the re-
SponS1ble heads of the administration
secretly thanked the American high
commissioner for relieving them so EN-
GENTLY OF an essential but distaSteflil
job.
New Revenues Provided.
To meet the emergency caused by the
low value of the currency from another
angle Mr.. Smith saw to it that artificial
support Of the crown was terminated
and that the projected new bank of is
sue, based on sound, conservative prtn.
ctples, was started. The economic plar1
laid down by Sir Arthur Salter and his
associates of the League Finance Com
mission had meanwhile been put in ef.
feet, and under Mr.. Smiths direction
produced by September a new volume Of