Sept. 15.
INTERESTING information concerning the financial condition of Austria is contained in the Reports by the _Commissioner-General of the League of Nations at Vienna (May-June, 1928) which we have just received. At the close of the great war Austria was in a most pitiable plight, and by the Treaty of Peace it was shorn of most of its territories. As an empire it had embraced an area of 240,456 square miles with a population (1910) of nearly 51,350,000. The republic now consists of 30,776 square miles with a. population of about 9,500,000. The territories lost were those from which Vienna and the manufacturing towns drew their food supply, and which held the seaports, much of the railroads, and the Danube river. In consequence of the war industry and commerce had come to a standstill; every economic function was dislocated. The national debt amounted to £280,000,000. Poverty was general. The attractive but unsound expedient of inflating the currency was adopted with the inevitable result that it depreciated in value, with a corresponding increase in the cost of living. For a time the distress was so great that the people lost heart and hope.
It almost seemed as if Austria would drift into anarchy and cease to exist as a national entity. But the nations of the world, besides being more compassionate than ever before when one of their number is overtaken by calamity, have learned the lesson that the financial and economic collapse of any nation works injury to all. Financial credit was given to Austria by former enemies to the extent of millions of pounds, which went mostly to purchase food for those who were actually starving. The League of Nations came to its support, appointing a Commissioner-General. to supervise the reconstructive measures deemed necessary to preserve the very existence of the nation. These methods of reconstruction are well worth the attention of Chinese officials and merchants who think it is possible for their country to go on indefinitely in a state of financial chaos, utterly regardless of the inevitable day of reckoning.
In the autumn of 1922, the Austrian Government was advised to appoint a foreign ex- j pert as Chairman of the. Bank of Issue, an institution which had been organized since the war as a branch of the National Bank of Austria. The object of the appointment was to raise Austrian credit and further the issue of loans. It was urged that by taking this step it would be possible to convince the money markets that the abusive inflation of the currency during the preceding two or three years would not occur again, and that there would be no further fear of the Bank of Issue. stultifying all efforts at financial reform by an unsound monetary policy.
As was natural, public opinion in Austria did not favour the foreign appointment. But as loans from abroad were desired the views taken by foreign financial circles had to be considered; the impressions produced upon them by recent Austrian financing were unfavourable, and they asked for guarantees which would enable them in the course of time to think differently. A compromise was made. The Austrian. Government appointed the Chairman of the Bank, but a foreign financial expert was appointed as adviser, with equal if not greater powers. Further, by arrangement with the League of Nations all government financial operations had first to receive the approval of the Commissioner-General, and all- government expenditures were regulared by him.
It was also insisted that great economies should be effected. The number of Ministries was reduced; which meant the dismissal of many officials; reforms were made in the management of the railroads, and the telegraph and telephone administrations were reunited with Postal - Administration. Other measures - recommended, but not yet carried out, point to the reduction of staff on privately owned, railt ways; the abolition or reduction of official publications; the re= gulation of the professional duties of teachers; the reform of the administration.of Federat theatres; last, but not least, thd abolition of superfluous army establishments. Under this strict but salutary' foreign regulation of its finances the country is beginning to recover. The number of unemployed has rapidly diminished; despite the high cost of living, travellers and other foreign visitors are more* numerous; there is ab economic revival, and the finan. cial deficits' of the Government are being steadily reduced. The future is 5 hopeful.
Once more to moralize. Chitt, is a country of immense actual wealth and undeveloped resources. Yet its financial condit tion is deplorable; its credit when unsupported by foreign Powers has almost gone. With the example of a deeply impoverished country such as Aus trio sacrificing its national pride and resolutely trying by 4 sound financial policy to recover its standing and prosperity, would it not be well for China to consider seriously whether the aid of foreign financial ext perts, whose: recommendation' will be faithfully carried out, is not merely desirable "but ab? solutely necessary if the finan-~ ces of the country are to Fest: on a sound basis?
Hunan, Chinese merchants il As a result of the fighting are holding up their shipmenté pending a return to peace. Fewét ships are calling at Hensnets ports than before.
Text read from the printed page and cleaned; old type leaves the occasional error.