A history of commerce

by Clive Day

761. Czecho-Slovakia.—Of the new states formed within the boundaries of Austria-Hungary that which gave the greatest promise of prosperity was Czecho-Slovakia, comprising the old kingdoms of Bohemia and Moravia, and extending to the southeast to include the Slovak population which had formerly been included in the kingdom of Hungary. This new state took that part of the old monarchy which was most richly endowed with natural resources and which had attained the highest industrial development. Stating the proportions approximately it included only one-fifth of the area of Austria-Hungary, but in that fraction comprised one-third of the factory workers and over one-third of the mining population. The land was fertile and highly cultivated, supporting a dense population and providing a surplus of food for export. The Czechs could look back with pride to a period in the past when they were one of the leading peoples of Europe, and they had prepared themselves for self-government by long struggles against the oppressions of German rulers.

Although Czecho-Slovakia is far distant from the sea it has means of access to it both by the Elbe and by the Danube, and is at the heart of the railroad system of central Europe. Provided with a surplus of products keenly desired in neighboring states, particularly coal, iron and food, its commercial future appears to be assured.

762. Magyar Hungary; German Austria.—Far less favorable was the condition of the two states, Austria and Hungary, which had been the seat of the power of the Hapsburgs in the past, and which had prospered when they had been supported by the labor of subject peoples, but which were now shorn of this support, and given each its own way to make in the world.

The Magyar state of Hungary offered at least tolerable prospects of success. Although it lost the border lands which had formerly supplied practically all its forest products and much of its minerals, it retained a compact and fertile territory, one of the granaries of central Europe, and could hope to exchange its surplus wheat for the products which it needed.

German Austria was left by the terms of peace in a pitiable condition. It retained a population of only 6 million, including less than half of the German-speaking people in the old dual monarchy. Of this total nearly one-third (1.8 million, 1920) was comprised in the single city of Vienna, which had grown to this size largely by the political advantage that it enjoyed as one of the capitals of a great state. Much of the area of the new state was mountainous, suited to grazing but not adapted to intensive agriculture. Before 1914 the territory of the present state was able to produce perhaps two-thirds of the necessary food supplies consumed by its inhabitants; in 1920, with powers depleted by the war, it could render only one-quarter. Endowed with only one mineral resource, iron mines in Styria, Austria could buy the food required for the maintenance of life only by the exchange of industrial products made with imported coal out of imported raw materials. At the close of the war the situation of the country was indeed desperate, for the people had no resource with which to make a start in the process of foreign trade. Gradually markets were opened, and some basis of credit was found for the beginning of commercial transactions, but meanwhile the government had plunged deep in the issue of paper money, which depreciated so far that itself formed a grave obstacle to economic recovery. Austria seemed destined for years to come to rely upon charity, whether private, public or international; and many questioned the wisdom of the peace settlement which forbade the union of this fragment of the German-speaking people with the rest of Germany.

763. Poland; earlier history.—The World War made its greatest change in the map of Europe not by the transfers of territory between bordering states, important as these were to the parties concerned, not by the creation of new states like Czecho-Slovakia but by the resurrection of an old state, Poland. Poland had played no great part in commerce in the previous period of its existence. The surplus supplies of wheat grown on the great estates of its landlords had been carried by road and river to Danzig, to be shipped to western Europe in exchange for metals, manufactured wares and exotic products that made the life of the Polish nobleman more comfortable. The country as a whole was too backward and too far removed from the centers of European progress to become an important member of the commercial system of the time.

The partitions of Poland at the end of the eighteenth century keenly as they were felt by patriots, made little difference in the life of the mass of the people. The divided people went their separate ways: neglected by Austria, schooled and drilled by Prussia, given in Russia at least access to an enormous market which was later to be a great stimulus to manufacture. Most of the people were employed in agriculture under a system of serfdom like the medieval. They were freed from this in the nineteenth century, and acquired in small holdings much of the land which had formerly been held in great estates. A turning point in the economic history of the Polish people came in the last quarter of the nineteenth century, when manufactures developed rapidly in Russian Poland, fostered by the high protective tariff.

764. Resources of the new Poland.—The new state of Poland was welcomed and supported by the Entente as a check on Germany. With a population of about 25 million it had claim to a place among the larger powers of Europe. Its economic endowment was adequate if not abundant; besides a sufficiency of arable land and great forests it had coal supplies comparable in amount to those of France, the oil of Galicia, and other mineral resources. Its gravest lack was that of experience in organization, group-action, both in economics and in politics. In manufactures the Poles have looked to Jews and Germans for leadership; the Poles have supplied labor, but have only by exception taken a place among those responsible for control. Their manufactures showed a high labor cost and heavy capital charge per unit of product. Behind the barrier of the Russian tariff they prospered. They could doubtless be maintained for the supply of domestic needs by protection, but they have shown slight capacity to win in the world market the opening which was formerly afforded to them by Russia.

765. Prospects of Poland.—In the field of politics, as in economic affairs, the Poles have yet to prove their mastery of the complicated problems that arise in the organization of a modern great state. In the years following the armistice that closed the war they showed a readiness for military adventure that boded ill for the future of a country needing all its resources for economic reconstruction. They soon contracted a heavy debt, by the accumulation of huge deficits in the budget and the endeavor to pay their way by printing paper money. The Polish mark, nominally equal to the German and therefore worth about $.24, declined to a point (Sept., 1921) at which 6,700 were exchanged for the American dollar. The position of Poland is difficult at best, and the prospects of the new state will be seriously impaired if a more sober spirit does not prevail in the national councils.

766. Russia and the revolution of 1917.—From the beginning of the war southern Russia was cut off from commercial contact with the Entente by the closing of the straits leading into the Black Sea. In the north the Baltic was likewise closed. Contact was maintained only on Russia’s Arctic coast, and by the Siberian railroad. Means of access by both routes were difficult and expensive; the exchange of products was restricted to those that served imperative military needs.