The Czechoslovak Review/Volume 3/Budget, War and Election

Budget, War and Election

On May 14th Minister Rasin laid the first budget of the Czechoslovak Republic before the National Assembly. As was to be expected, the budget showed a big deficit, and yet there are many encouraging features about it, proving that sound financial principles are being applied in the public administration.

The ordinary expenditures are figured at 2,124,000 ,000 crowns, and ordinary receipts at 2,306,000,000. That gives promise that with the return of normal conditions the state will be solvent. But the heritage of five years of war makes necessary special expenses, exceeding for the year 1919 the ordinary expenditures. Dr. Rašín estimates the extraordinary outgo at 3,829,000,000 crowns, whereas special receipts to cover this immense sum are expected to bring in only 505,000,000 crowns. Thus there is a deficit in the special budget of 3,324,000,000, as against the small surplus of 182,000,000 in the regular budget.

The greatest burden is caused by the virtual continuation of the state of war. The defense of the frontiers against the Magyars, the support of the Czechoslovak army in Siberia which cannot be withdrawn by reason oi the complexity of the Russian situation, and guarding oi the long boundary against Germany and Austria make it necessary to keep under arms a force of 370,000 men. That means a serious financial burden to a small nation oi 13 million people. The Czechoslovaks hate militarism and hope to be able to reduce their army to 60,000 men, when restoration of normal conditions shall have removed dangers to their independence; Rasin hoped that the sum of 216 million crowns, included in the regular budget would then be sufficient for the support of the army. But in the special budget 460 million must be provided for the extraordinary military efforts.

Even more burdensome is the appropriation of 1,200 million for financial assistance not only to the families of actual Czechoslovak soldiers, but also to demobilized soldiers of the former Austro-Hungarian army who are either sick or invalided or unable to find work. A similar item is the appropriation of 220 million to enable the minister of food supply to sell imported flour and fats to the people at prices within the reach of the poor and middle classes. Then there are special allowances to all state employees and railroad workers to supplement their ordinary salaries which are quite inadequate to buy the necessaries of life.

To cover the deficit it will be necessary to resort to an internal loan, but a large proportion of the deficiency will be defrayed by new taxes. The minister of finance proposes the following series:

A tax on interest paid on bank deposits, amounting to six per cent; an additional progressive supplement to the land tax, a tax on all commercial transactions, a special tax for the registration of foreign companies, a stamp duty on foreign securities and on all leases. The yield of all these taxes is estimated at 250 million crowns. It will also be necessary to impose a tax of 20% on the coal output with an estimated yield of 250 million, to increase the duties on alcoholic beverages by about 106 million, and to lay a 15% tax on railroad transportation which will bring in about 150 million. In addition it is proposed to raise passenger and freight rates to take care of the deficit of the state railroads.

Much criticism was encountered by Rašín after his budget was placed before the National Assembly for discussion. Like every finance minister he is unpopular, because he is obliged to turn down many requests for appropriations on the ground that he cannot find the necessary money. He ought to be called the watchdog of the Czechoslovak treasury. On top of that came the growing dissatisfaction with the coalition government of all parties. In theory the most desirable arrangement, in practice a ministry composed of leaders of contending parties becomes a government without a policy and without authority. Party strife has grown very bitter in the Czechoslovak Republic since the enthusiastic establishment of free government. Every newspaper is a party organ, and in view of the approaching municipal elections eachc journalist sought to make capital for his own party by criticising the acts of those administrative departments which were controlled by ministers of hostile parties. In the cabinet itself there must have been many recriminations and stormy scenes which finally culminated in the offer of resignation by minister of finance Rašín and minister of commerce Stránský. Their step was hastened by indications pointing to an understanding between the socialist parties and the agrarians as against the National Democrats or the so-called bourgeois party to which the two ministers belong. President Masaryk refused to accept the resignations, and even Rašín’s enemies were not anxious that he should quit, because no one was ready to take up his work of financial reconstruction. Thus the two ministers remain at their posts.

The internal political situation at the end of May was very unsatisfactory. Partisan bitterness was growing, the bolshevist element in the social democratic party, though weak in numbers, was ever bolder, and state authority weakened appreciably. There were constant complaints of thefts on railroads and in Prague itself riots occurred as a protest against high prices and profiteering in the necessities of life.

Magyar invasion of Slovakia cleared this oppressive atmosphere. It proved that the Czech people were patriots first and partisans only afterwards. When the news came that the Magyar Reds broke through the thin cordon of Czechoslovak troops on the long line of five hundred miles from Bratislava to Bukovina, all rancor was forgotten and everyone rushed to the defence of the country. The republic was faced with a serious situation: the bolshevist regime which everyone had expected to fall down very shortly suddenly manifested remarkable military strength. Bela Kuhn had mobilized the entire manpower of the Magyar nation against the Roumanians; when the Roumanians early in May stopped their advance, he saw a chance of striking a blow against the Czechoslovaks in the north. He made attacks simultaneously along the whole line, but his real effort was directed at the northeast. He wanted to carry the authority of the Red goverment of Budapest as far as the Ukrainian districts of Galicia and Bukovina and effect a junction with the Bolsheviks of Russia. For a time he was successful to a surprising degree. His bands overran a third of Slovakia, burning and wasting the country and committing unspeakable cruelties.
Map Indicating Military Operations in Slovakia.
Shaded portion covers territory invaded by Magyars, dotted portion indicates districts where bolshevist outbreaks occurred. Captured Czechoslovak soldiers were tortured and crucified; telephone girls were mutilated, and wounded or surrounded Czechoslovak patrols preferred to shoot themselves rather than fall into the hands of the devilish Magyar executioners. Insurrections occurred in the rear of Czechoslovak positions; a twofold propaganda was carried on there, one appealing to the Magyar elements of the population, calling on them to fight Czechoslovak rule, the other using bolshevist war-cries against a bourgeois government. The Magyar armies were well equipped, since they possessed the war material surrendered by Mackensen’s army in his retreat from Roumania, and since a large part of the Austro-Hungarian military supplies had been brought back from the old Italian front by Magyar regiments. It was also proved that Bela Kuhn received several batteries of guns from Italy, presumably because the Magyars were enemies of the Jugoslavs.

The Czechoslovak army lacked cannon, horses, trucks, munitions, officers of high rank, and it lacked numbers. Supplies of all sorts were rushed to Slovakia by minister of defense Klofáč; Italian officers were replaced by experienced French generals, and general Pelle was appointed by Masaryk commander-in-chief of the Czechoslovak armies. Mobilization of certain classes was ordered and volunteers were called for. Guns and rifles came from France, and by middle of June not only was Magyar invasion stopped ,but they were being pushed back. At the same time the Allies issued an ultimatum to Bela Kuhn ordering him to withdraw beyond the demarcation line, and at the end of June he complied reluctantly with the ultimatum. The material damage done by his barbarous troops is estimated at more than one billion crowns, and since Hungary is bankrupt, it will be hard to compel restitution. But at least the danger to the state re-created patriotism in Bohemia, and so the Magyar war was not altogether a calamity.

Municipal elections held on June 15 came out very much as everyone expected. They have proved a great growth of socialist sentiment; while the old social democratic party approximately held its own, as compared with the last elections under the Austrian regime in 1911, the Czechoslovak socialist party, formerly the national socialists, manifested a great increase of strength, mainly for the reason that clerks, school teachers and government employees whose lot is worse than that of workingmen look to this party to improve their economic position. National democrats and agrarians lost, and the Catholic party did not make much of a showing. In Prague itself the national democrats topped the list, the vote being: National democrats 38,933, national socialists 27,301, social democrats 26,498, people’s party (Catholic) 7,087; then there were several minor parties, including Germans.

A remarkable result of the elections was the demonstration, how artificial had been the German rule in many cities of Bohemia and Moravia. Brno and Olomouc, former strongholds of Germanism in Moravia, voted Czech two to one; in cities where formerly there was not a single Czech vote, there appeared now a Czech minority, strong enough to secure representation in the city council.

Municipal elections had no direct reference to the National Assembly and, the composition of the cabinet. Those are problems that will be settled by general elections in the fall. It is evident, however, that no party will be strong enough to form the government alone, and that some sort of a coalition will be necessary even in the future.

At the elections of June 15 both men and women voted. As voting is compulsory, the total vote cast was enormous. No disorders marked the casting of ballots.