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Czecho-Slovakia - Economy

Czecho-Slovakia inherited over sixty percent of the industries of the former Austrian Empire. Bohemia was one of the most highly industrial regions of Europe. The great Skoda ironworks at Pilsen provided all Austria's war equipment, including the famous 42-centimeter howitzers. The Bohemian glassworks alone employed fifty thousand people. There was a well-developed textile industry and a great beet-sugar industry, which in 1913 purchased eighteen per cent. of the world's entire supply of beet-sugar. It is estimated that seventy-five percent of the country's manufactured goods could be available for export. There were coal and iron mines. There were great forests in Slovakia, and there was an intensive agriculture which was very nearly sufficient to feed the entire population.

Altogether, theirs was a magnificent heritage, and the Czechs evidently intended to make the most of it. It was true that the country was far from salt-water; but the peace treaties had given it the important port of Pressburg on the Danube, and the freedom of the Elbe through Germany to Hamburg and the North Sea. Moreover, the reorganization of its railroads was proceeding rapidly. Economically it may be considered, both actually and potentially, as one of the strongest states in Europe.

The Czech lands were far more industrialized than Slovakia. In Bohemia, Moravia, and Silesia, 39 percent of the population was employed in industry and 31 percent in agriculture and forestry. Most light and heavy industry was located in the Sudetenland and was owned by Germans and controlled by German-owned banks. Czechs controlled only 20 to 30 percent of all industry. In Slovakia 17.1 percent of the population was employed in industry, and 60.4 percent worked in agriculture and forestry. Only 5 percent of all industry in Slovakia was in Slovak hands. Subcarpathian Ruthenia was essentially without industry.

In the agricultural sector, a program of reform introduced soon after the establishment of the republic was intended to rectify the unequal distribution of land. One-third of all agricultural land and forests belonged to a few aristocratic landowners--mostly Germans and Hungarians--and the Roman Catholic Church. Half of all holdings were under two hectares. The Land Control Act of April 1919 called for the expropriation of all estates exceeding 150 hectares of arable land or 250 hectares of land in general (500 hectares to be the absolute maximum). Redistribution was to proceed on a gradual basis; owners would continue in possession in the interim, and compensation was offered.

In the 20 years between the two World Wars, Czechoslovakia was one of the world's most advanced industrial-agrarian countries. In fact, it was among the 10 richest nations in the world at that time, as it had inherited virtually all of Austria's industrial base. This early stability paved the way for a flowering of Czech literature and culture. Proud of their new independence, Czechoslovaks were anxious to put their new country on the map - sometimes in the craziest ways. This led Czech Radio, for instance, to start broadcasting in 1923 - despite that they didn't have a transmitter or even a microphone. They simply borrowed the former (as well as a tent to protect them from the elements) from the Czechoslovak Boy Scouts, and manufactured the latter from a telephone receiver. Why the rush? They were anxious to be the first country in Central Europe to begin regular radio broadcaste. Of course, a Czech - by name of Frantisek Behounek - took part in the 1928 multinational attempt to reach the North Pole in a zeppelin - and was one of the survivors to be rescued after the good airship "Italia" crashed discouragingly far from its destination.

Experiments with architecture in interwar Czechoslovakia resulted in Prague today having the only Cubist buildings in the world, like The House at the Black Madonna (which houses a museum of Czech cubist art today) and a number of houses along the embankment under Vysehrad on Rasinovo nabrezi and on Neklanova Street. Franz Kafka, Josef Capek and his brother Karel (the two coined the word "robot" together), Jaroslav Hasek, Emil Filla, Max Svabinsky, Otto Gutfreund, Vaclav Spala all lived and worked at this time.

At the end of the twenties and the beginning of the thirties, the Czechoslovak economy was hit hard by the world economic crisis with disastrous social and political consequences: 1.3 million people were unemployed. Hardest hit were the soon-to-be-known-as-Sudeten border regions, where German inhabitants predominated.

A law passed on June 21, 1934, effective until June 30, 1935, extended the enabling act of 1933, giving to the Government absolute power during the economic crisis to pass economic legislation by decrees, including authority to change duties, and control prices. Under the Cartel Act of 1933, 712 agreements were in force on May 1, 1935. A compulsory cartel act was under consideration.



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