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A Series oi Articles Surveying 

Economic, Financial and Induslriol 

Conditions in the Dual Monardiy 

During the War. 

WU1& A 9pe€:laJ Iiilro4uctl€iii& 
Mgy S. U OrcbfsUe. 

Published by 






A Series of Articles Surveying Economic, 
Financial and Industrial Conditions in 
the Dual Monarchy During the War. 

With a Special Introduction by R. L. Orchelle, 


<3\ n> 

Published by 


BERLIN W. 50. 


Austro-Hungarian Labor Conditions During the War 7 

The Financial Strength of Austria-Hungary in the War 9 

Our Banks During the War 17 

The Austrian Iron and Coal Industry During the first year of the War . 21 

Austria's Steel and Iron Industry 26 

Austria's Industry in War 28 

The Financial Strength of the Monarchy 30 

The War Loans of Austria and Hungary a Golden Rivalry 33 

Hungary and the War Loan 35 

The Austrian War Loan Equals Germany's 37 

The Austro-Hungarian Petroleum Industry 39 



One of the greatest and most conspicuous surprises in this war 
of many surprises is the astounding economic and financial strength 
developed by the Dual Monarchy. This is entirely worthy of the 
equally amazing military power and unity shown by all the peoples 
of Austria-Hungary. It is a revelation which comes with a chilling 
and dismaying force to the enemies of the Central Nations and 
serves, on the other hand, to fortify and redouble the inner strength 
and powers of resistance of all the united nations comprised within 
the limits of the Danubian Realm. It is a power which may well 
surprise even themselves, and recalls forcibly to mind the ancient 
fable of the bundle of rods which, when united, no force could 

The enemies of Austria-Hungary at the beginning of the [war 
indulged in much wild talk of the inner weaknesses of the mon- 
archy, of the discord within the empire and the dissensions between 
the various elements. "The ramshackle empire" was one of their 
favorite expressions. With that peculiar and deadly fatuity which 
had led them to make almost every move in gross ignorance of 
their opponents, and in stupid underestimation of their nature and 
powers, they committed a fatal blunder when, belittling a brave 
and valiant nation fighting for its existence and its liberties, they 
failed to perceive that the very age of the venerable sovereign would 
only serve to bind his loyal subjects still more closely to him. 
Little as was known of the real Germany, still less was known 

of the real Austria-Hungary. This unbelievable ignorance extended 
so far that English officials were accustomed to ask Austrians in 
England whether they spoke "Austrian!" Two great nations, each 
with a glorious military and historical record, and representing many 
of the highest phases of modern civilization, were merely so 
much terra incognita to the gigantic blunderers who miscalculated 
every move in the infamous plot they had contrived. 

I have been reading through the translations made of certain art- 
icles dealing with the economic, industrial and financial conditions 
of Austria-Hungary during the war and now embodied in this 
pamphlet. These papers have all been written by men who are 
experts and authorities in their particular branches and may be 
considered as in every way authentic and authoritative. They re- 
veal a picture of innate confidence, of well-husbanded resources 
and of excellent organization which will continue to furnish the 
sinews of war, and to strengthen the arm of the warrior until such 
time as the enemies of the Central Powers rid themselves finally 
of their monstrous delusions and realize, however late in the 
day, the futility of their impossible dreams, 

Austria-Hungary in a still greater degree than Germany has re- 
mained an agrarian state, despite its great industrial development. 
It has natural resources and supplies such as render it practi- 
cally self-supporting. Its population is sturdy, frugal and indus- 
trious. It is a population imbued with that heroic sense of self- 
sacrificial devotion which does not hesitate to offer up its last man 
or its last coin in a cause in which its faith is fixed as rigidly as 
though it were some religion. Each successive Austrian and Hungar- 
ian War Loan has attested this fact with millions of tongues of 
silver and gold. A land such as this, a people such as this cannot 
be conquered nor starved, nor riven apart either from within or 
from without. 

One of the most momentous features of the present war is the 
work of construction, reconstruction and fresh creation undertaken 

by the Central Powers in the very midst of a struggle in which 
their enemies are bent ragingly upon ruining, "crushing" and 
devastating two great, highly-developed and prosperous nations. 
But this insane attempt has merely given a new strength and, best of 
all, a new direction to the Central Powers and their logical and 
valuable allies — Turkey and Bulgaria. An economic, industrial 
and financial alliance has been created which will send new 
life- currents of Trade and Commerce throbbing along the great 
trade-routes that already unite these lands in the bond of a vital 

One of the fruits of the war will be this closer commercial 
alliance between Germany, Austria-Hungary, Bulgaria and Turkey, 
The two latter states will be enabled to develop their vast and 
priceless natural resources, and the influence of this will be felt 
throughout the entire Balkans and extend up to the North Sea 
and the Scandinavian lands. One of the great highways of civili- 
sation is being built before our very eyes. The new road to the 
Orient is being paved— a road of iron and gold and the bodies 
of brave men. It is the new Appian Way along which shall be 
heard the clanging tread of new empires and of reinforced and 

rejuvenated states, 




The conviction prevails in all the national-economic and commercial 
circles of Austria-Hungary, that in spite of the enormous disturbance 
in all markets caused by the war, the re-establishment of normal 
mercantile conditions will progress with gigantic strides as soon 
as peace is declared. This conviction is based upon the fact that 
the internal commerce of Austria-Hungary is established on a genuine 
and solid foundation, and the organization of credit, of industry and 
of agrarian production has stood the test of the war with magnificent 
results. The "starving-out policy" which England thought to enforce 
by a naval blockade has already gone to pieces after a few months 
trial. The supplies of grain and flour were calculated and economised, 
and all classes accomodated themselves to the changed conditions. 
The tilling of the fields was accomplished by women and children 
and by prisoners of war, since the men, for the most part, were 
already at the front. Large tracts of wasle land were put under 
cultivation. In spite of the unfavorable weather in the harvest months 
and in spite of the lack of those foreign supplies which had hitherto 
contributed to the necessary total, the Austrian- Hungarian harvest 
provided sufficient supplies for everyone. This was in a large measure 
due to the precautions taken to ensure a proper division of the total 
quantity of grain, etc. 

The number of cattle and horses available has naturally been much 
diminished by the needs of the war. This diminution, however, is 
not serious, and ascertain outlay of capital after the war will set 
matters right without any further trouble. 

As regards the upsetting of the money market caused by the war, 
it may be noted that, in spite of the victories on all fronts, the Dual 
Monarchy is conducting the war at far less expense than its oppon- 
ents are able to do. 

Still more of a decisive factor is the fact that the money which 
we expend for war purposes remains almost entirely within our own 
land, from which home industry and agriculture profit. We are not 

forced to pay gigantic sums to America or Japan for wheat or 
munitions, we are not forced to send humiliating financial missions 
across the seas in order to beg for scanty foreign loans. We conduct 
the war exclusively with'the financial resources of our own country 
and employ therewith the labor forces of our own people. In this 
lies one of the chief roots of our future recuperation. 

A contributory factor to this result was that, in Austria-Hungary as 
in other quarters of the world, the people had experienced a growing 
period of prosperity during the decade immediately previous to the 
war. Whereas in the Eighties the total wealth of the people of the 
Dual Monarchy was estimated at 90 Milliards, in the days just before 
the war, it was estimated at 135 Milliards: an increase of 50 percent. 
The average yearly value of the Savings-bank deposits in the years 
1885-1889 amounted in Austria alone, without Hungary, to 110 million 
Kronen, in the years 1900-1914 it amounted to 225 million Kronen. 
The 'total increase of capital during the war is also not entirely at a 
standstill. This is accounted for by the issue of the great War Loans 
and the increase in deposits. 

The strength displayed by the Austrian-Hungarian industries in war- 
time is especially noteworthy. We give some statistical data from im- 
portant branches of industry and from some individual firms, as ex- 

R«w iron coal 

Production ^^^a,,^*:^^ 

ol our 4 production 

! Urgejt <*"""& ^0 

: smelting-works Months 

In Thousands of Tons 

A large 


Machine Works 

Turnover in 

millions of 



12 567 
14 087 

12 937 

13 335 



Number of 


in Brun 


in October 

5 500 

against 1914: 
Percent gain: 






+ 3V2 
+ 16 

+ 500 
+ 10 

The Austrian iron industry has attained to the maximum figures 
during times of peace. The coal-mines are somewhat handicapped 
not only by lack of proper skilled labor, but also for want of railway 
wagons. The textile industries, both wool and cotton, have been 
constantly occupied for the army. They have also achieved a splendid 
success with experiments with substitutes. The usual misery among 
the laboring classes attendant upon formerwars is a phenomenon which 
is happily absent from this one. In many cases women have temporarily 
taken the place of men. 

Owing to the prevailing fear of great losses at the^beginning of the 
warthedividendsofmany businesses were either reduced or su p d ed. 

The second year of war has proved this fear to be groundless for 

many firms, if not all, have made great profits during the war and 
strengthened their position. Many companies indeed are now in a 
position to increase their dividends. 

All of which speaks volumesforthe productive power and recuperative 
force of the Dual Monarchy at present and in days to come. 



By Philipp Broch 
Manager of the AUgemeine Verkehrsbank, Vienna. 

Part I. 

Although indeed as yet, no ray of light portending an approaching 
peace has anywhere pierced the war-clouds with which the sky is 
covered, yet our hearts are penetrated with a feeling of joyful assurance 
that we shall fight out this great war to a victorious finish. The con- 
tinuous display of offensive strength with which our armies have achie- 
ved the notable successes of the past weeks makes us almost forget 
that already eleven months of desperate struggles on innumerable 
battlefields lie behind us, and just as little does our economic life in 
the untiring intensity of its manifestation show any sign whatever of 
breaking down. Yet this is bitterly complained of as being the case in 
Russia, France, England and now in Italy, even by the press of those 
respective countries. 

Justified as we felt ourselves in confidently apprizing our financial 
and economic powers of resistance, yet the brilliant progress shown 
in the development of these powers during this war, has already become 
a matter of history, and has been for us all a joyful surprise. 

Factory chimneys pouring out their smoke in all localities, in all 
works, busy, pulsating life and the intensive employment of all the 
forces at disposal, increasing output of our iron works, a rapid and 
decided elimination of the moratorium in the matter of payments and 
credits, increase in the deposits of our saving-institutions and the willing 
adjustment of the people's dietary to the changes and limitations de- 
manded by the conditions — this is the external aspect of our economic 
life after eleven months of war. No weak break-down under the stress 
of the storm which has broken upon us, no trace anywhere of a crisis, 
but erect and strong as never before, our civil life in all its activities, 
stands with its rich resources as a support behind our front. 

Our Industrial Independence During the War. 

The Monarchy was suddenly cut off from the outside world at the 
very moment when the heaviest tasks were demanded of it. While the 
German Empire had been ever accustomed to be not only industrially 
independent, but to provide the whole world with its products, 
our Monarchy had adjusted itself to the practice of drawing a large 
part of its needed supplies from abroad. The plight in which we were 
therefore placed has brought it about in a most gratifying way that 
our industrial efficiency, supported by an inexhaustible supply of coal 
and iron, has been able to provide all of the thousand-fold require- 
ments of modern warfare, the whole series of weapons needed, from 
light hand-guns to our ingenious motor-batteries and 42 cm. howitzers, 
along with immense quantities of ammunition; and not only this, but 
likewise to supply our needs in all other products of the iron and 
steel industry, of the automobile and aeroplane industries, in explosives, 
in leather and textile goods and in optical and pharmaceutical wares, 
without having to yield place to the most powerful industrial states 
of the world in respect of equality of performance. 

This compulsory emancipation from the outside world has splendidly 
developed the abundant forces of our intellectual and material capa- 
cities in the domain of our domestic industry. It has had the further 
gratifying effect that the money which our government administration 
has to spend for the providing of war supplies is not withdrawn from 
domestic use and sent abroad, as is the case in Russia, England, France 
and Italy, but remains at home to fructify business and traffic, to lower 
the rate of interest, to render easier general credit conditions, and in 
this trying time to make it possible for the population to find work 
and the opportunityofearning, and this,joinedwitha curtailing ofgeneral 
living expenses conformable to the seriousness of the times, has extra- 
ordinarily raised the saving ability of the people. 

The published reports of the increase in deposits in Vienna and in the 
Crown Lands disclose record figures, such as have not been shown in 
the time of our greatest business prosperity, and the demand for in- 
vestment securities has led to a considerable advance in quotations, 
notwithstanding the compulsory withdrawal of the public from the 
share and bond market owing to the closing of the exchange. 

The Covering of Our Money Needs During the War. 

Even in 'times of peace we were not in favor in the great money 
markets of the world, because we were represented, for reasons easy 
to be understood, as an organisation of states, undermined in both a 
political and military sense, that must fall to pieces upon the first assault. 
We were consequently thrown upon our own resources for meeting 


the financial requirements for the economic development of the com- 

We have been economically and financially strong enough to create 
the Austria-Hungary of today, which has set the world in astonishment 
at the splendid way in which it has developed its financial and military 
forces, and we are also showing ourselves strong enough to meet 
the costs of the war in our own land, independent of outside help, 
while our adversaries are compelled, under oppressive conditions, to 
become indebted to foreigners, and thereby to enter into relations of 
financial dependence, which will prove to be a severe restriction on 
their freedom of political action in the future. 

In foreign newspapers the assertion is being constantly repeated 
that the Austrian state is meeting its money needs for carrying on the 
war principally from the coffers of the Austro-Hungarian Bank, and 
that in consequence the currency has been greatly inflated by issues 
of unprotected bank notes, and a depreciation of Austrian money values 
has set in. 

On the contrary, it may be maintained that the Austrian finance ad- 
ministration has neither in the case of the Austro-Hungarian Bank nor 
in that of the Post-office savings-banks made demands for advance- 
ments, but even now stands in relation to both institutions only as 
depositor on transfer accounts. 

The Austrian state in the financing of its loans, in times of war as 
well as in those of peace, relies exclusively upon the Austrian Con- 
sortium for State Finance-Transactions. The banks together with the 
postal savings-banks and the house of S. M. von Rothschild belong to 
this Consortium, which represents a capital concentration of more than 

Seven Milliards of Kronen 

(a Krone ^ about 21 cts.) 
and has an organisation for placing loans and investment which em- 
braces the whole Empire. 

Another Consortium, the equal of the above in capital strength and 
in the ability to place loans, formed of the Rothschild group enlarged 
by the addition of the prominent Austrian and Hungarian banks, is at 
the disposition of the Hungarian minister of finance for the negotiation 
of the loans of that kingdom. 

The success of both of the war loans shows that the efficiency of 
these Consortiums is equal to the strongest demands that can be 
made upon them. 

The two states have received from the proceeds of the 1st war 
loan 3V2 milliards and from the available results of the subscriptions 
to the 2nd loan, these will probably reach the sum of 4 milliards. The 


periods for payment extend to the month of September. From the proceeds 
of our loans to the amount of 71/2 milliards, we are amply provided 
for until Autumn, while Russia as also France and England have each 
contracted loans of 15 milliards, or in all, 45 milliards, and are imme- 
diately facing new difficult financial transactions in order to cover the 
pressing needs, amounting to milliards, of their expensive warfare. 
Italy is negotiating for the pledging of her customs duties to Eng- 
land to obtain from the latter a loan to meet her war costs. 

Lloyd George has said: "Germany, thanks to her industrial inde- 
pendence, is in a position to wage war much cheaper than England." 

The Morning Post did not exaggerate when it said in a leading article: 

"The cost of our improvised army is immense. It costs us more than 
all the armies which Germany and Austria-Hungary maintain on all 
the fronts." 

We do actually carry on war much cheaper than our adversaries, 
not only because we produce ourselves all that is required, but also 
because we, in the main, are carrying on a land war, while our enemies 
are also obliged to wage naval warfare on a large scale. 

In professional journals in foreign countries, which are, in other 
respects, to be taken seriously, it has been stated that the result of 
the 1st war loan was only able to be attained by such an expenditure 
of effort as is equal to a complete exhaustion of our financial ability 
for the future. On this account, the repeated milliard-success which 
we attained with our 2nd loan, may well fill us with redoubled satis- 
faction. Even this, however, has not by far necessitated the mobilisation 
of all the financial reserves which we have at command. 

Savings Deposits and War Loans. 

Let us take a look at the movement of the savings deposits during 
the month of May in which the withdrawals took place, for making 
payments on account of the war loan. In connection with this we must 
remember that the savings-deposits naturally belong to those classes 
which have paid for the most part, at once and in full, the amount of 
their subscriptions. 

The savings-deposits in the Vienna money-institutions, not consid- 
ering the far larger amount of current-account deposits in the banks, 
amounted at the end of April to 1944 million; at the end of May to 
1858 million. This is a diminution during May in connection with the 
war loan of 86 million = 77* per cent. In the first four months of the 
year, however, the deposits, notwithstanding the withdrawals in January 
and February for payments on the 1st war loan, had increased by 
220 million = 13 per cent. The nett result is, that, in spite of the with- 
drawals on account of the two war loans, the savings deposits in 


Vienna alone, since the first of ttie year and up to the end of May, 
increased by 85 million Kronen = 5 per cent. 

These figures are indeed an unerring witness to the fact that the 
means for meeting the subscriptions to the war loan have not been 
raised by drawing upon our stock of savings, which forms a national 
reserve of financial strength, but from the fresh supplies arising from 
our industrial activities, that is, from normal accumulations of capital. 

The same is true and in a like degree in reference to the savings 
of Hungary. The extremely advantageous disposition of the collective 
agricultural products has brought in many hundred millions in cash, 
which have accumulated in the savings institutions of Hungary. It is 
to be regretted that the amounts cannot be exactly stated, because 
the Hungarian money institutions do not publish any monthly reports, 
but from the rates of interest ruling in the money market there, it is 
to be seen that the institutions mentioned, owing to these influxes of 
funds, are in a financially strong condition, and one may say, saturated 
with money, and that also the payments on the Hungarian loans are 
made exclusively out of these fresh additions to capital. 

For finding out how far the savings institutions in the Austrian crown- 
lands have been called upon, valuable information is at hand in the 
several reports which have appeared for the month of May. 
Amount of Cash deposits. 

April 30 May 31 Difference 
in millions of Kronen 

Bohemian Savings Bank 258.1 254.6 —3.5 

City Savings Bank of Prague 210.0 209.7 —0.3 

Styria Savings Bank 144.5 1450 +0.5 

Linz General Savings Bank 100.5 96.7 —3.8 

Innsbruck Savings Bank 97.8 96.2 —1.6 

Salzburg Savings Bank 86.4 83,7 —2.7 

First. Moravian Savings Bank 66.0 63.4 — 2.6 

Reichenberg Savings Bank 63.7 64.3 +1.1 

Carinthian Savings Bank 49.6 48 5 —1.1 

1076.6 1062.1 —14.5 

Part II. 
In the case of these institutions with gold deposits of 1077 million 
Kronen at the end of April, the falling-off in connection with the warloan 
amounted in all to 14million = lV3 per cent, and this represents here also 
only a part of the inward flow of fresh money since the first of the year. 
How does the alleged uiolent plundering of our savings banks, occasioned by 
the subscriptions to the war loan, appear in the light of these actual facts ? 


The stock of cash deposits in the Austro- Hungarian money in- 
stitutions, amounting in round numbers to 20 milliards, remains there- 
fore an untouched, and strong financial reserve force for the future. 

We are on this account strongly equipped to meet the coming 
financial demands, whether they are made upon us for the continuing 
of the war, or for the tasks of peace. 

The Security of our War Loans. 

We have no need to shrink back from the question whether the 
financial efficiency of the Monarchy after the war will develop in 
such a way as to be equal to its increased liabilities. 

At the end of 1913, 

the Austrian public debt amounted to 12.5 milliard Kronen; 

the Hungarian to • 5.5 „ „ 

Total 18.— 

Of this amount, 7 milliards in Austria and 3 milliards in Hungary, 
together 10 milliards, represent investments in state railways, including 
private railways which have been taken over by the state; so that 
more than the half ol the public debt represents productive applications 
of capital, the returns from which, in the main, meet the interest 
charges and provide a sinking-fund for paying off the principal. 

The total state revenues amounted in the years 

1900 1913 Increase 

In Austria 1654 million 3486 million 1832 million 
„ Hungary 9 89 „ 2072 , 1083 „ 

2643 million 5558 million 2915 million 

The revenues of the two states have increased by an amount of 
almost 3 milliards since the year 1900. The total payments to the 
government, including those for use of the railways, for the post, 
telegraph, etc., amount therefore to about 110 Kronen per head of the 

In Austria alone, the personal incomes of the population, subject 
to tax, so far as known, amount to 6.7 milliards yearly, and the total 
personal income-tax is preliminarily assessed at 134 millionen Kronen. 

The wealth of the people belonging to the Austrian half of the 
Empire is estimated at 200 milliards, a figure, which in consideration 
of the known incomes subjecttotax,amounting in all to nearly 7milliards, 
is certainly not set too high. 

The state succession duties upon the change of title of this gigantic 
capital amount to scarcely 35 million yearly, in consequence of the as 
yet very low rate at which they are placed. 

The yield of the land tax, which more than 20 years ago experienced 
a reduction, but since then has never been raised, amounts, in conse- 


quence of this reduction, to about 50 millions, as against 70 millions 
in 1890, although the normal value of the agricultural production in 
Austria alone, without Hungary, has grown, in consequence of continued 
consolidation and improvement in management, to 5 milliards yearly. 

These data surely allow the conclusion that the Austrian budget, as 
well as the Hungarian which is framed on similar principles, possesses 
elasticity enough to be able to increase the revenues for the purpose 
of meeting the interest demands occasioned by the expenses of the 
war, without laying upon our industrial life burdens, which would 
limits it movements, and impair its ability to compete in the markets 
of the world. 

In what way a healthy industrial development affects the state revenues 
is shown us by the rise in the income of the Austrian state alone 
since the year 1900. 

The direct taxes have increased by 153 million, the customs-duties 
by 80 million, stamp taxes and fees by 73 millions, the income of 
the tobacco administration by 127 million, post and telegraph by 109 
million, receipts from transportation lines by 561 million, from forests 
and crown lands by 8V2 million, from mines by 16 million. 

The total revenue of the Austrian state alone, that is, without Hungary, 
has within this time, as before mentioned, advanced from 1654 to 
3486 million, an increase of 1831 million, or more than doubled itself. 

These are the figures of a normal economic development in times 
which were often politically greatly disturbed; and what a fullness of 
industrial and cultural productions the Monarchy has brought forth 
during this time! 

If once the great political anxiety can be removed from our industrial 
life, which for so many years like a heavy incubus has weighed upon 
every desire to inaugurate great enterprises, and has caused us such 
great damage by reason of the frequently recurring political crises and 
interruptions to business, we shall then have the experience that the 
German Empire had after the war of 1870-71, by which its Federa 
Union was accomplished, that the war has loosened the chains which 
bound our economic life, that it signifies not destruction merely, but 
also— rejuvenation and renewal, and that it will give an impulse 
to our productive abilities which no peace was able to evoke. 

The demand that will set in after a long period of limited supply 
will be all the stronger, and will offer to the spirit of enterprise a 
wide field for its manifestation. 

Our mdustrial life will enter upon an era of the greatest development, 
and with an increased activity and creation of capital, will certainly 
be able to afford the state a yet greater support. 


The Entente lands also wish to isolate us economically in the future. 
But just as they have by this attempt during the war more benefited 
than injured us, so will they too by such a policy in time of peace 
only do damage to themselves. 

Such a policy will afford the United States of America the opportunity 
of drawing increased advantage from the great industrial development 
that will soon take place. 

The import of Austria- Hungary from the North American Union 
amounts to 330 million Kronen, and our export to the Union to 70 mil- 
lion. The Union therefore has already a trade balance in its favor 
of 260 millionen Kronen in gold in its dealings with us, and this 
difference will in the future yet further proportionally increase, 
if is able to take the place of the Entente countries in supplying 
our market, the purchasing power and needs of which will hereafter 
be yet greater than at present. Especially will the projected extensive 
reorganization of our agricultural industry offer a strong stimulus to 
the import of agricultural machinery from the United States, which is 
already a very respectable one. 

The Austrian Stock Market in Time of War. 

Although the whole interest of the public seeking investments, especi- 
ally since Italy's declaration of war, is exclusively directed to the emis- 
sion of thewarloan.yet Austro-Hungarian stocks still claim undiminished 
attention. In spite of the modest rate of interest which these stocks 
pay compared with the war loan, quotations have continued to rise^ 
and it is characteristic for the working of the Austrian stock-market 
in time of war, that the supplies of stocks and other securities arising 
from the exchange operations in connection with the war loan are 
quickly taken up at rising prices. For every parcel that comes on the 
market there are several takers, and so these financial problems which 
the war has raised have also found their gratifying solution. 

The Food Supply During the War. 

The question of feeding our people during the war has been no 
less satisfactorily regulated. The people willingly accommodated 
themselves to the restrictions demanded by the circumstances, and 
understood how to keep_ house with the supplies that were in the 

This economy has caused an essential improvement in the' pro- 
portion of provisions on hand to the number of the population. While 
at first, with the continuous using up of last season's crops, an increasing 
contraction of the food ration was feared, we are now in a position 


where this can be improved both in quality and quantity. And so the 
starving-out war, in which we were to go to pieces, has like so many 
othercalculationsof our enemies, failed because of the firm determination 
of our people. While we were learning to be saving with our old 
supplies, the whole working energy of our country population was 
directed towards preparations for the new crop. 

The war has also proved to be a great teacher for our agricultural in- 
dustry. The fields were tilled with redoubled energy. By utilizing every 
foot of soil that was at all suitable for cultivation, an agricultural intens- 
ity was developed such as we have never known in times of peace. 
Children have sown the seed, women directed the plough and old 
men swung the scythe over luxuriant meadows. A rich blessing seems 
assured to this labor. The promising young crops spread out end- 
lessly on on every side, covering the land as with a variegated carpet, 
richer and fuller than we have seen them for a long time. And as 
mother earth, undisturbed by the great work of destruction which 
men are directing against their own productions, undisturbed by the 
streams of blood which drench her fields, renews and makes them 
young again, so will the genius and industry of man, overcoming all 
the wounds which this war has inflicted on humanity, fully complete 
the work of restoring peace among the nations, and all that has 
been destroyed. 


By Walter Federn. 
It has often been said during this war, that everything has turned 
out differently from what was anticipated, and thus the great fears 
that were entertained about our banks and our credit system in case 
a big war should break out are to-day almost forgotten. And yet there 
were many bank managers who at the beginning of the war looked 
forward with very mingled feelings, which could not be characterised 
as anxiety alone, to the future from the point of view of the interests 
which they had to guard. If the dangers which they feared were not 
realized, if after a few critical days everything settled into smooth 
channels, this was due to the circumstance that the war was being 
fought at the frontiers of the Empire, that the population observed an 
unforeseen stoical calmness, and particularly to the preventive meas- 
ures enacted by the Law and by the Administration. But it was cer- 
tainly also due to the fact that the greater majority of the Banks them- 
selves were absolutely sound, and stood on a firm basis; and where 
germs of instability may have existed, they had not been able to 


undermine and endanger the resistant force of the organism. But 
nothing could be more erroneous than to draw from this smooth working 
of the majority of our banks — of course there are exceptions, but not 
among our Viennese institutions — the conclusion that our credit policy 
could be relaxed, that the feared deposit-panic is a mere fable, that 
in consequence the old principles of bank policy need not be enforced 
as strictly as before. On the contrary, the war has taught us the very 

First of all, the fact that a general panic of the bank creditors did 
not break out during the war, does not prove that it will never break 
out. It only demonstrates that owing to the particular forms the war 
had assumed, and owing to the measures enacted, such as postponing 
the maturing of bills, etc., etc., a panic has been prevented. Perhaps it 
may be that the panic did not occur because under the overwhelming 
impression caused by the outbreak of war, the influence of which was 
paralysing on some and exhilarating on others, the majority of people 
were moved by quite other feelings than even the anxiety for preserv- 
ing their fortunes. And in the further course of the war nothing oc- 
curred on the battle field which might have caused the panic to set 
in, afterwards, it had been once averted at the beginning. But an eco- 
nomical crisis and unfavorable conditions prevailing in individual banks 
might cause a panic, such as America experienced in 1907. 

In spite of the fact that the war did not cause the general panic 
to break out, this does not mean that the good old principles of our 
bank policy always to keep ample ready cash on hand, to investone'sown 
and foreign capital in such a way that it can always be easily turned 
into ready cash again, to observe a proper relation between one's own 
means (and the foreign means deposited with one), a careful division 
of liabilities entered into, etc., etc. could now be dispensed with. Not 
only that certain individual bancs, to which we have referred above, 
are condemned to carry on a shadowy existence, that their crisis is 
only postponed, because it is not considered good policy during the 
war to let fate overtake them, and powerful organisations therefore 
prop them up; the balance sheets of our banks show which of them 
weathered the storm with small or greater losses, although there is an 
absence of details and an incompleteness in the reports on business 
events, on losses, and on probable losses. The amount of the losses 
in themselves is not the decisive factor. Chance plays a part here. 
And no bank has published its actual losses, giving us therefore no 
means of comparing notes. It is clear that the Galician Banks must be 
completely paralyzed, and that consequently those of our leading in- 
stitutions whose speciality it had been to support the Galician Banks, 


because much money could be earned in Galicia, must of necessity 
be suffering considerable losses. That banks wiiich had branches in 
enemy countries, must put aside reserves to cover losses wiiich they 
are bound to experience, is indisputable. 

There remains but the question as to how these losses fit into the 
general working of the bank, and how they appear in the balance- 
sheet. If a bank with mediocre means for years past extended its busi- 
ness disproportionately in the direction of Galicia, then it has com- 
mitted a serious error in bank policy for the sake of harvesting large 
profits. This mistake it has to pay for in this war. But not only the 
direct losses caused by the war have appeared on the surface. The 
relative amounts of the doubtful debts, as far as banks publish these, 
show clearly with a few solitary exceptions, the greater or lesser meas- 
ure of circumspection and discretion which the banks have excer- 
cised in granting credits. This is also shown by the relative amounts 
which they had to write off for losses on stocks and shares and private 
companies. The relationship of these engagements to the credit giving 
business, and the engagements resulting from current banking business, 
correspond clearly with the amounts which had to be written off on 
these accounts. 

Where this relationship was not well proportioned, there the sums 
which had to be written off, were also larger. A sure sign that the 
engagements which were beyond the normal, were mostly bad company 
promoting businesses, or the promoting of such enterprises as were 
intended to veil previously committed mistakes in credit giving. Also 
the bad or good policy in apportioning the annual dividends observed 
in peace times has now reaped its reward, or its punishment. Where 
the dividends were kept up artificially at the cost of the open or secret 
reserve funds — although this happened in quite isolated cases only — 
the present dividends had to be cut down so much the more. But 
where the profits from syndicate business were cautiously apportioned, 
the present dividends could be kept on a relatively higher level. I do 
not wish to say anything against the custom of forming silent, or secret 
reserve funds. But I do not approve of them from the point of view 
that the balance sheet should be absolutely true, and that the share- 
holders are made to believe in a stability of the dividends which in 
reality does not exist. I am of opinion that the banks would act more 
properly if they had open accounts for special reserve funds against 
losses from various possibilities, such as losses on stocks and shares, 
loss of clients, which funds they might now quite properly have used 
for covering losses incurred. This would have made a better impression 
than the payment of dividends out of general reserve funds. 


But the figures of the Balance sheet also clearly reflect the greater 
or lesser force of resistance and efficiency of the individual banks 
during the war. 

The easily foreseen, and yet not foreseen, event of the war was the 
great increase of money entrusted for administration to the banks, which 
naturally had as its effect the increase of bank notes, which was only 
temporarily arrested by the issue of the war loans, but not stopped. 
And the balance sheets of the banks show clearly by the influx of 
client's deposits, which banks, by their way of doing business before 
the war, and particularly during the first weeks of the war, had re- 
tained the confidence of the public, and where this was the case in 
a lesser degree. And on the asset side it is likewise discernible whether 
a bank was in a position to liquidate its assets easily or otherwise. 
The degree with which this might be possible is of course partly limited 
by the increase of client's deposits. Chance may play a part in the 
increase or decrease of debtors. If by chance a couple of clients who 
had been much in debt to the bank, by working for the war office 
received large sums in ready cash, they were able to pay off their 
debts. On the other hand there might be clients who were not indebted 
to the banks, but who, being unable to dispose of their goods to the 
war office and having new goods in hand to be finished, became 
temporarily obliged to open a credit with the bank. There are some 
clients whose trade is altogether paralyzed by the war, and they are 
entirely dependent on the credit of the banks for their existence. Par- 
ticularly the ready cash accounts are this year a test for the soundness 
of the balance sheets. For this year only those banks will be satisfied 
with keeping little ready cash who were unable to demonstrate the 
easy liquidation of their assets in consequence of large withdrawals 
of client's deposits, or owing to the fact that their funds were invested 
in real estate business. Similar conclusions may be drawn from the 
statement of the bill of exchange department, although the picture it 
presents may, in some cases, be somewhat blurred owing to the possi- 
bility of veiling the relations between debtor and bill. It is also pretty 
well known, although this does not appear in the balance sheet itself, 
which banks have been able to come to the assistance of smaller 
credit institutions to enable them to pay in the instalments on the war 
loans to which their clients had subscribed. At all events it will have 
to be assumed that those banks, which did not publish it in their bal- 
ance-sheet, were also not able to effect such a temporary use of the 
credits, which the Post office Savings Department kept with them out 
of war loans. 

Thus the balance-sheets of the Banks unintentionally give much 
information on their inner situation to the expert. That the conditions 

shown by the balance-sheets of almost all Vienna Banks present are 
good, although with a variation in degree, is a fact to rejoice over. 
However almost all banks will have to draw lessons for the future from 
the occurences of the war year. It is very probable that for the banks, 
not so much the war-time itself which afforded them great facilities 
owing to the abundance of means for payment, but the following peace 
years will form the touchstone for their financial abilities. Then only 
will it be seen whether in writing off losses and war loss reserves 
they took account of all possibilities of loss. Their task in credit policy 
will be ever so much more difficult than that during the war. They 
will be confronted with urgent demands for credit from State, Industry 
and Speculation. For productive purposes large means will be demanded 
because the consumption of all stored goods and the re-awakening 
of the suppressed power of consumption will cause a stormy demand 
for the most varied goods, which it will be impossible to meet with 
the existing means of production. 

The banks will then have to examine carefully whether there is the 
probability of a permanent demand for these products which are to 
be produced in those newly to be established, or newly to be enlarged 
factories, in order that a still severer crisis may not overtake the old 
and new establishments if the demand should cease after the con- 
sumed goods had been replaced. And the banks will have to observe 
the very greatest moderation in granting credits for speculative pur- 
poses. This is the domain in which most of the sins of the past have 
been committed, and various banks which had based their businesses 
exclusively on speculation in stocks and shares, have felt the result 
during the war, not in large losses, but in the disappearance of profits. 
From such losses the banks have been protected by the closing of 
the bourses, and a speculation-crisis after the first peace-orgies are 
over, which might coincide with a crisis in industrial circles, would 
no longer be afforded the same protection against losses by the public 
and the banks. 


By Director-General Wilhelm Kestranek. 

After a long term of paralysing feverishness, which almost asphyxiated 
Austrian trade and commerce, which moreover were handicapped by 
various circumstances predominating in the country, the thunderbolt 
of the call to arms against Servia fell suddenly from the air, followed 


by the stunning lightnings of numberless other declarations of war. 
The first effect was a moment of complete stoppage of all trade and 
commerce. The world stood before events the consequences of which 
could neither be gauged, nor guessed, nor had they ever been fore- 
seen. There existed in the experience of those concerned, no standard 
by which the future might be judged. There had been various op- 
portunities during the last few decades of observing the effect of 
wars between two states; but now one was confronted with a world- 
conflagration and the measure was missing by which one might 
estimate the consequences which the war might have on trade and 
commerce in the countries engaged in war, as well as on that of the 
world in general. Some were of opinion that in view of the enormous 
overtaxation of all forces which the vast masses of armies and 
modern means of fighting cause, such a gigantic struggle could not 
possibly last longer than a few months. Others were of opinion that 
in the face of the bitterness of feeling in the contest, and the far set 
aims of the fight, one would have to reckon with a duration of some 
years. By degrees however the blockage began to break up in a 
recommencement of tentative activity. It was just like some one push- 
ing a stick into an ants' nest. At first a great confusion, and dispersal 
in all directions of the little architects; but soon afterwards their 
return, and the recommencement of their accustomed regular work 
and of a systematic reconstruction of their dwellings. 


In the first month of the war, in August 1914, the production*^! 
goods naturally came at first to a stand-still. A great number of hands 
who were engaged in their manufacture were called to serve in the 
army, and the railways which are the only means of transport and 
distribution in modern business life, were used exclusively for the 
transportation of troops. The greater part of those engaged in the 
manufacture and production of commodities and merchandise who 
where not obliged to fight in the ranks, were to a great extent em- 
ployed to work for the outfitting of those going to the front, or in 
aiding their families at home to reconstruct their affairs on a new 
basis. Then at the outbreak of war many fields had not yet been 
harvested, and others had to be tilled, for which work, it was feared, 
there would be a scarcity of agricultural hands at the right moment. 
This fear caused many an iron-master and pit-owner, who were also 
afraid that in the near future they might have not enough work to 
do for their men, to advise their men to seek employment in the 
agricultural domain. Soon however it became evident that the busi- 


ness of the iron works and the coal mines grew so rapidly that the 
workmen who had been allowed to work in the fields, had to be 
called back to their old work in the mines and mills. 

In order to secure a regular supply of those most important ma- 
terials, coal and iron, for the armies, and for trade and commerce, 
and for the use of the public in general, it became eventually ne- 
cessary to discharge a number of skilled hands from the army and 
re-install them in their former places, to ensure the utmost use being 
made of their capacity to turn out coal and iron. The need for coal 
and iron, caused by the war, presented itself in the most varied 
shapes. Although it is not always recognisable, except when the 
orders come from the War Office direct, what purpose certain ordered 
goods are to serve, yet it is a fact that almost the entire output in 
iron-goods and products, is ultimately intended for military purposes. 
For instance, there began the supply of barbed wires and iron en- 
tanglements for defensive purposes. Then followed an ever increasing 
supply of steel for projectiles. The supply of steel for bayonets 
and swords; of supports for fortifications; of steel for protecting 
shields; steel for ammunition-boxes, for pontoons, for spades, orders 
came for rails and sleepers for field-railways, for rolled iron for field- 
beds; rolled tin for canned goods, refined tin for mess-plates and 
field-kitchens. Corrugated iron for bomb-proof shelters and barracks; 
iron chains of all sorts; tyres for the wheels of baggage vans; 
enormous quantities of horse-shoes and shoe-nails, and so forth. 
Then followed extensive constructions of buildings for housing the 
wounded, and the prisoners of war. Regular large towns sprang into 
existence which were supplied with all the most modern require- 
ments and contrivances, such as telephones, electric light, water 
supply, canalisation, and the latest inventions of sanitary engineers, 
and hygienic inspectors,— which all culminate in the use of iron. A 
great demand for iron stoves set in, which were required not only 
for the said shelters, but also for the comfort of the men in the 
trenches on the front. In the winter numberless sledges were required, 
all with iron mountings, and iron accessories. The railway plant was 
enlarged, loading sheds with iron-roofs were erected, great numbers 
of railway trucks and vans, and engines were ordered. And finally 
iron was, where possible, substituted for more costly and rare metals, 
such as brass, copper, and others, in small things and large. Thus 
today the small shell of the infantry cartridge is made of steel; and 
the large fire-boxes of the railway engines are likewise made of steel, 
instead of copper as before. 


All these new demands which have been quoted haphazard simply 
to give some idea of the new sources tapped by the order books of 
the iron industry, have increased the work and the state of existing 
orders in the hands of the Austrian iron and steel industry in such 
a degree that in the last few months the output and sale have reached 
higher figures than they had touched during the epoch which pre- 
ceded the outbreak of the war. The organised ironworks of Austria 
supplied during the first ten months of the war, i. e. from August 1st 
1914 to end of may 1915 for home consumption 7,275,000 Double cwts. 
of iron half manufactured; rod and special iron; girders; rough and 
polished tin, iron rails, rail joints, wire, wire-nails and forged iron 
pipes, as against 8,190,000 Double Cwts.^during the corresponding 
months of the previous year, from August 1913 to end of May 1914, 
These figures certainly show a deficit of 915,000 Double Cwts; but 
more than half of this deficit falls to the charge of the first war month 
August 1914. From that month onwards the sale increased continually. 
Commencing January of this year the sale figures are already higher 
than they were in the corresponding month of the year 1914, as the 
following tables show. 

Home supply of the organized Austrian iron-works, iron imperfect 
products, rod and special iron, rails and rail-joints, wires, wire-nails 
and wrought iron pipes: 

Month 1914 1915 

Double Cwts. 

January 783,000 791,000 

February 800,000 845,000 

March 1,078,000 1,105,000 

April 941,000 990,000 

May 955,000 808,000 

The decrease of sales in the month of May is only of a passing 

nature and is explained by the fact that immediately on the outbreak 

of the Italian war at the end of May the traffic was completely 

interrupted. In reality the Austrian iron works are now permanently 

employed to the utmost extent of their capacities, and of the number 

of hands available, with turning out materials and goods on order. 


The production of raw iron has already reached the figure of 90 
per cent of the normal output, whereas the output of steel has already 
surpassed the normal figure. Thus the iron and steel industry of 
Austria is in a position to satisfy without limitations the requirements 


and demands created by the war. It ought to be borne in mind that 
the Monarchy during the last years used to import iron ore amounting 
to 9,400,000 Double Cwts. (of which the greater part, namely 7,000,000 
Double Cwts. came from Sweden); as against an export of but 1,000,000 
Double Cwts. In spite of the strangling of the possibility to import iron 
ore, the Austrian blast furnaces were able to raise their output, as 
stated, to the normal figure by an extreme exploitation of home ore 
mines. In this connection it must be remarked that the Monarchy 
during recent years imported on'the average about 9 millions Double 
Cwts. of coke, and nearly all of this quantity came from Germany; 
while on the other hand, the Monarchy exports about 3,5 millions 
Double Cwts. of coke. This difference of 5,5 millions Double Cwts. had 
to be covered by imports from foreign countries. Thanks to the 
circumstance that the coal-mines and coke-furnaces of the Ostrau- 
Karwin coalfields, which are alone to be considered for the production 
of coke, could remain in uninterrupted working condition; and thanks 
to the circumstance that the German railway administration have so 
brilliantly stood the test to which they were put, were able to keep 
up an uninterrupted import of coke from Germany, the blast furnaces 
of the Monarchy have been spared all interruption in their work, 
and were able continously to increase their output. The fulfillment 
of the demands made on the iron works was assisted by the fact that 
the export of iron ware and steel manufactures dwindled by degrees 
down to a minimal quantity, thus the entire production was taken up 
by home consumption. The Monarchy in the year 1913 exported 
altogether 710,000 Double Cwts. of rolled iron goods, as specified above 
including wires, wire-nails and forged iron pipes, as against an import 
of 450,000 Double Cwts. And in the previous year 1912 an export ^1 
670,000 Double Cwts. as against an import of 570,000 Double Cwts. H. w 
necessary it was for the Austrian iron industry in the time before M e 
outbreak of the war, in consequence of the stagnation of the induriial 
activities, to seek a sale for its goods in foreign countries, is s own 
by the fact that in the first half of the year 1914 710,000 Double Cwts. 
of above-mentioned ^rgoods were exported, or as much as during the 
whole year 1913 had been exported, and only 200,000 Double Cwts. 
had been imported. 

The Steel Works of Austria were able to reach, and to keep up 
the full figure of their normal outputs in spite of the scarcity of many 
of the articles usually required for producing steel. One rapidly learned 
to economize that which was on hand, to find substitutes for certain 
materials, and to exploit to the full all existing resources, and even 
to open up new ones. Thus for instance the supply of iron manganate 


which is looked upon as indispensable for the production of steel 
and for the manufacture of which one was obliged to fall back ex- 
clusively on mangan ore from Caucasia, was secured by most economical 
use of those quantities which were still in stock, and by working home 
mines which had been lying dormant. 

The Austrian iron industry and the coal industry, like their sister 
industries in Germany, have shown in these severe times an extra- 
ordinary ability to adapt themselves to changed conditions. The coal 
mines in spite of an immense shortage of hands have reached figures 
in their outputs which closely touch on the figures of normal times. 
In fact in some districts, as for instance the Kladno coal fields, the 
present output has out-distanced the output of normal times, although 
naturally they had to battle with the same difficulties. Thus for 
instance the coal-mines are obliged to do without dynamite and high 
explosive stuffs for blasting purposes. But soon our enterprising 
technical home institutes found a substitute for these explosive 
materials. Thanks to the assistance of related industries; thanks to 
the overtime by the miners, and in consequence of the circumstance 
that all unprofitable, or unproductive work was eliminated, the coal- 
mines were able to increase their output to such a degree that all 
demands could be satisfied. At times, interruptions are caused by 
temporary stoppage of the railway traffic in consequence of military 

The demonstrated efficiency of the Austrian national economy and 
its capacity to adapt itself to changed circumstances in general, and 
of the iron and coal industry in particular, strengthens the confidence 
in a victorious end of this gigantic battle of peoples — a confidence 
which springs from the chief source of trust— the death-defying 
heroism of our valiant soldiers. 



The close brotherhood-in-arms between Germany and the Dual 
Monarchy finds a parallel development in the economic phenomena 
that accompany it. The external factors which condition prosperity 
and the reverse are in both cases identical. Austria-Hungary and Germany 
are both cut off from the great international trade routes bvthe tyranny 
of England upon the sea. Their industries are for the greater part 
sustained by the enormous demands of the war orders. At the same 
time there are essential differences in certain branches, based upon 


the commercial or financial conditions of certain industries and these 
are still further intensified and thrown into prominence by the war. 

The German iron works show clear signs of a certain slackening 
coincident with the progress of the war— the Austrian-Hungarian iron 
industry is, on the other hand, in full swing and can scarcely keep 
up with its orders. 

The September report of the iron industry of the Dual Monarchy 
shows a decided increase in all manufactured articles. It is natural 
that there should be an increase over the figures of last year, for in 
the months immediately following upon the breaking forth of the war, 
most of the furnaces were blown cold, and many rolling-mills and 
steel works were shut down. But there is also an increase over the 
production in the corresponding month of 1913, especially in certain 
important lines — such as iron rods and mercantile shapes— whereas 
steel beams, in view of the decrease in building activities, showed 
a marked decrease. The government is the source of most orders- 
work for the army goes on day and night. Arms, munitions, the end- 
less varieties of military equipments consume tons upon tons of iron. 
But the labors and needs of peace are also considered — the state 
railways, for instance, have given out enormous orders. The perma- 
nent ways and the rolling stock have naturally suffered great deter- 
ioration through the war, and require a constant renewal. A great 
number of bridges have been destroyed, and must be rebuilt. A vast 
quantity of new rails has been ordered. Contracts for steel bridges 
and culverts have been signed. The locomotive works and car factories 
have never been so busily occupied as at present. The Austro- 
Hungarian iron industry is assured of work for a long time to come. 

The picture presented by conditions in Germany is somewhat 
different. Here] too, the war had been a great accelerator of all 
branches of industry, but not to the same extent as in Austria-Hungary. 
The last (Sept.) report of the German Steel Companies available at 
this writing shows a diminution of some five per cent. The German 
steel industry is not working at full blast, like that of Austria-Hungary, 
but shows a considerable slackening in its activities. German iron 
works, prior to the war, disposed of about one-half their products 
to foreign countries, and most of the means of transportation are now 
barred. German exports, however, may still be sent to Denmark, 
Sweden, Norway and Switzerland, as well as to Roumania and Bul- 
garia — and now Turkey. The German reports show that the chief 
decline is in the branches of railway material and shaped iron. The 
long duration of the war has brought it about that many large 
buildings enterprises and public works have been completed, and 


have made way for new undertakings. Many large contracts, however, 
especially those in large cities, have been held in abeyance until 
after the war. And it has not been easy task to replace these. Army 
orders also cut a large figure in the German iron industry, but not 
so exclusively as is the case in Austria-Hungary. And the German 
works are not in a condition to develop a full output. Whereas the 
Austrian iron and steel companies are this year awaiting a considerable 
increase in their dividends— those of the Alpiner Montangesellschaft, 
for instance, have risen from 32 to 35 crowns and those of the Prager 
Eisenindustriegesellschaft from 140 to 150 crowns— it is very likely 
that the German firms will show the same dividends or, more 
properlydiminished ones. Several large companies have lately declared 
that they would pay no dividends this quarter, and it is probable 
that the German steel industry will take some time before it can 
once more be placed on a normal footing. 

The success of the Austrian War Loans, the immense flood of new 
supplies and fresh currents of vitality that will be set throbbing up 
and down the freed Danube and the railway to Constantinople will 
not only help to sustain the economic strength of Austria-Hungary 
and its ally, but will also open up fresh markets for the industries 
of both countries. Among these the iron and steel manufactories will 
have a large and profitable share — for though at present occupied 
chiefly with forging the sword, they are able at any moment to sus- 
pend these grim activities and once more take up their creative work, 
as was the case before the threats of the surrounding enemies forced 
them to suspend their peaceful and beneficient labors. 


By Max Friedmann, Member of the Reichsrat 

Austrian industry has in general survived the first year of war in 
excellent shape— the demands of the army as well as of the large po- 
pulations in the hinterland were entirely satisfied— and there is no doubt 
that these will continue to be met and nearly all expectations realised. 
It must be acknowledged that certain manufactures, such as those 
dealing with the production of luxuries, or such as depend upon the 
activity of the building trade, have been forced to suffer. 

Nevertheless most manufacturers were able to adapt themselves with 
remarkable speed to altered conditions and also meet the enormous 
demands of the army. The difficulties experienced at first in connection 
with the moratorium and certain unnecessary financial and commercial 


restrictions were soon overcome. The creation of ways and means for 
which one depended upon foreign countries in times of peace, and 
supplies made all the more necessary by the great demand for them, 
a demand impossible to satisfy by imports were undertaken and quickly 
carried out. In consequence of the numerous enlistments in the army 
the laboring forces were necessarily very much diminished— which 
called for the utmost utilisation of time and power, both of the manual 
and the mental laborers. 

Permission to import or export, the providing of raw material, diffi- 
culties of transportation, sequestration of supplies, multiple calculations 
new devices, double shifts and a whole mass of new demands and 
problems called for the utmost efforts of the reduced personnel both 
in the technical and the commercial world. The workmen were obliged 
to exceed the usual hours of their day, and all forces were exerted to 
the utmost. Such efforts, of course, are justifiable only in times of war, 
but many valuable points and statistics have been gathered for use 
in times of peace. The inventive spirit also produced brilliant results. 
Only after the war will it be possible to form a correct estimate of all 
that has been achieved in this field— how factories rose from the ground- 
how new means of manufacture, transportation, and application— were 
created with lightning-like speed. 

Austro-Hungarian manufactures have shown an astonishing adap- 
tability, and fulfilled the demands made upon them, despite countless 
hindrances. Commercial life has been kept vigorous and active, and 
the nation, so to speak, grew accustomed to the war and has been 
inspired by the will and the ability to "hold out." The industries also 
supported the War Loan by munificent subscriptions. 

No one can prophesy correctly the conditions which will prevail after 
the war. Just as all the fears that prevailed at the outbreak of the war 
have come to nought, so it is to be hoped that the anxieties of the 
mosttimid may in this respect likewise benegatived. Supplies, no doubt, 
will have suffered from depletion and there will be a tremendous 
amount of rebuilding to do in the wasted districts. There will thus be 
no lack of employment. Of course, various serious problems of an 
economic and administrative nature will have to be solved— as well 
as financial conditions readjusted to the scale of peace. The export 
trade which has naturally suffered very badly must be gradually re- 
stored, in brief— all sorts of questions will have to be considered. But 
it is not only Austria-Hungary that will suffer from these inevitable 
conditions. We have tested our economic and productive powers during 
this period of stress, and may regard the future with confidence. Many 
branches are already preparing for the reconversion— the new condi- 


tions. Organisation and system in the fiscal, administrative and other 
fields are necessary, and the machinery for these has already been 
partly put into action. A carefully thought-out system will be necessary 
in the rebuilding of the districts ruthlessly destroyed by the Russians. 
All unhealthy speculation must be prevented— and this colossal field 
of enterprise be devoted to the development of a wholesome industry. 
One priceless treasure has been won by the Austrian manufacturing 
world in this terrible war— self-confidence and knowledge of its own 
possibilities and power of development. In spite of all the difficulties 
it was forced to encounter, it has risen to all the demands of the hour 
and confounded all the hopes of the enemy— and will continue to do so. 
Herein lies the best pledge and proof for its reinforcement and develop- 
ment after the war. 


The Views of Privy Councillor Koloman von Sczell, Former Prime Minister 
and Ex-Minister of Finance. 

The "Zeit" has repeatedly drawn attention to the fact that the alarm- 
ist reports of the enemy's press about the unfavorable financial position 
of the Monarchy, and especially of Hungary, are intentional lies, and 
are absolutely without any foundation. For this reason it has been 
demonstrated already in these columns what an enormous importance 
the introduction of state monopolies would have. In particular the 
spirit-monopoly, which the eminent Hungarian statesman Privy Coun- 
cillor Koloman von Sczell proposed some years ago, — promises such 
rich results that it can hardly be doubted that the financial administration 
of both states will carry into effect the important and significant plan 
of Sczell. The former Hungarian Prime Minister, and late Minister 
of Finances has enlarged on his plan in an interview in Budapest in the 
following most interesting manner: 

.... "The noise which our enemies are creating in the world 
about the supposed bad, and even as they declare, ominously bad con- 
dition of our finances, need not excite us in the least," said the illustrious 
politician and financier. "Of course it would be foolish to deny that 
the budgets of Austria and Hungary after the war will show an essen- 
tially higher debt in interests to be paid, but this is a very natural 
symptom, and we shall hardly have to make any such immense sacri- 
fices as our opponents. The increase of the interests, to be paid by 
the state, by several hundred million Kronen will certainly not be a 
fact to rejoice over. But in the face of the world-historic problems 
which we had to solve, and our firmly rooted confidence that the historic 


struggle will end with our victory, such a change in our budgets could 
only signify a danger if no cover existed for the increase in the state 
expenditure. Fortunately this is not the case. On the contrary, we in 
Hungary are able to meet our share of the increased expenditure without 
any serious application of the taxation-screw. And Austria, a country, 
so much richer, will naturally find itself in a still more favorable po- 
sition. As far as Hungary is concerned, I have shown already in one 
of my speeches in Parliament, that rich sources of new and increased 
revenues may be opened and tapped for the benefit of the Hungarian 
budget, by a new regulation of railway tariffs, in particular by the 
abolition of the, very little justified, abatements; then by carrying 
into effect the amendments of the income tax provided for in the 
Wekerle-Act, which has long been passed by Parliament, but was never 
as yet enacted. These amendments of the income laws have long been 
carried out in Austria. It is granted that these sums are not yet suffi- 
cient to cover the entire increase caused by the war. But even for 
this uncovered remainder, or rather for the interests on the war loans, 
we find ample cover in the monopolies, and, in the first place, in the 
spirit-monopoly. I have repeatedly proposed this measure, and I have 
observed with great satisfaction that, in these last months, the "Zeit" 
has repeatedly drawn public attention to my proposal. 

The spirit-monopoly realizes enormous incomes for those states 
where it has been introduced — and is almost everywhere in force. 
In Germany the tax is about 2V2 Mark per hectoliter; in France a little 
more than 2V2 Francs; in Italy 2^|^ Lire; in Russia about 5 Kronen, 
reckoned in our money; and in England even 7 Kronen. With us the 
tax is only 1 Krone 10 Heller; and, probably in consequence of my 
agitation, was recently increased to 1 Krone 50 Heller. 

If we introduce the monopoly, and if we should decide to levy a 
tax of not more than 2 Kronen 50 Heller per hectoliter we should pro- 
duce annually in Hungary alone an increase of 100 Million Kronen 
in our revenue. 

I know quite well that the doubling of the present revenue from 
the spirit tax will not at once and automatically take effect. At first 
a decrease in the consumption will be noticeable. But under the pro- 
visions of the Monopoly Act a better quality of spirit, as compared 
with the present one, will be produced. And this better product, either 
as brandy, or as spirit for industrial purposes, will soon, not only secure 
the same rate of consumption as before, but in a large measure con- 
duce to an increase. Thus that the estimated surplus revenue will 
amount in the first year to about 80 million Kronen; in the second 
year about 100 millions; and in the third year 120 millions. And I 


consider it as certain that this annual increase will continue to grow 
every following year, though perhaps not at the same rate of progress 
as the first 3 years. We know that the Tobacco Monopoly has consi- 
derably improved the quality of our tobacco. And that our tobacco, 
and our tobacco-products are superior in every respect to the tobacco 
and the cigars of states where no such monopoly exists. And just as 
this is the case in the tobacco trade, so also in the spirit trade, our 
present manufacturers should continue to manufacture their products, 
only they should in future exclusively supply their goods and manu- 
factures to the State alone at a fixed price. In this way the spirit 
distillers, like the tobacco manufacturers, would continue to earn their 
present profits. The quality would only improve because there would 
exist a fixed permanent buyer. And the State could in an extraordinary 
measure increase its revenues by the sale of spirit, as it does by the 
sale of tobacco. 

But what is possible and what can be carried through in Hungary, 
is likewise possible, and can be carried through in Austria. When I 
was Prime Minister in Hungary, I discussed the question of the 
spirit monopoly with those circles in Austria whose business it is to 
consider such questions. But in those days I did not receive a definite 
answer to my proposals. But unless we erect a customs barrier between 
Austria and Hungary, such a spirit monopoly would have to be intro- 
duced simultaneously in both countries, under the safeguarding of our 
common customs. Still more is the introduction of the spirit monopoly 
to be recommended to Austria. For it can reckon on an increase of its 
revenues by 100 Millions Kronen yearly just like Hungary. And this 
money would come most usefully to the aid of Bohemia and Galicia 
which countries have a permanent deficit. Thus if Austria and Hungary 
from adopting only the spirit monopoly alone could realize an annual 
increase of 200 millions Kronen in their revenues, this fact demonstrates 
the extraordinary financial strength of the Monarchy: But there are 
other monopolies which could be introduced. For instance the Petro- 
leum-Monopoly. This monopoly would secure to the two States an 
increase in their revenues of another 20 or 30 millions Kronen, annually. 
These sums alone would protect and arm Austria and Hungary against 
all financial dangers and needs. 

These facts prove to every unbiassed observer and financial expert 
that in reality the financial situation of the Monarchy is sound, and 
these happy circumstances cannot in the least be altered, or still less 
reversed by false combinations, or ridiculous rumors of our enemies." 



Just as the soldiers of Austria and of Hungary seek to outdo one 
another in heroic deeds upon the battlefields, so the two states of 
the monarchy strove to have as large a share as possible in the 
financing of the war. The result of the subscription to the war loan of 
Hungary has reached the level of over two billions of crowns — that 
of Austria of over four billions, so that the two states out of their 
own resources have succeeded in raising for their third war loan the 
enormous sum of over six billion crowns. For the third time within 
a few months the capitalistic centres of the two countries have been 
compelled to undergo a severe test, and those enemies of ours who 
were formerly accustomed to indulge in orgies of ridicule with respect 
to our finances, and prophesied our exhaustion, cannot deny that we 
have stood the test in the most brilliant manner. Each in its own 
way — Austria and Hungary have reinforced their financial armament 
and have carried off a great and undisputed victory. Both states showed 
themselves actuated by that unconquerable will, that unyielding de- 
termination to maintain the equipment and the keep of the soldiers 
upon a lofty level, which are among the most important postulates 
for a final and honorable peace. They were likewise one in their 
firm belief that the heroic deeds of historic worth achieved by the 
arms of Austria-Hungary during this world-war, would in the end 
assure the conquest of this country's foes. 

The Hungarian half of the monarchy has profited exceedingly, 
because of its agricultural character, from the high prices at present 
prevailing in this field — a rich harvest and an abundant supply of 
cattle permitted the farmers to obtain tremendous prices for their 
products, and these prices were immediately paid them in cash. It 
was a characteristic phenomenon that the deposits in the Hungarian 
financial institutions should have attained a most abnormal height, 
a favorable condition which is largely to be attributed to the bene- 
ficent influence exercised upon the Hungarian money market by a 
successful harvest. This in turn resulted in the magnificent response 
made to the call of the war loan by Hungarian farming interests. In 
contrast to most of the Entente countries there can be no doubt that 
both in Austria as well as in Hungary, an excellent financial organi- 
sation has seen to it that the available funds are really transferred 
to the treasuries of the state— and a propaganda carried on along big 
lines has educated wide circles in a financial sense — circles which 
hitherto had been accustomed to maintain a rather unfriendly attitude 


towards devoting their money to investments with a fixed rate of 
interest. In Hungary, as in the sister state, the banks have proved 
themselves to be pillars of the system of credit, as true head-quarters 
of the entire money system— a system which, supported upon the con- 
fidence of their customers,spurred these on to magnificent endeavors. 


The first Austrian War Loan, after final competition, produced some 
2200 millions in subscription, the second some 2696 millions, so that 
the total sum of the two first Austrian War Loans gave us a total of 
some 4896 millions of crowns. Since the Third War Loan has up to 
now produced some 4015 millions, it approaches the results which 
the two former War Loans have attained. The Austrian people have 
placed at the disposal of their government all in all some 8911 millions 
of crowns— to which must be added the results of the three Hungarian 
War Loans. 

This tremendous financial feat becomes still more significant when 
one compares with this achievement the difficulties encountered by 
the hostile Quadruple Entente in its attempts to float its War Loans. 
Asquith himself has openly confessed to Parliament that the financial 
situation of England was a most serious one. England and France were 
compelled to go to America in order to raise upon heavy terms, a 
sum which does not by far approximate that raised by the Third 
Austrian War Loan. France was obliged to issue short term treasury 
certificates, and according to latest advices, the debt of the state to 
the Bank of France amounts to not less than 7.4 billions of Francs. 
Russia and Italy are in still greater financial difficulties. 

In order to estimate properly the triumph of the last billion victory 
of the Austrian loan, it will not do to compare it superficially with 
the last German victory in this field. These 4 billions, — 15 millions 
are not the product of the entire monarchy, but merely that of the 
Austrian half— which has a population of some 28 millions as against 
the 70 millions of the German Empire. Quite apart from the vast 
capitalistic strength of Germany, the population of the Austrian part 
of the Dual Monarchy is to that of Germany as 2 to 5. So if Austria 
subscribes 4 billions this is as much as when Germany subscribes 10. 
Adding to this the results of the Hungarian Loan, and the comparison 
is still more striking and satisfying. 

It would have been impossible to raise these immense sums from 
the savings that had been made between tlie second and third war 
loans. But the present, the past and the future— all contributed to 
the achievement of this great financial victory— so exasperating to 


our enemies— the present by means of the funds which flowed back 
to the public from the amounts of the earlier loans— the past through 
the conversion of former savings stored up in banks, saving insti- 
tutions, into war loan certificates— the future by subscribing such sums 
as are to materialise shortly, and which may be easily used for paying 
for war loan subscriptions. Much of this success is due to the brilliant 
financial genius which permitted this mobilisation of the financial 
resources of the empire upon so solid a basis, and secured for it so 
whole-hearted and generous a participation on the part of the 

This unprecedented world-war has accustomed us to reckon in 
terms of millions of men and billions of money. In spite of this, one 
might well say that the sunniest optimist would never have ventured 
to predict a year ago the tremendous economic forces that dwelt 
within our empire— an empire which, according to the views of our 
enemies was "ramshackle and decaying!" This knowledge of our 
strength will continue to operate after the war — for the war has taught 
us to have more confidence in ourselves, and to put aside a too great 
and dangerous modesty. We may well be proud of our economic 
power, as of our military might. 


The results of the Third Hungarian War Loan exceed the fondest 
expectations of the patriots— arouse the joy of those who feel a deep 
and warm sympathy for the realm of him who wore the holy crown 
of St. Stephen and will prove a bitter disillusion to those rancorous 
enemies of ours who calculated upon an early collapse of our economic 
powers of resistance and had accepted that collapse as a certainty. 

A people in arms has been supported, valiantly supported by those 
who, raising vast sums out of their fortunes, have contributed a 
material wonder to that martial wonder to which the valor of Hungarian 
arms has given birth— something of which no human soul had dreamed 
prior to the outbreak of this war. 

The results of the Loan— a round two billion crowns,— exceed by 
nine hundred millions the results of the second War Loan— so that 
Hungary all in all has contributed to the three loans some 4.2 billions 
of crowns. 

This is the expression of a material power of which the Hungarian 
people may well be proud— for it not only represents powerful evidence 
of the intrinsic force at the nation's heart, but also holds its own 


when compared with the stupendous results attained by the German 
empire and our neighboring and still closer ally, Austria. 

Austria has raised 8900 millions, the German Empire 26,000 millions 
in war loans. But the 4000 millions raised by Hungary count for more, 
far more, when we take into consideration the figures of population, 
the capitalistic wealth, the capacity for gaining and saving and the 
vast difference between a highly-organized industrial state and one 
that is primarily agricultural. The 21 million inhabitants of Hungary 
of whom some two millions dwell in close proximity to the war zone, 
and of whom another six millions live in the most modest circum- 
stances—represent in reality, and under the most favorable circum- 
stances, only some 12 millions from whom financial subscriptions 
might be expected. 

The population of the German empire amounts to some 66 millions, 
so that we have the proportion of some 12 to 66— and as for Austria— 
if we deduct the poorer population of the mountain regions and those 
that have felt the rigors of war,— we have some 21 millions— or the 
proportion of some 12 to 19. Taking into account the savings funds 
which decrease from 20 billions to 9 billions and to 4 billions, and 
estimate the national wealth at 350, 120 and 80 billions, we arrive 
at the conclusive fact that Hungary has achieved something prodigious 
in the field of finance. 

We are therefoie foiced to see in all this the wonderful spectacle 
of the Hungarian nation out of its own resources providing the means 
for defraying the costs of this most terrible of all wars, a war forced 
upon it by its enemies— and mobilizing a part of its fortunes, converting 
it into ringing metal, and thus putting itself in a position to endure 
the struggle to the very end— an end disastrous to its foes. 

This faculty of lofty sacrifice for the sake of the threatened Father- 
land is a trait common to all the allied Central Powers— it is a faculty 
which results in the operation of a tremendous power. In this the 
Central Powers offer a violent contrast to the states of the Entente— 
the financial ministers of which are forced to seek for help everywhere 
abroad. These have already seen the collapse of their financial empires 
and must face the bitter fact that a part of their financial power has 
been usurped by the coldly-calculating American republic. 

We have nowhere begged for support, we have given to the state 
that of which it had need, and if our Third War Loan has been 
helped by subscriptions from other states and from neutral countries, 
we accept this purely as a sign of their confidence— and a friendly 
incitement to further endeavor. 

The enemies of the Austrian-Hungarian monarchy had made our 
destruction their end and aim— but the monarchy will emerge from 


this sruggle greater than ever, greater than ever will Hungary be after 
this war. That is one of the meanings contained in this impressive 
result of our War Loans. 

Thirteen billions have been raised in Austria and Hungary, whereas 
wealthy France has run into debt to its national bank to the extent 
of 7 billions and gigantic Russia owes over 5 billions to its national 
bank. England and France have been forced to borrow from Morgan 
and his crew some 2V2 billions upon the most onerous conditions. 
Hungary in the course of a year has taken by less than IV2 billions 
from its own fortune to cover state obligations, a sum equal to the 
48 years of national debts that have accrued since its independence as 
a state, inclusive of the costs of all railway undertakings. 

No great upsetting of the savings bank deposits has resulted, nor, 
for that matter, any particular diminution. The rate of exchange has 
not only not sunk, but has even to a large extent recovered from 
the decline at the beginning of the war. It is with great satisfaction 
that Hungarians may contemplate the fact that the four percent crown 
consols are now rated by at least 5% higher than during those first 
fearful days in August, 1914. English consols, on the contrary', despite 
all desperate endeavors of the government, despite the upward con- 
version, have scarcely been able to maintain the minimum price of 65. 

These are facts which speak eloquently for us— and which serve 
to proclaim to the whole world the victory of a superb spirit of sacrifice, 
of the devotion to a lofty ideal, such as alone can serve to inflame 
a nation to the noblest and most sacred patriotism. 


More than four billions! A result such as the greatest expectations, 
the most excessive optimism, could scarcely have regarded as within 
the realm of probabilities! 

Four billions, or milliards of crowns! — that is about equal to two- 
thirds of the whole taxed income of the people — and one-third of 
the entire income of all Austria! Yes, our people have raised four 
billions for the new War Loan of the nation— even though we have 
been warring and warred upon for over sixteen months. This is an 
achievement of a people's loyalty, of a high ideal of citizenship, so 
splendid that it will long be honored as a great deed in the annals 
of our people. 

This magnificent success of our War Loan speaks a loud and 
potent language whose tones reach far beyond the confines of our 


realm — and our enemies, if any reason be left in their ranks, cannot 
fail to recognize how strong and upright Austria-Hungary stands. 

In order to obtain some comparatively correct idea of the immensity 
of this financial success, we can do no better than to compare it with 
that of the German nation — which is so indisputably richer. 

Let us take the result of the last War Loan of Germany, the third, 
that stupendous result of over 12 billions of marks — which are equal 
to some 14 billions of crowns — as a basis for comparison — we cannot fail 
to do honor to the achievement of Austria, although Germany not only 
absolutely but relatively exceeds the wealth of Austria in income and 
taxation. And we are likewise confronted bv certain very startling 
facts. Germany is very much richer than Austria is in direct proportion 
to the relative figures of population in the two states. In other words, 
although the population of Austria is by no means so rich as that 
of German> — yet the proportionate share of subscriptions per head 
is as great in Austria as in Germany. 

If we except Galicia and the Bukowina, the inhabitants of which 
naturally do not come into consideration for subscriptions to the War 
Loan,— and if, for the same reasons, we count the numbers of inhabi- 
tants of Trieste, Gorz and Gradiska, Istria and the coastlands with 
one half their numbers, we have, compared to the 65 millions of the 
inhabitants of Germany— some 18.7 inhabitants — who are to be con- 
sidered as potential subscribers to the War Loan. Comparing the 
results in the two countries — that of Germany with 14 billions and 
that of Austria (up to the present some 4 billions of crowns) we have 
in both cases a proportion of some 215 crowns per head of the 

This is a note of accord between Germany and Austria which in 
reality signifies still more. For this agreement between the amount 
subscribed per head of the population, means still more with respect 
to the entire greatness of the success won by the Austrian loan. This 
is due to the simple fact that the Austrian people are by no means 
so rich as the German people. And the war loans of different people 
are not to be considered as identical even though they sign for the 
same amounts — for the people themselves are different in custom, 
nature and point of view. 

Well may our people regard with pride this golden sword they 
have forged for the defense of their land and their liberties. 



The resumption of the normal traffic in the Austro-Hungarian crude- 
oil industry is taking somewhat longer than one had hoped. The 
damage that had been done, and the difficulties of transportation and 
of labor are greater than were assumed. 

A commission composed of leading experts in this line met recently 
in order to discuss ways and means and to make the necessary 
arrangements. The following is a fair estimate of conditions last August, 
since which a considerable amelioration of conditions everywhere has 
ensued. Before the war there were some 425 wells in operation in 
the district of Boryslaw-Tustanowice — of these some 262 had been 
set fire to or otherwise damaged — 150 to 160 are at present at 
work and soon the entire number may be restored. 

Borings, which take considerable time, have been made in most 
shafts, in order that a closer examination may be made of the kind 
and extent of the damage done — and as to whether it might be 
easily repaired or would require expensive and elaborate preparations. 

Thirty percent of the crude oil in storage has been burnt, leaving 
some 50,000 tanks available for refining. The State supplies have 
been completely destroyed, leaving only the residue. The empty tanks 
have also been for the most part destroyed — and even tanks which 
had never been filled have suffered through the neglect incident to 
the war. Parts of the wooden covers of these reservoirs have rotted 
away. There is no lack of storage room. The measuring-rooms and 
the pumping- stations are not damaged. The government refining- 
works and the private refineries are in a state of good preservation. 
The chief damage— the removal of all transmission belts and puUies, 
could be made good immediately after the retaking of Lemberg— so 
that the works could at once be put into partial operation. 

The state refineries produce no lubricating oils, but only petroleum, 
benzine and parafine. The parafine works have been in operation 
since August, the production of benzine for military purposes was 
undertaken at once. The state refinery working at full pressure could 
produce some 120 tanks of crude oil before the war. The proportion 
in August last was some 17 to 20 tanks per day; owing to the lack 
of laborers, the supplies cannot be increased rapidly, and one will 
have to rest content with some 80 tanks per day. Immediately after 
the withdrawal of the Russians, the supply ran from 60 to 70 tanks per 
day. Work is carried on only in those shafts which are most easily 

Crude oil is also being transported to other refineries in Austria- 
Hungary, but the excessive traffic on some of the lines in Galicia 


renders this on occasion very difficult — as is also the case with the 
shipment of the necessary materials. The refineries which produce 
lubricating oils are given first preference. The plan of laying a pipe- 
line across the Carpathians has not been carried out. But plans are 
now being considered for building a pipe-line from Drohobcycz to 
Sambor and Chyrow, from which a double track way may be erected. 
The costs of this 65 kilometre long line is estimated at 1.2 millions 
of crowns — and it is assumed that it can be completed in four weeks. 
This would enable the railways to be freed from the burden of 
carrying oil, and permit the vast quantities of crude oil which are 
still stored in the reservoirs, quite apart from the fresh production, 
to be easily and quickly transported. 

In August the price for crude oil in Drohobcycz was still as high 
as 11.5 crowns. Before the war it was only 6 crowns. Considering 
the fact that only about 30 per cent was destroyed, this price is still 
inordinately high. The new oil entails for its production an additional 
expense of 30 to 40 per cent. The price, however, is largely contingent 
upon the problem of transportation, and as soon as this is settled 
and large supplies thrown upon the market, the prices will rapidly 
and sensibly decline. 

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