THE MONETARY CRISIS 31 
mark is no doubt partly to be explained by a lack of 
initiative or power in the Banking Office, and by the 
economic and technical conditions as a whole. When 
the proceeds of the small American loan were exhausted 
in 1919, the United States, alarmed by the social policy of 
Czechoslovakia, which they believed to have fallen under 
the influence of the Bolshevists, stopped all credits. The 
Germans thereupon undertook to support the Czech 
exchange either by opening mark credits or by accepting 
payments in Czech crowns. 
In the event, Czechoslovakia succeeded, not only in 
paying for its purchases in Germany in marks, but also 
in accepting marks in payment for its deliveries in 
Germany. Thus on all sides the connection between the 
two exchanges was confirmed.! On the whole, dealings 
in Czech crowns were confined to Vienna, Prague and 
Berlin, and the Prague exchange could never obtain an 
ascendancy over its rivals at short notice. In particular, 
the Vienna exchange, which was better equipped, con- 
tinued to be the chief foreign exchange market in Central 
Europe ; for Western dealers continued to settle chiefly 
through Vienna or Berlin, and even the Zurich exchange 
felt this influence. 
This interdependence, however, of the rate of the Czech 
crown on the one hand and the rates of the mark and the 
Austrian crown on the other, lasting as it did for two years, the 
issue of the former being strictly limited 2 and the latter being 
subject to continual i»flation, none the less contradicts the theory 
on which Rasin based his plan and which is still held by so 
many economists. Moreover, in spite of currency contraction, 
domestic prices in Czechoslovakia rose steadily. The rise, 
which was at first moderated in the case of certain com.- 
modities in 1919 by a conjunction of favourable circum- 
!8ee A. Rasin, 0p. cit., p. 73. The author also shows that the Czech 
importers preferred paying for German imports in marks because they 
feared a disagio on the crown, and explains, on the other hand, why the 
Czech exporters desired the Czech crown to fall with the mark in order to 
have the benefit of a continually increasing premium on the exchange. 
® It may be added that, in spite of a social programme involving a con- 
siderable burden, the 1921 Budget was almost balanced. (Piot, p. 189.) 
[a