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influence of 
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Among the circumstances which exereise an influence on the ability of a country for competition 
on foreign markets its geographical position plays an important, though by no means decisive, part. 
When the‘ geographical situation of a country is referred to as favourable, this statement is correct, 
in all but a few cases, with certain restrietions Only, because on the one hand the extent to 
which geography favours a given region is not constant but liable to modifieations in the 
course. of the economic progress of the world, and on the other hand the geographical situation, 
as a rule, can be said to be favourable only in respect of certain markets or of certain classes of 
exportable goods. This restricetion applies particularly to inland states which, unless they dispose 
of convenient navigable waterways or unless their railway connections with foreign sea-ports 
are over short distances only, depend in the main on neighbouring states for marketing their 
heavy mass production. 
Austria possesses one waterway of importance only, the Danube, and the railway to the nearest 
sea-shore leads to Trieste, whose traffic is chiefly with the Orient. The direction which Nature appears 
;o have marked out for Austrian exports — apart from the exports to neighbouring countries — 
would therefore seem to be chiefly a west-easterly one. It is thus the Balkan countries and the 
Near East — in addition, of course, to the Succession States — which one would feel tempted 
to call the natural markets of Austria, especially in view of Austrian industry and commerce being 
more intimately acquainted with those markets through long experience and possessing a larger 
amount of knowledge of the psychology of, and the languages spoken by, the inhabitants of the 
territories in question than is possessed as a rule by the nationals of western states. The well- 
known economists Messrs. W. T. Layton and Charles Rist, who in 1925 conducted an enquiry into 
the economic situation of Austria on behalf of the League of Nations, saw the aptitude, which 
Austria. (and in particular Vienna) possesses for trade relations with eastern markets, in the light 
of an important asset of the country and the report which these eminent experts made to the 
League contains the following sentences on the subject: ‘The advantages of a great commercial 
city continue to attract merchants and traders from various parts of the world. Thanks to their 
intimate knowledge of the Danubian lands the Viennese merchants are the natural intermediaries 
between these countries and western Europe. Of perhaps even greater importance is the fact that 
Vienna remains the greatest banking centre of HKastern Europe. The Vienna money market 
sontinues to a very large extent to be the channel through which foreign credits are supplied 
ver a very wide industrial field and the Viennese banks still retain an interest in important 
ındertakings which are full of promise for the future.” The banking organisation of the country 
and the support it lends to the export trade will be referred to later in these pages. 
With a population of 6,535,000 (census of March 7th, 1923) and an area of 32,396 square 
miles, Austria has 19,423 miles of roads, 4274 miles of normal-gauge railways, and the navigation 
on the Austrian section of the Danube extends over 226 miles. Austria has been able in consequence 
io maintain its position as an important transit centre of European trade, 
It is well known that the influence exereised by the geographical position, though it has been 
supported in the case of Austria by the economic structure of what have been called the natural 
markets of the country and by certain historical facts, has not been allowed a free and unhampered 
scope. In so far as the neighbouring countries (in particular the Succession states) and the Balkan 
countries’ are concerned, the prevailing school of economic thought has created artificial obstacles 
to the mutual exchange of goods. A very vivid and instructive representation of the obstruetions 
to European trade, which have been raised by tariffs, has been constructed by Sir Clive Morison Bell 
and was on view in September 1926 at the Bank of England. The model was a map of Europe 
which showed, however, a wall round each country drawn in proportion to the ad walorem 
height of the various tariffs. The map showed Great Britain and the Netherlands having the lowest 
tariffs which, if an index were used, would correspond to the number 6, the index number for 
Denmark being 7 and for Belgium and Portugal 8. France, Germany and Scandinavia fall in a 
group of moderate protectionists with index numbers between 12 and 15. The Central 
European. countries starting with Austria at 16, .Rumania 18 and Bul-