THE MONETARY CRISIS 79 
monetary system; although he had studied economics 
after the war he had not specialised in the subject for 
many years, and, for this reason perhaps adopted without 
hesitation a theoretical and rigid plan which was rather 
over-simplified and more or less on traditional lines. But 
it should at once be added that, guided by the experience 
of the Austro-Hungarian monarchy, he supplemented 
this plan by a series of very effective practical measures. 
After having had the notes of the Austro-Hungarian 
Bank circulating in Czechoslovakia stamped in order to 
provide his country with a currency of its own, he con- 
templated the withdrawal of 809, of the note issue so as 
to leave only about 2 milliard crowns in circulation; he 
also thought, however, of floating a loan of 100 million 
dollars in the United States in order to obtain the neces- 
sary gold cover; and judging by the precedent of the 
Austro-Hungarian Bank’s action since 1892, it is clear 
that such holdings of gold abroad would have favoured 
effective stabilisation at whatever rate was thought con- 
venient.l 
1 See “Financial Policy of Czechoslovakia during the First Year of its 
History,” by Dr. Alois Rasin, Oxford, Clarendon Press, 1923. The passage 
in which the author gives his own account of his first plan of reform (0p. ¢it., 
P- 24) deserves to be quoted in full: “I wanted originally to withhold 809%, 
of the bank notes, so that approximately two milliards would have remained 
in circulation; to arrange at the same time for payment of all the salaries 
of State employees by means of cheques on compulsory cheque accounts 
assigned to them with financial houses; and to establish a new bank of 
issue forthwith. The Government should have got a loan in the United 
States of 100 million dollars in gold, and left the money in America, while, 
however, assigning it to the new bank of issue, in order to be in a position to 
withdraw the two milliard old bank notes circulating, and to exchange 
them for the bank notes covered by the American loan. In this way we 
should have come in for the crippled gold standard; but only the con- 
sumption sum of two milliards would have been covered in gold, and the 
excess over this amount would have had to be derived through credit. The 
bank notes would certainly not have been exchangeable for gold, but by 
means of a good bill and discount system the international exchange rate 
could have been maintained at par. The example of the Austro-Hungarian 
Bank’s method before the war was indeed tempting. In that case too there 
was no obligation to exchange, and the bank notes were forced currency; 
yet from the year 1893 to the year 1914 the Austro-Hungarian Bank had