THE MONETARY CRISIS 33 
and, it seems, took the view that the Czech crown should 
be allowed to appreciate until it reached the value of the 
former Austrian crown, i.., the gold crown. After 
having counteracted a drop in the crown by energetic 
measures on the part of the Banking Office which used 
a portion of its stock of foreign exchange for the purpose, 
Rasin proceeded to allow the rate to rise without regard 
to the resulting difficulties for industry. 
For the recovery of the crown had taken place before a 
corresponding fall of internal prices had occurred, and it was 
difficult to adapt cost prices to the selling prices abroad. 
It is true that domestic prices began to fall with the 
improvement in the exchange, of which imported pro- 
ducts were the first to feel the effects. *“ Colonial food- 
stuffs, cocoa and coffee fell immediately, and all the faster 
because the import duties upon them were lower. Freely 
imported commodities brought down the prices of identical 
and similar commodities produced at home; cotton 
affected wool, and lard affected butter. But it was also 
necessary that exportable commodities should fall, in 
order that Czech exporters should be able to keep their 
markets. A reduction in salaries became necessary, and 
one which brought them perhaps even below the level 
corresponding to the actual fall in the cost of living.” 
Industry met with serious obstacles, and yet it was the 
very crisis resulting from the difficulties of adaptation 
which finally removed them ; for the menace of unemploy- 
ment forced the wage-earners to give way.l 
of the Czech crown, once it had begun, produced an improvement in the 
balance of payments. Conversely, Czech exporters, who had hitherto 
sought to escape from the control of the F oreign Exchange Control Office, 
repatriated capital. 
! The following table showing the indices of various countries, given in 
Czech crowns at the current rate of exchange, shows that the fall in 
domestic prices was not great enough to counteract the recovery of the 
crown in the eyes of foreign debtors :— 
Jan. April Aug. Sept. Oct. Nov. 
Czechoslovakia . . 1675 1491 1386 1155 1059 1017 
United States. . . 2316 1609 1407 1126 994 99g 
Switzerland ~ +. 2360 2360 1501 1121 989 994 
(Piot, op. cit., p. 205.)