the nationality of all inhabitants of the czech provinces and ...

Chapter III
Hungarian financial elites, which had
been increased due to the wartime
economic measures. On February 25, a
separate Czechoslovak currency was
created. That monetary measure and the
strongly deflationary policies of the
Minister of Finance, Alois Rašín,
provided Czechoslovakia with a stable
currency during the first half of the
1920s, but it needed to be supported by
a prospering economy. That was a
The chalets in the Giant Mountains were mostly owned by Germans,
but they were also popular with Czech tourists.
harder task. It was assisted by the
establishment of an independent
Czechoslovak customs area.
Because of its structure and territorial
distribution, the economy of the new
republic was not entirely balanced and
as a whole it was among the moderately
developed economies. In
macroeconomic terms the
Czechoslovak Republic could be
regarded as a industrial and agricultural
country having a strong regional
economy (looked at from neighbouring
Germany). After all, it inherited
roughly 70% of the entire industry of
the former monarchy! Closer
inspection, however, reveals a somewhat
less rosy picture. Industrially speaking,
the most developed parties of the
country were in the Czech lands;
Slovakia and the territory of Carpathian
Ruthenia (annexed in 1920) were
agricultural areas. However, Czech and
Czechs and Germans in a Democratic
Czechoslovakia, 1918-1938
86
Moravian industry was essentially based
on small and medium-sized companies
whose equipment and manufacturing
technology were backward compared to
the advanced and leading-edge
technologies of those days. There were
only a few large companies with
appropriate technologies; these
undoubtedly included the Baťa shoe
factories and the Poldi iron and steel
works at Kladno, and among the
Germans, the Mannesmann works at
Chomutov and the Varnsdorf hosiery
factory. The state’s economic policies, a
combination of direct state intervention
and liberalism that left decision-making
up to the individual entrepreneurs, were
complicated at the outset by two
different sets of regulations, one for the
parts of the country that belonged to
Cisleithania before 1918 and those that
were part of Hungary (Transleithania).
The combined model of economic
management also meant that economic
policies in the republic were always
subject to a motley combination of
political and economic forces that was
heavily influenced by the economic
situation abroad. Czechoslovakia had an
open economy whose stability depended
on exports. Foreign trade accounted for
about a third of the nation’s income.
Nonetheless it was not long before a
powerful and influential financial group