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E. Varga

Economics

The World Economic Situation
in the Fourth Quarter of 1922

(February 1923)

From International Press Correspondence (Weekly), Vol. 3 No. 7, 22 February 1923, pp. 101–105.
From International Press Correspondence, Vol. 3 No. 19, 22 February 1923, pp. 149–151 (Part VII).
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

VI. The State or the Market

In the last quarter of 1922 the state of the market in Germany changed decisively for the worse. On December 19, there were already 276,871 unemployed, 50,000 of whom were entirely without any means of subsistence. On this date there were over 55,000 unemployed in Berlin alone. The reason for this decline are well expressed in the following notice (Börsencourier, January 5, 1923):

“The alarming increase of unemployment is to be attributed, in the main to the reduced exports of those branches of industry whose prices have already reached or excluded the world market prices. A second and no less important factor is the lessening of home consumption during the last few months For despite all wage increases, the rapid depreciation of the mark has affected a considerable lowering of the real wage, and consequently of purchasing power, among the broad masses. According to an investigation made by the Statistical Bureau, between April and November 1922, the wages of the miners in the Ruhr district remained 54% behind the higher prices, the wages of the metal workers 62%. To be sure, the workers in question are comparatively well paid skilled workers, and it is a well known fact that Germany’s impoverishment is being most clearly expressed by the circumstance that the wage of the skilled worker is sinking lower and lowc , down to the level of the minimum living wage. But there is no doubt that the “social existence minimum” of the German people – the absolute psychological existence minimum is practically of no importance – has sunk considerably.”

The development of unemployment in the craft unions may be seen from the following:

On the day on which the count was made, 120,000 of the 6½ million trade union members were out of work as compared with 89,000 the month before. Besides this, there were 418,000 part timers = 7½% as compared with 4.7% in November.

It is interesting to be that while 212,526 persons were drawing unemployment benefit on March 1, only 42,000 were doing so on December 1.

Coal production

The coal production of the Ruhr area was increased not inconsiderably during the last quarter of 1922 by the introduction of overtime shifts. The production of Ruhr coal (1922) expressed in millions of tons, was follows:

The number of workers also increased during the 4th quarter, as the slackeni g in the building trade and in agriculture caused the workers to stream back into the Ruhr valley. The daily output, expressed in 1,000 tons, was as follows:

The increased coal output did not, however, suffice to cover the requirements of the industries, for great quantities of coal were delivered as reparations, and the coal from Upper Silesia, now separated from Germany, was also lacking. During the period of this report, English coal continued to be imported, though in smaller quantities than in the third quarter. How much coal was imported cannot be ascertained, as there are great discrepancies between the German import statistics and the English export statistics. According to the English statements, 1,600,000 tons of coal were exported to Germany in September, while the German import statistics only give 1,200,000.
 

Iron and steel industry

In the iron and steel industry the state of the market began to be uncertain during the last quarter. The shortage of coke, as well as the frequent shortage of coal, prevented a full productive activity. The prices of iron relative to the depreciation of the currency increased with such rapidity that at the moment when the mark had been stabilized to a certain extent, the German iron prices were much higher than those of the world market. The depression was strongly felt in December, when the mark rose in value. The prices of iron were also partially reduced at this time Business was still good in most branches of the iron industry. There were even complaint of a labor shortage, especially of skilled technical workers. Business became worse m the locomotive building trade, wagon building, and electro-technical industry. On this subject the Prussian Ministry of Commerce reports as follows:

“In the electro-technical industry the receipt of orders wrong terms delivery leaves much to be desired, as at present no work is being done for the electrical utilization of water power or for building new plants or extending the old ones.”

All this shows that in Germany the actual accumulation is proceeding on a very diminished scale.
 

Textile industry

In many cases the textile industry has been obliged to limit production because of a lack of capital. The depreciation of the mark rendered the price of cotton so high, that the factories were not able to buy the raw materials required for carrying on their work on their accustomed scale. The reduced buying capacity of the public has been especially noticeable!
 

Foreign trade

In our reports we have often drawn attention to the circumstance that the gigantic fluctuations in the rate of exchange render Germany’s foreign trade statistics almost useless. The Statistical Bureau of Germany has recognized this fact and has made an attempt to calculate in gold marks. These show us the following comparison:

We thus see that there has been a great drop in exports, as compared with the earlier months of the year, and a great increase of imports This alteration has been brought about by the separation of Upper Silesia, and by the considerable import of foreign coal and ores during the last quarter of 1922. The figures are as follows:

The finances of the Reich, and notes in circulation

The final figures for the first 9 months of the current fiscal year, from 1 April till 31 December 1922, have now been published. The figures are as follows, in milliards of marks:

From this we may see that only about 22% of the Reich’s expenditures have been covered by the revenue during this period. The floating debt has been correspondingly increased, and at an accelerated pace. If we take the fourth quarter of the year only, we have the following results, in milliards of marks:

The floating debt has thus increased by more than 1,000 milliards in the last three months. It is interesting to note that during the last 9 months 234 milliards marks have been employed, to obtain foreign securities for fulfilling the peace treaty, this being the fifth part of the total deficit Unfortunately there are no data showing to what extent the German state has reimbursed the German capitalists for the payments in kind. The lack of these data renders it impossible to ascertain in how far the depression in the German finances is to be attributed to the reparations payments. The deficit in the state budget has been covered by Reichsbank treasury bonds, that is, by an increased issue of paper money. It must be observed however, that the increased issue of paper money has not been contributed to by the state alone, but to a great extent by private capitalists. The figures here given are in milliards of marks.

From this may be seen that during the last quarter of 1922, the state obtained about 800 milliards from the bank of issue, while the capitalist’ obtained about 400 milliards. This signifies that the capitalists have also made profits on the inflation.
 

The development of prices

The cost of living has risen just as rapidly. The miniciation [?] of the mark. The index figures of wholesale trade have developed as follows:

The cost of living has risen just as rapidly. The minimum living wage ascertained by Kuczinski shows the following developments:

During this quarter of the year the wage increases remained farther behind the increased prices than ever before.
 

The foreign character of German capital

It is difficult to give comprehensive data on the extent to which foreigners are participating in German capitalist undertakings. Much does not reach the ears of the public. We learn, for instance, from the American Journal of Commerce of November 15, that the American company formed for the purpose of utilizing the reserves of marks accumulated in America for buying German goods, has already bought 100 million marks worth of shares in the best German undertakings. We cannot take up a newspaper without reading that this or that company has elected a foreigner to its board of directors, as a corresponding number of shares are in foreign hands. In this manner an American was recently elected to the board of directors of one of the largest potash undertakings. French capital participates largely in German coat mines. The collieries Hamm and Friedrich Heinrich in Westphalia, and the Karl Alexander and Karl the Great pits in the Aix-la-Chapelle basin are for instance under French management. About 60 to 80 million French francs are invested in German coal mines, without counting the capital invested in mixed undertakings as for instance Harpener’s. (Data furnished by J. Levainville, Industrie de fer en France, 1922.)

In a communication to the Deutsche Allgemeine Zeitung it is stated that during the last 5 months no fewer than 8,500 houses in Berlin have passed into the hands of foreigners. We thus find that the process of super-foreignization is going forward almost without limit, and under conditions exceedingly detrimental to German economics as such. For at the present rates of exchange all capital invested in Germany by foreigners, reduced to gold marks, is so invested that the objects involved are paid for far beneath their real value. This means that the tribute to be paid by German economy to foreign capitalists, as profits on the capital invested, is much higher in reality than the average inland rate of profit.
 

The prospects of German economics
after the occupation of the Ruhr

The decay of German economics has progressed rapidly during the last three months. Proletarians, officials, intellecttuals, retail dealers and independent craftsmen are proceeding rapidly on the downward path to poverty. It is only the large land-owners, large farmers, and large capitalists, above all the heavy industrial magnates, who become more and more wealthy amidst this general impoverishment. These latter have benefited by the depreciation of the currency, for their debts have decreased accordingly. They have secured themselves against the consequences of the collapse of the mark by calculating and selling in foreign securities or gold marks, or in rye. Only the workers are paid in paper marks. They have detached themselves from the state and pay no taxes. And they feel very content with this state of affairs! No wonder then, that they are not particularly enthusiastic about the stabilization of the mark. They have arranged all their business on the assumption of a falling mark. Of course they could re-adjust themselves to a stable mark. But this would put an end to the constant reductions veiled by the depreciation of the mark and would mean challenging the proletariat, possibly rousing it, by open wage reductions. The capitalists do not want to do this until they are certain that the stabilization will be permanent, and this only appears to be possible if French and German capitalists come to an agreement on the reparations question. Therefore Stinnes, and with him the whole German bourgeoisie rejects every attempt at temporary stabilization of the mark. What these gentlemen want is: More work! This is Stinnes’ program (see his speech in the state economic council, reported in the D.A.Z. of November 11, and Thyssen’s letter to the chancellor, published by the Reichsecho.

What does Stinnes say?

“... The first premise of life in Germany ... is longer working hours. I do not shrink from declaring my conviction that the German people will certainly have to work 2 hours longer per day for a number of years – ten, fifteen years.”

And Thyssen in the same strain:

“... The most unhappy result which revolution could bring us would be the introduction of the universal eight hour day ... We lost the war. The Entente has deprived us of our fleet, of our colonies, of our property abroad, and of a great part of our land. Besides this, for years we have had to deliver many milliards in gold and kind to the enemy. And yet the German people, which had to work 10 hours to support itself in times of peace, now believes that it only news to work 8 hours, and can live better than before.”

And he demands the abolition of the eight-hour day.

“We have got to fight the battle at one time or another, and the sooner we do it, the more we can save. The chancellor Cuno should head the movement for the re-introduction of longer working hours ... now that even a number of the social democratic leaders have declared that it is impossible to go on as we are doing at present.”

The program of the great capitalists is here clearly and plainly stated: Restoration of capitalism, and payment of the reparation debt wit! out sacrifice of property, by means of increased exploitation of the proletariat, with the aid of the social democratic leaders.

This program is not changed in any way by the occupation of the Ruhr. The German bourgeoisie, reckoning on England’s aid, will perhaps attempt to thwart the French action by means of sabotage (removal of coal offices, cessation of deliveries of reparation coal, perhaps a “national” general strike of the miners of the Ruhr area). But this patriotic resistance of the capitalists will not last long, unless France’s dominion in the Ruhr valley is interfered with by England or America. The common interests of the coal and ore capitalists will soon work their way to the surface, despite all patriotic indignation.

In our opinion the program of Stinnes and Thyssen is objectively impossible of execution. The under-nourished German proletariat cannot work 10 hours daily. And it is not possible, in the midst of general ruin, for the great industrial capitalists to go on flourishing and increasing their wealth at the expense of the proletariat, without making the slightest sacrifice themselves But even the attempt to carry out this program will lead to severe conflicts, and – should these conflicts not end with the victory of the proletariat – to the complete collapse of German economics and culture.

* * *

VII. German-Austria

Despite the smallness of the country, the development of economic conditions in German-Austria is of great importance at the present time, for here the credits granted by the great powers have been successful in stopping the depreciation of the currency for the time being. If is an actual fact that in the last 3 months, the Austrian crown has been fairly stable. The index figures of the Austrian Economist show the following developments during the last few months:

The wholesale prices have developed in a similar manner.

The Austrian Economist of December 2, 1922 comments as follows on this change in Austrian economics:

“Up to now our political economy has been enjoying a certain state of prosperity, but this has been more a pseudo-prosperity, and state economy has decayed in a catastrophic manner. This apparent prosperity of political economy is over. The growing unemployment, the part time worked in numerous undertakings, show this plainly enough. Our economy has been granted a pause for breath. I his is shown by the comparative stability of the crown for nearly three months, and by the temporary rest of the bank note printing press. The future will show whether this pause for breath, this inactivity of the note press, will be of long duration. This depends on whether the international credits and loans reckoned upon with so much certainty will really be placed at Austria’s disposal punctually; it depends further on the contents of the reconstruction program. It will further depend on the nature and duration of the political economic crisis caused by this program of reconstruction, on the means which will be employed to aid the hundreds of civil servants and workers threatened with dismissal in finding new means of livelihood and productive activity – a task not even mentioned in the reconstruction program.”

The consequences of the artificial stabilization of the crown may already be plainly traced in Austrian economics. Prices are in general higher than abroad; the working capacity of the workers has greatly diminished. The resultant unemployment is very great; at the present time the number of unemployed is estimated at more than 100,000, a very large number for so small a country. The acceptance of the Geneva pact, which transforms Austria into a colony of the Entente, has been accompanied by a strengthening of the position of the bourgeoisie. This may best be seen in the declaration of the employers that they will no longer keep to the index when fixing wages, and will in no case grant further wage increases even if the index should rise further. This means that the wage reduction’s hitherto concealed by the rapid depreciation, is to be replaced by an open campaign against wages. The Austrian social democracy has resigned itself to the changed conditions with but little resistance. This is probably the reason why there has as yet been no conflict between the Austrian bourgeoisie and the working class.

On the other hand it is very much to be questioned if the stabilization of the Austrian crown is permanent. We have every reason to doubt it. In the first place the credits granted by the Entente have not yet been all placed at Austrias disposal. Moreover, the country consumes more than it produces, If this assumption is correct, the stability of the currency will only last till the securities provided by the Entente are used up. As soon as these are consumed, the depreciation of the Austrian crown will begin again.

Special attention should be paid to conditions in Austria, for the impending conditions in Germany may be deduced from them. But there it must be observed that in the first place, much larger sums would be required to stabilize the German mark, and in the second place, Austria is not burdened with reparations payments. But on the other hand, Germany’s economics possess, in our opinion, more real vitality than Austria’s.
 

Hungary

Despite the smallness of the country, it is extremely interesting to trace out Hungary’s economic development, for here, an actual test is being made as to whether it is possible or not to put the economic household of a country on a sound basis by the complete victory of the White Terror. The question can by no means be answered in the affirmative from the example offered by Hungary. If we select the course of the rate of exchange as a characteristic symptom we find that the Hungarian crown, the English pound being taken as standard, has sunk to a quarter of its initial value. During the last few months a stabilization has taken place, but this is principally due to an extensive limitation of imports, and probably to direct financial intervention as well.

It is interesting to note that the prices within the country itself -- as compared with other countries with depreciating currencies – have, during the past year risen more than would correspond to the depreciation of the Hungarian crown. Wheat, for instance, has risen to six times its original price in the course of one year. This must of course be partly attributed to last year’s bad crops. The export of flour, which amounted to 12,000 carloads in the second had of 1921, has fallen to 5,000 this year.

Hungarian industry can report a generally favorable state of the market, based on the exceedingly low real wage of the worker. A large number of Czecho-Slovakian undertakings, especially from the north Hungarian districts separated from Hungary, have removed to Hungary. Foreign Capital penetrates the country more and more The great French firm Schneider, has commenced to build the Budapest mercantile harbor, conjointly with the Hungarian government. The German Stinnes concern recently invested extensive capital in Hungarian iron works and machine factories. It is also interesting to note that the Hungarian petroleum refiners, who at present cannot obtain any crude oil trom Roumania, purchased 400 tanks of crude oil from Russia. The arrival of this consignment was greeted joyfully by the Hungarian capitalist press, as the Hungarian petroleum refining plant is at present working at only 1/6 of its capacity. The Hungarian capitalists are now endeavoring to do business with Russia on a larger scale. Although the industrial conditions appear fairly good Hungary’s trade balance is quite adverse

In 1922 the liabilities amounted to no less than 53 milliard crowns. As Hungary possesses practically no foreign capital, this adverse trade balance actually signifies a passive paying balance. To this must be added the interest and profit on the capital invested in Hungary and the interest on the old debts to France, England, Belgium, etc., which at the present rate of exchange, and after deduction of the counter-claims, amount to 147 milliards. To this must again be added large debts to Germany, Austria and Czechoslovakia. Moreover, the reparations question is not yet settled; Hungary, unlike Austro-Germany, can scarcely be said to be freed from all reparation claims, especially if we take into consideration the unfavorable political relations of Hungary to the Little Entente.

The deficits in the state finances are covered by the issue of paper money. Between September and December, the notes in circulation increased from 55 to 74 milliards.

Taking all in alI, we may say that the reactionary regime has by no means succeeded in developing the economics of the country in any higher degree than is the case in the neighbouring democratic countries.
 

The Balkan states

There is little change to be observed in the economic situation of the Balkan countries during the past half year. The economic situation in these countries is mainly determined by the crops. Last year these were generally good. But that no economic equilibrium has been attained here either is proved by the general depreciation of the currency. We shall not discuss the conditions in the separate countries in detail, as this would extend our report too much.
 

Poland

Here we may observe the continuation of the great contradiction in Poland’s economic life -- improvement of production, but deterioration of the State finances and depreciation of the currency.

In our last report we gave all details regarding the harvest and the extensive export possibilities:

“The following statements are given by the chairman of the Union of Agricultural Organizations and by the main import and export office: After the requirements of the country itself had been met, it was possible, during the past year, to export about 100,000 carloads of corn, about half as much barley and oats, and large quantities of pulses and oil seed; besides this, 250,000 car-loads of potatoes. To this must be added about 1½ to 2 million hectolitres of potato spirit, 300,000 Ions of starch and 20,000 car loads of hops. The crops of various field and garden vegetables were so excellent that it was possible to export large quantities. The mushroom export has assumed such large dimensions that the state will earn several million marks from this alone. The export of 1 million pigs and as many geese is also being counted on. Export licences have already been granted for 250,000 geese. The export in eggs is however to be limited, and will probably not be permitted to exceed 60 carloads at most in November.” (Industrial and Commercial Periodical, Nov. 8)

Business also appears Io have been satisfactory in industry during the past months. In the textile industry 90 % of the pre-war production has been attained. The Russian market being lost, the goods are mostly sold to Roumania and the Balkans.

On the other hand, the state finances are in a hopeless condition and consequently the rate of exchange as well, as may be seen from Ihe following figures:

In the course of five months the paper money in circulation has increased by 500 milliards, and the Polish mark is still below the German.

The cause of this contradiction between the economic and financial development of the country is difficult to explain; it is probable that it arises, as in Germany, from the complete freedom from taxation enjoyed by the owning classes; on the other hand the huge state and military apparatus appears to have swallowed up the fruits of the increased production. But these are mere assumptions which should be tested by data unfortunately not at our disposal.
 

Czecho-Slovakia

The economic crisis in Czecho-Slovakia continues; indeed, it seems as if it has become more acute during the last three months. It is not possible to ascertain the exact number of unemployed. Social democratic sources estimate it at about 1 million. The number of unemployed receiving benefit is much smaller, as the authorities employ every possible means to deprive the unemployed of the dole, the production of coal continues far below normal. The production of iron and steel is only about 20% of the actual producing capacity of the country.

Industrial undertakings continue to emigrate. A great section of the textile industry has removed recently from Frosnitz to Poland, a part of the Reichenberg yarn industry to Saxony. The great weaving factory Rosenberg (18,000 spindles), and the yarn factory in Pressburg (9,000 spindles) are negotiating with Hungary with respect to moving the factories. The glass industry continues to emigrate to Saxony. The great Slovakia iron works are also preparing to emigrate to Hungary. A part of the workers emigrate with the plant, but the greater part remain at home, without the least hope of finding work there. Under these circumstances it is probable that emigration to America will assume great dimensions before long, should emigration be in any way facilitated. In Czecho-Slovakia the cost of production of manufactured articles is so much higher than in the neighbouring countries that in many cases the Czech manufacturers pass on the orders abroad. Textile and leather factories, for instance, have had their orders filled in Hungarian factories.

The smaller undertakings go bankrupt one after the other in this severe crisis. The number of bankruptcies and insolvencies rose from 40 in January to 182 in October. A large number of undertakings are only able to keep their heads above water by affiliating themselves to some large concern, or by be absorbed by some large bank. Concentration thus advances rapidly. But even the large banking houses are not able to overcome the crisis; a great sensation was caused by the collapse of the Moravian-Silesian Bank, with an uncovered deficit of 100 million Czech crowns.

As was to be foreseen, the Czech crown could not maintain its high rate of exchange. The crown has actually fallen. The prices quoted for an English £ were:

It turns out that the high rate of exchange of the Czech crown was brought about to a great extend by speculative purchases. After the mark collapsed, Central European speculation cast itself upon the Czech crown. The Czech government encouraged this speculation by spreading the report that the Czech crown was to be stabilized at 20 Swiss centimes. The demand for Czech crowns was further increased by the circumstance that in Austria, Hungary, Yugoslavia, and Roumania, much business was done on the basis of the Czech crown, the currencies of these countries being subject to still greater fluctuations. This gave rise to the remarkable phenomenon th the Czech crown possessed a higher value abroad than buying power at home. The Federal Reserve Bulletin published an interesting table in December 1922, showing that the retail trade index was about 20 % higher than fie dollar parity of the Czecho-Slovakian crown.

Another example of high prices in Czecho-Slovakia is offered by the railway freight charges. According to the Economist, the comparative freight rates, for the same weight over the same distance, are as follows:

The high rate of exchange of the crown has been very detrimental to the competitive capacity of Czecho-Slovakian products, especially in the neighbouring countries with depreciated currencies, the natural markets of Czecho-Slovakia.

In order to render the country capable of competition in the markets of the world, it is imperatively necessary to reduce costs of production. This can be done, and is being done at the present time, automatically, by the falling value of the crown during the last three months. On the other hand the Czecho-Slovakian bank of issue has thrown great quantities of foreign securities on the market, – as may be seen by a perusal of the note bank returns – to the value of about 330 million Czech crowns, in order to retard the falling rate of exchange. The Czech bourgeoisie is also attempting to lower costs of production; by reducing wages. It has succeeded in this to a certain extent during the last quarter of 1922. But this method is bound to fail not only on account of the resistance offered by the workers, but because the buying power of the crown is small in the country itself. And the prices of the necessities of life show no tendency of falling. The whole development confirms the words of our last report, six months ago:

“A single small industrial state – when surrounded by states whose economics are in a state of decay and whose currencies are constantly depreciating – cannot possibly maintain a so economic situation.”

As a matter of fact, the present economic crisis in Czechoslovakia is much more acute than the crises in the United States or in England.
 

The neutral European countries

The economic position of these countries has also improved somewhat during the last three months, but all these countries are suffering from a high rate of exchange, which hinders their commercial, relations with countries of depreciated currencies. For this reason the unemployment is relatively very great in these countries.
 

Switzerland

The economic crisis is still on in Switzerland, although a certain improvement may be observed. The number of unemployed, which reached its maximum in March 1922 – 100,000 fully unemployed – fell to 50,000 by October. 400 million francs are said to have been expended on unemployed benefit since 1918. With regard to the position of the working class, this is said to be satisfactory. According to the Manchester Guardian, Reconstitution 10 11, the present wages are 92% higher than those of 1912, while the cost of living has only increased 72%.

The vote on the capital levy is of international significance. In September 1921 the socialist party introduced a motion, supported by 90,000 signatures, for the introduction of a capital levy to the value of 8–60%. The referendum on this question was long retarded, and did not take place until December 3, 1922. It ended with a complete victory for the capitalists. The introduction of a capital levy was rejected by 730,000 votes against 110,000. This result is the more interesting in that, according to statistical data, only 6% of the population would have been subject to the capital levy. It is further interesting to note that owing to the threatened capital levy, much capital left Switzerland to be invested abroad. As a result of this, the rate of exchange of the Swiss franc fell considerably in the autumn, and showed a loss in relation to the dollar. At the present time the Swiss franc is still lower than the Swedish crown or Dutch florin.
 

Holland

The economic crisis in Holland has scarcely undergone any change during the last quarter of 1922. There is still much unemployment. At the end of September there were 72,000 fully out of work. The position of Dutch industry is rendered particularly difficult by German competition. For this reason there is a strong tendency to introduce protective duties. This policy has been successful in some cases, especially in that of the cigar industry. The unhappy position of the shipping trade plays an important part in Dutch economics.

On the other hand, the foreign trade balance of Holland developed very favorably during the first 9 months of last year, and the deficit has been well covered by the revenues obtained from the Dutch colonies and the investments abroad. As a result of this we see that Holland’s currency is stable, at the present time only a fraction below dollar parity.
 

Sweden

The improvement in Sweden’s economic situation, which began in 1922, continued during the last quarter of the year. Despite this, the crisis cannot be said to be over. The state of the match industry is satisfactory a very important point for Sweden, as 1/6 of the world’s production of matches falls to Sweden, and a further fifth is under the control of the Swedish match manufacturers. The economic condition of the wood, paper, and textile industries is normal; the same is to be said of iron ores. But in the machine building trade, and in the whole iron and steel industry, things are still very unfavorable. The improvement of the economic condition is best shown by the decrease of unemployment:

The number of unemployed, in thousands, is as follows:

Since then, however, the number of unemployed has again increased. Among the organized workers, there were 153% unemployed as compared with 27.1% a year ago. The majority of unemployed belong to the iron and machine industry. The machine building trade suffers most especially from the lessened possibilities of selling to Russia since the rejection of the Swedish-Russian agreement by the Swedish parliament. The number of locomotives ordered by Russia was reduced from 1,000 to 500.

It is an interesting phenomenon that the Swedish crown has risen above dollar parity during the last few weeks.

In Stockholm the gold parity of the dollar is 3.73 crowns. During recent weeks it has frequently occurred that the official quotation tor New York was only 3.72, even 3.71, at the Stockholm exchange, so that the crown was above par. This tendency is causing much disquietude among Swedish business people, and not without reason. For the severe economic crisis into which Sweden has been plunged by the deflation of its currency, has just recently been somewhat alleviated by the appearance of American as an angel of salvation, there being a great American demand for certain Swedish products, especially wood, cellulose, and paper.

The high value of the Swedish crown naturally greatly hinders the export of Swedish goods. The association of Swedish banks has therefore demanded that action be taken against the further rise in the rate of exchange. The government has intervened in the security market and bought up large amounts of dollars. This is further shown by the fact that the amount of paper money in circulation has increased between December 9 and 23, from 522 to 547 million crowns.

The position of the Swedish working class has altered but little of recent months. The Swedish capitalists complain of high wages. According to a comparative table drawn up by them, a London worker has to work 1,415 hours to earn the sum which a Stockholm workman earns in 1,313 hours. In spite of this, there have been no great labor conflicts the wage agreements, which expired on September 30, were automatically renewed for another year, as neither employers nor employed gave notice of withdrawal from the agreements. The eight-hour-day law was extended for a further three years.

 
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Last updated on 9 July 2021