Financial Position of Austria in the First Quarter of 1934
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[Communicated to I he Council and Official No. ; C. 137. M. 55. 1934. IT.A. the Members of the League.] [F . 1339-] Geneva, April 25th, 1934. LEAGUE OF NATIONS FINANCIAL POSITION OF AUSTRIA IN THE FIRST QUARTER OF 1 9 3 4 TENTH QUARTERLY REPORT By M. Rost van Tonningen, the Representative in Austria of the League of Nations. CONTENTS. Page 1. I ntroduction ..................................................................................................................................................................... 2 2. F e d e r a l B u d g e t : (a) F e d e ra l B u d g e t for 1 9 3 3 .......................................................................................................................... 2 (b) Federal Budget for 1 9 3 4 .......................................................................................................................... 4 (c) T h e F e d e ra l R a i l w a y s .......................................................................................................................... 5 (d) A ssig n e d R e v e n u e s ..................................................................................................................................... 5 3- Local Finance ................................................................................................................................................................ 6 4 . Central Bank Position : (a) T h e S ta b ility o f th e S c h i l l i n g .............................................................................................................. 7 (b) T h e D o m e stic C re d it P o s i t i o n .............................................................................................................. 7 (c) S ta n d s till A g r e e m e n t.................................................................................................................................... 7 5- Economic Situation : (a) F o re ig n T ra d e (S p ecial Tr a d e ) ................................................................................................................. 8 (b) Production ............................................ 9 (c) E m p l o y m e n t ..................................................................................................................................................... 9 (d) P r i c e s ........................................................................................ 9 (e) S to c k E x c h a n g e .............................................................................. 10 (f) C o m m e rc ia l P o l i c y .......................................................................................................................................... 10 Ap p e n d ic e s : I. A n a ly sis of A n n u a l a n d Q u a rte r ly B u d g e t A c c o u n t s ........................................................... 12 II. Monthly Estimates and Provisional Results : December 1933-March 1934 . 14 III C e n tra l B a n k , I n d u s tr y a n d T r a d e .................................................................................................. 16 Series of League of Nations Publications II. ECONOMIC AND FINANCIAL 1934 II. A. 8 . ^ (A.) 1/34.—- Imp. néunies, S. A., Chambéry. T. INTRODUCTION. The provisional figures at present available indicate that the year 1933 closed with a deficit of 81.57 million Schillings. Of the total yield of 309 million Schillings of the Foreign Guaranteed Loan, 296 million Schillings were utilised in consolidating short-term liabilities, setting the pledged revenue system in motion again and reducing the debt of the State to the National Bank. There remained at the end of the year a small balance of 12 million Schillings, which, together with the shortly expected 3 million gold Schillings of the Dutch tranche, can be a p p lie d to a further reduction of the floating debt. The Domestic Lottery Loan had a net yield of 173 million Schillings, part of which was utilised for a further reduction of the State d e b t to the National Bank. The greater portion of the balance will be used to finance the Government plan of public works contained in the extraordinary budget. The estimates for the first quarter of 1934 show a deficit of 64.71 million Schillings. The information at present available seems to show that the actual results will approximately agree with this estimate, in spite of lower receipts during February, due to the political disturbances which also caused a withdrawal of savings deposits, which was limited to Viennese savings b a n k s . To cover necessary expenditure for police and gendarmerie, the Government was obliged to establish a new tax on income for two years, which should yield 28 million Schillings in 1934- As new sources of income can be tapped only with great difficulties and the strain on the Treasury has long been great, the need for the very strictest economy and for further retrenchment is imperative. Traffic on the Federal Railways in January was not unsatisfactory, but did not come up to expectations in February. The Government has authorised the electrification of the southern slope of the Tauern railway. The work, which completes the electrification of this section, should be finished by the summer of 1935. The foreign trade returns for January and February 1934 show a continuation of the favourable trend, the import surplus for this period being 16 million Schillings, or 22 per cent smaller than in 1933. Unemployment remained well below the level of the previous year, and production statistics seem to indicate that the slight upward trend is being maintained. The devaluation of the Czech crown has adversely affected certain branches of the Austrian export tr a d e . Much is expected from the Rome conversations of March 13th to 17th and the Protocols then signed. The details of these agreements are already being worked out and the results should be known by May 15th. Summing up the experience of the first quarter of 1934, it can be said that the budgetary situation still causes much concern and calls for further retrenchment, while the general economic progress noticeable in previous months was checked by the political troubles of February, which have also had repercussions on the budget. The upward trend of exports is being maintained, but still wider markets are required if Austrian industry and trade are to recover even the most modest prosperity. 2. FEDERAL BUDGET. (a) F e d e r a l B u d g e t f o r 1933. The provisional results for 1933 as published by the Audit Court are as follows : A. Ordinary Budget. Provisional results + Revised estima es Expenditure : (In millions of Schillings) P e rs o n n e l ................................................................................. 703.56 + I - ^ M a te r ia l........................................................................................... 1,220.90 — 5-3° T o ta l ..................................................................... 1,924.46 — 3-7° R e c e ip ts ............................................................................................ 1,842.89 D e f i c i t ..................................................................... 81.57 + 8 l'57 The deficit of 81.57 million Schillings was covered out of Treasury reserves (see Ninth Quarterly Report, page 3.) — 3 — The difference between provisional results and revised estimates arose as follows : Plus Minus Expenditure : (In millions of Schillings) Personnel : mainly larger military effectives and higher post office pension requirements .................................... 1.68 — M a te ria l : Smaller State debt requirements .................................... — 21-57 P olice a n d g e n d a r m e r i e .......................................................... 6.35 — U n e m p lo y m e n t in s u ra n c e ............................................... 6.45 — T ou rism ........................................................................................... 4-50 — N a tio n a l d efen ce ..................................................................... 2.89 — T o b a c c o ........................................................................................... — 1.29 Posts and Telegraphs . ............................................... — 1.32 Compensation of tax arrears of Federal Railways .. 4-95 — O th e r r a i l w a y s ................................................................................. — 1.26 Other expenditure ..................................................................... 0.68 5-76 27.50 31.20 N e t re d u c tio n in e x p e n d i t u r e .......................................................... 3.70 The smaller State debt requirements were mainly due to the fact that, though the 1933 estimates provided for the first interest payment on the new Foreign Loan, owing to delays in floating the issue, the first coupon did not fall due until January 1st, 1934. Plus Minus R eceipts : n millions of Schillings) D ire c t ta x e s ............................................................................................ 0.03 — C u sto m s ....................................................................................................... — 20.50 E x cise d u tie s ............................................................................................ — 5 7 9 T u rn o v e r t a x a n d tu r n o v e r ta x s u r t a x .................................... —- 11.04 O th e r t a x e s .....................................................................................................