Commissioner-General of the League of Nations found it unnecessary to use any part of the League of Nations' loan to cover the State deficit. At the end of November, 1924, 42.4 million dollars from this loan were still untouched, as was also the Swiss Government's credit of 20 million francs. In view of these facts the Government considered it appropriate to inquire officially of the League of Nations under what conditions that body would be prepared to declare the control of Austrian finances at an end. It certainly already aimed at balancing the Budget at a higher figure than had been agreed on with the League of Nations experts in the autumn of 1922. At that time a so-called "normal Budget" had been drafted on the attainment of which the reconstruction could be regarded as complete. In this Budget expenditure had been fixed at 350 million gold crowns. It had now become apparent that if the State was to make full provision for its legitimate needs and meet its indispensable outlays, an expenditure of 350 million gold crowns would be insufficient, all the more so as prices of commodities as reckoned in gold had risen very considerably since the autumn of 1922. On the other hand, however, the estimate of 490 million gold crowns for the State's revenue was far too low. In the first half of 1924 the actual revenue receipts were at the rate of 630 2 millions of gold crowns for the year, although taxation per head of population was only 80 per cent. of the pre-war figure. The Government in consequence requested the League of Nations to take steps for revising the financial programme which had been laid down in the international agreement of 1922. The League of Nations Council in a resolution passed on March 12, 1924, took its stand on a stipulation in the Geneva protocol that alterations in the scheme could be made only with the consent of the parties to the agreement, that the ending of the control was to depend on the restoration of permanent financial equilibrium, and that credits could be disposed of only under the control of the Commissioner-General. At the same time the Commissioner-General and the Finance Committee of the League of Nations were charged to examine the questions put by the Austrian Government, so that a definite answer might be given to them at the next session of the League of Nations. At this time an event occurred which seemed to justify the opinion of those who doubted whether the Austrian State revenue could permanently maintain itself at the figure which it had reached. Wild speculation in francs brought about a crisis on the Exchange which led to a collapse in the value of securities, and to the failure of a number of banking houses in the course of the next few months. The magnitude of this crisis was greatly exaggerated abroad, but its effects on Austria's economic position were certainly disastrous. Nevertheless it had its uses also. It put a sudden end to the speculation which had become rife since the inflation period, and brought home to the population the inestimable value of steady work and thrift. It also cleared away the mushroom creations of the speculation period-as a matter of fact none of the old, solid banks and business houses went under-and it showed how cautious the Government had been in its financial estimates. For in spite of the crisis the State receipts were still in all the succeeding months considerably above the estimates (on the average about 9 million gold crowns). On June 1 the Chancellor, Dr. Seipel, was shot at and dangerously wounded by a man who proved to be mentally deficient, and he was consequently unable to attend the League of Nations meeting which was held in Geneva shortly afterwards. His place was taken by the Finance Minister, Dr. Kienböck. Before his departure the Grand Committee of the National Assembly passed a resolution, which was entirely in accord with the views of the Government, for making the following proposal to the League of Nations: that the Council of the League should declare that the financial equilibrium of Austria should be regarded as secured if the country could reckon on keeping its Budget normally at 533 million gold crowns income and 520 million expenditure. In its sitting of June 16, the Council of the League declared that the expenditure figure of 350 million gold crowns must without question be raised, but in view of the economic crisis in Austria it found itself unable as yet to substitute any other precise figure. The Finance Committee of the League was charged, in conjunction with the Commissioner-General in Vienna, to make investigations which could serve as a basis for fixing anew the expenditure figure at the autumn meeting of the League. The experts of the League came to Vienna at the end of August, and on September 16 they laid their report before the League. The Austrian Government was represented at the meeting by Dr. Seipel, who had barely recovered from the effects of his wound, the Finance Minister, Dr. Kienböck, and the Foreign Minister, Dr. Grünberger. The Council of the League gave its assent to an arrangement which had been drawn up by the Austrian Government and the Finance Committee, according to which the expenditure for 1925 should not exceed 545 millions of gold crowns, of which 50 millions were to be for investments. The Government undertook in this arrangement to lower the tax on banking and exchange turnover, as also the corporation tax, to speed up the reduction of the Civil Service staff, to make certain changes in the policy of the National Bank, to establish a fixed proportion between the Austrian crown and a gold standard, to encourage the practice of publishing balance sheets in gold values, and to execute certain of its obligations under the reform and reconstruction pro gramme which it had not yet performed. If these conditions are fulfilled, and if the Budget for 1926 keeps within the same figures and the economic situation is regarded with confidence, then the Finance Committee will recommend the Council of the League of Nations to declare the time ripe for removing the control of Austrian finances. In view of the progress already made in the path of reconstruction, certain minor alleviations of the control were promised for the near future. The Government laid before Parliament a number of Bills which it had drafted to give effect to the agreement with the Finance Committee of the League of Nations and to various suggestions made by that body. Among these Bills was the Budget for 1925, in which expenditure was fixed without investments at 4948 millions of gold crowns, and revenue at 508.3 millions, so that-apart from the 50 millions for investments-the Budget showed a surplus of 13.5 millions. In addition, a number of taxes which weighed heavily on manufacturers and banks were materially reduced. At the beginning of November the railway workers made demands for increases in pay, and, failing to come to an agreement with the directors, went out on strike. The President of the Railway Board, Dr. Günther, sent in his resignation. The whole Cabinet resigned at the same time (Nov. 7), and announced that it would not return to office unless it were sure of being allowed to complete without hindrance the work of reconstruction. The railway strike came to an end in three days, and on November 12, the Grand Committee of the Diet again nominated Dr. Seipel Chancellor. For some days following Dr. Seipel carried on negotiations with the parliamentary groups of the majority parties. Although all parties declared their unflinching adherence to the reconstruction policy, Dr. Seipel found himself at variance with members of his own party on the question of Federalism, and as in addition the state of his health necessitated a rest, he declined the task of forming a new Government, and proposed another member of his own party, Dr. Rudolf Ramek, as his successor, while he himself took over the active leadership of the Christian-Socialist Party. On November 20, the National Assembly accepted the new Government with Dr. Ramek as Chancellor. Unlike its predecessor, it was a Christian-Socialist minority Government, but the Pan-Germans promised their support. In his declaration of policy Dr. Ramek announced that his programme would be based on the Geneva Protocol of October 4, 1922, the Reconstruction Law, and the subsequent arrangements made by the Seipel Government with the League of Nations. The Stock Exchange crisis mentioned above greatly accentuated the economic crisis which followed the stabilisation of the crown. The shortage of capital which forces the manufacturer to pay high rates of interest is a great drag on production, and many concerns had to close down or restrict operations because they could not procure the requisite capital. The number of assisted unemployed was in February 125,783; it sank gradually to the half of this figure in June, then rose again, reaching 115,601 in November. These figures would have been far higher but for the relief works undertaken by the municipality of Vienna, which constructed a water-power station in Opponitz, electrified the city railway, and erected workmen's dwellings. In 1924 there was again a very heavy adverse trade balance -nearly 1,000,000,000 crowns. To avoid the necessity of importing coal the Government proceeded energetically with the development of water-power. From 1921 to 1924 150,000 H.P. of water-power was made available, and at the end of 1924 works for providing additional 70,000 H.P. were under construction. In this way 800,000 tons of coal were saved. The municipality of Vienna was further able to lower the price of the electric current, and so reduce costs of production for Viennese industry. A decisive improvement in the trade balance can be brought about only by a very appreciable increase in exports. The Government seeks to attain this end, as far as lies in its power, by concluding commercial agreements which will, as far as possible, remove the barriers in the way of Austrian exports. In 1924 a series of such agreements was again concluded: with Germany, England, France, Latvia, Sweden, Norway, Czechoslovakia, and Turkey. In order to smooth the course of the negotiations a new Customs tariff, adapted to Austria's requirements, was drawn up to come into force at the beginning of 1925. It was already made the basis of the negotiations with Germany and Czechoslovakia, and will also serve as a basis for those with Denmark, Holland, Yugoslavia, Greece, and Spain. Among the Bills which the Government has submitted to the National Council in accordance with its agreement with the Finance Committee of the League of Nations, is one for keeping accounts in shillings and one for making out balance sheets in gold values. The first of these will do away with the host of ciphers which hitherto have concealed the value of Austrian money, while balance sheets in gold values will reveal the true value of Austrian undertakings. In its programme of reform and reconstruction the Austrian Government had pledged itself to dismiss 100,000 State officials. By the end of November, 1924, 71,352 had been dismissed, besides 9,948 employees of the Southern Railway, the employees of which were not servants of the Government at the time when the programme was drawn up. At the League of Nations meeting in September, 1924, the wish was expressed that the retrenchment in the Civil Service should be carried out more rapidly, and the Government has drafted a new Bill with this object in view. CHAPTER V. UNION OF SOVIET SOCIALIST REPUBLICS-ESTONIA-FINLAND- TURKEY-GREECE-ALBANIA UNION OF SOVIET SOCIALIST REPUBLICS. ON January 21 at 6.15 P.M., after a protracted illness, Lenin, the creator and chief director of the Soviet State, died in Gorki, near Moscow. The impression produced by this event was profound and widespread, and its political effects have been farreaching in the internal affairs of Russia during the year. The anniversary of Lenin's death was declared a day of mourning. M. Rykov, the lieutenant of Lenin in the Council of People's Commissaries of the Soviet Union and also in the Council of Labour and Defence, was elected President of the Council of People's Commissaries. The Vice-Presidents of the Council were M. Kamenev, who also held the post of President of the Council of Labour and Defence, M. Tziurupa, who was at the same time Head of the Economic Committee, M. Orkhelashvili, and M. Tschubar. Other prominent members of the Council were M. Tchitcherin, M. Trotski, and M. Krassin, who was later replaced by M. Scheinmann. M. Dserjinski was appointed President of the Supreme Economic Council. The real rulers of the Soviet Union since Lenin's death have been M. Kamenev, M. Zinoviev, Head of the Leningrad (formerly Petrograd) Commune, and M. Stalin, Secretary of the Russian Communist Party-the so-called "triumvirate.' The Second Session of the Congress of the Soviet Union (the Parliament) met in February, and elected the Central Exe-cutive Committee of the Union of the Soviet Republics. This Committee consists of two Chambers, viz. (1) the Council of the Union with 414 members, and (2) the Council of Nationalities with 100 representatives of 32 Republics and autonomous districts. The Chairmen are M. Kalinin (for Soviet Russia), M. Petrovski (for the Ukraine), M. Narimanov (for the Transcaucasian Federation), and M. Tcherviakov (for White Russia). During the year two new autonomous Republics have been formed, the Republic of the Germans on the Volga, and the Moldavian Republic. The Thirteenth Congress of the Russian Communist Party, held in June, was the outstanding feature in the internal affairs of the Union, for there occurred the decisive clash between the two groups which ever since the illness of Lenin had been struggling for mastery, the one comprising the majority of the party, headed by the aforenamed triumvirate, and the other including Trotski, Preobrajenski, Sapronov, and others. During the first half of the year drastic measures were taken to suppress the middle class, the chief victims being the children of the |