from further inflating her currency and to reduce the discrepancy between her income and expenditure. Austria, by means of rigid economy and merciless taxation, fulfilled these conditions to the satisfaction of the Powers, and was granted the loan in due course; and with the aid of this sum, and a smaller advance received earlier in the year, she was able not only to arrest the process of impoverishment and decay to which she had been a victim since the war, and which threatened her with complete dissolution, but also to lay the foundations of a financial and economic revival, the prospect of which has made Vienna the abode once more, not of gloom and despair, but of gaiety and light-heartedness.

The period immediately following Austria's acceptance of the Geneva programme was, as had been anticipated, the most trying for the population. The cessation of inflation led to a restriction of business for the time being, and this, combined with drastic reductions in the Civil Service, caused widespread unemployment. The months of January and February witnessed serious disturbances. Not only did great demonstrations of the unemployed take place towards the end of January, but the Social Democrats in Parliament, in their zeal for the working classes, used all means to obstruct the Chancellor's efforts to economise, and on February 6 created stormy scenes in the National Council, while a little later there was a fatal conflict between Socialists and Monarchists near Vienna.

On January 19 it was announced that the internal loan of 280 milliards of Austrian paper kronen had closed with a subscription of about two-thirds, a sum which, though regarded as satisfactory, could not carry the Government very far in view of the fact that on November 6 the deficit had been over 5,000 milliards. At the end of January it seemed doubtful whether Austria would be able to hold out till the loan promised to her was available, and accordingly Dr. Seipel, accompanied by the Foreign Minister, Dr. Grünberger, and the President of the National Bank, Herr Reisch, went to Paris in order to appeal to the Council of the League of Nations for immediate financial assistance. As a result of the Council's discussions, an Austrian financial mission, headed by Dr. Kienboeck, Minister of Finance, proceeded to London to arrange for a short-term loan for the purpose of tiding Austria over until the long-term loan could be floated. After considerable negotiation a sum of 3,500,000l. sterling was placed in the countries which had already agreed to participate in the League of Nations credit scheme, and by the end of February the British share-1,800,000l. was fully subscribed.

Everything now depended on whether Austria would inspire sufficient confidence in the financial world during the next two or three months to procure for her the loan of 27,000,000l. originally determined by the League of Nations as the sum required for restoring her finances. The first reports of the

Controller-General appointed by the League, Dr. Zimmermann, were not altogether favourable. He criticised severely the obstruction of the Social Democrats, the wastefulness of the railway regime, and the slowness with which the reduction of the Civil Service was being carried out. Nevertheless, he announced in February that he would not give up his post on April 1, when his provisional appointment ended, and this was regarded as a hopeful sign. On April 12 he left Vienna to attend the League of Nations Austrian Credits Committee, to which he presented further reports; and at the end of the proceedings à long-term loan of 650,000,000 gold kronen was authorised by the Committee. In his fourth report, which was published in Vienna on June 5, and in interviews given during a short visit to London at about the same time, Dr. Zimmermann, although still somewhat critical of the Austrian Government, gave facts and figures which showed that the position was more encouraging than anyone a few months previously could have dared to hope. In the eight months that had elapsed since the League of Nations scheme was floated, savings banks deposits had increased by 750 per cent.; unemployment had fallen between February and May from 169,000 to 122,000; the customs and tobacco tax yield, on which the international loan was to be secured, showed in April an improvement of 760,000 gold kronen over the average of 12,400,000 gold kronen for the first three months of the year; and the Budget deficit for May was 2,400,000 kronen less than the monthly average (23,500,000) since January.

These figures bore eloquent testimony to the vitality of Austria and her capacity for recovery, provided she were given the opportunity. Accordingly there was no difficulty in raising the loan. On June 11 the British portion, amounting to 14,000,000l. sterling was issued and quickly oversubscribed, and on the same day the American portion of 25 million dollars met with an equally favourable reception. On June 30 it was announced that Austria's portion of her own loan, 13 million dollars, was fully subscribed, and similar success attended the Italian portion in July. With her coffers thus replenished, Austria was relieved of anxiety as to the stability of her currency, and she immediately began to attract foreign capital for investment, to the great benefit of her industry and commerce. And not only did the loan remove from the Government all temptation to further inflation, but it also secured to it the possibility at least of making the Budget balance by the end of 1924. This became henceforth the chief object of Dr. Seipel's policy, and the progress made by the end of the year augured well for its ultimate attainment.

As already mentioned, Dr. Seipel had to carry out his reforms in the teeth of constant opposition and obstruction from the Social Democrats, who demurred both at the burdens laid on the working classes, and at the derogation to the

State's sovereignty involved in foreign control of its finances. In one case he had to make a somewhat important concession to them. In April it had been decided, on grounds of economy, to reduce the number of Ministries by placing those of Foreign Affairs and Justice under the Chancellor, and incorporating the Ministry of War-which, with an army of only 25,000 men, was hardly necessary-in that of the Interior. The Social Democrats, however, who cherished the "proletarian Army" as their own creation, insisted on its remaining under an independent administration, and the Chancellor had to give way, and instead of abolishing the Ministry of War he added the Ministry of the Interior to his own already overburdened office.

By the time the elections for the National Council were due in October, the Social Democrats had accepted the Geneva programme as inevitable, and differed from the bourgeois parties only in desiring to shift some of the burdens from the working to the capitalist classes. Dr. Seipel somewhat rashly provided them with an excellent war-cry by proposing just before the elections to allow owners of property, who had been hard hit by the depreciation in the currency, to increase rents. In spite of this, his party maintained its position in a poll in which 90 per cent. of the electors voted. In the old House of 183 members there had been 85 Christian Socialists (Government Party), 69 Social Democrats, 20 Pan-Germans, 8 Land League, and 1 Democrat. In the new House of 165 members there were 82 Christian Socialists, 66 Social Democrats, 10 PanGermans, and 7 Land League. Practically, therefore, the Social Democrats gained at the expense of the Pan-Germans. The losses of this group could be explained by the decline of interest in the Anschluss idea, due to the calamitous condition of Germany. The election was interpreted as giving a verdict for the Geneva programme on the one hand, and for the protection of tenants on the other. As soon as the National Assembly met, Dr. Seipel tendered his resignation, but he was immediately re-elected by 98 votes to 66.

The election for the Vienna City Council was held at the same time as the General Election. Here the Social Democrats retained their predominance, securing 78 seats against the Christian Socialists 41. Under the Social Democratic regime the housing conditions of the poorer classes had been considerably improved. In other respects, too, Vienna this year began to change its character, becoming predominantly a commercial centre. A principal part in effecting this change was played by the Jewish section of the population. It was one of the new Jewish financial magnates, Herr Bosel, who towards the end of the year by a generous subvention enabled the Vienna University to continue its work, and so put a stop to the anti-Semitic agitation among the students which at one time was carried to such lengths as to necessitate the closing of the University for two days (November 19 and 20).

Towards the end of November the Budget programme for 1924 was made known. It estimated a deficit of 836.2 milliard kronen (2,789,000l.), against 2664 2 milliards (8,880,000l.) for the previous year. As the deficit allowed under the reconstruction scheme is only 147 milliards, the Finance Minister, in order to remove the discrepancy, proposed to double the income tax, treble the turnover tax on businesses, and largely increase postal rates.

Evidence of the country's economic progress during the year was afforded by Dr. Zimmermann's report for November, which stated that deposits in savings-banks in September amounted to 32,000,000 gold kronen against 2,000,000 in the previous September, that the monthly deficit in October was 13,000,000 against 38,000,000 in September, 1922, and that the number of unemployed in receipt of assistance had fallen to 75,775. Exports in August amounted to 87.3 million gold. kronen, against an average of 69,000,000 for the first three months of the year. The only set-back to the continued progress of the country came in the last month of the year, when one or two serious strikes broke out. Through the Chancellor's mediation the men were induced to resume work, but were left in a dissatisfied condition.

Dr. Seipel in the course of the year visited a number of foreign capitals-Budapest in January, Belgrade in February, Rome in March, and Warsaw in September. The result was in every case an improvement in Austria's relations with her neighbours. A compromise was arrived at with Hungary on the question of the Burgenland, and an Arbitration Treaty between the two countries was ratified by the National Council on May 7, similar to those already in force with Switzerland and Czechoslovakia. An agreement was reached with Yugoslavia regarding pre-war debts and frontier traffic. On April 28 a Commercial Treaty for one year, but renewable after six months, was made with Italy, and in September an Arbitration Convention was concluded with Poland.

Thus for the first time since the war, the close of a year has found Austria in a better position than its opening. International goodwill towards her, seconded by the unstinted efforts of her own population, have made her once more an active member of the comity of civilised nations. Her recovery is not yet complete, but the League of Nations has every reason to be satisfied with the success of its experiment so far, and Austria can already look back to Dr. Seipel's appeal to that body as the turning-point in her post-war history.

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CHAPTER V.

UNION OF SOVIET SOCIALIST REPUBLICS - ESTONIA FINLANDLATVIA LITHUANIA - POLAND-CZECHOSLOVAKIA-HUNGARY - RUMANIA - YUGOSLAVIA TURKEY - GREECE - ALBANIA BULGARIA.

UNION OF SOVIET SOCIALIST REPUBLICS.

THE Constitution of the Union of Soviet Socialist Republics which the Constitutive Federal Congress drew up in December, 1922, has with some modifications been adopted by the Central Executive Committee of the Union. On July 14 the Committee approved the laws on the establishment of a Federal State Bank, a Central Commission for granting concessions, and a Council of Labour and National Defence. At the same time it was decided that the decrees and orders of the All-Russian Executive Committee should be binding throughout the whole territory of the Union. The paper Isvestija was made the official organ of the Union. The question of a Second Chamber to represent the separate Soviet Republics remains to be discussed at the Second Congress of the Councils of the Union.

In the beginning of the year Russia took an active part in the first Conference of Lausanne, which ended in a deadlock on February 4. The Soviet Delegation laboured hard to procure an agreement that the question of the Straits should be a matter for Turkey and the other Powers of the Black Sea only, but without success. The Turks yielded to the British point of view and left the Russian Delegation in an isolated position, so that it went home without having achieved anything.

The trial and subsequent execution of the Catholic priest Budkiewicz provoked indignation and protests not only in Poland but also in many other countries, including Great Britain. Diplomatic Notes were exchanged between the British Mission in Moscow and the Commissariat for Foreign Affairs. In consequence of the insolent tone of the notes signed by an official of the Commissariat, M. Weinstein, Lord Curzon ordered Mr. Hodgson, the Head of the British Mission, to demand satisfaction, and to leave Moscow in case it was not given. Meanwhile an incident had occurred which aggravated the situation. British fishing trawlers were seized early in April off the Murman coast by a Russian gun-boat. A British cruiser was thereupon sent to that coast in order to protect British fishermen operating in that region, and on April 28 a Note was despatched by the Foreign Office claiming that British subjects should be granted the right to fish in northern waters outside the three-mile limit. M. Litvinov replied in his Note of May 9 that the Soviet Government could not accept the principle of a three-mile limit, being of opinion, in view of the range of modern guns, that a twelve-mile limit should be established; they were, however,