From the very first days of the new State the Czech Government started to get rid of German civil servants in order to create posts for their own nationals. Since 1918 a total of 40,000 Sudeten officials have been dismissed (cf. The Times, 2. 12. 37, which mentioned that tens of thousands of Germans have been dismissed in this manner).

As a result of this systematic action the proportion of posts in the administration, the postal service, railways, and other public utility concerns held by Germans is altogether incommensurate with their population ratio. In Bohemia, where 32.4% of the population is German, 29.5% postal officials were German in 1929, but this figure had fallen to 15.4% in 1930. The percentage of Germans employed under the Ministry of Justice was 11.8%, according to a speech made by M. Hodza in November, 1937, though the German population ratio amounted to 22.4%. From the same source we learn that there are 11% of Germans in the railway service, 13% in the revenue service, and 10% employed by the postal service. The proportion of long-service German enlisted men is noticeably small. There are public undertakings, like the Prague post office savings bank, which employ no Germans whatsoever. All this goes to show Czech determination to employ none [55] but Czechs in the public service. Many Czech officials sent to German-speaking areas for the purpose of German denationalization cannot even speak the language of the district. On the other hand, on the few occasions when official posts are allotted to Germans, they are almost invariably in Czech-speaking districts. Again with the object of denationalization, more especially the case of the prospective officials' children.

The Czechs found the fact that industry was mainly in German hands intolerable. As a result, they inaugurated a policy whose aim was to weaken the German hold.

Jaroslav Stránský [czsk.net]

With a view to consolidation of the new State the Government inaugurated state-trading on a large scale. The object of this policy was not only the independence and security of the new Republic but envisaged also a sapping of the foundations of Sudeten German trade and industry. Czecho-Slovakia's first Foreign Minister, Dr. Stransky, described the first aim of his Government as follows:

"The balance of German and Czech industry in the Republic must be made equal."

[56] Sudeten German industry suffered a severe setback by the disruption of the old Dual Monarchy. While there had been 52,000,000 potential home consumers before the War only 14,000,000 were to be found in the Czech Republic. Loss of this large market led German industry to change its methods. Its leaders saw that increased exports were their only hope; they were, to some extent, successful in this up to the time of the world economic crisis. From 1927-1929 some 60% of the entire Czech output was exported, and in the case of certain articles produced in the Sudeten areas this figure was even exceeded. By making use of the possibilities presented by foreign markets the Sudeten industrialists were able to keep going without any very great difficulty during the first decade of the Republic's existence although they received no aid from the State. With the coming of the crisis and the consequent market shrinkage, industry in the German areas began to lose ground and looked in vain for a helping hand from Prague.

They might well look in vain, for the fresh blow to Sudeten German industry was very welcome to the Czech Government whose new-born native industries were in competition with German. This new Czech industrialization must, in any event, have seriously affected German undertakings. But the Czech industries were subsidized by the State and began to turn out products which had hitherto been the sole monopoly of German industry. Thus the German firms not only lost what was left of their home markets, so necessary to them in order to finance their export [57] trade, but had also to look on with folded hands while Czech industry supplied the needs of their own German areas. An important factor in the situation was the placing by the Government of State orders with Czech firms exclusively; these firms were consequently able to "lower" prices as the result of Government support.

Another means employed by the Czech authorities was the methodical transfer of industry from one part of the country to another, a policy which enabled Czech capital to acquire a commanding share in Sudeten industry. Important industrial concerns in the border areas, such as the iron foundries of Rothau, were transferred inland, for no apparent or justifiable reason. These changes only meant increased suffering in German areas, for no benefit accrued to the nation as a whole by increased production.

The State Defence Act was also used by the Czechs as a pretext for the further weakening and expropriation of Sudeten German industry "for reasons of State."

This Act makes possible the forced acquisition of control in any branch of industry and allows of the removal of entire industries from frontier areas. It also permits of many other acts of interference with normal industrial procedure; it includes a remarkable clause concerning the control of workmen, which allows of the dismissal of employees without the consent of the management. It should be emphasized that this State Defence Act, despite its name, [58] is a purely peace-time measure. It is very loosely worded and this gives rise to fears of further action inimicable to Sudeten German industry. Professor Arnold Toynbee referred to the handicaps under which Sudeten German industry suffered by the fact of this Act, vis-à-vis their Czech competitors, in an article he contributed to The Economist in July last year, under the title of "Czecho-Slovakia's German Problem."

The influence which Czech capital has acquired in German industry within the Republic, already great, is on the increase. German businesses are compelled to deal with Czech banks and, in many cases, to borrow Czech capital from them; these banks are backed by the State. They refuse credit to firms which cannot prove that they employ a certain percentage of Czechs, all German firms being thus ineligible. Grants of credit to German firms, states Professor Toynbee, have often been made dependent on the dismissal of German workers and their replacement by Czechs. The handicap under which German firms labour with regard to State contracts is obvious. The artificially nurtured Czech industry has been kept busy with orders from the State ever since its creation, while German tenders are systematically refused. It might reasonably have been expected that public works contracts in German-speaking areas would be awarded to German firms and German workmen. But it has always been and still is part of the German denationalization policy to allot all public contracts in the Sudeten area to Czech firms [59] who introduce Czech labour into German areas already suffering from widespread unemployment.

Between January, 1933, and September, 1936, 540 public contracts were placed in German areas, of which 442, or 82%, went to Czech firms. Nothing has been changed in this Czech boycott of German firms, despite the solemn promise of the Prague Government following repeated representations by the Sudeten Germans, that things would be altered. Many cases are on record where it is common knowledge that German tenders for contracts were lower than those received from Czech firms, yet in each case the contract was awarded to a Czech firm employing only Czech workmen. An example of this was published in The Times of December 2nd, 1937. In this case the erection of an electricity-producing plant was concerned; Czech workers from outside the area were carried to work each day by train, although the district in question was suffering from widespread unemployment.

A systematic bias is shown by the State wherever it comes into contact with Sudeten German industry. State control is on the increase, so that Prague can influence orders to a greater extent as time goes on. Production has been restricted in certain branches of industry and here again discrimination has been exercised in favour of Czech firms. The German quota of sugar production, for example, has been set at a very low figure in comparison with that for the Czechs. Restrictions on the production of margarine were introduced in 1935 and here again [60] the dice were loaded against the German factories. New refineries near Prague in another Czech district were allowed to produce to capacity while old-established and world-renowned firms, such as Schichts of Aussig, were allotted quotas from 30%-40% below capacity, condemning a large proportion of German plant to idleness and causing the dismissal of many hands.

The Czech Government has also been using tariffs to bolster up the industry of its nationals as far as possible. Though the pleas of German industry for protective duties fell on deaf ears, high tariffs were imposed for the safeguard of Czech industry. State export subsidies are almost exclusively confined to Czech products. Interference by petty officialdom with German industry is rife. Much evidence to this effect is suppressed by the victims for fear of worse to come. A boycott of German goods by Czechs has been quietly organized during the last months which led up to the present crisis, with the veiled approval of the Government. Sudeten industrial concerns, traders and craftsmen, all of whom depend on the home market, have been particularly hard hit. Many well-known brands produced by Sudeten firms can no longer be sold in packages bearing the imprint of their makers.

The proportion of German industrial concerns in the Republic has already been reduced by 50% through Czech economic action. The Czechs claim that the marked falling off of Sudeten industry is entirely due to the world economic crisis; this is patently untrue. It is correct to state that the Sudeten German industry suffered severely owing to the loss of foreign markets, the more so since the firms concerned were practically without reserves, but it is also true that the Prague authorities made no attempt whatever to come to their assistance. Furthermore, Czech industry has not only weathered the storm but flourished during it. The effects of the crisis on the Sudeten German firms was welcomed rather than otherwise in Czech circles, supplementing, as it did, the Governmental policy of fostering Czech industry by the award of public contracts to the exclusion of German firms.

While Sudeten unemployment was rising by leaps and bounds Czech industry prospered, a state of things still in force to-day. This applies more especially to the production of articles for immediate consumption, and also to the armament industry in which the Germans have no share whatever.

Czecho-Slovakian unemployment figures are relatively high in comparison with those of most other European countries, 643,500 workless being [62] on the registers in March of this year, and this state of affairs is mainly due to the lamentable condition of Sudeten German industry, as is shown by the figures submitted. In March of this year there were 54 unemployed per 1,000 of the German population and only 23 per 1,000 in Czech districts.

In districts where over 80% of the population were Germans, as compared with those in which the same proportion are Czech, the German unemployment figures are 62 per 1,000, the Czech 20 per 1,000.

It is worthy of note that of the twelve districts showing the lowest unemployment figures in the whole of the Republic in March, 1938, none had a preponderantly German population, while among the twelve with the highest number of unemployed no Czech district figured. These twelve distressed areas are all German and include many thousands of acres of farm land, a fact which goes to show that this widespread unemployment is not caused, as the Czechs aver, by over-industrialization of the Sudeten areas. Further proof of this is afforded by the fact that the twelve districts with the lowest unemployment figures, all of them Czech, include two which are very highly industrial.

Since March of this year unemployment figures for the whole country have fallen slightly; this is mainly due to seasonal causes. At the end of May there were 50 unemployed per 1,000 inhabitants in mainly German-speaking districts, compared with 11 per 1,000 among the Czechs. Three years ago the Germans had only two and a half times as many [63] unemployed as had the Czechs. The May figures speak for themselves.

The foregoing statistics are official and are taken from Prague documents. They do not give a really comprehensive report of the position, for they only include the unemployed registered at the Labour Exchanges. There are many others who have given up walking to the nearest Labour Exchange, finding it a mere waste of time.

Most countries are aware from their own experience of the terrible results of widespread unemployment. Poverty is rife; closed factories are gradually going to rack and ruin; in many cases the plant has been removed. There are no openings for the young, many of whom have never worked. Tens of thousands of families find themselves faced with a hopeless future.

The birth-rate is falling among the Sudeten Germans; to this fact the Czechs have no objection. The death-rate, on the other hand, is rising, which, again, no doubt, meets with Prague's approval.

In view of the foregoing the rise in emigration figures in the Sudeten German areas is hardly surprising. Unemployment and semi-official pressure combine to increase emigration from the mixed areas in the border districts which separate the language enclaves. Here the Czechs are particularly anxious to denationalize the non-Czechs. In 1937, 711 persons emigrated from the mixed district of Bischofteinitz, of whom 705 were Germans. As about 10,000 Germans are included in the population of 20,000 [64] this means that every fourteenth German left his home.

While there is a constant exodus from all the German-speaking areas Czech "squatters" seldom, if ever, migrate, thus proving that there is no difficulty for a Czech to make a living in areas where German unemployment is so widespread.

It will thus be seen that the distress and poverty of the Sudeten Germans is not mainly due to economic causes, but to political and therefore removable ones. The position is due to deliberate expropriation and oppression, aimed at the accentuation of the effects of the world economic crisis on Sudeten German industry. In a letter to The Times on July 15th last Lord Noel-Buxton wrote of the "genuine grievance of the Germans" in Czecho-Slovakia, which, he went on, "is perhaps most easily realized if we compare Czecho-Slovakia with Ireland. If we had lost the war, and Germany had created an independent Republic in the whole of Ireland, we should, of course, have sympathized profoundly with the Northern Irish, and when we became strong enough to press the claim we should have demanded that at least autonomy be given to Ulster. Mere promises of a revision of the settlement would after twenty years, sound quite hollow.... It would have been a question of how long we were willing to wait for revision, and after twenty years we should probably have used the threat of force."

Referring to Germany, Lord Noel-Buxton added that "aggressive intention has not been proved as [65] yet." He goes on - " The grant of adequate autonomy to the Sudeten districts is clearly indicated," and warns his readers that "the Czech Ministers may have to face the opposition of the reckless elements in the Czech electorate." He also emphasized that the Germans had "protested in 1919 against being placed under alien rule," and that "the British Labour Party strongly supported their protest" at the time. This letter was the subject of The Times leader on the same date. Since 1919 complaints on the part of the Sudetens have grown from year to year.

The Czech reply to all complaints by the various minorities is that the new State is still undergoing formation and change and that this cannot be accomplished without hardships. Since the new State has now been a political entity for nearly twenty years it would seem that this explanation hardly covers the facts.

Czecho-Slovakia Within