HUNGARY'S WORST YEAR
NEAR TO A FINANCIAL CRISIS. Mr. W. G; Max Muller, the" British Consul-General at Budapest, in a report on the trade and commerce of Hungary for 1913, published in London at the eiid of July, states that the year was from the economic point of view : one of tie worst which that country has experienced for the past thirty years. Everything suffered from 1 the Balkan wars—finance, commerce, and industry. ■The steady .rise in the. rate of interest charged by the banks ; the consequent diminution of confidence in 'business circles, aud the cessation of the supply of money' from abtoad came near to causing a disastrous' financial crisis. Austria-Hungary' was obliged by the events ■in the Balkans to resort to measures of defence,; which countries further' removed from the scene of the conflagration were able-,to dispense with. The mobilisation entailed not only an expenditure of ! many millions, but also the withdrawal from productive work of many thousands of able-bodied men. The closest commercial connection usually exists between Hungary and the Balkan States, and the war naturally had a very adverse effect on trade in this direction; indeed, tho unfavourable returns-of the Stato railways may bp ascribed principally to the cessation of the transit trade to the Balkans, heavyfall in the prices of Government, municipal, and other bonds and shares, the, low dividends returned by commercial and other undertakings, and the high interest charged for loans all combined to produce general financial depression throughout the country. The fall in the price of the Government Bonds made it increasingly difficult to issue new Government Bonds, and caused delay in tho execution of public works, which are here one of the chief means of providing employment for naindustry and labour. The impossibility of obtaining advances on mortgage from the banks except at prohibitive rates proved a serious hindrance to tho hitherto flourishing building trade. It is difficult to form an accurate estimate of the loss suffered by Hungarian trade and industry owing to the prevalence of 6uch a high rate of interest throughout the year, but it has been calculated that, taking the total amount advaucedby the banks on bills, securi-
ties, and current accounts at £189,833,333, and the average rate of interest oharged by the banks during 1913 at 15- per cent, higher than - in normal times, this would mean an increaso in the amount of interest paid of £2,847,500, which sum may bo said to be deducted from the incomes of the oarning classes. Tho bankruptcy of several smaller banks, especially in the provinces, contributed still further to aifcct credit. Groat loss was also occasioned by extensive floods in Transylvania.
The year 1913 has been a bad year for Hungary, but Hungarian credit has passed successfully through this period of economic stress. It must bo borne in mind-that Hungary is primarily an agricultural country, in which tho annual national revenue from agriculture alone amounts to about £230,000,000. Should the present upward trencl in'the money market be maintained and should" the blessings of peace and a good harvest be granted to the country, there is no reason why it should not soon recover from the effects of the financial crisis of the past year. It is satisfactory to note the steady if small increase in tho importation of British goods into Hungary, and the Consul-General adds, that it is of little use for commercial travellers only knowing English to try to do business in that country. According to tho last census there are 361 British subjects in Budapest. The British population consists almost exclusively of governesses and teachers. Many theatrical artists also como and go, so that the British community is largely a floating oue. The total British population iu Hungary is stated to be 1012.
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Dominion, Volume 7, Issue 2251, 10 September 1914, Page 6
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627HUNGARY'S WORST YEAR Dominion, Volume 7, Issue 2251, 10 September 1914, Page 6
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