Economic Chaos in Austria
Under the League of Nations, Austria's independence became a condition for large loans to overcome the worst post-war depression in Europe. Because Austria faced difficulties with manufacturing, transporting, and marketing goods, unemployment and labor unrest increased. In addition, the new national borders separated industries from natural resources, railroads, and shipping lanes. Moreover, the new states created from the former empire charged tariffs on Austrian goods. Thus, these factors and war reparations required by the Treaty of St. Germaine, caused inflation. Unlike Germany, Austria paid reparations in the form of having most of its territories taken away and the empire being dissolved. Because Austria was left with its industries idle, the unemployment ranks increased day by day. As a resolution to this problem, the Austrian government started to print money to provide relief for the citizens. The Austrian Krone began to decrease in value and by the summer of 1922 was worth about 1/2,000th of its pre-war value. Thus, the economy of Austria began to destabilize also contributing to its failure as a democracy.
©Navdeep Kaur |