CZECHOSLOVAKIA: Robbery by Decree

• Share

Having robbed the people of their freedom, Czechoslovakia's Communists last week got on with the job of robbing them of their money. The operation was neatly done—in three stages. First, Radio Prague boomed: "All state loans after 1945 and securities issued after 1945 are declared worthless." This meant that workers forced to put their savings into the Czech version of "E" bonds now hold worthless paper, a total of about $1,152,000,000.

The second stage was to raise prices. This is the way it was done: the money was revalued at the rate of five old crowns for one new; henceforth, a worker who had received 5,000 crowns monthly would get only 1,000, a cut of 80%. Prices were also cut, but only 31%; this meant that real wages dropped almost 70%.

Third stage was to wipe out savings accounts and under-the-mattress hoardings. The Reds did this by decreeing that all the old crowns had to be exchanged at a rate ranging from 50 to 1 down to 5 to 1. The wealthiest Czechs with the largest holdings would receive the least in return; only small savings accounts of 5,000 crowns ($100) or less would be exchanged at the 5 to 1 rate. Result: to deprive workers and peasants of their earnings, force them to work harder to stay alive in the proletarian paradise.