Prager Tagblatt
- A Hundred Million Schillings.
- Udržal on the Gajda Case.
- Sabotage?
The Prague German-language daily of 27 October 1926 covered two scandals in neighbouring states and ran a leading article on Franco-German relations. On the collapsed Zentralbank, it reported that after a long debate Hofrat Stern concluded the bank's share takeover had lacked every safeguard, that the Bauernbank and Steirerbank deals had booked future profits and interest gains in advance, and that things would have gone differently had Wutte and the other major shareholders met their obligations. On the Gajda case, it carried Udržal's charge that the general had spurned the military administration's good intentions and leaked the affair irresponsibly, together with his explanation that betraying French secrets was not punishable under Czechoslovak law. An editorial signed LG., headed 'Sabotage?', opened by arguing that the rush to embrace the idea of Thoiry showed Europe now understood that its fate rested on relations between Germany and France.
Translation
A Hundred Million Schillings.
After a lengthy debate, Hofrat Stern summed up that every safety factor had been lacking in the Zentralbank's takeover of the shares. In the transaction with the Bauernbank, he said, the unsound idea of anticipating future profits had been put into practice. This was the same impropriety as in the case of the Steirerbank, which, on accepting the 20-billion credit from the Postsparkassa, had anticipated the hoped-for interest gains from it. These are great financial errors, which of course only come to light once a misfortune has occurred. Had Wutte and the other major shareholders fulfilled their obligations, the situation would have been different.
Udržal on the Gajda Case.
The good intentions of the military administration, however, were not acknowledged by General Gajda, and the whole affair was thrown to the public as prey by devious routes and in an irresponsible manner. The commission first examined whether the accusations brought forward provided grounds for criminal proceedings. Liable to criminal prosecution is anyone who betrays to a foreign power something that is to be kept secret for the protection of the Czechoslovak Republic. The French Republic enjoys no such protection under our laws.
Sabotage?
October. The tremendous zeal with which everyone who has a word, or even a little word, to say in the world of politics, business and the press, and indeed in the realm of the arts and sciences, threw themselves upon the idea of a German-French understanding, upon the idea of Thoiry, proves best how ripe Europe has become for the recognition that, however worthy of respect every kind of peace effort may be, the fate of the continent will in the end always be determined by the nature of the relations between its two leading nations.
Context
Why a Prague paper followed a Viennese bank's fall
The Zentralbank, whose affairs the paper reported under the headline 'A Hundred Million Schillings', had Bohemian roots. It was founded in Prague in 1901 as the central institution of the German savings banks and only later moved its head office to Vienna. After the First World War it lost a large part of its business when its branches, now lying in Czechoslovakia, were cut off. That history helps explain why a German-language Prague daily treated the Viennese collapse as news for its own readers. The debate reported here took place against the background of an inquiry committee, set up because, once the bank's difficulties became known, the Austrian government had issued a guarantee for the bank that had no legal basis and could not be honoured.
Wutte's shareholder group and the forced takeovers
Stern's closing sentence, that the situation would have been different had Wutte and the other major shareholders met their obligations, matches what the later record shows: a group led by the Graz industrialist Viktor Wutte gained the majority of the bank's shares without paying the required purchase price. The Bauernbank and Steirerbank transactions Stern criticised were part of a wider series of rescues. From 1924 the Zentralbank had to take over the Industrie- und Handelsbank, the Steirerbank and the Lower Austrian Bauernbank under government pressure, although these banks were largely ripe for bankruptcy. Stern's charge that future profits and hoped-for interest income were booked in advance therefore describes how failing banks were absorbed by an institution whose controlling shareholders had not paid for their shares. As the paper reports him, Stern put the weight of blame on the shareholders, while the city history also names government pressure as a cause.
What Gajda was accused of, and why French secrets mattered
Udržal's remark that the French Republic enjoys no protection under Czechoslovak law makes sense against the substance of the charges. President Masaryk had placed Gajda on medical leave on 2 July 1926 and ordered an investigation into his activities. The central accusation, which a military tribunal upheld in December 1926, a few weeks after this issue, was that Gajda had passed secret French war plans to a Soviet agent six years earlier. Because the secrets in question were French rather than Czechoslovak, the commission had to ask whether betraying them was a crime at all, and Udržal's statement as reported points to the answer that it was not. Historians have since questioned the evidence. The Soviet Union, seeking to settle an old score, secretly fed the Czechoslovak government fabricated information that made Gajda look like a Soviet agent, and declassified French correspondence shows French officials doubted he could even have had access to such plans in 1920.
Gajda, the French military mission and the dispute over publicity
The French dimension had a history in Gajda's own career. On 1 December 1924 he was named deputy chief of the General Staff under General Eugène Mittelhauser, head of the French military mission in Czechoslovakia, and in that post he worked successfully to limit the mission's influence; the mission was brought to an end in 1926. On 20 March 1926 he became acting chief of the General Staff. Udržal's complaint that Gajda refused the military administration's good intentions and threw the affair to the public by devious routes is the government side's account. Military regulations at the time prevented Gajda from issuing statements to the media of his own accord, a constraint worth bearing in mind when reading the minister's charge that the affair reached the public by devious routes.
What Thoiry promised and how it was cut back
The idea of Thoiry that the editorial says everyone rushed to embrace came from a meeting in September 1926. During the ceremonies marking Germany's admission to the League of Nations, the foreign ministers Aristide Briand and Gustav Stresemann met in the French village of Thoiry. There Stresemann pledged material support to stabilise the franc, while Briand agreed to an early return of the Saar Basin to Germany. The scope of the Thoiry resolutions was soon reduced because of objections from the German and French governments themselves, and scholars often regard the meeting as both the peak and the end point of the Locarno policy. The paper's editorial, with its question 'Sabotage?', appeared in late October, while that retreat was under way; its opening sentence asserts that Europe had recognised Franco-German relations as decisive, which is the paper's argument rather than an established outcome.
Original
Hundert Millionen Schilling.
Nach längerer Debatte resumierte Hofrat Stern, daß bei der Aktienübernahme der Zentralbank jeder Sicherheitsfaktor gefehlt habe. Es sei bei der Transaktion mit der Bauernbank der unsolide Gedanke durchgeführt worden, daß künftige Gewinne antizipiert wurden. Es sei dies dieselbe Inkorrektheit, wie bei der Steirerbank, die bei der Annahme des 20 Milliardenkredites der Postsparkassa die erhofften bezüglichen Zinsgewinne antizipiert hat. Das sind große finanzielle Fehler, die freilich erst dann ans Tageslicht kommen, wenn ein Unglück geschehen ist. Hätten Wutte und die anderen Großaktionäre ihre Verpflichtungen erfüllt, dann wäre die Situation anders gewesen.
Udržal über den Fall Gajda.
Die guten Absichten der Militärverwaltung wurden aber von General Gajda nicht anerkannt und die ganze Affäre auf Schleichwegen und in unverantwortlicher Weise der Oeffentlichkeit als Beute hingeworfen. Die Kommission prüfte zunächst, ob die vorgebrachten Beschuldigungen die Unterlagen für ein strafgerichtliches Verfahren bieten. Strafgerichtlich verfolgbar ist derjenige, der einer fremden Macht etwas verrät, was zum Schutz der Tschechoslowakischen Republik geheimgehalten werden soll. Die französische Republik genießt in unseren Gesetzen einen solchen Schutz nicht.
Sabotage?
Oktober Der gewaltige Eifer, mit dem alles, was in der Welt der Politik, Wirtschaft, Presse, ja auch im Reiche der Künste und Wissenschaften ein Wort oder Wörtchen mitzureden hat, sich auf den Gedanken eines deutsch-französischen Einvernehmens, auf den Gedanken von Thoiry warf, beweist am besten, wie reif Europa für die Erkenntnis geworden ist, daß, wie achtenswert auch jederlei Friedensbemühung sein mag, das Schicksal des Kontinents zuletzt immer durch die Art der Beziehungen zwischen seinen beiden führenden Nationen bestimmt sein wird.