55 Law IV of 1805.
56 Most of this came from the Danubian Provinces, which were normally able to under-sell the Hungarian producers owing to their even lower costs of production.
57 A useful account of the British loans and subsidies is given in G. Otruba, Englands Finanzhilfe für Oe. in den Koalitionskriegen, etc. (Oe. in Gesch. und Literatur, Vienna, 1960, pp. 84 ff.). By the end of the First Coalition War, Austria’s foreign indebtedness was about 116 m.g., one fifth of the total State debt. See also K. F. Helleiner, The Imperial Loans (Oxford, 1965).
58 Some of his financial experts, on the other hand, thought ‘low taxation harmful to the people, since it opens the door to idleness, and effort slackens off’ (Beer, Finanzen, p. 9).
59 Some money was also brought in by debasing the silver and copper currencies, the former by fifty per cent.
60 For an account of them see Beer, op. cit., pp. 9–11.
61 The soldiers were comparatively little affected, since they received free quarters and rations and certain other allowances in kind.
62 These dismissals had taken place before the conclusion of peace; Colloredo had gone on 28 November 1805, and Cobenzl on 26 December.
63 Hormayr, Lebensbilder, cit. Rössler, Oesterreichs Kampf, I. 192.
64 Hantsch, Geschichte, II. 279.
65 The plan had been broached in 1796, but rejected by Francis on the advice of Colleredo who had thought it calculated ‘literally to overthrow the throne’. In 1797 it had, after all, been introduced, but too late to develop beyond rudiments. There appear to have been two special considerations which now altered the Emperor’s mind. One was that of economy: the Landwehr would cost much less than the equivalent number of regular troops. The other was the shock produced on his mind by Napoleon’s dethroning of the King of Spain.
66 Francis had originally wanted to promulgate an uniform Ratio for all his dominions, but Joseph had persuaded him that Hungary must be treated separately. Francis had then insisted that the Austrian reorganization must be taken first, and had turned to the Hungarian only after the Austrian had been completed.
67 His motive, however, seems to have been chiefly to ensure a supply of literate N.G.O.s for the Army.
68 See Beer, op. cit., pp. 14 ff.
69 It was calculated that only one man in 130 was serving with the colours in Hungary, compared with one in 70 in the ‘conscribed Hereditary Lands’. The number of Hungarians serving with the colours had been reduced again after the war of 1805 to 35,000 ‘in order not to withdraw too many hands from agriculture’.
70 The excise duty on salt, the ‘Jew tax’, postal charges and certain customs dues.
71 The requests were that Magyar should be taught, with the help of the pupil’s mother tongue, in all elementary schools, and after ten years no pupil ignorant of Magyar should be admitted to a gymnasium, and that all teaching in gymnasia (except in philosophy and theology) should be only in Magyar. Magyar was to be taught as a subject also in Greek Catholic and Greek Orthodox schools.
72 In Hungary the insurrectio was to be the counterpart of the Landwehr. It was thought unsafe to introduce the system into Galicia; there a larger number of men were enrolled as reservists.
73 The request for the introduction of Magyar had been flatly rejected.
74 Maria Theresa had died on 13 April 1807, of the effects of a premature confinement.
75 Gentz had been in Austrian service since July 1802 but it was only now that he was given a free rein as publicist.
76 On this occasion his Chief of General Staff, Count Wimpffen, was commanding the Austrian armies. It is thought that Charles may have been suffering from one of the epileptic fits to which he was subject. This may be the explanation also for his failure to follow up his victory at Aspern.
77 On this see M.K.P. III. 26 ff.
78 Id. p. 35.
79 This was, indeed, largely owing to his own attitude. He was invited to command the Austrian army supporting Napoleon in 1812, but refused. After this he was put again under strict surveillance. He was made Governor of Mainz in 1815, but not offered any important post until 1830, when he was invited to lead the crusade against revolution, but declined. His name was mentioned in other connections also in that year, but nothing came of plans to instal him on the throne of Belgium, or of Poland. After Francis’s death he offered to take over the army again, but the Staatskonferenz found a pretext to refuse the offer.
80 This was in the spring of 1813, when a little group of Tiroleans concocted an odd plan for raising the men of the Alps, from Switzerland to Istria, in a people’s war against Napoleon. Britain gave some money, and was to have sent naval units to help. One of the principals betrayed the plan to Metternich, alleging that John (who had been privy to the plan) was to marry a Russian Grand Duchess and have himself proclaimed King of ‘Rhaetia’. This was probably entirely untrue, but John was banished from the Tirol and from the Court. He was, indeed, entrusted with various relatively unimportant duties, but played no further major part in national affairs until after Francis’s death. The other leading conspirators were arrested, but released after Napoleon’s fall.
81 He was suspected of aspiring to the throne of Hungary, and of a liaison with the Empress. Metternich himself intercepted letters from Joseph to Maria Ludovica, and read them out to Francis, but this time Francis seems to have dug his heels in.
82 See his letter to the Countess of Lieven, written in 1819 (Lettres du Prince de Metternich à la Comtesse de Lieven, pp. 180–1).
‘Tout ici’, runs this devastating document, ‘est bon; je ne connais pas un fait basé sur un principe ou faux en lui-même ou condemnable. C’est le régime qui, au monde, respecte le plus tous les droits et guarantie le plus toutes les libertés … Notre pays, ou plutôt nos pays, sont les plus tranquils, pareeque ils jouissent sans révolutions antérieures de la plupart des bienfaits qui incontestablement ressortent de la cendre des empires bouleversés par les tourmentes politiques. Notre peuple ne conçoit pas pourquoi il aurait besoin se livrer à des mouvements, quand, dans le repos, il jouit de ce que le mouvement a procuré aux autres. La liberté individuelle est complète, l’égalité de toutes les classes de la société devant la loi est parfaite, toutes portent les mêmes charges; il existe de titres, mais point de privilèges.’
83 ‘What I want’, Metternich’s confidence to his mistress goes on, ‘is always what he wants to do. He is convinced of this.’ Even here, however, he confessed to a Russian General in 1829: ‘If he’ (sc, Francis) ‘heaps favours on me, it is because I go the way which he prescribes to me, and if I were so unlucky as to stray from it, Prince Metternich would not remain Foreign Minister for twenty-four hours.’
84 Napoleon had, indeed, hinted at his wishes before Metternich actually made the proposal.
85 Beer, op. cit., p. 45.
86 It was published at 5 a.m. on 15 March. It was not the ipse dixit of Wallis as which it is represented by Springer and other older historians. It had been preceded by prolonged discussion in high places, and constituted only a variant of many similar proposals. See Beer, op. cit., pp. 70 ff. Beer’s opinion of Wallis is higher, and perhaps juster, than that of the older writers.
87 The measure did not apply to debts already settled.
88 Whereas at the end of 1810, 63,218 persons had been employed in the factories and artisans’ workshops of Lower Austria, the figure two years later was only 42,247. In Bohemia the fall in the number of employed persons was 69,144.
89 So the historian Springer wrote, in a work published in 1863:
‘To this day the memory of the Finance Patent of 1811 remains more rooted in the memory of the people than that of any other historic event, and constitutes for it the most important event in the modern history of Austria … Its consequences are still visible, its connection with later facts and conditions undeniable’ (Geschichte, I. 143).
As we shall see, it was the fear of a renewal of inflation that triggered off the revolutions in Vi
enna and Hungary in 1848.
90 A considerable proportion of the members of the Diet were landowners who had been borrowing extensively and now found the weight of their indebtedness suddenly increased.
91 Because they represented the ‘anticipated’ revenue from the land tax for the next twelve years.
92 There were seven secret issues.
93 Wallis had resigned when the Government began issuing Anticipationsscheine.
94 Beer, op. cit., p. 85.
5
The System at its Zenith (1815–30)
But Austria’s fortunes were on the upgrade at last. When peace returned to her in 1815, it was with a different countenance from that which she had shown on her fleeting visits of earlier years. At the famous Conference, which was held in Vienna, the Emperor Francis acting as host, Metternich, on his home ground, largely dominated the play. Under the final Treaty of Paris, signed on 20 November 1815, Austria emerged with all the territory which she had lost since 1792 except the Netherlands and the Vorlande, and almost all the acquisitions made by her at any time since that date, except some of her more transitory gains under the Third Partition of Poland; and even here she had retained a right of co-supervision over Cracow, now a Free City. She dominated Italy through her own possessions of Lombardy and Venetia, through family connections (the secundo and tertio-genitures in Tuscany and Modena had been restored, and Marie Louise given Parma, Piacenza and Guastalla for life) and through her influence over the remaining Courts. The latest solution of the German problem – the constitution of the German Bund as a federation of thirty-five ‘sovereign princes’ and four Free Cities, under Austrian Presidency – probably gave the Emperor of Austria more influence in Germany than the Holy Roman Emperor had enjoyed for many generations. Austria, Britain, Russia and Prussia were jointly pledged to maintain the peace settlement, while every King in Europe (except our poor George, who was under tutelage) had signed a solemn declaration pledging himself to a Christian union of charity, peace and love. The three first signatories to this document had been its spiritual father, Alexander I of Russia, Francis, and Frederick William III of Prussia, and Metternich (who held, indeed, a realistic enough view of the declaration as such) believed that he had his Monarch’s two partners well in hand. In short, he flattered himself that the Concert of Europe was firmly established and playing well in tune, with himself as its conductor, or leader.
Finally, Austria was booked to receive an indemnity (of 150 million francs), an agreeable change from the obligation of paying one with which she had grown accustomed to ending her wars; and instead of having to support a foreign army on her soil, she was keeping 30,000 men on the soil of France.
Many Austrian writers of later decades have thought that Metternich did not choose his prizes wisely; that instead of spending so much effort on securing territory and spheres of influence in Italy, which in the event cost her blood and money and had to be relinquished, ignominiously enough, after only a few decades,1 he would have done better to recover for Austria the titular leadership of Germany – Francis could have had the revived Imperial Crown for the taking if he had been willing to reassume the responsibility – and to recover and extend the Vorlande, thus securing for the Dynasty a solid German Hausmacht. The Archduke John, while also doubting the wisdom of Austria’s acquisitions in Italy, thought that she ought to have expanded into the Balkans and the Danubian Principalities. Either of these alternative courses might perhaps have served Austria better than that which she chose, although it must be remarked that either would have brought with it its own problems, which might have been, each in its different way, as intractable as those which actually occupied her during the next decades. But at least, on Metternich’s own premises, he could (as he did) flatter himself that he had been highly successful. So much was sure, that the outward glory of Austria was shining more brilliantly than it had done for many a long year.
Against this there had, indeed, to be set the extreme financial chaos and economic distress to which the preceding twenty-five years had reduced the Monarchy. The situation of the currency has been described; further, the last campaign (for which Austria had undertaken to provision a large part of the armies of her allies, as well as her own) had almost exhausted her stocks, and then 1815 was a year of rain and floods, followed by a bad harvest; while the Congress of Vienna had ‘danced’,2 at the expense of the city, prices had risen fantastically. The harvest of 1816 was a complete failure, and in many parts of the Monarchy there was literal famine. People were eating grass, clover and maize-stalks, and perishing in their hordes of starvation and its attendant diseases. In fat Hungary itself, 18,000 persons perished of starvation in 1816–17 in Arad, and 26,000 in Szatmár, Krassó Bihár and Bereg.3 Conditions were as bad in Silesia and Friule. It could, however, be hoped that if the peace proved enduring, this last heritage of the unhappy past would itself become a memory.
In fact, the next decade saw a recovery even in these fields, but it was slow, painful and incomplete. The one evil which was really remedied was the inflation. In 1814 Stadion had been put in charge of the national finances,4 and in 1817, after an earlier, more ambitious, plan had foundered on the rocks of public mistrust,5 he succeeded in bringing into definitive being a ‘Privileged National Bank’, which was established with the help of private capital and remained a non-Governmental body (a Government Commissioner sat on its board, but had only an advisory voice). The main long-term function of this institution was to act as banker to the State, but it was empowered to issue its own notes, for which, on foundation, it exchanged the Anticipations-and Einlösungsscheine at the rate of 250, i.e., somewhat higher than that which had prevailed in the previous year. The Government succeeded in holding the exchange at that rate; the Bank’s notes gradually replaced the old paper money, and the Government was able to use them, and metal, which now began to reappear, interchangeably, and even, in 1820, to resume the full nominal payment on its own debt – a measure which raised its credit, although it met with a mixed reception from the public, since it was argued that most of the original buyers of the papers had sold them, so that the profits were going to speculators.
Stadion’s operation, however, meant in effect the repudiation by the State of another twelve shillings in the pound of its obligations, for the owner of 250 gulden Wiener Währung could exchange them only against one hundred gulden Conventionsmünzen, although they had been issued with a solemn promise that their full value would be maintained. Moreover, the inauguration of this severely deflationary monetary policy, which created a catastrophic shortage of money (and private credit, at that stage, hardly existed), coincided with the opening of a prolonged and severe economic crisis of markets. A series of good harvests following the appalling ones of 1815 and 1816 brought about a local abundance of commodities of prime necessity. On the other hand, the conclusion of peace and the ending of the Continental blockade were followed by the reappearance of Odessa wheat on the agricultural market,6 and of English manufactures on the industrial. The price of Hungarian wheat, which had risen to 143 groschen per Pozsony bushel in 1806, 152 in 1809, 158 in 1814, 513 in 1816, 413 in 1817, fell to 149 in 1818 and to 75 and even 60 in the 1820s; even in the 1830s it rarely rose above 100. The same fate overtook the Galician wheatgrowers, who complained in 1817 that the price of their produce had fallen by two-thirds and that their export trade had dried up altogether. The smaller owners in the Western Lands, many of whom were heavily indebted, found it impossible to meet their obligations. According to one writer:
In many villages hardly one owner in ten could keep his head above water. Peasant holdings which had cost 4,000 gulden Wiener Währung three years earlier could now often be had for 200 gulden Conventionsmünzen. Perhaps half the smaller landowners and one in ten of the bigger were ruined.7
Manufacture suffered as heavily when Britain began throwing her accumulated stocks on the Continental market, often at dumping prices. The industries which had been built up in answer to the Co
ntinental blockade – in particular, textiles, small metal objects such as buttons, buckles, etc., and sugar – were the worst sufferers. In 1818 the production of cloth in Reichenberg was barely half what it had been five years earlier; in some other centres, only one-third. Conditions in the Moravian wool industry were similar; out of twenty-three enterprises in Brünn, only seven survived the crisis. There were also many bankruptcies in Lower Austria. Broadly speaking, it was only the larger enterprises, which were able to import the new machines, and now began to do so,8 which escaped disaster. Many workers were thrown on the streets.
Things would have been worse still but for the inclusion of Lombardy-Venetia in the Austrian customs unit ordered by Francis in 1817. The population of these Lands, in which silver currency still circulated officially, provided a certain market for the Austrian industries, but the effect of this became really perceptible only after some years.9
A semi-autonomous Kommerzdirektorium, established, on Metternich’s initiative, in 1816, to act as a sort of economic planning centre, with executive powers, did some useful work, particularly in securing the abolition of the remaining internal tariffs, and it laid the foundations for the later reforms in Austria’s industrial legislation, but its director, the Prussian Freiherr von Stahl, could not get on with his Austrian colleagues, and the office was wound up in 1824. In any case, most of his proposals had foundered on Francis’s antipathy to innovations. Official policy on industrial questions was practically confined to taking decisions for or against encouraging, or allowing, ‘factories’ to compete against the guilds,10 and on this point, it changed repeatedly: the ban on granting new licences was reimposed in 1822, lifted again in 1827, imposed again in 1831. The effects of the continued protection enjoyed by the guilds was, incidentally, far from healthy for themselves; their fossilization grew even more pronounced.
The Habsburg Empire (1790-1918) Page 32