The Habsburg Empire (1790-1918)

by C A Macartney

  (a) That the citizens of Hungary, of every tongue, form politically only a single nation, the unitary and indivisible Hungarian nation, corresponding to the historical conception of the Hungarian State.

  (b) That all peoples living in the country, to wit, the Magyar, Slav, Roumanian, German, Serb, Russian, etc., are to be regarded as nationalities equal in rights, whose separate national claims can be made good freely within the limits of the country’s political unity, on a basis of freedom of the individual and of association, without any further restriction.

  The draft law laid down that the language used by the State authorities and that of Parliament and the University (Hungary at that time possessed only one) was to be Magyar, but every Ministry had to contain officials of non-Magyar nationality able to deal with papers in other languages coming up to it, and the University must contain Chairs of the non-Magyar languages and literatures. The use of any language on lower levels was left to the choice of those concerned, but County and communal officials must always deal with members of the public in the language (if locally current) in which they were addressed. Every citizen was entitled to use his own language in communications to the State or local authorities. Churches were free to conduct their own affairs and to choose their own language of business and the language of instruction in the schools maintained by them, including secondary and higher schools, which every denomination and nationality was free to erect, and each was equally entitled to claim assistance if it could not meet its own church or educational expenses. The Ministry of Education prescribed the language of instruction in State schools, but must take into account the language spoken in the district where such a school was founded. Finally, the draft ‘emphasised the maintenance in their full substance’ of the Laws guaranteeing the rights of the Protestant and Orthodox Churches.

  As we have said, the Diet had no time to do more than give general approval to this report, but it may be mentioned that neither the Slovaks nor the Serbs were satisfied with it. The Slovaks sent another deputation to Vienna to ask for an independent Slovak territory (advance proof that their later dissatisfaction was not, as is so often alleged, simply with the failure of the Hungarian authorities to apply the 1868 Law – although failure there was – but with the Law itself). They got no political satisfaction, but were allowed to found a Cultural Association (Matica) and two Protestant and one Catholic gymnasia. The Ministerial Council could not decide what to do about the Serbs, and ended by adjourning consideration of the problem.

  *

  Schmerling himself had not thought that Hungary would accept the Patent at once: he had even expected her to answer by a revolt which would have to be put down by force.87 But he had been confident that she would end by toeing the line – ‘We can wait’, he had said – and meanwhile, the business of the Monarchy could and should be conducted without her. The Reichsrat in Vienna had, in fact, started with some pieces of useful work. It had elicited from Francis Joseph – only, indeed, with extreme difficulty, and by threatening not to pass the accounts – a declaration that the Ministers were to regard themselves as responsible also to the Reichsrat for the maintenance of the Constitution and the exact execution of the laws88 and secured recognition of the principle of the immunity of its own members.89 It had re-regulated, this time in satisfactory fashion, the position of the Protestants, who now received full equality before the law and acceptance of most of their other wishes,90 and had enacted another Communal Autonomy Law, almost identical with that of 1849, which left the communes complete autonomy in their own spheres of action, subjecting them to State control only when they were acting as executants of central legislation. It had spoken up in favour of the separation of the executive from the judiciary, and in December 1862 had secured the establishment of a Permanent Committee, drawn from both houses, to control the State debt.

  Then, however, it had run into trouble. A premature assault by Mühlfeld on the Concordat had made the German Clericals declared enemies of their Liberal fellow-countrymen. The Poles withdrew in dudgeon when martial law was proclaimed in Galicia, in connection with the 1863 revolution in Russian Poland.91 The Czech Deputies, up to 1863, adopted the tactics of regularly objecting to the competence of the Reichsrat to legislate on Pan-Monarchic questions, on the ground that, in the absence of any representatives from the Hungarian Lands, those present were in fact only the ‘Narrower Reichsrat’. On 17 June 1863, after first Clam-Martinic, then Rieger himself, had been treated with gross discourtesy by the President of the House and the German majority, Rieger withdrew his followers from it altogether.92 The German Left, which should have been the Government’s chief prop, spent their time largely in attacking it, in language often more bitter than that used by the Opposition itself, for its loyalty to the Concordat, its failure to secure civil liberties and its inability to cut budgetary expenditure to the limits of such revenue as they were willing to see raised.

  Schmerling himself was perhaps more of a Josephinian than a true Liberal, at least in the anti-clerical implications of the term, and if he had felt differently, his hands would have been tied by the Emperor. He was, moreover, sensitive and impatient of opposition (he once told a friend that he was ‘by nature a soldier’). He came more and more to govern by the methods of Bach, forcing essential legislation through by the threat of the application of the emergency clause, Para. 13, and over-riding or stifling opposition. A new Press Law, enacted in December 1862, while purporting to eliminate abuses in its predecessor of 1852, was in certain respects still more severe, and was very strictly applied.

  Schmerling tried to organize reliable support for himself in the Reichsrat, and in September 1863 persuaded the majority of the Great Austrians and Unionists to fuse in a new ‘Club of the Left’ to act as a Government Party, but they were none too disciplined, while those Liberals who refused to join the Club (the Autonomists and the Constitutional Landowners, who now formed their own Club, which called itself the ‘Left Centre’) were more hostile still.

  Finance remained the great problem. Plener set himself two objectives: to put the Austrian currency back on parity, and keep it there; and to balance the budget. He made considerable progress towards the former end. After the public had so signally failed to subscribe to the 1860 loan, he persuaded the Rothschilds to under-write part of it,94 and the National Bank to take over most of the remainder, making for the purpose a new issue of five gulden notes. Then in 1862 the Bank was given a new Statute, running until 1876, which definitively established its independence, while the State’s debt to the Bank, now totalling 221·8 m.g., was to be repaid, out of a variety of sources, by the end of 1866. During this time the Bank’s note issue was to be reduced to a maximum of 347·4 m.g., while the silver reserve would have risen to 147·4 m.g. The premium on silver sank to 117 in 1862 and 110 in 1863, and the balance of trade became strongly active.95

  But the budget remained obstinately passive. The deficit was 110 m.g. in 1861, 94 in 1862, 62.5 in 1863, 93 in 1864.96 It was still necessary to borrow, and the State debt had risen by the end of 1864 to 2,500 m.g., not counting 500 m.g. due to landlords expropriated under the land reform, and the service on it, to 113 m.g., forty per cent of the nett national revenue. The estimates for 1865 foresaw a nominal deficit of only 8 m.g., but Plener asked for a credit of 11 m.g. to help repay the debt to the Bank.

  And the approach to balance, such as it had been, had been achieved almost exclusively by cutting expenditure. Voices were sometimes raised, Schmerling’s among them, that the better policy would be to increase the national wealth by productive investment, improvement of communications, etc. Plener maintained that Austria’s credit would stand no more than the minimum of borrowing necessary to square accounts with the Bank. He insisted on a rigidly deflationary policy, which produced an acute monetary shortage, and this caused widespread difficulties in industry and agriculture, these aggravated in the latter field by a series of bad harvests. In Carniola alone there were 26,000 distraints for non-payment of t
axes in the one year 1865. The difficulties of the peasants were debated at length in every Landtag, although opinions on the advisability of de-restricting the sale or subdivision of peasant holdings were sharply divided. Industry was hit by the shrinking market, and some branches of it, by special circumstances; the American Civil War drove up the price of imported cotton by five hundred per cent, and at one time, 300,000 of the 350,000 operatives in the industry were unemployed.

  A law passed in 1865, in an attempt to attract foreign capital, allowing any foreign enterprise, except an insurance company, to establish branches in the Monarchy, had had little immediate effect, the capitalists being too mistrustful of the Monarchy. An Anglo-Austrian Bank (regarded by Rothschild as ‘a personal declaration of war’ on himself) had, indeed, been founded in 1863.

  The Liberals of the Reichsrat saw in the financial stringency all the more reason to leave what money there was to fructify in the pockets of the taxpayer, and combined with their representatives in the Government, as whom we may count Plener and, up to a point, Schmerling, in insisting on the cutting of Government expenditure, as the only remedy; and faithful to their creed, they concentrated their attacks on the defence estimates. Plener, as Finance Minister, waged a stubborn war against the men responsible for the defence of the Monarchy.97 As we saw, it had been his veto which prevented Austria from making even the motions of intervening in Italy in 1860: when, in June of that year, the Archduke Wilhelm protested that it was impossible to ‘maintain’ the essential defences of the Monarchy with the sums allowed in Plener’s estimates, Plener replied that ‘he could give the army only what he could spare after covering other expenditure’.98 The estimates to which he did agree then came before a Reichsrat Committee headed by Giskra (the same man who afterwards admitted to having accepted a personal douceur of 100,000 fl. in connection with a railway contract), popularly known as the ‘Scrape Quartet’,99 which pared them further, and defence expenditure was in fact cut from 179 in 1860 and 1861 to 139 in 1862 and 118 in 1863, with its inevitable results for the army. Once again, units were left under strength, men being sent on leave, sometimes indefinitely, and the re-equipment of the army neglected. It was on grounds of forced economy alone that the Austrian army was not equipped with the breech-loading rifles which gave Prussia such an incalculable advantage in 1866, and this was only one instance of many. Francis Joseph had actually watched trials of the new breech-loader in April 1865, had convinced himself of its superiority, and on 20 January 1866 had given orders that the army should be equipped with it. But on 27 February the Minister of War had told him that owing to fresh cuts in the Budget there was money only for 1,840 new rifles.100

  Meanwhile, Prussia’s challenge to Austria’s leadership in Germany was growing ever bolder. The Nationalverein, founded to provide popular backing for the movement for the unification of a smaller Germany, under Prussian leadership and excluding Austria, was making rapid progress. In the summer of 1862 came the Franco-Prussian commercial treaty, the effect of which, when the consequential instruments had been agreed, was ‘to make definitive the economic divorce between Germany and the Monarchy’ – a consummation which was actually welcomed by Austria’s businessmen, on economic grounds, but most certainly constituted a big political gain for Prussia.102 On 27 September of the same year Bismarck became Prussian Foreign Minister.

  It should be emphasized that at this juncture, Francis Joseph was far from feeling defeatist; and with reason, for many of the smaller German States found the prospect of continued Austrian leadership – in practice, almost imperceptible – far less frightening than that of Prussian domination. His concessions to constitutionalism seemed to be having the desired effects, and to be worth pursuing. Thus a queer little interlude opened, very reminiscent of 1806. Black-red-gold flags were hoisted in Vienna; Press articles appeared on Austria’s and the Habsburgs’ German mission, the Archduke Charles’s statue in the Heldenplatz was inscribed ‘to the tenacious fighter for Germany’s honour’. Visiting parties from Germany were made welcome at congresses and festivities, and across the frontiers, Austria’s cause was popularized by a Reformverein, a counter-blast to the Nationalverein, called into being, interestingly, by the same Julius Fröbel who had come to Vienna from Frankfurt in October 1848 as an emissary of the German Left and had barely escaped with his life.

  It was Fröbel who was responsible for the idea of inviting the Princes of Germany to a Fürstentag at Frankfurt in August 1863.103 The avowed object was to revise the Constitution of the Bund (of course, in Austria’s favour), but it is probable that Francis Joseph hoped to be offered the Imperial Crown. But the Fürstentag proved the beginning and the end of the enterprise. The ceremony was gorgeous, but Bismarck had (although with great difficulty) persuaded his King to absent himself, and with Prussia absent, the Congress could do nothing but speechify. The same year the complicated diplomatic manoeuverings occasioned by the Polish revolt saw Russia closer to Prussia, and further from Austria, than before, and the autumn saw the beginning of the tedious Schleswig-Holstein imbroglio.

  In this, Austria and Prussia managed to act as partners, but all the real advantage, as well as a further access of prestige, went to Prussia, while Austria was left in charge of a province which she did not need and had only cost her money and blood which she did need. And it was the end of the partnership. By now Bismarck was ready to face a direct trial of strength with Austria, and Francis Joseph was beginning to glimpse the red light. Up to that date he had not only been hopeful of success in his German plans, but had genuinely believed that they could be achieved without serious objections from Prussia. As late as the spring of 1864 he had still regarded Napoleon III, whom he never liked,104 as the true common enemy of Austria and Prussia alike, and in the summer of the same year he could still write to his mother that ‘alliance’ (die Alliance) ‘with Prussia is the only right policy’.105 He complained of his partner’s ‘lack of principles and juvenile pranks’, yet ‘the relationship to Prussia is the keystone of our policy’.106

  But his meeting with the King of Prussia and Bismarck at Schönbrunn on 24 August seems to have convinced him that Prussia could not be checked except by force. Rechberg, who still favoured conciliation, believing as he did that war with Prussia would entail also war with Italy, and that the odds would be too heavy for Austria to face, might, perhaps, have bought a few more years of peace, but at a price, and Francis Joseph was not willing to pay what might be a heavy price for uncertain advantage. In October he replaced Rechberg by Count Mensdorff-Pouilly, who, with Hofrat von Biegeleben, the éminence grise of the Foreign Ministry, was in sympathy with the forward policy on which Francis Joseph was now decided.107

  In this situation Francis Joseph found himself again at loggerheads with the Austrian Liberals, for they refused obstinately to admit the need for rearmament. When, at the end of 1862, Degenfeld had drawn attention to the mounting armaments expenditure of Austria’s potential enemies, Plener had replied airily that ‘he had his own sources of information: the Press, the House of Rothschild, and other bankers; Austria could safely go on disarming’.108 In 1864 he pronounced that ‘the Schleswig-Holstein match seemed unlikely to start an European conflagration’;109 he wanted another reduction of the defence budget, which ‘exercised a depressing influence on the world of finance’.110 The Schleswig-Holstein campaign brought army expenditure up again to 155 m.g. in 1864, but it was cut down again to 101 in 1865, when Schmerling, who said that ‘today we are enjoying the certainty of European peace’, proposed reducing the Monarchy’s forces in Italy,111 and the estimates for 1866 were cut further still, to 80 m.g. for the army and 7·8 for the navy.112

  Nevertheless, the international situation brought about the next, and as the event was to prove, the decisive, turn in Francis Joseph’s internal policy.

  Since their victory, the great majority of the German Liberals had regarded the Hungarian question as settled. Most of them accepted, as a correct statement of the legal situation, th
e so-called Verwirkungstheorie, i.e., the case (restated in 1862 in book form by a Professor named Lustkandl) that Hungary had rendered her own Constitution null and void when the Diet declared the Habsburg Dynasty deposed in 1849,113 and they did not take the rumours of Hungarian discontent seriously.114 Like Schmerling himself, they were confident that Hungary would come to heel.

  But in this respect also Francis Joseph’s horizon was wider than theirs. He knew that if Austria became involved in war with either Prussia, or Italy, or both – and he knew that the prospect was not to be laughed off – a disaffected Hungary in her rear would be a serious danger to her. And his agents did not cease to report disaffection. Besides the purely internal passive resistance, Kossuth’s Italian backers had resumed touch with him, and their plans again provided for risings in Hungary and Transylvania; several Hungarians were arrested for complicity in these preparations.

  The question was whether Hungary could be reconciled. Esterházy, whose influence over the Emperor was very great at this stage,115 was emphatic that the possibility existed, but he can hardly be credited with the fatherhood of the developments which followed, for he still believed in the possibility of a Hungarian regime based on the Old Conservatives. Strangely enough, it seems to have been the Archduke Albrecht who advised his cousin to get in touch again with Deák, as the really important man.116 At any rate, Francis Joseph sent down an intermediary117 to Deák, in deep secrecy, in December 1864.

  And Deák proved more approachable than had been expected. Public opinion had, in fact, changed very considerably in Hungary in 1862–3. In December of the earlier year Deák himself, with many others, had been seriously perturbed by the indiscreet revelation in a foreign newspaper of Kossuth’s latest proposals for the future of Hungary, this time, a plan for constituting Hungary with Croatia-Slavonia, Serbia, and the Danubian Principalities as a Federal State, with a Parliament meeting in turn in the four capitals. The idea had few charms for a people accustomed to pride itself on its Western traditions, and to regard its Balkan neighours as unlettered barbarians, and the revelation of it had had a very big effect in turning opinion against the emigration.118 If this was the alternative to an accommodation with the West, then the latter was worth seeking, if it could possibly be achieved. The efficiency which the Austrian police had shown in detecting Kossuth’s correspondence, and arresting his correspondents, had made another deep impression, and there were also economic considerations. Hungarian agriculture was in difficulties, which reached a climax in 1863 with a disastrous harvest, so devastating that Schmerling’s Government itself, financially embarrassed as it was, had to make Hungary a special grant in aid, whereas the Austrian Government’s programme of public works, especially of railway expansion, promised constructive improvement. Quite suddenly, Deák had found his own policy of ‘waiting’ denounced as unconstructive and over-passive.