The Habsburg Empire (1790-1918)

by C A Macartney

  Finally, Deák himself appears to have been impressed by the support for Austria shown by the German Princes at the Fürstentag, and also, perhaps, by the backing which Schmerling seemed to be enjoying among most of the Austrian Germans. On the other hand, there was a group among the Austrian Germans which was beginning to favour agreement with the Hungarian Liberals. In 1863 Kaiserfeld had actually concluded an inter-Party agreement between his ‘Autonomists’ and the Deákists, and was exercising his influence in favour of what proved in the event the basis of the new structure of the Monarchy, Dualism based on an alliance between its German and its Hungarian elements. It is true that Kaiserfeld himself at that time envisaged treatment in a single Parliament of all ‘common’ subjects.119

  Nevertheless the development was of the utmost importance, for it meant that those Austrian-Germans who took Kaiserfeld’s view were now pulling on the same rope as the Hungarian Liberals, and not, as Schmerling and his followers were still doing, against them. The shift in the balance of forces was not yet big, but from the delicacy of that balance, even a small change might prove decisive.

  Deák told the intermediary that Hungary recognized the validity of the Pragmatic Sanction, but could not renounce her constitutional position. Francis Joseph must accept coronation and undertake the appropriate obligations. Transylvania must be re-incorporated and Croatia’s relationship with Hungary regulated in a fashion which did not defy history. But he was ready to reach a reasonable compromise with the Croats, and to give the ‘nationalities’ the treatment outlined in the 1861 report. He was also now prepared to admit that the personal union established under the Pragmatic Sanction entailed ‘community’ with the Monarch’s other dominions, not of the person of the Monarch alone, but also of those questions which had fallen within his royal prerogative in all his dominions, notably foreign policy and defence. There remained the problem of how these questions were to be treated under constitutional regimes, since a common legislature was quite unacceptable; but the ex-Chancellor, Apponyi, had shortly before thrown out a suggestion, which struck Deák as acceptable, that there could be two Parliaments and that these ‘common’ subjects might be discussed by ‘delegations’ from them on a footing of complete equality.

  On 16 April 1865 the Easter number of Deák’s organ, the Pesti Napló, carried an article (it was unsigned, but Deák’s authorship of it was at once generally known, as it was meant to be), in form a polemic against something written in Schmerling’s organ, the Botschafter, in which Deák expressed, in general terms, the view that a constitutional Hungary and a constitutional Austria could easily exist together under a common ruler and with a common defence system, provided that Hungary’s constitutional rights were in fact respected. A month later a series of articles inspired by him appeared in the Debatte, an organ maintained in Vienna by the Old Conservatives,120 formally admitting the existence of ‘matters of common interest’ to the two halves of the Monarchy – the Monarch’s household,121 foreign policy and diplomacy, defence, the taxation necessary to cover these items, and commercial and tariff policy, and advocating the system of ‘Delegations’ from two equal Parliaments as the machinery for dealing with them constitutionally. Francis Joseph in return demonstrated his intention of reconciling the Crown with Hungary by paying Pest a brief and almost unannounced, but very effective, visit. This was on 6–9 June. During his visit, he restored the full competence of the Hungarian Consilium, and suspended the operation of the military courts. On 26 June, Zichy was replaced as Chancellor by György Mailáth.

  The Emperor had done all this without consulting, or even informing, his Ministry, and when the change of Chancellors was thus made over their heads, the Archduke and Schmerling tendered their resignations. Schmerling was kept provisionally in charge of affairs until 27 July; then the Reichsrat was dissolved and the names of a new Ministry announced. Of the old Cabinet, only Mensdorff and Esterházy retained their portfolios. The new Minister President was Count Richard Belcredi; the Minister of Finance, Count Larisch-Mönich. The other Ministers were ephemeral figures, whose names are not worth recalling.

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  The dismissal of Schmerling was an admission that the idea of total centralization of the whole Monarchy, including Hungary, had been dropped; but what was to take its place was still obscure. Francis Joseph was still far from accepting the full programme of Deák and his followers, further yet from envisaging them as his partners in the governance of Hungary. The Hungarians on whom he placed personal confidence were, as his retention of Esterházy and appointment of Mailáth showed, still the Old Conservative aristocrats, who themselves had not yet given up hope of returning to power. And they, as we have seen, were the allies of the federalist feudal nobles in the West, and Belcredi, who was another of Esterházy’s nominees, was connected by birth and career with the Bohemian aristocracy, and so far as was known, a federalist in his sympathies.

  Belcredi’s first moves threw little light on his, or Francis Joseph’s, intentions. An Imperial Manifesto and Patent, both issued on 20 September, ‘suspended the operation’ (sistierte) of the February Patent so far as the composition (and, consequently, the operation) of the central Reichsrat was concerned, pending the outcome of negotiations, to be initiated with Hungary and Croatia, on such modifications of the February Patent as would secure their co-operation with the rest of the Monarchy. The Hungarian Diet and the Sabor were both convoked for December, explicitly for such negotiation; the Transylvanian Diet was convoked also, for 14 November, with a single item on its agenda, ‘the revision of the Act of Union of 1848’.122

  While these negotiations were going on, necessary Governmental business relating to the Monarchy as a whole was to be carried on by emergency decree, but the Landtage were convoked for November, and they were promised that the results of the negotiations with Hungary and Croatia, when complete, should be submitted to them ‘for the hearing and appreciaton of their views, which would be given equal weight’.123

  These edicts were naturally received with great indignation by the German centralists, and when the Landtage did meet, those of Upper and Lower Austria, Styria, Carinthia, Salzburg, Silesia and Vorarlberg protested against the suspension of the Patent; of the German Crownlands, only the incorrigibly federalist Tirol went the other way. Galicia, on the other hand, which had once again been administratively reunited, took the opportunity to demand Home Rule again, Moravia rejected, although only by a small majority, a resolution in favour of the Patent, and both Bohemia and Carniola (in both of which Slav majorities had been returned) saluted the change and pressed demands: Bohemia, for coronation of the Monarch in Prague, a Bohemian Court Chancellery, revision of the Landtag Statute to give more weight to the Czech element, and linguistic concessions to the Czech language in administration and education; Carniola, for concessions in favour of the Slovene language and a similar revision of the Landtag Statute. Belcredi in fact promised the coronation and made several concessions in the linguistic field in both Lands.124

  But the important issue was clearly what was going to happen in Hungary. The elections for the new Diet, which had been held in November 1865, had been fought exclusively on the constitutional issue, and they had returned twenty-one ‘Conservatives’, a hundred and eighty ‘Deákists’, prepared to accept their leader’s interpretation of the Pragmatic Sanction (most of the representatives of the Nationalities, who did not constitute themselves as a separate group, sat with the Deákists), ninety-four members of Tisza’s and Ghyczy’s ‘Left Centre’, who were still reluctant to go beyond the personal union in its purest form, and twenty members of the ‘extreme Left’. The country had thus pronounced decisively against the Conservatives, so that the Hungarian problem reduced itself, for Francis Joseph, to the questions whether he could agree with Deák, and whether Deák, for his part, could carry his countrymen with him. His majority was not too safe, for many of his followers were secretly rather sympathetic to the Left Centre, but it was soon strengthened by the result of t
he decision of the Transylvanian Diet, which had been duly packed by the nomination to it of suitably-minded ‘Regalists’.125 When it met, it decided by majority (the Roumanians and some of the Saxons dissenting) that the 1848 Act of Union had been valid, that all legislation passed since it had been illegal and that its own existence had no legal basis. It therefore begged the Crown to call Transylvania’s legal representatives to Pest, where they should resume the negotiations interrupted in 1849. The Crown having granted this request, new elections were held on the 1848 franchise, which resulted in the return of an overwhelming majority of Magyars, a small phalanx of Saxons, and only two Roumanians. The Deputies now appeared in the Pest Diet, where nearly all the Magyars attached themselves to the ‘Deák Party’.

  The negotiations did not go easily. Francis Joseph himself opened the Diet, on 14 December, with a speech in Hungarian, in which he made the important concession of admitting the legal validity of the April Laws. But he said that they would have to be revised in the sense of the October Diploma, and still asked for ‘common Parliamentary treatment’ of the common affairs enumerated in that instrument. He had at that time no intention of going much further.126 The Diet’s reply, drafted by Deák, again refused to entertain the idea of a common Parliament, and the whole spring passed in an exchange of notes in which neither side yielded any perceptible ground, although Deák was able to persuade his own fellow-Deputies to elect a Committee of sixty-seven (which in turn elected a sub-Committee of fifteen) to work out the details of the machinery for putting Hungary’s wishes into effect, when she had gained her point.127

  The Croat position reached a similar deadlock, for when the Sabor met at the end of 1865 the Crown had, in effect, told it to agree with the Hungarians, but in the subsequent negotiations the Croats had refused to accept anything short of their full demands, constitutional (for a personal union pure and simple) and geographical (for Fiume and the Muraköz), and the Hungarians had declared these demands unacceptable.

  The constitutional question was thus still in the melting-pot when the accumulated powder of Austro-Prussian relations exploded in war. What followed proved again the truth of Francis Joseph’s own later admission that he had ‘no lucky hand’, although the word unlucky is perhaps more appropriate than any adjective expressing strong moral reprobation. Austria was manoeuvred into declaring war, and the domestic responsibility for the declaration undoubtedly falls squarely on the Emperor’s shoulders, but he took the final decision only after Bismarck and others had created a situation which left him no other choice, unless he had been willing to acquiesce without a blow in the loss of Austria’s leadership in Germany and of her remaining possessions in Italy. If Francis Joseph miscalculated the forces involved, so that his choice proved, in the event, fatal, the blame was not his alone: his General Staff had, indeed, repeatedly called attention to the inadequacies of Austria’s armaments, but von Crenneville, whose sympathies were strongly with the war party, seems entirely to have failed to enlighten his master on the true facts,128 while his civilian advisers, as we have seen, brushed all warnings aside with something more than impatience, and their representations were actually among the factors which made him decide on war.129

  But the fact remains that the miscalculation was made, and that if Francis Joseph had been better informed, and if at the same time he had been psychologically capable of the voluntary renunciation, Austria would, indeed, have lost the disputed ground in Germany and Italy, but she would have lost it bloodlessly, and would even have recouped her finances in the process. In November 1865 Bismarck offered to buy Austria out of Holstein, and almost at the same time, the Italian Minister President, La Marmora, secretly offered to buy Venetia as far as the Isonzo, for 400 million Austrian gulden. Italy was prepared further to conclude an advantageous commercial treaty with Austria and to adopt a benevolent attitude on the Papal question.130 Francis Joseph rejected both offers, whereupon Bismarck concluded an offensive and defensive alliance with Italy (8 April 1866). Mensdorff’s riposte was to conclude, on 12 June, a treaty with Napoleon III, under which Austria promised after all to cede Venetia, even if she won the war.131 Her only reward was France’s neutrality, and as things turned out, she could hardly have fared worse with France against her.

  When war (which broke out immediately after this, Prussia finding a pretext in Holstein to force the issue), Francis Joseph made another grievous false move. The Archduke Albrecht was given the command on the easy Italian front, with a first-class Chief of Staff in the person of Field-Marshal G. John, while the command of the northern armies was forced on the unfortunate Benedek, despite his protests that he was unfitted for so large a command and totally unfamiliar with the terrain. Albrecht and John defeated the Italians at Custozza, on 24 June, and Admiral Tegetthof won a naval victory over the same easy opponents at Lissa on 20 July. But on 3 July, Benedek was crushingly defeated at Königgrätz (Sadowa) by the Prussian armies, which proved far superior to the Austrian in both leadership and armament.

  A preliminary peace was signed at Nikolsburg on 6 August and the definitive treaty, at Prague on 23 August (peace with Italy had come on 10 August). Austria had to consent to ‘a new formation of Germany, from which the Austrian Empire should be excluded’, and to pay Prussia an indemnity. She ceded Venetia to Napoleon, who re-ceded it to Italy.

  These were mild terms, and ought to have been even milder, for Bismarck had been willing not to ask even for an indemnity if Austria left the Bund immediately; but Esterházy, who seems to have been Francis Joseph’s evil genius in these negotiations, suspected a trap and Francis Joseph’s answer accepting the offer reached Bismarck half an hour too late.

  The finishing touch to the many foolish and wicked actions which marred this sorry story was provided by the Emperor’s unforgivable treatment of Benedek, who was publicly disgraced for his failure to succeed in a task for which he had protested his unfitness. It does not, indeed, appear to be proved that Francis Joseph deliberately allowed Benedek to risk defeat in order to spare the Archduke the danger of it; for one thing, he did not expect defeat, and according to one authority132 had not even himself wanted to give Benedek the appointment, which was forced on him by the unanimous voice of the army, Austria’s South German allies, and public opinion in general. It also seems clear that Benedek really lost his head. Nevertheless, there is something mysterious and unsavoury about the exaction from him of a pledge (which he kept most honourably) to say nothing in his own defence, a few days before the appearance (of which he was given no pre-warning) of a most vicious and gratuitous attack on him.

  The war, of course, also wrote finis to Austria’s immediate hopes of balancing her budget. The Minister of Finance had not expected it to have this effect: he had calculated that it would end in a speedy victory, after which Austria would receive an indemnity and be able to disarm, so that it would actually be a profitable enterprise – a view which seems, as we have seen, to have been shared by Francis Joseph. The operation had, however, to be financed by borrowing, since the Reichsrat would not loosen the purse-strings, and when the inevitability of war became apparent, Larisch sent an emissary, von Becke, to Western Europe in search of a loan. The money-lenders were less optimistic than he, mistrusting as they did political conditions in the Monarchy, especially after the suspension of the February Patent. Lionel Rothschild demanded recognition of the Kingdom of Italy and advised Austria to sell Venice; James Rothschild advised her to sell Holstein. In November 1865, von Becke got a loan of 147 million gulden (nominal) in Paris, but it was floated at 69, so that Austria received only 90 million, and the interest on it came to 9·6%. It was repayable at par in 37 years. On top of this, the underwriters exacted a commission of nearly 10%.133 For another 60 m.g., lent by the Bodenkreditanstalt, the Treasury had to pledge State forests and estates.

  When war broke out, the State took over the 1 and 5 gulden notes of the National Bank, at an obligatory course, to the tune of 150 m.g., the Bank being authorized to issue notes o
f higher denominations to the same value, and to deposit them with the State. In the next two months the issue of another 150 m.g. was authorized.

  In the event it was, of course, Austria that had to pay the indemnity (which again had to be raised with the help of the banks),134 while military and naval expenditure for the year was 256 m.g. The deficit was 292 m.g., and the debt rose to 3,049 m.g., with a service of 127 m.g.

  Meanwhile, the Bourse had taken a different view of the prospects from the Minister’s. When the news of Königgrätz came, quotations rose on the Bourse, which preferred quick defeat to a prolonged war, even should it be followed by victory.