Austrian Empire

"1908-18. AUSTRIAN EMPIRE - The external designation of the state " unofficially known as Austria " (see 3.2) was for a long time unsettled.' The official name since 1867 for the Austrian half of the Austro-Hungarian Monarchy, as including the Habsburg possessions W. of the river Leitha, was " the Kingdoms and Territories represented in the Reichsrat " (Die im Reichsrate vertretenen Konigsreiche and Lander). It was cumbrous and but little calculated to arouse patriotic sentiments in its citizens. In the style of the Government offices this mass of territories was known as " Cisleithania." But the population was accustomed to talk of an Austrian Empire and of the Austrian Emperor, neither of which designations was quite happy or accurate. It was not till the World War that the dynasty felt the necessity for giving this group of countries a definite name and state arms of its own (as was done on Oct. 10 1915), the term " Austrian Empire " being adopted with the motive of giving " precise expression to the political unity of the Austrian territories " and " displaying tangibly the Austrian state as a unity." This proceeding might be compared to a death-bed baptism.

Nationalities

The Austrian state had from its first origins always had a self-imposed political mission; its very name of origin, Ostmark (The Eastern March), marked it geographically as a bulwark, a gate-keeper, to defend Europe on the W. against encroachments from the E. From this criginal task arose a second, that of affording shelter to the fragments of peoples heaped together in inextricable confusion in this corner of the earth. With a few exceptions (Poland, Bosnia) it was through their free will that the Empire had come into being. The external legal forms of the union were marriages, inheritance and election; it was essentially the self-determination of the nations which brought them together. For 50o years Austria had fulfilled this double task fairly adequately; but in its third task, that of turning a mechanical combination into an intimate union, a symbiosis of the nationalities, the State failed. If it had achieved this as well, it would have given a model solution of the most difficult European problem; for Austria was Europe in miniature. There was no lack of attempts to do so; the methods varied, experiments were made as on a subject for vivisection; the object of the experiment suffers under it, but the method is perfected step by step.

Till late in the 18th century the nationality question remained untouched, and the Austrian peoples got on well with one another. Maria Theresa and Joseph II. were the first who thought it desirable to form these nationalities into a uniform nation coextensive with the state. The attempt failed, and the nationalities became self-conscious and split apart. The next stage was to take one people and train it as the representative par excellence of the State idea; and this people could only be the Germans. This attempt also failed; for the Germans were numerically too weak, ' For Hungary, as the other constitutional half of the old AustroHungarian Monarchy, see the separate article under that heading; also Bosnia-Herzegovina, and the articles on the different " succession states " which were formed on the break-up of the monarchy in 1918. As a matter of convenience, the account of Austro-Hungarian foreign policy (i.e. the Dual Monarchy as a whole) in 1909-18, dealing, from the Austrian standpoint, with the political developments resulting in the World War, is included as a final section under the present heading. The Austro-Hungarian army is dealt with under Army. (Ed. E. B.) and not vigorous enough in their methods (Bach period, 1850-60).

A third experiment took the form of distributing over many backs a burden too heavy for one. In 1867 the Magyars accepted with alacrity this role in Hungary, the eastern half of the Dual Monarchy, while in the Cisleithanian territories the cooperation of the Poles was also sought. But this way too had to be given up, since even the smallest nationality would not allow itself to be absorbed, and during Taaffe's administration (1878) the idea came into favour of treating each nationality, and allowing it to grow up, according to its own idiosyncrasies; they were only to be restricted so far as the unity of the state rendered it absolutely necessary. What Austria desired to be was a state at once conciliatory and just, and it opposed no national demand which did not overstep the limits of state security; but this loosing of bonds unchained at the same time a number of national passions before which the state retired step by step.

As to the details, the following observations 2 may be made for the last phase of the empire which expired in 1918. The Germans had for long past given up all efforts at Germanization; their watchword was " maintenance of the national status quo " - that is to say, not an aggressive but a defensive principle. It was in Bohemia that they championed the principle most openly, where they were striving for national separation and protection against the Czechs of the territories which they had inhabited since the Middle Ages. The Germans of the Alpine lands were less ready to carry out the same principle in Tirol and the regions leading down to the Adriatic. The divided policy of the Germans led on all sides to their failure. In Tirol they lost even purely German territories; they were pressed back from the Adriatic; and in the lands S. of the Sudetic Mountains they were brought under a Czech national state, which inherited, with them, the problem of nationality.

The Czechs came under the sceptre of the Habsburgs after the battle with the Turks at Mohacs (1526), through an inheritance treaty confirmed by the vote of their Estates; an unsuccessful rebellion which they made in 1621 against the ruling house as protagonist of the counter-Reformation, brought them under the power of a ruthless conqueror, who wished to crush both their faith and their national independence. The reign of terror which followed the battle of the White Mountain was intended to remove all possibility of a fresh rising in the future. The Czechs rightly refer to this period 300 years ago when they describe themselves as a once oppressed nation. But in more recent times the position was different; the conquered race recovered, and a learned work, Die bOhmische Nation, published in 1916 by the intellectual leaders of the nation, enlightens us as to their position. Dr. V. Zdeako Tobolka, leader of the " Young Czechs " (i.e. the party which had frustrated the efforts of the Old Czechs for a reconciliation with the Germans) produced this magnificent work in collaboration with 22 professors, artists, industrial leaders and writers of Czech nationality, supported by a national subsidy; it can therefore be accepted as a trustworthy Czech autobiography. This comprehensive book describes the collective life of the " Bohemian " people, as the Czechs called themselves in contrast to their present. appellation of the Czechoslovak state. It describes its material development, " its physical constitution and warlike prowess," of which they make a special boast, and after that its intellectual progress. In the sphere of education attention is drawn to the fact that 96.69% of the population of the Sudetic territories can both read and write: "Our education is, next to the German, the best organized and stands decidedly the highest " (p. 122). Next follow chapters on the literary renaissance of the nation, its progress in art, mathematics, chemistry and natural science; the magnificent development of agriculture, modern industry, commerce and finance; and in particular its flourishing selfgovernment, " which will be exercised in the fullest freedom," and in which " the communal organization embodies in the highest degree the conception of self-government " (p. 234), and " the independent sphere of activity unlimited in its fundamental principle " (p. 235) in that " State control is exercised seldom and discreetly " (p. 236). " The control which is exercised over the land is in Czech hands since we possess a majority; the territorial authorities for the greater part belong to our nation " (p. 242). The influence of German culture is also remembered with gratitude. Of Palacky, the father of the nation, it says: " It was under the influence of German culture that Palacky was able to give a firm foundation to this conscious Bohemian ideal of his. To cut oneself off from external cultural influences, especially from German ones, he declared to be a mistake." Besides mentioning the encouragement bestowed by leading Germans like Goethe, Herder, Raumer, etc., on Czech poets and scholars, the book gives an appreciative account of the Emperor Joseph. The article by Jakubel on " the literary renaissance " says: " The Prague theatre, which had vegetated miserably up to now, developed under the reign of Joseph II. into a powerful instrument of culture. Joseph's 2 As elsewhere throughout this article, the point of view is that of a fair-minded Austrian historian. (Ed. E. B.) enlightened despotism preserved to the Bohemian people at one stroke an astonishing number of distinguished and progressive spirits." In Prof. Kadner's article on education we read: " A new organization was first created by the famous May education laws of 1869. It was the liberal-minded Germans who were instrumental in the first place in getting them passed; while the Sla y s from the beginning took up - to their own disadvantage - a hostile or at least passive attitude towards the establishment of these laws." It should be difficult, after the copious details of this autobiography de luxe of the Czech nation in the year 1916, to speak of it historically as an " oppressed " nation of Austria.

The Poles were, together with the Ruthenians, the youngest Austrian nation; the repeated partitions of Poland since the 18th century brought them unwillingly under Austrian rule. After a short period of German government, which was highly beneficial to the country, Galicia received after the Constitution of 1867 an exceptional position which was gradually consolidated; the German officials were removed, and the Polish members in the Reichsrat (who represented 71 votes) held the balance between the parties, which brought Galicia, without any effort, great financial advantages at the cost of the other Crown territories. Up to the World War there was actually no articulate irredentism among the Austrian Poles; they were more contented than their co-nationals in Russia and Germany, and this explains their attitude of vacillation and indecision during a long period of the war.

Ruthenians

Just as the Czechs had a majority in Bohemia, so had the Poles in Galicia; and they used their strength against the Ruthenians. The Austrian Government being largely dependent upon the parliamentary aid of the Poles, could not stand out against them much on account of the far-reaching autonomy of the Galician Territorial Government. And so Russophil agitation found a fruitful soil, especially among the clergy and intellectuals. The Ruthenians, who were loyal to the empire, drew attention to the small degree of resistance offered to this agitation by the Polish authorities, who were interested in making the whole Ruthenian people suspect of irredentism. A grand campaign of agitation on the part of the Russian Count Bobrinsky, whose watch-word was that the Russian banner must wave over the Carpathians, though winked at by the Polish governor, led to a great political trial (Dec. 29 1913) for high treason of 180 Ruthenians who had been seduced by this agitator. It was not till towards the end of the war that the Austrian Government, in response to the wishes of the Ruthenians, began to come round to the idea of a separate status for Eastern Galicia; but it was then too late for such changes within the old territory of the empire.

The Southern Sla y s were divided among four countries: Austria, Hungary, Serbia and Montenegro. Ban Jellacic, though loyal to the Emperor, had given expression to their aspirations towards unity as early as 1848; but Francis Joseph handed over the Croats and Serbs to Magyar domination (1867), and Dalmatia, the territory of the Austrian Croats, had been neglected by Vienna for years past; thus it was not till the years immediately preceding the war that it was rapidly developed by the construction of ports and railways and the encouragement of tourist traffic. The Slovenes, who inhabited Carinthia and Carniola, had less grounds for discontent, for the barren Karst had been afforested at the expense of the state; but though they were at the very gate of Serbia, they suffered from a shortage of meat, for Hungary obstructed the traffic in livestock in the interests of her great territorial magnates, and Austria bore the brunt of this. Vienna had for long been the hope of the Southern Sla y s, and many of them had dreamed of a union under the Crown of Austria (" trialism "). It was not till this failed them that they turned towards Belgrade.

Of the three Latin races, Italian, Ladin and Rumanian, national fragments were to be found in Austria. The Italians and Ladins, treated as separate in Switzerland, were in the Austrian official statistics treated as a single national group (like the Czecho-Slovaks and Serbo-Croats), but even then only totalled together 2.75% of the population of the empire. The claim set up by the Italians to a university of their own within the territory inhabited by them led to various controversies with the Germans and Southern Sla y s. The Ladins, who formed about a quarter of this group, were not affected by irredentism, but looked rather towards German culture, and were to the end outspoken in their Austrianism. The Italian bourgeoisie of the towns, thanks to the force of attraction exercised by Italy, was all the more conspicuously irredentist, since the country population maintained an attitude of comparative opposition to this movement. Among the Rumanians, who inhabited three states (Austria, Hungary and Rumania), the desire long prevailed for union within the monarchy, and Austria would only have had to stretch out her hand to them; but the Magyars would not have it. Bukovina, the chief abode of the Austrian Rumanians, which they shared with the Ruthenians, offered the spectacle of a German adminstration in which without any compulsion German was the official language and also that of society, and neither efforts at Germanization nor language controversies were to be found. The Rumanians for years had proved themselves loyal to the State.

Constitution

The establishment in Austria of universal suffrage in 1907 had as its aim the creation, in the place of the old Parliament, which was crippled by the strife of nationalities, of a Chamber in which social and economic interests should prevail over national ones. It had been believed that it was property owners and intellectuals who placed the question of nationality above all others, while behind them stood a solid mass of workingpeople who were uncorrupted by nationalist chauvinism. The Social Democrats in particular had always insisted that the working-classes were necessarily international. The House now consisted of 516 members, of whom 221 were of Slav nationality, 177 of German nationality, and 87 Social Democrats, so that in every national controversy t he latter could carry a decision in accordance with their principles. In spite of this, the calculation was defeated; for in Europe every true democracy at once becomes national, and hence the national problem infected the working-classes so soon as they won parliamentary power; the " International " split up into national groups, just as the bourgeoisie had done before it. Thus the motive force of nationality proved itself stronger than that of Socialism.

With the introduction of universal equal suffrage the stormy suffrage agitation came to rest, although one of its demands was unfulfilled, namely female suffrage for the Austrian House of Deputies. Active committees for women's rights were, it is true, set up in the territorial capitals. The election of a woman as a deputy to the Diet, which took place prematurely through their influence in Bohemia in 1912, was annulled by the governor as illegal. Women's activity was, for the rest, kept free from demonstrations and excesses. They were not, however, without quiet success, for these committees worked so intensively to create a public opinion favourable to woman's suffrage that immediately after the proclamation of the Austrian Republic in 1918 the vote was unanimously conceded to women, even the conservative parties agreeing to this.

It might have been expected that the concession of universal suffrage in the case of the House of Deputies would have led to the abolition of the class system of voting for the legislative bodies of the several territories and the introduction of an equal franchise, and also to the doing away with the three-class system of voting - established on the Prussian model - in the case of the election of municipal representatives. This was all the more probable owing to the fact that since the Constitution of 1867 there had been a certain analogy between the franchise for the Reichsrat, the Territorial Diets, and the elected commercial bodies. The Social Democratic party endeavoured, indeed, to remove the last remains of the old electoral privilege in town and country; but the urgent motion which they brought in to this effect as early as July 8 1908 broke down, owing to a not unfounded anxiety lest in the Crown territories of mixed populations one nationality should predominate too much over another. There was only a cautious and gradual extension of the right to vote in Diet and municipal elections in the several territories; and it was not till Jan. 20 1918 that the Government adopted the point of view of the Social Democrats, and promised to extend the principle of the parliamentary franchise, as established in the case of elections to the Reichsrat, to the communal elections also, but with reservations intended to guard against " the undesirable reaction of nationality in districts of mixed population." The principle of full equality of electoral rights in all three spheres was not carried out till the republic.

Parliament

The activity of the Austrian Parliament can best be characterized as a continuous inactivity. The two great recurring " necessities of State," the budget and the authorization of the contingents of army recruits, regularly occupied a large part of the sittings; the budget was generally passed only in instalments in three or six monthly grants, and the Government was forced to adopt the practice of adjourning the obstructive House of Deputies and of providing for indispensable requirements in its absence by emergency decree.

The procedure of emergency decree was based upon Par. 14 of the constitution, which provided that: " When pressing necessity for such measures presents itself at a time when the Reichsrat is not sitting, they may be promulgated by imperial decree, in so far as they do not produce any lasting burden on the State treasury." The current administration could, it is true, be provided for by this means, but new commitments could not be entered upon. This resulted, indeed, in a fairly economical administration, but nothing could be done on an imposing scale. Par. 14 of the constitution also contained a safety valve which enabled the Government to carry on current business for a time without the cooperation of the Parliament. The Government repeatedly exposed itself to the charge of proroguing Parliament in order to avail itself of these emergency paragraphs. This procedure has often been blamed as unconstitutional; but the excuse must be taken into account that a constitution which provides such an emergency exit must be prepared for use to be made of it. The situation was often such that Parliament would not work, and the Government was faced with the alternative of stopping the machine of State or availing itself of emergency decrees. Such occasions arose even before the war on an average every two years.

The Reichsrat's right of control was secured after the event by the fact that the Government was bound, the next time it assembled, to lay the emergency decrees before it within four weeks; and that it could refuse its ratification. But before the war the Reichsrat never exercised this right, and thus each time the Government's proceedings were whitewashed. It was only in 1917 that the emergency decrees promulgated by the Stargkh Ministry at the beginning of the war failed to receive ratification, in retaliation for the suppression of trial by jury by a military trial and the extension over civilians of the j urisdiction of the military courts. The normal processes of criminal jurisdiction were consequently restored. On July 26 1914 Stiirgkh closed Parliament altogether, and non-parliamentary absolutism reigned for three years. At last Stiirgkh's second successor again summoned the Reichsrat; but since its six years' mandate was expiring, it was prolonged by a special law towards the end of 1918. On the break-up of the State in 1918 the German deputies of this rump Parliament assembled to form the constituent national assembly of German Austria, while in the Czechoslovak and Yugoslav states there were committees from which the German and Italian deputies were excluded, which proceeded to take measures towards forming states.

Organized obstruction of parliamentary business by a section of members has been, of course, not confined to Austria. But it was in Austria that this singular procedure was first brought to technical perfection; and it became an Austrian speciality. The reason for this was that every party had cause to fear parliamentary oppression at the hands of other nationalities, and this was why it was long impossible to reconcile the principal parties in the House to any effective remedy. It was not till the end of 1909 that this was achieved by a tightening of the standing orders.

The standing orders under which the business of the Reichsrat was conducted were, as the law originally stood (1867 and 1873), intended for a dignified assembly of which each member aimed at avoiding disturbances. With the extension of the suffrage and the growth of nationalist conflicts, the powers of the president were no longer sufficient, and he was unable to deal with the obstruction of even a small group. At. last, on Dec. 17 1909, after an 86-hour sitting, entirely occupied with debates on emergency motions, an emergency motion as to new standing orders proposed by the Polish group was passed; on the following day the Upper House adopted these resolutions, and on Dec. 20 1909 the new law was promulgated. By its provisions communications from the Government and the other House, and reports of commissions, had to take precedence of other business; further, the president could postpone to the end of the sitting formal motions, interpellations, emergency motions, and other obstructive measures. In the long run, however, even this palliative ceased to work; and accordingly on June 5 1917 a new stiffening of the standing orders was voted, which sufficed in effect during the later period of the Parliament.

Language Question

There was no law regulating the question of what language was to be used in parliamentary debates. Every deputy might speak in his mother tongue; but custom had brought it about that, in order to be understood by the whole House, the members of Parliament spoke German. It was not till the Taaffe Government that it became a frequent thing for individual Slav deputies to speak in their own language. These speeches were generally not recorded by the stenographer; the Sla y s protected themselves against this by gradually getting it accepted that polyglot stenographers should be appointed, that their speeches should be translated, and that they should be added as appendices to the parliamentary reports in the correct national language; finally it was resolved (June 1917) that all speeches should be reported verbatim in the parliamentary reports, in the language in which they were delivered. The Upper House agreed, but expressed its misgivings as to such a polyglot report of proceedings.

Administrative Commiss i on for Bohemia

In June 1913 the Government considered itself justified by necessity of the State in adopting a measure which in many respects was held to be a breach of the constitution; it appointed a commission for Bohemia, the members of which were nominated by the State, to deal with the autonomous affai s of this country. Since the last election in the spring of 1908 the Bohemian Diet had been unworkable, eventually owing to obstruction on the part of the Germans, who saw themselves handed over hopelessly to the Czech majority, until a rearrangement of the voting groups (curiae) should afford them protection against Czech oppression. In 1913 the Germans sent in a petition that each nationality should pay the costs of its own educational and cultural institutions, as otherwise one nationality would have to bear the expenses of the other, and vice versa. When the Czechs refused this request the Germans responded with more obstinate obstruction. The representative assembly now ceased to work, and since no legal expedient could in consequence be found by which legislation and current business could be carried on. the Government stepped in and appointed a mixed commission of Germans and Czechs, which should, as it were, administer the affairs of this country like a trustee for a person incapable of volition. This commission was admitted to have exercised its functions with impartiality as a matter of fact; but as a matter of form it stood on a weak foundation. The Germans were thereby deprived of their weapon of obstruction, and the Czechs lost the power of misusing their majority to oppress the Germans. The Czechs declared this to be a breach of the constitution; but the courts recognized the national commission as a measure of necessity justified in law. And so it subsisted until the break-up of the monarchy.

Administration

The organization of the administrative system in the Austrian Empire was complicated by the fact that between the State and the purely local communal administration there intruded yet a third element, grounded in history, the territories (Lander). The State administration comprised all affairs having relation to rights, duties and interests " which are common to all territories"; all other administrative tasks were left to the territories. Finally, the communes had self-government within their own sphere.

To this division of the work of administration corresponded a three-fold organization of the authorities: State, territorial and communal. The State authorities were divided on geographical lines into central, intermediate and local, and side by side with this there was a division of the offices for the transaction of business according to the various branches of the administration. The central authorities, which as early as the 18th century worked together in a common mother cell of the State chancery, became differentiated so soon as the growing tasks of administration called for specialization; in 1869 there were seven departments, and in the concluding decade of the Austrian Empire there were set up Ministries of Labour, Food, Public Health and Social Care. Under these ministries came the Statthalter, whose administrative area had ordinarily the proportions of a Crown territory (Kronland); but the immense variations in area of the Crown territories made a uniform and consistent intermediate administrative organization practically impossible. The lowest administrative unit was the political sub-district (Bezirk) under an official (Bezirkshauptmann), who united nearly all the administrative functions which were divided among the various ministries according to their attributions.

Side by side with the State administration certain Crown territory administrations also existed in the 17 Crown territories, carried on by selected honorary officials, having under them a staff of professional officials. Many branches of the territorial administration had great similarities with those of the State, so that their spheres of activity frequently overlapped and came into collision. This administrative " double track," as it was called, led, it is true, in many cases to lively emulation, but was on the whole highly extravagant. The evils of this complicated system are obvious, and easy to condemn. They can be explained, partly by the origin of the State - for the most part through a voluntary union of countries possessed by a strong sense of their own individuality - partly by the influence in Austria of the Germanic spirit, well understood by the Slays, which has nothing of the Latin tendency to reduce all questions of administration to clear-cut formulae as part of a logically consistent system. Like the English administrative system, the Austrian presented a rich variety, a variety indeed so rich that it clamoured for drastic reform.

Bienerth's last act as premier in May 1911 was the appointment of a commission nominated by the Emperor, to draw up a scheme of administrative reform. So early as 1904 KOrber had declared a complete change in the principles of administration to be essential if the machinery of State were to continue working. After seven years of inaction, however, this imperial rescript was pitched in a far lower key. The continuous progress of society, it said, had made increased demands on the administration, that is to say, it was assumed that reform was not demanded so much by the defects of the administration but by the progress of the times, not because the administration was bad, but because life was better. It was an attempt to reform the administration without first reforming the State on equivalent lines.

A reform commission without a programme naturally first occupied itself with reforms about which there was no controversy. After a year had gone by it drew up " Proposals for the training of State officials." After another two years it had indeed brought to light carefully prepared material for study, which was of great scientific value; but its proposals. though politically of importance, did not provide any basis for reform on a large scale. And so when the World War broke out the commission dispersed without practical results, leaving behind it an imposing array of folio volumes of great scientific value. It was not till March 1918 that the Seidler Government decided upon a programme of national autonomy as a basis for administrative reform, which was, however, never carried into effect. Education. - The organization of the Austrian elementary schools was based on the principle of compulsory school attendance, free education, and the imparting of public instruction in the child's own language. Side by side with these existed private schools. The proportion of children attending private schools to those attending the public elementary schools in 1912 was 144,000 to 4.5 millions, i.e. a thirtieth part. Hence the accusation of denationalizing children through the Schulvereine must be accepted with caution. The expenses of education were distributed as follows: the communes built the schoolhouses, the political sub-districts (Bezirke) paid the teachers, the Crown territory gave a grant, and the State appointed the inspectors. Since the State supervised the schools without maintaining them, it was able to increase its demands without being hampered by financial considerations. It is remarkable that the difference between the State educational estimates in Austria and in Hungary was one of 9.3 millions in the former as opposed to 67.6 in the latter. The elementary schools in Hungary were a State concern and a means of Magyarization, whereas in Austria their direction was left by the State to the nationalities. Thus in the former the schools were a means of denationalization, in the latter a means of national education. Under Austria, since everywhere that 40 scholars of one nationality were to be found within a radius of 5 km. a school had to be set up in which their language was used, national schools were assured even to linguistic minorities. It is true that this mostly happened at the expense of the German industrial communities, since the Slav labourers as immigrants acquired schools in their own language. The number of elementary schools increased from 19,016 in two to 24,713 in 1913; the number of scholars from 3,49 0, 000 in 1900 to 4,630,000 in 1913.

Illiteracy

In proportion to the raised standard of popular education, further aided by the number of popular educational establishments which were springing up, and the university extension movement formed on the English plan, the proportion of illiteracy rapidly decreased. In 1890 the percentage of illiterates in the total population had been 28.5; in 1900 it had fallen to 22.7, and in 1910 to 16.5. As regards the several nationalities: among the Czechoslovaks in 1910 the percentage was 2.4; a little higher among the Germans (3.1) in consequence of the difficulties of school attendance in the Alpine territories; among the Italians 10.0, and among the Slovenes 14.7. The percentages were much higher among the peoples situated on the E. (Poles 27.4, Magyars 36.4, Rumanians 60.4, Ruthenians 61.o, Serbo-Croatians 63.7). It is their influence which explains the high average for the whole state.

Universities

The higher educational establishments, which in the middle of the 19th century had had a predominantly German character, underwent in Galicia a conversion into Polish national institutions, in Bohemia and Moravia a separation into German and Czech ones. Thus Germans, Czechs and Poles were provided for. But now the smaller nations also made their voices heard: the Ruthenians, Slovenes and Italians. The Ruthenians demanded at first, in view of the predominantly Ruthenian character of East Galicia, a national partition of the Polish university existing there. Since the Poles were at first unyielding, Ruthenian demonstrations and strikes of students arose, and the Ruthenians were no longer content with the reversion of a few separate professorial chairs, and with parallel courses of lectures. By a pact concluded on Jan. 28 1914 the Poles promised a Ruthenian university; but owing to the war the question lapsed. The Italians could hardly claim a university of their own on grounds of population (in 19to they numbered 783,000), but they claimed it all the more on grounds of their ancient culture. All parties were agreed that an Italian faculty of laws should be created; the difficulty lay in the choice of the place. The Italians demanded Trieste; but the Government was afraid to let this Adriatic port become the centre of an irredenta; moreover the Southern Sla y s of the city wished it kept free from an Italian educational establishment. Bienerth in 1910 brought about a compromise; namely, that it should be founded at once, the situation to be provisionally in Vienna, and to be transferred within four years to Italian national territory. The German National Union (Nationalverband) agreed to extend temporary hospitality to the Italian university in Vienna, but the Southern Slav Hochschule Club demanded a guarantee that a later transfer to the coast provinces should not be contemplated, together with the simultaneous foundation of Slovene professorial chairs in Prague and Cracow, and preliminary steps towards the foundation of a Southern Slav university in Laibach. But in spite of the constant renewal of negotiations for a compromise it was impossible to arrive at any agreement, until the outbreak of war left all the projects for a Ruthenian university at Lemberg, a Slovene one in Laibach, and a second Czech one in Moravia, unrealized.

History During the period from the assembly of the first Parliament elected by universal equal suffrage (1907) to the break-up of the Dual Monarchy, Austria itself had nine Governments under the following premiers: All these ministries may be characterized as Cabinets composed of Government officials. Not one of their heads was drawn from the Chamber of Deputies. The Government was no longer the expression of the majority of the House, but had to be a nonparty Government standing outside the House. An objective and non-party application of the laws, and equal rights for all nationalities, were in consequence the ever-recurring heads of their programme. From time to time, naturally, these Governments required a majority for the budget. They tried to arrive at it by negotiations with the parties, and by admitting to the Cabinet representatives of every nationality willing to cooperate. By this means the Cabinets acquired at least a measure of control over Parliament. A representative of Polish interests was generally to be found in every ministry, and usually too a. minister of Czech and of German nationality. The political characteristics of these ministers are hardly distinguishable one from another; they all took their stand on a middle course of loyalty to the state and party impartiality. Beck, however, was held to be a shade more Slavophil, Bienerth Germanophil,, Gautsch dynastic, Stiirgkh a Conservative Socialist; Korber and Seidler were mere officials, Clam-Martinitz an old aristocrat, Hussarek and Lammasch Clericals. They regarded it as their principal task to bring about a compromise between the nationalities, and this again depended on the outcome of the GermanCzech negotiations which were always being started afresh. this none of these Austrian ministers succeeded.

Beck' Ministry

With the carrying through of suffrage reform the Beck Ministry, which started in June 1906, had. exhausted its strength. On June 17 1907 a promising speech from the throne opened the first universal suffrage Parliament and promised " to leave to the peoples as a secure heritage the integrity of their national territories"; "to solve the language question. .. on a foundation of equality of rights"; "to organize education with an equal consideration for all races"; " to introduce insurance against old age and infirmity. .. social reforms with regard to female and night labour, and an extension of the participation of the State in the exploitation of the coal-mines." Beck's next success was in reaching an understanding as to the language to be employed in Parliament. He also succeeded (July 12 1908) in bringing about an imposing procession in honour of the Emperor as an opening to the festivities of his diamond jubilee (Dec. 1848-1908). But apart from this celebration the second period of the Beck Ministry was attended by unfortunate incidents. On April 12 1908 Count Potocki, the governor of Galicia, was shot by a Ruthenian student. Then there was the Wahrmund affair. The Clericals started an agitation because Wahrmund, the professor of canon law at the university of Innsbruck, subjected the dogma of the Immaculate Conception to critical examination. They demanded from the Liberal Minister of Education, Marchet, that disciplinary measures should be used against him. The Minister endeavoured on the one hand to safeguard the principle of freedom of instruction, and on the other hand to avoid anything resembling a Kulturkampf. A general strike at the universities was averted by a compromise, by which Wahrmund was transferred from the pious land of Tirol to Prague, which was more than he had desired. In July a Pan-Slavonic congress took place at Prague, accompanied by anti-German excesses which had a serious sequel in Laibach. The Germans thereupon paralyzed the Prague Diet by means of obstruction, upon which the Czech members of the Beck Cabinet left it, and the prime minister, seeing himself abandoned by both Germans and Czechs, resigned on Nov. 14 1908. Shortly before this Beck had introduced yet another bill dealing with industrial insurance, to supplement the already existing sickness and accident insurance. The bill only received the assent of Parliament just before the break-up of the monarchy.

1 Baron Max Vladimir Beck (b. 1854) entered the service of the State in 1876, in two became head of a section in the Ministry of Agriculture, in 1906-8 Prime .Iinister; in 1907 he got universal parliamentary suffrage accepted; he was responsible also for farreaching measures of railway nationalization.

Bienerth Ministry

Beck's successor Bienerth 1 attempted to rule by means of a Cabinet of mere officials, in which undersecretaries of State were appointed as temporary directors of their respective departments. Moreover the three chief nationalities, the Germans, Poles and Czechs, were each represented by a so-called national minister (Landsmann-Minister). Bienerth's policy was to confine himself in a purely objective spirit to the execution of the laws until such time as he had gradually gained the confidence of the nation. The Germans made their cooperation contingent on various conditions. They insisted that the Government should introduce proposals as to the official language of functionaries, for they feared a return of the procedure used by Badeni, which by means of a Government ordinance had altered the received usage and upset the national balance of power; that in Bohemia the purely German sub-districts (Bezirke) should be included in German districts (Kreise), and in like manner the purely Czech sub-districts in Czech districts, so that there would then be a relatively small number of territories of mixed nationality, which would have to be governed bilingually; that minorities should be protected by law; and that in appointing to posts in the offices of the autonomous Bohemian territorial Government, proportionate consideration should be given to the Germans, attention being paid to the fact that in Bohemia more than a third of the population were German, and that they paid more than half the taxes, but that the Czech national majority had appointed more than 90% of Czechs and not even 10% of Germans in the Government offices. In purely German territories moreover it was claimed that only German officials should be appointed, just as in purely Czech territories the appointment of Czech officials was already uncontroverted and looked upon as a matter of course. Finally the old wish was put forward for a separation of nationalities in the representative assembly at Prague, in order that neither of the two nationalities should oppress the other in the internal affairs of Bohemia.

These German demands, which were exactly analogous to those formerly put forward by the Czechs, so long as they were still in a minority, now roused violent opposition among the latter. They called attention to the fact that the Germans in earlier days were deaf to such requests; they saw in them a " dismemberment of the country," and asserted that in the central public departments of Vienna, too, the Czechs did not occupy a number of official positions in proportion to their population. Serious excesses were now indulged in towards the German population and the German students in Prague, where, on the very day of the imperial diamond jubilee, the Government had to proclaim a state of siege.

The Reichsrat, which reopened under such conditions in Nov. 1909, stood under the threat of a paralyzing Czech obstruction. This time the Poles came to the rescue of the Government in its hour of need, by getting a form of standing order approved which rendered obstruction somewhat more difficult, and in this, curiously enough, they were helped by the Czechs; for obstruction had brought even them into an impasse, since their financial requirements had not been met. Thus the law for strengthening of the standing orders was carried through by an ad hoc combination of Poles, Czechs and Christian Socialists. But the freedom of parliamentary activity did not last for long. On Feb. 13 Bienerth went part of the way to meet the German demands by introducing a bill dealing with the rearrangement of the administrative districts (Kreise) in Bohemia. According to the statistical returns there were 139 administrative sub-districts where only Czech was spoken and 95 speaking only German, as opposed to only five bilingual ones. These 239 sub-districts, according to the bill, were to be grouped in 20 districts, 10 Czech, six German and four bilingual, in which provision was to be made for minorities throughout the whole land through official translation bureaus. This bill was intended to be a solution of the language question, which should take into account the actual conditions of the population as well as practical needs. The 1 Baron Richard Bienerth-Schmerling (1853-1919) was made Minister of the Interior in June 1906; Prime Minister Nov. 1908June 1911; and till 1915 he was Statthalter for Lower Austria.

excitement with which the Czechs opposed this measure was extraordinary. They brought about a scene in Parliament which ended in hand-to-hand fighting and assaults, whereupon the Government immediately closed the Parliament.

In other directions, too, Bienerth's period of government was filled with hostile nationalist proceedings. The Italian students desired to revive the question of an Italian university, which had come to a deadlock, and in Nov. 1908 set on foot a great demonstration at the university of Vienna, in which the usual fairly harmless fighting with sticks was replaced by revolver shooting. In spite of this, Bienerth, with the consent of the Germans, introduced a bill in Jan. 1909 which was to set up an Italian faculty of laws provisionally in Vienna.

At this time the Czechs were trying to gain a foothold in frontier lands which had hitherto been considered solely German. They alleged as a reason that two small country communes of Lower Austria, Oberand Unter-Themmenau, had a mixed colony of Czechs and Croats; it was further advanced on their side that a considerable annual migration to Vienna took place, which became Germanized in the second generation, and so lost to their Czech nationality. Vienna, with over ioo,000 Czechs, was actually the second largest Czech town. In reality a still clearer diminution of the Czech population of Vienna was noticeable; according to the census of 1900, out of 1,674,000 inhabitants there were 102,970 Czechs, i.e. 6.1%; in 1910, out of 2,030,000 inhabitants, 98,400 Czechs, i.e. 4.8 per cent. The Czech colonies in Vienna endeavoured, by means of the so-called " Komensky schools " (from the Czech form of the name of Komenius, the educationalist), to protect themselves against fusion with the indigenous population. The Viennese Germans saw in this a danger to the hitherto peaceful common life of the population of Vienna. On Sept. 3 1909 the Lower Austrian Diet, in opposition to these Czech encroachments, tried to establish German by law as the language of instruction in all the public schools of Lower Austria, in correspondence with the actual state of affairs hitherto. On Oct. 7 Burgomaster Lueger insisted that Vienna could only be a unilingual city, as otherwise she would have to speak nine languages; and on Jan. 18 1910 this resolution received the force of law. Analogous laws were promulgated in the three other purely German Crown lands.

After the Tauern railway had been built for the Alpine countries - without, it is true, any particular pecuniary help from the Polish part of the empire, which was known to be only passively interested - the Poles demanded a complete carrying into effect and extension of the waterways law, with a larger State subsidy. It was over these demands in connexion with the waterways, which the Minister of Finance declared to be impossible of fulfilment to the extent required by the Poles, that Bienerth's mainstay failed to support him; and on Dec. 12 he sent in his resignation, which was, however, followed by a renewed Bienerth Ministry, composed of Germans, Poles and officials. By means of this coalition the Ministry succeeded, indeed, in passing the military service reforms on April 24 1911 (reduction of the three years' service to two years, combined with an increase in the contingent of recruits); but this completely exhausted its parliamentary strength, and the first parliamentary suffrage Parliament ended with but poor results in the midst of unsolved national problems.

Since 1910 a meat shortage in Austria had made itself more and more felt, especially in the towns, owing to their rapid growth, the decrease of cattle-raising in the Alpine lands, and the reduction in the imports of Serbian meat through the antiSerbian agrarian policy of Hungary. The Christian Socialist party, from being originally an urban party, had become partly an urban and partly a peasant party, and the Minister of Commerce, Weisskirchner, 2 who had come from its ranks, had not 2 Richard Weisskirchner (b. 1861 in Vienna) entered the municipal service in 1883 and became in 1903 president of the town council; 1909-11 Minister of Commerce; 1912-8 Burgomaster of Vienna; a deputy from 1896 onwards; and in 1907 president of the Chamber of Deputies. He was a disciple of Lueger, a Christian Socialist, and framed a new municipal statute and associations based on the Christian view of society.

only to reckon with the opposition of Hungary but also to pay particular attention to the peasant voters, in the question of buying meat abroad and importing frozen meat from the Argentine. On this account, especially after the death of Lueger (on March 10 1910), a dominating personality who had held all parties together, opinion in Vienna and other towns turned against the Christian Socialists, who were accused of refusing all active measures of relief. Thus it happened that the elections to the Reichsrat in July 1911 were characterized by a temporary coalition of the German Liberals with the Social Democrats against the Christian Socialist party; this led to heavy losses on the part of the latter, especially in the towns. In Vienna especially they lost every seat at one blow, by which means Weisskirchuer found himself deprived of all parliamentary support. He resigned, and with him the head of the Cabinet; all the ground had slipped from beneath his feet, and on June 19 1911 Bienerth resigned for good.

Gautsch Ministr y

The Bienerth Government was succeeded by that of Baron Gautsch.' He too could attempt nothing more than to take up as objective an attitude as possible above parties. His first task was to try to set in motion again the negotiations for a German-Czech compromise in Bohemia. The Czechs, however, had realized that at need they could get along without a Diet, and they began once more their encroachments in Vienna. They opened a Komensky school there without proper authorization, and when this was closed by the municipal authorities, they organized a demonstration of Czech women, who crowded with their children into the Parliament House. Shortly before this the protests of Hungary had succeeded in procuring the rejection of a cargo of Argentine frozen meat which had been destined for Vienna. The fury of the Viennese found expression in violent demonstrations, in which, for the first time, employees of the State took part in uniform, among them employees of the State railways and of the post-office. Gautsch, who was a convinced upholder of the principle of State authority, had recourse to severe measures of punishment and discipline, which had as their result a revolver attack on the Minister of Justice from the gallery of Parliament.

On Oct. 28 somewhat unexpectedly the prime minister resigned, partly because this series of unfortunate incidents had shaken the Emperor's confidence, partly because his secret efforts to persuade the Czechs to join his Cabinet had made him suspect to the other parties. But the Czechs not only demanded two Czech ministers, but also a number of headships of departments and councillorships in each department. This would have led to an introduction of the national divisions into the central administration, and if similar claims were put in by other nations the principle of a purely objective Government transcending nationality would have been done away with. So Gautsch would have nothing to do with it.

Stiergkh Ministry

Count Stiirgkh (b. 1859), the Minister of Education, was next entrusted with the formation of a Cabinet. He composed his Cabinet of colourless officials and confessed adherents of the various nationalities. His programme was to be an honourable mediator in the German-Bohemian quarrel, to extend the railway system, and to satisfy the wishes of the Poles in the waterways question by an expenditure of 73.4 million kronen on canal construction in Galicia, to which Galicia was to contribute only 9.4 million kronen, the State finding the other 64, and by an expenditure of 125 millions on river improvements, 99 of which would be contributed by the State.

Early in Stiirgkh's Ministry prominence was taken by the Catholic marriage question. While in Austria the marriage of non-Catholics could be dissolved, so as to make a new marriage possible, paragraph iii. of the civil code provided that " the tie of a valid marriage between Catholic persons can be dissolved only by the death of one of the parties. And this shall be the case even when only one party was attached to the Catholic religion at the time of the conclusion of the marriage." Thus Catholic and mixed Catholic marriages were indissoluble even in the 1 Baron Paul Gautsch von Frankenthurn (b. 1851) had been Premier and Minister of the Interior, 1897-8, and Premier 1904-6.

event of a change of creed. The desire of numerous divorced persons for a change in the law which prevented their remarriage was manifested in repeated demonstrations before Parliament; especially in that of Dec. 1911, in which it was asserted that the lives of half a million divorced wives were affected. In spite of the reform of the civil law in other respects (June 1 1911) these provisions remained in force until the republic. Owing to the opposition of the Christian Socialist party, they were even then not abolished; but they were relaxed by numerous dispensations in individual cases.

It was while Stiirgkh was Austrian premier that the World War broke out (see under Foreign Policy, p. 327). At the beginning of the war the attitude of the nationalities of the Austrian Empire was somewhat unexpectedly loyal to the state. The immediate cause of war - the murder of the heir to the throne - had profoundly impressed all the Austrian peoples, and the belief that efforts were being made from without to destroy the old empire produced among them a strong reaction in favour of its preservation. Enrolment in the army proceeded everywhere without friction, and much more expeditiously than the military authorities had expected. It was only to be expected that the Germans, whose very existence was in question, should show themselves to be patriotic. But it was somewhat surprising that at Prague, after the declaration of war, Germans and Czechs sang Die TV acht am Rhein together in the streets, and the burgomaster, a Czech, made a speech in German before the town hall in which he called for cheers for the Emperor William and the fraternization of Germans and Czechs. On Oct. 24 1914 the Czech Union solemnly declared: " It is true that we have been against one Government or another, but never against the state." On Nov. 15 the Czech parties in Moravia issued a patriotic manifesto. The procedure of the Poles was similar; all the Polish parties united in a joint central committee which issued a manifesto in favour of performing their duty to the state (Aug. 15). On Aug. 27 the Ruthenian Metropolitans, too, issued a protest against " tsarism," and in like manner the Ukrainians protested (Nov. 1) against Russian oppression of freedom of conscience. On Nov. 23 30,000 Rumanian peasants of the Bukovina got up a great manifesto in favour of the emperor and the empire, and on Dec. 1 patriotic protestations from the Rumanian Club followed. These proclamations on the part of all the Slav peoples of Austria proved that imperial sentiment was more deeply rooted than Austria's enemies had believed.

These evidences of patriotism continued for a long time during the war; even after Italy's declaration of war the majority of the Italian deputies in S. Tirol issued a loyal declaration " in the name of the overwhelming majority of the population," as they asserted (June 14 1915). On the other hand the efforts made for years by Panslav idealists, Russophil agitators, Serbian propagandists and Italian irredentists, were naturally not without effect. Isolated instances of relations being established with co-nationals in the enemy camp were recorded from the beginning. The question was repeatedly raised as to why the prime minister did not take advantage of this patriotic spirit to obtain a corresponding parliamentary demonstration; but it had surprised him, as it had many, and he shrank from the serious responsibility which would have resulted if the experiment had turned out badly; the aged Emperor's need of quiet, and the conviction that the Reichsrat, if summoned ad hoc, would, as for so long before, be of no active use, also played their part. The population had not been consulted as to the declaration of war, and their opinion was no more listened to now; but by giving up the cooperation of Parliament the prime minister at the same time abdicated his power in favour of the military authorities. Since there was no longer a Parliament, or any personal immunity, the military authorities established unlimited police rule, which seemed to be obsessed with terror of its own citizens; anyone who seemed to them suspect was subjected to internment in concentration camps. This ruthlessness towards their own citizens, who were arraigned before military courts in trials for high treason, stood in curious contrast to the considerate treatment of " enemy aliens," who were comparatively little molested. For example, even many months after the beginning of the war advertisements were to be read in all the papers, in which English and French people offered to teach languages or instruct children even in English and French, stating their nationality and address - a proof that the authorities did not put any particular difficulties in the way of these foreign ers, and that the people did not take advantage of knowing their addresses to molest them.

The political impotence of the prime minister was plainly evident in the military proceedings against Kramarz, in which Stiirgkh shook hands with the accused and gave evidence in his favour, but without being able to avert the death sentence passed by the military court, though he did at least prevent the execution of the sentence.

During the later part of the Stiirgkh Ministry it is no longer possible to speak of an internal policy, for the military alone ruled. Towards the end, however, Stiirgkh was actually endeavouring to bring about a reassembly of the Reichsrat, when he was shot by the Independent Socialist Dr. Friedrich Adler (Oct. 21 1916).

Kdrber Ministry

The object of the murder of Stiirgkh, namely, to lead to a, powerful demonstration in favour of the summoning of the Reichsrat, was not attained; at a meeting held between some deputies and members of the Upper House (Oct. 23 1916) no definite proposal to this effect was brought forward, and the Kdrber Ministry, which was summoned on Nov. i, ruled during its eight weeks' period of activity without Parliament. On Nov. 14 Kdrber set up an office for food control (Volksernahrungsa7nt) which later became the Ministry of Food (Jan. 1917). Little else was done; the approaching death of Francis Joseph (Nov. 21) prevented any far-reaching plans. When the worn-out old Emperor was succeeded by an immature boy, the serious, positive and somewhat " schoolmasterish " Kdrber did not strike the right note with him. Charles I. could not forgive Kdrber for prevailing upon him to promise to take the oath to the constitution, since the constitution was no longer tenable and Stiirgkh had already prepared constitutional amendments; on the other hand Charles's assumption of the supreme command of the army was opposed to Korber's taste. When Kdrber declined to carry through the Ausgleich with Hungary without consulting Parliament, and made it a question of confidence the young Emperor on Dec. 20 1916 lightly dismissed his best adviser.

Clam-31artinitz Ministry

Kdrber' s successor, Clam-Martinitz,' who belonged to the violently Czech feudal nobility, tried to form a national coalition Cabinet, including two German politicians. The political event of the moment was President Wilson's note (Dec. II 1916) and the Entente's answer (Jan. 12 1917) as to the liberation of the " oppressed " peoples of Austria. It called forth sharp counter manifestoes on the part of those who were to be " liberated." A resolution adopted unanimously on Jan. 17 1917 by the Croatian representatives proclaimed, as a condition of the national existence and the cultural and economic development of the Southern Sla y s, that they should remain under the House of Habsburg. The Czech Union rejected, by a unanimous resolution of its governing committee, the suggestions of the Entente, as being insinuations based on erroneous premises, and deprecated by a reference to their secular allegiance " the interference of the Entente Powers " (Jan. 23 1917). Koroschek, the Slovene leader, wrote to the minister in the name of his party that " these hypocritical assurances have called forth nothing but indignation among the Southern Sla y s " (Jan.

1917). The Rumanian Club made a similar declaration on Jan. 24.

The hope of achieving parliamentary cooperation on the basis of such loyal declarations as these soon vanished. The Germans demanded, as a condition precedent to the effective participation of their nationality in the affairs of the state, an alteration of the constitution by imperial ordinance (Oletroi), which should define 1 Count Clam-Martinitz (b. 1863), an hereditary member of the House of Lords, and chairman of the Committee of Privileges in it, had been head of the Ministry of Agriculture from Oct. 31 1916; up to June 23 1917 he was Prime Minister, then Governor of Montenegro till 1918.

the boundaries between the nationalities in Bohemia, rearrange the districts (Kreise) accordingly, declare German to be the language in which the business of the Reichsrat was to be conducted, and lay down more stringent rules of procedure. The Sla y s, on the other hand, demanded the " unconditional " summoning of Parliament. The Germans yielded, and the Reichsrat met on May 31. Both the Southern Sla y s and Czechs immediately made constitutional declarations; the former demanded a national union of the Southern Slays, the latter a territorial union of the lands S. of the Sudetic Mountains, while the Germans opposed any transformation of the monarchy into a federal state. In the face of this uncompromising display of opposition there could be no hope for the Coalition planned by Clam-Martinitz for the creation of a new Austria, and on June 19 he resigned.

Seidler Ministry

On June 24 1917 the Emperor appointed as prime minister his former tutor, the Ritter von Seidler,2 who summoned a Ministry of mere officials, just to carry on business for the time being; any constitutional reorganization was still postponed. On July 2, on the occasion of the Crown Prince's birthday, the Emperor proclaimed a wide measure of amnesty, in which on July io even Kramarz and his confederates were included. This precipitate action aroused the mistrust of the Germans, and, in view of the ambiguous attitude of the prime minister towards the Czechs, led to a vote of censure being passed at a meeting of the German national council at Prague on July is.

Seidler now resolved to undertake the reconstruction of the crumbling body politic, with a reorganized Cabinet (Aug. 31 1917). A great economic and social programme 'was announced, including the extension of waterways, the exploitation of electricity, an improved system of communication, industrial insurance, and a department for public health. Politically the organization of the state on the fundamental principle of national autonomy was to follow; he hoped to get round the nationalist obstacles in Bohemia by a rearrangement of districts with local delimitation according to nationality. This bold plan met with no success; the economic programme in particular did not come into force; it was an empty promise, which was not taken seriously. But the political programme, on the other hand, let loose a violent attack of the Slav nationalities on the state. The Polish committee, which had been formed on a political basis, was dissolved after unprecedentedly stormy negotiations, due to discontent at the cession of Chelm (Kholm) to the Ukraine; the Poles threatened the rest of Austria with a boycott of food, and abstained from voting on the budget. The action of the Czechs was even more dangerous to the state; on Jan. 12 1918 a meeting of their deputies at Prague unanimously accepted a resolution to the effect that the Bohemian question was to receive an international solution at the Peace Congress. Seidler regretfully pointed out in Parliament on Jan. 22 that this resolution was totally opposed to that of May 1917, which could still be reconciled with the fundamental conceptions of patriotism. The Germans rejoined with a demand for a province of their own, German Bohemia, separate from Czech-Bohemia (Jan. 22). Similarly the Ruthenians demanded that East Galicia should be erected into a separate Crown land under the name of the Ukraine (March 3). Since the Northern and Southern Sla y s had absented themselves and the Poles were in opposition, the Reichsrat was adjourned (May 3), and the Germans now again demanded the grant of a revised constitution, with German as the language of State, a special status for Galicia and Dalmatia, access for the Germans to the Adriatic, and the partition of Bohemia. Seidler granted indeed a rearrangement of districts in Bohemia (seven Czech, four German and two mixed); but he could not make up his mind to go further, and tried the expedient of summoning a fresh Parliament on June 16. But the day before 2 Ritter Ernst von Seidler (b. 1862 at Schwechat, near Vienna) was secretary to the Chamber of Commerce in the mountain town of Leoben; then an official in the Ministry of Agriculture, and from June i 1917 Minister of Agriculture; he was also a university reader in constitutional law.

the Czechs had set up a national committee, with Kramarz at its head, which adopted the programme of " a Czechoslovak State sovereign and independent." They proposed the impeachment of the minister responsible for the nomination of the chiefs of the districts, and declared that they would take no part in revising the constitution. His plans having thus been completely shipwrecked, Seidler resigned on July 22 1918.

Hussarek Ministry. - Hussarek,' who was appointed prime minister on July 24, declared his programme to be parliamentary government, with reconciliations of the nationalities, and constitutional and administrative reform. The Czechs, however, declared that. so far as they were concerned, nothing had been altered. Hussarek got through a six months' provisional budget with the help of the Poles against the votes of the Ukrainians, a proof that he had shelved the partition of Galicia. Immediately afterwards the Reichsrat adjourned for the summer holidays (July 26), without having ventured on any steps towards the solution of the great problems of State.

The process of dissolution advanced rapidly, when England on Aug. 17 recognized the Czechoslovaks as an allied nation; to which the Austrian Government replied with the declaration that no such state existed, but only individual traitors. In a communication to the press on Sept. 4 Hussarek insisted that there were no oppressed peoples in Austria, that on the contrary her constitution assured to the several nationalities a status of equal rights like that of no other state on earth, and he gave a warning against its destruction - a vain appeal to reason. On Sept. 18 the Czech National Council had already imposed some taxes. On Oct. 1 Hussarek again gave the Reichsrat a chance; he recognized expressly the right of the peoples to free self-determination, adopted the standpoint of national autonomy, championed Polish independence, and announced the union of all the Southern Sla y s of Austria by constitutional means. This programme met with a cool reception; the Poles by now were expecting a new organization from the Peace Congress; the Southern Sla y s desired union with those of their race in Hungary also; the Czechs opposed the division of the administrative commission into two parts; they did not want autonomy for their nation, but incorporation of the German Bohemians in their State, and refused all negotiations.

The Emperor now made a last despairing attempt; a manifesto of Oct. 16 proposed the conversion of Austria - not of Hungary, it is true - into a federal state composed of free nations, each with the territory which it occupied. This was far from resulting in any cooperation of the nationalities in realizing their former ideal; on the contrary, they felt themselves free from all constraint, and formed Governments having no connexion with the old state. On Oct. 19 the Ukraine National Council was set up in Lemberg, and the Slovene-Croat in Agram; on Oct. 20 the Czechs followed suit in Prague, on the 21st the German delegates in Vienna, on the 25th the Magyars in Pest.

Lammasch Ministry

The summoning of the last Ministry of the Austrian Empire, under Lammasch from Oct. 27-31 1918, could only be regarded as an attempt on the part of the impotent Monarch to bring about a friendly liquidation between the peoples who were separating from each other. But since the non-German nationalities were not prepared to accept such a peaceful settlement, the liquidation between the monarchy and the new republic was confined to German-Austria, and Lammasch's friendly offices might certainly be thanked for the fact that in this quarter the settlement was achieved quite bloodlessly, in favourable contrast with the two years of fighting between Czechs, Poles, Ruthenians, Magyars, Rumanians, Southern Slays and Italians. Lammasch and his ministers shared their official premises peacefully with the new secretaries of state of the Austrian Republic, and his last official act was to send out posters with an appeal for peace and quiet. (For the later history, see Austria, Republic Of.) 1 Baron Max Hussarek (b. 1860) professor of canon law at the university of Vienna, was of clerical leanings; he was Minister of Education from Nov. 3 1911 to his appointment as head of the Cabinet (July-Oct. 1918).

Bibliography. - The Oesterreichische Politische Chronik, published by Neissel (Vienna 1910-8), contains among other things an account of the most important transactions of all the public bodies (Parliament, the Delegations, etc.); Neuere Gesetzgebung Oesterreichs nach den Reichstagsverhandlungen (Vienna); H. Kelsen, Reichsratswahlordnung (1907); Hauptprobleme der Staatsrechtlehre ('191 I); ' Verfassungsgesetze (1919); R. Charmatz, Der demokratischnationale Bundesstaat Oesterreich (1904); Oesterreich als Volksstaat (1918); Deutsch-oesterreichische Politik (1907); F. Kleinwachter, Untergang der oesterreich-ungarischen Monarchie (1920); Seton-Watson, The Future of Austria (1907); The Southern Slav Question; Absolutism in Croatia; Zd. Tobalka, Das bohmische Volk (1916); J. Zolger, Staatsrechtliche Ausgleich (1916); P. Samassa, Volkerstreit im Habsburgerreich (1910); K. Reuner. Oesterreichs Erneuerung (1916); R. Sieger, Oesterreichischer Staatsgedanke (1916): C. Brockhausen, Oesterreichische Verwaltungsreform (1916); Fr. Tezner, Entwicklung des Parlamentarismus in OesterreichUngarn (1914); Fr. Wieser, Oesterreichs Ende (1919); Th. Sosnosky, Politik im Habsburgerreich (1913); R. Laun, Nationalitdtenrecht (1917); J. Barnreiter, Die bohmische Frage (1910); V. Lischka, Deutsch-Oesterreich unter slawischer Herrschaft (1913); E. Zenker, Nationale Organisation in Oesterreich (1916); L. Wimmer, Die Ostmark (1917); Munin, Oesterreich nach dem Kriege (1915); W. Schilling-Singalewitsch, Sonderstellung Galiziens (1917); A. Skene, Nationaler Ausgleich in Mahren (1910); L. Czwiklinski, Das Konigreich Polen (1917); E. Plener, Reden (1911). (C. BR.) Economic Conditions Pre-War Period. - During the years 1910-4, immediately preceding the World War, economic conditions in Austria showed no uniform tendency, for in many fields the signs pointed to a crisis, while in others developments seemed full of promise. These conditions were undoubtedly determined by the critical political situation from 1908 onward, which made it probable that, sooner or later, the Habsburg Monarchy would have to fight for its right to exist. It is true that nobody could have foreseen coming events; but things kept on occurring which counselled prudence, and threatened the economic situation from without. Added to this the state saw itself compelled, in view of the political situation, to increase its expenditure on armaments; and since this expenditure grew at a rate with which the revenue could not keep pace, the Government had constantly to raise large sums by borrowing in the open market, and in 1912 had even to raise a big loan in America. All this, combined with the stringency of the international money-market, meant a heavy burden on Austrian national economy. Voices were not lacking which, in view of Austria's relatively small share in foreign investments, ascribed the deterioration of the trade balance to the fact that the public bodies were " living beyond their means." (From 1875 onwards the balance of trade had been in favour of Austria; in 1907 it turned against her, and from this time the adverse balance showed a steady increase until 1913, when it slightly diminished.) According to the census of 1910, out of 16 million persons following an occupation 8.5 millions were engaged in agriculture and forestry, 3.6 in industr y, 1 6 in commerce and transport, 2.3 in the public services, liberal professions, etc. Agriculture is thus the basis of economic existence for the greater part of the population; and the favourable crop statistics for the last years preceding the war, and especially the record harvest of the year 1912, must have had a beneficial influence upon the economic situation. The production of the most important crops for the whole of Austria is shown in Table I.

TABLE I. - Crop Statistics. (Thousands of tons.) We must consider, in this connexion, that the prosperity of certain industries depends directly upon the results of the harvest. It was only in years when the harvest was most favourable that AustriaHungary was able to provide for her own requirements in corn; for export purposes only barley was of considerable importance, while wheat, and above all, of recent years, maize had to be imported. In Table II. is shown the excess of imports of grain over exports (+), or of exports over imports (-).

TABLE II. (Thousands of tons) In Table III. are given the average prices of the most important varieties of grain.

TABLE III.-Average Prices, Vienna (in kronen). The prices of the principal kinds of meat do not show the same tendency as those of corn; it is only after 1911 that a certain pause can be remarked in the rise of prices, as Table IV. shows: TABLE IV.-Retail Price of Meat, Vienna (in kronen). The statistics of sugar are given in Table V.: TABLE V.-Sugar. (Thousands of tons.) The price of sugar in Vienna showed in 1913 a considerable fall following the good harvest. The total production for the year 1912-3, and also the amount of consumption, are the highest recorded in Austria.

As to the products of other industries closely related to agriculture that of beer and brandy varied, and was at times extraordinarily large.

The old Austria was very richly provided with raw materials; the coal and iron supply was especially rich; in the years immediately preceding the war the production of these two commodities followed in general a rising curve. Table VI. gives the quantities of important mineral products.

TABLE VI.-Mineral Production. (Thousands of tons.) The amount of manufactured iron produced was also on the ncrease; the quantities in thousands of tons were After 1908 the Austrian textile industry suffered from a serious depression; owing to the extraordinarily steep advance in the prices of raw materials the position of this industry was unfavourable, in spite of increased production and rising prices at the spinning mills. The figures for the cotton industry are representative: Imports of Cotton. (Thousands of tons.) The number of cotton spindles in Austria was: in 1910, 4,643,300' in 1911, 4,563,700; in 1912, 4,797,9 00; in 1913, 4,9 0 9,45 8. After 1910 an ever-increasing quantity of cotton had to be exported.

Exports of Cotton. (Thousands of tons.) The number of looms increased steadily, but the output per loom showed partially a distinct decrease.

A good general impression of the economic situation can easily be gained from the returns of the state of the labour market. Table VII. shows how many offers of places corresponded on a yearly average to every hundred applications for work: TABLE VII.-Employment per too Applications.

An improvement was shown only in the position of employees in smelting works, otherwise a deterioration is to be observed everywhere, most markedly in the textile industry. In spite of this wages showed a rising tendency. Table VIII. gives the average daily wage (based on the returns for the accident insurance contribution): TABLE VIII.-Average Daily Wage in Vienna (in kronen). The cost of living increased on the whole; it was only in 1913 that there was a fall in the price of certain important commodities. The average prices per kilogram of certain commodities in Lower Austria are shown in Table IX.: TABLE IX.-Average Food Prices (heller per kilogram).

This very cheapening of many commodities in 1913, side by side with which went also a cheapening of many manufactured articles, was indicated as the sign of a decline in the power of consumption of the population.

It may here be mentioned that according to the savings bank returns there was also a decline in the amount of deposits. The deposits and withdrawals were respectively, in thousands of kronen: After the heavy withdrawals of 1912 the decline in deposits together with a continuance of heavy withdrawals in 1913, is a clear sign of economic depression. The economic situation of Austria shared in this respect in the general development of world affairs, in which also, after a period of prosperity, a reaction set in in 1913. It is Only surprising that in 1912 the reaction already showed itself sharply in Austria. The year 1914 soon showed signs of a coming relaxation of the economic crisis; but this development was interrupted by the World War.

The War Period, 1914-8.-The outbreak of war meant the almost complete paralysis of industry in Austria. Only the very narrow range of goods manufactured in peace-time found buyers, and these were used exclusively for the equipment of those going to the front. The bulk of industry found itself faced with the impossibility of disposing of the goods previously manufactured, and acted in consequence as best suited the interests of the moment: there were general dismissals of workmen, and enterprises were restricted or suspended. Numerous industries were almost entirely dependent upon export trade (e.g. the glass and porcelain industry in Bohemia), but foreign relations were to a large extent broken off through the closing of trade-routes and the entry into the enemy camp of countries which had been important markets. Thus during the first weeks of the war there was very great unemployment in parts of the industrial regions, since the dismissals far exceeded the proportion of enrolments in the army, while agriculture, which was already occupied with the harvest, suffered from a serious shortage of labour.

The Government had not prepared in advance any measures for setting industrial production going again in any way. Its first steps in war economy were confined to the sphere of finance and credit: the bourse was closed, and a moratorium announced. With regard to the latter, however, the requirements of industry were studied to a certain extent, in that the withdrawal of money from the banks was allowed, so far as it was necessary for paying wages and for the provision of working capital.

There was no revival of industry until the orders of the military authorities began to come in, which gave lucrative employment. In a short time, and without any pressure from the Government, but solely as a result of the favourable prices it offered, industrial conditions were completely transformed so as to meet the exigencies of the war. At first indeed, since the war was only expected to last a short time, there was little disposition to incur the heavy expenditure necessary in order to secure a share in the manufacture of war material; but this attitude was soon changed, and within six months factories everywhere had been adapted to the supply of munitions and all the variety of other things required by the Government for the armies. Industry was thus in many ways compensated for the paralysis of trade with private buyers in the home market and for the closing of foreign markets, and it would have been able to continue quietly on the old lines but for the emergence of a new factor which fundamentally altered the conditions. This factor was the rupture of communications with foreign countries, due in the earlier stages of the war to the limitation, and at one time the prohibition, of exports by neutral countries, the passing over of some of these countries to the enemy, and lastly the blockade by the enemy Powers, which increased in efficiency and made it more and more difficult to import the most essential commodities, until in the end it was almost impossible to obtain from abroad anything, needed either for the soldiers or the civilians.

In this respect Austria found herself in the same position as the German Empire; in fact, her position was in many respects considerably worse; many richly productive territories were temporarily occupied by the enemy; and as Austria was far less well provided with raw materials than Germany she was less in a position to produce goods for exchange. In addition to this there was another quite exceptional source of difficulties which had the most serious consequences for Austria, namely her relation with Hungary, due to the peculiar constitutional structure of the Austro-Hungarian Monarchy. The Hungarian Government could claim the right to take independent economic measures for her own territory in war-time; a joint arrangement was only possible for the territories of the Dual Monarchy - which were united for tariff purposes - by agreements between the Austrian and Hungarian Governments; and since neither Government was exclusively concerned to carry out an adjustment of economic conditions solely in accordance with what was necessary for waging war and holding out with the supplies at their disposal, but each had also to champion the interests of one half of the monarchy against the other, the negotiations between the two Governments were often attended with the greatest difficulties, and constantly ended unsatisfactorily. Hungary, in accordance with her economic situation, had always the advantage in these negotiations, since she was incomparably richer than. Austria in foodstuffs, and the latter was constantly thrown back upon Hungarian supplies; and this superiority on the part of Hungary became more and more definitely pronounced in proportion as the provision of the necessities of life for the army and civil population became a steadily-increasing anxiety.

The more complete the economic isolation of the monarchy the more the lack of raw materials made itself felt, both for the manufacture of indispensable war supplies and for the feeding of the civil population. To prevent the war being brought to a premature end by dearth of supplies, the Government took measures, modelled on those adopted in Germany, for ensuring that necessary goods should be supplied to the proper quarters - whether the army authorities, manufacturers of war material, or consumers - and at a moderate price.

The quantity of raw materials which Austria had been in the habit of importing from abroad, and the quantity stored in the country at the outbreak of the war, were comparatively very small. The Austrian and Hungarian ports were of little importance as ports of entry for raw materials, the goods stored there being mainly from the Levant. On the other hand, wool, cotton, metals, etc., which came from overseas, were imported through German or Dutch ports, and were stored there, though often already in Austrian ownership. It was of the first necessity to assure the transport through Germany of these Austrianowned goods, and an agreement with the German Government securing this was made. Agreements were also concluded by which a share of the goods owned by Germany was conceded to Austria.

It was next necessary to organize the purchase of goods in neutral countries. This was at first left wholly to private enterprise; but, as Austrian buyers not only competed with each other but also with buyers from other countries, this was bound to send up prices, while the interests of the State were subordinated to private gain. To meet this situation Germany set up central boards (Zentralen), and Austria followed suit, partly at the request of the German Government, which wished to avoid the competition of Austrian agents. Since the functions of these organizations were commercial, for which the regular Government officials were unsuited, they were established as commercial joint-stock companies under peculiar conditions adapting them to the service of the state. Any dividends earned by them above 5 or 6% on their capital were to go to the State (in the first place to the Minister for War, to be applied to war purposes). In Austria the Government did not subscribe any of the capital, but the central boards were subjected to State supervision and their power of fixing prices was in many ways limited. These boards were now given the monopoly of the right to import certain wares (sometimes private buyers were allowed to purchase, but only on condition of selling the goods imported to the board); they were also entrusted with the reception of the instalments of raw materials already mentioned as released from bond in Germany. The activity of the central boards as purchasers in neutral countries did not last long; it came quickly to an end in 1915, especially after Italy's entry into the war.

Fresh tasks were, however, soon imposed upon them. The virtual stoppage of all supplies of raw materials from abroad necessitated the strictest economy in the use of those available at home, and this led to an elaborate system of Government control. Since expert advice was absolutely essential to the efficient working of such control, the task of carrying out the regulations as to the distribution of materials, etc., was entrusted to central boards under the form of war associations (Kriegsverb¢nde), or economic associations (Wirtschaftsverbcinde), each controlling certain materials. The associations, to which the manufacturers using these materials had to belong, were directed by elected committees; at the head of each was an expert appointed by the Government, which was represented on the board by a commissioner exercising the Government's right of supervision. In addition to regulating the distribution of raw materials these boards exercised other useful functions, such as discovering fresh sources of supply, improving methods of production, etc. They also acted as receiving centres for goods imported from neutral countries, allied states or occupied territories. In this way there arose central boards for wool, cotton, oil and fat, hides and leather, and various metals - to name only the more important materials.

The control exercised by these boards was limited in scope and touched only comparatively narrow classes. It was otherwise with the control of foodstuffs, which was all-embracing. The problem in Austria, as elsewhere, was to keep the prices of the necessaries of life at a level low enough to enable the people to live. The attempt to fix maximum prices broke down, owing to the temptations to secret dealing, and, as in England, the card system had to be introduced.

Early in 1915 an institution was established for regulating the traffic in grain during the war (Kriegsgetreide-Verhehrs-Anstalt); it had been preceded by a central maize board, established to control the distribution of the maize contributed by Hungary.

The new institution was registered as a trader and was to be conducted on commercial principles, its expenses being covered by its receipts, and the State only guaranteeing it against eventual loss in order to secure the credit of the company. The principle of balancing expenditure and receipts was, indeed, soon abandoned, the State making advances to the institution in order that bread-stuffs might be sold under cost price. This institution, in the conduct of which officials and experts appointed by the Government took part, had complete control of all grain, flour, mills and bakeries. Its activities in fixing the price and quality of bread, etc., and in rationing, closely resembled those of the food controller in Great Britain (see Food Supply and Rationing) .

This system of State control prevented industries which used grain as their raw material from buying in an open market, and in their case too it was found necessary to regulate supplies by means of an organization analogous to that of the economic associations already mentioned. In many cases these boards were established in connexion with the already existing trade associations (e.g. the Central Brewery Board in connexion with the Central Association of the Austrian Brewery Association), which set up their own distributing-stations and divided the raw material among producers according to a scale fixed by the Government, charging the producers a commission, in addition to the cost price, in order to cover costs. These boards also undertook other functions, such as introducing new methods of manufacture and supplying the workers in the munition factories with beer. Sugar and alcohol were also placed under the control of central boards, in connexion with existing organizations but with a certain independence: for instance, the Sugar Kartel ceased to exist, while the Central Sugar Board continued. The latter also managed the export of sugar, in return for which certain wares were imported.

Of particular interest were the purchasing associations formed during the war. In the autumn of 1915 the Ministry of the Interior established the Einkaufsstelle m. C. H." (Purchasing station with limited liability licensed by the Ministry of the Interior), known as the "Miles," which was charged with the buying of goods in neutral countries. At first this organization acted as agent of the newlyestablished approvisionment departments; it was only later that it received the monopoly of the right to import certain articles, the Government at the same time placing at its disposal certain wares with which to pay for them. The prices fixed by the Miles for the sale of its wares were not at first interfered with; it was only later that its dividends were limited to 6%. It was then transformed into the " Oezeg " (Oesterreichische ZentralEinkaufsgesellschaft: Austrian Central Purchasing Company), which was the very type of an " altruistic company." In addition to the dividend 5% was allowed for commission, office expenses and risk. By agreement with the Ministry of the Interior, as soon as the reserve exceeded by io% the working capital (which was partly in shares, partly in bank advances) the company was to sell food under cost price; and this actually happened.

The system of regulation by central boards was severely .criticised for incompetence and even for corruption, and sometimes justly; but on the whole it was amply justified by the urgent necessities of the times and by its results. Many other measures had also to be resorted to in order to maintain the industry of the country. Briefly, the duty of maintaining industries was made obligatory, and in the last resort the military authorities were empowered to take them over, though this was not likely to happen as long as the high prices continued and the Government supplied raw materials. Tillage was also made compulsory, but this had little effect on production owing to the shortage of labour, draft animals, manures and agricultural implements, together with the oppressive restrictions caused by the fixing of maximum prices.

All these measures could not alter the fact that the national economy became less and less equal to the tasks imposed upon it by the war. So soon as State control was applied to any article it could be taken as a sign that the supplies would soon come to an end, or at any rate were very restricted; and thus it was impossible to prevent the equipment of the army from becoming gradually more inadequate, and the provision both of the army and of the population behind the lines with all kinds of necessaries from being altogether insufficient; only wholly unsatisfactory substitutes could be provided, and the available provisions could hardly be made to go round. When the war came to an end Austria was almost completely stripped of many important commodities.

No better picture can be obtained of its overwhelming economic impoverishment than by studying the figures which show the decline in the crop returns for Austria, and taking into account the fact that imports from Hungary and the territories under military occupation naturally fell far below the proportion of foodstuffs formerly imported. Table X. gives the returns of the principal crops for Lower Austria according to the statistics of the Ministry of Agriculture.

Table X. - Crop Statistics. (Thousands of tons.) *Average.

In the other Crown lands the crops declined in the same proportion. The production of fodder also declined steadily, the number of cattle fell, and the army horses were insufficiently fed. To these purely economic difficulties was added the growing opposition of the population to the measures of compulsion. This in part depended on national factors, which became more clearly visible as the situation of the Central Powers became more and more unfavourable, but it was in part due simply to the exhaustion due to economic need. Thus the spirit of the labouring classes became more and more inflamed, and at the beginning of 1918 the Government had the greatest difficulty in suppressing an anti-war agitation among the working classes, which assumed a threatening form. Movements were now unchained which were bound after the end of the war to leave their impress upon the political events and internal economy of the young Austrian republic (see [[Austria, Republic Of). (K. P]].; R. STR.) Finance and Banking. - The third licence granted to the AustroHungarian Bank expired on Dec. 31 1910. It was at first extended provisionally, as it was impossible to reach a settlement between Austria and Hungary regarding the continuance of common currency and banking arrangements. In Hungary a strong majority, which the Government could not afford to ignore, insisted on the formation of an independent Hungarian bank; on the other hand the advantages accruing to Hungary through the community of the financial and banking organization were quite obvious. There was an important divergence of opinion between Austria and Hungary concerning the constitution of the bank. Since the closing years of the 19th century the Austro-Hungarian Bank had pursued a policy which had in the main the object of making the Austrian krone a gold exchange standard. It was decided, however, by the Austrian financial authorities that the obligation of the Austro-Hungarian Bank to convert its notes into gold on demand should remain suspended as hitherto, owing to fear lest the renewal of the obligation of the bank to cash its notes in gold should lead to a rise in the rate of interest. Hungary, on the other hand, striving for access to the money markets of the West, desired that the obligation of the Austro-Hungarian Bank to cash its notes should be explicitly mentioned in the law, in order to make the public loans rank as easily negotiable securities on foreign bourses. In the banking law of Aug. 8 1911 a compromise was formed on the following lines. The suspension of cash payment by the Austro-Hungarian Bank was continued, but the bank was bound to provide, by every means at its disposal, that the value of its notes as quoted on foreign bourses should be permanently secured in proportion to the parity of the legal mint standard of the krone currency. Hungary's wishes were met by the introduction of a specially prompt procedure for the eventual future abolition of the suspension of the bank's obligation to cash its notes. By the same law, besides other less important provisions, the amount of the bank's tax-free issue of notes was raised from 400 to 600 millions of kronen, and the conditions formerly attached to the issue of 10 and 20 kronen notes were sensibly relaxed, A 4% bank-rate had been uninterruptedly in force from May 8 1908 to Oct. 23 1910. From Oct. 24 1910 to Feb. 3 1911 it was 5%; on Feb. 4 1911 it was reduced to 41%, and on Feb. 23 1911 further to 4%. From Sept. 22 191 I to Oct. 25 1912 the bank-rate was again 5%; on Oct. 25 1912 it was increased to 51%; and on Nov. 16 1912 a rate of 6% came into force and so remained until Nov. 27 1913, when it was lowered to 51%, falling on Jan. 20 1914 to 5%, on Feb. 3 1914 to 41%, and finally on March 12 1914 to 4 These changes in the bank-rate show that Austria passed through a financial crisis and credit difficulties in 1912-3, from the consequences of which she had only just recovered at the outbreak of the war. The stringency of the money market and the crisis had their commencement as early as the spring of 1912. The Balkan War, which broke out in the autumn of 1912, did not occasion the crisis, but it made it more acute. The number of trade insolvencies in AustriaHungary had reached its height in 1912. The Vienna Creditors' Association for the protection of claims in bankruptcies had in 1909- It fresh failures with liabilities of 45, 40 and 43 millions of kronen respectively. In 1912 the value of fresh claims involved rose to 112 millions of kronen; in 1913 it still amounted to 73 millions. One obvious sign of a crisis was the demand for loans against security from the Austro-Hungarian Bank, which was the result of the unfavourable position of investments on the bourse. In each of the five years, ending Dec. 31, from 1909 to 1913 the loans granted by the Austro-Hungarian Bank against securities amounted to 90, 149, 187, 355 and 311 millions of kronen successively. The bank-note circulation rose in proportion. Notwithstanding the fact that the banking law raised the tax-free note issue in 1911 from 400 to 600 millions of kronen, in 1913 the bank was unable to avoid incurring tax payments for notes issued in excess of the amount allowed free of tax, a state of affairs which had no parallel in the bank's history. From Aug. 23 1912 to Jan. 23 1914 the bank return showed no taxfree reserve of notes.

On July 23 1914 the gold reserve of the Austro-Hungarian Bank amounted to 1,238 millions of kronen, its silver to 291 millions. In its portfolio were discounted bills to the amount of 768 millions of kronen. It had loans on security outstanding to the amount of 186 millions, and the bank-notes in circulation amounted to 2,130 millions of kronen. The outbreak of the World War compelled the bank to raise its rate on July 27 1914 from 4 to 5%, on July 31 to 6% and on Aug. 2 to 8%. The public rushed to the bank to obtain advances by pledging securities. On Aug. 4 1914 the Bank Act was suspended by imperial ordinance having the force of law. In this manner the bank was converted into an institution which could supply the Government, by fresh issues of notes, with loans to an unlimited extent. The legal forms under which this source of credit was assured were various, but the actual result was in every case the same. The bankrate was reduced to 6% as early as Aug. 20 1914, and the granting of credit on depositing securities was facilitated by extending the limits of the securities accepted.

The note issue was as follows: Dec. 31 1914.5,137 millions of kronen " „ 1915 . 7,162 " ..

" " 1916.. 10,889 ". 18,440 ., 35,5 8 9 " In proportion to the increase of the notes in circulation prices and wages rose, and the krone depreciated on the foreign exchanges. The Government tried to oppose the rise in prices by penal measures, and in public attributed the rise of foreign rates to speculation. A Central Securities Board (Devisenzentrale) was set up on Feb. 24 1916; and regulations were issued on Dec. 19 1916 and June 18 1918, attaching a series of conditions to dealings in foreign money, bills and securities, which amounted actually to a monopolizing of all such operations by the Devisenzentrale. These measures had no success. The value of the American dollar, in terms of AustroHungarian paper kronen with legally fixed value, varied in fact, as shown by the Swiss exchange market, as follows: - State Finances. - The revenue from taxation rose year by year, partly owing to the increased profits of industry, partly to fresh increases in taxation. From the year 1902 to the financial year 1914-5 the State revenues doubled, rising from 1,730 millions of kronen to 3,460 millions of kronen, but this increase in revenue could only be achieved by placing an extraordinary strain on the taxable capacity of the country. In the financial year 1913 the amount of estimated expenditure rose to 3,461 millions of kronen. Of the estimated net revenue of 2,102 millions of kronen, 432 millions (20.5%) came under the head of receipts from direct taxation, 905 millions (43%) under the head of receipts from indirect taxation and taxes on commerce, while 294 millions (14%) were the proceeds of State property and State institutions. Of the direct taxes the land tax produced 52 millions, the house taxes 127 millions, the taxes on industry 127 millions and the income tax 102 millions. Of the taxes on consumption the spirit tax produced 95 millions, the beer duty 85 millions, and the sugar duty 176 millions. The State debt amounted to 11,340 millions of kronen. On the outbreak of the war it was at first impossible to contemplate meeting the cost of the war by raising existing taxes or by imposing fresh taxation. The costs of the war were in the first place met by loans and the assistance of the noteprinting press. The means of carrying on the war were obtained by the State becoming the debtor of the Austro-Hungarian Bank, in so far as credit was concerned.

The debt of the Austrian State to the Austro-Hungarian Bank in direct loans made by the bank to the State amounted at the end of 1919 to 25,088 millions of kronen. But, besides this, the bank had also afforded credits to the State in other forms. In return for bonds given by the Austrian and Hungarian State they issued Treasury bills, and transferred the proceeds from them to the two finance departments. The total amount of such Treasury bills in circulation at the end of 1918 was roughly 7,400 millions of kronen. The Post Office Savings Bank was also made to serve the financial needs of the State. Whenever a war loan was impending it accepted advances from the members of the Banking Consortium, which had to place the war loans, and as soon as the subscription was closed they were compensated for the underwriting. At the end of June 1919 these advances still amounted to 2,605 millions of kronen. Foreign credit also was laid under contribution by the Austrian State. On Oct. 31 1918 the amounts of outstanding debts incurred abroad during the war were as follows: 2,696 millions of German Reichsmarks 42.9. " " Dutch florins 20.6 " " Danish .kroner 7.9 " " Swedish kroner 3.6 " Bulgarian levas.

The home money market was approached by the Government through the issue of war loans. The total number of such war loans was eight. They bore interest at 51%. The first issue took place on Nov. 11914, and from that time onwards a fresh war loan was issued about every six months. In this way a State debt of 35,069 millions of kronen was accumulated.

Up to Sept. 1915 no increases in taxation were introduced in Austria, except a slight increase in the duty on beer; neither were any new taxes created. Even the reform of taxation carried out in the autumn of 1915 (modification of the inheritance and donations duty and the taxation on insurance policies and legal charges) cannot be regarded strictly as war taxes, as they had been planned a considerable time before the outbreak of the war and had only been delayed by the inability of Parliament to continue its work. It was not until 1916 that increases took place in every field of taxation. The price of tobacco and the tariff of the State railways were considerably increased, special war increases were introduced in the direct taxes, and in April 1916 an entirely new tax was imposed - the " war profits tax," the name of which was subsequently altered to " war tax." But all these taxes and increases of taxation were quite inadequate to meet the enormous expense of conducting the war. War finance was not able to dispense with the printing of notes. (L. v. M.)

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