8: The Crisis of 1903
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SINCE the years 1866-1871 no period of
Austro-Hungarian development has been so important as the years 1903-1907. The defeat of
the old Austria by Prussia at Sadowa in 1866, the establishment of the Dual Monarchy in
1867 and the foundation of the new German empire in 1871, formed the starting-point of
Austro-Hungarian history properly so called; but the Austro-Hungarian crisis in 1903-1906
- a crisis temporarily settled but not definitively solved, - and the introduction of
universal suffrage in Austria, discredited the original interpretation of the dual system
and raised the question whether it represented the permanent form of the Austro-Hungarian
polity.
At the close of the 19th century both states of the Dual Monarchy
were visited by political crises of some severity. Parliamentary life in Austria was
paralysed by the feud between Germans and Czechs that resulted directly from the Badeni
language ordinances of 1897 and indirectly from the development of Slav influence,
particularly that of Czechs and Poles during the Taaffe era (1879-1893). Government in
Austria was carried on by cabinets of officials with the help of the emergency clause
(paragraph 14) of the constitution. Ministers, nominally responsible to parliament, were
in practice responsible only to the emperor. Thus during the closing years of last and the
opening years of the present century, political life in Austria was at a low ebb and the
constitution was observed in the letter rather than in the spirit.
Hungary was apparently better situated. Despite the campaign of
obstruction that overthrew the Bánffy and led to the formation of the Széll cabinet in
1899, the hegemony of the Liberal party which, under various names, had been the mainstay
of dualism since 1867, appeared to be unshaken. But clear signs of the decay of the
dualist and of the growth of an extreme nationalist Magyar spirit were already visible.
The Army bills of 1889, which involved an increase of the peace footing of the joint
Austro-Hungarian army, had been carried with difficulty, despite the efforts of Kálmán
man Tisza and of Count Julius Andrássy the Elder. Demands tending towards the
Magyarization of the joint army had been advanced and had found such an echo in Magyar
public opinion that Count Andrássy was obliged solemnly to warn the country of the
dangers of nationalist Chauvinism and to remind it of its obligations under the Compact of
1867. The struggle over the civil marriage and divorce laws that filled the greater part
of the 'nineties served and was perhaps intended by the Liberal leaders to serve as a
diversion in favour of the Liberal-dualist standpoint; nevertheless, Nationalist feeling
found strong expression during the negotiations of Bánffy and Széll with various
Austrian premiers for the renewal of the economic Ausgleich, or "Customs and
Trade Alliance." At the end of 1902 the Hungarian premier, Széll, concluded with the
Austrian premier, Körber, a new customs and trade alliance comprising a joint
Austro-Hungarian tariff as a basis for the negotiation of new commercial treaties with
Germany, Italy and other states. This arrangement, which for the sake of brevity will
henceforth be referred to as the Széll-Körber Compact, was destined to play an important
part in the history of the next few years, though it was never fully ratified by either
parliament and was ultimately discarded. Its conclusion was prematurely greeted as the end
of a period of economic strife between the two halves of the monarchy and as a pledge of a
decade of peaceful development. Events were soon to demonstrate the baselessness of these
hopes.
In the autumn of 1902 the Austrian and the Hungarian governments,
at the instance of the crown and in agreement with the joint minister for war and the
Austrian and Hungarian ministers for national defence, laid before their respective
parliaments bills providing for an increase of 21,000 men in the annual contingents of
recruits. 16,700 men were needed for the joint army, and the remainder for the Austrian
and Hungarian national defence troops (Landwehr and honvéd). The total contribution of
Hungary would have been some 6500 and of Austria some 14,500 men. The military authorities
made, however the mistake of detaining in barracks several thousand supernumerary recruits
(i.e., recruits liable to military service but in excess of the annual 103,000
enrollable by law) pending the adoption of the Army bills by the two parliaments. The
object of this apparently high- handed step was to avoid the expense and delay of
summoning the supernumeraries again to the colours when the bills should have received
parliamentary sanction, but it was not unnaturally resented by the Hungarian Chamber,
which has ever possessed a lively sense of its prerogatives. The Opposition, consisting
chiefly of the independence party led by Francis Kossuth (eldest son of Louis Kossuth),
made capital out of the grievance and decided to obstruct ministerial measures until the
supernumeraries should be discharged. The estimates could not be sanctioned, and though
Kossuth granted the Széll cabinet a vote on account for the first four months of 1903,
the Government found itself at the mercy of the Opposition. At the end of 1902 the
supernumeraries were discharged - too late to calm the ardour of the Opposition, which
proceeded to demand that the Army bills should be entirely withdrawn or that, if adopted,
they should be counterbalanced by concessions to Magyar nationalist feeling calculated to
promote the use of the Magyar language in the Hungarian part of the army and to render the
Hungarian regiments, few of which are purely Magyar, more and more Magyar in character.
Széll, who vainly advised the crown and the military authorities to make timely
concessions, was obliged to reject these demands which enjoyed the secret support of Count
Albert Apponyi, the Liberal president of the Chamber and of his adherents. The obstruction
of the estimates continued. On the 1st of May the Széll cabinet found itself without
supply and governed for a time "ex-lex" Széll, who had lost the
confidence of the crown, resigned and was succeeded (June 26) by Count Khuen-Héderváry,
previously ban, or governor, of Croatia. Before taking office Khuen-Héderváry negotiated
with Kossuth and other Opposition leaders, who undertook that obstruction should cease if
the Army bills were withdrawn. Despite the fact that the Austrian Army bill had been voted
by the Reichsrath (February 19), the crown consented to withdraw the bills and thus
compelled the Austrian parliament to repeal, at the dictation of the Hungarian
obstructionists, what it regarded as a patriotic measure. Austrian feeling became
embittered towards Hungary and the action of the crown was openly criticized.
Meanwhile the Hungarian Opposition broke its engagement.
Obstruction was continued by a section of the independence party; and Kossuth, seeing his
authority ignored, resigned the leadership. The obstructionists now raised the cry that
the German words of command in the joint army must be replaced by Magyar words in the
regiments recruited from Hungary - a demand which, apart from its disintegrating influence
on the army, the crown considered to be an encroachment upon the royal military
prerogatives as defined by the Hungarian Fundamental Law XII. of 1867. Clause 11 of the
law runs: "In pursuance of the constitutional military prerogatives of His Majesty,
everything relating to the unitary direction, leadership and inner organization of the
whole army, and thus also of the Hungarian army as a complementary part of the whole army,
is recognized as subject to His Majesty's disposal." The cry for the Magyar words of
command on which the subsequent constitutional crisis turned, was tantamount to a demand
that the monarch should differentiate the Hungarian from the Austrian part of the joint
army, and should render it impossible for any but Magyar officers to command Hungarian
regiments, less than half of which have a majority of Magyar recruits. The partisans of
the Magyar words of command based their claim upon clause 12 of the Fundamental Law XII.
of 1867 - which runs: "Nevertheless the country reserves its right periodically to
complete the Hungarian army and the right of granting recruits, the fixing of the
conditions on which the recruits are granted, the fixing of the term of service and
all the dispositions concerning the stationing and the supplies of the troops according to
existing law both as regards legislation and administration." Since Hungary reserved
her right to fix the conditions on which recruits should be granted, the partisans of the
Magyar words of command argued that the abolition of the German words of command in the
Hungarian regiments might be made such a condition, despite the enumeration in the
preceding clause 11, of everything appertaining to the unitary leadership and inner
organization of the joint Austro-Hungarian army as belonging to the constitutional
military prerogatives of the crown. Practically, the dispute was a trial of strength
between Magyar nationalist feeling and the crown. Austrian feeling strongly supported the
monarch in his determination to defend the unity of the army and the conflict gradually
acquired an intensity that appeared to threaten the very existence of the dual system.
When Count Khuen-Héderváry took office and Kossuth relinquished
the leadership of the independence party, the extension of the crisis could not be
foreseen. A few extreme nationalists continued to obstruct the estimates, and it appeared
as though their energy Would soon flag. An attempt to quicken this process by bribery
provoked, however, an outburst of feeling against Khuen-Héderváry who, though personally
innocent, found his position shaken. Shortly afterwards Magyar resentment of an army order
issued from the cavalry manveuvres at Chlopy in Galicia - in which the monarch declared
that he would hold fast to the existing and well-tried organization of the army" and
would never "relinquish the rights and privileges guaranteed to its highest
war-lord" - and of a provocative utterance of the Austrian premier Körber in the
Reichsrath led to the overthrow of the Khuen-Héderváry cabinet (September 30) by an
immense majority. The cabinet fell on a motion of censure brought forward by Kossuth, who
had profited by the bribery incident to resume the leadership of his party.
An interval of negotiation between the crown and many leading
Magyar Liberals followed, until at the end of October 1903 Count Stephen Tisza, son of
Kálmán Tisza accepted a mission to form a cabinet after all others had declined. As
programme Tisza brought with him a number of concessions from the crown to Magyar
nationalist feeling in regard to military matters, particularly in regard to military
badges, penal procedure, the transfer of officers of Hungarian origin from Austrian to
Hungarian regiments, the establishment of military scholarships for Magyar youths and the
introduction of the two years' service system. In regard to the military language, the
Tisza programme - which having been drafted by a committee of nine members, is known as
the "programme of the nine" - declared that the responsibility of the cabinet
extends to the military prerogatives of the crown, and that "the legal influence of
parliament exists in this respect as in respect of every constitutional right." The
programme, however, expressly excluded for "weighty political reasons affecting great
interests of the nation" the question of the military language; and on Tisza's motion
the Liberal party adopted an addendum sanctioned by the crown: "the party maintains
the standpoint that the king has a right to fix the language of service and command in the
Hungarian army on the basis of his constitutional prerogatives as recognized in clause 11
of law XII. of 1867."
Notwithstanding the concessions, obstruction was continued by the
Clericals and the extreme Independents, partly in the hope of compelling the crown to
grant the Magyar words of command and partly out of antipathy towards the person of the
young calvinist premier. In March 1904, Tisza, therefore, introduced a drastic
"guillotine" motion to amend the standing orders of the House, but withdrew it
in return for an undertaking from the Opposition that obstruction would cease. This time
the Opposition kept its word, The Recruits bill and the estimates were adopted, the
Delegations were enabled to meet at Budapest - where they voted £22,000,000 as
extraordinary estimates for the army and navy and especially for the renewal of the field
artillery - and the negotiations for new commercial treaties with Germany and Italy were
sanctioned, although parliament had never been able to ratify the Széll-Körber Compact
with the tariff on the basis of which the negotiations would have to be conducted. But, as
the autumn session approached Tisza foresaw a new campaign of obstruction, and resolved to
revert to his drastic reform of the standing orders. The announcement of his determination
caused the Opposition to rally against him, and when on the 18th of November the Liberal
party adopted a "guillotine" motion by a show of hands in defiance of orthodox
procedure, a section of the party seceded. On the 13th of December the Opposition,
infuriated by the formation of a special corps of parliamentary constables, invaded and
wrecked the Chamber. Tisza appealed to the country and suffered, on the 26th of January
1905, an overwhelming defeat at the hands of a coalition composed of dissentient Liberals,
Clericals, Independents and a few Bánffyites. The Coalition gained an absolute majority
and the Independence party became the strongest political group. Nevertheless the various
adherents of the dual system retained an actual majority in the Chamber and prevented the
Independence party from attempting to realize its programme of reducing the ties between
Hungary and Austria to the person of the joint ruler. On the 25th of January, the day
before his defeat, Count Tisza had signed on behalf of Hungary the new commercial treaties
concluded by the Austro-Hungarian foreign office with Germany and Italy on the basis of
the Széll-Körber tariff. He acted ultra vires, but by his act saved Hungary from
a severe economic crisis and retained for her the right to benefit by economic partnership
with Austria until the expiry of the new treaties in 1917.
A deadlock, lasting from January 1905 until April 1906, ensued
between the crown and Hungary and, to a great extent, between Hungary and Austria. The
Coalition, though possessing the majority in the Chamber, resolved not to take office
unless the crown should grant its demands, including the Magyar words of command and
customs separation from Austria. The crown declined to concede these points, either of
which would have wrecked the dual system as interpreted since 1867. The Tisza cabinet
could not be relieved of its functions till June 1905, when it was succeeded by a
non-parliamentary administration under the premiership of General Baron Fejérváry,
formerly minister for national defence. Seeing that the Coalition would not take office on
acceptable terms, Fejérváry obtained the consent of the crown to a scheme, drafted by
Kristóffy, minister of the interior, that the dispute between the crown and the Coalition
should be subjected to the test of universal suffrage and that to this end the franchise
in Hungary be radically reformed. The schemes alarmed the Coalition, which saw that
universal suffrage might destroy not only the hegemony of the Magyar nobility and gentry
in whose hands political power was concentrated, but might, by admitting the non-Magyars
to political equality with the Magyars, undermine the supremacy of the Magyar race itself.
Yet the Coalition did not yield at once. Not until the Chamber had been dissolved by
military force (February 19, 1906) and an open breach of the constitution seemed within
sight did they come to terms with the crown and form an administration. The miserable
state of public finances and the depression of trade doubtless helped to induce them to
perform a duty which they ought to have performed from the first: but their chief motive
was the desire to escape the menace of universal suffrage or, at least, to make sure that
it would be introduced in such a form as to safeguard Magyar supremacy over the other
Hungarian races.
The pact concluded (April 8, 1906) between the Coalition and the
crown is known to have contained the following conditions: All military questions to be
suspended until after the introduction of universal suffrage; the estimates and the normal
contingent of recruit to be voted for 1905 and 1906 the extraordinary military credits
sanctioned by the delegations in 1904, to be voted by the Hungarian Chamber, ratification
of the commercial treaties concluded by Tisza; election of the Hungarian Delegation and of
the Quota-Deputation, introduction of a suffrage reform at least as far-reaching as the
Kristóffy scheme. These "capitulations" obliged the Coalition government to
carry on a dualist policy, although the majority of its adherents became, by the general
election of May 1906, members of the Kossuth or Independence party, and, as such, pledged
to the economic and political separation of Hungary from Austria save as regards the
person of the ruler. Attempts were, however, made to emphasize the independence of
Hungary. During the deadlock (June 2, 1905) Kossuth had obtained the adoption of a motion
to authorize the compilation of an autonomous Hungarian tariff, and on the 28th of May
1906, the Coalition cabinet was authorized by the crown to present the Széll-Körber
tariff to the Chamber in the form of a Hungarian autonomous tariff distinct from but
identical with the Austrian tariff. This concession of form having been made to the
Magyars without the knowledge of the Austrian government, Prince Konrad Hohenlohe, the
Austrian premier, resigned office, and his successor, Baron Beck, eventually (July 6)
withdrew from the table of the Reichsrath the whole Széll-Körber Compact, declaring that
the only remaining economic ties between the two countries were freedom of trade, the
commercial treaties with foreign countries, the joint state bank and the management of
excise. If the Hungarian government wished to regulate its relationship to Austria in a
more definite form, added the Austrian premier, it must conclude a new agreement before
the end of the year 1407, when the reciprocity arrangement of 1899 would lapse. The
Hungarian government replied that any new arrangement with Austria must be concluded in
the form of a commercial treaty as between two foreign states and not in the form of a
"customs and trade alliance."
Austria ultimately consented to negotiate on this basis. In October
1907 an agreement was attained, thanks chiefly to the sobering of Hungarian opinion by a
severe economic crisis, which brought out with unusual clearness the fact that separation
from Austria would involve a period of distress if not of commercial ruin for Hungary.
Austria also came to see that separation from Hungary would seriously enhance the cost of
living in Cisleithania and would deprive Austrian manufacturers of their best market. The
main features of the new "customs and commercial treaty" were: (1) Each state to
possess a separate but identical customs tariff. (2) Hungary to facilitate the
establishment of direct railway communication between Vienna and Dalmatia, the
communication to be established by the end of 1911, each state building the sections of
line that passed through its own territory. (3) Austria to facilitate railway
communication between Hungary and Prussia. (4) Hungary to reform her produce and Stock
Exchange laws so as to prevent speculation in agrarian produce. (5) A court of arbitration
to be established for the settlement of differences between the two states, Hungary
selecting four Austrian and Austria four Hungarian judges, the presidency of the court
being decided by lot, and each government being represented before the court by its own
delegates. (6) Impediments to free trade in sugar to be practically abolished. (7) Hungary
to be entitled to redeem her share of the old Austrian debt (originally bearing interest
at 5 and now at 4.2 %) at the rate of 4.325 % within the next ten years; if not redeemed
within ten years the rate of capitalization to decrease annually by 1/12 % until it
reaches 4.2 %. This arrangement represents a potential economy of some £2,000,000 capital
for Hungary as compared with the original Austrian demand that the Hungarian contribution
to the service of the old Austrian debt be capitalized at 4.2 %. (8) The securities of the
two governments to rank as investments for savings banks, insurance companies and similar
institutions in both countries, but not as trust fund investments. (9) Commercial treaties
with foreign countries to be negotiated not, as hitherto, by the joint minister for
foreign affairs alone, but also by a nominee of each government. (10) The quota of
Austrian and Hungarian contribution to joint expenditure to be 63.6 and 36.4 respectively
- an increase of 2 % in the Hungarian quota, equal to some £200,000 a year.
The economic dispute between Hungary and Austria was thus settled
for ten years after negotiations lasting more than twelve years. One important question,
however that of the future of the joint State Bank, was left over for subsequent decision.
During the negotiations for the customs and commercial treaty, the Austrian government
attempted to conclude for a longer period than ten years, but was unable to overcome
Hungarian resistance. Therefore, at the end of 1917, the commercial treaties with Germany,
Italy and other countries, and the Austro-Hungarian customs and commercial treaty, would
all lapse. Ten years of economic unity remained during which the Dual Monarchy might grow
together or grow asunder, increasing accordingly in strength or in weakness.
During this period of internal crisis the international position of
the Dual Monarchy was threatened by two external dangers. The unrest in Macedonia
threatened to reopen the Eastern Question in an acute form; with Italy the irredentist
attitude of the Zanardelli cabinet led in 1902-1903 to such strained relations that war
seemed imminent. The southern Tirol, the chief passes into Italy, strategic points on the
Istrian and Dalmatian coasts, were strongly fortified, while in the interior the Tauern,
Karawanken and Wochein railways were constructed, partly in order to facilitate the
movement of troops towards the Italian border. The tension was relaxed with the fall of
the Zanardelli government, and comparatively cordial relations were gradually
re-established.
In the affairs of the Balkan Peninsula a temporary agreement with
Russia was reached in 1903 by the so-called "February Programme," supplemented
in the following October by the "Mürzsteg Programme." The terms of the
Mürzsteg programme were observed by Count Goluchowski, in spite of the ruin of Russian
prestige in the war with Japan so long as he remained in office. In October 1906, however,
he retired, and it was soon clear that his successor, Baron von Aerenthal, ¹ was
determined to take advantage of the changed European situation to take up once more the
traditional Policy of the Habsburg monarchy in the Balkan Peninsula. He gradually departed
from the Mürzsteg basis, and in January 1908 deliberately undermined the Austro-Russian
agreement by obtaining from the sultan a concession for a railway from the Bosnian
frontier through the sanjak of Novibazar to the Turkish terminus at Mitrovitza. This was
done in the teeth of the expressed wish of Russia it roused the helpless resentment of
Servia, whose economic dependence upon the Dual Monarchy was emphasized by the outcome of
the war of tariffs into which she had plunged in 1906, and who saw in this scheme another
link in the chain forged for her by the Habsburg empire, it offended several of the great
powers, who seemed to see in this railway concession the price of the abandonment by
Austria-Hungary of her interest in Macedonian reforms. That Baron von Aerenthal was able
to pursue a policy apparently so rash, was due to the fact that he could reckon on the
support of Germany. The intimate relations between the two powers had been revealed during
the dispute between France and Germany about Morocco; in the critical division of the 3rd
of March 1906 at the Algeciras Conference Austria-Hungary, alone of all the powers, had
sided with Germany, and it was a proposal of the Austro-Hungarian plenipotentiary that
formed the basis of the ultimate settlement between Germany and France. The cordial
relations thus emphasized encouraged Baron Aerenthal, in the autumn of 1908, to pursue a
still bolder policy. The revolution in Turkey had entirely changed the face of the Eastern
Question; the problem of Macedonian reform was swallowed up in that of the reform of the
Ottoman empire generally; there was even a danger that a rejuvenated Turkey might in time
lay claim to the provinces occupied by Austria-Hungary under the treaty of Berlin; in any
case, the position of these provinces, governed autocratically from Vienna, between a
constitutional Turkey and a constitutional Austria-Hungary, would have been highly
anomalous. In the circumstances Baron Aerenthal determined on a bold policy. Without
consulting the co-signatory powers of the treaty of Berlin, and in deliberate violation of
its provisions, the king-emperor issued, on the 13th of October, a decree annexing Bosnia
and Herzegovina to the Habsburg Monarchy, and at the same time announcing the withdrawal
of the Austro-Hungarian troops from the sanjak of Novibazar.
Meanwhile the relations between the two halves of the Dual Monarchy
had again become critical. The agreement of 1907 had been but a truce in the battle
between two irreconcilable principles; between Magyar nationalism, determined to maintain
its ascendancy in an independent Hungary, and Habsburg imperialism, equally determined to
preserve the economic and military unity of the Dual Monarchy. In this conflict the
tactical advantage lay with the monarchy; for the Magyars were in a minority in Hungary,
their ascendancy was based on a narrow and artificial franchise, and it was open to the
king-emperor to hold in terrorem over them an appeal to the disfranchised majority.
It was the introduction of a Universal Suffrage Bill by Mr Joseph Kristóffy, minister of
the interior in the "unconstitutional" cabinet of Baron Fejérváry, which
brought the Opposition leaders in the Hungarian parliament to terms and made possible the
agreement of 1907. But the Wekerle ministry which succeeded that of Fejérváry on the 9th
of April 1906 contained
¹ Alois, Count Lexa von Aerenthal, was born on the 27th of
September 1854 at Gross-Skal in Bohemia, studied at Bonn and Prague, was attaché at Paris
(1877) and afterwards at Petrograd, envoy extraordinary at Bucharest (1895) and ambassador
at Petrograd (1896). He was created a count on the emperor's 79th birthday in 1909.
elements which made any lasting compromise impossible. The burning
question of the "Magyar word of command" remained unsettled, save in so far as
the fixed determination of the king-emperor had settled it; the equally important question
of the renewal of the charter of the Austro-Hungarian State Bank had also formed no part
of the agreement of 1907. On the other hand, the Wekerle ministry was pledged to a measure
of franchise reform, a pledge which they showed no eagerness to redeem, though the
granting of universal suffrage in the Austrian half of the Monarchy had made such a change
inevitable. In March 1908 Mr Hallo laid before the Hungarian parliament a formal proposal
that the charter of the Austro-Hungarian Bank, which was to expire at the end of 1910,
should not be renewed; and that, in the event of failure to negotiate a convention between
the banks of Austria and Hungary, a separate Hungarian Bank should be established. This
question, obscured during the winter by the Balkan crisis, once more became acute in the
spring of 1909. In the Coalition cabinet itself opinion was sharply divided, but in the
end the views of the Independence party prevailed, and Dr Wekerle laid the proposal for a
separate Hungarian Bank before the king-emperor and the Austrian government. Its reception
was significant. The emperor Francis Joseph pointed out that the question of a separate
Bank for Hungary did not figure in the act of 1867, and could not be introduced into it, especially
since the capital article of the ministerial programme, i.e., electoral reform, was
not realized, nor near being realized. This was tantamount to an appeal from the
Magyar populus to the Hungarian plebs, the disfranchised non-Magyar majority; an appeal
all the more significant from the fact that it ignored the suffrage bill brought in on
behalf of the Hungarian government by Count Julius Andrássy in November 1908, a bill
which, under the guise of granting the principle of universal suffrage, was ingeniously
framed so as to safeguard and even to extend Magyar ascendancy. In consequence of this
rebuff Dr Wekerle tendered his resignation on the 27th of April. Months passed without it
being possible to form a new cabinet, and a fresh period of crisis and agitation was
begun.
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