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10: Party Government in Austria

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AS already explained, the name Austria is used for convenience to designate those portions of the possessions of the house of Habsburg, which were not included by the settlement of 1867 among the lands of the Hungarian crown. The separation of Hungary made it necessary to determine the method by which these territories¹ were henceforth to be governed. It was the misfortune of the country that there was no clear legal basis on which new institutions could be erected. Each of the territories was a separate political unit with a separate history, and some of them had a historic claim to a large amount of self-government; in many the old feudal estates had survived till 1848. Since that year the empire had been the subject of numerous experiments in government; by the last, which began in 1860, Landtage or diets have been instituted in each of the territories on a nearly uniform system and with nearly identical powers, and by the constitution published in February 1861 (the February Constitution, as it is called), which is still the ultimate basis for the government, there was instituted a Reichsrath or parliament for the whole empire; it consisted of a House of Lords (Herrenhaus), in which sat the archbishops and prince bishops, members of the imperial family, and other members appointed for life, besides some hereditary members, and a Chamber of Deputies. The members of the latter for each territory were not chosen by direct election, but by the diets. The diets themselves were elected for six years; they were chosen generally (there were slight local differences) in the following way: (a) a certain number of bishops and rectors of universities sat in virtue of their office; (b) the rest of the members were chosen by four electoral bodies or curiae, - (1) the owners of estates which before 1848 had enjoyed certain feudal privileges, the so-called great proprietors; (2) the chambers of commerce; (3) the towns; (4) the rural districts. In the two latter classes all had the suffrage who paid at least ten gulden in direct taxes. The districts were so arranged as to give the towns a very large representation in proportion to their populations. In Bohemia, e.g., the diet consisted of 241 members: of these five were ex officio members; the feudal proprietors had seventy; the towns and chambers of commerce together had eighty-seven; the rural districts seventy-nine. The electors in the rural districts were 236,000 in the towns 93,000. This arrangement seems to have been deliberately made by Schmerling, so as to give greater power to the German inhabitants of the towns; the votes of the proprietors would, moreover, nearly always give the final decision to the court and the government, for the influence exercised by the government over the nobility would generally be strong enough to secure a majority in favour of the government policy.

This constitution had failed; territories so different in size, history and

¹ It is impossible to avoid using the word "Austria" to designate these territories though it is probably incorrect. Officially the word "Austria" is not found and though the sovereign is emperor of Austria an Austrian empire appears not to exist; the territories are spoken of in official documents as "the kingdoms and lands represented in the Reichsrath." The Hungarians and the German party in Austria have expressed their desire that the word Austria should be used but it has not been gratified. On the other hand, expressions such as "Austrian citizens," "Austrian law" are found. The reason of this peculiar use is probably twofold. On the one hand a reluctance to confess that Hungary is no longer m any sense a part of Austria; on the other hand the refusal of the Czechs to recognize that their country is part of Austria. Sometimes the word Erbländer, which properly is applied only to the older ancestral dominions of the house of Habsburg is used for want of a better word.

circumstances were not contented with similar institutions, and a form of self-government which satisfied Lower Austria and Salzburg did not satisfy Galicia and Bohemia. The Czechs of Bohemia, like the Magyars, had refused to recognize the common parliament on the ground that it violated the historic rights of the Bohemian as of the Hungarian crown, and in 1865 the constitution of 1861 had been superseded, while the territorial diets remained. In 1867 it was necessary once more to summon, in some form or another, a common parliament for the whole of Austria, by which the settlement with Hungary could be ratified.

This necessity brought to a decisive issue the struggle between the parties of the Centralists and Federalists. The latter claimed that the new constitution must be made by agreement with the territories; the former maintained that the constitution of 1861 was still valid, and demanded that in accordance with it the Reichsrath should be summoned and a "constitutional" government restored. The difference between the two parties was to a great extent, though not entirely, one of race. The kernel of the empire was the purely German district, including Upper and Lower Austria, Salzburg, Tirol (except the south) and Vorarlberg, all Styria except the southern districts, and a large part of Carinthia. There was strong local feeling, especially in Tirol, but it was local feeling similar to that which formerly existed in the provinces of France; among all classes and parties there was great loyalty both to the ruling house and to the idea of the Austrian state; but while the Liberal party, which was dominant in Lower Austria and Styria, desired to develop the central institutions, there was a strong Conservative and Clerical party which supported local institutions as a protection against the Liberal influence of a centralized parliament and bureaucracy, and the bishops and clergy were willing to gain support in the struggle by alliance with the Federalists.

Very different was it in the other territories where the majority of the population was not German - and where there was a lively recollection of the time when they were not Austrian. With Palacky, they said, "We existed before Austria; we shall continue to exist after it is gone." Especially was this the case in Bohemia. In this great country the richest part of the Austrian dominions, where over three-fifths of the population were Czech, racial feeling was supported by the appeal to historic law. A great party, led by Palacky and Rieger, demanded the restoration of the Bohemian monarchy in its fullest extent, including Moravia and Silesia, and insisted that the emperor should be crowned as king of Bohemia at Prague as his predecessors had been, and that Bohemia should have a position in the monarchy similar to that obtained by Hungary. Not only did the party include all the Czechs, but they were supported by many of the great nobles who were of German descent, including Count Leo Thun, his brother-in-law Count Heinrich Clam-Martinitz, and Prince Friedrich von Schwarzenberg, cardinal archbishop of Prague, who hoped in a self-governing kingdom of Bohemia to preserve that power which was threatened by the German Liberals. The feudal nobles had great power arising from their wealth, the great traditions of their families, and the connexion with the court, and by the electoral law they had a large number of representatives in the diet. On the other hand the Germans of Bohemia, fearful of falling under the control of the Czechs, were the most ardent advocates of centralization. The Czechs were supported also by their fellow-countrymen in Moravia, and some of the nobles, headed by Count Belcredi, brother of the minister; but in Brünn there was a strong German party. In Silesia the Germans had a considerable majority, and as there was a large Polish element which did not support the Czechs, the diet refused to recognize the claims of the Bohemians.

The Poles of Galicia stood apart from the other Slav races. The German-speaking population was very small, consisting chiefly of government officials, railway servants and Jews; but there was a large minority (some 43 %) of Ruthenes. The Poles wished to gain as much autonomy as they could for their own province, but they had no interest in opposing the centralization of other parts; they were satisfied if Austria would surrender the Ruthenes to them. They were little influenced by the pan-Slav agitation; it was desirable for them that Austria, which gave them freedom and power, should continue strong and united. Their real interests were outside the monarchy, and they did not cease to look forward to a restoration of the Polish kingdom. The great danger was that they might entangle Austria in a war with Russia.

The southern Slavs had neither the unity, nor the organization, nor the historical traditions of the Czechs and Poles; but the Slovenes, who formed a large majority of the population in Carniola, and a considerable minority in the adjoining territory of Carinthia and the south of Styria demanded that their language should be used for purposes of government and education. Their political ideal was an "Illyrian" kingdom, including Croatia and all the southern Slavs in the coast district, and a not very successful movement had been started to establish a so-called Illyrian language, which should be accepted by both Croats and Slovenes. There was, however, another element in the southern districts, viz. the Serbs, who, though of the same race and language as the Croats, were separated from them by religion. Belonging to the Orthodox Church they were attracted by Russia. They were in constant communication with Servia and Montenegro; and their ultimate hope, the creation of a great Servian kingdom, was less easy to reconcile with loyalty to Austria. Of late years attempts have been made to turn the Slovenian national movement into this direction, and to attract the Slovenes also towards the Orthodox non-Austrian Slavs.

In the extreme south of Dalmatia is a small district which had not formed part of the older duchy of Dalmatia, and had not been joined to the Austrian empire till 1814; in former years part of it formed the republic of Ragusa, and the rest belonged to Albania. The inhabitants of this part, who chiefly belonged to the Greek Church, still kept up a close connexion with Albania and with Montenegro, and Austrian authority was maintained with difficulty. Disturbances had already broken out once before; and in 1869 another outbreak took place. This district had hitherto been exempted from military service by the law of 1869, which introduced universal military service, those who had hitherto been exempted were required to serve, not in the regular army but in the militia. The inhabitants of the district round the Bocche di Cattaro (the Bocchesi, as they are commonly called) refused to obey this order, and when a military force was sent it failed to overcome their resistance; and by an agreement made at Knezlac in December 1869, Rodics, who had taken command. granted the insurgents all they asked and a complete amnesty. After the conquest of Bosnia another attempt was made to enforce military service; once more a rebellion broke out, and spread to the contiguous districts of Herzegovina. This time, however, the government, whose position in the Balkans had been much strengthened by the occupation of the new provinces, did not fear to act with decision. A considerable force was sent under General Baron Stephan von Jovanovich (1828-1885); they were supported from sea by the navy, and eventually the rebellion was crushed. An amnesty was proclaimed. but the greater number of the insurgents sought refuge in Montenegro rather than submit to military service.

The Italians of Trieste and Istria were the only people of the empire who really desired separation from Austria; annexation to Italy was the aim of the Italianissimi, as they were called. The feeling was less strong in Tirol, where, except in the city of Trent, they seem chiefly to have wished for separate local institutions, so that they should no longer be governed from Innsbruck. The Italian-peaking population on the coast of Dalmatia only asked that the government should uphold them against the pressure of the Slav races in the interior, and for this reason were ready to support the German constitutionalists.

The party of centralization was then the Liberal German party, supported by a few Italians and the Ruthenes, and as years went by it was to become the National German party. They hoped by a common parliament to create the feeling of a common Austrian nationality, by German schools to spread the use of the German language. Every grant of self-government to the territories must diminish the influence of the Germans, and bring about a restriction in the use of the German language; moreover, in countries such as Bohemia, full self-government would almost certainly mean that the Germans would become the subject race. This was a result which they could not accept. It was intolerable to them that just at the time when the national power of the non-Austrian Germans was so greatly increased, and the Germans were becoming the first race in Europe, they themselves should resign the position as rulers which they had won during the last three hundred years. They maintained, moreover, that the ascendancy of the Germans was the only means of preserving the unity of the monarchy; German was the only language in .which the different races could communicate with one another; it must be the language of the army, the civil service and the parliament. They laid much stress on the historic task of Austria in bringing German culture to the half-civilized races of the east. They demanded, therefore, that all higher schools and universities should remain German, and that so far as possible the elementary schools should be Germanized. They looked on the German schoolmaster as the apostle of German culture, and they looked forward to the time when the feeling of a common Austrian nationality should obscure the national feeling of the Slavs, and the Slavonic idioms should survive merely as the local dialects of the peasantry, the territories becoming merely the provinces of a united and centralized state. The total German population was not quite a third of the whole. The maintenance of their rule was, therefore, only possible by the exercise of great political ability, the more so, since, as we have seen, they were not united among themselves, the clergy and Feudal party being opposed to the Liberals. Their watchword was the constitution of 1861, which had been drawn up by their leaders; they demanded that it should be restored, and with it parliamentary government. They called themselves, therefore, the Constitutional party. But the introduction of parliamentary government really added greatly to the difficulty of the task before them. In the old days German ascendancy had been secured by the common army, the civil service and the court. As soon, however, as power was transferred to a parliament, the Germans must inevitably be in a minority, unless the method of election was deliberately arranged so as to give them a majority. Parliamentary discussion, moreover, was sure to bring out those racial differences which it was desirable should be forgotten, and the elections carried into every part of the empire a political agitation which was very harmful when each party represented a different race.

The very first events showed one of those extraordinary changes of policy so characteristic of modern Austrian history. The decision of the government on the constitutional question was really determined by immediate practical necessity. The Hungarians required that the settlement should be ratified by a parliament, therefore a parliament must be procured which would do this. It must be a parliament in which the Germans had a majority for the system of dualism was directly opposed to the ambitions of the Slavs and the Federalists. Belcredi, who had come into power in 1865 as a Federalist, and had suspended the constitution of 1861 on the 2nd of January 1867, ordered new elections for the diets, which were then to elect deputies to an extraordinary Reichsrath which should consider the Ausgleich, or compact with Hungary. The wording of the decree implied that the February constitution did not exist as of law; the Germans and Liberals, strenuously objecting to a "feudal-federal" constitution which would give the Slavs a preponderance in the empire, maintained that the February constitution was still in force, and that changes could only be introduced by a regular Reichsrath summoned in accordance with it, protested against the decree, and, in some cases, threatened not to take part in the elections. As the Federalists were all opposed to the Ausgleich, it was clear that a Reichsrath chosen in these circumstances would refuse to ratify it, and this was probably Belcredi's intention. As the existence of the empire would thereby be endangered, Beust interfered; Belcredi was dismissed, Beust himself became minister-president on the 7th of February 1867, and a new edict was issued from Vienna ordering the diets to elect a Reichsrath, according to the constitution, which was now said to be completely valid. Of course, however, those diets in which there was a Federalist majority, viz. those of Bohemia, Moravia, Carinthia and Tirol, which were already pledged to support the January policy of the government, did not acquiesce in the February policy and they refused to elect except on terms which the government could not accept. The first three were immediately dissolved. In the elections which followed in Bohemia the influence of the government was sufficient to secure a German majority among the landed proprietors; the Czechs, who were therefore in a minority, declared the elections invalid, refused to take any part in electing deputies for the Reichsrath, and seceded altogether from the diet. The result was that Bohemia now sent a large German majority to Vienna, and the few Czechs who were chosen refused to take their seat in the parliament. Had the example of the Czechs been followed by the other Slav races it would still have been difficult to get together a Reichsrath to pass the Ausgleich. It was, however, easier to deal with the Poles of Galicia, for they had no historical rights to defend; and by sending delegates to Vienna they would not sacrifice any principle or prejudice any legal claim, they had only to consider how they could make the best bargain. Their position was a strong one; their votes were essential to the government, and the government could be useful to them; it could give them the complete control over the Ruthenes. A compact then was easily arranged.

Beust promised them that there should be a special minister for Galicia, a separate board for Galician education, that Polish should be the language of instruction in all secondary schools, that Polish instead of German should be the official language in the law courts and pubic offices, Ruthenian being only used in the elementary schools under strict limitations. On these terms the Polish deputies, led by Ziemialkowski, agreed to go to Vienna and vote for the Ausgleich.

When the Reichsrath met, the government had a large majority; and in the House, in which all the races except the Czechs were represented, the Ausgleich was ratified almost unanimously. This having been done, it was possible to proceed to special legislation for the territories, which were henceforward officially known as "the kingdoms and lands represented in the Reichsrath." A series of fundamental laws were carried, which formally established parliamentary government, with responsibility of ministers, and complete control over the budget, and there were included a number of clauses guaranteeing personal rights and liberties in the way common to all modern constitutions. The influence of the Poles was still sufficient to secure considerable concessions to the wishes of the Federalists, since if they did not get what they wished they would leave the House, and the Slovenes, Dalmatians and Tirolese would certainly follow them. Hence the German Liberals were prevented from introducing direct elections to the Reichsrath, and the functions of the Reichsrath w ere slightly less extensive than they had hitherto been. Moreover, the Delegation was to be chosen not by the House as a whole, but by the representatives of the separate territories. This is one reason for the comparative weakness of Austria as compared with Hungary, where the Delegation is elected by each House as a whole; the Bohemian representatives, e.g., meet and choose 10 delegates, the Galicians 7, those from Trieste 1; the Delegation is, therefore, not representative of the majority of the chamber of deputies, but includes representatives of all the groups which may be opposing the government there, and they can carry on their opposition even in the Delegation. So it came about in 1869 that on the first occasion when there was a joint sitting of the Delegations to settle a point in the budget, which Hungary had accepted and Austria rejected, the Poles and Tirolese voted in favour of the Hungarian proposal.

As soon as these laws had been carried (December 1867), Beust retired from the post of minister-president, and in accordance with constitutional practice a parliamentary ministry was appointed entirely from the ranks of the Liberal majority; a ministry generally known as the "Bürger Ministerium" in which Giskra and Herbst - the leaders of the German party in Moravia and Bohemia - were the most important members. Austria now began its new life as a modern constitutional state. From this time the maintenance of the revised constitution of 1867 has been the watchword of what is called the Constitutional party. The first use which the new government made of their power was to settle the finances, and in this their best work was done. Among them were nearly all the representatives of trade and industry, of commercial enterprise and financial speculation; they were the men who hoped to make Austria a great industrial state, and at this time they were much occupied with railway enterprise. Convinced free-traders, they hoped by private energy to build up the fortunes of the country, parliamentary government - which meant for them the rule of the educated and well-to-do middle class - being one of the means to this end. They accepted the great burden of debt which the action of Hungary imposed upon the country, and rejected the proposals for repudiation, but notwithstanding the protest of foreign bondholders they imposed a tax of 16 % on all interest on the debt. They carried out an extension of the commercial treaty with Great Britain by which a further advance was made in the direction of free trade.

Of equal importance was their work in freeing Austria from the control of the Church which checked the intellectual life of the people. The concordat of 1855 had given the Church complete freedom in the management of all ecclesiastical affairs, there was full liberty of intercourse with Rome, the state gave up all control over the appointment of the clergy, and in matters of church discipline the civil courts had no voice - the clergy being absolutely subject to the power of the bishops, who could impose temporal as well as spiritual penalties. The state had even resigned to the Church all authority over some departments of civil life and restored the authority of the canon law. This was the case as regards marriage, ail disputes were to be tried before ecclesiastical courts, and the marriage registers were kept by the priests. All the schools were under the control of the Church, the bishops could forbid the use of books prejudicial to religion, in elementary schools all teachers were subject to the inspection of the Church, and in higher schools only Roman Catholics could be appointed. It had been agreed that the whole education of the Roman Catholic youth, in all schools, private as well as public, should be in accordance with the teaching of the Roman Catholic Church. The authority of the Church extended even to the universities. Some change in this system was essential, the Liberal party demanded that the government should simply state that the concordat had ceased to exist. To this, however, the emperor would not assent, and there was a difficulty in overthrowing an act which took the form of a treaty. The government wished to come to some agreement by friendly discussion with Rome, but Pius IX. was not willing to abate anything of his full claims. The ministry, therefore proceeded by internal legislation, and in 1868 introduced three laws: (1) a marriage law transferred the decisions on all questions of marriage from the ecclesiastical to the civil courts, abolished the authority of the canon law, and introduced civil marriage in those cases where the clergy refused to perform the ceremony; (2) the control of secular education was taken from the Church and the management of schools transferred to local authorities which were to be created by the diets; (3) complete civil equality between Catholics and non-Catholics was established These laws were carried through both Houses in May amid almost unparalleled excitement, and at once received the imperial sanction, notwithstanding the protest of all the bishops, led by Joseph Othmar von Rauscher (1797-1875), cardinal archbishop of Vienna, who had earned his red hat by the share he had taken in arranging the concordat of 1855, and now attempted to use his great personal influence with the emperor (his former pupil) to defeat the bill.

The ministry had the enthusiastic support of the German population in the towns. They were also supported by the teaching profession, which desired emancipation from ecclesiastical control, and hoped that German schools and German railways were to complete the work which Joseph II. had begun. But the hostility of the Church was dangerous. The pope, in an allocution of 22nd June 1868, declared that these "damnable and abominable laws" which were "contrary to the concordat, to the laws of the Church and to the principles of Christianity," were "absolutely and for ever null and void." The natural result was that when they were carried into effect the bishops in many cases refused to obey. They claimed that the laws were inconsistent with the concordat, that the concordat still was in force, and that the laws were consequently invalid. The argument was forcible, but the courts decided against them. Rudigier, bishop of Linz, was summoned to a criminal court for disturbing the public peace, he refused to appear, for by the concordat bishops were not subject to temporal jurisdiction and when he was condemned to imprisonment the emperor at once telegraphed his full pardon. In the rural districts the clergy had much influence, they were supported by the peasants, and the diets of Tirol and Vorarlberg, where there was a clerical majority, refused to carry out the school law.

On the proclamation of papal infallibility in 1870, the government took the opportunity of declaring that the concordat had lapsed. on the ground that there was a fundamental change in the character of the papacy. Nearly all the Austrian prelates had been opposed to the new doctrine; many of them remained to the end of the council and voted against it, and they only declared their submission with great reluctance. The Old Catholic movement, however, never made much progress in Austria. Laws regulating the position of the Church were carried in 1874.

During 1868 the constitution then was open to attack on two sides, for the nationalist movement was gaining ground in Bohemia and Galicia. In Galicia the extreme party headed by Smolka, had always desired to imitate the Czechs and not attend at Vienna - they were outvoted, but all parties agreed on a declaration in which the final demands of the Poles were drawn up; they asked that the powers of the Galician diet should be much increased, and that the members from Galicia should cease to attend the Reichsrath on the discussion of those matters with which the Galician diet should be qualified to deal. If these demands were not granted they would leave the Reichsrath. In Bohemia the Czechs were very active; while the Poles were parading their hostility to Russia in such a manner as to cause the emperor to avoid visiting Galicia, some of the Czech leaders attended a Slav demonstration at Moscow, and in 1868 they drew up and presented to the diet at Prague a "declaration" which has since been regarded as the official statement of their claims. They asked for the full restoration of the Bohemian kingdom; they contended that no foreign assembly was qualified to impose taxes in Bohemia; that the diet was not qualified to elect representatives to go to Vienna, and that a separate settlement must be made with Bohemia similar to that with Hungary. This declaration was signed by eighty-one members, inducing many of the feudal nobles and bishops. The German majority declared that they had forfeited their seats, and ordered new elections. The agitation spread over the country, serious riots took place, and with a view to keeping order the government decreed exceptional laws. Similar events happened in Moravia, and in Dalmatia the revolt broke out among the Bocchesi.

Before the combination of Clericals and Federalists the ministry broke down; they were divided among themselves Counts Taaffe and Alfred Potocki, the minister of agriculture, wished to conciliate the Slav races - a policy recommended by Beust, probably with the sympathy of the emperor; the others determined to cripple the opposition by taking away the elections for the Reichsrath from the diets. Taaffe and his friends resigned m January 1870, but the majority did not long survive. In March, after long delay, the new Galician demands were definitely rejected; the whole of the Polish club, followed by the Tirolese and Slovenes, left the House, which consequently consisted of 110 members - the Germans and German representatives from Bohemia and Moravia. It was clearly impossible to govern with such a parliament. Not four years had gone by, and the new constitution seemed to have failed like the old one. The only thing to do was to attempt a reconciliation with the Slavs. The ministry resigned, and Potocki and Taaffe formed a government with this object. Potocki, now minister-president, then entered on negotiations hoping to persuade the Czechs to accept the constitution. Rieger and Thun were summoned to Vienna; he himself went to Prague, but after two days he had to give up the attempt in despair. Feudals and Czechs all supported the declaration of 1868, and would accept no compromise, and he returned to Vienna after what was the greatest disappointment of his life. Government, however, had to be carried on; the war between Germany and France broke out in July, and Austria might be drawn into it; the emperor could not at such a crisis alienate either the Germans or the Slavs. The Reichsrath and all the diets were dissolved. This time in Bohemia the Czechs, supported by the Feudals and the Clericals, gained a large majority, they took their seats in the diet only to declare that they did not regard it as the legal representative of the Bohemian kingdom, but merely an informal assembly, and refused to elect delegates for the Reichsrath. The Germans in their turn now left the diet, and the Czechs voted an address to the crown, drawn up by Count Thun, demanding the restoration of the Bohemian kingdom. When the Reichsrath met there were present only 130 out of 203 members, for the whole Bohemian contingent was absent; the government then, under a law of 1868, ordered that as the Bohemian diet had sent no delegates, they were to be chosen directly from the people. Twenty-four Constitutionalists and thirty Declaranten were chosen; the latter, of course, did not go to Vienna, but the additional twenty-four made a working majority by which the government was carried on for the rest of the year.

But Potocki's influence was gone, and as soon as the European crisis was over, in February 1871, the emperor appointed a ministry chosen not from the Liberals but from the Federalists and Clericals, led by Count Hohenwart and A. E. F. Schäffle, a professor at the university of Vienna, chiefly known for his writings on political economy. They attempted to solve the problem by granting to the Federalists all their demands. So long as parliament was sitting they were kept in cheek; as soon as it had voted supplies and the Delegations had separated, they ordered new elections in all those diets where there was a Liberal majority. By the help of the Clericals they won enough seats to put the Liberals in a minority in the Reichsrath, and it would be possible to revise the constitution if the Czechs consented to come. They would only attend, however, on their own terms, which were a complete recognition by the government of the claims made in the Declaration. This was agreed to; and on the 12th of September at the opening of the diet, the governor read a royal message recognizing the separate existence of the Bohemian kingdom, and promising that the emperor should be crowned as king at Prague. It was received with delight throughout Bohemia; and the Czechs drew a draft constitution of fundamental rights. On this the Germans, now that they were in a minority, left the diet, and began preparations for resistance. In Upper Austria, Moravia and Carinthia, where they were outvoted by the Clericals, they seceded, and the whole work of 1867 was on the point of being overthrown. Were the movement not stopped the constitution would be superseded, and the union with Hungary endangered Beust and Andrássy warned the emperor of the danger, and the crown prince of Saxony was summoned by Beust to remonstrate with him. A great council was called at Vienna (October 20), at which the emperor gave his decision that the Bohemian demands could not be accepted. The Czechs must come to Vienna, and consider a revision of the constitution in a constitutional manner. Hohenwart resigned, but at the same time Beust was dismissed, and a new cabinet was chosen once more from among the German Liberals, under the leadership of Prince Adolf Auersperg whose brother Carlos had been one of the chief members in the Burger Ministerium. For the second time in four years the policy of the government had completely changed within a few months. On 12th September the decree had been published accepting the Bohemian claims; before the end of the year copies of it were seized by the police, and men were thrown into prison for circulating it.

Auersperg's ministry held office for eight years. They began as had the Bürger Ministeriums with a vigorous Liberal centralizing policy. In Bohemia they succeeded at first in almost crushing the opposition. In 1872 the diet was dissolved; and the whole influence of the government was used to procure a German majority. Koller, the governor, acted with great vigour. Opposition newspapers were suppressed; cases in which Czech journalists were concerned were transferred to the German districts, so that they were tried by a hostile German jury. Czech manifestoes were confiscated, and meetings stopped at the slightest appearance of disorder; and the riots were punished by quartering soldiers upon the inhabitants. The decision between the two races turned on the vote of the feudal proprietors, and in order to win this a society was formed among the German capitalists of Vienna (to which the name of Chabrus was popularly given) to acquire by real or fictitious purchase portions of those estates to which a vote was attached. These measures were successful; a large German majority was secured; Jews from Vienna sat in the place of the Thuns and the Schwarzenbergs; and as for many years the Czechs refused to sit in the diet, the government could be carried on without difficulty. A still greater blow to the Federalists was the passing of a new electoral law in 1873. The measure transferred the right of electing members of the Reichsrath from the diets to the direct vote of the people, the result being to deprive the Federalists of their chief weapon; it was no longer possible to take a formal vote of the legal representatives in any territory refusing to appoint deputies, and if a Czech or Slovene member did not take his seat the only result was that a single constituency was unrepresented, and the opposition weakened. The measure was strongly opposed. A petition with 250,000 names was presented from Bohemia; and the Poles withdrew from the Reichsrath when the law was introduced. But enough members remained to give the legal quorum, and it was carried by 120 to 2 votes. At the same time the number of members was increased to 353, but the proportion of representatives from the different territories was maintained and the system of election was not altered. The proportion of members assigned to the towns was increased, the special representatives of the chambers of commerce and of the landed proprietors were retained, and the suffrage was not extended. The artificial system which gave to the Germans a parliamentary majority continued.

At this time the Czechs were much weakened by quarrels among themselves. A new party had arisen, calling themselves Radicals, but generally known as the Young Czechs. They disliked the alliance with the aristocracy and the clergy; they wished for universal suffrage, and recalled the Hussite traditions. They desired to take their seats in the diet, and to join with the Germans in political reform. They violently attacked Rieger, the leader of the Old Czechs, who maintained the alliance with the Feudalists and the policy of passive opposition. Twenty-seven members of the diet led by Gregr and Stadkowsky, being outvoted in the Czech Club, resigned their seats. They were completely defeated in the elections which followed, but for the next four years the two parties among the Czechs were as much occupied in opposing one another as in opposing the Germans. These events might have secured the predominance of the Liberals for many years. The election after the reform bill gave them an increased majority in the Reichsrath. Forty-two Czechs who had won seats did not attend; forty-three Poles stood aloof from all party combination, giving their votes on each occasion as the interest of their country seemed to require; the real opposition was limited to forty Clericals and representatives of the other Slav races who were collected on the Right under the leadership of Hohenwart. Against them were 227 Constitutionalists, and it seemed to matter little that they were divided into three groups; there were 105 in the Liberal Club under the leadership of Herbst, 57 Constitutionalists; elected by the landed proprietors, and a third body of Radicals, some of whom were more democratic than the old Constitutional party, while others laid more stress on nationality. They used their majority to carry a number of important laws regarding ecclesiastical affairs. Yet within four years the government was obliged to turn for support to the Federalists and Clericals, and the rule of the German Liberals was overthrown. Their influence was indirectly affected by the great commercial crisis of 1873. For some years there had been active speculations on the Stock Exchange; a great number of companies, chiefly banks and building societies, had been founded on a very insecure basis. The inevitable crisis began in 1872; it was postponed for a short time, and there was some hope that the Exhibition, fixed for 1873, would bring fresh prosperity; the hope was not, however fulfilled, and the final crash, which occurred in May, brought with it the collapse of hundreds of undertakings. The loss fell almost entirely on those who had attempted to increase their wealth by speculative investment. Sound industrial concerns were little touched by it but speculation had become so general that every class of society was affected, and in the investigation which followed it became apparent that some of the most distinguished members of the governing Liberal party, including at least two members of the government were among those who had profited by the unsound finance. It appeared also that many of the leading newspapers of Vienna, by which the Liberal party was supported, had received money from financiers. For the next two years political interest was transferred from parliament to the law courts, in which financial scandals were exposed, and the reputations of some of the leading politicians were destroyed.

This was to bring about a reaction against the economic doctrines which had held the field for nearly twenty years, but the full effect of the change was not seen for some time. What ruined the government was the want of unity in the party, and their neglect to support a ministry which had been taken from their own ranks. In a country like Austria, in which a mistaken foreign policy or a serious quarrel with Hungary might bring about the disruption of the monarchy, parliamentary government was impossible unless the party which the government helped in internal matters were prepared to support it in foreign affairs and in the commercial policy bound up with the settlement with Hungary. This the constitutional parties did not do. During discussions on the economic arrangement with Hungary in 1877 a large number voted against the duties on coffee and petroleum, which were an essential part of the agreement; they demanded, moreover, that the treaty of Berlin should be laid before the House, and 112 members, led by Herbst, gave a vote hostile to some of its provisions, and in the Delegation refused the supplies necessary for the occupation of Bosnia. They doubtless were acting in accordance with their principles but the situation was such that it would have been impossible to carry out their wishes the only result was that the Austrian ministers and Andrássy had to turn for help to the Poles, who began to acquire the position of a government party, which they have kept since then. At the beginning of 1879 Auersperg's resignation, which had long been offered, was accepted. The constitutionalists remained in power; but in the reconstructed cabinet though Stremayr was president, Count Taaffe, as minister of the interior, was the most important member.

Parliament was dissolved in the summer, and Taaffe, by private negotiations, first of all persuaded the Bohemian feudal proprietors to give the Feudalists, who had long been excluded, a certain number of seats; secondly, he succeeded where Potocki had failed, and came to an agreement with the Czechs; they had already, in 1878, taken their seats in the diet at Prague, and now gave up the policy of "passive resistance," and consented to take their seats also in the parliament at Vienna.

On entering the House they took the oath without reservation, but in the speech from the throne the emperor himself stated that they had entered without prejudice to their convictions, and on the first day of the session Rieger read a formal reservation of right. The Liberals had also lost many seats, so that the House now had a completely different aspect; the constitutionalists were reduced to 91 Liberals and 54 Radicals; but the Right under Hohenwart, had increased to 57, and there were 57 Poles and 54 Czechs. A combination of these three parties might govern against the constitutionalists. Taaffe, who now became first minister, tried first of all to govern by the help of the moderates of all parties, and he included representatives of nearly every party in his cabinet. But the Liberals again voted against the government on an important military bill, an offence almost as unpardonable in Austria as in Germany, and a great meeting of the party decided that they would not support the government. Taaffe, therefore, was obliged to turn for support to the Right. the German members of the government resigned, their place was taken by Clericals, Poles and Czechs, Smolka was elected president of the Lower House of the Reichsrath, and the German Liberals found themselves in a minority opposed by the "iron ring" of these three parties, and helpless in the parliament of their own creation. For fourteen years Taaffe succeeded in maintaining the position he had thus secured. He was not himself a party man; he had sat in a Liberal government; he had never assented to the principles of the Federalists, nor was he an adherent of the Clerical party. He continued to rule according to the constitution; his watchword was "unpolitical politics," and he brought in little contentious legislation. The great source of his strength was that he stood between the Right and a Liberal government. There was a large minority of constitutionalists; they might easily become a majority, and the Right were therefore obliged to support Taaffe in order to avert this. They continued to support him, even if they did not get from him all that they could have wished. and the Czechs acquiesced in a foreign policy with which they had little sympathy. Something, however had to be done for them, and from time to time concessions had to be made to the Clericals and the Federalists.

The real desire of the Clericals was an alteration of the school law, by which the control of the schools should be restored to the Church and the period of compulsory education reduced. In this, however, the government did not meet them, and in 1882 the Clericals under Prince Alfred v. Liechtenstein, separated from Hohenwart's party and founded their own club, so that they could act more freely. Both the new Clerical Club and the remainder of the Conservatives were much affected by the reaction against the doctrines of economic Liberalism. They began to adopt the principles of Christian Socialism expounded by Rudolf Mayer and Baron von Vogelfang, and the economic revolt against the influence of capital was with them joined to a half-religious attack upon the Jews. They represented that Austria was being governed by a close ring of political financiers, many of whom were Jews or in the pay of the Jews, who used the forms of the constitution, under which there was no representation of the working classes, to exploit the labour of the poor at the same time that they ruined the people by alienating them from Christianity in "godless schools." It was during these years that the foundation for the democratic clericalism of the future was laid. The chief political leader in this new tendency was Prince Aloys v. Liechtenstein who complained of the political influence exercised by the chambers of commerce, and demanded the organization of working men in gilds. It was by their influence that a law was introduced limiting the rate of interest, and they co-operated with the government in legislation for improving the material condition of the people, which had been neglected during the period of Liberal government, and which was partly similar to the laws introduced at the same time in Germany.

There seems no doubt that the condition of the workmen in the factories of Moravia and the oil-mines of Galicia was peculiarly unfortunate; the hours of work were very long the conditions were very injurious to health, and there were no precautions against accidents. The report of a parliamentary inquiry, called for by the Christian Socialists, showed the necessity for interference. In 1883 a law was carried, introducing factory inspection, extending to mines and all industrial undertakings. The measure seems to have been successful, and there is a general agreement that the inspectors have done their work with skill and courage. In 1884 and 1885 important laws were passed regulating the work in mines and factories, and introducing a maximum working day of eleven hours in factories and ten hours in mines. Sunday labour was forbidden, and the hours during which women and children could be employed were limited. Great power was given to the administrative authorities to relax the application of these laws in special cases and special trades. This power was at first freely used, but it was closely restricted by a further law of 1893. In 1887-1888 laws, modelled on the new German laws, introduced compulsory insurance against accidents and sickness. These measures, though severely criticized by the Opposition, were introduced to remedy obvious, and in some cases terrible social evils. Other laws to restore gilds among working men had a more direct political object. Another form of state socialism was the acquisition of railways by the state. Originally railways had been built by private enterprise, supported in some cases by a state guarantee, a law of 1877 permitted the acquisition of private lines; when Taaffe retired the state possessed nearly 5000 m. of railway, not including those which belonged to Austria and Hungary conjointly. In 1899 a minister of railways was appointed. In this policy military considerations as well as economic were of influence. In every department we find the same reaction against the doctrines of laissez-faire. In 1889 for the first time the Austrian budget showed a surplus, partly the result of the new import duties, partly due to a reform of taxation.

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