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32: Industry and Commerce

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Industry. - The manufactures of Austria were much developed during the last quarter of the 19th century, although Austria as a whole cannot be said to be an industrial country. Austria possesses many favourable conditions for a great industrial activity. It possesses an abundance of raw materials, of fuel - both mineral and wood - of metals and minerals, in fact all the necessaries for a great and flourishing industry; and the rivers can easily be utilized as producers of motive power. It is besides densely populated, and has an adequate supply of cheap labour; while the undeveloped industries of the Balkan states also offer a ready market for its products. The glass manufacture in Bohemia is very old, and has kept up its leading position in the markets of the world up to the present day. Industrial activity is greatly developed in Bohemia, Lower Austria, Silesia, Moravia and Vorarlberg, while in Dalmatia and Bukovina it is almost non-existent. The principal branches of manufactures are the textile industry; the metallurgic industries; brewing and distilling; leather, paper and sugar; glass, porcelain and earthenware; chemicals; and scientific and musical instruments.

The textile industry in all its branches - cotton, woollen, linen, silk, flax and hemp - is mostly concentrated in Bohemia, Moravia, Silesia and Lower Austria. It is an old industry, and one which has made great progress since 1875. Thus the number of mechanical looms increased more than threefold during this period, and numbered in 1902 about 120,000. In the same year the number of spindles at work was about 3,100,000. Austria had in 1902, 21,837 textile factories with 337,514 workmen. The principal seat of the manufacture of cotton goods is in northern Bohemia, from the Eger to Reichenberg, which can be considered as the Lancashire of Austria, Lower Austria between the Wiener Wald and the Leitha, and in Vorarlberg. Woollen goods are manufactured in the above places, and besides in Moravia, at Brünn and at Iglau; in Silesia; and at Biala in Galicia. Vienna is also distinguished for its manufacture of shawls. The coarser kind of woollen goods are manufactured all over the country, principally in the people's houses as a home industry. The most important places for the linen industry are in Bohemia at Trautenau; in Moravia and Silesia, while the commoner kinds of linen are mostly produced as a home industry by the peasants in the above-mentioned crown-lands. The manufacture of ribbons, embroidery and lace, the two latter being carried on principally as a house industry in Vorarlberg and in the Bohemian Erzgebirge, also thrives. The industry in stitched stuffs is especially developed in northern Bohemia. Ready-made men's clothes and oriental caps (fezes) are produced on a large scale in Bohemia and Moravia. The manufacture of silk goods is mainly carried on in Vienna, while the spinning of silk has its principal seat in southern Tirol, and to a smaller extent in the Küstenland.

The metallurgic industry forms one of the most important branches of industry, because iron ore of excellent quality is extracted annually in great quantities. The principal seats of the iron and steel manufactures are in Bohemia, Moravia, Silesia, Upper and Lower Austria, Styria and Carinthia, which contain extensive iron-works. The most important manufactured products are cutlery, fire-arms, files, wire, nails, tin-plates scythes, sickles, steel pens, needles, rails, iron furniture, drains, and kitchen utensils. A famous place for its iron manufacture is Steyr in Upper Austria. The manufacture of machinery, for industrial and agricultural purposes, and of railway engines is mainly concentrated in Vienna, Wiener-Neustadt, Prague, Brünn and Trieste; while the production of rolling stock for railways is carried on in Vienna, Prague and Graz Shipbuilding yards for sea-vessels are at Trieste and Pola; while for river-vessels the largest yards are at Linz. Among other metal manufactures, the principal are copper works at Brixlegg and other places in Tirol, and in Galicia, tin and lead in Bohemia, and metallic alloys, especially Packfong or German silver, an alloy of nickel and copper, at Berndorf in Lower Austria. The precious metals, gold and silver, are principally worked in the larger towns, particularly at Vienna and Prague. Vienna is also the principal seat for scientific and surgical instruments. In the manufacture of musical instruments Austria takes a leading part amongst European states, the principal places of production being Vienna, Prague, Königgratz, Gralsitz and Schönbach.

The glass manufacture is one of the oldest industries in Austria, and is mainly concentrated in Bohemia. Its products are of the best quality, and rule the markets of the world. In the manufacture of earthenwares Austria plays also a leading part, and the porcelain industry round Carlsbad and in the Eger district in Bohemia has a world-wide reputation. The leather industry is widely extended, and is principally carried on in Lower Austria, Bohemia and Moravia. Vienna and Prague are great centres for the boot and shoe trade, and the gloves manufactured in these towns enjoy a great reputation. The manufacture of wooden articles is widespread over the country, and is very varied. In Vienna and other large towns the production of ornamental furniture has attained a great development. The industry in paper has also assumed great proportions, its principal seats being in Bohemia, Moravia, Upper and Lower Austria. Of food-stuffs, besides milling and other flour products, the principal industry is the manufacture of sugar from beet-root. The sugar industry is almost exclusively carried on in Bohemia, Moravia, Silesia and Galicia It has attained such large proportions that large districts in those provinces have been converted from wheat-growing districts into fields for the cultivation of beet-root. Brewing is extensively carried on, and the beer produced is of a good quality. The largest brewing establishment is at Schwechat near Vienna, and large breweries are also found at Pilsen and Budweiss in Bohemia. whose products enjoy a great reputation abroad. There were in Austria 1341 breweries, which produced 422,993,120 gallons of beer, in 1902-1903. Distilling is carried on a large scale in Galicia, Bukovina, Bohemia Moravia and Lower Austria; the number of distilleries being 1257, which produced 30,435,812 gallons of spirit Rosoglio, maraschino, and other liqueurs are made in Dalmatia and Moravia. The manufacture as well as the growth of tobacco is a government monopoly, which has 30 tobacco factories with over 40,000 workpeople, the largest establishment being at Hainburg in Lower Austria. Other important branches of industry are the manufacture of chemicals in Vienna and in Bohemia; petroleum refineries in Galicia, and the extraction of various petroleum products; the manufacture of buttons; printing, lithographing, engraving and map-making, especially in Vienna, &c.

In 1900 the various manufacturing industries employed in Austria 3,138,800 persons of whom 2,264,871 were workmen and 103,854 were labourers. Including families and domestic servants, a little over 7,000,000 were dependent on industry for their livelihood.

Trade. - On the basis of the customs and commercial agreement between Austria and Hungary, concluded in 1867 and renewable every ten years, the following affairs, in addition to the common affairs of the monarchy, are in both states treated according to the same principles: - Commercial affairs, including customs legislation; legislation on the duties closely connected with industrial production - on beer, brandy, sugar and mineral oils; determination of legal tender and coinage, as also of the principles regulating the Austro-Hungarian Bank; ordinances in respect of such railways as affect the interests of both states. In conformity with the customs and commercial compact between the two states renewed in 1899, the monarchy constitutes one identical customs and commercial territory inclusive of Bosnia and Herzegovina and the principality of Liechtenstein.

The foreign trade of the Austro-Hungarian monarchy is shown in the following table: -

Year. Imports. Exports.
1900 £70,666,000 £80,916,000
1901 68,833,000 78,541,000
1902 71,666,000 79,708,000
1903 78,200,000 88,600,000
1904 85,200,000 86,200,000
1905 89,430,000 93.500,000

The following tables give the foreign trade¹ of the Austro-Hungarian monarchy as regards raw material and manufactured goods: -

Articles. Value in Millions Sterling.
1900. 1901. 1902. 1903. 1904.
Raw material (including articles of food;
raw material for agriculture and industry;
and mining and smelting products)
41.5 40.5 41.8 45.9 51.9
Semi-manufactured goods. 9.6 9.6 10.3 10.6 10.8
Manufactured goods . 19.5 18.7 19.5 21.6 22.5
Articles. Value in Millions Sterling.
1900. 1901. 1902. 1903. 1904.
Raw material (as above) 34.1 34.1 35.8 39 35.3
Semi-manufactured goods. 12.6 11.1 11.1 12.4 12.6
Manufactured goods . 34.2 33.3 32.8 37.2 38.3

The most important place of derivation and of destination for the Austro-Hungarian trade is the German empire with about 40 % of the imports, and about 60 % of the exports. Next in importance comes Great Britain, afterwards India, Italy, the United States of America, Russia, France, Switzerland, Rumania, the Balkan states and South America in about the order named. The principal articles of import are cotton and cotton goods, wool and woollen goods, silk and silk goods, coffee, tobacco and metals. The principal articles of export are wood, sugar, cattle, glass and glassware, iron and ironware, eggs, cereals, millinery fancy goods, earthenware and pottery, and leather goods.

Communications. - As regards internal communications, Austria is provided with an extensive network of railways, the industrial provinces being specially favoured. This has been accomplished in spite of the engineering difficulties owing to the mountainous nature of the country and of the great financial expenses resulting therefrom, The construction of the Semmering railway, opened in 1854, for instance, was the first mountain railway built in the European continent, and marked an epoch in railway engineering. The first railway laid down in Austria was in 1824 between Budweis and Kerschbaum, over a distance of 40 m., and was at first used for horse tramway. The first steam railway was opened in 1837 over a distance of about 10 m. between Floridsdorf (near Vienna) and Wagram. From the first, the policy of the Austrian government was to construct and to work the railways itself; and in granting concessions to private companies it stipulated among its conditions the reversionary right of the state, whereby the line becomes the property of the state without compensation after the lapse of the period of concession With various modifications, according to its financial means, it vigorously pursued its policy, by both building railways itself, and encouraging private companies to build. In 1905 the total length of railways in Austria was 13,590 m., of which 5017 m. belonged to and were worked by the state, and 3359 m. belonged to private companies, but were worked by the state.

At the end of 1910 Austria had 20,486 m. of railways, of which 7939 m. were state railways, 544 m. companies' lines worked by the state, and 3287 m. companies' lines worked by the companies. The revenue from the state railways was £26,000,000.

The length of the navigable rivers and canals was 4055 m., of which 825 m. were navigable for steamers. A bill was passed by the Austrian Parliament in 1912 for extending and improving the waterways and canals, on which £15,000,000 would be spent during the next 15 years. The principal works to be executed are in Galicia, Bohemia and Lower Austria. In Galicia the completion of the Vistula canal by building a canal from Cracow to Oswiecim was undertaken, and also the building of portions of navigable connection between the Oder and the Dniester. Work on the Cracow-Oswiecim canal began during 1912. The works

¹ The outstanding feature of the foreign trade has been the growing excess of imports over exports. This so-called "unfavourable balance of trade" which began in 1907 had grown steadily until in 1911 it amounted to over £32,000,000. Austro-Hungarian economists have come to consider this state of affairs as a normal condition of the existing economic development of the country, which is going through the transition from a mainly agricultural to an industrial state. Elsewhere the excess of imports is mainly due to the large importation of foodstuffs and raw materials, while the export of manufactured goods grows faster than the imports of similar character from abroad.

in Bohemia comprise the canalisation and regulation of the middle Elbe from Melnik to Jaromer, the completion of the Moldau canal in the district and town of Prague, and the continuation of the Moldau canal from Prague to Stechowitz. In Lower Austria, the Vienna-Danube canal is to be enlarged and a winter harbour to be built at Vienna.

Commercial Navy. - The commercial sea navy of Austria, excluding small coasting vessels and fishing-boats, consisted in 1900 of 154 vessels, with a tonnage of 198,322 tons, of which 123 vessels with a tonnage of 183,949 were steamers. The greatest navigation company is the Austrian Lloyd in Trieste, which in 1900 employed 70 steamers of 165,430 tons. During 1900 the total tonnage of vessels engaged in the foreign trade, which entered all the Austrian ports, was 1,448,764 tons under the Austro-Hungarian flag, and 888,707 under foreign flags; the total tonnage of vessels cleared during the same period was 1,503,532 tons under the Austro-Hungarian flag, and 866,591 under foreign flags. At Trieste in 1911 12,998 vessels of 4,271,073 tons entered; of these, 86 vessels of 283,176 tons were British.


Industrial Development. - Efforts to create a native industry date only from 1867, and considering the shortness of the time and other adverse factors, such as scarcity of capital lack of means of communication, the development of industry in the neighbouring state of Austria, &c., the industry of Hungary has made great strides. Much of this progress is due to the state, one of the principal aims of the Hungarian government being the creation of a large and independent native industry. For this purpose legislation was promoted in 1867, 1881, 1890 and 1907. The principal facilities granted by the state are, exemption of taxation for a determined period of years, reduced railway fares for the goods manufactured, placing of government contracts, the grant of subsidies and loans and the foundation of industrial schools for the training of engineers and of skilled workmen. The branches of industry which have received special encouragement are those whose products are in universal request, such as cotton and woollen goods, and those which are in the service of natural production. In this category are the manufacture of agricultural machines, of tools and implements for agriculture, forestry and mining; such industries as depend for their raw material on the exploitation of the natural resources of the country, viz. those related to agriculture, forestry, mining, &c. Lastly, encouragement is given to all branches of industry concerned with the manufacture of articles used in the more important Hungarian industries, i.e., machinery, or semi-manufactured goods which serve as raw material for those industries. For the period 1890-1905, an average of 40 to 50 industrial establishments with an invested capital of £1,250,000 to £1,750,000 were founded yearly.

The principal industry of Hungary is flour-milling. The number of steam-mills, which in 1867 was about 150, rose to 1723 in 1895 and to 1845 in 1905. Between 3,000,000 and 3,200,000 tons of wheat-flour are produced annually. The principal steam-mills are at Budapest; large steam-mills are also established in many towns, while there are a great number of water-mills and some wind-mills. The products of these mills form the principal article of export of Hungary. Brewing and distilling, as other branches of industry connected with agriculture, are also greatly developed. The sugar industry has made great strides, the amount of beetroot used having increased tenfold between 1880 and 1905. Other principal branches of industry are: tobacco manufactories, belonging to the state, tobacco being a government monopoly; iron foundries, mostly in the mining region; agricultural machinery and implements, notably at Budapest; leather manufactures; paper- mills, the largest at Fiume; glass (only the more common sort) and earthenwares; chemicals; wooden products; petroleum-refineries; woollen yarns and cloth manufactories, as well as several establishments of knitting and weaving. The various industrial establishments are located in the larger towns, but principally at Budapest, the only real industrial town of Hungary.

In 1900 the various industries of Hungary (including Croatia-Slavonia) employed 1,127,730 persons, or 12.8 % of the earning population. In 1890 the number of persons employed was 913,010. Including families and domestic servants, 2,605,000 persons or 13 5 % of the total population were dependent on industries for their livelihood in Hungary in 1900.

Commerce. - The following table gives the foreign trade of Hungary only for a period of years in millions sterling: -

Year. Imports. Exports.
1886-1890 37.3 37.5
1891-1895 43.7 44.1
1900 46.3 55.3
1907 66.0 64.7

Of the merchandise¹ entering the country, 75-80 % comes from Austria, and exports go to the same country to the extent of 75 %. Next comes Germany with about 10 % of the value of the total exports and 5 % of that of imports. The neighbouring Balkan states - Rumania and Servia - follow, and the United Kingdom receives somewhat more than 2 % of the exports, while supplying about 1.5 % of the imports. The principal imports are: cotton goods, woollen manufactures; apparel, haberdashery and linen; silk manufactures leather and leather goods. The exports, which show plainly the prevailing agricultural character of the country, are four, wheat, cattle, beef, barley, pigs, wine in barrels, horses and maize.

With but a short stretch of sea-coast, and possessing only one important seaport Fiume, the mercantile marine of Hungary is not very developed. It consisted in 1905 of 434 vessels with a tonnage of 91,784 tons and with crews of 2359 persons. Of these 95 vessels with a tonnage of 89,161 tons were steamers. Fifty-four vessels with 84,844 tons and crews numbering 1168 persons were sea-going; 134 with 6587 tons were coasting-vessels and 246 with 353 tons were fishing vessels.

At all the Hungarian ports in 1900 there entered 19,223 vessels of 2,223,302 tons cleared 19,218 vessels of 2,226,733 tons. The tonnage of British steamers amounted to somewhat more than 11 % of the total tonnage of steamers entered and cleared.

Railways. - Hungary is covered by a fairly extensive network of railways, although in the sparsely populated parts of the kingdom the high road is still the only means of communication. The first railway in Hungary was the line between Budapest and Vácz (Waitzen), 20 m. long, opened in 1846 (15th of July). After the Compromise of 1867, the policy of the Hungarian government was to construct its own railways, and to take over the lines constructed and worked by private companies.² In 1907 the total length of the Hungarian railways, in which over £145,000,000 had been invested, was 12,100 m., of which 5000 m. belonged to and were worked by the state, 5100 m. belonged to private companies but were worked by the state, and 2000 m. belonged to and were worked by private companies. The passengers carried in 1907 numbered 107,171,000, the goods traffic was 61,483,000 tons; the traffic receipts for the year were £16,420,000. The corresponding figures for 1880 were as follows: passengers carried, 9,346,000; goods carried 11,225,000 tons; traffic receipts, £4,300,000. The so-called zone tariff, adopted for the first time in Europe by the Hungarian state railways, was inaugurated in 1889 for passengers and in 1891 for goods. The principle of this system is to offer cheap fares and relatively low tariffs for greater distances, and to promote, therefore, long-distance travelling. The zone tariff has given a great impetus both to passenger and goods traffic in Hungary and has been adopted on some of the Austrian railways.

In 1907 the length of the navigable waterways of Hungary was 3200 m., of which 2450 m. were navigable by steamers.

Seaports. - On the Adriatic lies the port of Fiume, the only direct outlet by sea for the produce of Hungary. Its commanding position at the head of the Gulf of Quarnero, and spacious new harbour works, as also its immediate connexions with both the Austrian and Hungarian railway systems, render it specially advantageous as a commercial port. As shipping stations, Buccari, Portoré, Selce, Novi, Zengg, San Giorgio, Jablanac and Carlopago are of comparative insignificance. The whole of the short Hungarian seaboard is mountainous and subject to violent winds.

¹ Merchandise passing the boundaries is subject to declaration, the respective values are stated by a special commission of experts residing in Budapest.

² The acquisition of the Austrian Staatsbahn in 1891 practically gave to the state the control of the whole railway net of Hungary. By 1900 all the main lines, except the Sud- bahn and the Kaschan-Oberbergar Bahn, were in its hands.

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