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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 Ł22,000,000 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 Ł2,000,000 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 Ł200,000 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, š 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

š 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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