AUSTRIA-HUNGARY. 



65 



financial arrangement between the two halves of 

 the monarchy, adopted for the ten years ending with 



1*H7. provides that, of the sum voted by tlie I). 

 ti"iis in excess of the net proceeds of the common 



:ns and the receipts from the various depart- 

 ments. Hungary jays 2 per cent., representing the 

 proportion of the former military frontier, which 

 lias been incorporated in the Hungarian kingdom, 

 and the remainder is to be borne by the two mon- 

 archies in the proportion of 70 per cent, from the 

 ian Treasury and 30 per cent, from the Hun- 

 garian. The surplus of customs for 1896 was esti- 

 mated at 49.047.140 florins, the receipts from the 

 war and naval departments at 2.509.873 florins, and 



of the other departments at 122.302 florins. 

 Of the sum needed in addition. Hungary's 2 per 

 cent, makes 2.091.043 florins. Austria's quota 71.- 

 722.774 florins, and Hungary's quota 30.738.331 

 florins. Of the total expenditures. 138.699.204 flor- 

 ins are classed as ordinary, of which 3.858.300 florins 

 are for the Mini-try of Foreign Affairs. 122.215.042 

 florins for the army. 10.464.060 florins for the navy. 



.'50 florins for the Ministry of Finance, and 

 120.552 florins for the Board of Control. Of the ex- 

 traordinary expenditure, amounting to 17.592.259 

 florins, 14.389.059 florins are required for the army 

 and 3.117.200 florins for the navy. The revenue 

 collected in Bosnia and Herzegovina for 1895 was 

 estimated at 14.010.720 florins, and the expenditure 

 at 14.084,990 florins, not including 3.559.000 florins 

 of extraordinary expenditure representing the ex- 

 penses of the army of occupation. The revenue 

 collected and expended in the occupied provinces is 

 constantly increasing. In 1897 it is expected to 

 amount to 18,160,000 florins. Their economic and 

 intellectual progress is such that Herr von Kallay 

 predicts that Bosnia will soon become the attractive 

 force among the Balkan states. The increase in 

 population, in the number of cattle, and in the ex- 

 tent of land under tillage testify to prosperity. 



The budget for 1897 makes the common expendi- 

 tures amount to 160.500.000 florins, of which the 

 two halves of the monarchy have to provide 107.- 

 200.000 florins. The military expenditure is esti- 

 mated at 125.300,000 florins, an increased amount 

 being needed for additional officers, ammunition for 

 rifle practice, and mounts for infantry- captains. 

 There is an extraordinary military budget of 14,- 

 800.000 florins, including the annual installment for 

 the introduction of smokeless powder and large sums 

 for the improvement of fortifications and fortress 

 artillery. The naval expenditures are estimated at 

 14.000,000 florins, a large part of which will be de- 

 voted to the construction of armored cruisers and 

 torpedo boats. 



The Public Debt. The general debt amounted 

 on Jan. 1. 1895, to 2.757.072.783 florins. Austria's 

 special debt amounted to 1.274.074.670 florins. 

 The consolidated debt amounted to 3.975.893.267 

 florins, of which 1,926.399.844 florins bear interest 

 in paper currency. 1.442.531.352 florins in silver, 

 503,373,560 florins in gold, and 103,588,511 florins 

 bear no interest. The interest on the public debt 

 for 1895 amounted to 116,613,997 florins and the 

 sinking fund to 12.638,930. Of the interest, 86.452.- 

 790 florins were chargeable to Austria and 30.161.207 

 florins to Hungary. The separate debt of Hungary, 

 contracted mainly for the purchase of railroads, 

 lands for the peasantry, etc.. amounted in 1894 to 

 2,302,342,506 florins, while the railroads, mines, for- 

 ests, sums due. and other real and movable prop- 

 erty of the state were valued at 2.295.900,000 florins. 

 A Bosnian national loan of 12,000,000 florins, 

 bearing interest at 4 per cent., was raised in the 

 early part of 1896 at the price of 97| per cent. 

 The proceeds were applied i'i part to repay advances 

 made from the Austrian and Hungarian govern- 

 VOL. xxxvi. 5 A 



ments for the construction of railroads and in part 

 for the extension of the system, which, as far as 

 constructed, returns a considerable profit on the in- 

 vest ment. ( hit of the future profits the annual sum 

 of 530,000 florins will be reserved for the extinction 

 of the loan in sixty years. This is the first loan 

 raised on the credit of the occupied provinces. 

 Neither Austria nor Hungary undertakes any guar- 

 antee or responsibility in connection with it. The 

 favorable conditions prevailing in the two provinces 

 appear to justify the operation. The Bosnian budg- 

 et showed a surplus of 67,000 florins in 1894. and 

 in 1895 one of 74.000 florins, while in 1896 there was 

 one of more than 45,000 florins. 



Foreign Affairs. The diplomatic relations of 

 the Hapsburg Monarchy were reviewed in a remark- 

 ably frank speech of Count Goluchowski to the 

 Delegations. The declaration made by the powers 

 on the initiative of Austria-Hungary had put an 

 end to the agitation in Bulgaria. The action of the 

 powers was equally effective in Asia Minor, and 

 Austria-Hungary had left nothing undone to pro- 

 mote peace. The dual monarchy had originally 

 adopted an attitude of great reserve in the Arme- 

 nian question, taking no part in the action of Eng- 

 land, France, and Russia. Afterward, however, 

 when there was danger of a one-sided interven- 

 tion that would have been the signal for a confla- 

 gration and the opening up of the whole Eastern 

 question, the Austro-Hungarian Cabinet took an 

 initiative which, furthered by the love of peace of 

 the other powers, soon deprived the question of its 

 acute character. The Government had not only 

 served the interest of peace by its firm determina- 

 tion to preserve the status quo in the Balkans, but 

 was entitled to the gratitude of Turkey, and the 

 Government of the Porte ought, in its own interest 

 and in consideration to the friends of Turkey, of 

 which Austria-Hungary was one of the best, to take 

 such measures both in the Asiatic and the Euro- 

 pean territories as would justify Europe in believ- 

 ing in the vitality of Turkey, preventing further 

 massacre and violence and the outrage and perse- 

 cution of Christians. Otherwise the Ottoman power 

 would more and more approach its fall until its best 

 friends would no longer be able to prevent it. The 

 entente between Austria and Germany had in no 

 way been weakened, and the relations with Italy 

 were exceedingly intimate. Russia, having declared 

 the maintenance of the status quo and the strict 

 observance of treaties to be the goal of its policy, 

 could count on the unconditional and loyal support 

 of Austria-Hungary so long as it continued on that 

 path. The objects pursued by Austria-Hungary 

 had been the consolidation of the state of things 

 established in the East by international agreement, 

 the preservation of Turkey, the independence, 

 strengthening, and free development of the differ- 

 ent Balkan states, the cultivation of friendly re- 

 lations with them, and, finally, the exclusion of the 

 predominant influence of any one power in particu- 

 lar to the disadvantage of the others. After allud- 

 ing in favorable terms to Russia's reconciliation 

 with Bulgaria, Count Goluchowski said that the 

 neighbors of Austria-Hungary were well aware that 

 the monarchy would raise its voice against any at- 

 tempt to do them violence, and that it would itself 

 demand nothing calculated to infringe their na- 

 tional existence. Alluding in flattering terms to 

 Roumania. the Minister of Foreign Affairs made the 

 important statement that, thanks to the wisdom of 

 the King and the sagacity of the statesmen of that 

 country, it had attained political maturity and was 

 now a weighty factor in the grouping of the Euro- 

 pean states. Servia, which was counted in the six- 

 ties as an exemplary state, had latterly been so dis- 

 tracted by party strife that its friends viewed recent 



