AUSTRIA-HUNGARY. 



which form the later deficits were converted. 

 The debt of the whole empire and of the Aus- 

 trian monarchy, on the 1st of July, 1882, was 

 8,280,055,699 florins, of which the consolidated 

 debt, bearing interest, represents 3,038,116,776 

 florins; non-interest-bearing, 115,756,604 flor- 

 ins; floating liabilities, 112,183,618 florins; and 

 annuities, 13,998,701 florins. The total annual 

 charge of the Austrian and common debts 

 amounted in 1882 to 158,365,020 florins, of 

 which the share borne by Hungary was 30,317,- 

 753 florins. 



An operation for the conversion of the Hun- 

 garian debt was begun in 1881, in which year 

 160,000,000 florins of 6 per cent, gold bonds 

 were redeemed by the issue of a 4 per cent. 

 loan which was taken at a fixed price of 77f. 

 The operation was suspended on account of 

 the monetary crisis, and resumed again in 1883, 

 when 300,000,000 florins were converted on 

 slightly less favorable terms than before. 



Tariff. By agreement between the Austrian 

 and Hungarian governments an increase in the 

 tariff on petroleum, coffee, and tea was adopted 

 as a means of reducing the chronic deficits in 

 both countries. These enhanced duties, which 

 fall with excessive severity on the laboring 

 classes, went into operation in 1882. The im- 

 port duty on petroleum was increased from 3f 

 to 10 florins per metric quintal. In addition 

 to this an excise duty on refined petroleum of 

 6i florins per 100 kilos was imposed by the 

 Hungarian Government. The increased reve- 

 nue in both halves of the empire from the new 

 petroleum duty is calculated at 6,000,000 flor- 

 ins. The duty on coffee is increased from 24 

 to 40 florins per metric quintal, and on tea from 

 50 to 100 florins, from which changes an in- 

 creased yield of 6,500,000 florins is expected. 



Taxes. A bill for Ihe amendment of the in- 

 come-tax, carried through by the Austrian Gov- 

 ernment, forms part of a plan for the reform 

 of the whole system of direct taxation. The 

 revision of the land and house taxes had already 

 been accomplished. The new income-taxes are 

 much simpler than the former system, which 

 even the officials had difficulty in understand- 

 ing in all its details. A progressive scale is 

 established for incomes derived from trades and 

 professions. Besides the other taxes on special 

 kinds of income, every one receiving more than 

 700 florins a year of net income pays a personal 

 income-tax calculated on a progressive scale. 

 The changes afe expected to augment the reve- 

 nues, which the chronic deficits in the budget 

 render necessary in Austria as well as in Hun- 

 gary. In both halves of the empire the indirect 

 taxes, consisting of stamps, fees, and imposts 

 on articles of consumption, have been pushed 

 to the extreme limit, with the exception, per- 

 haps, of the sugar and spirit taxes. The in- 

 come-tax in Hungary is higher than in almost 

 any other country, being 12 per cent, on incomes 

 from stocks and bonds.* The revision of the 



* It is exceeded only in Italy, where Incomes from funded 

 securities pay 18- S per cent. 



Austrian system of taxes, the fourth within 

 eighteen years, turns to this source which is 

 already so fully utilized in the sister kingdom. 

 The new land-tax is apportioned among the 

 different provinces, and is assessed at 37,500,- 

 000 florins for fifteen years from 1881. The 

 new personal income-tax is intended to replace 

 all other methods of extraordinary or supple- 

 mentary taxation. The rate is variable, and 

 is fixed in the budget annually, according to 

 the requirements of the Government. Incomes 

 from enterprises which are required to furnish 

 an official exhibit of their finances, and which 

 are taxed at their source, are not subject to 

 the personal income-tax. This variable extraor- 

 dinary tax is supplementary to the scheme of 

 the ordinary direct taxes, which covers system- 

 atically the five classes of objects approved by 

 modern national economists, viz., land, houses, 

 income from investments, trades, and salaries. 

 The land-taxes are copied after the Prussian 

 system. The cadastral survey and valuation, 

 begun in 1869, was completed in 1881, at a 

 cost of 20,000,000 florins. The yield of the 

 land-tax is not greater than before. The house- 

 tax is assessed on town property according to 

 its renting value, and upon rural dwellings ac- 

 cording to the number of rooms they contain. 

 Mud and thatch cabins pay 75 kreutzers (37 

 cents), houses with a single room 1 florin 50 

 kreutzers (75 cents), with two rooms 1 florin 

 70 kreutzers, up to villas and castles with forty 

 rooms, which pay 220 florins ($110) per annum, 

 and 5 florins more for each additional room. 

 This class-tax on dwellings is higher, and the 

 progression somewhat steeper than under the 

 old law. The new income-tax affects all in- 

 comes from invested capital which are not taxed 

 under other heads, or expressly exempted from 

 taxation by special laws, as are the interest on 

 deposits in the postal savings-banks, and the 

 revenues of charitable institutions, of public 

 schools, and incomes not exceeding 300 florins. 

 The law requires every one to give any desired 

 information respecting his own income or that 

 of another. The tax is 5 per cent., except on 

 dividends derived from corporations, which pay 

 10 per cent. Industrial and commercial con- 

 cerns are taxed according to their mean profits, 

 beginning with 3 per cent, on 1,500 florins, and 

 ascending to 10 per cent, on over 50,000 florins 

 annual profit. The tax on earnings does not 

 touch incomes below 300 florins. Up to 500 

 florins the rate is 0*2 per cent., ascending to 1 10 

 per cent, for salaries or professional earnings 

 exceeding 5,000 florins. 



Army and Navy. The total war strength of 

 the Austro-Hungarian army in the beginning 

 of 1883 was about 1,250,000 men, including 

 245,000 Austrian Landwehr and 205,000 Hun- 

 garian Honveds. The standing army is under 

 the control of the common Minister of War, 

 while the militia is looked after by the Minis- 

 ters of National Defense in the two king- 

 doms. The system of army organization agreed 

 to by the two states and embodied in the law 



