Mr. Motley to Mr. Seward
Sir: I have no startling events to record since my last writing. Nevertheless it cannot be denied that the attention of the Austrian statesmen is absorbed by very grave matters. Whether the position of the administration or of any members of it is seriously compromised or not I am not prepared to decide; but it is certain that defeats have been sustained by the government on vital questions, which, in a regularly organized parliamentary system on the English model, would necessarily lead to a resignation or to a dissolution. A few days ago there was a warm debate upon the question whether, according to a certain article (No. 13) in the February constitution, ministers were not bound to obtain the sanction of the Reichsrath to measures taken during its recess. A resolution to the effect that such measures were unconstitutional and void unless subsequently confirmed by the representative body was carried against the ministers by a majority of two-thirds. I have not learned that there are to be any steps taken in consequence of this vote.
This week the minister of finance has announced that a loan of 117 millions of florins will be necessary to cover the estimated deficit for the years 1865 and 1866. The house of deputies refused to sanction at present a loan of more than 13 millions, or one-ninth of the whole amount, a sum immediately required for the protection of the July coupons on the existing debt, and reserves the further authorization of the loan demanded until the finance laws for 1865 and 1866 shall have been constitutionally passed.
The effect of these sentiments and discussions has been very perceptible on the exchange and in the public feeling. There is a sentiment, amounting almost to conviction in some quarters, that the empire is on the high road to national bankruptcy; that it is impossible to raise any more revenue from taxation, as the people are not able to bear the existing burden, and that some means must be discovered without delay for reducing the expenses at least to an equilibrium with the present revenue, and for putting an end to the annual deficit which has assumed a frightful regularity.
Those means have not yet been found, and I refer you to extracts appended to this despatch from remarkable speeches just made in the house of peers, by some distinguished members of that body, as proofs that very great alarm is felt, and that the alarm is not without cause.
In previous despatches I have given you sufficient details as to the annual budgets of the empire, and as to the amount of the national debt.
In round numbers, for general purposes, it may be said that Austria owes today about as many florins as the United States government owes dollars.
The annual interest, exclusive of that upon the “Grund Entlastung,” (a debt of about 500 millions, contracted for the emancipation of the peasants,) is not far from 120 millions of florins. The market price of the Austrian loans, bearing 5 per cent. interest in specie, is quoted to-day in Frankfort at 66⅞, and that of the United States six per cent. five-twenties at 75.
Thus, at this moment of our emerging from a terrible civil war of four years’ duration, which has cost 3,000 millions of dollars, our credit is about equal to that of the Austrian government, although our actual indebtedness is about double theirs, (a florin being nearly half a dollar,) while the population, respectively, of the empire and of the republic is almost exactly the same.
As United States stocks have been sold as low as 36 in Frankfort, or at less than half their present market value, you perceive how rapid has been the advance, in the belief that the American government is not rushing very rapidly [Page 29] upon that national bankruptcy which our excellent friends in England have so steadily predicted.
After all, it is felt that a nation which has a vested capital of at least 21,000 millions of dollars, or seven times its debt, whose population doubles every quarter of a century, whose wealth doubles every ten years, and whose annual production may be fairly stated at 4,000 millions, or considerably more than that of any other country, is not in danger of insolvency unless the character of its people, both for industry and good faith, should suffer some astounding metamorphosis.
The instant disbanding of a large part of those armies and navies, (as soon as the last shot in the civil war was fired,) with which it was considered so certain abroad that we were at once to attack England and France, and the world in general, in order to find occupation for our warriors, and to slake the persistent thirst for blood which the war against the slave power was supposed to have engendered, has astounded Europe—for Europe always knows that we are going to do exactly the reverse of what we really do—but it has benefited our credit.
The rapid disappearance of those tremendous forces seems as prodigious to the European mind as their sudden apparition when required to save our national life, while the vanishing into space of the “nation” created by Jefferson Davis, and so warmly welcomed by the haters of our republic, without leaving one solid fragment of itself in existence, ought to furnish a lesson to politicians in future in the art of distinguishing exhalations from organized bodies.
But it is hardly possible for the Austrian empire, or for any of the great or little powers of the continent, to effect such sweeping retrenchments as our geographical position and our democratic institutions allow. Of the four millions of soldiers always kept on foot in Europe, this empire has from 320,000 to 613,000, the latter figure being that of its army on a war footing, while the total number (active and reserve) of the army of Hesse Cassel, with its population of 740,000, is 15,000, or two thousand more than the whole United States army—officers, musicians, and privates—in 1860.
It is true that the expense of the imperial army has just been reduced, as was well put by Minister von Schmesling in his speech to the peers, from 135 million florins to 95 millions, being a saving of 40 millions; but the exposed condition of the empire, the troops of enemies ever ready to take advantage of any momentary weakness, and the constant possibility of external wars, great or little, or of disturbances in some portion of its very heterogeneous population, render it doubtful whether such a diminution can be sustained, and almost certain that it could be carried no further.
That the exigency of diminishing the imperial expenditure is very great, and that there is a frank determination, both of the ministry and of the opposition, to effect such retrenchments, seem to be certain, but the road to them does not seem so clear.
It was wittily observed by Count Rechberg, ex-minister of foreign affairs, that the opposition was very loud in shouting fire, but they did not come forward with the engines to put it out; and it was quite as wittily replied, by Count Auersperg, that the key of the engine-house was not in their hands, but in that of the authorities.
Thus far I have not seen any very promising indications of large economies to be effected in the future; and, after all, a great empire in Europe must, under the universal system which now prevails in this hemisphere, look rather to increased national production than to very great savings of expenditure to relieve its embarrassments.
I suppose it to be as well established a fact as any in human history, that the largest individual liberty of action consistent with due security to life and property will give the largest national production, other things being equal.[Page 30]
It is for this reason that in the United States the same amount of capital, land, and labor yields more wealth than can be expected in any European country.
No doubt the resources of Austria are great, almost inexhaustible; but this, after all, is but a phrase. The resources of Mexico are boundless, so are those of Turkey, while the national resources of Holland are almost null; yet Holland has been at times one of the richest and most productive states in the world.
The more Austrian industry is freed from its fetters; the sooner the emancipated serf finds himself able to earn more than twenty kreuzers, or ten or twelve cents per diem, which is about the daily wages of the laborer in many of the most populous and important provinces, the sooner will the deficit which now perpetually stares the country in the face, suggesting horrid visions for the future, begin to withdraw his disagreeable visage.
Certainly democratic institutions are not possible, scarcely conceivable; or desirable in Austria; but so long as protection, legislation, class privileges and general administrative interference with the individual prevent the mass of the people, by whom the resources of a state must be worked, from having any better prospect in life than that of earning, by twelve hours of daily toil, about one-tenth of what can be earned by an American laborer of the lowest class in the same time, certainly a very largely increased productiveness of the empire cannot be expected.
To perpetually look upward to government for assistance, direction, instruction, advice, and commands in daily affairs is not a habit which inspires a people with the spirit of self-confidence and of self-help, out of which is born national wealth, and which gives the deathblow to deficits. But I am not Writing an essay on political economy.
I have the honor to be, sir, your obedient servant,
Hon. W. Hunter, Acting Secretary of State.