Mr. Hay to Mr. Seward.

No. 14.]

Sir: On Sunday last the houses of Parliament held their last session under the old constitution of 1861. At the opening of the session of the lower house [the Abgeordneten-Hans] in the morning, Baron von Beust, chancellor of the empire, announced that the fundamental laws amendatory of the constitution [Staatsgrundgesetze] had received the imperial sanction and entered on that day into full force.

The president of the legislative body, Dr. Geskra, one of the ablest leaders of the new constitutional movement, who, under the former system, was appointed by the Crown, immediately left the chair, and in an eloquent and significant address declared the office vacant by operation of the new law. The house at once elected him president by a unanimous vote. He resumed his seat, accepting the honor shown him as a demonstration of adhesion to the principles of liberty and progress, to which he promised to devote himself in the future as in the past.

The house then proceeded to the election of members of the delegation, which (according to the law numbered 146) is to meet a similar delegation from the Hungarian Parliament, to discuss and legislate upon matters common to both halves of the empire. The house, after passing without debate the government proposition in regard to the next quarter’s budget, was then prorogued by the chancellor, in accordance with the imperial command, until the 29th of January next.

In the evening Baron Beust also announced to the House of Lords the prorogation of the legislature and the promulgation of the fundamental laws. I send by this mail an official copy of these most important statutes. They embrace, 1. The law relating to the representation of the empire; 2. The law relating to the common rights of the citizens; 3. The law relating to the institution of an imperial court; 4. The law relating to the judicial power; 5. The law defining the limits and operation of the executive authority; 6. The delegation law.

With the publication of these laws Austria enters upon a new era of constitutional life. There can be no question of the sincerity and devotion of those leading minds of the empire who by the labor of years have at last brought about this result, nor do I have any doubt of the intentions of the present government to carry out in good faith the policy thus indicated by the representatives of the national will. The new system is launched under good auspices. Austria was never so completely the mistress of her own destinies. The unfortunate wars of last year, if she is wise enough to profit by them, will be her salvation. She has less than any nation in Europe need of an army or of foreign alliances. Her loss of Venetia has gained her immunity from a standing menace in the south, and her isolation from the political questions which agitate the rest of the German states gives her leisure for the full development of her enormous but neglected resources. The favorable results of this state of things already begin to appear. Commerce and agriculture [Page 61]have taken a new impulse. Manufacturers are busy and prosperous. The gold premium is continually diminishing in spite of the vicious state of the national finances.

There is evidently still a too great complexity in their political system. But it seemed impossible to avoid the dualism insisted upon by Hungary, which rendered necessary the consequent separation of the financial systems of the two halves of the empire, by which, as at last arranged, Hungary is to pay 30 per cent, of the common expenses and 29,000,000 florins a year in full of her liabilities for the common debt. It is somewhat remarkable that both Austrian and Hungarian statesmen denounced this arrangement, while they voted for it as a necessity of the situation, the former admitting that the passive resistance of Hungary could only be vanquished by this concession, and the latter, in their speeches recently made in the Diet at Pesth, insisting that Hungary was a kingdom completely shut in by two great empires, Prussia and Austria, and could not exist without alliances; and that the alliance indicated both by tradition and the nature of things was the Austrian. Even the moderate Hungarians made no concealment of their conviction that it was entirely within the competence of the Diet to make or reject the so-called alliance. Hungary has now an independent Diet and a responsible ministry, to which it is thought that Croatia will probably be joined. The rest of the Austrian dominions are united under the imperial Crown, with a Eeichsrath or imperial Parliament and a responsible government, whose formation has been as yet delayed by unforeseen difficulties in the personnel. There is still a third Parliament, or delegation, the members of which are elected by the Hungarian and Austrian Parliaments respectively, with a separate ministry, who are to regulate matters concerning the two halves of the empire jointly.

These governments are the fruit of many compromises. There are many statesmen who hope to see all these Parliaments and governments fused into one in the course of a few years, and on the other hand there is a strong disintegrating spirit of race at work, which if allowed free course would break the empire up into as many governments as there are languages and nationalities represented in it. This forms a most difficult question for Austrian statesmanship, as it is hard to say whether this clannish spirit is most nourished by concession or opposition. Hungary, for instance, has obtained nearly all it ever demanded, yet the government awaits the issue of the next elections in that kingdom with very serious concern.

I am, sir, very respectfully, your obedient servant,

JOHN HAY.

Hon. William H. Seward, Secretary of State, Washington, D. C.