No. 35.
Mr. Delaplaine to Mr. Evarts.

No. 91.]

Sir: Referring to my No. 86, relative to the decisions of the previous ministerial council, I beg to communicate that the minister of finance for the empire, Baron Hofman, has effected, without difficulty, the arrangement for the temporary loan to cover the cost of the partial mobilization, which Count Andrássy was, in the exercise of his discretion, empowered to carry into effect. Some satisfaction is expressed that the loan has been wholly taken within the empire, although at a fractional advance over the proposals of some foreign bankers. Still, as collateral securities were given, its negotiation was effected upon less favorable terms than had been anticipated.

It is reported now that the intended provisional mobilization of four army divisions is deferred, and doubtless the recent double defeat of the Russians before Plevna will have convinced even the most clamorous advocates in Cisleithania for armed intervention that no pressing necessity existed. I would not include those of Hungary, for the reason that the recent meetings held throughout that kingdom, demanding active measures to repress the expansive policy of Russia, have inflamed to an exaggerated degree the spirits of the people. To a deputation from a meeting convoked at Pesth, the reply of the Hungarian minister-president, Tisza, expressed the opinion that European powers would find soon in the events of the war a favorable occasion for making efforts tending to a re establishment of peace, while to the deputation from a meeting at Erlau he declared “that Austria-Hungary would only shed the blood of her subjects for her own interests, but never in aid of a foreign nation.”

Meanwhile similar meetings have been held in Croatia, where sentiments of an opposite nature have been uttered, and resolutions in sympathy with Russia have been adopted. I feel convinced that the minister for foreign affairs will not allow his past policy to be influenced by any sympathies or antipathies which may find expression in the distinct provinces of the empire, but will pursue the dictates of his judgment, the soundness of which results seem to have fully justified and proved. Apart from this political difference between Hungary and Croatia, a subject of discord which has been for some time past dormant has recently been fomented into a grave dispute.

About five years ago, the institution called the Grenze, in the military frontier district between the Hungarian and Croatian territory and that of Turkey, was suppressed. This district, then wasted and uncultivated, had been given, after the final conclusion of peace in the last century between Austria and Turkey, to the soldiers who had served in the armies of the Emperor, for settlement, and various immunities and privileges were conferred upon the inhabitants, under the condition of military and revenue services to be performed by them; thus forming a [Page 42]living bulwark against the Moslems, then regarded as hereditary enemies. After the suppression of the Grenze and the union of the district with the provinces of the Crown of St. Stephen, its population thereby passed from a military to a civil administration; consequently upon this followed the change and disbursement of the property of the Grenze, which consisted chiefly in vast primeval forests, which have since been in part sold. From this a special fund has been created, and it was resolved, with the concurrence of the population, to employ a large part of this fund in construction of railways in the district.

If the military district had been previously incorporated with Hungary and Croatia, then the question of the railways would have been considered in the Hungarian Diet and the Croatian legislative assembly. Such was, however, not the case. A provisional governor, now Lieutenant Field-Marshal Mollinary, administers the district, not only to the satisfaction of the population, but entirely to that of the crown. Lieutenant Field-Marshal Mollinary has prepared a draught as to the construction of the proposed railways, which has primarily in view the interests of the population, and has been approved by the provisional assembly of the district. Simultaneously, however, the Hungarian Diet has before it a draught of law relative to the railways, which provides for the Hungarian interests, and further designs to divert the Grenze fund into the independent administration of the Hungarian Government. Against this the voice of the district has been raised, and a remonstrance prepared, which the population intend to address to the Emperor.

The population of the district appear to be in the right, inasmuch as they maintain that their property should be employed for their individual benefit, while in a formal view of the case the Hungarians should be regarded as in the right, since the government and Diet are more competent to decide what shall be done in a portion of their territory, although not yet reduced into possession, than the population of the district, which has no constitutional representation. In a more tranquil period the question would doubtless be amicably arranged, as I believe will ultimately be effected; still, at the present moment, where the popular mind is excited by national passions, it may possibly give the signal to divisions and bitterness of feeling.

Apart from this, a complete calm exists in political circles. The hunting season having commenced, Count Andrassy left Vienna to-day with the intention of being absent about ten days at an estate in Styria, to which he has been invited.

The anniversary of the birthday of the Emperor will be celebrated on the 18th instant, which he will pass at Ischl, where many members of the imperial family are now assembled.

I have, &c.