No. 21.
Mr. Kasson
to Mr. Evarts.
Vienna, December 23, 1877. (Received January 11.)
Sir: My dispatch No. 22 contained a statement in gross of the Austro-Hungarian debt as nearly accurate as the means at my command enabled me to make it. It did not, however, appear to me to be sufficiently complete, and I therefore subsequently sought the aid of a banker of this city, by whose assistance I am now able to present the following more accurate and more satisfactory explanations and tables, showing the character and amount of the public debt of the Austro-Hungarian monarchies in the year 1877.
The public debt consists of three classes, obligations of three different nationalities, as follows:
- A.
- —Obligations of the whole Austro-Hungarian Empire.
- B.
- —Obligations of the countries represented in the Austrian Reiehsrath Cisleithania.
- C.
- —Obligations of the countries represented in the Hungarian Reichstag Transleithania.
A.—There is no consolidated debt of the whole empire. There is an imperial floating debt, which consists of “Staats noten” and “Münzscheine,” the large and small paper currency; and “Salinenscheine,” or exchequer bills, at six months’ date, bearing 4 per cent. interest, and to secure which certain Austrian saline property is hypothecated.
All this imperial floating debt is by law limited to the aggregate amount of four hundred and twelve millions of florins (about $202,000,000). The amounts composing the aggregate were originally 300,000,000 of circulating state notes, 100,000,000 exchequer bills, and 12,000,000 fractional notes (10 and 20 kreuzer). As the bills and fractional notes are reduced in amount, the state note currency is increased, and the aggregate debt, therefore, is maintained within a very trifling fraction at the extreme limit of 412,000,000 florins. Although literally it is only the circulating state notes which bind all parts of the empire in solidum, yet the provision for converting the whole amount into state [Page 27] notes, already 356,000,000, induces me to state the aggregate amount as being an imperial debt.
The old debt of the government to the national bank, amounting to 80,000,000 florins, is claimed to be obligatory on the whole empire. It is not yet acknowledged by Hungary, but is pressed for adjustment at this time, with probability of acknowledgment. I therefore add this to the imperial debt, which makes an aggregate of 492,000,000 florins.
B.—But the greatest indebtedness is that of the Austrian monarchy. It is composed of almost every variety of indebtedness, and in various forms of loan. The following table furnishes the clearest classification of it which I have been able to devise:
B.—Debt of Cisleithania (Austria, &c.), excluding the Salinenscheine, as stated in A.
| 1. A remnant of Staats-Central casse bills | 1,890 |
| 1. Schatzscheine (exchequer bills) issued under law of December 13, 1873. due May 1, 1878 | 25,000,000 |
| 3. Various deposits and securities | 4,664,479 |
| Fl. 29,666,369 |
Consolidated debt, reduced to Austrian values, and bearing 5 per cent. interest.
| 1. Loans in Weiner währung | 1,316,279 |
| 2. Remnants of loans in Conventions Müntze | 2,673,823 |
| 3. Remnants of loans, in Austrian value | 506,867 |
| 4. Unified debt (Einheitliche Schuld), 5 per cent. interest in paper | 1,265,791,907 |
| 5. Unified debt (Einheitliche Schuld), 5 per cent. interest in silver | 993,192,720 |
| 6. Goldrente, gold interest, 4 per cent | 120,000,000 |
| 7. Lottery loans of 1839 and 1854 in Convention M., redeemable | 51,201,985 |
| 8. Balances due to various funds for discharge of feudal rights, (Grundentlastung) | 46,327,300 |
| 9. Due Boden Credit Anstalt (mortgage on state property,) silver | 49,038,200 |
| 10. Due on 5 per cent. debentures of the Süd Bahn (silver) | 14,901,909 |
| 11. Lottery loans of 1860 and 1864 | 213,786,000 |
| 12. Due on loan for improvement of Danube | 7,722,366 |
| 13. Overdue sums on loans | 3,682,747 |
| 14. Calculated principal of certain annual payments | 14,305,862 |
| Making aggregate consolidated debt | 2,784,447,965 |
| Add floating debt | 29,666,369 |
| Total debt attributed to Cisleithania | Fl. 2,814,114,334 |
From the 5 per cent. interest on the “unified debt” 16 per cent. income tax is deducted by the government.
There is also a debt divided among the several provinces for the discharge of feudal rights, for which Cisleithania is guarantee, amounting to 195,256,540 florins.
On the other hand, there is a fixed annual subsidy, agreed to be paid by Hungary, in consideration of certain of the debts of Cisleithania, amounting to 29,188,000 florins.
C.—The Hungarian debt, (Transleithania.) None of the debt of Hungary is classed as floating. The following table shows its character and amounts:
[Page 28]C.—Debt of Hungary.
[1. There is no floating debt, the treasury bills (Schatzscheine) being enumerated with the consolidated debt. 2. Consolidated debt reduced to its equivalent in Austrian value but irrespective of the rate of interest.]
| Description of loan. | Original amount of loan in florins. | Rate of emission. | Rate of interest. | Redeemable in years. | Repayment begins in | Payable in— | All these dates. | The amounts respectively outstanding were— |
| Florins. | ||||||||
| Bonds for release of feudal rights (Grundenstlastungs obligationen). | 5 per cent | Paper | Dec. 31, 1876 | 252,307,734 | ||||
| Bonds for the release of wine tithes (Weinzchenk obligationen). | Dec. 31, 1876 | 21,291,670 | ||||||
| Lottery Loan | 30,000,000 | 80 per cent., paper | 50 | 1870 | Paper | Sept. 30, 1876 | 28,105,000 | |
| Railway loan | 85,125,000 | 60 per cent., silver | 5 per cent | 50 | 1870 | Gold | Sept. 30, 1876 | 81,264,000 |
| Mortgage loan of Göinör Railway | 60,625 ,000 | 75 per cent., silver | 5 per cent | 40½ | 1872 | Silver | Sept. 30, 1876 | 6,329,100 |
| Silver loan. 1871 | 30,000,000 | 75¼ per cent., silver | 5 per cent | 32 | 1873 | Silver | Sept. 30, 1876 | 28,284,000 |
| Silver loan, 1872 | 54,000,000 | 79⅕ per cent., silver | 5 per cent | 30 | 1875 | Silver | Sept. 30, 1876 | 53,148,000 |
| Treasury bills, first emission | 76,500,000 | 6 per cent | Dec. 1, 1878 | 1878 | Silver | Sept. 30, 1876 | 76,500,000 | |
| Treasury bills, second emission | 76,500,000 | 6 per cent | Aug. 1, 1879 | 1879 | Silver | Sept. 30, 1876 | 76,500,000 | |
| Goldrente sanctioned by law December 27, 1875 | 80,000,000 | 81 per cent | 6 per cent., gold | Not repayable | Sept. 30, 1876 | 80,000,000 | ||
| Debts for purchase of the Hungarian Ost Bahn, ancient debentures. | 5 per cent | Silver | 44,812,800 | |||||
| Ancient second debentures | 5 per cent | Gold | 29,997,600 | |||||
| Bonds for purchase of shares | 5 per cent | Gold | 10,004,466 | |||||
| Total of Hungarian consolidated debt | 788,344,370 |
summary.
| Florins. | |
| The imperial debt, according to statement A is | 492,000,000 |
| The Cisleithanian (B) | 2,814,114,334 |
| The Transleithanian (C) | 788,344,370 |
| The aggregate for both monarchies is | 3,094,458,704 |
Without including provincial or municipal indebtedness, for nearly 200,000,000 of which Austria is indorser.
The revenue is inadequate to meet the current expenditures, and there are some deficits which are not exactly known, and do not appear in these statements of the indebtedness of either monarchy. The two governments are seeking new sources of revenue or increasing the existing contributions. Many public men are looking especially to the reduction of the army as the chief resort for economy. It embraces nearly three hundred thousand men as the peace establishment, and about eight hundred thousand men as a war footing. With annually recurring deficits, it is evidently necessary to make reductions of expenditures, in order to preserve a semblance of national credit. This year’s budget for Hungary showed an actual deficit of 31,000,000 florins. The budget for 1878 acknowledges a probable deficit of over 16,000,000 florins.
The actual deficit in the Austrian (Cisleithanian) budget for 1877 was about 37,000,000 florins; the estimated deficit for 1878 is over 20,000,000 florins. The minister expressed the hope that by reduction of expenditures and increased revenue an equilibrium might be established between revenue and disbursements in the year 1880.
The common imperial budget for 1878 proposes a total expenditure of 113,731,167 florins indicating a reduction of over 3,000,000 florins on last year’s budget. This expenditure is chiefly apportioned as follows:
For the ministry for foreign affairs, 4,496,580 florins (of which 1,125,900 florins is subvention paid to steamers); for the common ministry of finance (including pensions), 1,976,978 florins; for ordinary expenses of the common ministry of war (including marine), 102,558,313 florins.
As the two monarchies respectively vote their proportion of this imperial budget, the deficits, if any, occur in the several budgets of the two monarchies, not in that of the empire. Also the consolidated debt is composed of the separate obligations of the two monarchies.
Having been misled as to this in my former dispatch (No. 22,) by the form of publication, I beg that a note may be made at the foot of that dispatch referring to this for correction of the statement of the debt.
I doubt if the debt statements of any country in Europe are so intricate and complicated as those of this empire.
I have, &c.,