Historical Documents - Office of the Historian

[Enclosure—Extracts]

Austria-Hungary After a Year of War

Vienna, July 29, 1915.

War’s vicissitudes in superlative contrast have been illustrated by the experiences of Austria-Hungary in the year of unceasing conflict ending yesterday. For eight months success seemed resolutely forbidden to the arms of the Hapsburg Monarchy by fate. The hordes of Russia had grown accustomed to holding a greater part of the vast province of Galicia, and Lemberg had come to be regarded almost as a Russian city. The invasion of Servia had not produced the purpose for which Austria-Hungary avowedly had gone to war; indeed, the bloodless expulsion of the Austro-Hungarian forces from Belgrade after occupying the Servian capital for fourteen days possessed many of the characteristics of a fiasco. Two campaigns against Servia had ended disastrously.

With the Muscovites fairly through the Carpathians and thousands of them on Hungarian soil; with the Bukowina seemingly wrenched forever from Francis Joseph’s rule; with daily reports of the failures and dethronement of Potiorek, Franck, Auffenberg and other once-popular generals, and gossip dealing with various idols of the military caste; with the navy secluded in Adriatic harbors and doing nothing save an occasional dashing performance of a submarine boat; and with hospitals everywhere so filled with wounded from the several theaters of war that it seemed as if the land had been transformed into a shambles, it was indeed difficult for an impartial observer in Vienna to recognize any of the vaunted glories of war.

No public enthusiasm in these long eight months was perceivable, and the speech of every Austrian discussing the conflict was against a continuance of a war that meant only loss of territory and impairment of prestige. From Italy constantly came mutterings pregnant with bellicose possibilities. Servia, the acknowledged cause of the war, had escaped punishment by Austro-Hungarian troops, but was almost prostrate by ravages of cholera and fleck-typhus. The humiliating news of the fall of Przemysl, with the reported loss of 120,000 soldiers and civilians, produced a paralyzing effect on all classes in the Dual Monarchy.

New alignments heavily reinforced by German officers and German soldiers then appeared in Galicia, with all possible power focused on Przemysl. The giant Austrian fieldpieces in time began to silence the outlying forts of Przemysl, and the prediction soon followed that the Austro-German armies had the fortress city surrounded and that it was but a matter of days when Przemysl would capitulate. The prophecy was fulfilled, and it was the first dependable good news that Austria-Hungary had received in eight months of warfare. Vienna was gaily decked with flags, and the changed mood of the people became more than apparent; they perceived the first glimmer of hope, and this spark quickly blazed into firm belief in final victory over Russia. Newspapers began giving in detail accounts of national victories in place of The brief reports confessing defeats sugar-coated with phrases like “strategical realignment” and “masterly retreat.”

Then on the 24th of June the Austro-German armies captured Lemberg, which had been in occupation by the Russians since the 3d of September, 1914. Vienna went wild with joy over this news. For two days and evenings celebrating processions filled the streets, the capital was drowned in bunting, a Te Deum was sung at the Cathedral, and happiness reigned everywhere.

From the Balkans came reports that Roumania and Bulgaria were not as certain of entering the conflict as when the Russians were carrying everything before them. The setback experienced by the Tsar’s armies caused Balkan statesmen to think twice before urging their Governments to take chances as [Page 47] combatants. The expectation had been that Roumania would declare war against Austria-Hungary following Italy’s declaration.

June 28 was the anniversary of the Sarajevo tragedy, and on that day nearly every journal in Austria-Hungary printed editorials teeming with prophecy that the murder of the Archduke Francis Ferdinand was certain to be gloriously avenged.

The military fortunes of Austria-Hungary had changed with the conquest of Lemberg, as if by magic. It was known in military circles that the count of prisoners and booty at Lemberg, as at Przemysl, was not great, for the Muscovites had at both places systematically removed nearly everything of value. The Russians, now in full retreat, were pressed in their rout until two great Austro-German armies were actually pursuing them on Russian soil. Austria was justified in her happiness, certainly. The cry now is “On to Warsaw!” Austrians dislike to admit that control of their offensive against Russia has passed to German generals, but it is the practical fact.

italy’s entrances into the world war

Excitement over Italy’s entrance into the struggle ran high in Vienna, and evidences of patriotism reached a climax. No other declaration of war had raised half the ardor. No Austrian remained indifferent to his country’s claim of Italian treachery and ingratitude, and all classes sought to participate in combating the new enemy of the southwest in the most effective manner open to them. In Vienna thousands of people paraded the streets, singing national songs and cheering the Emperor, the Kaiser, Germany, and the army and navy. There were loud cries against Italy, and before the War Ministry many speeches were made.

The Narodni Politika of Prague discussed editorially Italy’s move and said: “The Monarchy has no fear of the war, which it will undergo victoriously and gloriously, with all the more certitude because of the loyal assistance of Germany.”

The Hlas Naroda of Prague said that the people of Austria and Hungary would “prefer a war with Italy to purchasing an untrustworthy and untenable friendship with heavy sacrifices.”

In the determination to punish Italy the Austrians dropped the campaign against Servia, and composedly saw their Balkan foe in collaboration with Montenegro seize what those kingdoms wanted of northern Albania, now a no man’s land, whereas but a year and a half before the desire to participate in the rule of the fledgling country was the bent of European diplomacy. Austria-Hungary had ceased to care what became of Albania. In her detestation of Italy the Monarchy of the Hapsburgs had modified her hatred of other enemies; France was almost forgiven, and Great Britain also would have been were it not ordained from Berlin that England had made the war and must be punished.

His Majesty Francis Joseph obviously had known that Italy’s declaration of war was on the way, inasmuch as he issued a manifesto1 to his troops on the 23d of May scarcely more than an hour after the Italian Ambassador had left the formal communication at the Ministry of Foreign Affairs in Vienna. The aged Emperor’s pronouncement was a wonderful composition. It breathed no anger, but was vibrant with the pathetic reproach of one stricken by what he called the “perfidy” of a King who for many long years had been a trusted ally. No monarchical utterance in the course of the war bears any similarity to it, perhaps nothing epistolary in the history of the Hapsburgs equals it....

estimate of number of soldiers fighting for austria-hungary

If there be an official who knows how many soldiers Austria-Hungary has called up, his name cannot be learned. Probably not five functionaries in the War Ministry know the number, and for the best of reasons these will not talk. It is a conservative estimate, however, that 4,500,000 men have been called to the colors, and that 3,000,000 soldiers are now at the several fronts. In like manner it is reasonable to believe that the casualties in the year of conflict—killed, wounded, ill, and lost—is 1,500,000. An American official from Petrograd recently assured me that Russia had in the neighborhood of 750,000 Austro-Hungarian prisoners. These cannot all be military captives, as approximately [Page 48] 100,000 civilians were removed from Przemysl to Russian detention camps, most of them being sent to Siberia, while some were sent practically to the Persian frontier.

One of our official American Army “observers,” who passed eight months on the fighting line in Galicia, recently assured me that after the long series of sanguinary and disastrous encounters with the Russians a field division was reduced from 15,000 men to about 200. Another division unit that he had campaigned with had undergone practically three changes in its personnel, meaning that the first two complements had been killed or become ineffective through wounds, illness, or taken prisoners.

It is claimed that 500,000 men are at present being trained to go to the front. The limits of age for service have now reached the extremes of eighteen and fifty years.

The withdrawal of so many men from industrial vocations naturally makes an appreciable inroad upon the prosperity of the Empire. The men’s places as far as possible have been taken by women, old men, and boys. Women are employed in innumerable ways, especially in cities and large towns. In Vienna where tramcars run in pairs the rear car is nearly always in charge of a uniformed woman who collects fares and performs the other duties of the position as well as a man could do them. Thousands of women and girls work in ammunition factories, and more than half the field work in this vast country is performed by women....

evidences of racial differences of opinion

In a Monarchy possessing so many races of humanity it was not to be expected that Austria-Hungary could engage in war without developing internal difficulties, but for political reasons no public acknowledgment could be made of these troubles. This was foreseen when the conflict began.

The most serious trouble has been with the Czech population of Bohemia and Moravia, and from time to time Vienna has heard whisperings of situations in which the Czech people were playing a rôle approaching open revolt. The Bohemian capital, Prague, has been the focal point of these dissensions. So bound up with the Slavs are the Czechs that Russian victories have been celebrated in parts of Bohemia in a manner defiant of the authority of the Emperor. In Prague cafes and clubs there have been frequent demonstrations of disapproval of Germany and undisguised preference for the Allies.

For months there were frequent reports of mutiny in Bohemian regiments, with some of these commands being decimated by execution as a warning. According to rumor civilian agitators against Austrian rule have also been put to death on short notice.

The Embassy is in possession of a report written by a Bohemian correspondent to a newspaper in another country, reading:

The situation in the Czech-speaking parts of Bohemia and Moravia during recent weeks has become very acute. The Moravian Statthalter, Baron von Leyleben, has been maintaining for some time a very strict régime, and several persons have already been executed on the charge of carrying on a Russophile propaganda.

At Kyjov, Moravia, twelve persons have been hanged for having circulated a manifesto of Grand Duke Nicholas to the peoples of Austria. Recently a Czech member of the Diet, Dr. Fischer, of Brünn, was condemned to death because it is alleged he caused the manifesto to be prepared in his office. Another Czech politician, Slama, a counselor of the courts and member of the Reichsrath, was sentenced to two years’ imprisonment on a charge of high treason.

In Bohemia an open policy of persecution against Czech political quarters has been initiated. The arrest of Dr. Kramarz, the Young Czech leader and member of the Reichsrath, and of Dr. Scheiner, president of the Slav Sokol Union, who were deported to Vienna and there placed under arrest, caused great excitement among the population. The Government has taken extensive measures to maintain public order in Bohemia. All the Czech regiments have been sent to towns outside of Bohemia. It is asserted that this measure is connected with the fact that the Czech regiments of Prague and Pilsen, the Twenty-eighth and Thirty-fifth, surrendered without fighting to the Russians in Galicia at the beginning of April.

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Besides racial troubles in Bohemia and Moravia, the Government has had similar problems to deal with in other parts of the Empire. In Trieste and neighborhood persons of Italian blood and sympathies for months presented many difficulties to the Central Government, and the southern Slavs in Bosnia, Herzegovina, and along the Servian and Montenegrin borders have from the inception of the war been a constant menace. In all these places scores of persons have been put to death for treason or treachery.

controlling the consumption of staple foods

Germany’s scheme for regulating the consumption of cereals in a manner establishing a per capita amount having worked so well, a like program was adopted four months since by the Austro-Hungarian Government, when “bread cards” came into operation in cities and large towns. It has worked well in Vienna, where every inhabitant from peasant to prince—and ambassadors have fared the same—has been furnished with cards calling daily for either 490 grams of bread or 350 grams of the mixture from which the war bread is made.

It would be difficult to say just what substances are mixed with the wheat to produce this mixture; but Indian meal, barley, and other coarse cereals are known to be in the compound, and probably some potato flour as well. The “bread card” is arranged in coupons to accommodate persons not always dining at home or who circulate in places out of Vienna.

In view of the satisfactory crops being gathered in most parts of Hungary and Austria, the Government now makes announcement that in a few weeks there will be an abundance of wheat and rye flour at the price at which it is taken from the farmers. This means a return to normal conditions, with a disappearance of the mysterious mélange now issued by official decree. White bread for months has not been seen in Austria, while Hungary has had none too much.

Public economy has been regulated in other dietary forms, as in meats, which can be procured at markets on but five days in the week. Even horses are forced to contribute in conserving the resources of the Monarchy, for their oats and corn have been greatly reduced. Every class of horse proves its short rations by accentuated ribs and moderate gait. The horses of landed aristocrats, whose estates are producers of grain in quantity, fast in a like measure with the animals of town hucksters.

Away from the capital nearly every town has its special program of food conservation. In certain places milk can be had only in meager quantities. In Fiume, for example, butter cannot be had at any price, and no individual can buy more than four eggs at a time. Naturally the cost of all forms of food has risen prodigiously, in many instances from two to three hundred per cent. The authorities are vigilant against extortion or speculation in necessaries, it should be added.

Through the aid and encouragement of the Vienna City Council some 700 acres of building lots and park land within the city and in the immediate vicinity have been converted into “war gardens” and planted with miscellaneous crops. The larger portion of the ground is being cultivated directly under the municipality, which will sell this produce to the public at reduced rates. The labor employed includes 500 Russian prisoners of war and a large number of women. In addition about a thousand plots of land have been let to private persons at nominal rents, and about 30 acres have been allotted free to school children, who are given the produce.

For the better provisioning of the city Vienna is building an immense coldstorage warehouse capable of containing 1,700 tons of meat, besides great quantities of fish, poultry, eggs, and other provisions. It will be a two-story structure 360 feet long, 110 feet broad, and with a floor area of 36,000 square feet.

expedients for raising war necessaries

Warfare creating scores of uses for metals, especially copper and the mixtures of which copper is the chief component, it was feared that a dearth of these might cripple Austria-Hungary in the war. The popular belief had been that there was not sufficient copper to supply, the ammunition factories, whereas in reality Austria-Hungary secured in the early months of the conflict large quantities of copper from America by transshipment through neutral lands. The amount imported through Italy was enormous, and when Italy [Page 50] checked the traffic a smaller but constant importation of the metal through Roumania has been in progress.

For several months there have been “war-metal collections” in all cities and towns of the Empire, with wagons going from house to house with the patriotic appeal. Every description of metal has in this manner been gathered in, ranging from mantel ornaments to chandeliers and stair rails. For weeks it was a familiar sight in Vienna to see the “war-metal” men on their rounds, who would receive from householders every form of useful and useless metal which patriotic ardor would prompt them to contribute. Even old bathtubs and brass crucifixes were loaded upon the wagons with the cheering approval of spectators.

Churches have been levied upon as well, with the result that hundreds of cracked and ancient bells have found their way to the melting pot. From St. Stephan’s Cathedral in Vienna a massive but obsolete bell was removed, and has probably been fabricated into cartridge cases. The Bishop of Trieste turned all superfluous church bells of his diocese over to the Ministry of War to be converted into ammunition.

There are deposits of copper in the Dual Monarchy, not rich enough, perhaps, to compete with foreign mines in normal times; but these mines, I am advised, are now being worked, and their product must be vitally helpful to a nation at war and shut off from the markets of the world.

In like manner the Catholic churches! have been drawn upon to yield their share of the sinews of war to the Empire of the Hapsburgs in its hour of need. There has never been any publicity given to this form of national assistance, and it would probably be denied. But it is a fact, nevertheless.

On a recent visit to the shrine church of Mariazell, in Steiermark, the sacristan showed me several empty cases in the treasury of the church and explained that their contents—pearls, diamonds, rubies, and other gems—had been sold by orders from a high source and the money devoted to war purposes.

For hundreds of years devout Catholics have made pilgrimages from all parts of Europe to this shrine, and many have been the bequests of prized articles for benefits believed to have been conferred as a result of the visit to the miraculous church in the mountains.

waning supplies of cotton and rubber

In the matter of certain important commodities the Monarchy appears to be in danger of running short in the near future. Four months since a reliable cotton expert assured me that the country had but sufficient staple to last four or five weeks, and that with England’s commercial blockade of Germany a cotton famine was certain. That calamity has not occurred, and Bohemian and Hungarian mills seem to be turning out their wonted amount of sheeting and other fabrics. It is claimed that the excess of raw cotton that for months was shipped from America to Greece, Roumania, and Bulgaria eventually found its way to this Empire.

Rubber is an essential that is becoming scarcer with the lapse of each day. The Government, using many thousand automobiles and motor trucks in the war, commandeered practically all tires in sight months ago. The value of a standard tire has consequently doubled or trebled in the last few weeks, and the expectation is that two months hence tires cannot be had. Old tires and discarded articles of rubber command a high value from tire manufacturers. The giving out of tires would seriously cripple the army, and no one seems to know how the Monarchy can procure fresh rubber supplies.

A normal supply of benzine is assured from the reconquered Galician oil fields in the not distant future, or as soon as the refineries can be rebuilt.

In the natural order of things tea should be exhausted before the arrival of winter. It is expected that all necessary coffee can be obtained from neutral Holland. Austria is a large producer of beet sugar. Tobacco for the Government regie can probably be had from Turkey throughout the remainder of the war, but Habana and Porto Rico tobaccos as well as Egyptian cigarettes have disappeared from sale.

Statistics purport to show that Austria-Hungary’s foreign trade for the first half of 1915 had fallen approximately one half over the same period last year. The decline in imports is claimed to be 55 per cent, and exports 45 per cent. Imports from the United States have sunk to the vanishing point—there are none.

war’s crushing cost

What has the war cost Austria-Hungary? No person can tell, not even His Majesty or the Imperial and Royal Minister of Finance. So stupendous is the sum that its statement in exact figures would bewilder even a statistician. The Finance Minister might be able to state the aggregate amount of drafts on the treasuries in Vienna and Budapest, but this could only be an aid in computing the direct cost of the year of warfare. The indirect cost, with business paralyzed and Austria-Hungary’s foreign trade reduced to almost nothing, with disappearance from all seas of the flag of the Empire, and but little coming in from import duties, is probably twice as great as the recorded direct expenditure.

It has been estimated that the actual cash cost of Austria-Hungary’s participation in the conflict is $7,000,000 a day, week in and week out. If so, this known outlay totals $2,555,000,000.

When the war was in its early months, a Vienna financier of recognized intelligence predicted that if the conflict lasted a year, Austria-Hungary would be helplessly bankrupt, whatever the outcome of arms. It should be borne in mind that the Monarchy’s cash box was far from full when the war started. A period of commercial depression occasioned by two wars in the neighboring Balkans, with more than one scare caused by mobilization against Russia, had had the effect of bringing lean years to Austria-Hungary. Stated mildly, the nation’s finances were anything but flourishing when the ultimatum was sent to Servia.

In both Austria and Hungary there have been two war loans. With much appealing to patriotism and arrangements with banking houses to invite subscriptions on terms suggestive of what might be described as an instalment plan, the first loan produced about $500,000,000. Nobody seemed cheerfully to subscribe, for up to that time the Dual Monarchy had had no success in the war, none whatever. The Servian campaign had produced nothing but disappointment, and the Russians were in occupation of a greater part of Galicia.

The second war loan of a few weeks since was represented to have produced upwards of $725,000,000, and was stimulated by the series of Austro-German victories in the north that included the retaking of Przemysl and Lemberg. The entrance of Italy into the war at the time of the Austro-Hungarian appeal to the public was also helpful in causing people to lend their savings to assist in defending the Monarchy. But still, almost at the moment when the latter popular loan was closing, announcement was briefly made in Vienna journals that Austria had just borrowed the equivalent of $62,000,000 from a syndicate of German bankers.

Both public loans were made at such an unusual, high rate of interest and on such terms that this war money costs the Government about 5¾ per cent.

My despatch No. 561 of June 3, 1915,1 explained certain methods of “high finance” that had been employed for securing subscription to the war loans.

Throughout the course of the war it is known that the Government has issued “Treasury notes” to an amount almost unbelievable. It is further known that a tremendous inroad has been made upon the gold reserve of the Government to pay for supplies and commodities purchased abroad. This diminution of the bullion reserve was reflected in the gradual decline in exchange value of the paper money of the Dual Monarchy. Not for years have gold coins been used in ordinary commercial transactions. At present Austro-Hungarian currency measured in American value is worth considerably less than 70 per cent of its face. In normal times drafts on America bring four crowns and ninety-three hellers to the dollar. The present rate of exchange on American drafts is six crowns and sixty hellers.

A well-informed neutral banker provided this analytical judgment several weeks since (before the second war loan,) of the financial position of Austria-Hungary:

Money is plentiful, that is to say, paper money and silver and nickel coins. More than $1,500,000,000 of paper money has been issued in the Dual Monarchy since the beginning of the war. The gold covering for the paper circulation has decreased during the same period from nearly $350,000,000 to about $150,000,000. But gold is only needed for purchases of food and war materials from abroad, and these are restricted to a [Page 52] minimum. At one moment when the Russians were nearly through the Carpathian Passes, and people in Budapest were preparing to move to Croatia and elsewhere, Austrian paper was at a discount of more than 40 per cent in Roumania, Switzerland and other countries; but with the improvement of the military situation, the discount fell and stands now at about 25 per cent. As far as I am aware, the Austro-Hungarian State Bank has not lent gold to the German Imperial Bank. On the contrary, the German Imperial Bank lent some $40,000,000 in gold to Austria-Hungary before the Italian declaration of war. Most of this sum was spent in buying foodstuffs from Italy. If hostilities were to cease and peace were to be signed to-morrow, Austria-Hungary would as a bookkeeping fact be bankrupt. She might be able to pay a dividend of 11 per cent to her creditors, but not more Austria-Hungary needs more than $100,000,000 in gold every year for the service of her foreign debt alone, and all the large Austro-Hungarian banks have heavy gold debts abroad. But Austrian and German financiers are buoyed up by the belief that a huge war indemnity will be secured and that the enemy will have to pay for all expenditures.

Of course the concluding passage of the above was the language of hope in its wildest flight, to say the least. Whatever prospect Germany may have of pecuniary or territorial gain, poor Austria, battling with four enemy neighbors, can have little hope of solvency that is dependent upon victory. As a matter of unsentimental fact it is the expectation of many Austrians that Germany will exact prodigious reward for sending relief to Austria-Hungary in the hour of the Empire’s desperate needs, fully as much as a conquering alien would demand.

a page from nineteenth century austrian history

(Appended only as an interesting fact, and not meant to have application to present-day conditions in a great Empire very different from the undeveloped Austria of the period of the Napoleonic wars.)

That a nation cannot be bankrupt is a trite saying, but the student of history knows that the Austrian Government in 1811 declared itself insolvent and went through the form of “wiping out” 80 per cent of its obligations. This catastrophe had been gradually worked up to by the financial disasters of the preceding years, caused by the enormous expense of the Napoleonic wars.

Continual war loans since 1792, which were little better than taxes in disguise, had impoverished the people. The scarcity of gold and silver coins, and the necessity of melting down church vessels, had led to the emission at different times of a huge quantity of paper money called Banco Zettels, which by the patent of February 20, 1811, were declared to have shrunk 80 per cent of their face value. Meanwhile rates and taxes were raised five times their original amount, and had to be paid in new currency. This operation beggared many people overnight.

The reasons given for these drastic measures were the expenses of the wars and the unfavorable peace signed at Vienna in 1809. Various expedients like state lotteries had been tried, but without sufficient success to prevent the radical step of the Government, The sum represented by the fiat Banco Zettels was more than a milliard, Austrian histories tell us.

In 1810 trade had sunk to a minimum. Wild industrial ideas were exploited, communication was difficult, and duties exorbitant. The Emperor agreed to pay certain officials out of his private fortune, but demanded in exchange that his people give up their silver with the exception of spoons, seals, and medals. Hungary not being subject to this ordinance, many wealthy people smuggled their silver over the border to save it.

Papers Relating to the Foreign Relations of the United States, 1915, Supplement, The World War

The Ambassador in Austria-Hungary (Penfield) to the Secretary of State