Paris Peace Conf. 184.011102/560½
Mr. A. W. DuBois to the Secretary of State48
Memorandum on Recent Political Events in Austria
The peace treaty of Saint Germain was accepted on October 17th by the National Assembly after a short report by Dr. Weiskirchner, chairman of the committee for peace negotiations, without debate. The treaty goes to Dr. Seitz, president of the National Assembly, for ratification. The Social Democrats and Christian socialists voted for the treaty, while the All-German party withheld their vote.
The treaty having been accepted, the old cabinet under the leadership of Dr. Renner, handed in its resignation. Dr. Renner stated that the work of the cabinet, namely that of treaty making, had been concluded and since new problems were to be undertaken a new government [Page 581] would have to be formed. The leaders of the Social Democratic and the Christian Socialist parties have been in negotiation for some time for the formation of a coalition cabinet and government and on October 16th had agreed upon a program which was carried out on October 17th without a hitch.
Dr. Renner was asked to present a cabinet list which was accepted. The new coalition cabinet is as follows:
- State Chancellor, Dr. Karl Renner
- Vice Chancellor, Jodok Fink
- Minister for Foreign Affairs, Dr. Karl Renner
- Minister for Interior, Matthias Eldersch
- Minister for Justice, Dr. Rudolf Ranek
- Minister for War, Dr. Julius Deutsch
- Minister of Finance, Dr. Richard Reisch
- Minister for Agriculture, Joseph Stöckier
- Minister for Commerce, Johann Zerdik
- Minister for Ways of Communication, Ludwig Paul
- Minister for Social Government, Ferdinand Hanusch
- Minister for Food, Dr. Johann Loewenfeld-Russ
- Minister for the Preparation of a Constitution and Government Reform, Dr. Michael Mayr
- Undersecretary for Education, Otto Glöcke
- Undersecretary for Worship, Wilhelm Miklas
- Undersecretary for Justice, Dr. Arnold Eisler
- Undersecretary for War, Dr. Erwin Weiss
- Undersecretary for Commerce, Dr. Wilhelm Ellenbogen
- Undersecretary for Social Administration, Joseph Resch
- Undersecretary for Health, Dr. Julius Tandler
The new cabinet has thirteen ministers—secretaries of state—and seven undersecretaries, of whom eight are social democrats, eight christian socialists, and four professional men but conservative and probably also christian socialists. This majority or apparent majority of the conservative party has brought forth a cry of opposition from the radical elements who claim that they have been sold out to the middle class. However the social democrat leaders defend their position by claiming for themselves the six important political posts in the cabinet, namely the state chancellorship, the ministry for war, the ministry for foreign affairs, the ministry for interior, the ministry for instruction, the ministry for social administration, and further through the control of the socialization commission.
Equally as interesting as the attempt to coalesce the two political parties, is the attempt to bring about a better understanding between Vienna and the counties by placing in the cabinet the representatives of the latter, namely, minister for justice, a social democrat from Salzburg, the undersecretary of justice, a social democrat from Graz, and the minister for constitutional and administrative reform, a christian socialist leader from the Tirol.
[Page 582]In general it can be said that the new cabinet has been formed along common sense lines and the selection of the individuals on the whole has been a good one. The character of the chancellor and minister for foreign affairs is well known. Dr. Deutsch retains his post as minister for war. His policy has been described in a former report (No. 5, Sept. 17th).49 Dr. Reisch, the new minister for finance and who has one of the most difficult positions conceivable, is leading director of the Boden Credit Anstalt (Bank), is a leading financier and expert on taxation. He has served as counsellor to the ministry for finance and bureau chief for tax and finance reform and is well versed in governmental finance problems. He is considered a great improvement over Schumpeter, his predecessor. The elimination of Otto Bauer rids the cabinet of an extreme radical, an intelligent but dangerous man. Kautz, Bauer’s secretary, who held a position in the foreign office, has resigned thus further purging that office of extremists and allowing the more reasonable elements to breathe more freely. Zerdik has been retained in the cabinet, on account of his knowledge of the coal industry but has been changed from interior to industry. The new government has four Jews in the cabinet.
Program of the new administration.
The Reichspost, the christian socialist paper, and the Arbeiter-zeitung, the social democrat paper, published yesterday signed statements of the coalition government’s program, a copy of which is attached to this memorandum.50 Both parties are to be equally responsible in the new government and neither is to make political material of labor or wage questions.
The first question of importance is that of finance reform for which the following program has been set forth. Immediate contribution of wealth, to take place but once (einmalige Vermögungsabgabe); a large part of the proceeds to be used for securing of foreign currency, to reduce the war debt, to cover current deficits, and to secure government aid for important undertakings. Demand for deliverance of gold and foreign securities, for payment of foodstuffs, against complete reimbursement. The creation of a steady currency. The tax system to be based on a graduated income tax. Division of tax between State and counties. Regulation of payments of state employees. The adaptation of selling prices of foodstuffs to production costs.
The task next in importance is the drafting of the new constitution, in the carrying out of which the administration will consult both parties and also the counties. The new draft will constitute German Austria as a federated state; German West Hungary will be considered [Page 583] as a separate county a part of the new federation. The powers of the federation will be specified. The federal government is to have exclusive control over foreign affairs, law making (civil and criminal), the army, the higher schools, labor laws and insurance. The federal government will have the power to impose taxes. All powers not specifically granted to the federal government fall to the counties. Relation of state to church is to be regulated, all creeds to be respected. The lawmaking power is to be vested in the national assembly and a federal council, the latter to be modelled after the German Parliament. It will introduce the initiative and referendum. It will do away with the bureaucratic form of government.
The program acknowledges the faults of organization of councils (soldiers and workmens) and the misuse of their powers, but promises freedom to the individual, clubs, meetings, and so forth.
The new military is to be a democratic, republican army. All members are to swear to defend the democratic republic and not to take part in political movements directed against the republic. It is to be the army of the republic and not that of a party. However the individual members will have all the rights of citizens and outside of their duties can as individuals take part in politics. Men will be selected from the officers of the old Austro-Hungarian army for commissions and for non-commissioned rank. But also men who have become officers since the overthrow and who are qualified may become officers. All former officers may apply for entrance into the ranks of the new army on the same basis as other citizens. For those officers of the old army who do not enter the new some means will be found for their care. They will be especially selected for the work of carry[ing] out the deliverance of wealth, collection of gold and jewelry, agricultural operations, and census taking. The new army is to be subordinate to the federal authorities. Delegates of the rank and file (soldiers councils) will represent the economical interests and stipulated rights of the men, but they will not be allowed to prejudice the powers of the commanders. Soldiers will serve in their own counties. Only when the volunteers from any county do not suffice will soldiers who are citizens of other counties be stationed therein.
The new program states in regard to its foreign policy that the government must show the best will to carry out the peace terms, and that German Austria must not attempt to carry out its national aims of union with Germany and reunion with the German elements lost to it through intrigue or force but only with the consent of the League of Nations. As far as possible good relations are to be established with the neighboring countries, but there shall be no meddling with their internal affairs. Alliances will not be sought with the neighboring states. The first aim must be to conclude commercial treaties and to do away with the system of compensation treaties. Representation [Page 584] of Austrian interests in foreign countries is solely confined to the federal government. Diplomatic missions will be established in the succession states and in England, Italy, and the United States as soon as possible. (France is not mentioned probably through typographical error)
The program further covers the food problem, but in a rather indefinite manner, and in the same way handles the socialization work, labor, insurance and other matters.
Dr. Renner yesterday was unusually cheerful and seemed well satisfied with the present political situation and line-up. The people as a whole however are apathetic to appointments of new government officers and publishing of programs. They want results and have very little faith in seeing them attained no matter what government is in charge. They consider their position hopeless and are greatly depressed with the prospect of a winter full of misery. There is some faith in the proposition of establishing a Notenbank to raise credits and stabilize the currency but more in the Reparations Commission which is to commence its work this week.
The serious condition of the country has brought about a coalition of hostile political elements that nothing else could possibly have accomplished. The bright spot in the situation is that this coalition may go far to soften the hatred between classes, at least between the classes as represented by the two large political parties. The real monarchists and the communists, also the All Germans, are left out but they have no program to offer which might alleviate the present situation, and everything considered the present political and administrative arrangement is the [best?] that could be brought about and therefore the best for coping with the situation, hopeless as it may be.