III.

The Compromise

The shock of defeat speedily produced the Compromise of December 1867, concluded between Francis Joseph and his Hungarian subjects. Francis Joseph reigned, separately but in parallel, as Emperor of Austria and King of Hungary—the Dual Monarchy that was the core of the system. In the rest of the empire (Cisleithania) outside the Kingdom of Hungary (Transleithania) the existing constitutional arrangements of 1861 continued, with some subsequent modifications (see below), until 1918. Hungary attained a large measure of autonomy in its internal affairs, including a parliament in Budapest in which the Magyar elite maintained its domination, by dint of a complex system of “electoral geometry” over the Romanian and Slovak minorities. By a subsidiary compromise (Nagodba) of 1868 the Kingdom of Croatia was granted a measure of autonomy within the Kingdom of Hungary. However, the emperor-king retained control—through a Common Ministry for Foreign Affairs, a Common War Ministry, and a Common Ministry of Finance to provide for them—of foreign policy and the Imperial and Royal Army (as opposed to the “home guard” forces that fell within the purview of the parliaments at Vienna and Budapest). Matters of common economic concern—tariffs, the Austro-Hungarian Bank, and the quota contributed to common funds by the two halves of the empire—were regulated by a Commercial Compromise that was subject to a revision every ten years.

These arrangements lasted in essence until the end of the empire in 1918. In their defence, it can be said that, whereas the repeated failures of the period 1848 to 1865 had shown that no solution could please all the 11 races of the empire, and that no system that ignored Magyar wishes could bring any stability, the Compromise allowed the monarchy to continue to function as a Great Power for the next 40 years and proved the most durable of all the constitutional arrangements embarked on by Francis Joseph. On the other hand, the Compromise did not put an end to political conflict: even in Hungary, the common institutions remained an object of suspicion, and between 1888 and 1912 it was to prove impossible to secure Hungarian consent to an increase in the size of the Common Army. This weakened the empire’s standing as a Great Power; as did the undermining of the empire’s Serbian and Romanian alliances by Hungarian interference in the affairs of Croatia and the Magyarization policies inflicted on Romanian and South Slav minorities within the Hungarian Kingdom. This was why in the years before World War I the heir apparent, Archduke Francis Ferdinand, planned to break the power of the Magyar elite when he came to the throne. However, the old emperor, although he never shrank from confrontation when it was a question of upholding his prerogatives in foreign and military affairs, was never prepared to jeopardize the 1867 settlement by challenging the power of the Magyars in Hungary. Indeed, he even dropped plans for constitutional reform in Cisleithania, such as a plan of 1871 to appease the Czechs by conceding a measure of autonomy to the Kingdom of Bohemia, which the Magyars regarded as a dangerous precedent for change. While the Compromise produced a workable and long-lasting solution to the problems of the 1860s, therefore, it also served over the years to confine the empire in a straitjacket that impeded the chances of further constructive reform.