ECONOMIC CONDITIONS IN AUSTRIA, 1918-38 The old Austro-Hungarian empire consisted of the great fertile plains of the Danube, the Theiss, and the Elbe, the ring of moun tains which surrounded them, and to the north-east the uplands and plateau which lie beyond those mountains. Of this somewhat amorphous, but geologically united area, post-war Austria formed a rough sector which ran from the extreme western boundary to Vienna, the sector which was left after the frontiers of the other succession states had been determined. Geologically, this new Austria consisted of the major part of the eastern wing of the Alps and of a stretch of the Danube valley to the north-east. The val ley is rich, but over two-thirds of the total area, which amounts to 32,369sq.m., is mountainous. In 1934, when the last census was taken, the population was 6,759,062, of which about 65% were living in the relatively low-lying districts of Upper and Lower Austria and in Vienna. In Vienna itself there were 1,861,856 per sons. The mountainous nature of the territory and the large proportion of the population resident in the capital city are the two factors which mainly determine and must determine the es sential economic characteristics of the country.
Until the autumn of 1922 when the League of Nations formu lated its reconstruction scheme, Austria lived a precarious exist ence with the aid of relief loans, private charity and the sales of her depreciating paper currency to unduly optimistic speculators. The population of Vienna was unable to procure the bare necessi ties of life. The State budget, burdened by relief expenditure and the salaries of a staff far in excess of the requirements of the re duced territory, was in chronic deficit. Her inflated currency lost day by day in value and her industries divorced at once from their sources of raw material and their former markets, battled vainly in a sea of tempestuous prices. The relief credits which were granted by the Allies proved to be of no value—save as temporary palliatives, and in the autumn of 1922 it was decided by the As sembly of the League of Nations that measures of relief must be replaced by a definite scheme of reconstruction. It is not neces sary here to record the details of the League of Nations plan of reform. It involved the formal re-affirmation of the independence and sovereignty of Austria, a moratorium from reparation lia bilities for a period of 20 years, the raising of a foreign government guaranteed loan of 88o million schillings' (net), a precise and elaborate scheme of budget reform, the reorganization of the national bank, the definitive stabilization of the currency, and finally the appointment of a high commissioner to supervise the execution of the reforms proposed. After the repayment of cer tain relief credits, a sum of 6S3 million schillings became avail able from the loan for utilization by Austria as required, and to this was added in the autumn of 1927 a further sum of approxi mately 27 million schillings on account of the postponed Swiss block.
Austria is thus largely dependent on foreign sources of food supply and that fact determines and must continue to determine her general economic structure. In 1926 about 37% of her gross imports consisted of live animals and articles of food and drink. These imports are mainly paid for by the export of manufactured goods and by the services of middlemen, although the largest sin gle article of export is building timber.
Of the crops the most important are rye and oats. The yield of the major crops in thousands of metric tons was as follows:— During the World War agriculture suffered severely from lack of labour and lack of fertilizers, and during the inflation period the peasant had little inducement to produce more than he required for his own needs. Inflation, however, relieved him of practically the whole of his mortgage debt, and although the high rates of interest which ruled in Austria until about 1926 made borrowing for land betterment or indeed on short term extremely difficult the ultimate gain to agriculture must not be overlooked.
In spite of the progress which has been achieved in recent years Austrian agriculture can only cover a relatively small proportion of the cereal requirements of the population. The relationship of production to consumption in 1926 was as follows:— Production as Percentage of Total Quantities Available for Consumption These particular industries employed labour in the proportions indicated largely owing to historical causes—only to a limited extent do they depend on existing natural advantages. They were grouped in part round their market and distributing centre, Vienna, in part round the Styrian ore-fields, and they were closely con nected with what is now the German Protectorate of Bohemia and Moravia. Cotton yarn was spun in Austria and woven in Bohemia, and Bohemian piece goods were made up in Austrian clothing factories. The steel works in Styria employed Moravian coke and those in Moravia Styrian ore. Modern Austria found herself with an excess of spindles and a lack of looms, an excess of ore and lack of hard coal. The result of these conditions has been to stimu late the use of water power and create a certain shift in the relative importance of the different industries in favour of those such as paper for which the raw materials were available at home, of those such as hosiery and motor-cars which have enjoyed a general prosperity in post-war years, and more recently in favour of the typical Viennese luxury industries. The development of those industries for which data exist may be judged from the following figures: Although the stockbreeding and dairy-farming of the Alpine districts are rapidly developing, Austria still imports considerable 'The schilling (=,o,000 paper crowns=.73 gold franc) was intro duced in the spring of 1925.
Moreover, the importance of Vienna as an international mart to-day is not due only to the special skill and experience of her bankers and her merchants, but to the fact that Austria is a transit country (by river and by rail) between south-eastern and western Europe. It has been estimated that in 1924 the earnings of middle men on transit trade alone amounted to 216 million schillings, to which must be added receipts by railways on international traffic which exceeded 45 millions. Almost as important as a source of income is the expenditure of foreign tourists which in the same year was estimated at 200 million schillings.
Further, private citizens in Austria as well as the great Viennese banks had large interests in industries in Czechoslovakia, Hun gary and other neighbouring states, and according to reliable esti mates, despite the magnitude of her foreign borrowings, Austria received more in interest and dividends from abroad than she was liable to pay on the loans she had effected.
General Characteristics of Austrian Economy.—From what has already been said it is clear that Austrian economy is to an unusual degree mixed in character. According to the census returns of 1920, just under one-third of the gainfully employed persons were engaged in agriculture, almost exactly one-third in mining and industry, and just under one-third in other occupa tions, including transport, trade, domestic services, liberal pro fessions, etc. It is at once an industrial area, a transit country, and,a banking and commercial centre. Its mountainous districts afford a playground for foreign tourists, and Vienna is a centre of culture and of trade—in the retail shops of the Ring especially of luxury trade. It is in this mixed character of its economy and in the adaptability and artistic powers of its population that the potential strength of the country lies.
In Jan. 1925 she introduced a new tariff, better adapted to her economic need than the old Austro-Hungarian tariff of 1900 on which she had worked up to then. This tariff was substantially lower than those applied in any of the other Succession States. But the difficulties from which her trade suffered in common with that of other countries in central and eastern Europe in 1925, and the feeling that the concessions obtained by commercial treaty were inadequate, brought about a reversal of policy in 1926, and a series of amendments to the tariff law were introduced, by which the rates were substantially raised. They remained, however, lower than those of the majority of her neighbours.
"It is natural," they state, "that in Vienna, which was recently the capital of a great empire, the idea should be prevalent that a tiny country can with difficulty exist in the present economic world. A comparison with Switzerland, however, suggests that this assumption is too hasty a one.
The geographical position of the two countries is in many re spects similar. But it has often been observed that Switzerland's economic resources are more limited. In proportion to its popu lation its cultivated area is smaller and its dependence upon for eign food supplies is greater than is the case with Austria. It possesses no coal resources, whereas Austria supplies nearly a quarter of her requirements from her own mines. While Austria is self-supporting in iron ore, Switzerland depends entirely for its supply upon foreign sources. As regards water-power, nature's most generous gift to Switzerland, Austria is almost as well equipped as that country and better than most other countries in Europe. The urban population of Switzerland is a larger percent age of the total population than is the case in Austria. `The for eign assets of Austria are probably not lower per head than are those of Switzerland. Even the tourist earnings of Switzerland do not suffice to restore the balance, for the latter constitute less than 7% of the national income of the country. In spite of the fact that Switzerland is lacking in some of the most important raw materials, that country had in 1913 the highest average accumu lated wealth per head of population of any political unit in Europe." The problem indeed is not one of Austria's power to live, but of her probable degree of prosperity in the immediate future. The answer to that problem depends on the progress which is achieved in the surrounding countries and the importance which they attach to the development of their foreign trade by the free exchange of goods. (A. Lov.; X.) Declaration of Austrian Republic.—(For Austrian history prior to 1918, see AUSTRIA-HUNGARY.) NOV. I 2, 1918, the day after the last Habsburg emperor abdicated in Vienna, is also the day from which the new Austrian republic dates its birth. On Oct. 21 the assembly of all the German members of the Lower House (Abgeordnetenhaus) of the former Austrian parliament, basing their action on the Emperor Charles's manifesto issued on Oct. 16, had already determined to declare the German-Austrian portion of the Austrian territories, formerly under Habsburg rule, an independent state, and had constituted itself the Provisional National Assembly.
On Oct. 3o this Assembly assumed the supreme independent authority in those Austrian territories claimed by it to be pre dominantly German, and appointed a State Council as executive under the leadership of the three presidents of the Assembly, who then nominated secretaries of state as heads of the adminis trative departments simultaneously organized for German-Aus tria. But the revolutionary movement, which broke out in Vienna at this moment as a consequence of the general military break down of the Central Powers, led to the declaration of an inde pendent German-Austrian republic on Nov. 12. This declaration, which was in accordance with the right of self-determination, was the result of revolutionary action, and expressly repudiated any legal descent from the broken-up empire. The law promulgated by the Provisional National Assembly on Nov. 1 2, 1918, explicitly declared in its first article "German-Austria is a democratic republic," and in its second "German-Austria is a component part of the German republic." Thus in the proclamation itself of the new state, there was adumbrated its cessation by a future treaty uniting it with the German Reich.
Ten days later, in a special law, on Nov. 2 2, 1918, the National Assembly defined its territory. It claimed the ancient hereditary Austrian lands (Crown lands), except the districts inhabited by the Yugoslav and Italian races, and also a large number of pre dominantly German districts in Moravia and Bohemia. Simul taneously with the constitution of the republic, administration was taken over in the separate provinces (the former Crown lands), of which it was composed. The provincial diets, resolv ing themselves into provisional assemblies, carried out corre sponding changes, the presidents being entrusted with the conduct of the provisional administration and the executive power in their provinces. Thus the autonomous organization and provincial self-government, established by the constitution of the Austrian empire of Feb. 26, 1861, was perpetuated as a real popular self government in the separate provinces, this time on a really demo cratic foundation.
The ministry, consisting of the state chancellor, the vice chancellor and the secretaries of state, now received full execu tive and administrative powers, and was henceforward to be elected on nomination of the main committee of the National Assembly, the permanent link between legislative and executive, consisting of the president, two vice-presidents and eleven depu ties. Several former functions of the Council of State were now transferred to the ministry; some of its prerogatives, such as the appointment of judges and higher officials, were, however, transferred to the president of the National Assembly acting in agreement with his vice-presidents. He became the representa tive of the republic abroad and treaties must be ratified by him. He represented the supreme power in the republic, although with strictly limited functions. The Constituent Assembly, elected for two years, was to be in continuous session for this period.
The Social Democratic Party found its main support in the trade unions and party organizations, which in Vienna and in all industrial districts included almost the whole of the working classes. The revolutionary feeling born of the War and the down fall of the monarchy was a strong auxiliary. Part of the official class and of the lower middle class also supported it. On the other hand, the Christian Socialist Party included all the agricul tural class, and the overwhelming majority of the upper and middle classes in Vienna and the provincial towns. The Social Democrat leaders regarded the coalition, from which the first constitutional go iernment was formed, as a union of workers and peasants, from which a complete democratic republic would emerge through the legislation to be passed by the National Assembly. The party, under the leadership of Dr. Renner, Presi dent Seitz and Dr. Otto Bauer (foreign minister), was able to preserve its unity by successfully combating those activities of its own Left wing, which had been inspired by the establishment of the Bolshevist republic in Russia and by the temporary success of Bolshevism in Hungary.
In the spring of 1919, when the Soviet republic in Hungary was exercising increasing pressure on Austrian Social Democracy, the situation became at times highly critical, but the policy and tactics of the Social Democrat leaders directed against Bolshe vism were successful in restraining the population of Vienna. The armed police easily repressed the isolated attempts by the extrem ist elements to disturb by violence the quiet development of Austria's republican democracy, and despite the vast and ever increasing difficulties, public order was preserved.
The gradual cooling of revolutionary sentiment in the masses did not therefore lead to any change in Social Democratic policy, which was directed to the maintenance and development of the democratic republic, nor to any reactionary movement against democracy by the Christian Socialists. This relative stability was further demonstrated by the united opposition from both the great parties in the country to the attempts made by the ex-emperor Charles, on March 13 and Oct. 26, 1921, to restore the dynasty by his return to Hungary. Nevertheless the second coalition, formed on Oct. 17, 1919, with Dr. Renner at its head, was felt to be an undesirable hindrance to normal political devel opments, while the agricultural and urban middle classes began to resist the predominance of socialistic ideas in government and administration. These tendencies emerged most clearly on the question of the new army organization.
The coalition was formally dissolved, and a "proportional" Government formed which accomplished its tasks of completing and introducing the new federal constitution (Oct. 1, 192o). On Oct. 27 new elections were held.
The constitutional problem of centralization or federation— the provinces, particularly the farmers, demanding the wider ad ministrative and financial independence, while the German Na tionalists and Christian Socialists of Vienna and the whole So cial Democrat party urged the retention of the "Centralist" con stitution—was solved by a compromise on the principle of an eventual administrative reform on federal lines, the execution of which was deferred for future legislation. The opposition of the Social Democrats was removed by the assurance that the city of Vienna, containing little less than one-third of the total popula tion of the State, in whose city council Social Democracy had had an overwhelming majority since 1919, should be legally severed from the province of Lower Austria, and be declared an inde pendent province (Bundesland). The city council thus became the Provincial Diet, and received all the legislative and adminis trative powers which the constitution gives to the provinces. It became a provincial government, and the burgomaster the gover nor of a province. Some minor modifications of the principle were conceded to the Christian Socialists.
Austria's internal policy was, from this time onward, domi nated by the dangerous economic situation, above all by the rapid depreciation of the Austrian exchange consequent on con tinuous currency inflation to stop the gaps in the federal budget and provincial revenue. The yield of the taxes disappeared, and the capital levy of 1920 remained inoperative. The embarrass ment of the Mayr government was heightened by the pressure of the popular movement, instigated by the Tirolese and other pro vincial governments, under the influence of the Conservatives and Nationalists in Bavaria, for union with Germany. The Govern ment under pressure of French intervention opposed the move ment when its strength was evidenced in plebiscites.
In the spring of 1921 the chancellor tried unsuccessfully to obtain financial help in London and America. The reviving indus try needed credits and foreign currency to pay for imports of raw materials; the Government had immediate and similar needs, and the result was a further fall in the Austrian exchange.
The Schober, Seipel, and Ramek Ministries.—Unwilling to shoulder alone the inevitable unpopularity of Government, the Christian Socialists combined with the German Nationalists to elect a cabinet of officials, with J. Schober (q.v.), the police presi dent of Vienna, as chancellor ( June 21, 1921). The cost of living, however, continued to rise, especially in Vienna.
Schober resigned on May 31, 1922, in favour of an anti Socialist coalition of Christian Socialists and German Nationalists under Monsignore Ignaz Seipel. Meanwhile, an English loan had been rapidly exhausted and the Austrian exchange was dropping headlong. Dr. Seipel determined to treat the collapse of Austria as a European problem, to be solved only by a broad policy of long date and adequate credits. He undertook diplomatic journeys to Prague, Berlin and Verona, and finally obtained the desired loan which stopped the financial collapse (see section, Economic Condi tions, 1918-38). It was not popular as it imposed many sacri fices on the Government servants and others ; but Seipel retained his majority in the 1923 elections which altered the party figures little. He resigned in November 1924 after an attempt on his life had injured his health. His successor, Dr. Rudolf Ramek, com pleted the Constitution, in agreement with the Socialists, further strengthening the federal principle. In December 1925 the League Council held Austria's budget to be permanently balanced, al though at a level higher than anticipated, and transferred the remainder of the loan to the Government. In March 1926 the controller-general left Vienna.
In 1926 the Government's position was weakened by two scan dals : the collapse of a bank with which various Christian Social leaders had been connected, and the discovery of irregularities in the conduct of the Austrian Post Office Savings Bank. In Novem ber 1926 Seipel again became chancellor.
Growth of the Private Armies.—Inter-party political tension was growing rapidly. Immediately after the War various provinces had formed local defence forces (Heimwehren) , partly for defence against Austria's neighbours, but afterwards increasingly against Socialism. The Socialists, on losing control of the Army—which, in the first months, had been a "Red Party Guard"—had formed their own force, the "Republikanischer Schutzbund," while the National Socialists had small troops of their own. In January 1927 some of the last-named had in an affray killed a child and an old man. In July a Viennese jury acquitted the persons concerned. Radical elements utilized the popular anger for a mass demonstra tion in which the police were assailed and the Palace of Justice burned. The police then opened fire, and order was restored only after 89 persons had been killed. The Socialists proclaimed a gen eral strike, but this was crushed in the provinces by the Heimwehr and called off after four days. The result was a great strengthening of anti-Socialist feeling in the provinces and an impetus to the Heimwehr organization. A Socialist proposal for general disarma ment was rejected, and the situation as between the rival elements continued serious throughout 1928. On one occasion only heavy rain prevented probably a pitched battle in Wiener Neustadt be tween the Heimwehr and the Schutzbund. The chancellor now declared himself openly on the side of the Heimwehr, while the Socialists were further embittered by the election of the clerical W. Miklas as president of the republic. The tension increased in 1929. The Heimwehr passed to open threats. Although Seipel resigned on April 3rd, his successor, Dr. Ernst Streeruwitz, was powerless in the face of the Heimwehr, whose leaders, Steidle and Prince Starhemberg, openly defied the Constitution. To the polit ical crisis was added a financial one, when in September the largest Austrian bank, the Bodenkreditanstalt, was found to be on the verge of failure. Seipel forced the resignation of Streeruwitz, but on September 26th Schober took office again and temporarily saved the situation. The Bodenkreditanstalt was merged in the Credit Anstalt, and a constitutional reform act was passed on December 7th, being accepted by the Socialists as less reactionary than any thing to be anticipated from Seipel. Vienna remained a federal province, but the president of the republic received increased powers. In foreign affairs Dr. Schober at first succeeded in relax ing the tension between Austria and Italy, and concluded a com mercial treaty with Germany (April 12th, 1930) besides negotiat ing at The Hague Austria's release from her reparations obliga tions. He also managed for some months to hold the Heimwehr in check, but his measures so infuriated them that they success fully intrigued him out of office (September 25th). A Heimwehr Government under Vaugouin took charge and held elections in No vember; but these giving the Socialists 72 seats against 66 to the Clericals, 7 to the Heimwehr and 20 to Schober, the Clericals were forced to accept a coalition with Dr. Otto Ender as chancellor and Schober as vice chancellor and foreign minister.
The Austro-German Customs Union.—On March 20, 1931, it was stated that Austria had concluded a customs union with Ger many. A storm of protest arose from France and her allies, who regarded this as tantamount to political union. The atmosphere of uncertainty was increased by the announcement that the Credit Anstalt, now far the biggest Austrian bank, was in its turn threatened with failure. France insisted on political conditions in return for help, and although British intervention postponed the day, Schober was forced to resign and Austria had to renounce the customs union a day before The Hague Court, by a ma jority of one, declared the plan incompatible with Austria's in ternational obligations. A new Government was now formed under Dr. Buresch, who was succeeded on May loth, 1932, by Dr. Doll fuss. The Government had a majority of only one vote, but in August just secured the adoption of the Lausanne Protocol which gave Austria a new loan of £9,000,000 under humiliating condi tions, including the renunciation for 20 years of a customs union with Germany, and strict financial control.
The Rise of National Socialism. —Meanwhile, the National Socialist movement had made sudden and rapid strides in Austria, and at the provincial elections the Nazis practically wiped out the Pan-Germans, also making gains at the expense of the Socialists and moderate Conservatives. The Nazi propaganda redoubled in vigour when Hitler came into power in Germany in 1933, with a policy which included the early absorption of Austria. The whole political alignment in Austria was now changed, for the Socialists at once renounced the idea of Anschluss so long as the Nazis re mained in power, while the Jews, to a man, supported the Govern ment in its anti-Nazi activities. On the other hand, many of the Heimwehr were Nazi in sympathies.
A temporary breakdown in the Austrian Constitution in March, gave Dollfuss a legal excuse to rule thereafter by arbitrary decree. He now found himself absorbed in a violent struggle with Germany, which attacked the Austrian Government with scurrilous broadcasts and leaflets, dropped by aeroplane, while a tax of 1,000 marks imposed on June 1st on all German visitors to Austria was designed to ruin her tourist traffic. A legion was formed of Nazi deserters and fugitives from Austria, and frequent acts of terrorism were perpetrated. The Bavarian minister of justice vis iting Austria in the spring, attacked the Government violently.
Dollfuss took strong measures against the Nazis. He enjoyed much sympathy from France and Britain. He flew to Italy, and seems to have received a guarantee that Italy would defend Austria's "independence" if she would adopt the Fascist form, crush the Socialists and refrain from appealing to the League. Dollfuss now made definite terms with the Heimwehr (which had largely been reconstituted) making Emil Fey, a Heimwehr leader, vice-chancellor.
The Revolts of 1934.—The Socialists offered to co-operate with the Government, on moderate terms, against the Nazis, but Dollfuss rejected their offer.
When the Socialists resisted by force, they were crushed in a battle which broke out on February 12 and lasted for several days with heavy casualties. Many Socialists were thrown into concentration camps and the movement driven underground.
Nazi violence continued, and on July 25 a coup d'etat was at tempted. It failed, although Dollfuss was killed. Italy mobilized on the Brenner, Yugoslavia made counter-preparations. However, Dollfuss's successor, Kurt Schuschnigg, had a quieter time, partic ularly when Hitler sent Herr Franz von Papen to Austria to initi ate a rapprochement. Schuschnigg, however, remained true to Dollfuss's pro-Italian policy. Meanwhile, a new Constitution was adopted, based on the corporate system.
With Hitler's seizure of power in 1933 the Austrian desire for union largely evaporated. Austrian Socialists abhorred Hitler's destruction of the German Social Democratic Party and its trade unions. Austrian Roman Catholics rightly distrusted the Nazi promises given to the German Catholics in the Concordat of Austrian Jews were horror-stricken at the anti-Semitism across the border. And most easy-going Austrians disliked the brutal total itarian regimentation taking place in the Nazi Third Reich. The only persons in Austria then favouring union with Germany were the Austrian Nazis. They were organized by Hitler as a division of the larger Nazi Party, and they were secretly encouraged with money and advice from Germany to work for union by undermin ing Austrian independence in defiance of the Peace Treaties. Under instigation from Germany they made the abortive revolt of which resulted in the assassination of Chancellor Dollfuss.
Dr. Kurt Schuschnigg, the successor of Dollfuss as Austrian chancellor, made an earnest and hopeful struggle to maintain Aus trian independence for nearly four years. He greatly improved the country's economic and financial condition, so that Austria was able to balance her budget and to pay interest on her foreign loans. He dismissed some of his strongest potential rivals and became virtually dictator. The dangerous private armies were dis solved or forced to enter his own loyal Fatherland Front. But he was guided by strongly clerical interests, and he made the mis take of not making concessions to secure the co-operation of the Socialists who had revolted and been suppressed in Schuschnigg also had to meet continued danger from Germany, which kept on inciting Austrian Nazis to stir up disorders which might give Hitler a pretext for intervention. In the hope of ending this intolerable situation Schuschnigg consented to sign with Ger many the agreement of July 11, 1936. The German Government "recognized the full sovereignty of Austria, including the question of National Socialism in Austria, which is to be regarded as exclu sively an Austrian question, in which the German Government promises to exert no interference either directly or indirectly." Austria on her part would "respect the internal organization of Germany, and conduct her policy in general, and especially as re gards Germany, in accord with the fundamental basis which corre sponds with the fact that Austria acknowledges herself to be a German state." This agreement was followed by diplomatic con versations for the removal of friction on both sides. Schuschnigg promised an amnesty to political prisoners except those convicted for serious crimes. He also agreed at a future suitable time to take into the Austrian Government some representatives of the Austrian Nazi group, if he could find persons whom he could trust.
The agreement of July II, 1936, unfortunately did not bring the internal quiet in Austria nor the good relations with Germany that had been hoped for. Schuschnigg delayed to take Nazis into his cabinet. The Nazis in turn continued to foment disorders and were arrested and sent to concentration camps. So, after a year and a half, Hitler's followers reverted to the "putsch" policy of when Dollfuss was assassinated. A plot was organized to kill the German military attache in Vienna or even the German am bassador, Franz von Papen ; the blame would be laid on the Austrian Legitimists; and Hitler would then have a pretext for in tervening. But in Jan. 1938, Schuschnigg's police nipped the plot in the bud and seized incriminating documents. To prevent their disclosure and to induce Schuschnigg to make concessions to the Nazis, the Austrian chancellor was persuaded to come to a meet ing with Hitler at the latter's Bavarian mountain chalet.
At the Schuschnigg-Hitler conference at Berchtesgaden on Feb. 12, 1938, Hitler put strong pressure on his guest and intimated that German troops might force compliance. Alone and defence less, Schuschnigg felt compelled, in order to prevent greater dan gers to Austrian independence, to promise that he would urge concessions upon President Miklas. Great was the gloom among loyal Austrians when he returned to Vienna, for he seemed to have capitulated pretty completely to the demands of the German dictator who had at his call immense military forces and a popula tion ten times that of Austria. On February 15 Schuschnigg and Miklas did in fact grant a general amnesty to the Austrian Nazis, suppressed the incriminating evidence, and took several Nazi sympathizers into the cabinet, including Arthur Seyss-Inquart.
Dr. Seyss-Inquart thus became minister of the Interior, which meant that he would have control of the Austrian police. Within a few hours of his appointment he hurried to Berlin to confer with Hitler and with Heinrich Himmler, the head of the Elite Guard and the secret police of Germany. Upon his return he pre tended to be loyal to Schuschnigg and Austrian independence, but winked at and tolerated wide-spread Nazi activities. It was apparently arranged between him and the Berlin leaders that German Nazi propaganda and money should be poured into Aus tria and that after some months, when these had done their work, Hitler would insist on a plebiscite in Austria to decide whether it should be united with Germany.
When Schuschnigg learned of this plan he decided to forestall it by holding a plebiscite at once. He announced by radio on March 9 that the vote would be held on Sunday, March 13. In accordance with the Austrian Constitution, only those who were twenty-four years of age could vote; this provision was unfavour able to the Nazis who had relatively more adherents among the young than the old. Certain other of Schuschnigg's plebiscite arrangements would also work against the Nazis, so Schuschnigg could reasonably count on getting a clear majority in favour of himself and Austrian independence. Hitler, at first nonplussed at Schuschnigg's manoeuvre, then acted quickly before Austria could get support from other countries. He moved troops to the Austrian frontier and on March i i despatched two ultimatums to Vienna demanding the postponement of the plebiscite and the resignation of Schuschnigg.
Threatened by an overwhelming invasion of German troops and police, Schuschnigg, to avoid bloodshed, yielded. He resigned after ordering the Austrian troops to offer no resistance to the Germans who crossed the frontier on March 12 and occupied Vienna next day. Hitler came in with the troops, and on March 13 proclaimed the union of Austria with Germany. He thus united the land of his birth with the land of his adoption, and created a "Greater Germany" of nearly 75,000,000 population. On April io he held a vote throughout Greater Germany to ratify his action and to elect a new Reichstag for the enlarged state. In Old Ger many he received a 99% endorsement, and in Austria a shade higher endorsement. This remarkable "yes" vote in Austria did not of course give a true picture : all Jews were disfranchised ; the presence of German troops and police exercised an inevitable pressure; and terrorized Socialists, Communists, and Catholics conspicuously voted "yes" for fear of the consequences if they did not do so.
Austria thus ceased to exist as a political entity. The former Austrian territory was soon divided up into seven districts (Gaue) which follow fairly closely historic provincial lines. At the head of each district is a leader (Gauleiter) who is both the head of the Nazi Party in the district and also the chief Government official of the district. The seven new Gaue, with the capital of each in parentheses, are as follows: (1) Upper Danube (Linz) ; Lower Danube (Krems), these two replacing the former provinces of Upper and Lower Austria; (3) Vienna, which has been somewhat enlarged in order to be the "portal" to the south-east just as Hamburg was recently enlarged to be the "portal" to the north; (4) Styria (Graz); (5) Carinthia (Klagenfurt) ; (6) Salzburg (Salzburg) ; and (7) Tirol, including Vorarlsberg (Innsbruck). (See, for the character and history of each of these former Aus trian provinces, the articles on UPPER AUSTRIA, LOWER AUSTRIA, STYRIA, CARINTHIA, SALZBURG, TIROL.) Immediately after the annexation Hitler accomplished rapidly the political and economic co-ordination of Austria into "Greater Germany." Joseph Buerckel, an ardent Nazi who had had experi ence in organizing the Nazi vote at the time of the Saar plebiscite, was transferred from the Saar to Vienna, made commissioner for the Ostmark for a year, and was charged with preparing the plebi scite in new territory. In order to get the vote of the Roman Cath olics, who form the great majority of the population, Buerckel had several conferences with Cardinal Innitzer, Archbishop of Vienna, and his brother bishops. He held out assurances to them of favourable treatment for the Catholic Church. The assurances were very welcome, since the Austrian Concordat of 1855, more favourable to the Catholics than the German Concordat of was declared to have automatically lapsed with Austria's extinc tion as a sovereign State. Cardinal Innitzer, being a native of the Sudeten territory and strongly German nationalist, and his brother prelates, apparently trusting in Buerckel's assurances, and without consulting the Pope, then issued the declaration de sired by Buerckel. They stated that "as a result of their inner most convictions and of their own free will" they had joyfully decided to recognize National Socialism, and to vote "Yes" as a national duty, nd that they expected all good Austrian Catholics to do likewise. Their statement was read from all the Austrian pulpits, and a copy of it was sent to Buerckel in a note that Cardinal Innitzer signed in his own hand with "Heil Hitler"—cer tainly the first time that a German bishop had used the Hitler greeting. These documents were published in facsimile very widely in the Austrian newspapers. The plebiscite resulted in a more than 99% endorsement of the annexation to Germany. Of course this did not register the real feeling of the people, because a great many persons, just as in the plebiscites in Germany, voted "Yes" out of fear of what might happen to them if they should show opposition to the Nazis.
Buerckel's assurances were not kept by the Gestapo (German secret police) and by the more radical German Nazis who poured into the Ostmark. Many of the Catholic religious orders were de prived of their buildings, and the residence of the Archbishop of Salzburg was seized for Nazi uses. In Jan. 1939, all Catholic property was inventoried, which was thought to be a preliminary step to its eventual confiscation. In July 1939, Cardinal Innitzer, who had previously been attacked and had the windows of his palace broken, was insulted with a shower of rotten eggs and cries of "murderer" while making a rural tour, because he did not inter vene in 1934 to prevent the execution of two Nazis connected with an abortive "putsch" and the assassination of Chancellor Dollfuss.
The so-called "Nuremberg Laws" were introduced and resulted in even greater hardships and misery to the Austrian Jews than that already suffered by the Jews in Germany. Of the approxi mately i8o,000 Austrian Jews who were members of Hebrew reli gious communities before the annexation, 99,672, or more than half, had emigrated from Austria in little over a year, according to figures published on May by the official Nazi Central Bureau for Jewish Emigration. By a decree of the following July, emigration was made more difficult by an order that thereafter all emigrating Jews must pay half the cost of their steamship tickets in foreign currency supplied by their relatives or friends abroad. In addition to the Jews who are members of Hebrew religious communities, there is a large number of other Jews, many of them baptized, but exact figures as to how many have emigrated and how many still remain in Austria have not been published. It is the Nazi hope to have all the Jews out of Austria within three years.
Already they have almost completely disappeared from the prov inces, those that remain being mainly concentrated in Vienna where they can more easily escape notice.
In the economic field German efficiency and hard work replaced the easy-going life of the Austrians. In the early summer of 1938 many thousand Austrian unemployed were despatched in special trains to work on the triple line of fortifications, or "Westwall," against the French frontier. Within a month after annexation, as a symbol of the new employment which the Germans would bring to Austria, Hitler turned the sod near the frontier town of Wels for the new Austro-German highway which would connect Vienna with the super-highways of the old Reich. To add spectacular emphasis, as Hitler finished his speech at the spade ceremony, the crowd was thrilled to see a forest of birch and oak fall with a ter rific roar along the path of the new road.
In his report at the end of a year Commissioner Buerckel claimed that 65o,000 unemployed had been put back to work, the skilled in munition factories, and the majority at building new motor highways, bridges, streets, waterways, and houses. Ore-min ing in Styria was expanded to supply the great Hermann Goering Iron Works under construction at Linz. Idle mines of gold, silver, lead, antimony, and other metals, abandoned previously as un economic in view of the world prices, began to be worked again to serve an economy wherein world prices are disregarded. The Austrian Schilling was replaced by the German mark at the ratio of two marks for every three schillings, an arrangement favour able to Austria. The Austrian banks were co-ordinated under the Reichsbank, and some $6o,000,000 in gold belonging to the Aus trian National Bank was transferred to the Reich. Similarly the Austrian railway, tariff, and insurance systems were assimilated to those of Germany. The German rigid control over prices and wages and service in the army, Labour Front and other German organizations was introduced.
The administration of the Ostmark was given a definite form by a decree which went into effect on May 1, 1939. In each of the seven new Gaue, or districts which correspond closely with the former historic provinces of Austria, there is a supreme adminis trator known as the Reichsstatthalter. He is both the representa tive of the central government of Greater Germany and the head of the Gau administration. He is also the head of all the other special Reich administrations within his Gau (except the army, which has its own centralized organization) like the forestry, in surance, peasant, employment, etc., organizations. He naturally leaves these organizations to function according to their own rules, but he is kept informed of all their doings, and may, if he sees fit, step in and give orders. He is also the Gauleiter, or Leader of the Nazi Party, for his district. In his person the Party and the State are united in one supreme district head.
BIBLIOGRAPHY.-H. Kelsen, Die Verfassungsgesetze der Republik Bibliography.-H. Kelsen, Die Verfassungsgesetze der Republik Deutsch-Oesterreich (1919-22) ; Oesterreichisches Staatsrecht (Tubing en, 1923) ; Oesterreichisches Jahrbuch (1919, ff.) ; Wiener Statistisches Handbuch fur die Republik Oesterreich (192o, ff.) ; Otto Bauer, Die oesterreichische Revolution (1923, bib.) ; Gustav Stolper, Deutsch-Oes terreich als Social and Wirtschaftsproblem (1921); C. A. Macartney, The Social Revolution in Austria (1926, bib.) ; K. Schuschnigg, Drei mal Oesterreich ; Eng. trans., My Austria, 1938) ; E. Lennhoff. The Last Five Hours of Austria (1938) ; M. W. Fodor, "Finis Austriae" in Foreign Affairs (N. Y., July 1938) ; Plot and Counter-Plot in Central Europe (1938) ; W. Frischauer, Twilight in Vienna (1939) ; Vincent Sheean, The Eleventh Hour (1939) ; Martin Fuchs, Show down in Vienna: The Death of Austria (1939) ; Royal Institute of International Affairs, Southeastern Europe: A Political and Economic Survey (1939) ; Atlas des Deutschen Lebensrausnes in Mitteleuropa (S. B. F.)