Page - 43 - in THE FIRST WORLD WAR - and the End of the Habsburg Monarchy, 1914 – 1918

Poor State, Wealthy Businesses 43 by suspending the Reichsrat, Count Stürgkh had set a course that allowed the Austrian half of the Empire to slither into war without being asked. Following the de facto end of parliamentarianism, the fact that the parliamentary building on the Ringstrasse in Vienna was converted into a hospital shortly after the war began was no longer felt to signify a turning point. Poor State, Wealthy Businesses In order to better understand the July weeks in 1914, the economic situation of the Dual Monarchy should also be mentioned. High finance and industry had been in a critical state since the outbreak of the Balkan Wars. A weakness in capital levels and a lack of competitiveness were all too evident, and a general recession led to a mood of pessimism. By contrast, before 1912, the state of affairs had appeared to be highly pos- itive. The Habsburg Monarchy, unlike Western Europe, had secured its base by means of comparatively high growth rates.78 A growth of 1.3 percent was fully in keeping with the European average. Naturally, things looked very different when the gross national product was included in the comparison. Austria-Hungary lagged significantly behind the comparable figures of the other major powers, particularly those of Western Europe. Only Italy had even poorer figures.79 The economic integration of parts of the Empire was progressing, but the contrast remained between the large agricultural regions and the industrial regions, and above all the metropolitan city of Vienna. Vienna was home to a quarter of all those liable for tax in the Austrian half of the Empire, who in turn earned a third of all taxable income. The remaining areas of the Empire that lagged behind were not only Galicia, for example, but equally the Alpine regions where whole mountain valleys had suffered from depopulation. Ernest von Koerber, who was prime minister from 1900 to 1904, had attempted to solve this problem by proposing an ex- tensive canal and railway construction programme. The great currents of the Monarchy should be connected to each other, and the Alpine region, with its Tauern and Kar- awanks, Wocheiner, Pyrhn and Wechsel railways should in turn have better connections with the centres. The railway programme, which was of no importance to the northern and eastern crown lands and indeed appeared to be aimed against their interests, was by contrast supported by the Alpine regions. However, the canal construction programme faced determined resistance from the agricultural associations, which feared that canals would only serve to bring cheap grain from other countries into Austria.80 So it was that both projects were endlessly debated until Koerber fell from office. The economic upturn came anyway  – or so it appeared  – until the Balkan Wars took their severe toll. There were numerous indications that this would happen. Tax revenues decreased, although this had little effect on wages and earnings, since these were only taxed from