Page - 562 - in THE FIRST WORLD WAR - and the End of the Habsburg Monarchy, 1914 – 1918

562 How is a War Financed ? had raised 5.9 billion with the help of loans, and had spent only 5.4 billion, putting it in a far better position, and even having generated a surplus of a kind, albeit of a purely arithmetical nature, since, ultimately, it was ‘merely’ a question of having higher or lower debts. One thing was clear : Hungary was supposed to raise more than a third of the monthly amount needed by the military. In the light of the weaker economic performance in the Hungarian half of the Empire, this was, he claimed, also out of the question. It had already been necessary to request an advance of the second war bond from the banks in order to make the ongoing payments. And from July 1915, halfway normal means of providing funds would be utterly impossible. As a solution, Teleszky suggested issuing a Hungarian loan in Austria, or that Austria should make its surpluses available in the short term. The minister also proposed that the Emperor and King, Franz Joseph, should be requested to attend the conference.1317 Although this wish was not fulfilled, the conference did take place a few days later, on 18 June. Teleszky’s contribution certainly succeeded in ruffling feathers. He presented the same arguments as he had done in Budapest : from July 1915 onwards, the Hungarian half of the Empire would no longer be capable of funding the war by means of the meth- ods that had been applied until then. Austria was in a better position because it was economically far more powerful. In the Hungarian crown lands, however, money had already been borrowed and spent in anticipation of the receipt of loans that had not yet been granted. The ‘normal’ credit operations had been supplemented by such un- orthodox liabilities as a Bulgarian and a Turkish loan, which could not be refused due to foreign policy interests. And even if Hungary only had to take on the repayment of an aliquot share of 36.4 per cent of the 150 million francs (leva) granted by Bulgaria and the sum in excess of 47 million kronen for Turkey, it again amounted to a great deal of money, all the more so since the loan repayments had in part been requested in gold. Due to the fact that the requirements of the war were increasing steadily, and that since the war against Italy, the Navy had also been requesting more and more funds, there was no end to the liabilities in sight. This should surely also give the Army High Command pause for thought. And with Conrad in mind, Minister Teleszky claimed that there was no doubt ‘that the period within which we could wage the war from an economic perspective at least could be significantly extended if greater care could be taken across the board to conduct the war in a significantly more economical fashion than has been the case to date’. This had to be said once and for all in all clarity, and it remained to be discussed in all openness from which point in time ‘the continuation of the war becomes questionable, including from the point of view of human and war material’. Conrad would not be moved, and as could only be expected, the conference on 18 June 1915 failed to achieve a result. In the light of the declaration of war by Italy, words such as ‘economical’ and ‘limitation’ had no meaning for the military. Everything was at stake. Ultimately, the Hungarian financial administration caved in after the