Page - 563 - in THE FIRST WORLD WAR - and the End of the Habsburg Monarchy, 1914 – 1918

The Search for the Nervus Rerum 563 spectre suddenly emerged that the Army Administration might contemplate calling on the Law on War Contributions in order to sequester the entire apparatus of the central bank for its own purposes.1318 However, once the appeal for economy had been made from the Hungarian side, it was also seized upon by War Minister Baron Alexander von Krobatin, although he almost became a laughing stock with his recommendations, since with one solitary measure, he proposed a regulation whereby all automobiles used for private purposes should be withdrawn in order to save rubber, petrol and lubricant oil. In Vienna alone, according to the War Minister, around 3,000 ‘luxury cars’ had been counted over the Whitsun period in 1915. The Hungarian Minister of the Interior, János Sándor, put this figure into perspective by saying that in Hungary, there were at most 600 such vehicles, of which between 200 and 300 were in Budapest. He claimed that the rented cars would anyway have been forced off the road due to the lack of petrol. Since Krobatin refused to relent, however, on 13 August 1915, the Hungarian Council of Ministers turned the tables and demanded to know how matters stood with the army, for which ‘as everyone knows, an enormous quantity of automobiles is still used today without any effective monitoring or restriction for the diversion or purposes of convenience of individual persons’. The withdrawal of these vehicles would achieve a dual purpose by making the cars available and using the drivers for active field services, those gentlemen, in other words, ‘for whom the automobile service provides a conven- ient excuse in order to avoid those duties that entail greater risks and hardships’.1319 The issue ran into the sand. However, the fact that it was becoming increasingly difficult to cover the needs of the Army, and that each side was seeing the mote in the other’s eye, while overlooking the beam in their own, was blatantly clear. From the summer of 1915, simple borrower’s notes were issued by the credit institu- tions instead of more collateral or discount credits. On 15 July, the first new type of loan totalling 1.5 billion kronen was transferred to the governments : 954 million to Austria and 546 million to Hungary. The money lasted until the autumn. A second loan fol- lowed and, finally, during 1916 and 1917, the authorities managing the budgets in the two halves of the Empire received eight further payments totalling the same amount, at the same conditions (1 per cent interest) and with the same allocation. What was then not yet known was that in 1918, the looming collapse would be revealed in the form of exploding national debt. Between 20 March and 14 October, the two parts of the Empire received 11 (!) loans of 1.5 billion kronen each.1320 The increases in taxes that were imposed even during the war were hardly able to yield the interest for the burgeoning war debt. In order to keep Hungary’s liquidity problem in check, Hungary was permitted to be issued with a bank loan in Austria, which while it was not issued for public application did however offer Finance Minister Teleszky somewhat more room for manoeuvre. Naturally, this was also nothing more than a temporary measure of assistance. Despite