The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-02-08
The Parliamentary Crisis in Austria
Hungary.

The attitude of the Hapsburg Empire to-
ward the Turkish imhroglio has hitherto
been determined by Count ANpRAssY. and
| there is no doubt that tho Magyars, whom
| he represents, have some reason to withstand
| the advancement or consolidation Of the
| Slavic race. A financial question, however,
| has long been pending which has threatened
| to entail radical change in the foreign, no
less than the home policy of Austrla-Hun-
gary, and this has led as We learned by
cable yesterday, to the resignation OF the
Hungarian Ministry. We refer to the pro-
posed establishment OF a dual national bank,
a measure to which the present Cabinet ia
committed, but which has encountered the
most vehement and, as 1t now appears, eff
fectivc opposition.
The details Of this notable project, which
seems to be an anomaly in banking have
been lately published by the Neue Freie
Ircsse. The privilege Of issuing bank notes
is to be conidcd to single corporation
known rs the Austro-Hungarian Bank,
which will found two main establishments
at Vienna and Buda-pcsth. For both instl
tutions the notes will be identical, and be
printed on one side in German, on tho other
in the Magyar language. The organization
VI the business. rights and obligations Of
the two establishments is modelled on that
Of the existing national bank, but there IL
an impressive difference In the scheme Of
administration II Is proposed TO regulate
| the distribution OF notes according to the
share Of the national expenditure assumed
| by the respective countries; that Ia 20
say. the Vienna bank will have seventy and
the Hungarian bank thirty per cent of the
whole circulation. Each bank Is substan-
TALLY independent, being governed by
board Of ten directors chosen Mt the general
meeting of stockholders among those menu
bcrs belonging to the proper nationality.
Besides the exclusive control Of its own
bank, such a board Is invested with abso-
lutte authority over certain branch estab-
lishmcnts, and has the power Of augment
ing their number. Finally, we may men
ton that the official language OF the Aus
trian directory Is to be German, and that Of
the other management will be Hungarian.
In one word, under this singular system one
set of directors In Buda-Pcsth may imperil
tho capital OF an institution charged with
the financial interests Of thirty-hve millions
II people, In operations OF which their col
leagues at Vienna have never heard.
1t is true that this dual organization Is sup
10 represent a unity OF control. Nominally
the supervision of this body, composed Of
four Germans and four Magyars covers all
transactions which affect tho companys
assets. and especially tho disposition Of
deposits and emission or redemption Of
notes. In theory, for instance this commit
tee names the rate of discount, determines
what securities may be accepted as collat-
arn1 md Hxaa tba limit nf lnapa How Ia.
adequate these contrivanccs for coherent
and harmonious action might prove in prac-
ticc, can be Inferred from the significant fact
that none of the decisions OF the committee
become definitive and valid until after con-
sultation with both boards Of directors
Now, in the United States the advocates of
n system which should intrust a single in
stitution with the species of monopoly OK
crcsed by the Bank of France, and hitherto
by the national bank Of Austria, are very
scarce indeed. But whatever may be thought
Of the policy of Capitalization in such mat
tors, 1t is plain enough that unity OF counsels
and the dominance Of single will are indis-
pensable to the application Of the principle.
In finance, as on the battlefield, division OF
authority must mean disaster Tho condi-
tions and arrangements above outlined can
agement Of banking institution, to en-
larrass and retard its operations, and to
eliminate in complete dsorganzation. 1t
would be, In the first place, extremely diff
cult to provide tho Buda-Pesth establish
ment with board Of directors composed ex-
clusivele Of Hungarans, 10 say nothing of
the representation accorded 10 the same clc-
mcnt in tho committee Of control For there
stand banking matters, and still fewer
, Magyar stockholders. In fact, at tho
last general meeting ont OF one hun.
drcd and thirty-six owners of shares
there wcre but three Hungalians. A worse
obstacle to effective action is the stipu-
mtion that one Of the institutions shall ON.
ploy the Magyar tongue since it is not to bc
forgotten that German hrs always been the
, business language and international speech
Of the composite Austrian monarchy. These
objections, however, dwindlc before tho CON
fusion suro TO follow the almost absolute
independence Of the two boards Of direction
in the conduct Of affairs. In practice Tia,
, supervising committee must proven nullity
, since its members will bee in no position t,
follow the movement Of transactions, or b,
initiated in their details. This drawback
seems TO be fatal to the now project. Ac
= cordingly, on the day OF its publication, ia,
liberal majority OF the Austrian Parliament
called on tho Ministry for an explanation
aud II IS now considered certain that thu
Rclchsrath will reject the scheme.
, What would be tho effect on Austria.
: foreign policy Of n downfall Of the ANDRAssl
| Cabinet 1t must be remembered that the
I plan Of a dual bank Is a Magyar invention
, and that defeat Of the present Ministry OF
, this question would be tantamount to az
eclipse Of Hungarian influence. In thai
: event German interests and opinions woul,
, dominate in the Imperial councils, and tn,
, German subjects Of the Austrian Kaisc
Z have nothing to lose, and much TO gain, by
a an enlargement Of the southern frontier
, Moreover their Scrvian fellow citizens VIII,
4 have uniformly sided with them in civil war;
"a and political controversies, have claims OF
: their sympathy and active cooperation whicl
o could hardly be ignored. With n German
statesman in the Foreign Onicc mt Vienna. w,