Omaha daily bee., 1916-01-03
UNION FOR TWO EMPIRES?
important Conferences Between
Germans and Austro- Hungarisns
Deal with Economic Relations.
DUAL MONARCHY IS FEARFUL


Correspondence OF the Associated Press)
ZURICH, Switzerland, Dec. 2O-Im-
,ortant conferences between German and
Austro- Hungarian politicians and lead
ng representatives of finance and COM
nerce are now going on in Vienna and
Berlin Tor the purpose of finding basis
If establishing closer economic relations
between the allied empires Although
several meetings have already taken
place. no definite results have yet been
obtained The Industrial and commercial
interests of the two countries are so d.
vergent that It is difficult to see how an
understanding can be reached which will
prove satisfactory TO both sides. And so
far every conference seems only 20 have
discovered new troubles in the way of
reaching an agreement
Austro- Hungarians fear that just as at
present they are under the domination OF
Germany in military affairs, so later
their financial and economic independ-
ence will also be lost before the persist
ent and powerful monarch OF Germany.
The whole question is one of the most
vital Importance for the future welfare
of the dual monarchy, and lncites far
more interest in the business community
IMAM the progress OF tne war.
Since the Franco Prussian war Ger
many has become an industrial state, |
while Austria Hungary has remained es-
sentially agricultural. With the excep-
ton of Bohemia, Moravia and Lower
Austria which includes Vienna. all the
! other provinces Of Austria are purely
agricultural, and Hungary Is overwhelm-
ingly so. In both parliaments. at Vienna
/ I.,Aa ri n So
sess large majority.
Closed Union "A Necessity.
Nevertheless, both politically and mill
tarily closer union between Germany
| and Austria is generally regarded as an
absolute necessity. and will doubtless
continue to he so long after the war is
ended. But the problem as to how this
is to be brought about is exceedingly
complex.
BY high protective duties Austria has
long maintained an economic existence
independent of Germany, and, indeed,
even opposed to German interests. In
Austria everything is much dearer than
i'm Germany, from 20 to even 80 per cent,
The difference in prices is especially
great i'm heavy wares, such as coal, iron,
steel and machinery. It is only through
]
managed to develop a growing industry
and prevent the country from being
! flooded with cheap German products.
For some years Austria has almost mo-
| nopolzed the trade i'm the Balkans and
| the Levant, but latteTly German mer-
| chants have been creeping in there and
capturing customers. THIS has been the
case more than ever since the annexation
! by Austria-Hungary of Bosnia and Her
zegovina in 1909, when both Turkey and
Serbia boycotted Austrian goods. The
rapidity with which Germany seized the
! opportunity to enter these markets
caused intense irritation in Vienna and
Budapest at the time. Nor has this feel
| ing diminished since. German trade has
steadily grown in southeastern Europe,
while Austria's has steadily decreased.
How all these matters will develop after
the war nobody can foresee. Undoubtedly
Austria II hungary is placed under heavy
| obliga lions to Germany for its military
aid in the wsy How and In what form
will Germany require payment for such
service? Probably through preferential
customs tariffs. or perhaps by a customs
union. In either case, 1t is declared Ger
many stands to gain all the profit and
Austria to suffer all the injury. For
/
trian markets, prices generally would be
forced down, and Austrian competition
for the trade in the Balkans and Levant
would be hopeless.
Hence it is easy to understand the
covert opposition. in nearly all parts of
Austria, to Germany's efforts TO bring
ia ally in closer commercial relationship,
lit Is feared that economic dependence
will surely follow military Ever since
the war began things have occurred
which indicate Germany's aim at bring
ing Austria Hungary under its CONNER
cial subsection. Only a short time ago
the big banks in Berlin sent circulars TO
the principal Austrian investors In the
first and second Austrian war loans Of
fering to advance them 80 per cent OF the
face value of their holdings provided
! they would use the money for investment
IN the third loan The Austrian banks
were only advancing Is per cent of the
former loans. Such incidents have created
much distrust In the Austrian capital,
and show the necessity for exercising
/ the utmost caution before entering into
any new kind OF economic arrangement
with Germany. which may be fraught
with the most serious consequences for
the future of the dual monarchy.
shoe Prices Doubled.
Shoes have doubled I'm price In Vienna
in the last few months. and this largely
through the wearing of the short skirt
which calls for higher footwear II Is
not that raw material is scarce at all;
there Is plenty OF II from OK, calf and
goatskins. but tanning materials are
hardly obtalnsble at any price. Most OF
these come from abroad. but their i'm
port has been rendered impossible by the
war for some time past. With the aid OF
these Austrian tanners could convert a
hide into leather in three weeks; the