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 difficulties. The revolutionary movements had been suppressed, the attempt of Prussia to assume the leadership in Germany defeated, the old Federal Diet of 1815 had been restored. Vienna again became the centre of a despotic government the objects of which were to Germanize the Magyars and Slavs, to check all agitation for a constitution, and to suppress all attempts to secure a free press. For some ten years the Austrian dominion groaned under one of the worst possible forms of autocratic government. The failure of the Habsburg emperor to perpetuate this despotic régime was due (1) to the Crimean War, (2) to the establishment of Italian unity, and (3) to the successful assertion by Prussia of its claim to the leadership in Germany. The disputes which resulted in the Crimean War revealed the fact that “gratitude” plays but a small part in international affairs. In the minds of Austrian statesmen the question of the free navigation of the Danube, which would have been imperilled by a Russian occupation of the Principalities, outweighed their sense of obligation to Russia, on which the emperor Nicholas had rashly relied. That Austria at first took no active part in the war was due, not to any sentimental weakness, but to the refusal of Prussia to go along with her and to the fear of a Sardinian attack on her Italian provinces. But, on the withdrawal of the Russian forces from the Principalities, these were occupied by Austrian troops, and on the 2nd of December 1854, a treaty of alliance was signed at Vienna, between Great Britain, Austria and France, by which Austria undertook to occupy Moldavia and Walachia during the continuance of the war and “to defend the frontier of the said principalities against any return of the Russian forces.” By Article III., in the event of war between Russia and Austria the alliance both offensive and defensive was to be made effective (Hertslet, No. 252). With the progressive disasters of the Russian arms, however, Austria grew bolder, and it was the ultimatum delivered by her to the emperor Alexander II. in December 1855, that forced Russia to come to terms (Treaty of Paris, March 30, 1856).

Though, however, Austria by her diplomatic attitude had secured, without striking a blow, the settlement in her sense of the Eastern Question, she emerged from the contest without allies and without friends. The “Holy Alliance” of the three autocratic northern powers, recemented at Münchengrätz in 1833, which had gained for Austria the decisive intervention of the tsar in 1849, had been hopelessly shattered by her attitude during the Crimean War. Russia, justly offended, drew closer her ties with Prussia, where Bismarck was already hatching the plans which were to mature in 1866; and, if the attitude of Napoleon in the Polish question prevented any revival of the alliance of Tilsit, the goodwill of Russia was assured for France in the coming struggle with Austria in Italy. Already the isolation of Austria had been conspicuous in the congress of Paris, where Cavour, the Sardinian plenipotentiary, laid bare before assembled Europe the scandal of her rule in Italy. It was emphasized during the campaign of 1859, when Sardinia, in alliance with France, laid the foundations of united Italy. The threat of Prussian intervention, which determined the provisions of the armistice of Villafranca, was due, not to love of Austria, but to fear of the undue aggrandizement of France. The campaign of 1859, and the diplomatic events that led up to it, are dealt with elsewhere (see, , , ). The results to Austria were two-fold. Externally, she lost all her Italian possessions except Venice; internally, her failure led to the necessity of conciliating public opinion by constitutional concessions.

The proclamation on the 26th of February 1861 of the new constitution for the whole monarchy, elaborated by Anton von Schmerling, though far from satisfying the national aspirations of the races within the empire, at least gave Austria a temporary popularity in Germany; the liberalism of the Habsburg monarchy was favourably contrasted with the “reactionary” policy of Prussia, where Bismarck was defying the majority of the diet in his determination to build up the military power of Prussia. The meeting of the princes summoned to Frankfort by the emperor Francis Joseph, in 1863, revealed the ascendancy of Austria among the smaller states of the Confederation; but it revealed also the impossibility of any consolidation of the Confederation without the co-operation of Prussia, which stood outside. Bismarck had long since decided that the matter could only be settled by the exclusion of Austria altogether, and that the means to this end were not discussion, but “Blood and Iron.” The issue was forced by the developments of the tangled (q.v.), which led to the definitive breach between the two great German powers, to the campaign of 1866, and the collapse of Austria on the field of Königgrätz (July 3. See ).

The war of 1866 began a new era in the history of the Austrian empire. By the treaty of Prague (August 23, 1866) the emperor surrendered the position in Germany which his ancestors had held for so many centuries; Austria and Tirol, Bohemia and Salzburg, ceased to be German, and eight million Germans were cut off from all political union with their fellow-countrymen. At the same time the surrender of Venetia completed the work of 1859, and the last remnant of the old-established Habsburg domination in Italy ceased. The war was immediately followed by a reorganization of the government. The Magyar nation, as well as the Czechs, had refused to recognize the validity of the constitution of 1861 which had established a common parliament for the whole empire; they demanded that the independence of the kingdom of Hungary should be restored. Even before the war the necessity of coming to terms with the Hungarians had been recognized. In June 1865 the emperor Francis Joseph visited Pest and replaced the chancellors of Transylvania and Hungary, Counts Francis Zichy and Nadásdy, supporters of the February constitution, by Count Majláth, a leader of the old conservative magnates. This was at once followed by the resignation of Schmerling, who was succeeded by Count Richard Belcredi. On the 20th of September the Reichsrath was prorogued, which was equivalent to the suspension of the constitution; and in December the emperor opened the Hungarian diet in person, with a speech from the throne that recognized the validity of the laws of 1848. Before any definite arrangement as to their re-introduction could be made, however, the war broke out; and after the defeats on the field of battle the Hungarian diet was able to make its own terms. They recognized no union between their country and the other parts of the monarchy except that which was based on the Pragmatic Sanction. All recent innovations, all attempts made during the last hundred years to absorb Hungary in a greater Austria, were revoked. An agreement was made by which the emperor was to be crowned at Pest and take the ancient oath to the Golden Bull; Hungary (including Transylvania and Croatia) was to have its own parliament and its own ministry; Magyar was to be the official language; the emperor was to rule as king; there was to be complete separation of the finances; not even a common nationality was recognized between the Hungarians and the other subjects of the emperor; a Hungarian was to be a foreigner in Vienna, an Austrian a foreigner in Budapest. A large party wished indeed that nothing should be left but a purely personal union similar to that between England and Hanover. Deák and the majority agreed, however, that there should be certain institutions common to Hungary and the rest of the monarchy; these were—(1) foreign affairs, including the diplomatic and consular service; (2) the army and navy; (3) the control of the expenses required for these branches of the public service.

Recognizing in a declaratory act the legal existence of these common institutions, they also determined the method by which they should be administered. In doing so they carried out with great exactitude the principle of dualism, establishing in form a complete parity between Hungary on one side and the other territories of the king on the other. They made it a condition