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 150 AUSTRIA Benedok was appointed commander-in-cMef of the northern and Archduke Albrecht of the southern armies of Austria. The Prussians ad- vanced with a rapidity for which Austria and her allies were not prepared, and the troops of the smaller states proved as of old entirely inefficient. The Prussian progress through Sax- ony was undisputed, and the first serious en- counter took place on Austrian soil. The mil- itary superiority of the Prussians soon became apparent ; one Austrian corps after another was beaten, until on July 3 the bulk of their army suffered a crushing defeat at Sadowa near Ko- niggratz in Bohemia. This victory of Prussia filled the army of Austria, as well as the gov- ernment and the population, with consterna- tion. No halt was made in the retreat, and all the provinces north of Vienna were aban- doned to the enemy. The government re- lieved Benedek of the chief command, which was transferred to the archduke Albrecht, who in the meanwhile had been entirely suc- cessful in the campaign in Venetia, having de- feated the Italian army at Custozza (June 24) and driven it back across the Mincio. With him a part of his army was called to the north- ern seat of war. Hoping to detach Italy from the alliance with Prussia, the Austrian govern- ment had, moreover, on the day after the battle of Sadowa, ceded Venetia to Louis Napoleon, and requested his friendly mediation for bring- ing about peace. Italy declined to follow the advice of Napoleon, and, while the Prussians marched upon Vienna, again invaded Venetia and some districts of Tyrol. A naval victory of the Austrian admiral Tegetthoff at the island of Lissa (July 20) did not change the general prospects of the war, and had no influence upon the progress of the peace negotiations, which through the mediation of France had began at Nikolsburg. A preliminary peace was concluded on July 26, which on Aug. 23 was followed by the definitive peace of Prague. Austria consented to the establishment of the North German confederation under the lead- ership of Prussia, and to the incorporation of Hanover, Hesse-Oassel, Nassau, Frankfort, and Schleswig-Holstein with the Prussian domin- ions. Between Austria and Italy a truce was concluded on Aug. 12, and a definitive peace on Oct. 3 at Vienna. Austria recognized the union of Venetia, which Napoleon had ceded to Vic- tor Emanuel, as well as of Lombardy with the kingdom of Italy, while the Italian govern- ment agreed to assume the debt of Lombardy and Venetia, and 35,000,000 florins of the gen- eral Austrian debt, and also promised to re- store to the dethroned princes of Tuscany and Modena, who were relatives of Francis Jo- seph, their private movable and immovable property. Count Mensdorflf, the minister of foreign affairs, and Count Maurice Esterhazy, who was believed to be the chief adviser of the emperor, resigned their places in the ministry on Oct. 30. Mensdorff was succeeded by Baron Beust, who, as the representative of Saxony in the federal diet, had gained the reputa- tion of being the ablest opponent of the Prus- sian policy among the statesmen of the middle states. Beust soon submitted a novel plan for the reconstruction of Austria. He was as much opposed to the centralism of Schmerling as to the feudal federalism of Belcredi, and in the place of both recommended a strictly dualistic basis as the best remedy for the evils which had brought Austria to the Lrink of an un- fathomable abyss. As the hope of Belcredi and his old conservative Hungarian friends to effect a reconciliation with Hungary was dis- appointed, Beust found a favorable hearing for his ideas. The main point of his programme was a lasting reconciliation with Hungary, and to that end the adoption of the proposi- tions which Deak, the recognized leader of the majority of the Hungarian diet, had made to Belcredi. Beust advised the em- peror to appoint at once a Hungarian minis- try, and to obtain through it the consent of the Hungarian diet to the draft of the agree- ment between Cisleithan and Transleithan Austria, as proposed by Deak ; to call then, in accordance with the constitution of February, 1861, a meeting of the "limited Keichsrath" of Cisleithania, lay before it the agreement with Hungary as an accomplished fact, and to propose to it such changes in the constitution of February as the concession made to Hungary would require. The advice was accepted; Belcredi resigned, and on Feb. 7, 1867, Beust was appointed prime minister. Within one month the most important points had been settled. Hungary abandoned the idea of a purely "personal union," and agreed to have the army and the foreign affairs in common with Cisleithania; it also promised a revision of the laws of 1848. On the other hand, the subordination of Croatia to the Hungarian ministry and the reincorporation of Transylva- nia with Hungary were readily conceded. The Hungarians were notified of the accomplished agreement and of the appointment of a respon- sible Hungarian ministry, of which Count Ju- lius Andrassy was the president, by rescripts dated Feb. 17, 1867, and signed by Francis Joseph as "king of Hungary." On the next day, Feb. 18, the provincial diets of all the German and Slavic crown lands were opened. The German diets generally declared them- selves satisfied with the settlement of the Hun- garian question ; most of the Slavic diets showed themselves at least not irreconcilable ; but the Czechs of Bohemia so violently opposed the projects of the government that the Bohemian diet had to be dissolved. The Czech leaders were so incensed at the new turn of Austrian politics that they used the so-called ethnograph- ical exhibition at Moscow (May, 1867) as a wel- come occasion for an ostentatious display of Panslavistic tendencies. The Reichsrath of the German and Slavic provinces, which was opened on May 22, 1867, formally approved the agree- ment concluded with Hungary, but at the