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Speech from the throne of his I. R. Apostolic Majesty at the opening of the Hungarian Diet, December 14, 1865.

[Translation.]

While we greet with sincere joy the estates and representatives of our beloved kingdom of Hungary assembled in Diet, we at the same time make known the purpose which has brought us here with that open frankness which can alone establish the indispensable bond of confidence between a monarch and his people.

We came to complete that which we had begun, penetrated with the feeling of our duty as regent. Our object is, by our personal intervention, and therefore the more successfully, to settle those doubts and to remove those obstacles which hitherto have opposed the solution of pending questions of state law.

Among these do we class in the first line the violent contradiction which existed in the different starting-points towards the contemplated mutual understanding. Legal forfeiture on the one side, and stiff legal continuity on the other, could not lead to any agreement. The obstacle we now remove in choosing a universally acknowledged ground for our starting-point.

Whereas this fundamental state law has guaranteed the self-dependence of the inner formation and administration of the kingdom of Hungary and the adjoining provinces, it has at the same time preserved the constant indissoluble and inseparable union between the kingdoms and provinces standing under the government of our house, and therewith the position as a great power of their entirety. Even as we therefore find in this entirety a necessary and legal limitation of that independence, even so we recognize, without reserve, justification thereof within these limits.

In the same manner do we wish to preserve unimpaired the conditions of the pragmatic sanction which related to the integrity of the Hungarian crown, and although we are obliged to pay regard to those facts upon record in the last decade, we have at the same time directed our sovereign care to make possible the representation of the provinces of our Hungarian crown at this Diet.

For this purpose we have convoked the Diet of our principality of Transylvania, in order that it may undertake an earnest and thorough examination of the first law-article of the year 1848, relating to the union between Hungary and Transylvania, and we require the estates and representatives of our kingdom of Hungary assembled in Diet to take a similar action in regard to the seventh law-article of the year 1847-'8, in order that this question, not, according to the dead letter of the law, a fictitious and doubtful one, but, on the contrary, in harmony with all vigorous factors, may find through their intimate conjunction a lasting and complete solution.

In the same manner have we made known the summons to the assembled Diet of Croatia and Sclavonia reasonably to provide that it should be represented at this Diet; and while we communicate the resolution of the Croatian Diet, passed in the year 1861, regarding the relation of Croatia to our kingdom of Hungary, do we feel the confidence that the argument in regard to the legal relations of brother races, united for centuries, will be firmly established in the way of mutual yielding and in the spirit of that equitable conception to which the estates and representatives of the kingdom of Hungary assembled in Diet have lent an unequivocal expression in their address in this regard, issued July 6, 1861.

As the first task of this Diet we must indicate the manner of negotiating affairs common to all our kingdoms and provinces.

The existence of such affairs has its formation already in the spirit of the pragmatic sanction, although, in regard to the manner of negotiating, the essentially altered relations demand an essential change.

The transformation of the political, economical, and social factors which in the meanwhile had gained ground, decided us, in the consciousness of our high task, to confer constitutional rights also on our other kingdoms and provinces, and therefore the affairs common to all provinces are only to be conducted under the constitutional co-operation of those kingdoms and provinces.

These were the motives which guided us when we issued our diploma of October 20, 1860, and we still firmly hold the conviction that a common constitutional treatment of affairs, indicated in that diploma as universal, forms an incontrovertible requisite of the united stability and position as a power of our collected monarchy to which every other consideration must be subordinate.

As regards the manner of negotiation, we have indicated a form in our patent of February 26, 1861, which has, however, excited various and important scruples. While we, therefore, cannot withhold the conviction that this question cannot be determined definitely and lastingly with the weapons of material or moral pressure, but, on the contrary, only in the way of general compromise, and a recognition of necessity, we have temporarily, by our manifests of September 20, suspended the efficacy of the statute of the representation of the empire,. and do now lay before the estates and representatives of the kingdom of Hungary assembled in Diet our diploma of October 20, 1860, as well as the patent of February 26, 1861, for mature consideration, incisive criticism, and acceptance.

The well-understood interests of our kingdom of Hungary, as well as the prosperity and safety of the whole empire, require the soonest possible settlement of this affair, so that the constitutional rights of the single kingdoms and provinces may, through the cordial annexation of our people, be durably secured, may develop themselves on a firm basis, and may rejoice in a vigorous bloom. We expect, therefore, of the estates and representatives of our kingdom of Hungary assembled at this Diet, that they may in a spirit of equity examine the state papers submitted to their judgment, and in case of the existing objections appear ing insurmountable, they may propose such modifications only as can be brought into harmony with the vital conditions of our entire monarchy. In close and inseparable conjunction with the decision of this question stands the revision, and respectively the reform, of that part of the 1848 laws which has reference to the efficacy of our rights as sovereign, and the limitation of our attributes of government.

Things which stand in a close conjunction and exercise a mutual effect upon each other cannot in practical realization be separated.

The unchanged coming into life of these laws does not lie within the region of possibility when we take into consideration the position as a power of our empire, the undiminished value of our sovereign rights, and the just demands of the neighboring provinces. Although, therefore, the formal legality of these laws cannot be questioned, yet our duties as a sovereign, and the conscientious consideration of the care owed equally to all our people, forbid us to confirm by our inaugural oath the vindication and application of these laws, before the simultaneous fixation of the relation of the mutual rights and duties. It is, therefore, necessary that the motives of these laws which either circumscribe our sovereign rights or bear reference to the alteration of the form of government, without bringing them into harmony with the conditions of stability of the monarchy, or with the inner institutions of the land that repose on a long-inherited basis, may be carefully examined and judiciously altered. In this way it will be made possible that we, too, may with a quiet conscience render our royal inaugural oath to the suitably remodelled and, for late posterity, firmly established constitution, and receive the consecration of coronation with the diadem of the holy Stephen, our apostolic ancestor, with that holy crown in which we are disposed to insert, as its most precious stone, the prosperity of our kingdom of Hungary and the unbroken love of its people. As crowned king, we will not fail to impart to the assembled estates and representatives, besides those state papers which we already submitted to the Diet of 2d of April, 1861, also our royal propositions in regard to numerous other affairs. These are objects which touch the spiritual and material interests of the wisest circles, and whose successful regulation cannot be postponed without detriment to the land.

The will of Divine Providence has imposed on us great and heavy tasks, and to this land not less earnest ones, and charged with grave responsibility, by reason of the suspension of constitutional life which has now taken place in a great portion of our empire.

Insoluble, however, they are not, if the country, in union with its sovereign, and following the traditions of the forefathers, undertakes them with self-denial and willingness of sacrifice. We hope this so much the more as the land, in imparting strength and weight, gains strength and weight, in progressing to the lifting of these difficulties elevates itself, in working for procuring the stability of the whole secures its own stability; and if we are successful, after a long pressing epoch, in leading our empire with the help of the country through the doubtful turnings of a difficult situation to the wished-for term, we shall bless the moment that ripened our resolution to revive and confirm the confidence between the sovereign and the people.

With confident success do we look forward to the candid exposition of the views of the assembled estates and representatives of this land, and while we solemnly declare the Diet of our kingdom of Hungary as open, we close with the earnest wish that it may be granted to us, with God's help, to lead to a happy issue the great work of mutual agreement.

No. 141.]

Mr. Motley to Mr. Seward.

LEGATION OF THE UNITED STATES,

Vienna, January 8, 1866.

SIR: I have the honor to acknowledge the receipt of your despatches Nos. 159 and 160, of dates November 4th and 6th, 1865.

I have nothing further to state to-day concerning the affairs of Hungary, as the diet of that kingdom was adjourned for the Christmas holidays and has not yet reassembled.

It is understood that the Emperor and Empress, with the whole court, will proceed to Pesth on the 20th.

The most important incident relating to Austrian affairs since my last despatch

is the promulgation, in accordance with the September manifesto, of the finance law for 1866 by the Emperor.

During the suspension of any general legislative body, the monarchy is of course governed absolutely.

The finance edict or budget is accompanied by an elaborate report of the finance minister, Count Larisch, addressed to the Emperor.

The sum total of expenditures for the year 1866 is fixed at 531,273,881 florins, Austrian currency.

The sum total of receipts is estimated at 491,134,735 florins.

Deficit for the year 40,139,146 florins, to be covered by a loan.

The report of the minister is characterized by a courageous frankness; a determination being evident on his part to tell the whole truth concerning the financial condition of the empire, even although that truth cannot be considered cheerful.

The most striking general features in the report are the statements that it is entirely out of the question to increase the income of the empire by an increase of taxation; that there is a deficit of this year of forty millions; and that there is an additional deficit for the two past years of seventy millions over and above what had been hitherto announced by the former minister of the treasury. As the best illustration of this impossibility to increase the taxes, the proposition is made for a reduction in some of the most oppressive ones, namely, the land and house taxes, now more than 33 per cent. of the rent, making a diminution of the treasury receipts for the year of 4,600,000 florins.

"This loss," says the minister, "will be richly compensated by the moral impression produced by a measure which constitutes a practical pledge of the earnest intention of lightening as far as possible the burdens imposed upon your Majesty's faithful peoples."

As an explanation of the revelations as to the results of the years 1864 and 1865, (including the two last months of 1863,) it is stated that the expenditures for that period were almost exactly in accordance with the published estimates of M. de Plener, but that his estimates of receipts fell short in round numbers about seventy millions.

The finance law of 1865 announced a nominal deficit of nearly eight millions. It really amounted to a sum but little short of eighty millions. The details as to these discrepancies will hardly interest you. It may be as well to state, however, that thirty millions had been relied upon by the former minister from the sale of public property, but that it had been found impracticable to effect these sales.

A loan of ninety millions specie has very recently been negotiated. This has been mainly employed in covering the deficiency just indicated. There remains in the treasury for the use of the present year a sum of twelve million florins. As the deficit for the fourteen financial months of 1864 actually amounted to one hundred and fourteen millions, and the deficit of 1865 to eighty millions, it is considered by the present minister a subject of congratulation that the estimated deficit for the current year is only one-half that for the last year.

"Chronic, deeply rooted evils," says Count Larisch, "cannot be got rid of at once; one must be content if the cure of them is gradual but constant."

It is also important to state that the deficit for this year is caused almost entirely by the necessity of providing for the last instalment of the debt to the National Bank, amounting to 35,600,000 florins, which falls due on the last day of December, 1866.

Another encouraging symptom indicated by the minister is the approaching resumption of specie payments by the bank, to take place after this liquidation of the imperial debt has been duly made.

The agio on gold has already fallen to less than five per cent., and no doubt is at present entertained of a return to a metallic currency with the beginning

of next year. The National Bank is described by Count Larisch as one of the most solid and healthy institutions of credit in Europe, and he observes that "the providing for the necessities of the state by making use of a bank-note printing press is now reduced by legal measures to an impossibility.”

While the minister modestly refrains from any hope that the actual receipts for the current year may exceed his estimates, he ventures an expectation that those of 1867 may, with the preservation of peace and the return of public confidence and public prosperity, show an improvement.

As during the two past years every source of income, with scarcely any exception, ordinary and extraordinary, direct and indirect, is proved to have been largely overestimated, to the gross amount already mentioned, it is hoped by the minister that his own estimates, already subjected to an incisive criticism by experts, may prove more satisfactory.

The rough estimate of the budget for 1867, taking the expenditures at the same figures as in 1866, with the deduction of the payment to the bank, is as follows:

Expenditures
Income..

Deficit...

485,621,243 florins.

457,134,735 florins.

28,486,508 florins.

This is certainly an improvement on the past, but very far, of course, from healthy housekeeping, especially to an empire always from geographical and historical causes exposed to war.

Having thus given you a general view of the finance minister's annual report, I think it may possibly interest you if I very briefly indicate a few of the leading items of Austrian expenditure and revenue, making use of round sums, as close as possible to the actual ones, in order to avoid the confusion of long strings of figures, not necessary for the purpose of this despatch. The accounts are in Austrian currency, which now varies very little from specie. The Austrian florin is equal to a little less than half a dollar.

Expenditures.-The Emperor's household, 73 millions; foreign office, over 2 millions; state department, including police and education, about 30 millions; chancery of Hungary, 11 millions; ditto Transylvania, over 3 millions; finance ministry, 350 millions, including 124,636,662 interest on the debt, and 65,834,998 of debts falling due; ministry of justice, nearly 10 millions; ministry of war: army, 88,763,000; navy, 7,825,981-964 millions. Total, 511 millions. The chief sources of revenue are direct taxes. Land tax, nearly 65 millions; house tax, 23 millions; trade and business taxes, 11 millions; income tax, (7 per cent.,) 20 millions. Total, 119 millions."

Indirect taxes.-Brandy, 14 millions; wine, 6 millions; beer, 17 millions; sugar, 9 millions; cattle, to be killed, 5 millions; Pachtungon leases, 5 millions; salt, (monopoly,) net receipts, about 33 millions; tobacco, net, 25 millions; stamps, 16 millions; taxes on legal business, 26 millions; lottery, 20 millions; customs, less 1,674,614 for collection, net almost exactly 12 millions. Total,

190 millions.

About three-fifths of the national revenue is made up of these items.

I have given the net income of the two monopolies-salt and tobacco-as, of course, if deductions were not made from the gross receipts (stated in the report at over thirty-nine millons and over fifty-six millions respectively) of the expenses of the business, my statement would be valueless. You will be struck with the trifling amount of the trade of Austria, as shown by the traffic receipts, which in gross were only 14,172,684 florins.

Whether the reduction next year of the tariff according to the AngloAustrian treaty just concluded and described in one of my last despatches, and

according to the French-Austrian treaty soon to be negotiated, will produce a larger sum than the present very insignificant amount, time will show.

I shall make but one more quotation from the minister's report. After stating that the interest on the national debt has been growing steadily year by year, from 106,719,800 florins in the year 1861, to 124,636,663 florins in 1866, he observes that "this is a progression in which an earnest warning lies to make every exertion to restore as soon as possible the equilibrium of the national accounts."

I have the honor to remain, sir, very respectfully, your obedient servant, J. LOTHROP MOTLEY.

Hon. WILLIAM H. SEWARD,

Secretary of State, Washington, D. C.

No. 145.]

Mr. Motley to Mr. Seward.

LEGATION OF THE UNITED STATES,
Vienna, February 13, 1866.

SIR: I have not the honor to acknowledge the receipt of any despatches since your No. 163.

The most important event in this empire since my last despatch is the presentation on the Sth of this month of the project of an address to his Majesty by the Hungarian Diet in answer to the speech from the throne.

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A translation of that speech was sent in my despatch No. 137. I have now translated the most important passages of the proposed address and send them herewith. This document, the importance of which, as a manifesto of the great majority of the Hungarian Diet and public, can hardly be overrated, is mainly the work of Francis Deák.

This statesman, undoubtedly by far the most influential and popular personage in the kingdom, who, although himself an advocate, belongs to the middle classes, wields immense power over the highest aristocracy in the most aristocratic country in Europe, seems to possess at this moment the confidence both of the Austrian government and of the Hungarians. Gifted with much eloquence and administrative tact, he has been looked upon as almost the only individual capable of dealing with the great Hungarian question. Whether the sphinx which has been oppressing the imperial house for the last seventeen years will accept the present solution of her riddle and cast herself forever into the abyss, the immediate future will show. It does not seem probable, however, that she will be got rid of so easily.

I have said so much concerning the Hungarian subject in previous despatches that I refrain from wearing your patience with many comments on the present address.

Placing yourself in the position of a Hungarian you would probably admit that the document breathes noble sentiments and expresses reasonable views concerning self-government and the true relations between king and people. But taking the position of a citizen of the Austrian empire you would find it difficult to see much improvement in the present address over that of 1861.

The Emperor as king of Hungary asks the Diet to favor him with views and suggestions as to the October diploma and the February patent. In reply those famous creations are very respectfully but most decidedly despatched by the address to the limbo of all departed or abortive constitutions.

Calmly ringing the death-knell over the constitutional unity of the empire, the address then summons the sovereign in the name of the pragmatic sanction to restore the time-honored "constitutional self-dependence and legal independence" of Hungary. That phrase occurs sixteen times in the document. A mild

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