----------AUSTRALIA: End-------- ----------AUSTRIA-HUNGARY: Start-------- AUSTRIA-HUNGARY: Financial relations of the two countries forming the dual Empire. "The financial relations of Austria and Hungary fall under three main heads. Firstly, the Quota, or proportionate contribution to joint expenditure. The Quota is an integral portion of the compact of 1867 [see—in volume 1—AUSTRIA: A. D. 1866-1867], but is revised every ten years. Failing an agreement on the proportion to be paid by each half of the monarchy, the Quota is fixed from year to year by the Emperor till an agreement is arrived at. Secondly, the so-called commercial 'Ausgleich' treaty, which provides for a customs union, postal and telegraphic union, commercial equality of citizens of one state in the other, identical excise duties, &c. Thirdly, the Bank Union, by which Austria and Hungary have a common Austro-Hungarian bank, and common paper money. The Ausgleich and Bank Union are not essential parts of the 1867 compact; they are really only treaties renewable every ten years, and if no agreement is come to, they simply lapse, and each state makes its own arrangements, which seems very likely to be the fate of the Ausgleich unless the present crisis can be got over. The proceeds of the joint customs are applied directly to common expenses, and only the difference is made up by Quota. But if the Ausgleich falls through, the whole of the joint expenditure will have to be settled by quota payments. The joint expenditure goes almost wholly to the up-keep of the army, navy, and consular and diplomatic services. It amounts on an average to about 150 million florins or 12½ million £, falling as low as 124½ million florins in 1885 and rising to nearly 167 million in 1888. Of this total the customs revenues have, in the last few years, accounted for nearly a third, usually about 31 per cent. The Quota was fixed in 1867 at 70 per cent. for Austria and 30 per cent. for Hungary, based on a very rough calculation from the yield of common taxation in the years 1860-1865, the last few years preceding the restoration of Hungarian independence. On the incorporation of the so-called Military Frontier in Hungary, the Hungarian proportion was increased to 31.4. Hitherto the Hungarians have resisted any attempt to increase their quota. This 'non possumus' attitude has provoked great resentment in Austria, especially when it is compared with the self-complacent tone with which the Magyars dwell on the enormous progress made by Hungary since 1867. That progress is indubitable. Hungary has not only developed as an agricultural state, but is in a very fair way of becoming an industrial and manufacturing state as well. … {35}