As it was, the wife of an official was very angry when I said I could get a meal in any village. For she declared she and her husband had even been refused coffee, the people all vowing they had none. The reason for all the fuss was that the authorities were trying to hide the fact that the country was going through a very bad crisis, which was further exacerbated by the rumoured annexation; the open talk of an advance towards Salonika; and the renewed political activity of Russia and Serbia, which had now got England installed again at Belgrade. Speaking Serb, I found without difficulty that there was a very strong Serb propaganda being worked from Belgrade among the Orthodox, who at that time formed nearly two-fifths of the native population. Next in number were the Moslems and after them the Catholics, lastly several thousand Spanish Jews. Orthodox, Moslem and Catholic native populations were entirely Slavonic. There was an acute division between the Orthodox and the other two parties. The Catholics and even some of the Moslems called themselves Croat, and hated the term Serb. I had heard a report that in Croatia a reconciliation between Serb and Croat had taken place. None was to be seen in Bosnia. Only in the Herzegovina did the Catholic natives wish union with Montenegro. The bulk of the Moslems looked longingly towards Turkey. The Orthodox, on the other hand, were violently pro-Serb, and feelings between Austria and Serbia had risen to fever heat. Towards the end of 1905, Pashitch, then Prime Minister of Serbia, though already working hard against Bulgaria in Macedonia, signed a secret commercial convention with that country providing for the free interchange of goods with the exception of certain specified objects, and binding the two to a monetary convention and assimilation of weights and measures. As both countries produced much the same articles the arrangement did not appear to be likely to stimulate trade and as the racial hatred and rivalry of the two over the unsettled Macedonian scheme was extreme, the permanence of the arrangement was in any case doubtful. Serbia was in dire need of a loan, and was on the point of concluding one for 70,000,000 francs. Part of this was to be supplied by the Vienna Bank, and both Serbia and Bulgaria were negotiating new commercial treaties with Austria. Serbia thought best therefore to keep the transaction with Bulgaria quiet. But just as business was almost concluded with Austria, a Bulgarian newspaper blurted out the Bulgar-Serb convention. The Austria-Hungarian Government demanded at once to see the document, and all business came to a standstill. Nor was this surprising, for Petar I, Pashitch and the regicide group were notoriously Russia's proteges, and any secret arrangement on their part was likely to be directed against Austria. Austria closed her frontier to Serbian live stock.