12. Winds of War

12
Fresh Start

AUSTRIA'S SITUATION CONSIDERABLY WORSENED under the impact of the Treaty of Saint-Germain-en-Laye, signed on September 10, 1919. The treaty was a diktat rather than a true agreement, designed to ensure the political weakness of Germans rather than durable peace among the nations.¹ It placed all burdens attributable to the “Austrian” part of the Austro-Hungarian monarchy on German-Austria, and in all questions pertaining to the relations between the successor states of the monarchy, it ruled against German-Austria and in favor of the other states. This procedure was based on the view that the Habsburg family had pursued a longstanding policy of German hegemony vis-à-vis the Czech, Slovenian, Italian, Croatian, and Polish peoples and that therefore the German Austrians now had to bear all costs related to the military defeat and to the dissolution of the empire.

In accordance with this view, the treaty stipulated that the republic of Deutsch-Österreich (German-Austria) change its name into “Republik Österreich”—an unusual provision, to say the least. But the new Republic of Austria had also to endure humiliating demands of a less cosmetic nature. While the principle of national self-determination had been used to justify the separation of Czech, Polish, and Yugoslav lands from the Austro-Hungarian Empire, the goal of “making the Germans pay” trumped principle. In the Czech case, “historical law” was invoked to justify the incorporation of the Sudetenland, which had first been settled by Germans and still had a vast German majority; and in the case of Italy, the establishment of a “natural border” at the Brenner Pass brought South Tyrol under Italian dominion. In German-Austria's own case, “independence” was considered more important than the desire of its inhabitants to join the German Reich. Three months after the Treaty of Saint-Germain had been signed, all the Austrian provincial parliaments voted resolutions in favor of the establishment of economic union with the German Reich. The Entente reacted immediately, on December 17, 1919, insisting that Austria's political and economic independence not be relinquished.

German-Austria lost almost 40,000 square miles—more than a third of its soil—territories that for centuries had been inhabited and cultivated by Germans. Most of the other stipulations of the treaty further humiliated German-Austria and poisoned relations with its neighbors.

The most pressing problems were of a financial nature. The Allies were holding German-Austria alone responsible for the debts of the former Austro-Hungarian Empire. Because war bonds and other war-related debts were denominated in kronen, they could be handled through the printing of more banknotes, but two other financial liabilities proved permanent and pernicious: the salaries of the civil servants and the massive deficits being run up by government-owned industry.

Civil servants in Austria-Hungary had been predominantly German, and a great number of them lived in Vienna. After the dissolution of the empire, German-Austrians found themselves in the awkward position of having five million citizens supporting a civil service developed for fifty million. Various means were tried to reduce the number of civil servants, but in 1922, one out of ten men still received a salary from the public treasury.

While the excessive number of civil servants was an inheritance from the old empire, public firms running huge losses were the achievement of the social democrats, who had “socialized” the coalmines and other industries.

Under these circumstances, it was out of the question for German-Austria to pay damages to anyone. Its citizens were hardly able to feed themselves—especially in Vienna. The traditional trade channels with the eastern provinces no longer existed. Trade with its Czech, Yugoslav, Hungarian, and Polish neighbors—who were even more nationalist and protectionist than the Austrians themselves—had fallen to a minimum. Far from being able to pay reparations, German-Austria depended for survival on the financial support of its former enemies. And from the end of 1919 onwards, it did receive such help.