Hungarians claimed that the finances, the tariffs, and the public works of the country should be controlled by the Diet at Pesth exclusively; the Croats asked that the Assembly at Agram should have a share in their administration; the Hungarians proposed that there should be a Croatian Secretary of State with a seat in the Diet at Pesth, who should control the Ban, and that the Ban should be appointed by the Emperor on the recommendation of the Hungarian Prime Minister. The Croatians wished the Ban to be responsible to the Diet at Agram, and communicate directly with the Emperor. Before an agreement could be arrived at, war broke out with Prussia, and the two deputations returned home. The result of the war had naturally an immense influence on the future of the questions at issue. It became necessary to the statesmen at Vienna to conciliate Hungary at any price, and the general result of the labours of Count Beust was enormously to strengthen her influence in the affairs of the empire. It was therefore under an immense moral disadvantage that in 1868 the Croatian leaders renewed their negotiations with the leaders at Pesth. The appointment of Freiherr Levin von Rauch, a notorious Unionist, as Ban, instead of the popular F. M. Freiherr von Schokcsevits, was a safe index as to which way the tide was running. The Landtag was dissolved in order to get rid of the National majority, a new electoral law was promulgated by the Diet at Pesth, and the Hungarian officials made the most determined efforts to get together a Unionist majority. They were successful all along the line. No more than fifteen Nationalists were elected, who only entered the Landtag to protest against the electoral law as illegal and invalidating the future proceedings. A new deputation was appointed to go to Pesth, where everything of course under the circumstances went perfectly smoothly, and what is known as the Ausgleich of 1868 was agreed upon.

By it Croatia was recognised as belonging to the category of lands subject to the Hungarian crown, and accordingly acknowledged the agreement of 1867 between Hungary and Austria as binding on herself. She was to be represented at Pesth by thirtyone delegates from the Landtag. The territory of Fiume was recognised as belonging to Hungary, and bound to send her deputies direct to Pesth. Nothing was said about Dalmatia or the Military Frontier. The Croatian Chancellery at Vienna was abolished. Local government, justice, and education, were left to the direction of the Landtag at Agram; everything else was to belong to the Hungarian Diet. The taxes were to be collected by Hungarian officials. The Croatian revenue was first charged with seven per cent. of the common expenses of the Austro-Hungarian empire, next with a sum of 2,200,000 florins for the expenses of the local administration mentioned above, and the remainder was then to be paid into the Hungarian exchequer. The Ban, who was always to be a civilian, was to be appointed by the Emperor on the recommendation of the Hungarian Prime Minister. There was to be a Croatian minister, with an office at Pesth, sitting in the Hungarian Cabinet, through whom all matters relating to Croatia were to be laid before the Emperor. Such was the Ausgleich of 1868.

Unfavourable as the result of the negotiations was to the views of the National party, the manner in which the agreement arrived at was carried out made it doubly odious to them. In a few years Baron Rauch had accumulated a load of deserved unpopularity which might alone have been enough to render his resignation probable. Fortunately his connection in a variety of speculations, which he had used his official position to further, brought matters to a crisis. The circumstances which led to his dismissal were as follows. In order escape the persecution to which the National Press was subjected, the Zatocsnik newspaper established itself

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at Petrinia, on the Military Frontier, and commenced a series of articles professing to show up a scandalous speculation to which Baron Rauch had been a party. At the same time Miletits, the best known among the Nationalist leaders, in his newspaper, the Zastava, denounced him as а "Haramia" (scoundrel). Miletits was condemned to a year's imprisonment, but against the writers in the Zatocsnik, Mrazovitz and Voncsina, Rauch took no steps. The charge brought forward by them was the following. A company consisting of landed proprietors was desirous of obtaining a concession from the government in order to drain the large swamps on the Save, known as the Lonjokopolje, in exchange for a long lease of the reclaimed land. Amongst the shareholders was the Ban's brother. The cost of the engineering operations was estimated by the government officials at an excessive amount, and the concession was accordingly granted on very easy very easy terms to the company. Hardly, how

ever, had the transaction been completed than the company sold their lease to a Dutch company at a far higher price. The profit thereby made by the vendors was enormous. It was asserted that Baron George Rauch was only a man of straw, behind whom stood the Ban himself. A similar affair was that of the Limito salt pans. The corporation of Karlstadt was refused a renewal of a lease of these salt pans, which it had enjoyed on very easy terms for many years, and the lease was given to a Jew from Agram on the same terms. It was asserted that the Jew also was a man of straw put up by Rauch, whose rule began to be accounted as corrupt as that of the Turkish Pashas in Bosnia. Ultimately the outcry became so great that Rauch received orders from Vienna to indict Mrazovitz and Voncsina for libel. Mrazovitz and Voncsina pleaded the truth of what they said, and their "exceptio veritatis" was admitted by the High Court of the Military Fron

tier, before whom the trial took place. Rauch was thereupon instantaneously dismissed. No successor was for some time appointed, and the duties of the post were temporarily performed by the "Sectionschef" Vakanovitz of Agram. A fresh Landtag was about to meet. The position of the government was highly critical, as it was known the Nationalists were going to make an effort to regain their old predominance. On the 20th September, 1871, they held a public meeting, and protested against all the proceedings of the Diet of 1868 as invalid, owing to the manner in which the Landtag had been elected, again claimed Fiume as an integral portion of the Croatian territory, and demanded the incorporation of the Military Frontier with the country. Thereupon the Landtag was dissolved. In the new elections, which, owing to the agitation, had to be carried out under the old election law, the National party gained an easy majority. Negotiations were thereupon set on foot between the leaders and Count Lonyay, the Hungarian Prime Minister, which pointed to a favourable result; but the intrigues of the Unionist party and of the supporters of Rauch succeeded in preventing any good result arising from them. A report was spread that Miletits and a deputation of the Servian Omladina were coming to Agram to stir up the Landtag and make anti-Hungarian demonstrations. Thereupon the Landtag was immediately dissolved without having met for business. New elections were ordered. During their continuance the negotiations continued, but Count Lonyay asked that in order to restore the balance of parties in the Landtag, the Nationalists should abandon a certain number of seats to the Unionists. The Nationalists refused, but expressed themselves ready to consent to the deputation which might have to go to Pesth to discuss the final settlement, consisting of one half Unionists, one half Nationalists.

The Nationalists again obtained a

decisive majority at the elections of 1872. The Hungarian Government having little confidence in the promises of the Nationalists, now had recourse to another electioneering device. By the old Croatian electoral laws, under which the Landtag had been elected, the great landowners, to whose property a seignoral jurisdiction belonged prior to the year 1848, had an ex-officio right to a seat and vote in the Landtag. The great majority of these "Virilists," as they were called, were Hungarian absentee proprietors. At the bidding of the Hungarian Government they all now appeared in a body and claimed their seats. The Unionist party thereby just obtained a majority, and a deputation, on the whole satisfactory to them, was elected, and proceeded to Pesth to meet the Hungarian deputation. The negotiations between them lasted nearly eight months, from the 27th October, 1872, to the 29th June, 1873. More than once they were nearly broken off. The contest raged chiefly around these points, viz., the powers of the Ban, those of the Croatian Minister at Pesth, and the financial relations of the two countries. The Croatians demanded that the Emperor should nominate the Ban without waiting for the advice of the Hungarian Prime Minister, and that the Ban should have the right of communicating directly with the Emperor, and should be responsible to the Landtag at Agram. On the financial question they objected to the arrangement under which a lump sum of 2,200,000 florins was allowed out of the taxes to the Landtag for local purposes, and to the 7 per cent contribution to the common expenses of the Empire, as being too high. An agreement was first arrived at on the second question, which was discussed by a special committee of eight members. It was agreed that 45 per cent of the gross revenue of Croatia should be reserved for local purposes, and the remaining 55 per cent paid into the Hungarian Exchequer, and appropriated to Hungarian and Austro

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Hungarian purposes. Hungarian purposes. The advantage to Croatia of this arrangement was that, if, as was anticipated, the 45 per cent of the revenue exceeded the sum of 2,200,000 florins, the difference would be so much gained to the Croatians. On the constitutional question, after long discussions, it was agreed that the Croatian Minister should always be obliged to submit the proposals of the Ban to the Emperor, and only express a separate opinion if in his opinion the position of Hungary were likely to be injuriously affected. the demands of the Croatian deputation, that the direct taxes should be collected by their own civil service, and the railroads and roads be similarly administered, the Hungarians opposed an unyielding resistance. The responsibility of the Ban to the Croatian Landtag was left unmentioned in the new Ausgleich, but the principle was admitted, and it was left to be expressed in a law to be passed by the Landtag, to whose sphere it more properly belonged. At the same time the popular Mazsuranitz was appointed Ban. The Croatian demand relating to Fiume was refused, but that regarding the Military Frontier had been accepted even prior to the commencement of the negotiations, and on June 9th, 1872, a Royal Proclamation appeared directing the necessary steps to be taken.

The general result of the agreement was on the whole favourable to Hungary, for the points conceded to Croatia, except that relating to the Military Frontier, were few and unimportant, while Hungary had obtained what to her was of vital importance, the practical recognition of the legality of what passed in 1868.

The new Ausgleich passed the Hungarian Diet unanimously, the Croatian Landtag after a division. In the latter, Makanec and other leaders of the National party inveighed against it with extreme bitterness, as being an abandonment of all the historical claims of their country to equality with Hungary, and of everything

which from their own point of view was contained in the words regnum socium as distinct from pars adnexa. Their speeches found an echo which has not only not died away, but has been roused again by the struggle going on across the border between Servia and Turkey.

The area of Croatia is indeed small, even since the incorporation of the Military Frontier. It comprises only 16,773 square miles, nor can it be described as rich. The population

falls short of 2,000,000. But the National party in Croatia feels that behind it are greater forces, of which it is only one of the representatives.

The political tendencies of the Croatian population are to gravitate towards their Servian brethren. At first sight it might have been supposed that it would have been otherwise, for while the history of the Serbs belongs to the East of Europe, that of the Croatian people is knit in with the fortunes of the West. The Croatians were first converted to Christianity from Rome, the Serbs by the Greek missionaries Cyril and Methodius. The Croatians use the Latin alphabet, the Serbs the Cyrilian letters. Croatia was not included in the great Serb empire of Stephen Douchan in the fourteenth century. But here their differences end, and these do not go deep. Croatians and Serbs," says Dr. Ficker in his description of the various races inhabiting the Austrian empire, "are so closely allied to one another that while few difficulties exist in determining the frontier between them on the one hand and the Slovene and the nonSclavonic population on the other, it requires a careful inquiry to determine those existing between the two peoples themselves." The necessities of politics have completed what nature had begun. In the Hungarian the Croat of Agram sees an enemy he wishes to get rid of; the Serbs of Belgrade have a like feeling towards the Turks of Constantinople. The old Military Frontier now incorporated with Croatia is mainly inhabited by Serbs, and an

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anti-Serb policy would consequently find little or no favour at Agram. is recollected that in 1848 Jellachich, when appointed Ban, though himself a Catholic, had himself installed by the Serb Patriarch, Ragatschitch.

Two lines of policy may be said to find favour with the National party. That the day is not far off when the Turkish empire will break up is admitted on all hands. Who will then be the heir of the Sublime Porte, so far as Turkish Croatia, the Herzegovina, and Bosnia are concerned those "Hinterländer Dalmatiens," which are absolutely necessary to her development? Some of the politicians at Agram would reply Croatia, and would see in such an annexation the means of strengthening themselves against the Diet of Pesth, while maintaining the connection if not with Hungary at least with the House of Hapsburg. This solution would have for its chief supporters the Roman Catholic section of the population. Others, believing that the Dualistic system would yet be too strong for them, look forward to the day when there shall be one great Croat-Serb empire, with its centre at Belgrade. And hence it is that some of the leaders of the National party at Agram so frequently spend no inconsiderable portion of the year in prison, and that Austrian statesmen see so many objections to schemes of autonomy for the subject provinces south of the Danube and the Save.

Certain it is that whenever the Eastern Question is finally settled, the wishes and aspirations of the inhabitants of Croatia will have to be taken into account. The issues involved, like every issue which helps to constitute the great riddle now puzzling the statesmen and diplomatists of Europe, are complicated in the extreme. A separation of Croatia and Sclavonia from the crown of St. Stephen, to which they have been subject for so many centuries, is a change of such magnitude that it is not likely to take place so long as the Austro-Hungarian empire

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exists. It is an open question whether the cause of good government would be really advanced by the formation of a great Croat-Serb kingdom, at least at present. On the other hand, if Bosnia, Turkish Croatia, and the Herzegovina were placed under the dominion of the House of Hapsburg it is difficult to believe that the existing distribution of power in the Austro-Hungarian empire could be preserved, and that some hazardous federalist experiment might not have to be attempted. is this feeling which, without justifying the foolish attempts of Magyar fanatics to impose their own language on the Croats, makes their determination to subordinate the Landtag at Agram to the Diet at Pesth a matter of easy comprehension, for the question involved is to them almost one of existence. As regards Fiume and the Littoral it must be recollected that the Italians, who form the majority of the population of that district, are strongly opposed to the views of the Sclavonic agitators, whom they regard

as barbarians. If any considerable change were likely to take place in the territorial distribution of the neighbouring provinces, and the connection with Hungary were to be finally severed, an immediate movement for annexation to Italy would begin in the Littoral, and in more than one district of Dalmatia. If, however, Fiume and the Littoral were to be annexed to Italy, Trieste could hardly remain Austrian; but Germany, it is generally supposed, will never consent to Trieste becoming Italian. Thus, which ever way the look-out turns, there are breakers ahead, Scylla on one side, Charybdis on the other, and Englishmen, while watching the efforts of Continental statesmen to steer through, do so not merely as spectators of a complicated experiment in which they have no concern, but as feeling that on a successful result attending those efforts may depend the preservation of Europe an peace, and of interests which are their

own.

EDMOND FITZMAURICE.