Austrian Empire

The Austrian Empire was the result of the post-war reorganization of the former Austro-Hungarian Empire.

Aftermath of the Great War
Austria-Hungary was in dire straits by the end of the Great War. Prior to the war the empire had experienced significant industrial and economic development rising into the ranks of the top five industrial manufacturing powers in the world. Though the empire experienced relatively little destruction of its industry or infrastructure, endemic food shortages had plagued the empire throughout the war and by 1917 were reaching critical levels. Starvation was becoming a reality and in response workers were beginning to strike for food. In addition, the empire was continually plagued by internal ethnic tensions, nationalist unrest, and the resulting disunity and disorganization.

The first and biggest problem facing post-war Austria Hungary was staving off widespread starvation. This problem would be made more difficult by the loss of Galicia which had been a major agricultural region for the empire. Austria would exacerbate the already mountainous war debt by the need to import as much food as possible.

In the realm of internal ethnic strife a new solution was called for to combat the rising threat of nationalist and socialist revolutions. Emperor Karl I had always had warmer relations with the Croats than the Hungarians. The experiences of the war increased his affection and respect for the Croats and Bohemians. This respect was shown publicly when Karl I replaced Field Marshall Conrad Von Hotzendorff with Svetozar Boroevic, the first Croat to ever hold the rank of Field Marshall. Not only did this provide a new point of pride for the Croatians, it markedly improved the competence of the Austrian General Staff. Imperial internal relations with the Croats and Bohemians grew stronger, but worsened with Hungary. The Hungarian nobility feared losing their Croatian territory as well as their privileged status within the empire.

The Trialist Reform
In 1919 Karl I proposed to implement a form of the long discussed Trialist solution in an attempt to bring greater unity to the Empire. The Croatian Kingdom of Illyria would be created including Bosnia and Slavonia in its territory. The new kingdom was to be given an equal status with that of Hungary. Bohemia and Slovenia were retained under the Austrian Imperial Crown. Hungary, Slovakia, and Transylvania were retained under the Hungarian Crown. While Slavonia and Bosnia were retained under the newly created Illyrian Crown. The Dual Kingdom of Austria and Hungary would become the Triple Kingdom of Austria Hungary and Illyria.

The Trialist option had always been opposed, and vetoed, by the Hungarian nobility who didn’t want to lose their privileged status or see their political power diluted by the inclusion of the Croats. Some among the nobility now recognized the looming specter of socialist revolution as a greater threat to their position and were willing to approve a Trialist proposal in an attempt to increase the stability of the empire.

Hungarian Revolution
Karl's Reforms would prove too little too late for the disparate dissident groups within Hungary. In 1919 a revolution began led by Count Mihaly Karolyi. Karolyi had been a long time dissenter and opponent of the war, even going so far as to collaborate behind the scenes with the Entente powers. After the war he managed to form a coalition between liberal democratic revolutionaries and socialist revolutionaries. The combined forces managed to oust the current Hungarian administration and force the Prime Minister to step down. Revolutionary agents also attempted to assassinate Count Istvan Tisza, former Prime Minister, proponent of the Dual Monarchy, and one of the finest political and economic minds in Hungary. Count Tisza fled to Austria and Karolyi declared the First Republic of Hungary with himself as President.

The Hungarian revolution threw the military into turmoil as many of the Hungarian soldiers in the K.u.K. Common Army defected as did significant portions, and eventually all, of the Royal Hungarian Honved. In addition Austria was still in the grip of both material and manpower shortages from the Great War. There was little appetite for a protracted civil war. As a result after some initial attempts to put down the revolt, Karl I opted to withdraw from Hungarian territory and not contest the new Republic’s existence. The loss of Hungary would exacerbate food shortage problems further as well.

Imperial Reform Conference
For Austria, once the Hungarian Revolution had become a fait accompli, the most pressing issues of the day became to end the ruinous food shortages and to figure out the practical implementation of the Trialist solution that the emperor had announced in 1918. Karl I created a series of councils and conferences of political theorists and economists to formulate a plan for the reorganization of the empire.

Count Tisza was initially of a mind to retire from political life, having been forced to leave his beloved Hungary and seeing it fall to the hated socialists. He had also been in conflict with Emperor Karl I prior to the end of the Great War, which had led to his resignation as Prime Minister of Hungary. Supporters of the status quo, however, saw Count Tisza as a valuable asset and pushed for his inclusion in the Trialist conferences.

In the subsequent debates the two great issues were the land question and the question of local autonomy. In the compromise of 1867 Hungary had been granted local autonomy and had thus been given a completely separate and autonomous government, united with Austria only in foreign policy and military affairs. The Trialist solution, in principle, had meant extending this same local autonomy to the Croatians under the new Kingdom of Illyria.

In addition, many of the empire’s citizens were peasant farmers who worked on lands owned by the aristocratic elite. For the Croatians this had been a mixture of Hungarian and Austrian nobility. The primary demand of this peasant majority was the desire to own their own lands. The leftist agitators who had most of their constituents among the factory workers of the cities, had long attempted to gain the support of the rural peasant populations with promises of land redistribution.

The situation had changed considerably with the Hungarian revolution and Hungary’s subsequent exit from the empire. The Dual Monarchy had essentially come to an end and thus in a certain sense the Trialist solution had become simply another Dual Monarchy. In addition, Hungary lost all of its former territories in Croatia and the Hungarian nobility had been dispossessed. This meant that the Emperor effectively had lots of Croatian land to dispose of.

The proponents of the status quo essentially favored the solution of simply creating a new Dual Monarchy with the Croatian Kingdom of Illyria taking the place of the former Kingdom of Hungary. They also wanted the former lands of the Hungarian nobility to be returned to those nobles who had fled from Hungary and the rest made available for purchase.

Another faction proposed creating a federal state with Austria, Bohemia, Slovenia and Croatia each having a national assembly. The national assemblies would run the local states, and the federal parliament would legislate for the federal super state with the Emperor acting as the Executive. This group favored allowing the land redistribution question to be settled by the national assemblies.

The Emperor himself was a devout Catholic and was desirous of implementing the Church’s social teachings. He was particularly interested in the teachings of Rerum Novarum and commissioned a panel of political theorists and economists to provide recommendations on how the principles of Rerum Novarum might be implemented in the reformed Austrian empire.

The Emperor wanted to reconcile three primary concerns, equity for all parties to bring about an end to ethnic and class strife, a system which would support the modernization of the military, and the preservation of Imperial authority and prerogatives.

In a surprise move, Karl invited Count Tisza to participate in the Rerum Novarum Commission. A staunch Calvinist, Tisza had little religious sympathy for Rerum Novarum, and he did not like its apparent support of restrictions on the free market. He did, however, like that the document not only recognized but insisted that cooperation between the classes was possible and indeed essential to a good society. He himself had always insisted that the idea of necessary class conflict as a historical construct was nonsense. Though he had never favored any kind of land reforms, he did recognize that there were important benefits to be found in depriving the socialists of one of their key propaganda points, especially in light of having lost his beloved homeland to a Soviet revolution.

The recommendations of the Rerum Novarum commission were extremely controversial and strongly opposed by the entrenched nobles who wished to maintain the status quo. They were dealt a significant blow, however, when Count Tisza unexpectedly came out in favor of the recommendations.

In the end Karl’s proposals won the day and led to the establishment of a political and economic system unique in Europe.

Economic Reforms
Economically, no property would be forcibly redistributed. However, strong economic, and particularly tax, incentives would be used to encourage the break up of large land holdings and loans would be made available to peasants desiring to buy their own land. A similar system of incentives and disincentives would be used to reshape the model of industry from a pure capitalist system to a distributed capital system in which worker ownership through a guild structure was promoted. For further information see Austrian Distributism.

Political Reforms
Politically the empire would be reorganized into three Kingdoms, Austria, Bohemia, and Illyria. Each Kingdom would have its own parliamentary body, local judiciary, and constabulary. The internal domestic affairs of each Kingdom would be handled by these national governments.

Over all the Emperor would promulgate a new Imperial Constitution that would define and limit the powers of the national assemblies. The Imperial Constitution would guarantee minority rights in the nations, as well as retain control of macro-economic, finance, foreign policy, and military matters in the hands of the Imperial government.

An Imperial Parliament would be established to enact laws and recommend policy for the empire. Representation in the Imperial Parliament would be established by a new class system. The voting citizens of each nation would be enrolled in a class based on their occupation or state in life and would elect representatives for their class to the Imperial Parliament. The recognized classes would be Nobility, Commerce, Intellectual, Religious, Agrarian, Labor, and Technical. Illyria and Bohemia would provide two representatives from each class for a total of fourteen representatives while Austria would get three representatives from each class for a total of twenty one.

Implementation
The reorganization conferences would suffer repeated delays due to the troubles faced by post-war Austria. Food shortages were made worse by the loss of Hungary, which had been the empire’s primary agricultural producer. The war debt of Austria was massive and paying it, combined with the limited reparations imposed by the Treaty of Brussels caused a series of inflationary crises.

In addition the conference debates had been widely publicized and propaganda from all sides routinely sought to stir up public outrage. Frequently enough this succeeded and further delayed a resolution. By 1922, however, things had begun to normalize. Karl I concluded the conferences and began to move forward with implementing the reorganization of the Empire.

The opponents of the new reforms, ranging from the nobles and capitalists to the socialists launched seemingly endless propaganda attacks and opposed every step along the way. The implementation of the reforms was further delayed by the Austro-Italian War in 1925.

After the war, the reorganization of the empire continued as planned. The first phase of implementation involved new elections to form the new national assemblies and the roll out of a high tax rate on large land holdings. This first phase also announced a five year window during which companies involved in industrial production could transition to the new Private / Corporate / Guild model, after which high tax rates would be levied against all still holding the Corporate designation.

The first consequence of the new policies was a decline in agricultural land prices as many large land-holders scrambled to sell, flooding the market. This would stabilize, however, as peasant farmers began to buy up land using government loans. The issuance of the Land Loans caused the last of Austria's post-war inflationary crises.

The economy as a whole, suffered instability as a number of industrialists and capitalists sought to move their businesses and assets to other countries. In addition, the influx of money from government loans would reignite inflation problems.

There were also problems caused by large landholders trying to circumvent the new land taxation rules by reclassifying all of their land as non-agricultural and kicking out all of the tenant farmers etc. For many of the common people, however, the reforms of the new system had become a rallying point amidst the desperate hunger and supply shortages that plagued post-war Austria.

After this initial rough period, however, the disruptions began to ease and the Austrian economy began to show modest but steady growth.

Inflationary Crises
During the war Austria had abandoned the Gold Standard and financed much of their war effort by the issuance of War Bonds. Both during and after the war, the Austrian government paid these debts by simply printing the necessary money. This resulted in rampant inflation. During the war, consumer prices rose to sixteen times their prewar values.

First Crisis
The first inflationary crisis following the war gradually worsened over the course of three years from 1918 through 1920. As war debts came due, Austria printed more and more money to pay the debts. In addition, the Empire was desperately trying to import more food in an effort to end critical food shortages. To this end, the government printed more money to spent internationally.

The result was that the Austrian Krone (Crown) was progressively devalued both internally and internationally. In 1919 about fifty paper Kronen were equal to one prewar gold Krone. By mid 1920 it took two thousand paper Kronen to equal one prewar gold Krone. At this point much of the war debt had been paid with inflated currency and the food shortages had begun to ease, bringing an end to Austria's money printing spree. Confidence in the currency was severely damaged, but from late 1920 through 1921 the Krone stabilized and even began to recover some of its value.

Second Crisis
The second inflationary crisis followed closely on the heals of the first and was the direct result of Austria's return to printing money as a strategy to make their reparation payments. Austria's deferred reparation payments were scheduled to come due in 1923. The treaty obligations mandated that the reparations could not be paid in Austrian paper Krone. In an effort to come up with the hard currency necessary to make the payments, Austria began buying as much foreign currency as possible.

This sudden spending spree quickly reignited the inflation that had previously stabilized and the Austrian paper Krone quickly became completely worthless in the international markets. Internally the government attempted to limit the impact of inflation by imposing price controls but these met with very limited success and only prompted the growth of barter economy and black markets.

By this 1923 confidence in the Austrian paper Krone was completely destroyed both internally and externally. It had also become clear that Austria would be unable to meet the full obligations of their reparations payments without help.

With strong economic recoveries under war in England and the United States, financial interests in those countries feared that an Austrian default would harm the global economy. This enabled Austria to secure favorable loans from a consortium of American and English banks. Famously as part of this deal, Emperor Karl put up several Hapsburg family treasures as collateral.

The Austrian Empire used these loans as backing to issue a new currency. In 1923, Austria issued the new Kaiserlich Krone, or Imperial Crown. The new Imperial Krone was issued at one Imperial Krone to ten thousand paper Krone.

Third Crisis
The third and final inflationary crisis occurred in 1926 when the government began issuing Land Loans to peasant farmers to enable them to buy their own lands.

The new economic and social reforms included tax incentives and penalties designed to break up the large landholding of the noble class and enable the peasant farmers to actually purchase the land they lived on and farmed. This program essentially funneled large amounts of cash from the government into the hands of the nobility. This initially had little impact on the lower classes and average citizens as it didn't substantially increase the demand for common consumer goods.

Upon receiving this influx of cash, the nobility tended to follow one of three courses of action. Some, who were particularly angry over the reforms, simply left the country taking their wealth with them. This resulted in a significant increase of Austrian currency being spent abroad, thus lowering the value of the new Imperial Krone internationally. Others spent their money as quickly as they received it on luxuries. Lastly, some either hoarded their cash or invested it.

The net result of all this was that the Imperial Krone lost about half it's value internationally from 1926, gradually recovering over the next decade. The cost of luxury goods and services in Austria significantly increased, causing a subsequent boom in luxury industries.

The effects of the devaluation of the Imperial Krone internationally rippled through the Austrian economy. Imports became more expensive, which in turn caused increases in the cost of many manufactured goods.

In the short term, strong inflation hit only a few specific sectors of the economy, leaving most people relatively unaffected. In the long term, this crisis resulted in a decade of moderately high inflation and slowed economic growth.

Austro-Italian War
In may of 1923 the new fascist government of Italy occupied the Papal territories secured by the Lateran Treaty. The Vatican itself was invaded by fascist Blackshirts and the pope had been forced to flee into exile.

Though Austria was just beginning to climb out of the post-war troubles, Emperor Karl I saw himself as the last great Catholic Monarch of Europe and as such obliged to come to the aid of the Church. When the pope, now in exile, made a plea for aid and international action, Karl I went to the Imperial Parliament and asked for a declaration of war on Italy.

Between just beginning to recover from the post-war shortages and economic woes and beginning planning for the Imperial reforms, it took Austria some time to mobilize the military. As a result the first real assault on Italy could not be launched until late fall. Rather than invading during the winter the Austrian high command decided to delay until spring and use the extra time to thoroughly stage and supply the invasion forces.

During this time the Pope also called for volunteers and declared the formation of an International Catholic Volunteer Corp. Although the Pope did not officially use the term, many traditionalists took to calling this a new crusade. The surviving Swiss Guard took the opportunity to bolster its numbers. In addition many Monarchist French, Irish, Bavarian, and Polish volunteers flocked to the new Catholic Volunteer Corp. The Palatine Guard was also retrained and rearmed to form an effective fighting force on a modern battlefield.

Extra time for the Austrian and Papal forces was also extra time for the Italian fascists. When the offensive was finally launched in the spring of 1924, it found the Italian forces well prepared and dug in. During the spring and summer Austrian forces could make little headway.

The war ended with Austrian victory in 1926. Austria reclaimed territories lost to Italy in the Treaty of Brussels and Italy was broken up.

Post-War Economic Boom
In 1928 an economic boom had begun in the major industrial powers, Great Britain, Germany, and the USA, as well as in South America. Growth came somewhat slower to the Austrian Empire, but by 1933 the economy was experiencing excellent growth. Partially due to the French economy still languishing, Austria would vie with Japan for ranking as the 4th biggest industrial economy in the world.

Succession and Mid-Century Diplomacy
In 1936, having finally set the empire on a stable footing for the future, Karl I of Austria would die of heart failure and pneumonia. Karl would be remembered as a peace maker and a ruler devoted to the good of his people. Karl’s eldest son Otto would succeed him and become Emperor at the age of 24.

Otto had just finished his PhD in Political Science from the University of Louvain when his father died and he ascended to the Imperial throne. He was a strong proponent of cooperative relations among the European powers. While at university, Otto had met Luis Prince Napoleon. The two developed a friendship that would continue when each became the leader of their respective nations. This friendship was further bolstered by Otto's opposition to the French lead Comintern and its many sponsored radical and subversive member organizations around the world.

Austria would maintain close ties with the Third French Empire through out the 20th century and into the age of stellar colonization.

Relations with Germany were initially tense following the conclusion of the Great War. Many in Germany regarded Austria both as the reason they were brought into the war in the first place and as a contributing factor to their loss. Otto pursued a renewal of ties with the young Kaiser Wilhelm III and once economic prosperity returned, Austria and Germany were able to strike mutually profitable trade agreements.

Military Reforms
Austria's military performance in the Great War, with a few exceptions, was something of an embarrassment. This continued a trend of military under-performance going back to the Austro-Prussian War of 1866. Even before the Austro-Italian War, Karl I had undertaken to reform the Military. The improvements of the initial reforms were evident in the victory over Italy. This victory also did much to restore morale in the Imperial Army.

Otto V resumed comprehensive military reforms in 1938.

Space Race
In 1940 the Imperial government contracted with the Falkenberg (Monfalcone) Shipyard to begin work on an Austrian space program, the Agentur Kaiserliche Astronautik. The first AKA space-flight launched in 1944.

The AKA began building an Austrian orbital space station in 1951 and completed the station in 1958. One year later Austrian explorers established a mining outpost on Ceres and began mining in the asteroid belt.

1968 Austrian colony on Callisto

1969 Bonapartist enclave in Callisto colony

Discovery of Triangulum
In 1960, Austrian miners of the Solar Mining Guild discovered deposits of a previously unknown element. Initial research on the element proved dangerous as the element was only stable at very low temperatures. A serious accident early in research resulted in an explosion that had unexpected side-effects. In the aftermath of the accident Austrian scientists found that the space-time continuum was unstable in the area where the explosion had occurred and there was evidence of other dimensions intruding into our universe.

Further research would lead to the conclusion that there were three universes interacting, including our own 'prime' universe. The new element had the unique property that it existed in all three universes at once, as a result it was named Triangulum. The new element would prove to be an unparalleled energy source. Triangulum would be the first step in the revolution of space travel that would lead eventually to stellar colonization.

Austrian scientists initially studied Triangulum in secret, but before long the discovery was published and samples were provided to German, British, and American scientists as well. Austria would begin exporting Triangulum in 1962, leading both to an economic windfall for the Austrian Empire, and also to a revolution in power generation and propulsion in space travel.

Ancient Ship Discovery
In 1961 Bonapartist French explorers discovered a large object orbiting below the upper cloud layer of the Jovian atmosphere. In a daring salvage operation they managed to tow the object out of Jupiter’s atmosphere. It turned out to be an ancient ship of unknown origin. The Bonapartists didn’t have the resources necessary to exploit their find and as a result they partnered with Austrian interests to study the ship and attempt to reverse engineer its technology. This joint effort was codenamed Project Dreadnought.

The joint Austrian-Bonapartist salvage and research project would, in 1963, be organized under a Guild charter as the Altair Kaiserliche Gilde / Altair Imperial Guilde (The Guild of the Imperial Eagle). One of the first products offered for sale by AKG was advanced radiation shielding. Within a few years, AKG also offered significantly improved sub-light propulsion engines. In 1970 AKG began manufacturing artificial gravity tech.

Stellar Colonization
The Austrian Empire and the Third French Empire became wealthy off of Triangulum and the technological advances made by AKG's Project Dreadnought. Their technology revolutionized space travel and became indispensable for any nation wishing to produce modern space faring vessels. The British Solar Commonwealth struck a deal with the Austrians to exchange their Faster Than Light drive technology for Artificial Gravity tech.

The Austrian-Bonapartist shipyard at the Calisto colony began building their first FTL capable ship in 1971. Over the next three years the Austrian Empire worked to put together a colonial expedition, and in 1974, the Austrian Colonial Expedition claimed the Cygni Tau and Epsilon 451 Systems. Epsilon 451 was renamed to Karlsberg and became the first colony site of the Austrian Empire.

Cyngi Tau would become the second colony site, renamed to Altair.