Henryk Grossman Works, Volume 4: Writings on Economic and Social History 9004678581, 9789004678583

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Henryk Grossman Works, Volume 4

Historical Materialism Book Series Editorial Board Loren Balhorn (Berlin) David Broder (Rome) Sebastian Budgen (Paris) Steve Edwards (London) Juan Grigera (London) Marcel van der Linden (Amsterdam) Peter Thomas (London) Gavin Walker (Montréal)

volume 292

The titles published in this series are listed at brill.com/hm

Henryk Grossman Works, Volume 4 Writings on Economic and Social History

By

Henryk Grossman Edited and introduced by

Rick Kuhn Translated by

Dominka Balwin Ben Fowkes Rick Kuhn

leiden | boston

Library of Congress Cataloging-in-Publication Data Names: Grossmann, Henryk, 1881-1950, author. | Kuhn, Rick, 1955- editor. Title: Henryk Grossman works. Volume 4, Writings on economic and social history / by Henryk Grossman ; edited and introduced by Rick Kuhn ; translated by Dominka Balwin, Ben Fowkes, Rick Kuhn. Other titles: Writings on economic and social history Description: Leiden ; Boston : Brill, 2023. | Series: Historical materialism book series, 1570-1522 ; volume 292 | Includes bibliographical references and index. Identifiers: lccn 2023030152 (print) | lccn 2023030153 (ebook) | isbn 9789004678583 (hardback ; alk. paper ; vol. 4) | isbn 9789004678590 (ebook) Subjects: lcsh: Galicia (Poland and Ukraine)–Economic conditions. | Austria–Economic conditions. Classification: lcc HC340.3.Z7 G3447 2023 (print) | lcc HC340.3.Z7 (ebook) | ddc 330.9438–dc23/eng/20230713 lc record available at https://lccn.loc.gov/2023030152 lc ebook record available at https://lccn.loc.gov/2023030153

Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill‑typeface. issn 1570-1522 isbn 978-90-04-67858-3 (hardback) isbn 978-90-04-67859-0 (e-book) Copyright 2023 by Rick Kuhn. Published by Koninklijke Brill nv, Leiden, The Netherlands. Koninklijke Brill nv incorporates the imprints Brill, Brill Nijhoff, Brill Schöningh, Brill Fink, Brill mentis, Brill Wageningen Academic, Vandenhoeck & Ruprecht, Böhlau and V&R unipress. Koninklijke Brill nv reserves the right to protect this publication against unauthorized use. Requests for re-use and/or translations must be addressed to Koninklijke Brill nv via brill.com or copyright.com. This book is printed on acid-free paper and produced in a sustainable manner.

Contents Acknowledgements

ix

Introduction 1 Rick Kuhn Section 1 The Area of Galicia After Its Occupation by Austria 30 Section 2 The Industry and Trade Policies for Galicia of Maria Theresia’s and Joseph ii’s Governments, 1772–90 (A Lecture at the Fifth Congress of Polish Lawyers and Economists) 37 Section 3 Official Statistics of Galicia’s Foreign Trade to 1792 71 Section 4 Austria’s Trade Policy, with Reference to Galicia during the Reform Period 1772 to 1790 85 Preface

87

Introduction 91

part 1 The Relationship with the German-Slav Hereditary Lands of the Monarchy, 1772–76 1

The Provisional Form of the Customs System, 1772–73 121

2

The Reform of Old Polish Legislation, 1774 134

3

Special Privileges Granted to Improve Galician Trade, 1773–75 152

4

Plans for a New System of Regulating Galicia’s Relationship with the Hereditary Lands, 1775–76 176

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part 2 Galicia’s Relationship with Poland, 1772–90 5

The Significance of the Vistula Trade Route to Gdańsk for Galicia 187

6

Attempts to Conclude a Trade Treaty with Poland 190

7

The Trade Treaty of 15 March 1775. Its Ratification. The Tariff of 1 October 1776 230

8

Supplementary Provisions 237

9

The Implementation of the Treaty. An episode of Tariff War. The Extent of Austrian-Polish Trade Relations 242

part 3 Galicia’s Relationship with the Hereditary Lands and Hungary, 1776–84 10

The ‘Provisional’ Tariff of 28 December 1776 255

11

The Galician Tariff of 3 January 1778 266

12

The Struggle over Brody’s Privileges, 1778–79 298

13

Livestock Export Policy and the Organisation of the Cattle Trade 1772–90 309

part 4 The Austro-Prussian Relationship and the Struggle for Supremacy in Germany between 1772 and 1790 14

The Economic Background to the Antagonism between Austria and Prussia 325

15

Prussian Policy on Trade between Galicia and Silesia 334

16

Prussian Policy on Trade between Galicia and Gdańsk 339

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17

Austria’s Attitude to Prussia. The Period under Maria Theresia, 1773–80 348

18

Continuation. The Period of Joseph ii, 1780–90

358

part 5 Galicia’s Relationship with the Hereditary Lands and Hungary, 1784–90 19

The Tariff Reform of 1784 381

20

The Extension of the Reform 402

part 6 Galicia’s Trade Relations with the South and the South-East, 1772–90 21

The Effort to Open New Export Routes through Trieste 413

22

Trade with Turkey and to the Black Sea. The Trade Treaty of 1 November 1785 with Russia 423

Final Observations 438

Appendices Appendix 1: Some Remarks on the Relationship between the State and the Nobility 465 Appendix 2: Joseph ii’s Economic Policy in Hungary 475 Appendix 3: The Tariff of 2 January 1778 477 Appendix 4: The Promotion of Linen Exports 479 Appendix 5: The Official Language 481 Section 5 The Beginnings of Capitalism and the New Mass Morality 486 References 501 Index 523

Acknowledgements Family and close friends have underpinned my physical and emotional wellbeing, in circumstances which have not always been rewarding for them, with love and generosity and thereby sustained the project of Grossman’s Works. Comrades in Socialist Alternative and the organisation as a whole provided political inspiration and a sense of perspective on the (in places arcane) content of project. Monica Mayer Segal kindly gave permission for me to quote from the manuscript memoirs of her grandfather, Herman Thorn. Librarians at the Australian National University have facilitated access to research materials used in this book and the project’s three previous volumes. The project was supported financially and in other ways by the Australian National University, until late 2020. At that point continued support, apart from library access, was denied, without explanation.

Introduction Having spent most of his time over the previous four years providing practical and theoretical leadership in a revolutionary Marxist organisation, in late 1908 Henryk Grossman moved from his hometown, Kraków, in Galicia, the Austrianoccupied Province of partitioned Poland, to Vienna where he began a new phase in his life. He had just completed his final university examination and been granted his doctorate in law (which was a first degree). On 1 December Henryk and Janina Reicher, an artist from the Russian-occupied part of Poland, married in the Austro-Hungarian capital. He soon began work on the higher doctoral thesis (Habilitationsschrift) which was the gateway to an academic career and would also improve his chances of securing a senior public service post. But the move did not mean that Grossman had abandoned his Marxist politics. He did not sever his ties with the Jewish Social Democratic Party of Galicia, the organisation he had co-founded: comrades were urged not to send him and Janina expensive congratulatory wedding telegrams but to donate to the Party’s press fund instead and (at least formally) he remained a member of the Party’s executive. That was still the case even when he moved further west to Paris, on what a relative described as ‘a honeymoon that lasted two years’.1 In February 1910, he gave a talk on the economic history of the Jews in Galicia at the Ferdinand Lassalle Club, which jsdp members in Vienna had set up. In October that year, he telegrammed his greetings to the Party’s Fourth Congress and was re-elected to its Executive. Only a year later was an Executive which did not include the jsdp’s founding Secretary and theoretician elected. This, the fourth volume in a series of Henryk Grossman’s works, contains studies of the transition between feudalism and capitalism. The first four sections were fruits of Grossman’s research for his higher doctorate, on the economic history of Galicia, written between his departure from Kraków and 1913, starting with a brief article about the area of Galicia at the time of its annexation by Habsburg Austria, in the first partition of Poland. It is followed by a lecture outlining Grossman’s arguments about the development of Galicia’s trade and industry during the two decades after its annexation and another short article analysing Galicia’s early trade statistics. These were preliminaries to the next section, Grossman’s substantial book focussed on Galicia’s trade over the same period. The final section in the volume is an essay on early capit-

1 Thorn 1962.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_002

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alism and ideology, which amounts to a very effective refutation of Max Weber’s influential The Protestant Ethic and the Spirit of Capitalism.2 The first volume of Grossman’s works was made up of essays, letters, manuscripts and monographs on economic theory; the second, writings which were primarily political; the third, a full translation of his best-known work, The Law of Accumulation and Breakdown of the Capitalist System, Being also a Theory of Crises.3 Contrary to the content foreshadowed in the first volume, this one does include Grossman’s conference address on Habsburg industry and trade policy for Galicia. The series, thus far, has not encompassed works concerned with the history of science, because the most significant of them have already appeared together in English;4 his primarily statistical studies;5 nor many manuscripts, drafts and notes, in widely divergent states of completion, held by the Archive of the Polish Academy of Science in Warsaw.6 The following sections indicate the context, in Grossman’s life and other writings, of the works in this volume; outline the arguments in each of the studies, their reception, relevance and validity; and explain the conventions used in this book.

Contexts Chaskel Grossman was born in Kraków to a Jewish family in 1881.7 His parents came from the town of Tarnów in Galicia, a province primarily inhabited by Poles, Ukrainians and Jews. But they had moved to Kraków, the cultural capital not only of Galicia but the whole of partitioned Poland. Sara Grossman, née Kurz, Chaskel’s mother, came from a family of entrepreneurs. His father Herz, was also a businessman. Upwardly mobile, the Grossmans assimilated to Polish high culture. So Chaskel grew up in a household whose language was Polish, rather than Yiddish, the mother tongue of most Galician Jews. Both Herz and

2 Weber 2001. The book ‘undoubtedly ranks as one of the most renowned, and controversial, works of modern social science’, Giddens 2001, p. vii. Similarly Barbalet 2007, pp. 7, 14. 3 Grossman 2020e. 4 In Freudenthal and McLaughlin 2009. 5 Grossman 1911a; Grossmann 1911b; Grossmann 1913; Grossmann 1916a; Grossmann 1916b; Grossman 1917; Grossman 1920; Grossman 1921; Grossman circa 1921; Grossman 1922; Grossman 1925. 6 Apart from the translations of manuscripts and correspondence in the first two volumes of this series, a few further manuscripts in German have been published in Grossmann 2017. 7 Unless otherwise indicated, information below about Grossman’s life is from Kuhn 2007. His most significant writings are mentioned in the following biographical sketch.

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Chaskel were known as Henryk, a Polish rather than a traditional Jewish name, and Sara as Salome. The younger Henryk and his younger brother Bernard, who did not even have a Jewish name on his birth certificate, had a privileged, academic education in Polish, at the Święty Jacka Gimnazjum (St. James High School), rather than a traditional Jewish one. The Grossmans’ prosperity insulated them, to some extent, from the consequences of widespread antisemitism. For a while, their home was a symbol of their social situation. They lived in a well-to-do area between the Kazimierz, the Jewish quarter, and Kraków’s old inner city. In one respect, however, Herz/Henryk and Sara/Salome had an unconventional relationship. Perhaps because, in the process of cultural assimilation, they no longer regarded a Jewish wedding as sufficient8 or because Henryk senior was someone else’s husband when he and Sara started living together, their civil marriage only took place in 1887, three years after the birth of their last child. Henryk senior died in 1896. Salome and her children moved to a large, multi-story apartment building, which she owned, just inside the Kazimierz the following year. Henryk junior had become a socialist during the year of his father’s death, while still at school, and was soon involved in organised socialist activity. Straight from school, in the winter semester of 1901–02, he started attending Kraków’s ancient Jageillonian University, taking courses in the faculties of law and philosophy. He joined and soon played a leading role in Ruch (Movement), the main organisation of radical and socialist university students in Galicia, and was also a member of the Polish Social Democratic Party of Galicia (ppsd). This Party, whose leaders oriented to the distinctly nationalist Polish Socialist Party (pps) in the more industrialised Congress Kingdom of Poland, a province of Russia, was the local component of the federal Austrian Social Democratic Party. Grossman expanded his involvement in socialist politics from activity among students to organising Jewish workers, whose first language was usually Yiddish. He began by hanging out in cafes frequented by Jewish workers and starting conversations. These efforts gave rise to Postęp (Progress), a general association of Jewish workers with socialist politics. The project expanded and intersected with similar efforts by students and a few veteran Jewish, socialist workers in Lviv, Galicia’s administrative capital and largest city. The ppsd, however, generally neglected work amongst Jewish workers, except when it was a matter of garnering votes before elections. There was friction between the Party and the mainly young, Jewish activists. Eventually, in March 1905, the

8 This possibility became apparent to me after the publication of Kuhn 2009.

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third Galician Trade Union Conference, which was effectively controlled by the Party leadership, moved to disband the general Jewish workers’ associations, now present in several towns and cities across the Province. These associations had also become centres for the organisation of many Jewish workers into industrial unions. In the face of the ppsd leadership’s neglect of Jewish workers and hostility to the activists who were successfully organising them, they began planning the establishment of a separate Jewish socialist party in 1904. Their model was the General Jewish Workers’ Union in Lithuania, Poland and Russia, known as the Bund, which was then the largest Marxist organisation in the Russian Empire. The Jewish Social Democratic Party of Galicia (jsdp) announced its existence on May Day 1905. It claimed about 2,000 members and immediately sought affiliation with the General Austrian Social Democratic Party. From its foundation the major political force in the Province’s Jewish working class, within a few months, the jsdp’s monthly publication had become a weekly newspaper, the Sotsial-democrat. Henryk Grossman was the jsdp’s founding secretary and leading theoretician. In the political atmosphere heightened by the revolution of 1905–07 across the border in the Russian Empire, the Party established union branches and recruited Jewish and, in some cases, Christian workers into the Vienna-based central (social democratic) trade unions; led strikes and boycotts; helped build rallies and marches for equal, universal male suffrage for the Austrian parliament; and, after that had been achieved, mobilised support for ppsd candidates in elections of May 1907. Even before the elections and influenced by the defeat of the Russian revolution, Austrian employers regained confidence and became more aggressive; working-class struggles subsided and were increasingly defensive. While remaining on the jsdp’s executive, during the winter semester of 1906–07 Grossman handed over his posts of Party Secretary and responsible publishing editor of the Sotsial-demokrat and went to Vienna, where he attended the seminar of the social and economic historian and theorist Carl Grünberg, the first Marxist professor at a German language university. Grossman was prominent in the jsdp’s 1907 election campaign in Galicia.9 After his return to Kraków, he wrote an historical and analytical account of the emergence of the jsdp, Bundism in Galicia, serialised in the Party’s newspaper and then published as a pamphlet.10

9 10

See, for example, Grossman 2020c. Grossman 2020d.

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Janina Reicher witnessed Grossman’s arrest, after giving a fiery speech in Kraków against the Austrian government. She was impressed and sent him ‘a package of candies’ while he was still in police custody. Janina and Henryk fell in love. She was year and a half younger than him, a Jewish painter from a very wealthy family in Russian-occupied Poland, studying at Kraków’s School of Fine Arts.11 Although Grossman successfully completed a law degree in 1908, he had no intention of setting up in legal practice. Encouraged by Carl Grünberg, he aimed to pursue an academic career. After settling in Vienna, he began meticulous archival and other research for his higher doctoral thesis on Austria’s economic policies for Galicia during the late eighteenth century and the first stage of the transition from feudalism to capitalism there. Grünberg had conducted extensive research on the economic history of Austrian provinces, particularly the transition from feudalism to capitalism, and had an interest in the history of socialism. His higher doctoral research had been guided by Georg Friedrich Knapp of Strasbourg University, an important proponent of the Younger Historical School of economics, whose founder and most prominent figure was Gustav Schmoller.12 The School stressed the importance of detailed empirical research and was critical of efforts to identify economic laws, made by the Classical School of Adam Smith and David Ricardo; their marginalist successors (with Stanley Jevons, Léon Walras and Carl Menger at their head); and also Marx. Grünberg and his students published further historical studies of major economic developments in different Austrian provinces and related issues.13 During the first decade of the twentieth century, at the latest, his evolution towards Marxism, far from a good career move, was apparent in his writings on social theory. While Grossman was engaged in research, supervised by Grünberg, there were long struggles in the University over the proposal to appoint his mentor to a full professorship, which eventuated in 1909, and then to a professorial chair. In 1912, the chair finally offered to Grünberg was in modern economic history rather than, more appropriately, political economy. Only in 1919, after the revolution which brought down the Austro-Hungarian Empire and when

11 12 13

Thorn 1962. Grünberg 1893–94. On Grünberg’s relationship with the Historical School see Redl 2004. See, for example, Grünberg 1901, 1902 and 1911; Přibram 1907; Cronbach 1907. Before he went over to the Austrian school of economics, Ludwig von Mises (1902) published his higher doctoral thesis, written under Grünberg’s supervision, on The Development of the Lord-Peasant Relationship in Galicia. Otto Bauer (1976), a former student of Grünberg, also contributed to this tradition.

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a social democrat held the education portfolio in a coalition government with bourgeois politicians, was Grünberg’s formal disciplinary competence extended to economics. Politically, he came out fully that year, by joining the Austrian Social Democratic Workers Party.14 Janina’s and Henryk’s son, Jean Henri, was born on 16 October 1910, while they lived in Paris, where he researched15 and she made connections that enabled her to exhibit works at the Salon d’Automne in 1912 and 1913. On their return to Vienna they were accompanied by a French nurse.16 ‘The industry and trade policies for Galicia of Maria Theresia’s and Joseph ii’s governments, 1772–1790’ (the second work by Grossman, below) was an overview of Grossman’s research project, presented in 1911 as a lecture at the fifth conference of the Polish Lawyers and Economists in Lviv. It expressed the intention to publish the results of his research in two books. The principal work which resulted from Grossman’s investigations in Vienna, Paris, Kraków and Lviv, Austria’s Trade Policy for Galicia during the Reform Period, 1772–1790, was completed before September 1913 and was published the following year. In several places, the book foreshadowed a sequel, on the development of capitalist relations of production in Galician industry, that never appeared.17 Grossman’s book employed the meticulous research methods of the Historical School, inherited from Grünberg. Its epigraph was a quotation from Schmoller, quite compatible with Marxism. Several citations of studies by Schmoller, including major works, followed, compared to a single reference to a newspaper article on Austria’s maritime trade by Marx. But for Grossman, unlike Grünberg, the Historical School was not a way-station to Marxism but rather camouflage for his pre-existing Marxist perspective. Austria’s Trade Policy presented an historical-materialist analysis in a superficial Historical School disguise. This camouflage served to reduce the possibility that Grossman’s early academic (or public service) employment would meet with the same hostility from conservatives that Grünberg had experienced. His low political profile in Vienna also helped. 14 15

16 17

Stamm 2009, pp. 93–4. Grossman referred to sources in the archive of the French Ministry of Foreign Affairs not only in the second and fourth works by him in this volume, but also in Grossmann 1911 p. 57; and Grossmann 1916a, pp. 397–8. Thorn 1962. Such unfulfilled promises of sequels were a pattern in Grossman’s work, from his first known publication in 1905, a pamphlet on the Jewish question (Grossman 2020a, p. 47); through his 1911 essay on the area of Galicia, in this volume; and an essay on academic attitudes to Marxism in Poland (Grossman 1923); to his most influential work, on crisis theory, in 1929 (Grossman 2020e, p. 48).

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Kraków was a long way from Vienna. Grossman may have participated in the small jsdp-associated Lassalle Club beyond a public lecture he delivered for it. And he may have been involved in the socialist-oriented People’s University of Vienna and the Social Science Education Association, of which Grünberg had been a founder.18 When he lived in Warsaw later, Grossman was certainly involved in running a similar institution there, as a Communist front organisation. Mutual hostility between the founder of the jsdp and leaders of the German-Austrian Social Democratic Workers Party meant that he was not a member of that organisation, which was hegemonic in the Empire’s Germanspeaking working class. Following his conscription into the Austro-Hungarian army and initial training in 1915, Grossman served on the Russian front. From the field he was appointed to a post with the Scholarly Committee for the War Economy of the Ministry of War, in Lublin, the administrative centre of former Russian territory of occupied Poland, now under Austrian control. In December 1917, after the Bolshevik Revolution, he was summoned to be a specialist on economic aspects of peace negotiations with Russia, in the War Economy Section of the War Ministry, in Vienna. Six months later he was working for the Scholarly Committee again, still in Vienna. During the War, Grossman demonstrated that he was not only academically competent (a status enhanced by an academic study of the history of Austrian official statistics published in 1916) but was also capable of practical statistical studies, including estimates based on limited data. Not long after hostilities ceased, he was on the verge of appointment to a post with the Central Austrian Statistical Commission. But the coalition government of rump Austria, under social democratic chancellor Karl Renner, passed a racist citizenship law. There was a purge at the Statistical Commission and Grossman, having been designated a Pole, was no longer eligible for appointment there. He moved to Warsaw, but before taking up residence in the city, delivered a presentation on Marxist crisis theory to the Polish Academy of Sciences in Kraków, in June 1919. In the capital of Poland, independent again, Grossman was employed as a senior specialist in the Polish Central Statistical Office (gus). He was in charge of the new Polish Republic’s first population census, a massive undertaking. While working for gus, Grossman published several articles in its journal. Apparently under the influence of the October revolution in Russia, he embraced the Bolsheviks’ strategy for the achievement of

18

Stamm 2006, p. 5.

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working-class self-emancipation; as the logical corollary, he joined the Communist Workers Party of Poland (kprp). From the gus, which he left over pressure to fudge census results in favour of the country’s Polish majority and against national minorities, Grossman took up a professorial post in economics at the independent Free University of Poland, in 1921. He taught several courses, and published major studies of the Swiss economist and litterateur Simonde de Sismondi’s economic theories and the censuses of the short-lived Napoleonic Duchy of Warsaw. As a result of his membership of the illegal kprp and the literary and administrative tasks he undertook for the Party and its front organisations, Grossman was arrested several times and imprisoned, on one occasion for eight months. He negotiated a qualified exile, which allowed him to visit Poland for two weeks a year, so long as he was not politically active. On that basis he moved to Frankfurt am Main in 1925, to work as an assistant of Carl Grünberg, now the Director of the Institute for Social Research, and at the city’s university. There, despite the opposition of the Prussian police and provincial authorities, Grossman was awarded the degree of higher doctorate in 1927; Austria’s Trade Policy was recognised as his higher doctoral dissertation. In Frankfurt, he published his best-known work, The Law of Accumulation and Breakdown of the Capitalism, as well as several essays on Marxist economic theory. Politically he remained an apparently uncritical supporter of the Communist International and a discrete fellow-traveller of the Communist Party of Germany (kpd), both subordinated to the Russian Communist Party and then the state capitalist regime under Stalin, which had emerged by the end of the 1920s from the defeat of the revolution. After Hitler was handed power in 1933, Grossman moved to Paris, while most other members of the Institute for Social Research, now under Grünberg’s successor the philosopher Max Horkheimer, soon went into exile in the United States. When Walter Benjamin had failed to deliver,19 Horkeimer commissioned Grossman to write a critical review of a book, Franz Borkenau’s The Transition from the Feudal to the Bourgeois Worldview. The review, in its house journal, enabled the Institute to distance itself from this severely flawed work, which it had subsidised. Written in Paris during 1934, Grossman’s review article was, in its own right, a superior and important study of the history of science, compared with Borkenau’s effort. There was only room in the journal for some of the results of the substantial research project he had undertaken for his review,

19

Benjamin 1978a, p. 561; and Benjamin 1978b, p. 624.

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‘The Social Foundations of Mechanistic Philosophy and Manufacture’. The project was an expression of Grossman’s continuing interest in the transition to capitalism. An essay, ‘The Beginnings of Capitalism and the New Mass Morality’, not included in the article, amounted to a devastating critique, based on primary sources, of Max Weber’s argument about the relationship between Protestantism and capitalism, on which Borkenau had uncritically drawn. The essay was published first, in an English translation, in 2006; a German text was only published in 2017.20 A new translation is the final section below. Hitler’s rise to power and the disaster of the Comintern’s and kpd’s sectarian ‘Third Period’ policies, which had failed to orient the German Party for an effective struggle against fascism, led Grossman to adopt a much more critical attitude to Stalinism. In Paris he associated with a group of former kpd members who had become leaders of the Socialist Workers Party. Its origins were in a split to the left from the Social Democratic Party of Germany in 1931. But he later swung back to supporting the Soviet Union’s foreign policy, hence also the positions of the Comintern, apparently influenced by its zag from Third Period denunciation of social democratic parties as ‘left fascist’ to the zig of Popular Front pursuit of alliances with bourgeois parties, and Russian support for the Republican side in the Spanish Civil War. Yet he continued to advocate his contributions to Marxist economics, even though their denunciation by Jenö Varga, Stalin’s lieutenant in economic theory, had become an orthodoxy in the international communist movement. Concerned about the prospect of war and the inadequate collection policies of the French National Library, for the purposes of his economic research, Grossman moved to London in early 1936. Among other studies, he began to write an article to celebrate the seventieth anniversary of the publication of the first volume of Marx’s Capital, in 1937. This drew on earlier research and eventually gave rise to a monograph, in 1942, and a two-part article, in 1943, after Grossman had moved to New York in October 1937. Both examined Marx’s relationships and innovations compared with his most important predecessors in economics. Marx, Classical Political Economy and the Problem of Dynamics also offered an important critique of contemporary, mainstream economics. In the United States, after World War ii, Grossman completed a further study in the history of economic thought, published in England in 1948. He also continued his research into the history of science and to write a substantial manuscript, which provided a materialist account of René Descartes’s contributions to mathematics.

20

Grossman 1934; Grossman 2006; Grossmann 2017.

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Differences over politics and the management of the Institute for Social Research’s US incarnation led Grossman to minimise his collaboration with it, although he remained on the payroll. Suffering ill-health and disturbed by the increasingly vicious anti-communist climate in the USA, Grossman took up a chair in political economy at the University of Leipzig, in the Russian-occupied sector of Germany in 1949 and did a deal to separate entirely from the Institute. He joined the Socialist Unity (i.e. Communist) Party and was enthusiastic about the ‘construction of socialism’ but his efforts to have a collection of his essays republished were unsuccessful. Nor were any of his works re-issued in East Germany after his death in 1950.

Grossman’s Arguments in His Galician Studies The Habsburgs in the late eighteenth century ruled an economically, linguistically and culturally diverse hodge-podge of territories in western, central and eastern Europe. The head of the family held lands as King, Archduke, Grand Duke, Duke, Grand Prince, Margrave, Princely Count and Count, in parts of what is now Belgium to territories in modern Ukraine and Italy. The male head of the House of Habsburg or, when Maria Theresia inherited her father’s domains in 1740, her husband, was also the Emperor of Germany, over most of which they were not the sovereign. Capitalist economic activity was relatively advanced in parts of the Austrian Netherlands, while most of the population in the Habsburgs’ eastern provinces were feudal serfs. Their largest and most populous territories were the Kingdoms of Bohemia, now in the Czech Republic, Hungary and, from 1772, the Kingdom of Galicia and Lodomeria. The Habsburg Monarchy suffered military defeats and the loss of important, economically productive territories in Silesia to Prussia during the War of the Austrian Succession (1740–48), over Maria Theresia’s right to rule her House’s lands. She failed to retrieve these territories during the Seven Years War (1756– 63), which involved most of the major states in Europe. Prussia remained the Habsburgs’ most significant rival throughout the period covered by Grossman’s Galician studies and competition with Prussia shaped Austrian policies for the Province. In the first partition of Poland, extensive territories of the Polish-Lithuanian Commonwealth were annexed by House of Habsburg, Russia and Prussia. The Habsburg acquisition in the south and south-east, which had not previously been a single administrative unit, was dubbed the Kingdom of Galicia and Lodomeria, generally referred to as simply Galicia. Today the west of the

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Province is in Poland, the east in Ukraine. Galicia was added to the Habsburgs’ ‘Hereditary Lands’, which Grossman usually referred to as all its other diverse possessions, with the exception of the Kingdom of Hungary and the territories of the Military Frontier (with the Ottoman Empire). Maria Theresia and her son Joseph ii, who was co-ruler with her from 1765 and sole ruler after her death in 1780 until his own a decade later, modified feudal relations in Galicia and improved the position of the bulk of the serf population. In particular, Joseph abolished personal serfdom (Leibeigenschaft), a status which differed little from slavery, across his territories in 1781–82. These steps were motivated by the desire to establish the authority of the central state, as against the aristocracy; and to promote economic development, particularly tax-raising capacity and productivity, in order to strengthen the state in competition with rivals. They were also justified in humanitarian terms.21 Hardly had the implementation of Joseph’s most radical measures, which further eroded the feudal rights and practices of the nobility, begun than they were reversed after his death. Legal serfdom, including the remaining peasant obligations to perform labour services for the feudal lords, was only fully abolished in Habsburg territories in 1848. The Size of Galicia after Its Occupation by Austria Lack of clarity about the size of Galicia on its annexation prevailed at the time and subsequently. An early task in Grossman’s research was to establish exactly how large the Province was. Drawing on archival and published sources, he worked backwards from its current size through a series of border changes to Galicia’s original dimensions. The Industry and Trade Policies for Galicia of Maria Theresia’s and Joseph ii’s Governments While Grossman’s first substantial publication on the history of Galicia, his 1911 lecture in Polish, foreshadowed his book, it had a wider scope and was the result of an early stage in his research. Compared to Austria’s Trade Policy, it was more focussed on arguing with a Polish audience and, closer to the period of his deep involvement with jsdp, paid proportionately more attention to the treatment of Galician Jews. The lecture was divided into three sections. The first argued that there was no evidence to support the dominant account of Galicia’s history, which expressed the viewpoint of the Polish nobility, that Habsburg policy simply

21

For an overview of Maria Theresia’s and Joseph’s reforms see Scott 1990.

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treated the Province as a market for the industries of the Monarchy’s Hereditary Lands. On the contrary, on its annexation, Galicia was transferred from an economically stagnant, anarchic feudal state to one subject to mercantilist policies, which sought to promote economic development. Grossman compared the goal of these policies as a revolutionisation of social relations, in the direction of capitalism, with the scope of the transformation of society envisaged in the programme of contemporary socialism. The lecture’s second section outlined Galicia’s backwardness and Maria Theresia’s economic policies for her new Province. Its urban population was tiny. Jews were the most significant group living in towns and were predominant in trade. Maria Theresia implemented measures to promote Galicia transit trade; create a domestic market; develop export markets; reform guilds and import skilled workers; and replace the urban Jewish population with Christians. A more detailed account of Habsburg economic policies and an assessment of their success constituted the final, longest section. Attempts to promote Galicia’s export trade had some success in relations with the rump of the PolishLithuanian Commonwealth. But trade on what had been the main routes to the world market was throttled by Prussian control of most of Silesia and a stretch of the Vistula. Primitive riverine transport and political instability meant that efforts to expand trade to and through the Ottoman Empire achieved little success. Tariff reforms to sustain and promote the transit trade through Galicia to Poland, Russia and Ottoman lands, and the west, actually initiated at the expense of industry in the Hereditary Lands, were successful, as was the encouragement of exports to other Habsburg territories. These measures reduced the central government’s income, and included free fairs and the granting of exemption from tariffs to Brody and later Podgórze. Industry policy for Galicia passed through two stages. Essential preconditions for industrial development had to be established first. This was undertaken between 1772 and 1784, by focussing on trade and the creation of the necessary infrastructure of financial and legal institutions, as well as a supply of labour available for employment, and the expansion of consumption and markets. The Monarchy encouraged the growth of the urban population, which was subject to moderate taxation, and the migration of skilled craftspeople and their families, who were exempt from conscription for a period. Where possible, the government, particularly the army, engaged in local procurement to satisfy its needs. Transport was dramatically improved through the construction of sound roads and bridges, while a regular and relatively cheap postal service was set up.

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The next stage saw the integration of Galicia into the tariff area of the Hereditary Lands, excluding Hungary, and active promotion of specific industries and particularly large enterprises, through subsidies, bounties and other incentives. But the regime hindered another source of industrialisation: the nascent putting-out system, the control of cottage industry by merchants who provided craftspeople with raw materials and purchased their output. The merchants and money-lenders in Galicia, with the potential to evolve into productive capitalists, were overwhelmingly Jews, who suffered from official discrimination. It can be added that they were excluded from some occupations, even by Joseph ii’s reforms that introduced a degree of toleration and culminated in the Edict of 1789, the year before he died.22 In 1787, Galicia still imported foodstuffs but had notable manufactured exports, an indicator of the success of the government’s industry policies. The main obstacles to industrial development were Prussian trade policy, lack of urban capital and labour, the repression of the Jews, and the hostility of the Galician nobility and their conservative allies within the state bureaucracy. In the jsdp’s newspaper, Sozial-demokrat six years earlier, Grossman had already briefly made the argument that the nobility in Galicia had stood in the way of the Province’s economic development.23 During the late eighteenth century and subsequently, industrial development in Galicia developed in parallel with that in Austria. Both suffered when reaction triumphed in Vienna, after 1792. Official Statistics of Galician Foreign Trade to 1792 The very primitive structures of the Polish state meant that it took time for the Austrian regime to establish institutions capable of collecting trade statistics. Using the fragmentary material for several years, which survived in archives, including tables of customs receipts, Grossman described the value, direction and development of Galicia’s foreign trade, concluding that it tended to expand during the first two decades of Austrian rule. This 1913 study was published in the journal of the Central Austrian Statistical Commission. Austria’s Trade Policy, with Reference to Galicia during the Reform Period 1772 to 1790 Preface In the preface to his book on Habsburg trade policy for Galicia, Grossman explained that it was the first instalment of a larger project on Galicia’s eco22 23

‘Patent. Kraft welchen den Juden alle Begünstigungen und Rechte der übrigen Unterthanen gewähret sind’, Edicta 1789, pp. 90–100. Grossman 2020b.

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nomic development under Maria Theresia and Joseph ii (as sketched in his lecture). An understanding of the Province’s external trade relations was a necessary preliminary to discussion of the development of its domestic market. His warning that ‘the presentation here suffers on the one hand from being overburdened with detail and on the other hand from frequently only being able to offer overviews’ did not just apply to the sketch of overall Habsburg policy, while detailed accounts of relevant policies, their implementation and effects constituted the bulk of the book. It was also particularly true of the (implicitly) Marxist framework outlined in the preface and occasionally glimpsed later in the empirical body of the work. Grossman provided a study of an early phase in the transition to capitalism in Galicia. Maria Theresia’s and Joseph’s policies, Grossman maintained, promoted the transition from feudalism to capitalism. In Galicia, Jewish merchant and usurious capital began to develop modern industry. Joseph, Grossman misleadingly stated, granted Jews equal rights. While the monarchs’ trade policy broadly accorded with mercantilist doctrine, that positive balances of trade should be secured through the encouragement of domestic industry, their agrarian policy was physiocratic in complexion. The physiocrats emphasised the fundamental importance of agriculture and the establishment of arrangements which gave peasants incentives to increase their productivity. These policies were, however, complimentary. The abolition of serfdom and Joseph’s other attempted agrarian and tax reforms would have created free wage labour available for employment in industry, propelled the peasantry into the money economy and created a market for industrial products. Introduction Polish contemporaries were not the source of the legend that Habsburgs’ initial and subsequent policies in Galicia were responsible for the Province’s backwardness.24 On the contrary. In an historiographical survey, Grossman traced its origin back to Konstanty Słotwiński in 1819. From then on, it was repeated without reference to any evidence. The alternative view although also articulated was less prominent. But from the 1880s it gave rise to a more critical assessment of the nobility: ‘the barren witlessness and reactionary character of the nobles’ policy and the harm it did to the Province’, a point elaborated in the book’s first appendix. Until Grossman’s research, however, with the excep-

24

Grossman’s first known published work was directed against another legend, of the superiority of Polish over backward Yiddish culture, Grossman 2020.

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tion of Władysław Szumowski’s study in the area of public health, the legend had not been refuted by detailed archival research. After his historiographical survey, which indicted the viewpoint of the Polish nobility, Grossman emphasised that his study was an economic one that did not prejudge the effects of the Austrian occupation of Galicia on the Polish population’s national interests, presumably as far as culture and language were concerned. Immediately after annexation, the regime sought information about Galicia as the basis for sound policies. The first instructions to administrators there were inspired by mercantilist desire to increase the Province’s trade and industry, ordering them to promote industry, agriculture and trade, including by means of free trade arrangements with Poland, if they could be agreed with the Polish Republic. The government also called for the establishment of public education, enforcement of laws against the abuse of serfs and even consideration of the abolition of serfdom and the introduction of private property in land. In contrast to the situation in Hungary (discussed at greater length in the second appendix), where unlike Galicia after its annexation the nobility had continued to be exempt from taxation and retained a formal role in government, there was no evidence of any intention to suppress industry in the Habsburgs’ new Province. Part 1 The Relations between Galicia and the German-Slav Hereditary Lands of the Monarchy, 1772–76 Grossman proceeded to describe the evolution of tariff administration and trade relations between Galicia and the Habsburgs’ principal German and other Slav lands to 1776. The regime’s policies sought to sustain and expand the Province’s external trade, especially with Poland, as there was very little local industry or internal trade. With the same intent, Brody, the pivot of the transit trade to the east, was exempted from the Province’s tariff arrangements, and annual trade fairs, likewise free of customs duties, were established in other towns. In order to sustain its foreign trade and against the interests of industries in the more economically developed Habsburg territories, Galicia was not integrated into the tariff system of the Hereditary Lands, even though its continued exclusion severely limited customs revenue. Part 2 Galicia’s Relationship with Poland, 1772–90 Feudal agriculture and other industries in Galicia had long been dependent on trade down the Vistula to Gdańsk and the world market. Since the partition, the route passed through foreign Polish and then Prussian territory. For this reason the Austrian regime sought free trade along the Vistula. While a favourable treaty, though not free trade, was achieved with Poland, in 1775, Prussia

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instituted what was close to an economic blockade on the Vistula, by means of high tariffs and the chicanery of its customs officials. Part 3 Galicia’s Relationship with the Hereditary Lands and Hungary, 1776–84 It was decided to maintain Galicia’s special status when a common tariff system was introduced for the Habsburgs’ principal German and Slav territories in 1775, in order to sustain the viability of the Province’s foreign trade. Proposals to incorporate Galicia into that system were rejected because the common tariff system’s prohibition of many imports would have been very burdensome there, without promoting the development of local production, given the Province’s economic backwardness. Incorporation into Hungarian tariff arrangements was also rejected because it would have entailed exempting the Galician nobility, which favoured this solution, from taxation, like the Hungarian nobility; and because, as in Hungary, Galician trade and industry would not receive the Monarchy’s support. The regime particularly promoted the export of Galician cattle and Galicia’s transit trade in livestock. Unlike grain, this product of Galicia’s overwhelmingly agrarian economy had previously been mainly exported to the west, rather than down the now economically blocked Vistula, and there was demand for it in the Hereditary Lands. Part 4 The Austro-Prussian Relationship and the Struggle for Supremacy in Germany between 1772 and 1790 Efforts to secure Galicia’s trade along the Vistula were unsuccessful, a victim of Prussia’s favourable geographical situation and the rivalry of its ruling House of Brandenburg with the House of Habsburg. Attempts to overcome this problem by means of a trade treaty with Prussia and, by securing Habsburg dominance in the Electorate of Bavaria, using diplomatic and military methods, failed. Prussia had no interest in making trade concessions and the Habsburgs were unsuccessful in the War of the Bavarian Succession of 1777–78. Nor did the Russo-Austrian treaty of 1781, which was primarily directed against Prussia, as far as the Habsburgs were concerned, yield the desired fruit of an exchange of their territories in the Netherlands for Bavaria. Part 5 Galicia’s Relationship with the Hereditary Lands and Hungary, 1784–90 The progress made in the establishment of a sounder economic infrastructure in Galicia and the failure to open export routes by undermining Prussia’s strategic advantages in Germany, Grossman argued, led to a shift in Joseph’s economic policies for Galicia. He incorporated the Province into the tariff system

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of the Hereditary Lands in 1784 and shifted away from trade policy as the prime means of promoting the Galician economy, to a far more active policy of supporting industrial development there. The legend included the assertion that Galician manufactured goods had to be sent to Vienna to be stamped before they could be sold, even in Galicia. Grossman demonstrated that this was a fiction. Furthermore, Brody’s free trade status was continued, to sustain Galicia’s transit trade, and Podgórze and Biała were granted the same privilege. Part 6 Galicia’s Trade Relations with the South and the South-East, 1772–90 The regime in Vienna was also at pains to develop new export routes for Galicia, through the port of Trieste on the Adriatic, and through Ottoman territories. The first achieved positive results, from a low base. The limited trade to the east expanded a little until the Habsburg–Ottoman War of 1788–91, which was largely a consequence of the Habsburg Monarchy’s treaty obligations to Russia. Final Observations In conclusion, Grossman summarised the evidence demonstrating that, far from undermining the Galician economy, favourable development was promoted because of ‘the energetic and uninterrupted efforts of the government, which embraced all sides of economic life’, under Maria Theresia and Joseph. Polish nobles propagated the legend because they resented their loss of privileges after the partitions and were, with minor exceptions, entirely uninterested in the development of Galicia’s trade, beyond that in grain and grain spirits, or of its industry. They were particularly hostile to Joseph’s complementary tax and agrarian reforms, which would have created a free peasantry with access to land. Together with members of their class in other Habsburg territories, they eventually overturned these reforms before they were fully implemented. Joseph’s policies were also met with opposition and sabotage from sections of his own bureaucracy, allied to the nobility. Estate fragmentation in Galicia under the old Polish Republic had undermined grain production for export on the basis of serf labour. The mercantilist policies applied for eighteen years in newly acquired Galicia under the Habsburgs were, Grossman argued, a logical response to this decline in productivity. In the spirit of long-term historical-materialist analysis, the conclusion of his book ended with the observation that ‘the mercantilist economic policy of the Austrian government in the newly acquired Province, taken as a whole and leaving aside minor errors, was historically inevitable and therefore justified. It had every possibility of success and was therefore useful in essence and desirable from the standpoint of Galicia’s own interests’.

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Receptions and Appraisals Austria’s Trade Policy was widely and mainly positively reviewed, which must have pleased its author and improved his prospects of gaining an academic or senior public service job. In five mainstream German, Italian and English journals, reviewers, including members of the historical and Austrian schools of economics, praised the book for its scholarship. An article in a sixth, by Leonhard, Rudolf, made extensive use of Grossman’s work to refute the legend that Maria Theresia and Joseph ii had contributed to Galicia’s backwardness. In contrast, Mario Alberti’s review was critical of Grossman’s lack of Polish national spirit and defended the legend simply by listing the Polish authors whom Grossman had explicitly refuted. Karl Přibram, another protégé of Grünberg who worked in the Central Austrian Statistical Commission and also taught at the University of Vienna, lavished praise on the work, lent it a contemporary Austrian imperial colouration and looked forward to its sequel.25 In the journal of Grossman’s political opponents in Austrian Social Democracy, there was a politically hostile review. Jakob Pistiner was a leader of the social democratic movement in Bukovina and, from 1913, the representative of its Jewish Section on the Executive of the jsdp. Pistiner was, no doubt, aware of Grossman’s Marxist politics but warned readers that the book ‘has to be read critically, because it is not based on the materialist conception of history’ and mendaciously asserted that it explained Joseph’s policies in Galicia in terms of ‘the Kaiser’s good will’ rather than ‘the deeper economic connections and necessities’.26 Much later and accurately, however, Grossman explicitly claimed that his study was ‘written from the standpoint of historical materialism’.27 The most substantial response to Austria’s Trade Policy, came in 1916 from Franciszek Bujak, an economic historian at the Jagiellonian University in Kraków, in the premier journal of Polish history.28 He was the reviewer most familiar with the period and sources of Grossman’s study. But he was not entirely disinterested. Bujak was an antisemitic Polish nationalist, associated with peasant co-operatives and, at the latest by the 1920s, the peasant-oriented Polish People’s Party ‘Piast’. And he resented the footnote which stated that he had drawn on Grossman’s 1911 lecture, asserting his own priority in identifying the promotion of industry by the early Austrian regime in Galicia.

25 26 27 28

Leonhard 1917, pp. 429–32; Alberti 1914; Přibram 1916. Also see Fay 1915; Rachel 1914; and Srbik 1916. Pistiner 1915. Grossmann 1949, p. 64. Bujak 1916.

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Although Bujak agreed with one of Grossman’s fundamental arguments, that Joseph attempted to promote Galicia’s industrial development, his review was a hatchet job. There were, according to Bujak, many flaws in Grossman’s book: it neglected Galicia’s internal trade; did not draw on the archives of the Province’s Governor in Lviv or the Prussian state archives; was repetitive and poorly structured; lacked a subject index; dealt with some important matters only in footnotes; included far too much detail; discussed some matters, which Bujak regarded as significant, too little; and was disrespectful of previous Polish scholarship. In order to denigrate the book, the review railed against Grossman over differences in emphasis, occasional exaggerations, minor points of interpretation and, from the start of Grossman’s preface, obstinant misconstrual of its contentions. Employing an antisemitic trope, the review characterised criticism of the Polish nobility’s failure to expand the raising of livestock to meet demand in the imperial capital as ‘not an argument in a work of economic history, but more like a paragraph from an article by a Viennese journalist from Galicia’. But soon, in his monographic survey of Galician economic development, Bujak drew on Grossman’s results and conclusions about the development of industry.29 Yet Bujak also raised substantive issues in his review. Although he objected to Grossman’s rather favourable treatment of Maria Theresia’s and Joseph’s policy towards Galician Jews, in order to cast the old Polish Republic in a more favourable light, his point had some merit. Maria Theresia was hostile to Jews. She imposed new legal and financial burdens on Galicia’s Jews. Joseph improved their legal situation in some respects, while undermining it in others, notably by imposing German on them, in a Province where most of the population spoke Ukrainian or Polish, and depriving documents written in Yiddish or Hebrew of any status before the courts. Jews were still subject to special taxes and legally forbidden from holding feudal leases for taverns in which Christians drank, land or grain mills; the only exception was that leasing of entire manors could continue.30 Grossman’s judgement in his lecture had been that ‘repressive economic policies with regard to Jews’ was ‘the fundamental mistake in [Habsburg industry] policies, which caused the Province immeasurable damage’. Austria’s Trade Policy recapitulated the point that Jewish merchants were in the position to become a nascent productive capitalist class. While discrimination against

29 30

Bujak 1917, pp. 12–3, 59; Bujak’s bibliography included Grossman’s lecture but not his book. See the ‘Toleration Patent’ of 1789, which consolidated, modified and extended earlier regulation of Galician Jews, Edicta 1789, pp. 90–100.

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Jews was mentioned, the overall assessment in the preface stressed the beneficial consequences of Joseph’s grant of ‘equal rights’ to Jews. It is true that moves towards equal civil rights improved Jews’ capacity to accumulate and invest, including in the putting-out system, which would have promoted the development of capitalism. But Grossman did not state that Joseph failed to establish full legal equality between his Jewish and Christian subjects. Grossman’s work has been a source for details of Austrian trade policy for Galicia and Galician trade in subsequent works touching on the topic.31 There has also been acceptance by some Polish historians of the conclusion that Maria Theresia and Joseph promoted the Province’s economic development.32 But the legend of their hostility to growth of industry there has also lived on. In his ‘social-political’ history of Austrian Galicia to 1848, Stanisław Grodziski, for example, maintained that ‘the Austrian regime did nothing to support the economic development of Galicia and Joseph’s colonisation was not intended so much to develop the trade and industry of the Province as to Germanise it’. Furthermore, ‘The Viennese Court … did nothing to raise the Province out of the economic crisis which was deepened further by severing it from its natural economic hinterland of the Vistula region and artificially integrating it with the provinces of the Danube basin’. Even the myth that Galician manufactures had to be stamped in Vienna before they could be sold has survived. An effort to restore the honour of the nobility in this respect adduced no material in support for the period of these Monarchs’ rule and scant evidence for the period before railway construction began in the 1840s.33 Employing a world systems theory framework, Klemens Kaps produced valuable treatments of Galician economic development, which included extensive references to Grossman’s empirical findings. Kaps recapitulated Grossman’s arguments that discriminatory treatment of Jews restricted the ability of Jewish merchants to evolve into capitalists, reinforcing Galician economic backwardness, as did senior Galician officials’ lack of interest in promoting industry. Concern not to undermine established industries in other territories; very limited interest outside the Province in investing there; and Joseph’s 31

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E.g. Rutkowski 1953, p. 552; Glassl 1975, pp. 17, 23, 50, 61, 66–7, 80, 91, 93; Sharlin 1978, p. 132; Carter 1994, p. 312; Kazusek 2007, pp. 53, 54, 56, 119, 123; Kaps 2015a, pp. 485, 494–7, 501; Gur 2011, passim; Kuzmany 2017, pp. 18, 19, 22, 24. Rutkowski 1950, p. 100. Grodziski 1971, pp. 296, 299. The only reference to a work by Grossman in Grodziski’s book was to the short study of the area of Galicia. Ślusarek 2010, passim, recapitulated the myth, p. 32. Bujak 1916, pp. 51–2, using the same principal primary source, had already defended the Galician nobility specifically against Grossman’s alleged calumnies. Also maintaining the legend, for example, see Biskupski 2018, p. 27.

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disinclination to support industrial initiatives with state funds, in any of his territories, were also factors. Grossman’s interpretation of the logic behind Galicia’s incorporation into the Hereditary Lands’ customs system in 1784 was also endorsed in Kaps’s book-length account of the period 1772 to 1914.34 Grossman’s studies of eighteenth-century Galicia were materialist analyses, which acknowledged the significance of prevailing religious and political doctrines, and the inclinations of monarchs and their senior officials, as opposed to the preoccupation with individuals and ideas widespread in the general historical literature. Referring to these studies and Grossman’s largely statistical account of the Napoleonic Duchy of Warsaw, the Polish Marxist Tadeusz Kowalik in 1971 accurately observed that ‘Grossmann was one of the first Marxist economic historians in Poland’.35 Marxist attention and debates over the transition to capitalism have tended to focus on western Europe and especially England.36 This was true of Marx and Engels, and also the debates over the transition during the 1950s and since the late 1970s.37 Absolutist states in western Europe could balance between the old nobility and the emerging bourgeoisie to enhance their own power, and in the process implement changes which favoured capitalist development. As Chris Harman put it, ‘in this period … the state does not simply adjust to advances in capitalist forms of production which had already taken place, but encourages such advances itself, sometimes from scratch’.38 The situation in eastern Europe was different: absolutism was more a consequence of military competition with rival states and less of governments’ abilities to balance between urban classes, which were weaker there, and the nobility. Nevertheless, eastern European absolutism led to the centralisation and development of more modern state structures and eventually to state initiatives which promoted capitalist relations of production, by constructing infrastructure, initiating strategic industries and liberating serfs. Rosa Luxem-

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36 37 38

Kaps 2015b pp. 127–8, 142–2, 212, 220, 232–4. Whereas Grossman demonstrated that Maria Theresia and Joseph did not intend Galicia to be, like Hungary, simply an agrarian province and market for manufactured goods from the more developed Hereditary Lands, Kaps maintained the opposite and cited Grossman in support, Kaps 2018, pp. 213–14. This was despite Kaps’s earlier observation that Grossman had rejected the notion that the intention of the regime was to treat Galicia as an agrarian colony, Kaps 2015b, pp. 382–3. Kowalik 2014, p. 178. Grossman 1925 was a study of the Duchy of Warsaw on the basis of the censuses of 1808–10. Rosa Luxemburg (2013) was Grossman’s main Marxist predecessor in Polish economic history; neither the periods nor the territories they studied overlapped. Anderson 1974 was an exception. See Harman 1989 for a splendid overview of and response to the debate. Harman 1989, p. 72.

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burg and Vladimir Lenin highlighted these developments during the nineteenth century in the Russian-occupied Congress Kingdom of Poland and Russia respectively.39 Grossman’s studies showed that reforms which favoured capitalist development in Galicia (and this was also true of other Habsburg lands) began earlier than in Russia. But the process was cut short in the Habsburg lands and its reversal began, as a result of mobilisation by the nobility and their allies in the state bureaucracy even before Joseph’s death. Grossman anticipated the work of later Marxist and other historians in several respects. Long before Georges Lefebvre and Perry Anderson, for example, he identified military competition with Prussia as a decisive factor in the formulation of Habsburg policies under Maria Theresia and Joseph ii.40 He drew attention to the way discriminatory burdens on Jews hindered the development of the putting-out system in Galicia, while Lefebvre identified the obstacles to this form of organisation in the transition to capitalist factory production and hence to the achievement of their economic goals by the absolutist regimes in Prussia, Russia and, with the failure of Joseph’s reforms of rural relations and taxation, the Habsburg lands.41 Jairus Banaji has demonstrated the economic importance of merchant capital over a prolonged period and across many areas, and its crucial role in the development of industrial capitalism.42 The Marxist investigation of the transition to capitalism in Galicia was resumed two decades after Grossman’s studies by the Trotskyist Roman Rosdolsky. In his work on the liberation of Galician serfs, Rosdolsky referenced Grossman’s explanation of the complementarity of the mercantilist and physiocratic aspects of Joseph’s policies favourably.43 Both projects reflected their personal antecedents: Rosdolsky’s in the Ukrainian peasant population’s Ukrainian Greek Catholic clergy; Grossman’s in the layer of Jewish business people. Their shared Marxist conception of the role of absolutist regimes in the transition to capitalism was expressed by Rosdolsky with particular clarity: ‘the “historical function” of enlightened absolutism’ was to prepare the way for capitalist production, which was based on the concentration of money capital, individual ownership of land and free wage labour.

39 40 41 42 43

Lenin 1960; Luxemburg 2016. For example, Marxists: Lefebvre 1964, p. 57; Anderson 1974, pp. 197, 317–18. Non-Marxists: pp. 42–3; Scott 1990, p. 181; Szabo 1994, pp. 4–6; Polonsky 2009, p. 251; Szabo 2018, p. 2. Lefebvre 1964, p. 60. Banaji 2020; Banaji 2022. Rosdolsky 1992, pp. 12, 33; Rozdolsky 1962, p. 90.

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Self-evidently, this can only be understood as the objective result of the economic policies of Maria Theresia and her son, as the promotion of capitalist production, in itself, was not at all the intention of absolution, but only a by-product of measures taken to strengthen the state’s financial capacity and, bound up with that, national wealth. With the energetic acceleration of the development of the productive forces, absolutism at the same time – beyond its particular interests – supported the development of capitalism. For a time this was even precisely one of the principal pillars of its political power, allowing it, so to speak, to raise itself above the whole of society and apparently make itself independent of the feudal estates and other layers. This happened before the critical year 1789. Shortly thereafter, ‘the thunderclap of the French Revolution’ convinced the absolute monarchy of the threat of further unhindered development of bourgeois production to its own existence and forced it to seek shelter in a partial return to the feudal past.44

Grossman’s Critique of Borkenau and Weber In ‘The Beginnings of Capitalism and the New Mass Morality’, Grossman demolished another ‘legend’. Max Weber and, following him, Franz Borkenau, had asserted ‘the special role of the Protestant ethic in the origins and development of capitalism’. The essay stressed Marx’s argument, already employed in Grossman’s study of Galician economic development in the late eighteenth century, that the bearers of capitalist development were merchants and money-lenders who invested in the putting-out system and later in manufacture. The essay made four principal points. First, when it emerged, Calvinism was not associated with the masses or the bourgeoisie but with craftspeople. It did not serve as a morality that led the masses to accept wage labour; it did not express the interests of the bourgeoisie; and capitalism did not emerge from the craft stratum. Capitalism, secondly, predated Calvinism by two centuries, ‘in Italy without any help from religious irrationalism’. Thirdly, Borkenau and Weber neglected coercion, the decisive aspect of ‘education in labour discipline’ under early capitalism.45 The second part of the essay illustrated this

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Rosdolsky 1992, pp. 12–3. Weber, a wilier writer than Borkenau, noted the existence of ‘capitalism’ in fourteenth- and fifteenth-century Florence and maintained that the Puritans took ‘part in the severe English Poor Relief Legislation’, referring to developments in the seventeenth century (2001, pp. 121, 122, 240). These precautions against objections such as those made by Grossman

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point with detailed examples from seventeenth-century France, supplementing Marx’s material on England in Capital.46 The essay’s final important point was that religion in general serves as ‘an instrument of mass domestication’ and there were Catholic currents – Molinarism and Jansenism – better suited to be mass capitalist moralities than Protestantism. Others had criticised Weber’s argument about the relationship between Protestantism and capitalism before Grossman. Richard Tawney, with whom Grossman corresponded and who later assisted him in obtaining a visa before he moved to London, did so from a materialist perspective, in a 1922 lecture series and subsequently.47 Grossman, however, made distinctive Marxist arguments about Calvinism and criticisms of Weber. In his later work, Marx had sustained the core of his early assessment of the relationship between Christianity and modern ‘civil society’ in ‘On the Jewish Question’. A discussion of religion as a reflex of the real world, in Capital for example, argued that Christianity, especially in its bourgeois variants like Protestantism, was appropriate for societies based on commodity production.48 Karl Kautsky accepted Weber’s argument that craftspeople played the decisive role in the emergence of capitalism, while rejecting his definition of capitalism and claim that Protestantism’s influence on economic life refuted historical materialism.49 Other prominent Marxist contemporaries of Grossman referred uncritically or favourably to Weber’s position or even, more often, assimilated Weber’s account to Marx’s.50 This view persisted among some Marxists.51 But, in 1961, the conclusion of Christopher Hill’s discussion of the relationship was that ‘there is nothing in Protestantism which leads automatically to capitalism: its importance was rather that it undermined obstacles which the more rigid institutions and ceremonies of Catholicism imposed’.52 And Kieran Allen’s thorough critique of Weber included some of the same refutations of the argu-

46 47 48 49 50 51 52

were flimsy. Weber used a very broad definition of ‘capitalism’, which ‘existed in all civilized countries of the earth … [i]n China, India, Babylon, Egypt, Mediterranean antiquity, and the Middle Ages, as well as modern times’, in the sense of ‘adaptation of economic action to a comparison of money income with money expenses’ (Weber 2001, p. xxxiii). Puritan ethics, furthermore, could not explain English laws against vagabondage and begging introduced in the late fifteenth and sixteenth centuries. Marx 1976, pp. 896–9. Tawney 1948, pp. xii–xvii, 319–21. Marx 1976, pp. 172–3. Kautsky 1988, pp. 356, 359–60, 369–70. Gramsci 1971, p. 338; Lukács 1971, p. 218; Bukharin 1976, pp. 154, 291; Bukharin 1935, p. 45. For example, Hobsbawm 1964, p. 17. Hill 1961, p. 35. Also see Lukács 1980, pp. 605–6, for a more schematic critique of The Protestant Ethic.

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ments in The Protestant Ethic as those in Grossman’s essay, first published two years later in 2006.53 Since it appeared, Grossman’s insights appear to have been incorporated into literature critical of Weber, thus far without challenge.54 Unlike Grossman, whose earlier Marxist critique he acknowledged, Jack Barbalet, in his valuable study of The Protestant Ethic, focussed on Weber’s arguments about capitalists’ motivation and his method rather than on mass morality.55 Other less substantial Marxist critiques of Weber were more extensively reliant on Grossman.56 In terms of historical evidence, historical-materialist method and appreciation of Marx’s views about religion, Grossman’s refutation of Weber is far more persuasive than the idea that Weber’s account is both valid and compatible with Marx’s.

Conventions In this book, geographical entities, apart from those with very commonly used English names (such as countries, capital cities, large rivers and historical provinces) or in quotations are generally designated by the names used in the countries within whose borders they currently lie. Their names in other languages, where relevant, are indicated in the index. Grossman referred synecdochically to ‘Austria’, for the Habsburg regime or territories; ‘England’, for the United Kingdom of Great Britain and Ireland; ‘Holland’, for the Netherlands; and ‘Turkey’, for the Ottoman Empire. Original texts quoted by Grossman have been modified to comply with this book’s citation and stylistic conventions. Minor errors in Grossman’s quotations, spelling of names and references have been corrected without comment. The editor has modified the initial translations in many places, with reference to Grossman’s original German and Polish publications and, wherever possible, his published as opposed to archival sources; the editor is therefore responsible for errors in translation. Where they exist, published English translations are 53 54 55 56

Allen 2004, pp. 32–46, particularly p. 46. E.g. Law 2014, p. 168.; Zafirovski 2009; Zafirovski 2018. Barbalet 2008, p. 3. Ferre 2017 was a brief but useful popular account. Longer but less substantial are Tittenbrun 2011, pp. 127–33, which quoted many of Grossman’s arguments at some length and made the peculiar criticism that both Grossman and Borkenau denied the existence of classes before capitalism; and a later essay, which went over similar ground, adding the bizarre assertion that the concept of labour power ‘plays a relatively minor role in the Marxian discourse’, Tittenbrun 2017, p. 30.

26

introduction

used in quotations and references. Other things being equal, editions available free on websites, such as www.archive.org, have been preferred for references. In the bibliography, references include the years of publications’ original editions and/or during which they were written [in square brackets], where relevant. Words in square brackets in quotations are Grossman’s, unless otherwise indicated; elsewhere they are the editor’s. Emphasis in quotations, except those in archival sources, is the original author’s, unless otherwise indicated. In quotations from archival documents, unless otherwise indicated, the provenance of the emphasis is unknown. Translations of foreign language text in the body of the book are provided in footnotes. Explanations of abbreviations and basic biographical information about people mentioned in the body of the book are provided in the index. The relationships among the units of weight, volume and currency mentioned are: 1 ship’s pound = 320 Gdańsk pounds or 330 Prussian pounds = 154.3 kilograms 1 stone = 32 Polish pounds or 24 Austrian pounds = 13.0 kilograms 1 centner = 100 Austrian pounds 1 barrel = 3 casks = 120 Maass = 170.1 litres 1 load = 60 Polish bushels [Morzec] = 120 Metz = 7,378.4 litres 1 Polish ducat = 18 Polish guilders 1 Austrian florin/guilder = 4 Polish guilders 1 Austrian florin/guilder = 60 kreutzers = 240 pennies The purchasing power of an Austrian florin in 1786 was, very roughly, equivalent to us$20/€20/au$30 in early 2020. Rick Kuhn

Giovanni Antonio Bartolomeo Rizzi Zannoni Map of Poland, index sheet, 1:2,760,000, Zannoni 1772

section 1

The Area of Galicia after Its Occupation by Austria* Translated from Polish by Rick Kuhn

The importance of and need to know about space as a social factor does not require further explanation. ‘Since permanent settlement, the territory of a given society has been the workshop of its labour. A society’s location, configuration, as well as climate, attributes and strengths condition and support its effectiveness’.1 Furthermore, in addition to this economic significance, space is a precondition for a scientific approach to social phenomena. Social life develops within states, cities, villages, counties and districts; society is not just a simple sum of individuals, but generates numerous, often smaller focal points and administrative and political, scientific, family and provincial organisations; it creates circles, layers and classes, and all these social focal points have a specific relationship to space, which can be understood numerically. So, whether it is a matter of a quantitative approach to contemporary social phenomena or historical statistics about the past chains of development, the determination of space must be the starting point for scientific research. Determining Galicia’s area at the time of its ‘reclamation’ is not as easy as it seems.2 We know, after all, that geographical knowledge in Poland was poor and even [Giovanni Antonio Bartolomeo] Rizzi Zannoni’s map, the best of those which then existed, was inaccurate.3 So neither the Delegation nor the commissioners assigned the power to ‘draw borders’ in 1773 knew exactly how much land they gave up.4 There was only general geographical information about Poland and Galicia, and even this often lacked the most basic data. Consequently [Anton Friedrich] Büsching, in his New System of Geography,5 in more than 63 pages about Poland, was not tempted to specify its area. And in his Magazine for Contemporary History and Geography stated that ‘Die an Oestreich gekommene polnische Prowinzen, enthalten nach der im Jahre 1774 * [Originally published as Grossman 1911a.] 1 Milewski and Czerkawski 1905, p. 99. 2 [‘Reclamation’ was the euphemism used by the Habsburg authorities for the annexation of Galicia from Poland.] 3 [Zannoni 1772 was a detailed atlas. See p. 28–9 for its index sheet.] 4 Korzon 1897, 1, p. 39. [Both the 1767–68 and 1773–75 sessions of the Polish Parliament, appointed a body, ‘Delegation’, to act on its behalf.] 5 Büsching 1762, pp. 567–625.

© Translated from Polish by Rick Kuhn, 2023 | doi:10.1163/9789004678590_003

the area of galicia after its occupation by austria

31

gemachten Revision, 2,700 Quadratmeilen’.6 And this cannot be regarded as a printing error (instead of 1,700 square miles), because this number, 2,700, was repeated and the population per square mile was stated to be 78711/27, which when multiplied by 2,700 results in the population of Galicia, according to him, amounting to 2,126,000 inhabitants in 1774. Following Büsching, the Political and Historical Diary in 1782 also stated that the area of the Austrian partition was 2,700 square miles.7 The well-known German physiocrat [Johann August] Schlettwein, in his memorial about Galicia in 1774, accepted that its area was, ‘certainly 2,000 geometric [!] square miles, if not more’.8 As well as these excessive numbers, others were too low. On 27 May 1772, shortly after the Austrian army seized Galicia, Prince [Wenzel Anton von] Kaunitz, submitted a description and account of the territory to the Empress, writing that ‘dieser Antheil, welcher nach unser gemachten ersten Proposition nicht viel weniger als 1000 kw. Meilen betragen dürfte’.9 Count Pergen, in his well-known memorial of June 1773, assumed that the territory was 70–89 miles long, from Biała to Podillia, and that its greatest width was 30 German miles, covering within these limits an area of 1,300–1,400 square miles. He did not know exactly for lack of a map.10 We could multiply these divergent numbers extensively with data taken from early Austrian statisticians. Instead of decreasing, discrepancies grew. Fifty years after the partition, a professor of statistics at the University of Lviv, Michael Stöger,11 calculated that the area of Galicia (excluding Kraków) and without Bukovina, was 1,373.73 geographical square miles.12 Later, [Joachim] Lelewel in his geography stated that the area of the Austrian partition was 1710 geographical square miles.13 [Walerian] Kalinka’s figure for Galicia together with Kraków after 1846, of 1,379.8 square miles, based on official lists, was incorrect.14

6 7 8 9

10 11 12 13 14

Büsching 1782, pp. 4, 7. [‘The provinces which came to Austria were, after the revision of 1774, 2,700 square miles in area’.] Pamiętnik Polityczny i Historyczny 1782, p. 214. ‘Reflexiones über die Verfassung Pohlens’, ami, ii A 2/5, p. 18. ‘A. Untert. Vortrag dto Wien 27/5 1772’, ami, ii A 2/5, ad 34 ex Majo 1772. [‘This share, which, according to the first proposal we made, should not be much smaller than 1,000 square miles’.] ami, ii A 2/5, ad 860 ex Augusto 1773, paragraph 3. Stöger 1833, 1, p. 60. [A geographical mile is the length of 1 minute of arc along the Earth’s equator.] Lelewel 1853, 1, pp. 218–19. Kalinka 1898, p. 17.

32

section 1

This state of uncertainty has persisted in our historical literature to the present. Everyone writing about Galicia provided figures for its area after the partition, no-one has been tempted to calculate it exactly. [Wacław] Tokarz cited details of the areas of a few districts; he did not think to calculate the area of the whole of Galicia.15 Father Władysław Chotkowski stated the area was 1,280 square miles in 1776, when – according to him – 120 square miles were returned to Poland (thirty something [square miles were actually] returned), so Galicia in 1772 was 1,400 square miles in area.16 [Abraham Jacob] Brawer followed on. Knowing that today Galicia’s area is 78,500 square kilometres he stated that it was around 82,000 square kilometres in 1772 and 80,000 square kilometres in 1776, after the border was demarcated,17 which would be roughly 1,489.3 square geographical miles in 1772 and 1,452.9 square miles in 1776. As we will see, these numbers are too small.18 The errors of Brawer and Father Chotkowski were more amazing because they came after a more accurate calculation by [Tadeusz] Korzon, who stated that the area of Galicia was 1,508.75 geographical square miles.19 This figure was much closer to reality, although, as we will see, it was still not accurate. Such has been the calculation of Galicia’s area to the present. Let us finally try to do the calculation accurately. Korzon included the following components in his calculation. geographical square miles a)

According to the Statistisches Jahrbuch für das Jahr 1874, the current area of Galicia, with Kraków, was b) removing Kraków and the surrounding area (which remained with Poland after the partition) leaving c) Add to this the Zamość District which was then part of Galicia So, after 1776, Galicia had a total area of

1,416.60 9.04 1,407.56 101.19 1,508.75

I will use the reduction method, based on the current area of Galicia. The numbers quoted here use accurate planimetric calculations, made in the past on

15 16 17 18 19

Tokarz 1909, pp. 34–5. Chotkowski 1909, 1, p. 46. Brawer 1910, p. 9. Calculated on the basis that 1 geographical square mile is 55.06 square kilometres. Korzon 1897, 1, pp. 44–8.

33

the area of galicia after its occupation by austria

the basis of accurate maps, by the office for administrative statistics in Vienna, under the supervision of its then director, Dr [Adolf] Ficker.20 The items considered are as follows:

a)

Contemporary Galicia including Kraków This is only since the Vienna Agreement of 9 November 1846 which annexed the Republic of Kraków to Galicia, as the so-called Grand Duchy of Kraków [whose area was] b) [So] the area of Galicia from 1815 until 1846 was From 1815 it included lands which had previously been incorporated into the Duchy of Warsaw and were returned to Austria by Russia under the Austro-Russian Treaty of 3 May, namely the right bank of the Vistula near Kraków and the Ternopil District, together c) [So] the area of Galicia before 1815 was It had this area from 1797, when Austria handed part of the Province to the Duchy of Warsaw. To obtain the area of Galicia before 1797 it is necessary to add everything Austria gave up. That is: 1) the right bank of the Vistula near Kraków and the Ternopil District, i.e. the territories returned, as above

20 21

geographical square miles21 1,425.58

22.27 1,403.31

138.62 1,264.69

138.62

Ficker 1878, p. 19 et seq. This figure is different from that used by Korzon. It is the 1,425.58 geographical square miles provided by Gustawicz 1881, p. 446. That this figure was based on exact measurement is widely recognized today. According to Gustawicz, the area of Galicia was 1,364.06 Austrian square miles. This figure is correct. Admittedly, Mitteilungen 1852, p. 1 stated that Galicia, including Kraków, was only 1,358.70 square miles in area but detailed measurement had not yet been completed for 459 Austrian square miles of Galicia. The Austrian square mile was 10,000 morgens, with 1,600 square fathoms to the morgen, the flattening of the earth [i.e. the extent to which the earth’s ellipsoid shape deviated from a sphere] was calculated to be 1/310 and its radius at the equator to be 3,362,034 Viennese fathoms, so that a geographical mile is 3,911.9 Viennese fathoms, while an Austrian mile is 4,000 Viennese fathoms. Therefore 100 Austrian square miles are 104.51 [Grossman’s text had 104.55, an error in calculation] geographical square miles, Gustawicz 1881, p. 446. ‘Ł.B.’ stated that the ‘area’ in geographical square miles was 1356.3 (Łepkowski 1861, p. 3), which is obviously a mistake. It should have been ‘Austrian’ square miles.

34

section 1

2) an area on the right bank of the San 8.67 3) the Zamość District, correctly calculated as 106.86 So Austria lost 241.15 d) Between 1776 and 1797, the area of Galicia was thus 1,518.84 This is the final and correct modern measurement for 1776 and is different from all those cited above. e) What was Galicia’s area in 1772, i.e. before the revision of 9 February 1776? Unfortunately, only the inaccurate dimensions from the eighteenth century for the fragment returned to Poland at that time are available. The Governor’s report of 18 March 177722 specifies the areas of these scraps of land surrendered to Poland, as follows. 1) part of the Bełz District (part of the subdistricts of Biłgoray, Zamość and Sokal) 33.25 2) part of the Lviv District 2.00 Total 35.25 3) In addition Kazimierz near Kraków, which, together with the area provided above, results in an area of 1,554.09, in 1772, possibly 3 square miles more if we assume that the [contemporary estimates of the] areas of the scraps returned to Poland were too small. For studies of Galicia in the eighteenth century, the area in 1776, 1,518.84 geographical square miles, is important as the territorial basis of the reforms of Maria Theresia and Joseph ii, and later to 1797. The determination the actual area of Galicia at that time does not, however, exhaust the matter; it is necessary to identify the ruling circles’ conception of Galicia’s area and the number they used in their political and economic calculations and plans. For conceptions, although erroneous, had a decisive influence on administrative relations, since the number and areas of districts, the location of administrative offices, financial offices, courts and the like depended on the conception of Galicia’s area. It influenced population policy, whose starting point was population density per square mile; the government’s trade policy, since the arrangement and size of roads and the organisation of post offices depended on this conception. It indirectly affected agrarian policy, since in the absence of the dimensions of agricultural land and soil, the concept of their

22

ami ii A 2/5, ad 11 ex Majo 1777; demarcation map attached.

the area of galicia after its occupation by austria

35

sizes was formed on the basis of general concepts of Galicia’s area. Finally it influenced a number of other important issues.23 In all these matters, the government’s policy would have been different if, following Büshing it had accepted that Galicia’s area was 2,700 square miles rather than, with Count Pergen, at most 1000 square miles. Korzon, concluded from the title of [Joseph] Liesganig’s map, which mentions that it was issued by order of Maria Theresia and Józef ii, that it was created after the border demarcation of 1776 and before the death of the Empress in 1780.24 Gustawicz briefly mentions Liesganig’s ‘geographical map of Galicia of 1790’.25 These claims are inaccurate. Work on the area of Galicia began simultaneously with the military occupation of Galicia and already on 13 May 1772 the Court Chancellery reports to the Court War Council ‘dass zur politischen Mappierung der i. Liesganig ernennet worden’,26 and in 1774 the dimensions were already calculated in principle.27 Based on these measurements, Liesganig estimated the area of Galicia in 1772 to be 1,400 geographical square miles.28 The area given to Poland under the border demarcation in 1777, according to the convention of 9 February 1776, we indicated above. From then on, the area of Galicia was determined as follows: geographical square miles According to Liesganig’s calculations, the Provinces of Galicia and Lodomeria together with the Principalities of Oświęcim and Zatorsk, before the final demarcation of the borders in 1777, had an area of

23 24 25 26 27

28

1,400.00

At the same time, identifying this conception will reveal the degree of accuracy of measurements and the extent of the error. Korzon 1897, 1, p. 46. Gustawicz 1881, p. 446. Ministerium des Innern, ‘Protocoll Galiz’, ex 1772 N 26. [‘that Joseph Liesganig was appointed to undertake the political mapping’.] ‘Darstellung der Methode welche bei Ausmessung und Zeichnung der Konigreiche Galiz. und Lodom. ist angewandt worden’, ami, ii A 2/5, ad 63 ex Aprili 1795. We will devote a separate article to the history of the first map of Galicia and to Liesganig. ‘Darstellung der Methode welche bei Ausmessung und Zeichnung der Konigreiche Galiz. und Lodom. ist angewandt worden’, ami ii A 2/5 ad 63 ex Aprili 1795.

36

section 1

the border treaty returned Galicia’s area then amounted to

35.25 1,364.75

This number was therefore used in all administrative calculations, for Joseph ii’s reform of districts and the like. This figure was 154.09 geographical square miles smaller than the actual area of Galicia at that time. Liesganig’s error was serious, amounting to 10.14 percent of the real area. Henryk Grossman

section 2

The Industry and Trade Policies for Galicia of Maria Theresia’s and Joseph ii’s Governments, 1772–90* (A Lecture at the Fifth Congress of Polish Lawyers and Economists) Translated from Polish by Dominika Balwin

1 The starting point of our argument is the assumption of the necessity of historical development, which does not, of course, occur mechanically but as a consequence of specific historical conditions. From this point of view, let us examine Galicia and Poland during the period of the first partition, the era when capitalism, in this initial stage labelled mercantilism, was beginning there. In Galicia, the policies of Maria Theresia have not previously been regarded favourably; still less those of Joseph ii. Numerous documents, since the Charta Leopoldina,1 including [Konstanty] Słotwiński’s works and especially [Walerian] Kalinka’s writings of about Galicia, with few exceptions, established the view, current to the present, that their policies were hostile to the nobility, which was in turn identified with the Province as a whole. Their policies were condemned, not only for being against the nobility but also against the towns and industry, responsible for ruining trade and emerging industry by means of fiscal stringency, customs policies and hostile industry policies. These were not imposed in the interests of Galicia but those of the Hereditary Lands. Over the past half century, an almost universally repeated opinion has become established that ‘the Austrian government, with exceptional rigour, oppressed every sign of industrial life in Galicia’,2 considering it an outlet for the industries of the Hereditary Lands.3

* [Originally published as Grossman 1911b. Grossman did not provide detailed references to his published or archival sources in this conference paper.] 1 [Ossoliński 1893.] 2 Kalinka [presumably 1891]. 3 Władisław Łoziński [presumably 1872], Dr Tadeusz Rutkowski [1883a], Schnür-Pepłowski [presumably 1895], Dr Henryk Jaworski, and Father Chotkowski.

© Translated from Polish by Dominika Balwin, 2023 | doi:10.1163/9789004678590_004

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section 2

A comprehensive examination of this period, however, has led to diametrically opposed conclusions and has demonstrated that the above opinion was incorrect. Closer scrutiny of the literature up to the present convincingly shows that there is no basis for this accusation. Not only were the governments of Maria Theresia and Joseph ii not hostile to industry but, on the contrary, they implemented highly mercantilist policies in Galicia, using all the radical methods and means typical of that system, developed earlier in the west, which we will consider below. This was only natural. Galicia, previously a part of a system that operated along the lines of anarcho-feudal development, was pushed by the catastrophe of partition into a system operating along quite different lines, of a centralistbureaucratic military state. It began to be subject to the influences of the larger organism of which it had become a part. Hence the influence of mercantilist policies. From the point of view of the contemporary Galician nobility, of course, such a change in the system of economic policy was a shocking and sudden social revolution, threatening to depose it from its previously leading social role in favour of new elements. ‘At that time, it may have been easier to be reconciled with the idea of the Province’s separation than with the liberation of the peasantry and constraints on the nobility …’4 The nobility, identifying immediate policies as the real cause of the social crisis, regarded the government as the only source of ill fortune. The matter looks different, almost a century and a half later. To gain the correct historical perspective, we must briefly recall the economic relations between Poland and western Europe. The policies of Maria Theresia and Joseph ii cannot be evaluated as isolated and artificially separated phenomena. At the point of the first partition, Poland was a feudal-agrarian country, with a largely natural economy. As a result of disastrous agrarian policies, towns collapsed completely. Exposed to the rapine and violence of the nobility, they lost their independence. The conditions for industrial development in towns were not present, the more so because there was no agent able to promote the process. The state had succumbed to complete decentralisation. There were no central administration, independent judiciary or legal protection, roads or promotion of trade. The violent and lawless nobility oppressed other social classes.5

4 Kraszewski [presumably 1902]. 5 Pawiński [presumably 1888], Bobrzynski [presumably 1879], Korzon [presumably 1897], Balzer [presumably 1891].

the industry and trade policies for galicia

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Agriculture was in an extremely critical state, even though the Republic’s entire distorted system was supposedly geared to its interests. The extensive latifundia economy and the incredible oppression of serfs caused agriculture to be ever more irrational6 and thus less productive. Three quarters of the nobility, suffering from political events, the confederations7 and the passage of foreign armies, was indebted (contractual liabilities and leases). The land of the nobility and was broken up by the inheritance law into what we would today call irrational[ly small] plots (in what was later Galicia). In this way serf labour, whose origin and historical justification was to provide forced labour on farms organised for capitalist export production,8 now, in the face of the parcellisation of the lords’ lands was transformed from an historical necessity into an historical anomaly. And with the collapse of agriculture, the structure of the Republic itself, which rested precisely on this agrarian organisation, was in danger of collapse. Under these circumstances a reaction against this agrarian trend had to occur sooner or later; and it took the form of mercantilism. At that time large states, under strong monarchical rule emerged in western and central Europe. But this was not their only essential characteristic. Large states have appeared in history more than once. What characterised them now was the fact that they created uniformly organised economies, removing provincial and urban distinctions. This was the task of mercantilist theory as well as state policy. The mercantilist desire to accumulate reserves of gold, exaggeratedly derided so often, is a caricature of mercantilism rather than deep analysis of its essence. For it was the reaction against the natural feudal economy; it was not about amassing gold, but rather facilitating more rapid internal circulation, an index of the exchange of commodities, which in turn was also correlated with producing not to satisfy the producers’ own needs but capitalistically. Mercantilism was something more than a narrow doctrine and the limited practice of commercial policy: ‘The essence of the system lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties or navigation laws; but in … the total transformation of society and its organisation … in the replacement of a local and territorial economic policy by that of the national state’.9

6 7 8 9

Bobrzynski [presumably 1879]. [Confederations were formed by members of Poland’s aristocratic elite in the pursuit, often armed, of specific goals against royal authority.] Grünberg [presumably 1893–94]. Schmoller [1896, p. 51]. This stress on the distinctive essence of mercantilism is all the more

40

section 2

In short, the aims and tendencies of the mercantilist system constituted such a radical and comprehensive revolution in the existing relations of production, exchange and the whole social order, that it can only be compared with the revolution in current relations envisaged by the programme of contemporary socialism. As no reconstruction of societies ever occurs peacefully, this was still less to be expected at the start of the transformation from a social order with centuries of tradition. As at present, the strata and circles whose very essence was at that time threatened with displacement from their control over and dominant social position, in favour of new elements began to defend themselves. That was natural, as was the ultimate result of this historical process of the internal reorganisation of states. ‘The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several Estates’. This was primarily ‘[t]he struggle against the great nobility, the towns, the corporations, and provinces, the economic as well as political blending of these isolated groups into a larger whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform laws and uniform administration, for freer and more active traffic within the land’.10 Such was the general and necessary trend in the west. It would have been the same in Poland, had political circumstances not held back the further development of [social] relations. Can we imagine, even for a moment, that Poland could have remained a feudal-agrarian state? Like the contemporary capitalist system, encompassing ever widening circles, drawing in ever more states into its sphere of influence, the mercantilism of those times had similarly expansionist tendencies. Sooner or later, it would have broken through into Poland. So we would also have had state support of trade and industry in Poland. It would have been necessary to centralise and create a bureaucracy; to reform

10

necessary, in order to avoid misunderstandings, since some of our writers (Szelagowski [1902]) discourse at length and broadly on the topic of mercantilism in Poland and the nobility’s mercantilist policy, already during the sixteenth and seventeenth centuries. Szelagowski admitted that it only consisted of the facilitation of raw material exports [!] and the desire to bring money into the country in exchange for them and that there was no mention of prohibiting foreign products or of supporting domestic industry. If commonplace gold fever constituted mercantilism then there has never been a shortage of ‘mercantilists’, from King Midas to Shylock. There can be no talk of mercantilism in prepartitioned Poland in any but this caricatured sense. [Schmoller 1895, pp. 50 and 51.]

the industry and trade policies for galicia

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the judiciary; establish a fairer system of taxation, doing away with the nobility’s exemptions; create a standing army; and so on. In a word, Poland would have had to transform itself into a modern state, with its entire complicated administrative and bureaucratic apparatus. What is certain, however, is that landed property, especially based on serf labour, could not constitute the foundation for such a modern, expensive state organisation, thus the state was forced to seek its support elsewhere and began its battle with the landed aristocracy. In Poland it could not have been otherwise since, there too as in the west, this entire evolution could occur only at the expense of the nobility11 and in struggle against it. Indeed, toward the end of the Republic’s existence, the beginnings of a mercantilist current emerged. Before the Great Parliament voices favouring tariff protection, the prohibition of foreign goods, the creation of a state bank and trade consuls are encountered in the literature.12 Against the background of this historical perspective, the mercantilist policy of the Austrian government in Galicia appears in a completely new light. What had no time to emerge from within, due to political circumstances, came about from without, as a result of partition. It came complete, in the form of a polished and considered system and plan of action, and, all too abruptly, shook up existing relations. But its advent was, as we have seen, inevitable. Simply ripping out and highlighting one aspect of the mercantilist system’s whole arsenal of measures, the struggle with the nobility, and explaining this struggle in Galicia exclusively in terms of national oppression by the invaders, intent on repressing the ‘most enlightened’ stratum of the nation, demonstrates a lack of understanding of the momentous historical process portrayed here. After all, the nobility gained numerous concessions on the level of the state and politics (the Guard, the Parliament of the Estates, the Noble Court etc.),13 while a ruthless struggle was taking place at the level of economics. Furthermore, it is parochial and insufficient to explain the struggle to consolidate the bureaucratic state against feudal parochialism and anarchy, which was

11 12 13

Staszyc [presumably 1787]. Korzon [1897]. [The Galician Noble Life Guard at the Habsburg dynasty’s Court in Vienna was established as a sop to the Galician nobility in 1782 and was dissolved in 1791 after Joseph ii’s death. The Parliament of the Estates was actually the name of a later consultative institution in Galicia, its processor, the powerless Postulate Parliament, made up of wealthy aristocrats and two representatives of Lviv met for a few days on only four occasions during the period in question. The Noble Court, ‘Forum Nobilium’ was an appeal court whose bench was made up of nobles.]

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widespread across western Europe and contemporary Austria as a whole, in national terms. In Galicia and Poland, where the exclusive, one-sided promotion of agriculture had been consolidated for several centuries and completely suppressed towns and urban industry, mercantilist policies, naturally directed against the nobility, were more necessary than anywhere else. Whether the Austrian government’s mercantilist policy in Galicia was justified in every detail depended, after all, on the knowledge, familiarity with relations and ultimately the intelligence of the people leading the state. Perhaps a Polish government’s mercantilist policy, had it emerged, would have avoided many mistakes, if only by causing less bitterness and ill-will because it was not an alien policy. The Austrian government’s mistakes were all more aggravating because they were attributed to the crimes of partition. This should not, however, cloud our judgement. It may be that a future historian of national life in this era will uncover a number of errors committed by this government and a number of painful losses inflicted on the nation. We must put these considerations aside here. Just as a doctor ‘investigating health’ by the examining the Austrian government’s sanitary activities in this period should be governed by medical reasoning rather than national considerations,14 so too for us, in the evaluation of the Austrian government’s economic policies, only economic criteria are to be employed. The unsympathetic Austrian bureaucracy intruding into Galicia after partition was, nevertheless, an instrument of an objectively unavoidable historical process. From this standpoint we must also admit that the government’s mercantilist industry policies – after all, comparable and parallel with the policies of western states – should be excused in their entirety; they were historically unavoidable for the Province and therefore justified. They were likely to succeed and were thus, in principle, beneficial and desirable in the Province’s interests. It may surprise many that this was an assessment expressed by contemporaries. None other than [Stanisław] Staszic, who directed vehement words against the House of Brandenburg, referred to Joseph’s reforms with unconcealed admiration, more than once proposing that they were a model for his countrymen. His assessment encompassed Joseph’s mercantilism:

14

Szumowski [presumably 1907].

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Emperor Joseph ii, in four years [1781–85], in all his lands granted freedom and protection to all religions, the same rights as other estates to peasants and townspeople, the same legal status as others to farmers and craftspeople; curtailed the special privileges of a single estate, which harmed others, as far as possible; abolished monasteries; encouraged Jews to work in agriculture and crafts; planted numerous colonies at great expense and, in all European states, declared that all those who came to his Province would benefit from ten years of tax exemption and financial support; prohibited all foreign merchandise; established various factories and crafts; apart from a small amount of grain, prohibited the entry into his Province of anything from Poland, while Poland pays him several million annually … By means of such arrangements, this wise and active Emperor will greatly decrease the number of idlers in his lands. Surely harvests, population and wealth will increase in his Province.15

2 Before proceeding to a closer examination economic policy with respect to industry, it must be stated that the government was well aware that an expensive, modern, state apparatus required more money than agriculture could provide. Relations in England, France and Prussia confirmed this view, as did the experience that the Hereditary Lands with more developed industry provided the state with far more funds than the purely agrarian provinces.16 So, on this point, the industrial interests of Galicia converged with the deeper financial and state interests of the Habsburgs. This also influenced the government’s industry policies for Galicia. In the first secret instruction for Treasury Councillors Törek and Heiter, who were to set up the Province’s temporary administration, Empress Maria Theresia (27 May 1772) already laid down an economic policy entirely formulated in the spirit of mercantilism: We always held to this fundamental position: that our own welfare is indivisible from the welfare of our subjects, that one is not possible without the other; therefore it is also necessary to try to enhance the might and income of the Monarchy only by promoting general welfare and wealth;

15 16

[Staszic 1787, p. 111.] Přibram [presumably 1907].

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even the smallest distinction between the interest of the Monarch and the country should not be made. And, acknowledging the truth that the real source from which the fundamental welfare of the Monarch, subjects and the entire nation flows is culture, workshops and factories, blossoming commerce and a strong population, the truth is further acknowledged that we therefore demand undivided attention be constantly devoted to their establishment and improvement and we recommend the removal of everything that stands in the way of these principal sources. And, further: ‘it must be remembered that this is not hostile territory but a land occupied as our Province, which should also be treated as such’. In accordance with these general principles, detailed instructions for the first governor, Count [Johann Anton von] Pergen (6 September 1772), and Court Councillor [Anton] Kozian (31 May 1773) followed. The instructions recommended granting various privileges to craftspeople and factory owners who settled in towns; ordered that attention be paid to trade routes between Galicia and Silesia, and to the construction of roads through the Carpathians, to facilitate trade links between Galicia and the Czech Lands, and through Hungary with the south (Trieste); ‘Die Ausfuhr der Landeserzeugnisse auf all Art begunstigen’;17 and wanted to direct trade from Podillia and Volyn through Galicia to Poland with the aid of low transit duties. In relation to Poland, they pointed out the need for a mutual reduction of import duties, declaring in favour of complete reciprocal freedom of trade between these lands, previously connected for centuries. These few points are sufficient, however, to characterise the government’s programme for trade and industry policy in outline. Before we discuss the government’s actions, we must at least briefly sketch the conditions for the creation of industry in the Province. After all, it must be emphasised that the government’s economic policies were not dictated by the abstract formulas of the system to which it adhered. On the contrary, concrete conditions in the Province heavily influence the means and measures chosen! The social structure of the Christian population (on the basis of the conscription [statistics] of 1776) of 501,302 families (clergy, independent households) was:

17

[‘Support the export of agricultural products by all means’.

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Household/family type

Number

Clergy’s households Townspeople and craftspeople in villages Officials and privileged commoners Nobles Peasants (full and part) [chłopów, serfs with enough land for selfsufficiency or part self-sufficiency] Cottagers [chalupników, serfs with a cottage and very little or no land] Crofters [zagrodników, serfs with some but insufficient land for subsistence]

7,944 17,445 724 17,997 103,763 275,750 77,679

Town-dwelling families therefore constituted barely 3.4 percent of the total and of these a sizeable fraction lived not in towns but in villages. Even if we were to count as part of this class a certain proportion of urban labourers, removing them from the category of crofters, the proportion of families engaged in crafts would not reach 6 percent, which would mean there were only 145,000, in comparison with two and a quarter million people living from agriculture; perhaps two thirds of craft workers lived in towns. But even this picture would be overly optimistic. The Galician ‘towns’ at that time did not deserve the name, either with regard to external appearance or inhabitants. In Lviv in 1776 (after subtracting the higher classes) in the Christian population of 3,861 urban dwelling families, there were only 495 workers’ families; the remainder were cottagers or crofters! Even in the capital of the Province the urban class comprised barely 13 percent and the whole urban element at most a quarter of the total Christian population. Of course, in other towns matters were even worse. Even 12 years after the occupation of Galicia and despite the government’s efforts to increase it, the urban element was [proportionately] four to six times more numerous in the Hereditary Lands than in Galicia. Even this minimal number of townspeople had less significance for industry because of their character. Only in exceptional cases did they live exclusively by their crafts (e.g. the clothiers of Biała). On the basis of detailed reports of Count Pergen (1773), Councillor [Conrad] von Sorgenthal (1775), Baron [Johann Wenzel] Margelik (1783), and [Ernst Traugott] von Kortum (1785), it is possible to establish that urban craftspeople for the most part had not yet severed ties with farming and did not differ much from peasants because they were also agricultural producers.

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In such circumstances, there could only be a limited basis for industry in the Province’s towns. In terms of consumption, the semi-agricultural population of Galician towns (and even more so its peasant population) satisfied its own needs for manufactured goods, in conditions of the natural economy. Nor was there a basis for industrial processes of production to be found in the towns. Not only was it impossible for barely vegetating and dying crafts to provide even meagre capital for the creation of industry; they could not even supply skilled workers. Craft activity in and outside guilds verged on decline and decay. Masters like their journeymen were ignorant, drunk and lacking knowledge of their trades. Any even slightly better products had to be imported. Finally, Galician towns at that time also lacked various other administrative, legal and police institutions necessary for the prosperity of industry and trade. They were severely neglected, without administrators or police; merchants did not want to be mayors. These functions were performed by craftspeople, after they had performed their occupational activities. Apart from the wealthier yet numerically small nobility which consumed manufactured items, one other urban element was the mass of Jews, as agreed by the reports which have been cited. They numbered 144,000, according to the census of 1776, in reality there were about 200,000. On the basis of detailed information, it is possible to calculate that numerous towns were entirely Jewish and even in Lviv and other more important towns they were twice as numerous as those in Christian crafts. Jews formed the real urban class, whether in relation to craft production18 or to consumption. Finally trade was almost exclusively in their hands. ‘Benimmt man den galizischen Städten die Juden, so hören sie auf Städte zu seyn’.19 Indeed, despite the political turmoil of the years before the partition, trade in Brody was lively. But only an insignificant part of it was conducted to satisfy the trivial needs of Galicia itself. It was overwhelmingly transit trade, whose task was to supply the east (Poland, Russia, Turkey, Podillia, Ukraine) with manufactured goods and its raw materials to the west (the Empire, Silesia, Saxony, Prussia). These economic conditions in Galicia on the point of partition determined the main lines of the government’s industry and trade policies. As the Galician market alone was of little significance for trade, instructions were issued to protect the transit trade above all. As industry and trade could not develop further because the towns were neglected and in a state of col-

18 19

Pergen 1773; Wrbna 1774 [archival sources]. Margelik 1783. [‘If Jews were removed from Galician towns, they would cease to be towns’.]

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lapse, the government undertook the task of the reform of urban, police and legal institutions. As the fundamental obstacle to the development of industry in the Province was the lack of an internal market, the government sought to strengthen it domestically by means of appropriate immigration policies and abroad by finding export outlets. As there was a lack of skilled workers locally, the government reformed the guilds; and, until that yielded results, it brought skilled workers in from abroad, through colonisation and by granting privileges. Since, finally, the harmfulness of such a great mass of Jews in Galicia was assumed, the aim was to replace the Jewish urban element with Christians, imposing repressive population, financial and economic policies on the Jews. Such were the general outlines of Maria Theresia’s and Joseph’s mercantilist policy. Let us now examine it in greater detail.

3 In the face of stifling limitations and abuses which had crept into the guilds in the eighteenth century, even in western Austrian provinces with their wealthier towns, modern industry could only arise outside the guilds and through their suppression. Such a course was even more necessary in Galicia, where guild crafts were in a state of utter collapse. The crafts worked for the local retail market. In the meantime, the idea of a balance of trade, which characterised mercantilist policies, demanded efforts to increase national production for wholesale markets and for export, which guild production, with its limitations, was unable to satisfy. For this reason, mercantilism was concerned, above all with Kommercial-Gewerbe, working for the wholesale market, as opposed to Polizei-Gewerbe,20 satisfying local needs. Only the first enters into the history of genuine industry and trade. Here, we must leave aside an account of guild production’s misery in Galician towns and villages. The fundamental condition for the emergence and development of such Kommercial-Gewerbe was, nevertheless a guarantee of markets. The history of the emergence of capitalism in all countries teaches us that the development of the forces of production in industry and industry itself could only emerge with the creation of more extensive markets. In Galicia, such markets were, moreover, first and foremost necessary for the entire provincial economy and

20

[‘Kommercial-Gewerbe’ means ‘commercial crafts’; ‘Polizei-Gewerbe’ literally means ‘administrative crafts’.]

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for the agricultural sector. Before the government could proceed to fostering genuine industry directly, it therefore had first to prepare the conditions for its existence, i.e. to ensure markets for Galicia in neighbouring territories. 3.1 Policy for Galician Trade Relations with Neighbouring Territories Of course, in terms of Galicia’s volume of trade, Poland and, because of the trade to Gdańsk, Prussia were most important, then Turkey and finally the Austrian Hereditary Lands and Hungary with Transylvania. The government sought to ensure markets for Galician products in all these places, although its efforts were not always successful. As to Poland, it can be established that the Austrian government, from the lowest levels to the highest with Emperor Joseph at the top, put a great effort into concluding a treaty based on complete mutual freedom of trade. Both in imports and exports, trade with Poland constituted a third of Galicia’s entire trade. The government was all too well aware of the importance of trade with Poland for the Province and, above all, of the necessity of free navigation on the Vistula, the main corridor for exports. In the meantime, trade with Poland was made more difficult by Polish customs arrangements, still infused with the spirit of the Middle Ages. There were not only duties on imports but also, precisely, on the transit trade (of 12 to 14 percent) and exports (10 to 12 percent). Thus all the documents during the long treaty negotiations (from January 1773 to 15 March 1775) – reports of the Galician authorities, ministerial meetings, secret instructions of the State Chancellery [Foreign Ministry] to [Karl Emerich Alexander] Reviczky and his despatches – endorse free trade. At the very forefront of making this demand was Emperor Joseph himself, fighting to defend Galicia’s interests. He, the prohibitionist, made an exception for Galicia and was prepared, in part, to sacrifice the interests of the Hereditary Lands to Galicia’s interests!21 Unfortunately, precisely this demand was rejected by the Polish side! In the name of the short-sighted, fiscal interests of the Polish Treasury, Galicia, ‘an imperial province’, was left to its fate. Admittedly, free trade was initially desired, in the hope that the Prussians would also grant it to Poland. When that did not occur, it was decided to take advantage of the constrained situation of Galicia, for which the Polish market was indispensable.22 Nevertheless, the treaty concluded was favourable for Galicia, even though it was not based on the principle of free trade. It lowered duties, on imports (to 4 percent) and above all on the transit trade (to 1 percent) and exports (to 5/12 percent)

21 22

Gutachten Celissimi ex 15 December 1773 [archival source]. Reviczky’s despatch of 22 March 1775 [archival source].

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and, most importantly gave free access on the Vistula. The treaty was supplemented by agreements on the Ukrainian transit trade (1778) and border revisions (1778, 1781), while Galicia’s trade with Poland developed normally (with minor exceptions) and without obstacles. In the course of the changing tariff arrangements for Galicia (1776, 1778, 1779, 1784, 1788), the treaty with Poland remained in force. The statistics show the magnitude of these trade relations. According to the (Polish) customs register of 1776, they were:

Exports from all of Austria to Poland Imports from Poland to Austria Transit trade from the [Holy Roman] Empire through Poland

in Austrian florins

in Polish guilders

5,910,499 2,260,439 1,620,562

23,641,996 9,041,757 6,482,249

This trade was, however, more significant for Galicia and it should be remembered that the official statistics are at least a third too low, because of the massive scale of smuggling during the eighteenth century.

Florins 1778 1787

Imports from Poland to Galicia Exports to Poland Imports from Poland to Galicia Exports to Poland

1,508,729 1,700,00023 2,576,267 2,659,37324

Trade relations with Prussia and Gdańsk did not fare so well. Austrian efforts to achieve free trade along the Vistula in Poland were a prelude to similar efforts with regard to Prussian, so that Galician produce could finally gain free access 23 24

It is only known that the figure for exports was higher than the figure for the transit trade. The figures for the transit trade from Poland through Galicia were 264,529 florins, and to Poland 767,671 florins, totalling 1,032,200 florins. The figures for exports in 1787 would have been still greater, if 1786 and 1787 had not been famine years.

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to Gdańsk and the sea. As early as December 1773 Emperor Joseph declared himself in favour of concluding a trade treaty with Prussia. It did not, however, come to that, then or later in this entire epoch, even though the idea was revived several times. This was a consequence of the fundamental divergence between the two rival powers’ economic and political interests. Prussia threatened Galicia on two sides, from Silesia in the west and Gdańsk in the north. The western roads to Frankfurt am Oder and Leipzig, over which light French and Swiss goods were imported, had already become more difficult for Polish trade many years before partition, until finally they were almost completely closed for 16 years, by a 30 percent transit duty (24 June 1771). By becoming part of Austria, Galicia, was less unfavourably affected by this Prussian policy and, on the contrary as a part of the Habsburg Monarchy, gained new transit and export routes westward to Saxony and Hamburg, through Austrian Silesia and Bohemia. Greater losses and utter catastrophe faced Galicia in the north, where it fell victim to Prussian policies which targeted Poland. Friedrich ii’s efforts to control Polish trade and seize Gdańsk are well-known, as are the extortionate duties of dozens of percent on Polish goods.25 The conclusion of a PolishAustrian treaty therefore threatened to thwart Friedrich’s plans. Polish produce could pass into Galicia, only paying a low 4 percent import duty there, as Galician produce could pass through Poland to Gdańsk. Friedrich extended his repressive policies to Galician goods.26 According to interested parties and the Austrian authorities, the Fordon tariffs27 amounted to 25, 30 and 50 percent on prices quoted (for linen, timber, grain, potash) on the Gdańsk exchanges. According to Prussian sources, some goods even attracted duty of 100 percent.28 This was a catastrophe for large agricultural properties, exporting grain, potash and timber to Gdańsk, and at the same time for the Province’s largest industry (linen!), cutting it off from the sea and especially from Gdańsk, which had inestimable significance for the organisation of trade and credit in Galicia. Finally, the low-cost water transport industry fell into disrepair. This external obstacle was one of the main and most damaging factors which not only inhibited the emergence and development of industry and trade but also the economic development of the whole Province, which had received its lifeblood from Gdańsk for over two centuries. 25 26 27 28

Korzon [presumably 1897]. Cabinet Order 25 December 1775 [archival source]. [Prussian tariffs, levied at Fordon on the Vistula, in Prussian territory.] Fechner 1886.

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And it must be admitted that the government made strenuous efforts to extract itself from the Prussians’ pincers – to no avail! Galicia’s salvation lay either in a trade war with Prussia and [trade] reprisals or in the conclusion of a trade treaty. Reprisals were repeatedly considered during Maria Theresia’s reign but they were not implemented for fear of the powerful adversary.29 It only came to them in the years between 1784 and 1790 and although the goal was a reduction in Prussian tariffs, Galicia suffered terribly from this policy of reprisals. The idea of a trade treaty was frequently revived (1773, 1776, 1780, 1786). In 1776 a number of proposals for Galician trade were formulated but Galicia had little to offer to Prussia in return … Galicia’s and Austria’s relations with Prussia were one-sided. It was not a matter of the absolute amount of their mutual trade but its relative significance. While Galicia and Austria were very dependent on Prussia, the Galician and even the Austrian market played a small role in Prussian trade, with its diversified maritime ties. And this one-sidedness (which still exists today in the relationship between Austria and the German Empire) underpinned the inability of Galicia and Austria to extricate themselves from the yoke of Friedrich ii’s tariff policies. Joseph’s effort to cut, by political means, the knot he had been unable to untie in the economic sphere was in vain. He turned to Bavaria, seeking there a new route up the Danube to the Netherlands and the sea, by-passing Prussia. This led to war with Friedrich and resulted in the diplomatic setback of [the Treaty of] Cieszyn (1779). For the time being, [Georg Adalbert von] Beekhen’s visit to Gdańsk (autumn 1780), whose purpose was to find an outlet for Galician trade and agriculture, did not lead to a successful outcome. So thoughts again turned to a treaty, ‘ob Mittel vorhanden seyen den Berliner Hof zu einer massigen Mautbehandlung der galizischen Producten zu bewegen?’30 (December 1780), only to search again for salvation in the maelstrom of politics, once the attempt to conclude a treaty had failed. Joseph therefore tried to break up the PrussoRussian alliance, by drawing closer to Russia himself and forming an antiPrussian alliance. The history of this policy is well-known: the meeting with Catherine [ii] in 1780; with the consent of the Elector [of Bavaria], France and Russia, new efforts whose object was Bavaria; then Friedrich’s organisation of the Fürstenbund31 against Austria in 1785; and the ultimate disintegration of Joseph’s plans. We have only been concerned to account for the connection between this policy and the government’s economic policies in Galicia. After 29 30 31

Votum Guinigi 1775, Kaunitz 1778 [archival sources]. [‘Whether means are available to shift the Court in Berlin to impose milder tariffs on Galician products?’] [‘League of Princes’.]

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the death of Friedrich ii (1786), there were new Austro-Prussian negotiations over a treaty, desired by both monarchs. This led to a reduction of the duty on the transit trade through Prussian Silesia (16 April 1787), less in response to Galician interests than those of Prussia and the collapse of its Silesian trade. And now Austria raised Galicia’s request for a reduction of ‘der exorbitanten Fordoner Zolle’.32 Yet, despite the wishes of both monarchs, reasons of state triumphed and no agreement was concluded (1787). Soon after war broke out between Austria and Russia, on one side, and Turkey, on the other; Prussia organised a coalition against Austria; and the death of Emperor Joseph [in 1790] brought an end to the era. The counter-position of the two powers’ interests prevented them from concluding a treaty and for this entire period the main arteries of Galician trade were blocked. The collapse in trade with Prussia and Gdańsk is apparent in the following figures:

Exports (florins) Imports (florins) 177833 Prussia Gdańsk 1787 Prussia Gdańsk

180,000 50,000 136,454 24,255

140,000 600,000 86,000 261,00034

3.1.1 Relations with the Porte35 and the Black Sea Trade At the time of partition, Polish trade in this direction had long been in a state of collapse. Podillia, Ukraine and part of Volyn did not have any trade route for the disposal of the excess of their abundant produce and experienced a lack of money along with agricultural wealth. The Dniester had no significance for trade at all.36 Once Galicia became part of the Austrian Empire, new opportunities opened up for the Province. As early as the end of the seventeenth century Austria

32 33 34 35 36

[‘The exorbitant Fordon tariff’.] Only the figures from 1787 are precise. Information only for half of 1778 is available, on the basis of which an estimate has been made for the whole year. Furthermore, in 1787 Prussian transit through Galicia amounted to 801,912 florins. [Porte was a term for the government of Ottoman Empire.] Korzon [presumably 1897].

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had turned to the east and south, to the Black Sea, Constantinople and the Levant. Under the Peace Treaties of Sremski Karlovci, (1699), Požarevac (1718) and Belgrade (1739) Austria’s trade had gained important concessions, both on the route down the Danube and overland, through Hungary. Galicia could also take advantage of them. But this trade was not developed by Austria, which had provided reciprocal concessions to Ottoman subjects, who (Turks, Turkish and Greek Jews) took complete control of trade with Austria. The balance of trade was in deficit on the Austrian side and the deficit rapidly grew.37 From 1771 Austria initiated new efforts to improve exports to the east and to revise the treaty with the Porte. Especially from 1775, there were discussions about facilitating exports from Galicia and gaining the same concessions from the Porte that Russia had gained under the treaty of 7 April. Trade with the east, nevertheless encountered great difficulties, not only as a result of domestic factors, like the inadequacy of merchants’ organisation, capital etc., but first and foremost due to the sad and uncertain state of relations in Turkish territories. Galician Governor’s Office Councillor Galicia Beekhen identified the main obstacles as venal justice, lack of personal safety and especially the fiscal oppression by the Turks of the princes of Moldova, who were obliged to pay tribute and sought to recoup this money at expense of Austrian and Galician merchants. For the time being relations were not improved (as a consequence of the abolition of the Galician Court Chancellery in 1776 and the Commercial Council [Kommerzienrat] in 1777). In 1780, after Beekhen’s trip to Gdańsk, a search began for a southern route to replace that through Gdańsk. Count [Rudolf] Chotek prepared a report ‘über die Ausfuhr der galizischen Produkten gegen die turkische Provinzen und das Schwarze Meer’ (1780).38 Then the brothers Israel and Moses Hönig, well-known financiers of the Mährische Lehnbank, sought the exclusive right to create, with the government’s financial support, a great Shipping Company for trade down the Dniester and the Pruth, to promote Galicia’s export trade. The authorities, although they were against such monopolies in principle, were well disposed toward the project. This monopoly was to have been the scaffolding necessary for the construction of a structure, which when it was completed would be taken down. But the attempts at trade failed, scaring off others (1780). Two years later (1782) an attempt to send a large shipment of thousands of pieces of linen, napkins and tablecloths from the Adrychów factory (owned by Count [Stanisław] Ankwicz) to Constantinople ended equally unsuccessfully. The ship was wrecked on the Black Sea coast

37 38

Beer [presumably 1883]. [‘On the export of Galician products to Turkish provinces and the Black Sea’.]

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and the cargo was stolen. Only thanks to the care and energetic intervention of the Austrian ambassador were the helpless peasants on board, who only spoke Polish, compensated and able to return home (1783). The government encouraged the export of grain, wax, linen etc. down the Dniester (24 June 1784). It later supported a trial shipment down the Dniester, undertaken by ‘Prince’ [Karl Heinrich von] Nassau-Siegen (1785). Trade with Turkey was nevertheless unable to overcome all the obstacles and remained one-sided: only imports grew.

Florins First half of 1778 Imports 398,758 Exports 101,659 Full year 1787 Imports 1,419,625 Exports 227,679

While imports grew by 80 percent over the decade, there was no change in exports. A trade sened39 with Porte did come about on 24 July 1784, its essential content was to accord Austria most favoured nation status (equal to France, England and Russia) and, more importantly, to remove of the manifold vexations which plagued eastern trade. It became impossible to take advantage of this treaty, as Austria initiated hostilities against the Porte at the start of 1788.40 In connection with navigation on the Dniester, it must be noted that article 7 of the treaty concluded with Russia (12 November 1785) conceded to Austrian subjects trading in Russian ports on the Black Sea (Kherson) a reduction in customs duty to a quarter of the Russian tariff. 3.1.2 Galicia’s Relations with the Austro-Hungarian Hereditary Lands This question is one of the most interesting and hitherto least understood. Precisely here, where only the oppression of Galicia by tariffs was previously seen, the government’s understanding of the Province’s economic needs is evident. This different presentation of the issue is a consequence of the fact that no-one with a professional education has previously studied it.

39 40

[‘Sened’ means ‘treaty’.] Presumably Kopetz 1829–30.

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At the time of partition there was a regime of ruthless prohibition, across the board, in Austria, which later (1775) was later modified into a system of milder, tariff protection, although still involving rather high duties. At that time, the imposition of this prohibitive system onto Galicia would have been fatal for the Province. In the Hereditary Lands, domestic products replaced prohibited foreign goods. Galicia did not have any factories. Foreign goods were not imported for domestic consumption but to be forwarded to the east, through Brody. The prohibition of foreign goods would have completely ruined this sole Galician trade, while industry within the Province would not have benefitted because it did not exist. The industries of the Hereditary Lands did stand to gain from the extension of prohibition to Galicia. Industrialists in the Hereditary Lands smiled at the thought of appropriating Galicia for themselves, through the exclusion of foreign competition. The government did not agree and, in the interests of Galicia, took the opposite course. Provisionally, Galicia remained separate from the Austrian customs system! The government retained all the Polish tariffs and the entire Polish customs administration, supplementing it with new offices in the north, on the new Polish-Austrian border (1772). These offices collected customs duties according to the Polish tariff and standards (8 to 10 percent on imports; 10 to 12 percent on exports, export duty [evecta], copying fee [pobór], drink tax [epistomiale], deposit [depositorium], customs officers’ fee [accidens], as well as weight, barrel, visa etc. fees). The dated Polish customs system was certainly not perfect but it did suit Galician conditions better than prohibition. All foreign goods could enter Galicia free of duty. When transported from there into the Hereditary Lands they had to pay the difference in duty, if they were not prohibited. The later development of Galicia’s customs system moved in the same direction and for 12 years, that is until 1784, Galicia was a province whose trade was isolated from the rest of Austria! The government acted energetically. In 1774–75 it reformed the out-dated Polish customs system. This facilitated the importation of goods from the Hereditary Lands and Hungary by lowering the import duty on their products to 2½ percent (1774)41 which, as trade was predominantly barter, meant simultaneously facilitating exports from Galicia. Moreover, the Court Chancellor for Galicia, Count [Eugen von] Wrbna, energetically demanded reciprocity of 2½ percent duty on Galician goods and manufactured products imported into Hereditary Lands. Emperor Joseph agreed in principle (2 September 1775), although the decision was only implemented a 41

The justification was that otherwise, under the treaty with Poland, the 10 percent import duty on Austrian goods would mean they would be treated more harshly than those of Poland, a foreign country.

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year later. Galician exports had been facilitated earlier (1774), by lowering the exorbitant export duty from 10 to 12 percent to 5/12 percent and the transit duty from between 12 and 14 percent to 1 percent. For Galicia this was a colossal and beneficial revolution in trade which, by relieving trade of burdens within the Province, made exports to and competitive struggle in previously inaccessible markets possible. Of particular importance, special privileges for Brody, through which half of Galicia’s trade passed, rapidly followed. In 1773–74, Brody was, in fact, separated from the Galician customs area and received these privileges, which were not formally announced until an Edict six years later (1779). These reforms were carried out by the government to the detriment of its finances. In 1773, gross customs income was 433,285 florins; after the reforms, in 1775, it was almost halved to 228,028 florins. The principle that ‘man soll bey der Tarif-Einrichtung zum Hauptzweck den Nahrungsstand und nicht die Mauterträgniss haben’42 was repeatedly stated.43 The conclusion of the trade treaty with Poland led to further losses in customs income. Support for Galician exports continued, in the form of fairs and the Krnov trade company (1774). Free fairs were initiated in Cieszyn (1775); their beneficial implications were praised by the Crown Treasury Commission of the [Polish] Republic. On 28 December 1776 a provisional tariff was issued, at last regulating duties on Galician imports into the Hereditary Lands. This was not a simple matter, given the different systems existing here [in Galicia] and there [in other Habsburg territories]. In Austria there was a system of prohibition. To give Galician goods free entry would mean flooding the Hereditary Lands with foreign manufactured goods, which had free entry into Galicia. Yet the terminating Galicia’s separation, so necessary for the Province, was not desired. A middle road was sought, which while ending Galicia’s separation, opened the markets of the Hereditary Lands to its products. A low import tariff of 4 percent on most Galician goods was established in Austrian and Hungarian provinces. The tariff on a few others was 10 percent. Most importantly for the Province’s largest industry, in view of the closure of the route to Gdańsk, the prohibition of linen imports into the Hereditary Lands was lifted, making an exception for Galicia and halving the duty on this item. The appropriate tariff for Galicia, which exhaustively regulated the Province’s trade relations was finally issued on 2 January 1778. Without specifying its complicated provisions, I will only outline its main principles. Galicia’s customs separation was ended, imposing a 10 percent duty on imports. Exceptions 42 43

[‘The main purpose in establishing a tariff should be to improve the level of subsistence and not to increase the yield from customs duties’.] Emperor Joseph in 1773, Count Wrbna in 1774 [archival sources].

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were made for essential foreign goods, whether necessary for consumption in the Province (grain, flour, poultry, fruit etc.) or industrial uses (raw materials), and for the transit trade (furs). Duties on these items were reduced to 8, 5, 2½, 5/6, and 5/12 percent, in accordance with the mercantilist goal of keeping the processing of raw materials to preserve ‘higher industrial value’ in the Province. The tariff expressed the relative ‘tension’ everywhere between raw materials and semi-finished or finished products. Conversely, there were tariffs higher than the base level only where necessary to protect the Province’s industry, for example, the 12 percent tariff on grobe Leinwanden.44 The tariff of 1778 differentiated among three import duties: on goods covered by the treaty with Poland, on goods from other foreign countries and on goods from the Hereditary Lands. Apart from general measures to facilitate the export trade, export industries which did not exist required no require special tariff. In the exceptional case of an export industries that did exist (the Biała cloth industry, linen), the tariff attempted to secure cheap raw materials for both (special regulations to reduce the customs duties on the importation of wool, tariff impediments on the export of flax and hemp) and to provide them with outlets for finished product. In short, there was diversified and consistently planned protection of the commercial and industrial interests of Galicia. It should be further noted that in January 1780, the duty on Galician products was reduced in Austrian Lombardy and the Netherlands to half the rate which applied to foreign goods. Finally, in 1784, Galicia was granted a second free trade city: Podgórze. We cannot present figures for the development of trade with the Hereditary Lands. We only know that in 1773 it hardly existed; at the first fair in Cieszyn (1775) little was sold to Galicia, whereas it was already substantial by 1779. The figures for half of 1778 were:

Imports (florins) Exports (florins) Bohemia Moravia Austria Austrian Silesia Styria

44

[Coarse linens.]

856 1,070 305,490 23,394 12,499

941 64,920 12,780 130,288

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(cont.)

Imports (florins) Exports (florins) Tyrol Hungary Transylvania Trieste Total

22,820 305,495 14,338 13,485 699,178

288,049 25,478 613 523,069

Exports from Galicia to Silesia grew rapidly, especially from the start of Joseph’s sole rule, as cattle exports increased after the establishment of the Oswiecim and Zator fairs.45 And although Galicia’s trade with other Austrian provinces was in deficit, exports to Silesia compensated and Galicia’s trade with the Hereditary Lands was generally in surplus [in 1781].46 In 1785 Jews in Lviv alone imported goods worth one million florins from Austrian factories. It still remains to be explained why Galicia tariff policy were changed in 1784. On 27 August 1784, a general customs law for the whole of Austria was issued. It tended to be prohibitionist and was highly protectionist. This law abolished Galicia’s separation and the Province was incorporated into the state’s general customs area. Undoubtedly this development was in accord with the trajectory of mercantilist policies, striving for large and uniform customs areas. The centralising inclinations of mercantilism and Joseph’s policies do not, however, explain this phenomenon, since the issue of incorporating Galicia into the general customs area was surely considered more than once after partition. And, after all, an exception was made for Galicia, with a view to its distinct interests for 12 years. And, from the very start, the most passionate champion of the idea of separateness was none other than Emperor Joseph himself (1773). Ten years later this was still his position and he opposed the application of prohibition to Galicia. In 1783, Chancellor Count Kolowrat brought the flood of foreign (Saxon and Prussian) manufactured goods into Galicia to the Emperor’s attention and advised that Galician merchants be forbidden from participating in foreign fairs. The Emperor rejected this proposal, which was in the spirit of prohibition, and resolved that ‘It is not appropriate to forbid Galician merchants from

45 46

In 1785 the export of cattle to Silesia was worth over half a million florins. ‘Presentation of the State Chancellor in the matter of the trade balance in 1781’.

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visiting the Leipzig fairs, since that constraint would lead to a rise in the prices of imported goods … in Galicia, without bringing any benefit to the factories of the Hereditary Lands; in general it is not prohibition but the introduction of good trade arrangements that should prompt local merchants to abandon harmful foreign trade voluntarily’ (25 January 1783). Why then, not a year later, did he change his mind? The solution of this puzzle must be sought in Prussia’s oppressive customs policy toward Galicia. Emperor Joseph agreed to the separation of Galicia and the admission of foreign goods there (undoubtedly to the detriment of future domestic industry), in the belief that this would be handsomely rewarded by the greater benefits from trade for the whole Province, in which contemporary industrial interests were insignificant. He believed that the Gdańsk market was more important for the development of the Province than any damage from allowing foreign products into Galicia or any benefits from closer ties with Austrian provinces. With this in mind, he concluded the trade treaty with Poland and attempted, unsuccessfully, to conclude one with Prussia. So now, when his hopes of extricating Galicia from the claws of Prussian customs were completely dashed, when he was convinced that foreign goods were indeed flooding into Galicia, while the benefits of exports to Gdańsk, which were to have evened out the losses, had not eventuated, he decided to revise his customs policies for Galicia. He wanted to make up for the closed route to the north by completing the process of opening new markets for Galicia in Austria. That was only possible if Galicia was incorporated into the common customs area. Beyond the colossal significance of this development for trade, it at the same time initiated a new age in the field of industry. While, during the period from 1772 to 1784, trade policy was at the forefront, subsequently, during the period from 1785 to 1790, industry policy moved to the fore. Despite this, despite shutting Galicia off from abroad with high tariff barriers, its trade did not suffer. Galicia’s general trade even developed satisfactorily, despite the complications, already discussed, arising particularly from Prussian policy and partly from relations with Turkey. In 1779 imports amounted to 4,099,000 florins and exports to 4,499,000 florins. We do not have accurate figures for the years between 1781 and 1783. From customs income, however, it is possible to calculate that imports and exports were worth at least 5–6 million florins. These figures exclude Brody’s trade, which was not included in the customs registers after it was declared a free trade city in 1779. Galicia’s trade was in surplus. In 1779 the surplus was 400,000, in 1781 116,000 florins, and with treasury salt47 reached one million 47

[From state-owned mines.]

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florins. The balance of trade for 1786 indicated a surplus of 1,600,000 florins. This was surely not so much due to a rise in exports as to the limitation (prohibition) of imports. The balance of trade for 1787, a year of famine and therefore decreased exports, proved to be 6,172,683 florins in exports and 5,618,803 florins in imports, thus a surplus of 553,000 florins. In addition the transit trade in that year amounted to 2,404,326 florins. During the period from 1779 to 1787 imports rose by 37 percent and exports by 35 percent (not including Brody). 3.2 Domestic Industry and Trade Policies It is only possible to grasp and understand the government’s domestic industry policies in the context of the foreign and external trade policies described above. It would be most interesting to examine all the factories established and existing during this period, their conditions of production and development, and the reasons for their collapse. In view of the insuperable constraints of an oral presentation, that has to be set aside. Here, I confine myself to the broad implications of these policies. In Galicia, after many years of arduous efforts to create industry and after many disappointments and unsuccessful attempts, we now know that it cannot be done from one day to the next. We know too that it cannot be created in the land of the Eskimos, since its establishment and survival require numerous conditions which must first exist. It is strange that our economic-historical literature has not exhibited such an understanding of the era under discussion. Allegations have been raised that the government stifled local domestic industry or, at the very least, refused to assist it. No such incidents are known to us. Whenever the intention to set up a larger factory was announced, the government reacted favourably and promised support. Of course the demand that after occupying Galicia the government should have established or subsidised factories itself is unreasonable and was even impossible, given economic conditions in Galicia at that time. Before direct support for industry (in the form of subsidies, bounties etc.) could even be considered, it was necessary, at a minimum, to prepare the most essential conditions for its existence. This is what the government understood as its task. The government’s industry policies fall into two fundamentally different periods. The period from 1773 to 1783 were years of preparatory work, when the interests of trade were at the fore and, in the sphere of industry policy, the government attempted to establish essential preconditions: roads and the postal service, improved arrangements for credit and mortgages, courts for bills of exchange and legal security, creation of means of public transport and workers (the abolition of serfdom), trade treaties etc. Direct support for industry was impossible at that time. The important interests of agricultural exports and trade meant that Galicia had to be separated, in

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terms of customs, and foreign competition had to be allowed in the Province. Under these circumstances, the government could not subsidise enterprises which would struggle to survive in the face of tough competition with established foreign and Austrian industries. If the government had provided large loans [to local enterprises], it would have had to secure its funds, which would mean granting factories exclusive privileges – prohibition! Only after the first decade, when the reforms mentioned above, in the fields of administration, legislation etc. had been carried out in full or in part, when at the same time general considerations about the Province’s economic development had led to the end of its customs separation and the introduction of prohibitions, i.e. when foreign competition was excluded and the domestic market was protected, only then, in the years between 1784 and 1790, had the time arrived for direct government assistance to industry. Indeed it now came to the forefront, ahead of trade interests, and Joseph’s government came to its aid, whether through subsidies, export bounties or other incentives. It is not possible here to discuss all the government’s broad range of industry policies, including a wide range of reforms in the fields of the administration of justice, protection of forests, health administration (the fight against cattle blight48), safeguards for personal rights and freedoms (legislation for religious freedom and toleration) etc. etc. In order to characterise this policy, I will only mention a few of the more important measures. 3.2.1 Population Policy The government strove to increase the size of the urban element. Immediately after the occupation it announced numerous privileges and significant material benefits for foreign craftworkers who settled in Galicia. It would be extremely interesting to present reasons why this action, in spite of the significant sacrifices and funds laid out, yielded results that were not commensurate. While in 1776 the conscription showed 16,503 heads of families under the heading of town-dwellers and craftspeople, twelve years later in 1788 there were 20,452. An increase, then, of only 3,949 families. Unfortunately, I must omit the details. This includes the influx which was entirely the consequence of the creation of the Austrian bureaucracy in the Province. Especially in district towns, where it was concentrated, it significantly increased consumption.49 Whereas in 1776 there were barely 724 such families, in 1788 there were already 2,428.

48 49

[Infectious bovine keratoconjunctivitis.] [Districts were the lowest unit of state administration.]

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3.2.2 Government Procurement The government also sought to increase consumption and facilitate sales through its own, mainly military, procurement. The military stores department set up in Galicia (in Jarosław) was guided by the principle, adopted long before in the Hereditary Lands, that all military requirements should be met within the Province. The army was also the largest consumer of agricultural and industrial products in Galicia. The first factories producing linen and linen goods were established in Jarosław, the stores headquarters. Linen from Galicia was even exported to the army in the Austrian provinces. Finally, in exceptional cases, the state administration itself made purchases to promote trade. Thus, for example, 10,000 florins from the Silesian Treasury in Opava were allocated to [Conrad] von Sorgenthal for the purchase of Galician and Polish products, at the first Cieszyn fair in 1775. 3.2.3 Financial Policy In the literature there is a long-established opinion that fiscal policies damaged the Province. Nothing is further from the truth. No-one has previously attempted to look at the figures. A simple tally of charges demonstrates that, in a Province of 3 million inhabitants, they were not exorbitant. In 1774 the most important taxes (in gross terms) on specific social classes were

Florins Ground Tax [dominikalny] Hearth Tax, Third Tax and Quarter Tax [dymidie, tercye i kwarty] Land Tax [rustykalny] Tax on Crafts [przemysłowy] Jewish Head Tax50 [pogłówne żydowskie] Excise [cła] Total

470,007 317,545 410,000 34,574 149,866 228,028 1,610,020

Even if we doubled this burden, by adding the Accommodation Tax, the Tax on Liquor Sales and net income from salt, tobacco and lotteries, the post and other smaller sources, the average burden per head of population, was not high by western European standards. If there were complaints about these burdens,

50

Burdens on Jews are discussed below.

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the reason lay not in their extent but in the circumstance, already noted by Stanisław Szczepanowski, of the Province’s immeasurable poverty. The state did not adapt its outlays to its income, on the contrary, it had to find ways to cover those expenses which it deemed necessary. The state in the age of mercantilism created a modern apparatus of civilian and military, financial and legal administration in Galicia and it must be admitted that every penny was counted and, especially under Joseph, thrift became a guiding principle. He found himself rather at odds with the economic relations and the base onto which this apparatus was grafted. The costs of this new administration of the Province with a natural economy, without industry or more substantial sources of income had to be covered. And just as the accusation of fiscal oppression collapses, it collapses even further in relation to industry. The entire tax on crafts (Gewerbesteuer), raised from 17,000 urban families, amounted to barely 34,574 florins in 1774. And the government continually reduced this burden. By a Decree of 19 April 1777, village craftspeople were exempted from the tax.51 By 1784, it raised only 15,746 florins. Then, on the government’s initiative, it was completely abolished in order to promote industry. It was only maintained in Lviv, at the express request of … the Galician Estates!52 The Galician Estates repeatedly pursued such egotistic class politics and were incapable of any, even the smallest sacrifices for other social classes or the Province as a whole. In addition to rent on houses and land, the [manorial] domains also collected a special levy on craftspeople, which was a problem for craft activity in view of lawlessness of the lords’ stewards. And here the government proposed a reform. The Estates, asked for their opinion, opposed freeing the most numerous industrial stratum, linen weavers, from this levy. The government carried out the reform against the will of the Estates, abolishing the levy by the Edict of 25 August 1785. In any case, the Gewerbesteuer did not burden the entire class of craftspeople; it did not, above all, apply to those who comprised the nucleus of the capitalist class in Galicia, that is, those ‘quartum genus hominum: die Kapitalisten, so keine Realitaten besitzen, Wechsler, Niederläger, Grosshändler, Herrschafts- und Wirtschaftsbeamten’,53 as well as other townspeople (doctors, lawyers, leaseholders), who were not subject to ground or land taxes, or the craft

51 52 53

Tokarz [presumably 1909]. [I.e. the wealthiest nobles, represented in the Postulate Parliament.] [‘The fourth kind of person: the capitalists, who do not own any real estate, money changers, business agents, wholesalers and manor and economic officials’.]

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tax. This group, uniquely, paid a donum gratuitum54 (for example 10 percent of income in 1778, before the war). 3.2.4 Exemption from conscription and quartering Exemption from conscription benefitted not only foreign craftsmen and their sons but also locals employed in factories, in so far as they were genuine craftsmen and not day labourers. Exemption from quartering applied to factory buildings. 3.2.5 Communications and Tariff Policy The state of roads and the post in Galicia at the time of partition was quite deplorable. In 1773–74 the government organised postal traffic (of letters and goods) on nine routes, with 66 offices and a total length of about 130 miles. The most important was the Vienna-Bielsko-Lviv-Brody route, with a branch to Hungary (through Dukla) and to Moldova (through Bukovina). Postal charges were not expensive and many times lower than in Poland; the post became accessible to all classes and postal traffic grew, immediately generating income. While in 1774 the cost of maintenance was 28,936 florins, income came to 39,585 florins. In 1775 passenger post was introduced. The work of the Austrian administration in the area of road and bridge repair was splendid. Already in 1775 a road construction directorate was established, at a cost of 14,700 florins; there was reform of lords’ vexatious tributes at weirs and bridges; the construction of the road to Hungary and important bridges. Especially under Joseph, this activity progressed energetically. In 1784 there were already 80 miles of roads, in 1789 120. In 1787 892,532 florins was spent on construction. Joseph’s roads were solid and compared favourably with the quality of foreign roads. By means of an appropriate tariff policy, the government attempted to open a new road from Galicia, through Hungary to Trieste in place of the blocked route to Gdańsk. Despite significant geographical and technical difficulties, traffic to Trieste grew substantially. And attempts were made to redirect transit trade from neighbouring countries to Galicia, by means of tariff policy alone. 3.2.6

State Subsidies and Bounties for Exports, Rebates of Customs Duty etc. Until 1784 the government did provide local manufacturing with all sorts of assistance but was guided by the principle that manufacturers had to establish their enterprises at their own expense. The period of active government assist-

54

[The ‘donum gratuitum’ literally meaning ‘free gift’ was a legislated tax.]

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ance only began in 1784, after the Province was enclosed within the wall prohibiting competition from imports. Government assistance took various forms. Through subsidies, bounties, publications and advice, it sought to develop the production of raw materials (flax, hemp, wool, cattle for hides, apiculture for wax, fruit trees, timber), as well as industry itself. The policies were twofold. Through small subsidies, from 50 florins or 200 to 500 guilders, it aided better qualified craftspeople. From among them, factories could then select foremen and supervisors, the more so as contemporary ‘factories’ did not vary technologically from craft production. But the government devoted its main efforts to larger industrial enterprises, seeing in them rather than craft production the future of industry in the Province. When, in 1780, Count Wilhelm Siemienski (the owner of formerly Jesuits estates near Jarosław) declared his willingness to establish a larger woollen cloth factory in Galicia, provincial Specialist [Referent] Count [Vincenz von] Guinigi wrote that ‘Wir sehen eine Unternehmung dieser Art, die erste in G., als einen einladenden Vortheil an, welcher sich durch ungezweifelte Heizung der Nachahmer verbreiten, und die erwünschliche Folge haben kann, das Geld welches für die mindeste Tuchgattungen hinausgeht, und den Ausländern nährt, im Lande zu behalten, und zugleich einen Theil der Inwohner eine gute Quelle der Arbeitsamkeit und Nahrung, wodurch sie auch kontributionsfähiger werden, zu öffnen’.55 This was just one among dozens of examples sufficient to characterise the government’s attitude to the Province’s industry as genuinely mercantilist. In February 1784 the Emperor, on his own initiative, recommended ‘das für die deutschen Erbländen bereits vorgeschriebene Praemien-Sisteme auf Galizien auch anzuwenden’, specifically ‘eine proportionirte Prime für die Ausfuhr der galiz. Tücher nach Polen oder andere fremde Länder zur mehreren Verbreiteitung dieser wichtigen Fabricatur’.56 A new era in the development of the Province’s industry was beginning. On 29 August 1785 a significant Court Decree regulating the grant of govern-

55

56

[‘We regard an enterprise of this kind, the first Galicia, as a welcome benefit, which can, through undoubted enthusiasm, promote emulators and have the desirable consequence of retaining in the province money, which previously sustained foreigners, that is spent on the smallest of types of cloth, and at the same time opening up a good source of work and sustenance for a section of the inhabitants who will then be able to pay higher taxes’.] [‘That the system of bounties already prescribed for the German Hereditary Lands also be applied to Galicia’, specifically ‘a proportional bounty for the export of Galician cloth to Poland or other foreign countries, in order to further promote this important industry’.]

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ment subsidies was promulgated.57 They were to be granted not only in the capital but across whole Province. The Decree specified the conditions under which loans would be granted, as well as the categories of people and factories which it was a priority to support. Ordinary crafts could not take advantage of this assistance. In the first year, the loan was to be interest-free and interest in subsequent years was to be 3½ percent, at most. The repayment of capital was to follow in instalments. Moreover, on being granted loans, applicants received further advantages, according to their conditions and circumstances. Governor [Josef Karl] Brigido had at his disposal an industry fund of 60,000 florins annually. It was a serious sum at that time. With the support of this fund, several larger factories were indeed established in the Province ([Karl Gottlieb] Litzke’s in Jarosław, Finsterbusch von Schutzbach’s in Tarnawiec near Leżajsk; each received 40,000 florins in cash, as well as materials, building lots etc.). In general, however, Count Brigido, a conservative who was reluctant to industrialise the Province and complied only of necessity with the instructions from Vienna, did not make more effective use of this fund. Despite numerous injunctions and encouragements, unused monies grew … If we must admit that, in general, the government’s industry policy (omitting mistakes in details) answered the needs of the Province then we cannot avoid mentioning the fundamental mistake in this policy, which caused the Province immeasurable damage. I am speaking of the repressive economic policies with regard to Jews. The government in the era of enlightened absolutism believed that the state was all-powerful and believed that it could, at will, transform social classes and strata, their role in the Province’s economy and relations with each other. Assuming that the Jews were harmful, it sought to remove them from the economic positions they occupied. Hence the repressive population, tax and craft policies imposed on them. Taxes on Jews reached unprecedented heights. Without shrinking from the use of the most barbarian means, Jews were expelled from all economic positions, in the desire to create a Christian urban element in their place. Such sudden displacement of a mass numbering hundreds of thousands from economic positions occupied for centuries must always and everywhere have led to disaster and disorder in economic life. The more so in Galicia at that time, where this mass of Jews substituted for a proper urban estate. It had trade entirely in its hands and, by controlling the channels [of trade] and markets, had a significant influence on the Province’s production, both agricultural and industrial.

57

Kopetz 1829–30, 2, p. 166.

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Everywhere in the west industrial capital was generated by commercial capital; merchants paved the way for industry. At first they were putters-out (Verleger, Verlagsystem),58 in time they became factory owners. Galician Jews were on this path; Jewish merchants moved from trade to industry by means of the putting-out system. The largest industry, making linen, was in their hands: they provided raw material and advances to peasants, whose (cottage industry) output passed abroad through their hands to Poland, Gdańsk and Trieste. It was the same in other industries. Everything justifies the assumption that the development of industry in Galicia would follow the pattern of western countries. The economic ruination of Jews and their remarkable impoverishment obstructed and prevented normal development in this direction, while the Jewish mass, driven to destitution, became a burden on the Province, which even now, over 100 years later, we all still feel acutely. The burden imposed by the Jewish ordinance of 1776 amounted to 425,000 florins! In 1785 it was 675,000 florins, not counting the significant burden of the Kahals59 on Jews. Such is an overview of the most important measures of the government’s industry policy. I would like to draw attention to the figures of Galician exports and imports. The complete hopelessness of the Province on its occupation can be summed up in a single sentence: although it was an agricultural province par excellence, it could not feed its own population. The huge mass of rural people had minimal scraps of land. They were always hungry and, by their thousands, sought a temporary income whether in Silesia or grape picking in Hungary or in the Ukrainian and Podillian salt mines or rafting to Gdańsk. And even those who remained could not feed themselves by farming and in (cottage) industry sought other means of survival. Galicia was then a province which imported rather than exported grain. In 1778 390,000 florins worth of grain was imported into Galicia from Poland; 40,000 florins of flour and tallow; 20,000 florins of fish and seed; and 70,000 florins of fruit. This was the case throughout the period under examination. In 1787 imports amounted to 5,618,000 florins, of this grain was worth 1,731,000 florins, flour 121,000 florins, seed 40,000 florins, lard and butter 16,000 florins, cattle 1,168,000 florins: in total over 3 million florins. One million was spent on importing beer (162,000 florins), malt (65,000 florins), leather (24,000 florins), spirits (303,000 florins) and wine (434,000 florins). Metal to the value of

58 59

[‘Verleger, Verlagsystem’ mean ‘putter-out, putting-out system’.] [The officially mandated Jewish community councils, which levied their own taxes.]

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300,000 florins was imported, 450,000 florins worth of manufactured products (66,000 florins of cloth), 138,000 florins of wool, 9,000 florins of woollen products, 35,000 florins of silk, 17,000 florins of paper, 21,000 of furriers’ products, 10,000 florins of hats etc. On the other hand, exports in 1787 amounted to 6,172,000 florins, divided among the following more important categories:

Commodity Linen Leather products Cloth Woollen products Yarn Rope Stockings Grain and flour Fruit and nuts Timber Potash

Florins 1,894,000 103,000 370,000 25,000 109,000 34,000 70,000 297,000 27,000 118,000 32,000

Commodity Cattle Butter Cheese, fat Honey, wax Salt Metal and metal products Furrier’s products Spirits Groceries Cobblers’ products

Florins 1,430,000 29,000 18,000 60,000 710,000 150,000 25,000 13,000 8,000 7,000

It is difficult to go into details here. But the enormous figures for exports of linen, yarn, cloth and leather goods were results of the government’s efforts to create industry in Galicia.

4 All the rich source materials for the era under discussion demonstrate, without exception and irrefutably, the energetic and fruitful efforts of the Austrian administration to create industry in Galicia and to expand its trade. Doubtless these efforts were not entirely successful. This should be no surprise; all industrialised countries initially struggled with similar obstacles. It must be admitted, however, that, in this field as in so many others, previously fallow soil was ploughed during the era of Maria Theresia and Joseph; a huge social laboratory, which prepared the basis on which the work of future generations could progress. These efforts met with fourfold obstacles in Galicia. Externally, the tradetariff policies of the Prussians; and internally, the lack of a domestic market and

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adequate productive elements in the towns (capital, skilled labour). This was, furthermore, linked with the government’s own mistaken economic policies in relation to the Jews, who were the sole urban agent which, to a certain extent, represented these necessary elements. Finally, there was the struggle within the bosom of the bureaucracy itself. The Austrian bureaucracy was a recent historical creation and was therefore still immature and unruly. While Vienna was, in general, the centre of enlightenment (‘der Aufklarung’) and echoes of currents flowing from the west, matters were different in Galicia. Admittedly, within the Governor’s Office and the Districts there were also individuals who belonged to the camp of reform. But, as jealous fate would have it, during the entire, momentous period of Joseph’s rule, a conservative and reactionary Governor, Brigido, was at the head of the Province. Preoccupied with and devoted to conservative, noble traditions, he was an opponent of policies of reform and progress, although called upon by his very position to implement them. So during the entire period of Joseph’s reign there was a quiet, subversive but constant and relentless struggle between Lviv and Vienna over Joseph’s reforms, which Brigido was able to overturn or distort in their implementation. Despite these difficult conditions, the government’s economic policies yielded some positive results that did in part – considering that the creation of industry requires not just momentary but long-term efforts – justify the hope that Galician industry would slowly move onto a more normal path of development. Events unfolded differently. With the death of the great monarch, the era of industrialisation in Galicia – and in Austria – ended. The outbreak of the Revolution in France and the advent of the Napoleonic period marked the start of an agrarian-conservation reaction in Austria, which for many years stifled weak and nascent industry, in both Galicia and Austria. Fear of revolution, fear of big capital, which supported the First Consul [Napoleon], and fear of the spirit of rebellion, born in industrial centres (unemployment!), led to a relentless struggle against industry, especially large-scale industry, in Austria throughout the period to 1835.60 ‘Österreich soll Ackerbaustaat bleiben’61 was the goal of economic policy during this period. Emperor Franz ii literally declared ‘dass er die Manufacturen überhaupt, und in Wien insbesondere, wenn sie von grösseren Umfang sind, nicht nur nicht vermehrt, sondern nach Thunlichkeit vermindert wissen will’.62 60 61 62

Reschauer [presumably 1882], Mayer [presumably 1882], Y. Zenker. [‘Austria shall remain an agrarian state’.] [‘That he not only wants the number of manufactories, in general and in Vienna in particular, when they are large scale, not to increase but, preferably, to decline’.]

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The wars of the Napoleonic era, the growth of state debts and taxes, a bankdraft economy and especially the uncertainty of relations and the depression it gave rise to, and finally a series of other misfortunes (cholera in 1831) did the rest: completely choking off Galician industry. It was from this latter period that Kalinka drew evidence for his accusations. He unfairly extended the accusation, however, into the previous period, the very period when industry was supported and created in Galicia. The general conclusion which comes to mind is that, in the eighteenth century, there was no conflict between the economic interests of Galicia and Austria, mentioned in the previous literature on the subject, did not exist. Despite apparent contradictions, in fact the industrial interests of Galicia were closely related to the overall industrial development of Austria as a whole. So long the progressive period of reform lasted in the latter, everything was done to implant and develop industry in Galicia. This movement collapsed in Galicia the moment industry was undermined in Austria. The industrial development of Galicia was not stifled by the industry of the Hereditary Lands but collapsed when both, equally, became victims of agrarian-conservative reaction! The conclusion flowing from consideration of economic relations in Galicia during the eighteenth century is all the more interesting and significant because it is, in principle, completely consistent with a deeper view of conditions for the creation of industry in Galicia at present. The formula of ruthless antagonism between industry in Galicia and in the Empire’s western provinces, while perhaps alluring for agitational purposes, gives way to a deeper and increasingly popular understanding: that the development of industry in Galicia remains closely connected with the development of industry in the whole of Austria. ‘It may sound paradoxical’, states the official publication of the Central Association of Galician Factory Industry63 ‘but it is, in general, true that the weakening of industry in Austria’s western provinces, which stifles our industry, also impedes the development of Galician industry …’ ‘We have certain opportunities only when the industry in question has vitality in the general customs area in which we exist, thus in the whole Austria …’ ‘On the one hand the strength of industry in western Austria does oppress our industry but, on the other hand that industry is like the shade of a large tree in which our industry can slowly grow in the midst of struggle’. In this respect, the conditions for industrial development, imposed by the first partition and the removal of our Province’s economic and political sovereignty, and of an independent customs area, have remained essentially unchanged over the past 140 years. 63

Battaglia 1904, pp. 7–8.

section 3

Official Statistics of Galicia’s Foreign Trade to 1792* Translated from German by Rick Kuhn

Trade statistics were produced quite late in Austria. There could be no talk of at all reliable statistics until the last years of Maria Theresia’s reign, because the state lacked the necessary administrative organs, quite apart from lack of training. And then, as greater attention began to be paid to statistical facts under Joseph ii, as enlightened absolutism sought to base its policies and statecraft on these facts and to assess the appropriateness of its regulations against numbers and to offer numerical proofs, demands that were too great were placed on statistics. That was similarly the case in Prussia.1 Attempts to encompass matters which were too extensive and diverse were made and they were therefore bound to fail. Not a few of the flaws in Austria’s trade statistics resulted from the lack of a central statistical agency, such as England had from 1696, in the Inspector General of Exports and Imports, and France possessed in the Bureau de la Balance du Commerce, established in 1716.2 It lay in the nature of mercantilist policy, which was primarily characterised by the concept of the balance of trade, that there was only slender interest in industry that only worked to satisfy local needs [Polizeigewerbe], so it was excluded from statistical collections. Attention was principally directed towards industry generating exports, hence the commercial and manufacturing tables. Here, where the issue is the extent of foreign trade, we will examine the commercial or mercantile tables, as all the manufacturing tables also record branches of production working for the domestic market.3 The commercial tables had two purposes and can only be understood in the context of the trade and tariff policies of that time. According to an ‘instruction’ to Galician tariff officials about the way they were to be assembled, The commercial or mercantile tables [were] introduced so that, on the one hand, the course of trade and on the other the rise and fall of cus* 1 2 3

[Originally published as Grossmann 1913.] Klinckmüller 1880. See Lohmann 1898, pp. 865, 878. See Kopetz 1830, 2, p. 5.

© Translated from German by Rick Kuhn, 2023 | doi:10.1163/9789004678590_005

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toms revenue are apparent, so that it can be determined whether or not the quantity of imported consumer goods … is appropriate for the presumed needs of the population and where the difference arises, whether perhaps it is being smuggled in.4 It is clear that trade statistics were not contemplated during the first years after the occupation of Galicia, when the concern, above all, was to introduce and organise the administration, as there were no standards of measurement and weight, etc. But even later, after the general tariff was decreed, the task allocated to the Governor’s Office, of ‘sending these commercial tables to the Court, accompanied by an expert memorandum, without delay’,5 was unfulfilled.6 So were subsequent, repeated instructions. Only after the introduction of the Galician customs tariff of 1 May 1778, was the customs administration in a position to provide a somewhat more precise statement for the first half year, from 1 May to 1 November 1778.7 Only summary total results were received for 1779 too. [Wenzel Anton von] Kaunitz’s opposition to the conclusion of a trade treaty with Prussia in 1780, in view of the lack of reliable figures for Austria’s balance of trade, however, already made their unreliability apparent. Under Joseph ii greater order was achieved in this area. On 31 May, the Emperor resolved, in relation to a proposal from the Treasury of 12 May, that ‘A statement of how much natural and manufactured products contributed to Galician exports is to be required of the customs administration in Lviv, in this, however, exports to the Hereditary Lands are to be distinguished from those to foreign countries, i.e. Poland, Turkey, etc.’.8 This did happen and Specialist [Referent] in the Governor’s Office, [Vincenz von] Guinigi provided the information sought, in a report of 20 December 1782.9 It was not free of errors and encountered sharp criticism from the Court Chancellery. The Emperor agreed and ordered that the tables be improved.10

4 5 6 7

8 9 10

hka, Galiz. M 2, Fasc 12.217, ad 316 ex 1791. ‘Zirkular an sämtliche Länderstellen vom 20. Juli 1776’, hka, Fasc. Commerz. 57, ad 7 ex Julio 1776. Eder ‘Entschuldigung wegen der bishero unterlassenen Galizischen Mercantiltabellen’, hka, Kameral Akt 7 G, ad 55 ex Aprili 1780. Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968, ad 56 ex Decembri 1780, sections 58 and 59. hka, Kameral Akt 7 G, ad 33 ex Juny 1782. hka, Kameral Akt 7 G, ad 609 ex Januario 1783. ‘Where, furthermore, the Governor’s Office, for the purpose of improving the transit and

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73

Unfortunately, these statements, apart from the summary total results, have not survived, nor have the subsequent tables compiled annually, with the sole exception of those for 1787. Only uninteresting traces of the tables compiled for 1786, 1788 and 1789 can be found.11 The stagnation of state administration after Emperor Joseph’s death is also apparent in the area of statistics. Gradually, the great interest in, where-ever possible, numerical assessment of economic and domestic conditions in the state entirely disappeared. Statistical collections were indeed maintained but they were regarded as a burden to be minimised as much as possible. In a missive of 12 July 1791,12 on the occasion of the standardisation of the statistics of the Hereditary Lands, the future inclusion of trade relations between the common customs area and Hungary was regarded as superfluous and this was because Hungary, although not part of the common customs area, was also not foreign.13 Nor, henceforth, was transit trade documented.14 Nevertheless, the course of development of Galicia’s trade during the two decades from 1772 to 1792 can be sketched on the basis of the fragmentary material, if only in outline. Self-evidently this is a matter less of the absolute accuracy of the figures adduced15 than of their relative values, of the rising or falling developmental trend. At the time Galicia was seized, trade relations with the Hereditary Lands were extremely slight, as the focus of Galician trade was abroad, above all on

11 12 13

14

15

commercial tables is certainly to provide the information sought’. ‘Resolution vom 25 Jänner 1783 über einen Vortrag vom 16. Jänner’. Hofdekret an das Gubernium von 30 Jänner, hka, Kameral Akt 7 G, ad 609 ex Januario 1783. It is worth noting that in England the compilation of transit trade tables was only undertaken from 1798. hka Galiz M 2, Fasc. 12.217, ad 286 ex 1788; ad 482 ex 1789; ad 222 ex 1790. hka Galiz M 2, Fasc. 12.217, ad 316 ex 1791. ‘It is only to be recalled in advance that those tables, which concerned the German and Galician Hereditary Lands’ export trade to Hungary and Transylvania, were found to be indispensable, because the mercantile tables actually only depict the mutual trade from foreign states into the Hereditary Lands and from these abroad … not however the trade from one Hereditary Land into another’ (hka Galiz M 2, Fasc. 12.217, ad 316 ex 1791). ‘In the same way, the transit trade tables, which previously did exist but were only compiled with arduous labour, were felt to be superfluous’ (hka Galiz M 2, Fasc. 12.217, ad 316 ex 1791). For, apart from the methods of collecting data in the eighteenth century, as a matter of course, being entirely inadequate, the following is to be noted. One the one hand, trade statistics had control of smuggling as a purpose (see above p. 72). We therefore have, on the contrary, to seek correction of the statistical results achieved in the existence of smuggling. Illicit trade at that time, not only in Austria but in the whole of Europe, particularly England and France, had grown to dimensions that can scarcely be imagined.

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Gdańsk, then also Saxony and Prussian Silesia. This is explained by Galicia’s geographical orientation along the course of the Vistula, to Poland and the Baltic Sea, and thus outside the geographical sphere of Austrian interests, concentrated along the Danube. Change, in two respects, only occurred because of Poland’s partition. On the one hand, Prussian tariffs, in large part, blocked the route to Gdańsk. On the other, however, the Austrian regime’s trade policy substituted paths to new markets in the Hereditary Lands for the loss of those markets. Trade relations with the Hereditary Lands were thus enlivened, so that Galician exports to them in 1781 and 1782 already constituted half of all exports. Furthermore, the domestic market, particularly consumption by the civil and military authorities, also gained in significance. In this way, Galicia’s trade, by and large, despite all the difficulties, not only did not decline but actually grew, if only slowly! The following table provides an overview of the configuration of trade during the half year from 1 May to 31 October 1778. ‘Composition of the value of all commodities which were imported into or exported from Galicia, from and to the countries indicated’16

Country

Imports (florins) Exports (florins)

1 Bohemia 586 2 Moravia 1,071 3 Austria 305,491 4 Austrian Silesia 23,395 5 Styria 12,500 6 Trieste 13,486 7 Tirol 22,821 8 Hungary 305,495 9 Transylvania 14,338 10 Gdańsk 42,889 11 Poland 1,472,639 12 Bavaria 60 13 Prussia 167,544 14 Empire17 39,702

16 17

942 64,921 12,780 130,288 0 613 0 288,050 25,479 107,278 1,244,666 0 33,106 0

ami, v G 12/2968, ad 56 in Decembri 1780, Beilage 12. [Total exports in this table do not reflect the figures above, according to which total exports should be 2,026,803.] [I.e. other parts of Germany.]

official statistics of galicia’s foreign trade to 1792

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(cont.)

Country 15 16 17 18 19 20

Saxony Swabia Italy Netherlands Russia Turkey Total

Imports (florins) Exports (florins) 212,094 1,795 25,648 21,369 11,984 398,759 3,093,663

0 0 14,010 11 0 104,659 2,026,801

Accordingly, the value of exports during this period was 2,026,801 florins and of imports 3,093,633 florins. It would, however, be a mistake to simply double these figures to arrive at annual totals. Exports of grain and other important goods, like linen and potash, took place along the Vistula during high water, either after the harvest, in autumn or during the spring months of March and April, and therefore were not present in the table for the summer months. Imports, on the contrary, came overland, from Hamburg, Leipzig and Frankfurt, during warm seasons, so long as the roads were passable, as well as on the Vistula. So, while it is imperative to double exports to arrive at the annual figure, the annual figure for imports should not increase as much. The figures for 1779 confirm this: Galician Exports of Imports of

4,499,000 florins 4,099,000 florins

consequently receipts were 400,000 florins greater than outgoings.18 And Treasury Specialist [Friedrich] von Eger received these figures with satisfaction, as ‘pleasing news’, because they ‘indicate a growth in Galicia’s assets and principally from foreign countries’.

18

‘Protokollextrakt d. Böhm. Öst. Hofkanzlei’, hka, Mautwesen in Galizien, 7 G ad 3 ex Juny 1781. Also see ‘Gubernialbericht vom 9. März 1781’, hka, Fasc. Commerz 57, ad 6 ex Majo 1781. These figures apparently lagged behind the usual, because 1778–79 were years of war and large consignments to the army must already have impaired foreign trade.

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The rising trend of Galicia’s trade is also confirmed by the figures for 1781 and 1782. We only learn the level of customs receipts from them but knowledge of tariffs enables the use of these figures to calculate imports and exports. Customs receipts in 1781 were 325,325 florins while in 1775 they were only 228,028 florins The rise in customs receipts was not caused by a rise in customs duties. On the contrary. While there was a single tariff rate of 10 percent on foreign goods until 1778, the new tariffs of 1 May 1778 included numerous exceptions and introduced reductions to 8, 5, 2½, 2 and ½ percent, so that the burden of tariffs overall was on average no more than 7 percent. Import duty on goods from the Hereditary Lands, from 1778 was just ½ percent, compared with 2½ percent previously. Finally, the import duty on Polish goods from 1 February 1777 was 4 percent and often still less; in any case, the average rate was only 3 instead of the previous 10 percent. Now, if customs receipts rose, despite all of these reductions, that is only explained by growth in Galicia’s trade after the introduction of the new tariffs in 1778. This was not only apparent in comparison with 1775 but also during the period after 1778, namely by comparing the figures for 1781 and 1782 with those for 1779. Thus the 5/12 percent tariff on exports to foreign countries brought in 20,141 florins, which (×240) indicates exports worth The tariff receipts of 20,284 florins, from exports to the Hereditary Lands indicate their value was The value of total exports in 1781 was therefore while in 1779 it was only Their value had thus more than doubled.20

4,833,840 florins. 4,868,160 florins 9,702,000 florins19 4,499,000 florins

It is more difficult to calculate imports, because the contribution to the revenue of 194,702 florins due to receipts arising from the rate set by the tariff treaty 19

20

In 1780 the value of exports was even higher, indeed about 200,000 florins. The decline in exports in 1781 was caused by the failed harvest of the previous year, as a consequence of which grain imports grew strongly, ‘these were 230,000 greater than exports of this commodity’. ‘Gubernialbericht vom 20 December 1782’, hka, Kameral Akt 7 G, ad 609 ex Januario 1783. This almost unbelievable increase can be explained, in part, by the figures for 1779 being extremely low, because of the War [of the Bavarian Succession].

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with Poland was not indicated. It can be assumed, however, that imports from Poland were 45 percent and from other foreign countries 55 percent of the total. Consequently, import trade can be portrayed as follows: Customs receipts from imports from the Hereditary lands were 15,869 florins, which (×240) indicates imports worth Receipts from Polish imports were 87,615 florins, indicating (×33) imports to the value of Receipts from tariffs on other foreign countries’ goods were 107,085 indicating (×14) imports to the value of to which duty-free imports to the value of roughly 200,00 to 300,000 florins should be added, so that imports would have had a value of around 8,500,000 florins [in 1781], while they were only worth 4,099,000 florins in 1779.

3,808,560 florins21 2,891,295 florins 1,501,190 florins 8,201,045 florins

Brody’s trade is not included in these import and export figures because it was declared a free trade city in 1779 and was not included in the mercantile tables. According to the calculation above, exports were worth around 1,200,000 florins more than imports. It is to be noted that exports included state produced salt worth 1,000,000 florins. The actual positive balance of trade therefore has to be reduced to only about 200,000 florins.22 The Court Chancellery, like Emperor Joseph were content with this development of Galicia’s trade. The Court Chancellery explained how It is apparent that, despite the unfavourable circumstances in Galicia at the end of 1781 and start of 1782 [poor harvest], the inflow of money has been such that circulation has been pretty much maintained. Certainly, the million due to salt has not greatly animated economic activity. Still, the production and transport [of salt] is undertaken so much by private industry, that the positive balance of trade resulting can be attributed to the Province itself.23 21 22

23

The Jews of Lviv alone obtained goods from the Hereditary Lands worth 1 million gulden. The ‘Hofkanzeleivortrag vom 16. Jänner 1783 über die Merkantilsummarien pro 1781’ stated that ‘Exports in 1781 [were] greater than imports by 116,158 florins’, hka, Kameral Akt 7 G, ad 609 ex Januario 1783. ‘Hofkanzeleivortrag vom 16. Jänner 1783 über die Merkantilsummarien pro 1781’, hka, Kameral Akt 7 G, ad 609 ex Januario 1783.

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And the imperial Resolution of 25 January 1783 was in the same spirit: ‘The situation indicated in the Galician commercial tables for 1781 has informed me and they have indeed confirmed the observations made by you, the Treasury’.24 The relevant figures for 1782 mentioned present the following picture. From duties on exports to foreign countries 17,219 florins were raised, indicating exports to the value of Receipts from duties on exports to the Hereditary Lands were indicating exports worth Total exports were therefore The receipts from the Hereditary Lands’ consumption duty was 17,733 florins (×240) indicating imports worth receipts of 181,010 from duty on imports from foreign countries, of which 45 percent = 81,455 florins came from Polish imports, which (×33) indicating imports worth the remaining duty of 99,555 florins on imports from other foreign countries represented (×14) imports worth the total value of imports was therefore in addition there were grain imports from Poland, the customs receipts from which was 5,781 florins, that is 4 percent of their value of Resulting in a total value of imports of

4,132,560 florins 17,150 4,116,000 florins 8,248,560 florins

4,255,920 florins

2,688,015 florins 1,393,770 florins 8,337,705 florins

144,525 florins 8,482,230 florins

Although these figures for 1782 now showed a quite significant decline in exports compared with the previous year, the picture previously achieved still remains, in general, unaltered. Fluctuations in the exports of goods from an agricultural country without industrial production, which is by its nature more stable, go without saying. Governor’s Office Specialist Guinigi remarked that The wealth of the Province is mainly agricultural. The greater part of the nobility here live, in large part, off grain shipments to Elbing and Gdańsk, which pay their expenses and for their fashions. Transactions are under-

24

‘Hofkanzeleivortrag vom 16. Jänner 1783 über die Merkantilsummarien pro 1781’, hka, Kameral Akt 7 G, ad 609 ex Januario 1783.

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taken partly in cash and partly through exchange of goods and thus the fate of commercial activity and customs receipts in this Province depends on agriculture. The poor harvest of 1781 necessarily affected exports during the following year. The value of exports in 1782 was almost 1½ million florins less than in 1781.25 Imports, on the other hand, remained at their previous level, for the time being. Guinigi explained that this was because Galicia did not obtain luxury goods but rather necessary consumer goods.26 Finally, it was certainly hoped that the losses of the bad year could be offset by good harvests in the future. Customs receipts, which rose from 290,832 florins in 1782 to 315,859 florins, demonstrate that trade did recover the following year (1783). There are great difficulties in following the development of Galicia’s trade in subsequent years. Among other reasons, this is because a new basis for trade policy was created on 1 December 1784, with the introduction of the prohibition system and the removal of tariffs between Galicia and the German-Slav Hereditary Lands. There are, nevertheless, further clues that allow assessment of commercial trade and even for a comparison with earlier years. Almost all information about trade is certainly missing for the next two years, 1785 and 1786. Nor do customs receipts, which fell to 188,672 florins and 205,952 florins respectively, allow any conclusion to be drawn, as the fall in customs receipts was a necessary concomitant of the high-pressure system of prohibition and protection.27 On the other hand, the authorities contended ‘that the advantageous, positive trade balance of this Kingdom is 1,600,000 florins’.28 Still, this positive balance was apparently achieved not so much by increasing exports as by reducing imports.

25

26

27 28

‘Now, insofar as is known the harvest of 1781 turned out to be so limited that the cerealshortage had to be managed by granting duty free status to the import of grains, Galicia could obviously export less abroad as to the Hereditary Lands, consequently, the Consumo receipts from exports abroad as well as the Essito receipts from exports to the Hereditary Lands necessarily had to fall’, ‘Gubernial Bericht’, 28 February 1783, hka, Kameral Akt, 7 G, ad 435 ex Aprili 1783. The decline in the province’s exports ‘had no bearing on its imports, namely on the province’s requirements, according to the size of its population, which cannot be forgone, and therefore must be obtained from elsewhere’, ‘Gubernial Bericht’, 28 February 1783, hka, Kameral Akt, 7 G, ad 435 ex Aprili 1783. In part a consequence of the duty-free importation of 2,129,602 Metz of grain, ordered because of the famine, which caused a loss of 100,000 in customs revenue. ‘Bericht des Mautadministrators von Schönauer vom 7 June 1788 über Tabellen pro 1786’, hka, Galiz. M 2, Fasc. 12.217, ad 286 ex 1788.

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We only have exact and detailed data for 1787. According to them, imports were worth 5,618,803 florins, exports 6,172,683 florins. The positive foreign trade balance was 553,880 florins, although 2 million gulden was spent on means of subsistence during this year of terrible famine. Compared with the figures for 1781 and 1782, the following table shows an enormous decline in imports as well as exports. ‘Total value of all goods imported from or exported to the countries listed, from 1 November 1786 to the end of October 1787’29

Country

Imports (florins) Exports (florins)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brody Austria Austrian Silesia Tirol Trieste Hungary Transylvania Poland Gdańsk Prussia Bavaria Empire Saxony Turkey Italy Switzerland Russia [Austrian] Netherlands Holland France Total

221,582 77 1,364 7,454 50,859 1,069,684 45,245 2,576,267 221,582 136,455 30 8,576 14,253 1,419,626 13,933 0 666 27,902 96 24,255 5,618,803

302,958 0 617,509 0 21,419 1,894,393 79,776 2,659,374 302,958 86,485 0 16,677 1,422 227,679 1,240 1,222 109 0 0 261,089 6,172,683

29

‘Pr. K. k. Mautgefällen-Administrations-Rechnungs-Confection. Lemberg, 7 March 1789, Johann Berger’, hka, M 3, Fasc. 12.222, p. 154. [The totals in this table do not reflect the figures above, according to which total imports should be 5,839,906 and total exports 6,474,310 florins.]

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official statistics of galicia’s foreign trade to 1792

Still, this decline is only apparent, as the figures up to 1784 include Galicia’s commercial trade with the Hereditary Lands as well as foreign countries. After 1784 and the removal of the customs barrier between the Hereditary Lands and Galicia, however, that was impossible and the table for 1787 only encompasses trade with foreign countries including Hungary, which was not part of the common customs area.30 If the figures for 1787 are compared with those for 1781, only the foreign trade in the latter should be considered. The result of doing so is that, while exports to foreign countries in 1781 were worth in 178731 they were worth Consequently, within six years exports rose by 15 percent, even though 1787 was a bad year. On the other hand, imports in 1781 were worth and in 1787 rose to that is, by only 11 percent

4,833,840 florins 5,533,755 florins

4,692,485 florins 5,559,049 florins32

Transit trade also developed favourably, although it experienced large fluctuations in individual years.33 To the extent that a conclusion can be drawn from a critical assessment of the available statistical material, the assertion that Galicia’s trade after 1772, particularly in the period between 1775 and 1787, was in the process of normal and constant development is justified. All the more so because the statistics of this Crown Land’s foreign trade after 1784 only included part of its total trade. While, [initially] after 1772, Galicia’s trade relations with the Hereditary Lands were extremely slight and its domestic market was of no great significance, that is, foreign trade was the largest part of its trade, this picture gradually changed. Galicia’s commercial trade with foreign countries did grow quite rapidly, despite serious obstacles, but in addition commercial trade with the Hereditary

30

31 32 33

The table did indicate trade with many Hereditary Lands. But these were either those provinces which enjoyed a special place in trade policy, like Tirol and Trieste, or were merely for the import and export of livestock, e.g. to Silesia, for which duties remained after the removal of the tariff barrier, until 1788. After deducting Silesia’s exports of 617,905 and Trieste’s exports of 21,419 florins. After deducting 59,754 florins from positions 2 to 5 in the table. During Joseph’s sole rule, the figures were 1781 3,775,800 florins 1783 3,658,870 florins 1782 2,920,000 florins 1787 2,404,326 florins In the last year Brody accounted for 619,000, Prussia 612,000, Turkey 462,000, Poland 265,000.

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Lands developed in parallel at an accelerated pace. It is, however, impossible to assess the scale of this development after 1784. Only by adding trade with the Hereditary Lands and, furthermore, the large consignments to the army, as well as growing domestic consumption in general to the figures for foreign trade would an approximately correct picture of the foreign trade results, calculated above, be obtained. A reversal of this development, in 1791 and 1792, only seems to have occurred after the death of Joseph ii, when political events and particularly the second partition of Poland and the unrest which followed severely impacted Galicia’s trade. The question of how large Galicia’s trade was in comparison with the commercial trade of all the other Hereditary Lands remains. It is impossible to answer this question precisely because of the lack of specialist research into the trade of the Hereditary Lands. Its importance, however, does not permit us to leave the question entirely unanswered. For the period to 1784, certainly, any attempted to make a calculation would be too risky, in view of the fact that Galicia and the Hereditary Lands had entirely different tariff systems. An acceptable basis for such a calculation is only possible for Galicia after it was incorporated into the common customs area in 1785; and we will, indeed, be able to draw conclusions about the relative size of the trade of individual provinces from the tariff receipts of each of them. According to state estimates34 for 1785 and 1786, customs receipts for the whole Monarchy were 6,682,216 florins and 6,689,679 florins respectively. After deducting the receipts from the Hungary, Transylvania, the Netherlands and the Italian provinces,35 which had separate tariff institutions, there remain 2,939,432 florins and 2,968,596 florins respectively, from this side of the Empire (approximately with its current borders). This income came from the individual provinces as follows:

34 35

‘Staatsvoranschläge’, hka, Fasc. 227 D. Lit. S. and N. The customs receipts in these provinces were

Province Hungary Transylvania [Austrian] Netherlands Italian provinces

1785 (florins)

1786 (florins)

636,100 84,640 1,988,400 1,033,602

619,416 86,440 1,988,440 1,026,784

official statistics of galicia’s foreign trade to 1792

Province Galicia Bohemia Moravia and Silesia Lower Austria Upper Austria Styria, Carinthia, Carniola Görz, Gradiska, Trieste Tirol36 Further Austria Total

83

1785 (florins) 1786 (florins) 188,672 230,000 140,000 1,417,000 85,000 374,000 119,000 320,690 65,070 2,939,432

205,952 380,000 168,000 1,273,000 93,000 325,000 112,500 345,000 66,144 2,969,596

Galicia therefore contributed 6.42 percent then 6.94 percent to customs receipts, while e.g. Bohemia contributed 7.8 percent then 12.8 percent. Considering that Galicia had to overcome more than a hundred years of trade policy neglect, the success of Austrian trade policy during a period of hardly one and a half decades is apparent from the figures above, which can certainly not be called unfavourable. The contribution of Galicia to the total trade of the Hereditary Lands only declined during the years 1791–2, which were critical for the Province. While total customs receipts in 1792 rose to 3,231,557 florins,37 Galicia contributed no more than 152,236 florins, i.e. scarcely 4.7 percent.

36 37

The reason for Tirol’s relatively large customs receipts was this Province’s particular customs regulations. ‘Staatsschulden’ hka, Fasc. 26, ad 144 ex Majo 1792, Rubrik ‘Zollgefälle’ in the Abteilungen ‘Camerale’ and ‘Bancale’.

section 4 Austria’s Trade Policy, with Reference to Galicia during the Reform Period 1772 to 1790* Translated from German by Ben Fowkes

∵ For my wife Janka

… To characterise a whole historical epoch in terms of political economy is to grasp it as an element in a broader process of economic development. Gustav Schmoller1

* 1

[Originally published as Grossman 1914.] [Schmoller 1884, p. 15.]

Preface I hereby present to the public the first part of my investigation, which is the fruit of almost five years of study. Its subject is the transformation of the economic and social structure of Galicia from the feudal into the capitalist form. In the second part of my work I will try to show how and why the power of the feudal landowners lasted longer in Poland than in western Europe, as well as the retardation of urban development and urban industry which resulted. I will also try to show that all the elements of the modern mode of production had already taken shape within feudal society. We will trace the prerequisite for the modern mode of production, ‘primitive accumulation’, in its two polar aspects: the historical process of the separation of the Polish peasants from their own means of production and, on the other hand, the emergence of capitalist entrepreneurs. We will see how the Jews, as representatives of usurious and commercial capital, notwithstanding all the efforts of the nobility and the craft guilds, set out to establish modern industry in the country, once the economic policy of Maria Theresia and Joseph ii had cleared all the obstacles which stood in its path. For this economic policy – with its reforms which favoured the peasant population and instituted equal rights for Jews, with its protectionism, its transformations of administration and efforts to codify laws – signified nothing other than the purposeful orientation of the economic mechanism in the direction of promoting and shortening the transition from the old, traditional to the modern mode of production. Previous literature on this epoch laid too little stress on the close connection which existed between Joseph ii’s great agrarian reform and his mercantilist industry policy. [Wilhelm] Roscher, [Adolf] Beer and [Hans] Rizzi were unable to advance beyond the contrast between Joseph ii’s agrarian policy, guided by physiocratic principles, and his industry policy, guided by mercantilist principles. They therefore became entangled in insoluble contradictions. Yet the facts themselves speak fairly clearly. It was very important that the abolition of serfdom ensured a flow of free wage labourers into the towns, while the protectionist system ‘manufactured manufacturers’ created new opportunities for business activity. But the cornerstone of Joseph ii’s agrarian reforms, his system of taxation and agrarian relations played an even more important role in promoting industrial development. Precisely this measure, of course, fell victim to the restoration, which began under his successor, Leopold ii. Without this reversal, the new tax system would have compelled the mass of the peasant population to shift from a natural to a money economy, even at this early

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_006

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date. It would have forced them into dependence on the market but at the same time given them the capacity to purchase industrial products. In order to gain a more precise insight into the transformation of the internal market, however, a pragmatic understanding of the influence of the external market is necessary. To start with, the extent and the character of the latter therefore needs to be established and this is undertaken in the following, first part of my investigation, which aims to provide an account of the configuration of trade policy for Galicia in relation to the other provinces. This is both an Austrian problem in general and a Galician one in particular, which still awaits a solution. Much has been written about the period of Maria Theresia and Joseph ii but almost no attempt has been made to clarify their trade policies, discover their goals and the forces that motivated them. Previously only their superficial features were known and evaluated exclusively with reference to the writers’ standard conception, i.e. as a paradigm of the struggle between the principles of protectionism and free trade. But the trade policies of Maria Theresia and Joseph ii can only be understood and judged correctly on the basis of the domestic and external political situation, and the economic situation of the Monarchy. The present investigation is intended to be a first step in this direction. The final step can only be taken when a series of specific monographic investigations have completely illuminated the history of Austrian industry in the second half of the eighteenth century. But even now, I believe that I have already achieved new insights into the understanding of the economic policy of the entire state at that time, even though, from a formal geographical perspective, my investigation covers only a single province. After all, both in terms of area and population, it constituted roughly a third of the half of the Empire inhabited by Germans and Slavs. Of the 510,215 square miles, in 1789, with 11,975,118 inhabitants, Galicia covered 151,884 square miles, 30 percent, with a population of 3,393,466, almost 33 percent. Moreover, the important trade policy interests of the entire state intersected precisely on the Vistula, in the same way that they had previously on the Rhine, Oder and the Elbe. The necessity of examining the trade policy in Galicia as a part of the trade policy of the entire state has given rise to not a few methodological and practical difficulties, increased further by the complete lack of preliminary critical work in this area. Consequently and owing to the narrow compass of this work in comparison with the vastness of the theme, the presentation here suffers on the one hand from being overburdened with detail and on the other hand from frequently being only able to offer summaries. In dealing with my theme consistently on the basis of newly acquired source material, I have been obliged to place myself in opposition to the predominant

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view taken by Polish public opinion. I am fully aware that in doing so I have, in a certain sense, taken on the role of devil’s advocate. Self-evidently, this has not deterred me from giving expression to the results I have arrived at any more than it deterred [Walerian] Kalinka and [Michał] Bobrzyński from examining the same problems, proceeding admittedly from a different historical basis and reporting on different historical events, but equally acting ‘in the name of historical truth’. As Kalinka wrote in 1881, I have overthrown much that previously counted as historical axiom, demonstrated the mistakes of those who were surrounded by an aura of undimmed brilliance and emphasised the services of those who were almost universally condemned … No-one, however, can attack old-established, traditional views without stirring up a certain irritation, indeed perhaps outrage. Anyone who undertakes such a task must reckon with this from the outset and calmly wait until the truth pierces the mist.1 I perform a duty which lies close to my heart in expressing my sincere thanks for his support to Professor Dr Carl Grünberg of Vienna, my revered teacher. Over many years, in all phases of my work, both in Vienna and in Paris, standing by my side completely ready to provide support and stimulation. He spared neither time nor effort right up to the final read-through, always imbued with a very lively interest in the task, which he had set himself and his students, of grasping the great reform period of Austrian history from all angles, whether agrarian, industrial or commercial. I also feel a particular sense of obligation to all those who facilitated my archival studies by their willingness to assist me: Archive Director Professor Dr Heinrich Kretschmayr, Dr Karl Huffnagel and Dr Josef Kallbrunner at the Archiv des k.k. Ministeriums des Innern; his excellency Privy Councillor Dr Ludwig von Thallóczy, Court Councillor Franz Kreyczi, Dr Josef Ivanić and Dr Gustav Bodenstein at the Archiv des k.k. gemeinsamen Finanzministerium; Court Councillor Dr Árpád von Károlyi and Archivist Dr Roderich Gooß at the k.k. Haus-, Hof- und Staatsarchiv. In Paris, the Austro-Hungarian Embassy and in particular Legation Secretary Prince Emil zu Fürstenberg, as well as Professor Georges Blondel and the management of the Archives du Ministère des Affaires Etrangères. Finally, the management of the Ossoliński Institute [Zakład imienia Ossolińskich] and of the Governor’s Office Archive [Statthaltereiarchiv], as also its director the late Professor [Alois] Winiarz in Lviv, who died far

1 [Kalinka 1895–96, 4, p. vi.]

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too early, and the Imperial and Royal Academy of Sciences [Kaiserliche und Königliche Akademie der Wissenschaften] and the Princes Czartoryski Archive [Archiwum Książąt Czartoryskich] in Kraków. I was prevented by external circumstances from making use of documents in the Royal State Archive in Gdańsk, which contain a certain amount of material on commercial questions during the period under investigation, as well as correspondence with individual Galician towns. Nevertheless, I have very good grounds for assuming that the picture I have presented has not been detrimentally affected in any essential respect. Vienna, in September 1913 Dr Henryk Grossmann

Introduction 1

The Legend about the Causes of Galicia’s Economic Backwardness

Polish historical literature almost unanimously ascribes the economic backwardness of Galicia, in general, and of its industry in particular to the Austrian government’s hostile economic policy, which allegedly began immediately after the Province was attached to the Habsburg Monarchy (1772). This view is, however, fundamentally wrong. It is certainly worthwhile and necessary, in the interests of a deeper understanding of Galicia’s economic development, to examine it critically on the basis of the facts. Its validity for the later period of the first half of the nineteenth century, will perhaps have to be conceded; but this is absolutely not the case for the first twenty years after Austria’s ‘recovery’ of the Province. The above-mentioned view is so customary, so commonly expressed in the scholarly literature, just as in journalism and the press, that it would be both impossible and superfluous to list all the examples that come to mind. For our purposes, it is quite adequate simply to provide a chronological overview of its important advocates. It should be noted at the outset that, in the eighteenth century, contemporaries judged Austrian economic policy quite differently and that anyone looking for examples of the negative judgement we are contesting would search in vain. No less a person than [Stanisław] Staszic only wrote in 1785 with genuine enthusiasm about Joseph’s reforms, repeatedly presenting them to his fellow citizens as a model.1 On the other hand, he attacked the policies of the House of Brandenburg sharply.2 He stated that In four years [1781–85] Emperor Joseph ii has secured freedom and protection for the religions in all his provinces; he has given the peasants and burghers equal status to that of the other estates; he has made sure that tillers of the soil and artisans have the same rights as other citizens of the Empire; he has reduced, as far as possible, the privileges that favour individual estates, which offend the others; he has dissolved the monasteries; he has compelled the Jews to engage in agriculture and craft production; he has founded numerous colonies at great expense and he has encour-

1 See Staszic 1787, pp. 111, 178 and 186. 2 Staszic 1787, pp. 108–10.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_007

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aged immigration from all other European states by promising ten years’ exemption from taxes and providing financial support; he has prohibited all foreign goods; he has set up various factories and manufacturing establishments; he has refused to allow the importation of cereals from Poland except in small quantities, although [this] cost him many millions every year … With all these measures, the wise and energetic Emperor will lessen the number of idle people in his lands. This will certainly increase the harvests, the population and the amount of money [in them].3 ‘The Polish government’ should therefore ‘take as its models all the laws, incentives and freedoms of the peasant and burgher estates … in the provinces of the Empire’.4 The great Polish statesperson and former Chancellor Andrzej Zamoyski, who after 1781 lived on his Galician, entailed manors in Zamość, also wrote with similar admiration about Joseph ii’s agrarian reforms, although not without expressing a number of reservations.5 Matters only began to be viewed differently after Joseph ii’s death, when conservative agrarian reaction was victorious and the spirit of medieval feudalism again advanced triumphantly. Then Galician journalism also began to be imbued with the same spirit of vehement hatred for the Josephine reforms, in a series which ran all the way from the well-known Charta Leopoldina6 to [Konstanty] Słotwiński’s comments in 1819 on [Franz Joseph] Jekel’s book.7 In Słotwiński we have the originator of the legend indicated above. But it found its classical formulation thanks to the great talent of Father Walerian Kalinka, who it should be added uncritically adopted many of Słotwiński’s facts and opinions. Kalinka is the source from which Galician journalism drew nourishment for more than half a century.8

3 Staszic 1787, p. 111. 4 Staszic 1787, p. 102. 5 In an anonymous pamphlet he wrote: ‘Joseph ii certainly freed the Galician peasants in order to improve the cultivation of the land: this is a great event [krok] for agriculture and for the well-being of the state’. [The pamphlet was written by Józef Pawlikowski 1788, p. 59.] 6 Exposé from the Galician nobility of 23 April 1790. [Zakład imienia Ossolińskich, 525, pp. 616– 19. The Exposé was submitted by the nobility before the Charta Leopoldina. The Charta Leopoldina (Ossoliński 1893) was submitted on 19 August 1790.] See Starzyński, 1893, p. 3; and Kalinka 1895–96, 4, section 124, p. 117. A well-known pamphlet issued in 1790 also presented the views of the Galician nobility (Anonymous 1790b). 7 Słotwiński 1819. [Jekel 1803–06.] 8 Kalinka 1898.

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To the question ‘Why does industry stand at such a low level in Galicia?’ Kalinka answered: In this field, every step [taken by the country] must appear as a kind of revolt in the eyes of the government, which has transformed this fine land into a colony of the Austrian provinces. For the German producers in the Empire, every industrial effort in Galicia is a loss; all production was therefore prohibited in Galicia … Certainly, if the facts did not speak so clearly, one could hardly credit the exceptional severity with which the government has persecuted every stirring of industrial life in Galicia. Where the refusal to give any kind of help was not sufficient to kill off the Province’s industries, restrictive regulations were imposed and, where this did not suffice, formal prohibitions put in place.9 In Kalinka’s work, however, one seeks in vain for the ‘numerous documents’ and ‘eloquent facts’ with which he promised to justify his assertions. In relation to the period which forms the subject of our own investigation, he gives absolutely no evidence to confirm either direct hostile action by the government or an intention to take such action.10 Nor did Kalinka limit the period to which his accusations applied. He implied that they referred to the earlier epoch, although the material he used stemmed overwhelmingly from the second quarter of the nineteenth century. His conclusions, which contained ‘one of the most terrible indictments of the Austrian regime of 1772 to 1850 ever made’,11 were actually couched in very general terms. He admitted this himself: ‘As an eyewitness to the present situation, I have tried to depict the circumstances prevailing during the epoch when this Polish Province came under Austrian rule, to trace out developments during the next 80 years and to demonstrate how and to what extent the laws and custody of the Austrian government influenced Galicia’.12

9 10

11 12

Kalinka 1898, pp. 254–5. The examples of budgetary policy and oppressive taxation given by Kalinka are sometimes regarded as proof that Galician industry was indirectly persecuted in the eighteenth century. We will wait until the second volume of this investigation to demonstrate the complete worthlessness of this and other similar assertions. See Tarnówski, quoted in the publisher’s preface to Kalinka 1898, p. 5. Kalinka 1898, p. 9. Thirty years later (in 1881) he delivered an even stronger verdict on Austrian rule, saying that, of three Polish provinces which came under foreign domination, Galicia was the most unfortunate and had to endure the most painful moral and material suffering (Kalinka 1895–96, 4, p. 104).

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Since then, this legend has been repeated again and again without any examination. In 1872, twenty years after Kalinka’s book appeared and a century after the First Partition of Poland, Władisław Łoziński made the first attempt to justify Kalinka’s conclusions on the basis of archival sources. In his historical portrayal of the first years of the Austrian regime Łoziński characterised the position of the central Austrian administration on the question of Galicia’s economic development as ‘All the official and unofficial reports which have survived since that period demonstrate that Galicia was in a state of complete material ruin’. And he justified this assertion as follows Mr [Michał] Wielhorski wrote volumes on Galicia’s … economic requirements. The College of Estates sent its report … to Vienna. It made a supplication to the Emperor in 1782 and again in 1785, but always without success … The rapid transformation of the relation between master and subject brought about by the introduction of the new system of agrarian relations deprived landed property of seven eighths of its value, while the landowners were ruined by exorbitant taxation and the disruption of credit.13 In 1883 this legend was again taken up by Tadeusz Rutowski, the commendable champion of Galician industrialisation, knowledgeable about the economic conditions of this Province, and indeed, with expressions copied almost word for word from Kalinka, though in part made even stronger. He explained that The economic martyrology of Galicia would require a special study, which one of us really should to undertake at some time. Since it was occupied, Galicia has been a terrain for exploitation by several western provinces of the Austrian crown – the Hereditary Lands.14 [Its] relationship with the Monarchy was … that … of a colony to the ‘mother country’. The whole system of taxation and particularly taxes on trade were directed to this end … The state’s foreign trade policy aimed to create and protect indigenous industry and, as in other countries, it passed through

13 14

Łoziński 1872, pp. 98–9. [Editor’s interpolation.] On this book, see Historische Zeitschrift 1873. [The Hereditary Lands, in this context, were the territories ruled directly by the Habsburgs, apart from those in Hungary, Italy, Banat and Galicia. Elsewhere in Grossman’s text, the term sometimes includes Hungary.]

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all the phases of Colbertism, Mercantilism and the System of Manufacture. Emperor Joseph ii introduced a system of prohibition by forbidding the importation of all foreign manufactures … Every attempt to call local Galician industry into life was regarded as a kind of rebellion, which seriously prejudiced the rights and privileges of the western provinces of the Austrian Germans … For a hundred years the regime has made it difficult to obtain credit … The behaviour of the government in Vienna towards the Province’s industry is a well-known fact. It will suffice to recall the Edicts of 1777, 1784 and 1789, which may have remained in force into the first half of our century. These required that goods manufactured by local factories had to be sent to Vienna to be stamped before they were sold.15 Again, Schnür-Pepłowski wrote in 1895 It was impossible for Galician industry to prosper under the custody of the government of Joseph ii. The innumerable administrative measures aimed at improving the position of the artisanate were almost always of an exclusively Germanising tendency. The high duties on foreign manufactures and the absolute prohibition of the importation of certain foreign goods into Galicia were aimed more at favouring the German and Bohemian provinces than assisting local Galician industry, which was not supported by the government in any way at all.16 Furthermore, in 1905 Henryk Jaworski reached the conclusion that the Austrian government had ‘not played any useful role’ in the development of Galicia’s economy before the Congress of Vienna. And he added that if Governors ever wanted to do something good for the Province, his good ideas or proposals almost always met with rejection by the government in Vienna. It only provided material support where it was to its own advant-

15

16

Rutowski, 1883a, pp. 49 et seq. We also find similar explanations ten years earlier, in Romanowicz 1873, p. 36. As late as summer 1912 the director of the Central Association of Galician Manufacturing Industry, Baron Roger Battaglia, referred to these stamping regulations in his opening address to the Congress of Polish Political Economists in Lviv. As against this, I must stress here that no such stamping regulations existed between 1772 and 1792 and that the whole story is plucked from the air. Such lapses are unfortunately not unusual in the relevant literature. See below, pp. 150–6. Schnür-Pepłowski 1895, p. 77.

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age. The population lay prostrate, lived quietly and waited – the Province became impoverished.17 Finally and most recently, the same general rhetoric and the same judgements were again encountered in a work by Father Władisław Chotkowski, which received a prize from the Academy of Learning [Akademia Umiejętności] in Kraków. He also raised the question ‘Why could this rich Province never develop economically?’ and, basing himself on quotations from a memoir by Count [Johann Anton von] Pergen,18 found the ‘key to this mystery’ in the hostile trade policy of the government, which wanted to maintain Galicia as a market for the industrial production of the German-Slav Hereditary Lands. This ‘key’ does not unlock any secrets and does not confirm the legend. As Galicia was an agrarian province, it had to import industrial products from somewhere; and in fact did this for many years both before and after the partition of Poland.19 What Chotkowski demonstrated, at most, was that the government wanted foreign commodities to be driven out by Austrian ones. That intention was not in the least harmful to Galicia, particularly because, as we will see, it was carried through with great care and consideration in order to avoid any rapid change or revolution affecting inherited trade connections with the outside world. To prove his assertions, Chotkowski would have had to show that the Austrian government tried to restrict the development of local industry in order to make Galicia a market for the products of the Hereditary Lands’ industries. He was no more able to provide this proof than any of the other historians mentioned above. On the contrary! He himself quoted [Johann Bernhard] Degelmann’s report of 1775, in which this honest political economist … called for the promotion of those branches of Austrian industry which were able to compete with Polish industry. He therefore advised the government to improve roads … to introduce a regular postal service and so on … His proposals were therefore aimed at raising the level of Galicia’s trade and industry.20

17 18 19

20

Jaworski 1904–05, p. 301. Chotkowski 1909, 1, p. 20. ‘As far as imports are concerned, it is impossible to enumerate them separately; it must be assumed that everything offered for sale was purchased’, Kubala 1872, p. 10. Staszic notes that the Polish magnates and senators consumed foreign goods almost exclusively. ‘Not one of them possessed the smallest item of clothing, not even a pin, which was made in the fatherland’ (Staszic 1787, pp. 142 et seq.). Chotkowski 1909, 1, p. 51, and Chotkowski 1897, pp. 82–3.

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One might think that this report would have shaken Chotkowski’s faith in the legend which had been circulating for two generations and, in any case, induced him to re-examine it carefully. Wasn’t Degelmann, that ‘honest political economist’, also an official of the same government blamed for causing Galicia’s economic ruin? But it is no easy matter to extricate oneself from the influence of deeply rooted prejudices. Chotkowski therefore settled the question with the unproved and arbitrary assertion that ‘all these sensible proposals’ by Degelmann ‘were ignored in Vienna’. Having thus removed all the evidence that contradicts his preconceived opinion with a stroke of the pen, he went on to assert categorically that ‘the irrationality went so far that every factory based industry and every craft was deliberately annihilated’, with the result that ‘whereas the commercial situation of Galicia was excellent when it was occupied … a hundred years later it had been thrown into complete economic ruin’.21 According to Chotkowski, therefore, Galician industry was deliberately destroyed. And the proof of this? He referred us to Kalinka! But since that text also contains no proof and Chotkowski was consequently unable to give any precise details, he cited Kalinka in the following manner, which is extremely interesting from a psychological point of view: ‘Kalinka, Galicya i Kraków, passim’. So the legend, passed from one hand to another, after sixty years returned to its origins, now, perhaps, to begin a new cycle. What, however, is the historical truth? Like every truth, this one has also started to make its way into the open only gradually and very slowly. Nevertheless, it was never suppressed completely. From the beginning, voices were raised against conception indicated above, although they were isolated and timid. These witnesses deserve to be retrieved from obscurity. As we have seen, even contemporaries during Joseph ii’s epoch, such as Staszic (1785) and Zamoyski judged the activities of the Austrian government favourably. No less later writers. Pre-eminently Franz Josef Jekel (1809), whom Chotkowski also praised as ‘a great expert on the economic and commercial conditions’.22 ‘Since its success-

21 22

Chotkowski 1909, 1, p. 51 [Grossman’s emphasis]; and Chotkowski 1897, p. 83. Chotkowski 1909, 1, p. 19. Jekel was in the service of King Stanisław August of Poland for a long time. Then, for several years (1781–88), he was an lawyer in Lviv where he received his doctorate in 1790. Under the protection of Count Ossolinski and as a friend of Samuel Linde, he devoted himself to the study of Polish conditions. His main works are Jekel 1803– 06; and Jekel 1809.

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ful acquisition of eastern Galicia in 1772’, wrote Jekel, ‘the Austrian government has tried with all its strength to raise the level of trade and industry, those essential sources of national well-being’ and he proposed to demonstrate this with reference to detailed facts and legal regulations.23 Leopold Friedrich von Schmid wrote the same thing in 1822. His verdict is interesting because as a Governor’s Office Councillor he was able to use the official documents of the provincial government in Lviv.24 He stated that with the seizure of the Province by Maria Theresia a new era in the development of its trade and industry began. ‘Hardly had a certain calm and public order been established … property protected and limits set to arbitrary measures, than the administration made a special point of giving fresh impetus to all branches of business activity’.25 Schmid mentioned privileges for artisans and manufacturers as proof of this and continued: ‘Emperor Joseph ii was particularly concerned to establish factories, which were completely absent from the Province. Not only were manufacturers encouraged to set up enterprises of this kind by special advantages and favourable treatment but, following the conviction that their efforts would bring great gains, they were also given support from the state Treasury, which was not distributed in a miserly way’.26 Similar ideas can be found in a work, which came out in 1838, by Franz von Minasiewicz, a lawyer and a member of the National Ossoliński Institute in Lviv.27 In it, he was concerned to ‘reveal the progress made by this Kingdom, by means of a comparative survey of the condition of trade and industry in this Province under the former Polish government and under the Austrian government’ and to exonerate ‘the government of the charge that it took too little care to promote trade and industry’.28 He enumerated the regulations issued with this intention and he used these to demonstrate that ‘the Austrian government’ demonstrated ‘appropriate attention … to the promotion of trade and industry in this Province right from the start’.29 He arrived at the conclusion that the advantageous effect of these government measures is undeniable. ‘Today, Galicia possesses many factories and workshops, of which there was no trace a few decades ago’.30

23 24 25 26 27 28 29 30

Jekel 1809, 2, p. 94. Schmid 1822. Schmid 1822, p. xvii. Schmid 1822, p. xx. Minasiewicz 1838–39. Minasiewicz 1838, pp. 373–4. Minasiewicz 1839, p. 49. Minasiewicz 1839, p. 62.

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After Kalinka’s book appeared (1853), such voices fell silent for a long time and a quarter of a century had to pass before this taboo was broken.31 The Provincial Statistical Office in Lviv was established in 1874, as a consequence of the ‘emergency debates’ in the Galician Parliament after 1866, and, to use Rutowski’s expression,32 the ‘epoch of historical investigation (1875– 1880)’ was inaugurated. Thanks to newly acquired material dealing with conditions in the Province, people began to realise that the hypothesis according to which Galicia’s industrial backwardness could be attributed to the repressive policies of the central government was untenable. For the first time it became apparent that the situation of agriculture was no better than that of industry, it was perhaps even worse. Galicia had enjoyed autonomy since 1861. Two decades later, however, Rutowski still complained ‘that so little had been done for agriculture in a largely or rather almost exclusively agrarian province, in which farmers and big landowners could make decisions about the local economy, within the limits of provincial autonomy’. He explained this fact, not as a result of the hostile foreign machinations but of the lack of any sense of initiative and the inactivity and aimlessness of the interested parties themselves.33 Half a century later, Stanisław Szczepanowski’s assessments moved in the same direction. He came to the surprising conclusion that Galicia is one of the most backward countries in the whole world in relation to agricultural production. ‘We never believed’, he wrote, ‘that we could measure up to other countries in trade, industry or finance. Our Province is after all agrarian; it 31

32 33

A few isolated voices which judged the economic development of Galicia to the middle of the nineteenth century differently from Kalinka, perhaps even too optimistically, can, however, also be found during this period. Thus, in 1867, the statistician Count Mieczysław Marassé asserted that the decline of industry and agriculture in Galicia only began after 1846. In his view several causes contributed to this: on the one hand there was the ‘laziness and negligence [of the population], their lack of enterprise, combined with a lack of capital’, on the other hand the abolition of serfdom, the potato blight of 1847, the years of starvation and the epidemics of 1847 and 1854–55, the introduction of the new tariff of 6 November 1851, finally increased taxation after 1848. ‘Before the frightful catastrophe of the year 1846, Galicia experienced fairly tolerable times [dosyć znośne chwile] under the Austrian sceptre’ (Marassé 1887a, pp. 258–9, 265–6 and 320). Rutowski 1883a, p. 171. Rutowski 1883b, p. ix: If we examine the results of the investigations and commissions of inquiry, if we consider the proceedings, the proposals and the resolutions of the Parliament, the activities of agricultural societies, economic literature, books, pamphlets or newspapers, we have to observe with amazement the modesty of the desires, demands, goals and efforts that have been advanced in the sphere of agriculture in this agrarian Province. We have not gone beyond the negative demand that the most burdensome abuses and constraints be removed or conceding the most primitive conditions of life.

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knows of agriculture and nothing else. But precisely for that reason it is all the more depressing that statistics show our enormous inferiority even in the one area in which we might have expected to compensate for our unquestionable inferiority elsewhere’.34 And he explained this fact in almost the same way as Rutowski: ‘If there was ever a land where the responsibility for miserable conditions lies more with people than institutions, it is Galicia’.35 But these people were not foreigners. Szczepanowski attacked the leading personalities in provincial politics in the sharpest terms,36 the ‘bureaucracy wearing Polish clothes and writing in Polish’, charging it with having ‘maintained the antediluvian traditions of the old republican nobility, which brought ruin to the Republic in the previous century and even now [in 1888] represent a serious obstacle to the social rebirth of our Province’.37 This new-won perspective undermined and shook the foundations of the legend – whether with full awareness or half unconsciously – even before its factual content had been examined and compared with concrete industrial development. For there is an irresolvable logical contradiction between the insights of Rutowski and Szczepanowski, on the one hand, and their leading idea, on the other hand, that German, foreign industrialists resisted the emergence of industry in Galicia in order to maintain the Province as a market for their own products and that the Austrian government supported this through corresponding economic policies. That such an assertion cannot be made about agriculture is clear. No-one proposed either a century ago or proposes at the present that Galicia should become a market for the agricultural products from the western part of the Monarchy. On the contrary, it exported its agricultural products to the west and continues to do so! The logical conclusions from these facts, arrived at by way of statistics, were almost simultaneously backed up by the results of historical research. At the end of the 1870s Arneth’s great work on Maria Theresia appeared.38 In it he established that the sources directly contradict the claim that Galicia was financially exploited by the central administration and that it deliberately failed to take into account special conditions in Galicia. We see how Emperor Joseph ii, who had the decisive voice in everything that affected Galicia, travelled through the Province in order to familiarise himself with its conditions;

34 35 36 37 38

Szczepanowski 1888, pp. 12–3. Szczepanowski 1888, p. x. Szczepanowski 1888, p. xv. Szczepanowski 1888, p. vii. Arneth 1876–79, 8 and 10. Beer 1873 did not examine the economic policy of the Austrian government towards Galicia.

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how, in considering the future relationship of the Austrian government to Galicia, he arrived at the conclusion that everything depended on whether the acquisition of the Province was regarded as permanent or merely temporary. In the first case – and nothing could have been further from Joseph’s mind than the thought of giving up Galicia – political measures should be taken to ensure its maintenance and, at least during the first few years, no attempt should be made to draw an income from the Province. Instead, its revenues should be used for its own benefit. If, however, the intention was to exchange Galicia for a more valuable acquisition, should the opportunity have arisen, the greatest immediate advantage and the maximum income should have been extracted from it.39 That Galicia was placed under a special Galician Court Chancellery headed by Count [Eugen von] Wrbna, is attributable to Joseph’s influence, against the wishes of Prince [Wenzel Anton von] Kaunitz.40 The Emperor placed a high value on the improvement of roads, the establishment of trade routes and the creation of a proper postal service.41 He expressed the view that Germans should not be sent to Galicia; in particular, judicial positions should be occupied by members of the local nobility.42 In other respects, he also criticised abuses in Galicia (1780), calling on the Empress to take remedial action. Self-evidently, these facts could not remain without influence on scholarly research in Galicia. In 1880 ‘Ignotus’ (Kazimierz Chłędowski), using archival material objectively, undertook to show that the policies of Maria Theresia and Joseph ii towards Galicia were thoroughly benevolent and that they were determined in their concern to raise the economic level of the Province, while at the same time taking the special circumstances prevailing there into account. It was precisely in view of the latter that Joseph ii ‘regarded the amalgamation [of the Province with the rest of the Empire] as impossible for the present’. Even if he sometimes made mistakes, the writer added, he always ‘wanted what was best for the Province’ and ‘his actions were always characterised by certainly clear and frank efforts’.43 In parallel with this positive evaluation of the government’s activities during the epoch of Maria Theresia and Joseph ii and, as a natural result of it, a harsher judgement of the Galician nobility of that time is encountered. The legend arose under its dominant influence and in its interests. The benevolent attitude which had so long prevailed in the investigation of the efforts and

39 40 41 42 43

Arneth 1876–79, 10, pp. 88 et seq. Also see Schnür-Pepłowski 1895, p. 18. Arneth 1876–79, 8, pp. 414 et seq.; and Arneth 1876–79, 10, p. 91. Arneth 1876–79, 10, p. 81. Arneth 1876–79, 10, pp. 97–8. Chłędowski 1880a, pp. 41 and 44. [Translator’s interpolation.]

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demands of the nobility in the first period after the annexation now receded. This did not happen, indeed, on the basis of critical research into the relations between the big landowners and their subjects during the eighteenth century, although this would certainly have been the best and most decisive way of demonstrating the barren witlessness and reactionary character of the nobles’ policy and the harm it did to the Province. It initially sufficed to compare the desires and efforts of the Galician nobility with what was happening in France and in Poland, which was awakening to new life. Here too, ‘Ignotus’ led the way. Instead of idealising the Galician nobility, on the contrary, he stressed its egotism. It was unable to judge events from a higher standpoint but ‘moved within the confines of aristocratic caste interests and far from the national interest’.44 Count [Ludwik] Dębicki’s judgement was essentially the same: ‘In those days of despotism’, he wrote, Galicia recovered from its decline and the nobility again became prosperous. The organisation of the state was not yet strictly centralised. A policy of centralisation was, it is true, inaugurated by Joseph ii but ministers only returned to complete it after the 1848 revolution … It is true that there was a little chicanery on the part of the bureaucracy and there was therefore a certain discontent in society, which sometimes turned into hatred. The Province did not, however, desire any political freedom. It contented itself with the estate-based Parliament and the improved material situation and sustained a loyal attitude to the monarch and the government.45 Professor [Stanisław] Starzyński, a conservative, also came to very similar conclusions in his study of the demands made by the nobility in 1790. In it, he did, far too often, uncritically repeat the complaints and accusations of the nobility but, on the other hand, he nevertheless also pointedly emphasised its ‘naive belief in the permanence of the system of estates as the foundation of society’s constitution’. He noted with amazement that ‘it did not even instinctively feel that the epoch of equality before the law, of equality of rights and duties, already inaugurated in France, was approaching’ and that the nobility’s proposed constitution, neither ‘anticipated the spirit of the times’ nor ‘kept pace with it’, remaining ‘roughly fifty years behind it’.46 44 45 46

Chłędowski 1880a, p. 48. Dębicki 1887, 2, p. 320. Starzyński 1893, p. 23. For a more precise characterisation of the Galician nobility at that time, see Appendix 1, below.

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The assessment of the peasant question underwent a similar change to that of the nobility after [Mikołaj] Zyblikiewicz had first glorified the fate of the peasantry during the period of Polish independence47 and Kalinka had produced a monstrous caricature of the measures introduced by Maria Theresia and Joseph ii to protect the peasantry.48 The misery of the peasants’ situation, precisely in Poland and particularly on nobles’ manors, is unreservedly conceded today in the literature49 and for this reason Kalinka’s judgement about Austrian agrarian reforms must be fundamentally revised. In fact [Józef] Waweł-Louis, an outstanding jurist, Court Councillor and member of the Supreme Court in Vienna, was of the opinion that Kalinka’s work was written ‘in an agitated state and outside the country’, under the impression of the events of 1846, and presented ‘the condition of the subject peasantry [after the Austrian occupation of Galicia] in too harsh a light’. He himself did not hesitate, ‘after reading hundreds of preliminary complaints and trial records bearing on this question over forty years, to express the opinion that the state’s protection of the peasantry [in Galicia] was necessary, honest and even-handed’. Certainly, this ‘originally good and speedy administrative jurisdiction’ had become ‘ponderous and slow-moving in the course of time and political events … and had come off the rails’. But the task of explaining this should be that of the historian rather than the jurist.50 Even according to [Wacław] Tokarz, in his review of Joseph ii’s policies which reformed the relationship between the manorial lords and the peasantry, the Galician nobility repeatedly asserted in 1790 that they had ‘only loosened all social ties, without improving the peasants’ conditions’. This opinion about the state of affairs in 1790, later formulated brilliantly by Kalinka, ‘with regard to those times, has been maintained by us right up to the present’. But it could no longer ‘be accepted without reservation’. For, the situation of the subject peasantry under the Republic was far removed from that perfection described by the authors of the pamphlet Obser-

47

48 49 50

During the Galician Parliament’s famous debate on the agrarian question following the address in 1866, Zyblikiewicz ventured to declare that ‘90 years ago, before Galicia was unified with the Austrian Monarchy … all expenditures were covered by the part of the land which was in the nation’s possession, to such an extent that subjects were free of all taxation’ (Sejm Krajowy we Lwowie 1866, p. 147) [Grossman’s emphasis]. Kalinka 1898, pp. 163–70. See Korzon 1897, 1, pp. 355 et seq.; Krasiński 1898, 1, pp. 98 et seq., 166–7 and 179–80; Balzer 1891, pp. 9 et seq.; Kutrzeba 1908, pp. 167 et seq.; and Lehtonen 1907, pp. 32–72. Waweł-Louis 1897, p. 224. [Grossman’s emphasis, editor’s interpolation.]

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vations on the Government of Galicia51 … In the last resort all decisions depended on the arbitrary will of the nobility, unrestricted by state control, and on tradition, in and of itself far from perfect and not even respected in many cases … As far as the removal of abuses is concerned, Austrian rule certainly brought about a change for the better. The guilty parties were threatened with a whole range of punishments … and the oppression of the peasants was controlled. It is impossible to deny this. Labour service [robot] obligations in Galicia were far from idyllic and the government’s measures to protect the peasantry necessarily had a beneficial influence.52 The same revision of previous opinions also took place with regard to something of particular interest to us here: the question of urban policy. Contradicting Chotkowski, Tokarz explained that ‘the idea of developing the towns in Galicia was one of those matters with which the Austrian administration was genuinely concerned’; admittedly, ‘initially for political reasons’ but then also, and mainly for economic reasons … They sought to create an internal market for Galician agriculture and at the same time an industrial centre, whose products could replace foreign goods … In Vienna … it was hoped that by applying a system of protection or even of prohibition to Galicia … industry could be created in the Province. There was no thought of exploiting the Galician market for the exclusive benefit of industry in the Hereditary Lands or of deliberately killing off provincial industry. On the contrary, in connection with the development of towns, the creation of industry, with the active support of the government was desired.53 In the most recent publication, to the extent that it relates to the eighteenth century, finally,54 it is unreservedly conceded that the central government was

51 52

53

54

[This a reference to Anonymous 1790b.] See Tokarz 1909, p. 191. [Grossman’s emphasis. Translator’s interpolation.] Despite expressing this accurate insight, Tokarz concludes his critique of Kalinka by saying: ‘His opinion is certainly correct in many respects’. This is only one of Tokarz’s innumerable inconsistencies, which derive from the way he wavers uncertainly between upholding the legend and recognising the facts that contradict it. Tokarz 1909, pp. 331 and 351–2. Despite its promising title, Paygert’s essay ‘The Austrian Industrial System in Galicia’ (1891) contributed nothing new on the subject of our investigation, as its historical section was based on the well-known work by Reschauer (1882), which did not take the Galician situation into account. Cwiklinski 1913. The lectures of Bujak 1913 and Twardowski 1913 are of special interest.

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concerned about the welfare of the Province and particularly its industrialisation. ‘In order to increase the value of the Province for the state as a whole’. states Franciszek Bujak, Joseph ii started to think about raising it up economically … The foundation of large industrial establishments by German entrepreneurs was supported … A far-reaching plan for developing towns was drawn up … Attempts were made to awaken the interest of the nobility in industry. And Joseph ii had a benevolent attitude to the Province’s cultural, just as to its industrial needs. ‘The Province enjoyed a vigorous administration; good roads started to be built; the towns and their industries recovered to some extent; but it was agriculture which showed the greatest improvement’. ‘By and large, the first 20 years of Austrian rule, up to the death of Leopold ii, were a favourable period for the Province, in spite of the burden of taxation and the impact individual, overhasty and excessively radical reforms by Joseph ii’. ‘It is only to be regretted that this beneficial epoch lasted for too short a time to exert more profound influence’.55 The comments recorded above are, it is true, only individuals’ assertions which have neither been sufficiently crystallised nor demonstrated through basic investigations. These issues have not yet been treated in an exhaustive fashion. One thing is clear, however, and should be sharply stressed at the outset: that in contrast to Kalinka’s verdict and the statements of those who followed him, a diametrically opposed view has begun to take shape, which is of equal weight and, as we will see, stands closer to reality and is not coloured by political bias. In general, however, my task is to investigate the whole issue of Joseph ii’s reforms by examining the facts, rather than simply to examine the opinions of others. Kalinka’s general condemnation of the epoch of Maria Theresia’s and Joseph ii’s administration has only been fundamentally refuted on one point – not addressed by him: the question of public health. This resulted from Władysław

55

These lectures were delivered at the end of May 1912 and make use of the results of my investigations, which had already been published in January 1912 [i.e. Grossman 1911b, pp. 37–70 above] (see, in particular, Bujak 1913, p. 11; and Twardowski 1913, pp. 37, 38, 56). Bujak 1913, pp. 10–2.

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Szumowski’s research into the state of medical science and public health provisions at the time of the Republic and the changes in them under Austrian rule.56 During the eighteenth century, Poland was crippled by internal disturbances. The general state of anarchy was also apparent in the sphere of public health. Anyone who wanted to could practice medicine. Doctors were adventurers, who had learned about everything except medicine; charlatans who exploited the credulity of the multitude. There was no official control of public health. Nor was there a single reputable educational institution for the training of doctors to serve the many millions of people in Poland. ‘Things were no better in the area of midwifery, for which no school existed in the Republic and which was mostly in the hands of ordinary village women’.57 Still in 1788, when the Great Parliament assembled, an anonymous writer bemoaned the fact that the most useful citizen of the country, namely the peasant, perishes from even the most minor illnesses, without the slightest help … Anyone in a village can observe what a large number of industrious people, who could have been saved by the very simplest means, die in the prime of life; but what is most damaging for the population is that in many places almost half the women perish when giving birth, along with the fruits of their wombs. The crude ignorance and superstition of the midwives, mainly, however, their alcoholism, drives these wretched mothers into the grave, together with the citizens who have just been brought into the world. Thought is seldom given to ways of counteracting this depopulation, which has a deleterious impact both on the lords and the Republic. It is scarcely apparent anywhere that owners of these slaves display the slightest concern for this matter, their most important interest.58 In view of the ‘universal neglect of medicine by the nation’ people had recourse to taking tips from vulgar pamphlets giving ‘domestic advice’, such as Two Tried and Tested and Particularly Effective Secret Remedies against Illnesses in Humans and Animals and Remarkable Information, Useful to Everyone, about the Effects and the Powers of Different Kinds of Grains, Vegetables and Herbs.59 It is interesting that even Staszic himself spoke out, sometimes in an inhumane way, against doctors: 56 57 58 59

See Szumowski 1907. Szumowski 1907, p. 27. Anonymous 1861, pp. 13 et seq. Szumowski 1907, p. 27.

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Nature alone makes people healthy … It is certain that illness increases with the number of doctors … They work against the decrees of providence, because they sometimes keep alive those who should die if it were left to nature.60 While we encounter such views 13 years after partition, the situation already began to improve immediately after the occupation. Three months after the Province was taken over, it was decided to send doctors and surgeons from Vienna to Galicia, to organise lectures on midwifery and to distribute good, popular books. At the same time, the necessity of establishing a university with a medical faculty in Galicia was recognised.61 Already six weeks after the occupation a medical officer was appointed and discussions began on the reorganisation of public health provision in the Province. The doctors and surgeons sent to Galicia were given excellent salaries and also provided with the surgical instruments necessary for them to practice.62 Further, the government also guaranteed an interest-free advance of 3,000 guilders to establish a pharmacy for the miners in Wieliczka.63 In short ‘Maria Theresia showed genuine concern and affection for the new Province. The initial decrees of the Austrian government bear witness to this concern’.64 Soon after, in addition to sending people, the government also issued the Public Health Law of 20 March 1773; announced the establishment of medical committees in Lviv and larger towns; laid down rules for public baths; and exercised supervision over quacks. Finally, it made efforts to investigate health conditions in the Province, in order to be able to introduce further reforms on the basis of a full knowledge of conditions there.65 These initial steps were followed in 1773 by the establishment up of public health commissions. At the start of 1776, the budget of the health service amounted to 8,939 guilders, which did not include the considerable cost of issuing medical texts, the organisation of lectures in Lviv and expedients necessary for these; the frequent journeys of public health officials; the outlays on 60

61 62 63 64 65

Staszic 1787, p. 25. Staszic’s disparaging of medicine was influenced by his political views. He argues, in the spirit of Montesquieu, that ‘only a good government increases the population … Even if a doctor were to be appointed to every small town and village in Poland, the number of illnesses would only increase. The population will not grow until Poland has got rid of its feudal government’ (Staszic 1787, p. 26; see Montesquieu 1900, pp. 24–5). Szumowski 1907, p. 33. Szumowski 1907, p. 41. Szumowski 1907, p. 43. Szumowski 1907, pp. 43–4. Szumowski 1907, p. 49.

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medicines, particularly for epidemic diseases; and the financing of the Saint Lazarus Hospital, etc.66 After the public health system had been introduced by the imperial Decree of 14 November 1776, the costs rose considerably to cover fresh expenditure for six senior District Medical Officers and 19 subordinate Subdistrict Medical Officers; support for 24 women from Galicia who attended courses in midwifery. This amounted to 12,400 guilders altogether, which, when added to the earlier expenditure, amounted to a total expenditure of 25,000 Austrian guilders, or 100,000 Polish guilders.67 What is more, these figures, provided by Szumowski, are probably too low, because it appears that he did not include the cost of maintaining a military public health cordon at the frontier, which was borne by the military rather than the civil administration. Admittedly, Szumowski also repeatedly complained about tendencies towards Germanisation. But he was quite capable of separating the point of view of the patriot from that of the ‘doctor who wants to maintain health’ and, writing as a doctor, his judgement was unambiguous: ‘The activity of the Austrian government in public health [was] undoubtedly beneficial and successful. All [its] steps: eradicating quackery, the discovery of mineral resources in the Province, the improvement of the public health aspect of towns etc. and, above all, the fight against epidemics, have had great significance in raising the cultural level of the Province and reducing mortality’.68 The sketch above demonstrates that there is a close inner connection between all the questions touched upon; that the subject of the following investigation, therefore, concerns not just a partial question but rather stands at the focal point of all these problems and can be reduced to two fundamental questions: 1. What are the facts of Galicia’s economic development in the sphere of trade and industry during the first two decades following the First Partition of Poland? 2. What role did the welfare state of Maria Theresia and Joseph ii play and what influence did it exert on this development? The following presentation should answer these. At this point, I think that a further remark is not superfluous. The following investigation will necessarily adhere to entirely economic criteria. In doing this the verdict on the activities of the Austrian government, from the point of view of the national interests of the Polish population of Galicia, will not be prejudged in any way. 66 67 68

Szumowski 1907, p. 115. Szumowski 1907, pp. 151, 158, and 190. Szumowski 1907, p. 300.

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Investigation of Conditions in the Province and the First Instructions Issued on the Establishment of an Administration in the Province after Its Occupation by Austria

Initially, before I move on to describe the activities of the Austrian government after the occupation of Galicia, the goals which shaped them – the government desire to become acquainted with the economic situation in the Province and the instructions to the first administrators – have to be examined. The assertion that ‘information on the real state of economic conditions in the Province’ was ‘primarily desired because the Province [was] expected to serve as a market for Austrian industry’69 is untenable. The negligence of the Polish government had been greatest in exactly this area and the deficiency of information was intensified by the complete decentralisation of administration.70 On these grounds, [Tadeusz] Korzon accused the Polish nobility, from the middle of the seventeenth century, ‘when governments everywhere were concerned to promote trade, when all the monarchs began to order investigations into the commercial conditions of their countries … when a money economy, credit and commercial policy were developing … and mercantilists and cameralists were writing, … of not recognising or understanding the progress of economic development in Europe’.71 We have to judge the efforts of the new regime to inform itself about economic conditions in the Province from this point of view. It is clear that this information did not only serve the interests of the government but those of Galicia and its population in the just distribution of the tax burden, in line with the distribution of property; a tariff system appropriate to the Province’s requirements for trade; future trade agreements and trade policy towards foreign states; and adequate protection for agriculture. In its systematic investigation of economic conditions in the new Province, the government was guided by all these considerations, as we will demonstrate. Because securing the Province’s interests depended on the reliability of this information, we find 69 70

71

Chotkowski 1909, 1, p. 19. This point has often been emphasised in the literature, see Korzon 1897, 2, p. 11. Kleczyński 1892, pp. 2–3, also comments that The administration, which had always been impotent and since Batory was completely disorganised, could never raise its horizons in Poland to a higher sense of administrative needs … There were therefore no regulations in Poland on registration of fiscal and military matters and in a history of many centuries not one single great administrator or financial official could emerge, because he would have had to restrict the privileges of the nobility. Korzon 1897, 2, pp. 11 et seq.

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constant legislative and administrative efforts, during the whole of the epoch under discussion, to improve and extend it. Bronisław Łoziński admitted that Joseph ii’s first journey to Galicia (1773) was of great significance because, having become familiar with conditions in the Province, the Emperor ‘changed his opinions, in favour of Galicia’.72 And the Emperor found the opportunity to tread the soil of Galicia five times, up to August 1783.73 Other measures went hand in hand with the collection of information. Even before the occupation of the Province, Prince Kaunitz had proposed undertaking ‘the economic measurement of all individual properties … the most accurate description of the population, the livestock, the production and the characteristics of the Province and its territories’. He also remarked that even if this ‘appeared burdensome and complicated at first sight … it could nevertheless be effected easily, simply and in an inexpensive manner’.74 He considered the collection to be all the more necessary because, ‘without this expedient … it [would be], for example, impossible to lay down a precise, cheap and proportionate taxation system … gradually to bring about a proper division of the land, as the principal basis for good agriculture and to arrive at the right arrangements for customs duties and commercial institutions’.75 For this purpose, orders were given to collect information according to a set questionnaire. A look at the questionnaire used in the inquiry shows how wide-ranging and profound an understanding of conditions in the Province the administration intended to gain.76 72 73 74 75

76

Łoziński 1879, p. 742. Polek 1895. Report of 27 May 1772, ami, ii A 2/5 ad 34 ex Majo 1772. It is apparent that – in contrast to the traditional view – Austrian investigations of resources were not carried out mainly for fiscal and military purposes but had the same character as they do today: namely to grasp mass social phenomena numerically, as a basis for orienting policy and thus for exerting conscious influence over those phenomena. As well as military and fiscal intentions, therefore, economic intentions are also apparent. This is particularly clear from the instructions to Court Councillor Kozian (see below, p. 116) in which he is given the task of collecting information on the nobility and its possessions, explicitly from the point of view of the protection of the peasantry and intended agrarian reforms. Appendix 7 to Report of 27 May 1772, ami, ii A 2/5 ad 34 ex Majo 1772, includes the following questions about industry: What manufacturing establishments and factories are present in the Province? In what condition are they? (Question 65) In what kind of crafts do inhabitants engage, in their main and most profitable business? (Question 68) What material is the inhabitants’ clothing made of? Is the cloth manufactured within the Province or imported from abroad and, if so, where from? (Questions 10, 11)

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In any case, the government by no means restricted its activities to the gathering of such general information, collected by both the military and the civil administration. Joseph ii himself travelled around Galicia several times during the period under study and the government also sent specially trained officials to the Province to reach a better understanding of economic conditions there and in neighbouring, foreign districts. We know from their reports of the journeys by [Karl Joseph] von Eder; [Friedrich] von Eger; à Sole; Governor’s Office Councillors [Georg Adalbert] von Beekhen, [Ferdinand] von Schönauer and Vlasics; Court Councillors Degelmann and [Conrad] von Sorgenthal; Abbé Caspari and Count [Josef Karl] Brigido; not to mention the report of Count Pergen and the fact finding journey of [Johann Wenzel] Margelik, both of whom were commissioned to examine general conditions in the Province. These accounts display considerable economic knowledge and understanding, which is not to be found in any printed publication of that period, and they provide us with a faithful picture industrial and commercial conditions in Galicia. The use the central government in Vienna intended to make of this information, i.e. the attitude it had to the Province, is shown by a series of instructions to high level administrators. It is important to stress the fact that in none of the innumerable files which have passed through my hands is there the slightest trace of any evidence that court officials intended to injure Galicia’s industry and trade (something which in the case of Hungary was by no means unusual).77 On the contrary. In Galicia mercantilist policies were the rule.

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Are there any clay sediments in the Province which would be used in manufacturing? (Question 35) In relation to trade What are the principal commodities traded within the Province, exported from it, and imported into it? (Question 69). Then there follow questions about prices of wood for building and for burning (question 28); natural products (question 56); communications by road (questions 64, 73) and by water (question 74); the characteristics of the rivers and streams (question 33); credit conditions and the rate of interest (question 61); currency, and the system of weights and measures (questions 63, 62); tariffs (question 67); the administration of justice (question 70); and public security (questions 75, 76). A year later, in September 1773, Joseph commanded Count Pergen to provide precise answers to no less than 154 questions, as has often been mentioned in the literature (see Helfert 1860, 1, p. 457; and Arneth 1876–79, 9, pp. 89–90). An instruction sent to Baron Reviczky in Warsaw requested ‘If, by the way, your excellency … is able to find out reliably about the political, economic and military measures which are being taken and will be taken in the future, in the Prussian Partition, please inform me at your discretion’ (ami, iv T 4/2622 ad 478 ex Aprili 1773). The attitude taken up towards Hungary was merely an exception, conditioned by the feudal constitution of that country, to the generally mercantilist economic policy of the

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Whenever the Province is mentioned, the need to raise the level of trade and industry and likewise whole economy is invariably emphasised as a necessity. Considerations of state finance, the conviction that the state’s resources were inadequate, provided an impulse to the energetic revival of the newly occupied territories’ economy. The government in Vienna – following the examples of France, England and Prussia and, not least, the Austrian lands themselves – was well aware that agriculture was by no means capable of providing the enormous financial resources required by a modern, costly state apparatus.78 In 1754, Count Rudolf Chotek, a representative of earlier Austrian mercantilism, held that ‘labour and profit [are] much more powerful means of populating and enriching a country than the overabundant growth of the fruits of the earth. This is apparent in the examples of many states, here and abroad, where more and wealthier taxpayers are to be found in the small districts into which labour and industry have been introduced than on the broad acres of the most fertile regions’.79 In May 1773 the Commercial Council called for industry to be strongly promoted, because manufactures increase the population and the wealth of the state. The Austrian Monarchy, it was said, would hardly have been able to bear the increase of 8 million in outgoings since the last war if manufacture had not been favoured.80 On this point, the industrial interests of Galicia therefore coincided with the deeper interests of Habsburg state finances. This decisively shaped economic policy for Galicia. The very first imperial instruction about Galicia, of 27 May 1772, to Treasury Councillors Törek and Heiter, who had the task of establishing a provisional Galician administration, already presented an economic programme of a completely mercantilist character: We have at all times borne in mind the essential point that our own welfare is inextricably bound up with that of our subjects and that the one cannot exist without the other; an increase in the power and income of the ruler cannot, therefore, be achieved in any other way than through

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central government in Vienna. See Appendix 2 on this question. Also see Part 3, Chapter 10, below. Also see Přibram 1907, p. 4. Beer 1893a, p. 105. For similar comments as early as the end of the seventeenth century, see Srbik 1907, pp. 97, 287. Also see Mayer 1882, p. 121. Beer 1894 p. 88. Degelmann formulated this view by saying that ‘subsistence depends on industry, the increase of population depends on subsistence, and both the strength of the state and the welfare of the individual depend on the increase of population’ (Beer 1894, p. 22).

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the promotion of the welfare and enrichment of the whole community and the slightest distinction should never be made between the interests of the sovereign and those of the country and it is exactly by this means that mutual trust between the ruler and his subjects [should] necessarily be reinforced more strongly. And since it is a well-known truth that agriculture, manufactures and factories, a flourishing commerce and a large population are the true sources of the essential prosperity of the ruler, the subjects and the whole state, we constantly keep a watchful eye on the establishment and improvement of these and always seek to prevent, where feasible, everything of disadvantage to these principal sources. Above all, the instruction continued (point 18), it was necessary to ‘preserve the subjects, because this country is not a hostage but is to be incorporated as one of our provinces and it also has to be treated as such’.81 The sincerity of these words can still less be doubted because they were not intended to be made public. Nor can the wisdom of these proposals be denied: the government realised that ‘increases in the ruler’s power and income’ could be expected, not from short sighted fiscal policy but from raising the economic level of the Province and tapping new sources of wealth. But even that was not enough! No sooner had the government become aware of the towns’ poverty, and the predominance of the Jewish element and the absence of a Christian element in them, than it was concerned to weaken the former and the strengthen the latter. And all this even before the civilian administration had been established in the Province, before its first Governor, Count Pergen, had arrived there, in the instructions issued to him on 6 November 1772.82 They promised (point 10) ‘ten years of freedom and the position of master craftsperson for all artisans and manufacturers of whatever nation and religion who settle in the towns or the countryside to carry on their trade’; further (points 45 and 47) bonuses for the improvement of agriculture were

81

82

‘Vorläufige Ausweisungens-Punkten, nach welchen sich von Seite des Civilis in Unserm neu occupirten Pohlnische Antheil zu betragen ist’ (ami, ii A 2/5 ad 31 ex Majo 1772, appendix 6). Chotkowski’s assertion (1909, 1, p. 281) that the establishment of a new Galician administration was first ordered on 31 March 1773, six months after the occupation of the Province and that Court Councillor Kozian was sent to Galicia for this purpose is therefore completely wrong. Equally unfounded is the facetious remark with which he accompanies it: ‘Hasty action has never been a characteristic of the Austrian government’. The orders in question had already been issued ten months earlier, hence before the occupation of the Province. Extractus Instructionis, Zakład imienia Ossolińskich 525, i, pp. 208 et seq. Fragments of this are printed in Łoziński 1872, pp. 123 et seq.

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announced and explained; (point 64) ‘the improvement of commercial roads to Hungary and Upper Silesia needs full attention; provisional arrangements [are] also to be made for the postal system’; and finally (points 48 to 51) measures were taken to restrict Jewish marriages and to remove Jews from the liquor trade, the customs service and the postal service. Half a year later, the provisional arrangements were replaced with permanent ones and Court Councillor Kozian was dispatched for this purpose. He received a long instruction dictated by the same considerations.83 Particularly with regard to economic conditions, roads and waterways were to be constructed to facilitate internal trade with Bohemia and Hungary. As far as foreign trade was concerned, exports down the Vistula were to be promoted and transit through Galicia to be facilitated. In the case of imports, the conviction was expressed that complete freedom of trade, unrestricted by tariffs, would be of most advantage to Galicia. It was actually only the interests of Galicia, not of the Hereditary Lands, which were decisive here. The order was therefore given that considering the construction of roads, the connection between the Kingdoms of Galicia, Bohemia and Hungary and the facilitation of trade in both directions … can be achieved in two ways. First by roads through the mountains, second by making their shared rivers navigable. As far as the first method is concerned, the roads over the Carpathian Mountains should be improved as much as possible and it would, perhaps, not be impossible to find a much more convenient route through this difficult range than those arduous ones currently in use, by joining various valleys together.84 As far as the second method is concerned, it can be seen from various maps that the Poprad river, the only one which has its source in Hungary, already carries rafts to the Polish [Galician] border and, after passing at length through Galicia reaches the confluence with the Vistula; it is necessary to take greater account of this.85

83

84 85

‘Commissions Protocoll vom 31. Mai 1773 über die zu bestimmende Gegenstände bei Eintheilung und Einrichtung der Creise, als seine Instruction für den dafür abgehenden Hofrat Kozian’, chaired by Baron Binder, report by Specialist Spielmann, ami, iii A 5/197, ad 588 ex Majo 1773. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part iii, section 1. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part iii, section 2.

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What is called the ‘defluidation’ or the export of the Province’s products of all kinds on the Vistula is to be favoured. Although rules of trade can only take their final form when the Warsaw Parliament closes, thought should be given from now on about the most effective means of drawing the transit trade of goods from Volyn and Podillia through Galicia to the rest of Poland, thereby gaining freight and encouraging trade on the roads. The extent to which consumption should be restricted and tariffs imposed at the border with Poland are dependent on the degree of reciprocity to be established by the Warsaw Parliament, although nothing could be more advantageous for the Province than reciprocal freedom from tariffs, because that would achieve a positive trade surplus on this side of the border.86 So far, we have discussed matters relating directly to trade and industry. It must, however, be emphasised here that, in a province where more than 90 percent of population lived from agriculture, even the most useful activities in the sphere of trade and industry would inevitably remain fruitless as long as the vast majority of the nation was held fast by poverty, ignorance and legal restrictions. It was for this reason that the economic advancement of Galicia and its commercial and industrial development appeared to depend indirectly on the freeing of the mass of the people from their age-old economic bondage, no less than on direct support by the government. This was by no means overlooked by the central government. The instruction just cited set out a generous programme in this respect as well. Relations of subservience were to be reformed, cattle-raising improved, education extended. ‘Where feasible’, it stated, ‘thought should be given to the abolition of serfdom and the introduction of private property in land’.87 ‘Heads of Districts [Kreishauptleute] should be primarily responsible for the improvement of the national spirit’. This was because ‘the absence of private property, the manner in which the nobility have previously treated the country people like slaves; the exactions of lease holders, who are mostly Jews; the apparent lack of any hope of any improvement in their circumstances; and finally the excessive and unnatural consumption of spirits, have reduced the common people in Poland to a pitiable level of stupidity and insensitivity’.88 ‘The Head of District’ should there86 87 88

‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part iii, section 3. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part iii, section 10. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 1.

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fore ‘consider measures to end the misuse of all intoxicating beverages and spirits in particular’.89 He should also take care that ‘the peasant is instructed in the morality appropriate to his position in society’ and primarily, ‘as it is a primary duty of the clergy’, ‘enable the priests to do this, their duty and vocation’.90 It was, further, made clear that ‘the moral instruction of the country people is not, in itself, adequate’. They also needed ‘education in reading, writing and arithmetic’. For this reason, ‘the establishment of rural schools and the appointment of capable schoolmasters’, ‘who have previously learned methods of education in a teacher-training college’, should be taken into consideration.91 That was not sufficient, however: the District Office [Kreisamt] should also acquire a precise ‘knowledge of the relationship of subjects to their lords’ and ‘accordingly set rules to govern relations between them and be alert to the observance of them by the lords’, that is, to amply protect subjects.92 In addition to the measures already mentioned and in connection with them, Heads of Districts were also required by this instruction to find out precise details of ‘the number and type of nobles in their District, their possessions and the provisions covering their future relationship with the sovereign’;93 of ‘the number and type of ecclesiastical benefices and foundations’;94 and of ‘the Jewish population’, bearing in mind particularly that ‘this people has increased in the Province to an astounding degree owing to the encouragement of the nobility and the inactivity of the nation’, so that it was necessary ‘to restrict them effectively and to put a stop to their search for profit, which is leading them to seize control of the very heart of the Province’.95

89 90 91 92 93 94 95

‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 3. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 4. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 6. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 7. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, sections 9–10. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 8. ‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part ii, section 11. These provisions on drawing up a catalogue of the nobility, the clergy and the Jews are a clear demonstration of the character of the exercise, which was indicated earlier (p. 110). The state regarded the purpose of its population policy as being to reduce the numbers of those in Galicia classes which were, in its view, excessively large and therefore harmful. The idea of equilibrium was dominant in its population policy. In 1771, Sonnenfels taught that ‘in order to prevent the dangerous expansion of one estate, the police must gain knowledge of each of them. A well-constructed population census is the most suitable method for achieving this’ (Sonnenfels 1771b, paragraph 10, p. 8). [Grossman’s emphasis. Sonnenfels was already teaching this in 1768, if not earlier. ‘Volk’, which can also mean ‘nation’, is translated as ‘people’ in the quotation.]

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According to the instruction, ‘the most important activity for the Province … after the cultivation of the soil’, with which ‘it is most closely connected, is raising livestock’. That, however, ‘appears to have been neglected in Galicia until now’. This is also easy to understand. ‘Disturbances lasting many years left the peasant without means and incapable of acquiring [them], since he was obliged to use three- and also two-year-old horses to cultivate his land, harming the rearing process’. For that reason, ‘the Governor and Court Councillor Kozian’ were recommended ‘to take steps to raise large, strong livestock in appropriate establishments’, particularly as regards the breeding of horses, to examine the practicality of the proposal to ‘transfer as many regiments of heavy cavalry to Galicia as circumstances permit’ and ‘at the cost of the provincial exchequer to provide a certain number of stallions to cover the most well-formed mares. The regiment would then give the foals to the Province’. The effectiveness of this measure would be heightened still more ‘if they took the precaution of forbidding the country people from harnessing horses before they are four years old’. As far as the ‘improvement of cattle’ was concerned, this can ‘be achieved most conveniently on manors owned by the government [Kameralgüter] by procuring heavy livestock and then distributing them throughout the Province’.96 So much for the first instructions, which soon crystallised into laws.

96

‘Commissions Protocoll …’ ami, iii A 5/197, ad 588 ex Majo 1773, part iii, section 4.

part 1 The Relationship with the German-Slav Hereditary Lands of the Monarchy, 1772–76

∵

chapter 1

The Provisional Form of the Customs System, 1772–731 1

Galicia’s Special Status within the Austrian Customs System. The Retention of the Old Polish Customs Arrangements

During the first decade of the new regime in Galicia the tariff element of trade policy initially occupied the foreground. The greatest emphasis was placed on regulation of the trade relations of the newly acquired Province with neighbouring regions. The concentration on tariff policy as a means of doing this, which has been somewhat exaggerated,2 is one of the characteristics of Austrian mercantilism of the epoch. On the other hand, tariff policy was more important for Galicia than for any other province, in view of its peculiar conditions. This point did not just apply to the exports of big landowners. The fate of commerce and the possibility of industrial development also depended on the form of foreign markets. As a home market was absent, foreign trade was the only source from which money flowed into the Province. It therefore determined consumption and demand, hence trade and industry in general. It is consequently from this viewpoint that we must evaluate the tariff policy of the Austrian government. The first edicts and regulations concerning Galicia’s tariff relations with neighbouring countries are not contained in Piller’s collection of Austrian laws, nor have they even been published. Three years after the occupation was completed, the Galician customs administrator von Eder stated that ‘no legal proclamation has yet been made that a tariff barrier separates Galicia from Poland’, although, in fact, duties were collected.3 1 On this chapter and the next, see Beer 1893b, pp. 299–305. 2 ‘“Cette protection” (des prohibitions contre les marchandises étrangères) “est presque la seule que le gouvernement accorde aujourd’hui aux fabriquans; et il paroit que s’il favorissoit plus qu’il ne le fait l’industrie et 1e commerce … etc.”’ [‘“This protection”’ (afforded by the prohibition of foreign goods) ‘“is almost the only one the government now provides to manufacturers; and it appears that if it favoured industry and trade more than it actually does” and so on’ (from De Breteuil’s report of 30 July 1777, quoted in Grossmann 1911, p. 57). See Rutowski 1883a, p. 19, for the suggestion that measures of domestic administration to raise the level of industry can be much more important than provisions of tariff policy. 3 Report of 30 December 1775, in hka, [Hofkammerarchiv], Kameralakt, ad 328 ex Majo 1776.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_008

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This fact alone gives an idea of the chaos which prevailed in the customs administration at the time. Nor is this surprising. During the first period after the occupation the Province’s administration, including of finances, lay in the hands of the military authorities. All of the Province’s customs revenue was paid into a special military account in Lviv, from which all expenditure came. Amongst the deposits into it, during the period between 11 October 1772 and 24 March 1773, receipts from the customs posts in Biała, Kęnty, Żywiec and Maków, to the amount of 85,387 Polish guilders, were reported. In addition to this amount, a further 322,747 Polish florins came in under the unclear heading ‘unspecified sums’, as well as 2,947 Polish florins charged at the border with Hungary as ‘monies from Hungarian tariff offices’. Another report for the whole of the year 1773 gives a figure of 212,221 Austrian florins for the total income from customs, excises and Hungarian tariffs [Dreißigstgefällen].4 The amount of tariff income is not what interests us at the moment, still less as the information on this point is imprecise.5 But it does at least emerge from this evidence that customs authorities were established immediately after the occupation of the Province and that they functioned. To the posts already existing on the old customs barrier around the western and southern borders of Galicia, new ones were now added, to the north, along the Vistula and then further north-east along the new Polish-Galician border.6 What we have to consider at this point, however, is the question of the kind of duties levied at these posts, the principles which underlay them and, in short, the kind of tariff system that was applied in Galicia immediately after its annexation. In order to evaluate the temporary government measures introduced in this field correctly, it must be remembered that both Maria Theresia and also particularly Joseph ii entirely supported the system of prohibiting of imports and that, into the 1870s, the advocates of prohibition were predominant in the Empress’s council. Accordingly, the importation of foreign commodities into Austria was as a rule forbidden. Exceptions were only made for items which were most necessary and the country lacked. Moreover, import licences for this purpose were only granted to privileged merchants and even they had to accept

4 hka, Fasc. 9.285, ad 7 ex Aprili 1773. 5 See below, p. 133. 6 Information on the history of the introduction of a customs system in Galicia can be found in the following documents: ‘Bericht des Mauteinrichtungs-Kommissärs Carl Josef von Eder’, 15 January 1775, which contains 146 folio pages, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776; ‘Gubernial Bericht’ 14 February 1775, in the same place; and ‘BuchhaltereiBericht’, 6 September 1775, hka, Fasc. 9286, ad 45 ex Martio 1776.

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various conditions and restrictions, for instance they were obliged to export definite quantities of domestic goods and so on.7 The application of these principles to Galicia would have been fatal to the Province. Prohibition in the Hereditary Lands arose from the objective of promoting domestic industry. Forbidden foreign manufactures were to be replaced in circulation by domestic products. Trade was not to suffer, rather industry was to benefit. Galicia, however, had no factories and it could not be expected that they would emerge in the foreseeable future. Foreign commodities were consumed in the Province itself to a minimal extent; the vast majority of them were destined to be passed on to the agricultural countries to the east. Galicia played the role of an intermediary between them and the industrial west. To prohibit the importation of foreign goods would simply have had the result of destroying the Galician transit trade, without achieving any corresponding benefit for the industrial interests of the Province. There was no industry in the Province! For precisely that reason, industry could not provide any impulse to commercial activity. In the absence of any revival coming either from within or without, therefore, trade would have atrophied completely, unless the Galician transit trade was conducted with products manufactured in the Hereditary Lands. The latter idea was certainly very tempting to the industrialists of the Hereditary Lands. The government, however, saw things differently. It did not identify with these plans and it regarded them, at most, as possibilities for the distant future. It lacked powerful means to force foreign merchants from Poland and Russia to come to Galicia (Brody) to purchase Austrian wares instead of commodities from Nürnberg, Leipzig, Frankfurt or England. In any case, the infant Austrian industries were incapable of satisfying the whole of the demand – as the government well knew – either as regards quantity, quality or variety. All these circumstances had the effect that, recognising Galicia’s particular interests of Galicia, the system of prohibition was not applied there and the new Province was given a special status within the Austrian customs area.8

7 See Beer 1898, p. 113; Beer 1894, pp. 77 et seq. 8 By the Resolution, of 16 September 1772, it was decided that ‘these two Kingdoms [Galicia and Lodomeria are] to be regarded, in this respect, in the same way as other Imperial-Royal Hereditary Lands which have a separate excise system’ (‘Protokollextrakt der Hofkammer’ 20 February 1773, hka, Commerz Fasc. 57, ad 6 ex Martio 1773). Baldauf’s assertion (1898, p. 68) that the incorporation of Galicia resulted immediately in its falling victim to the prohibitive system, is wrong. In his account, Beer 1893b, pp. 290–305, provides information on everything imaginable except the most essential fact: Galicia enjoyed a special status in tariff policy for 12 years, 1772–84.

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The old Polish tariff was provisionally retained, as were the levels of duties on import, export and transit goods. These duties were also introduced at the new (northern) Galician-Polish border. It was only in the case of new questions, which had no fixed answer in the old Polish legislation, that decisions were made from time to time in line with the principles and practice of the Hereditary Lands. In contraband cases, for example, the attempt was made ‘to punish the offender in part according to the previous practice of the Republic and in part according to the custom of the Hereditary Lands’.9 In this way, a fairly chaotic patchwork of spontaneous improvements, regulations, decisions and elucidations by the new government gradually developed out of the structure taken over from Polish times. As regards the level of tariffs, the export tariff was set, at 10 percent for local Christians and 12 percent for Jews and foreigners, as it had been in Poland. The import tariff for goods from abroad and from the Hereditary Lands amounted to 8 percent for local Christians and 10 percent for Jews and foreigners. Since foreign trade was exclusively in Jewish hands, the export tariff in Galicia was in practice 12 percent and the import tariff 10 percent.10 The actual calculation of the duty payable was done on the basis of the values set in the Polish tariff.11 There were practical difficulties to overcome, because under the Polish tariff duties were not calculated on a per unit basis but on the basis of the estimated value of items liable for duty. Moreover, calculations were made in ‘good coin’ which in practice did not exist, while payment took place in coins which were usually inferior, naturally with a supplement ‘pro bona moneta’.12 Finally, a real transit duty, was unknown. In its place, a duty of 8 or 10 percent was charged on the importation of the commodity then, when it left, although export duty was not charged, a fairly high, so-called export duty [Evectazoll]

9 10

11

12

‘Bericht Eders’, 30 December 1775, hka, Kameralakt, ad 328 ex Majo 1776. ‘Die dermalige Zollverfassung nach dem von dem Grafen Pergen unterm 15. März 1773 erstatteten Berichte’, recorded in ‘Vortrag der galizischen Hof-Deputation’ on 4 March 1773, hka, Commerz Fasc. 57, ad 27 ex Julio 1774, and ‘Bericht Eders’, 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. Korzon (1897, 2, p. 8) is wrong to assert that the Polish import and export duties ‘never amounted to more than 3 percent of the commodity’s price’ and that they are comparable to licensing fees today. Instruktarz Celny z. Taxą róznych Towarów per Alphabetum wypisany, an undated, printed Polish document, 45 pages long, comprising the duties on roughly 1,000 goods. A German translation of 1774 was appended to it (hka, Kameralakt, ad 312 ex Septembri 1776; also ‘Von dermaliger Hauptverfassung und dessen künftiger Regulierung’ Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776, section 2). See below, p. 213. [‘Pro bono moneta’, here, means ‘to compensate for inferior coins’.]

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of 4 percent was imposed. It is self-evident that this combination of duties, which raised a total transit duty of 12 or 14 percent hindered transit trade immensely. Only for a few commodities were exceptions made, on the basis of agreements with wholesalers. So the following charges were made on goods passing through to Wrocław: ‘3 ducats for each harnessed horse, carrying Frankfurt and Leipzig goods to Moscow, or any goods to Moldova, or Moscow goods travelling through Poland to Hungary. For Turkish goods, finally, 1 ducat for each horse’.13 In addition to these Polish duties, earlier supplementary charges were also retained. Thus every carrier had to pay ‘an annual payment to the Treasury of 28½ kreutzers in transportation money [Vecturisatio] for a permit to carry goods’. Moreover, ‘a copying fee of 4¼ kreutzers for officials, called the pobór’, had to be paid. Apart from this, every carrier ‘had to pay 4¼ kreutzers for each horse whenever he imported or exported anything’ and not less than this in drink tax or tap money [Zapfengeld] on all foreign drinks, as well as the import duty.14 Export duty of 4 percent were charged on all re-exported commodities, which had already borne duty when imported; there was also a deposit of 3 florins 48 kreutzers to pay on Hungarian wine. Finally the customs officers were entitled to receive a fee of 6 percent on all commodities exported, imported or travelling through, as well as the premium [Aggio] which derived from differences in the rate of exchange of the ducat, in the relationship to the Polish coin, since the duty was calculated at a time when the ducat was worth 4 florins 11¼ kreutzers, whereas after the occupation it rose to 4 florins 30 kreutzers. The premium was first introduced by Governor’s Office Councillor Splény and was 1 kreutzer on every Polish guilder, which was worth 15 kreutzers, that is 62/3 percent.15 13

14

15

‘The import duty for parties in transit was 8 or 10 percent and, over and above this, the export duty of 4 percent, excluding a few big wholesalers from Moscow and Moldova, with whom special contracts were concluded under which 1 ducat was charged per harnessed horse’, quoted in Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. This drink tax was not an insignificant amount. According to the Polish Parliament’s Resolution of 1764 it was to be levied in Galicia under the following headings: One gallon of Hungarian wine of all types 7.50 kreutzers One barrel of wine, customarily containing 40 gallons 5.00 florins One gallon of Burgundian or Champagne wine from France 7.50 kreutzers One gallon of French, Spanish or Italian wine etc. 3.75 kreutzers One gallon of Moldovan or Wallachian wine, all Hungarian and 2.50 kreutzers Polish mead, and English beer One gallon of Polish cream 1.00 kreutzers [Translator’s interpolations of the original terms in this paragraph.]

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This did not exhaust the long list of payments. There were other exactions, smaller it is true: barrel money, wagon money, visa money and money for passing through.16 All these payments were carried over from the Polish period, with isolated exceptions. They very clearly express the medieval spirit of the Polish customs system. The income arising from them was not inconsiderable, as is shown by a compilation according to which, in 1773, the exchequer took in:

Transportation money and copying fee Drink tax Deposit Premium Fees (approximately) Total

11,984 florins 72,439 florins 22,845 florins 28,884 florins 24,000 florins 160,157 florins

that is, one third of the total customs burden. It hardly needs to be argued that this Polish customs system was not ideal and was extremely burdensome from a financial point of view. The Austrian government certainly introduced a useful reform straight away, when the exemption from duties enjoyed by the nobility since 1507 was abolished. But the number and complexity of the payments required and the antiquated way of assessing them limited trade and gave officials many opportunities for abuses and arbitrariness. Despite all that, however, the retention of this system for Galicia was certainly more advantageous than introducing the system of prohibition that prevailed in the Hereditary Lands. The government also continued to hold fast to Galicia’s special status, although it met with opposition for two reasons. 16

Thus a) every barrel containing 2½ casks of wine: 19 kreutzers b) every harnessed horse carrying Frankfurt or Wrocław goods, also 19 kreutzers c) every ox being driven through: 6½ kreutzers d) every wagon carrying transit goods from Silesia to Hungary: 1 florin 16 kreutzers e) Leipzig transit goods: a quarter of the transit duty taken in the Hereditary Lands f) finally, at the last station, visa money: to the value of half the customs officers’ fee, 3 percent, and in the Province on the other side of the mountains for a second time 6 percent was taken again (Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776).

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First, the Galician customs system threatened the position of the Hereditary Lands in their existing markets. For example, the management of the Linz Imperial-Royal Woollen Cloth Factory [k.k. Linzer Wollenzeug-Fabrik] complained after the annual fair held in Vienna in 1774 ‘that the Transylvanian merchants had purchased few goods’. They explained that vast amounts of foreign goods were smuggled into Transylvania, having passed through Galicia, where they had free entry, with the result that in some towns, such as ‘Elisabeth, Szamosuywar, Hermannstadt and Karlstadt … considerable supplies of foreign goods [had been] found in Armenian vaults, although they were prohibited in Hungary and Transylvania’. But all the government did was to instruct the Galician customs authorities not to ‘allow these foreign goods to pass through nor to exit Galicia to Hungary and Transylvania … also to prevent them from being smuggled in’.17 This seemed, admittedly, to have helped little. In 1775 the director of the Linz factory, Court Councillor von Sorgenthal, made a report on the first Cieszyn fair. In it he repeated the complaints submitted the previous year. According to the fair’s Edict, foreign goods could enter Cieszyn without duties, ‘and experience has proved, without recourse to prophesy, that non-locals will bring in some goods’. The most important merchants from Bratislava stayed at the Cieszyn fair for over 14 days. ‘As the route through Vienna would have been far more advantageous, owing to the Danube river’, they had obviously only come to smuggle goods through Galicia. But small merchants, who did not come to the Cieszyn fair, also received goods from Galician merchants. At least, Sorgenthal had noticed, he wrote, that in Rzeszów ‘the ten Jewish general stores there were better stocked with goods than in other places’ and ‘the reach of their sales extended as far as Dukla and the Hungarian border and that their goods were brought into Hungary from there’. In the mountains, with their many secret paths it was difficult to supervise the tariff border. He himself attempted to avoid the Barwinek boundary post in a carriage and four and succeeded in passing both that post and the Hungarian border without being seen by the customs officials. It was therefore readily apparent that there must have been considerable amount of smuggling from Galicia to Hungary and Transylvania. ‘It must be engaged in particularly extensively to Humenné, Mamalyha and finally through Moldova to Braşov. There all the commodities which are subject to high duties in the Hereditary Lands, such as sugar, coffee and fine cloths, are cheaper than in Vienna. Bardejov too does not appear to be free of smuggling activity’.18 17 18

Letter of 30 June 1774 to the Governor, Count Auersperg, hka, Commerz fasc. 57, ad 14 ex Junio und 6 ex Julio 1774. Sorgenthal’s report, hka, Commerz fasc. 57, ad 13 ex Octobri 1775, pp. 7, 25 and 47–8.

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These and other similar pronouncements show that the industries of the old Hereditary Lands were really in considerable danger and that there was a threat that whole system of prohibition would be rendered ineffective. Even so, the government did not allow itself to be deterred and contented itself with a regulation that in Galicia ‘no goods should be stored within five miles of the Hungarian or the Silesian border without being registered officially’.19 On the other hand, Galicia’s special status had destroyed the hopes of industry in the Hereditary Lands that the Province would be its own exclusive sales outlet. So it is only too understandable that these circles also loudly raised the call for the extension of the system of prohibition to the newly acquired Province. So, for example in April 1773, the administrator of the Buchlov manor in Moravia, Count Prosper von Berchthold, through the mediation of the office of the Governor of Moravia and the Commercial Council, undertook steps in support of the sale of Bohemian and Moravian glass in Galicia and demanded the prohibition of the importation of Prussian glass, or the imposition of duties with a prohibitive effect.20 The Governor’s Office [Gubernium] in Lviv said it was opposed to granting this demand: ‘Polish glass is already burdened with a duty of 10 percent and English glass, which is too expensive in any case, does not require the precaution of a prohibition’. Therefore only Prussian glass came into consideration, but here too prohibition was not advisable, because there would be reprisals on the Prussian side as a consequence. ‘The only sensible precaution would be to subject Prussian and English glass to the same 10 percent tariff and to increase the excise payable on all three varieties’. The argument for limiting the response to these measures was not only fear of reprisals but also ‘the nature’ of Galician trade: it was countertrade. Alien merchants sold their foreign goods in Galicia on the assumption that they would immediately buy other goods there. If they were forbidden to market their goods, they would make their purchases elsewhere.21 19 20

21

Proclamation of 3 June 1775, Edicta 1775, p. 90. Berchthold complains that the previously flourishing export of Moravian glass to Poland has now ‘almost completely’ collapsed, as a result of competition from the big glassworks set up on the Pszczyna manor five years earlier at Wesoła on the Prussian-Silesian border with Poland. Within a short time it had drawn in almost all the Polish glass merchants, since it was near to the Polish border and enjoyed fewer transport costs. But precisely because the Polish market seemed to have been utterly lost, it was the more important to make sure of the Galician market (Berchthold’s petition of 18 April 1773; and the report of the Governor of Moravia of 15 May 1773 both in hka, Commerz fasc. 57, ad 27 ex Junio 1773. Also see ami, v G 12/2968, ad 889 ex Junio 1773 and ad 763 ex Aprili 1771). Postscript of General von Hadik to Count Wrbna, dated 6 May 1774, ami, v G 12/2968, ad 889 ex Junio 1774.

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This conception gained the upper hand in Vienna and with the Decree of 28 May 1774 these special conditions of Galician trade were taken into consideration when future tariffs were worked out.22 Rare exceptions in favour of prohibition were only made where there was a prospect of bringing Austrian goods into circulation to replace the prohibited foreign goods. Thus the Governor’s Office was instructed in the spring of 177423 ‘to prohibit all foreign’ (Saxon) ‘porcelain goods in Galicia, with the exception of faience, majolica and other earthenware vessels, as the domestic porcelain factory24 would be in a position to adequately supply the Kingdom of Galicia’. Exceptions of this kind, however, were only made in very isolated cases. Otherwise, the system of prohibition was entirely dispensed with. Galicia’s independent position in customs matters naturally also meant that the Province was separated from the Hereditary Lands by a customs boundary. Accordingly, when the foreign goods which entered the Empire through Galicia passed into the Hereditary Lands, they were charged an amount corresponding to the difference between the low Galician tariff and the higher tariff prevailing elsewhere, while if they belonged to the category of goods whose entry into the Hereditary Lands was prohibited, they were not allowed to leave Galicia. The grant of this distinct status is also explained by considerations other than Galicia’s trade relations, already discussed. Primarily the perceived necessity of concluding, in the interests of the Province, a trade treaty with Poland. But, since nothing was known about the character of trade in Poland and its influence on the interests of the Hereditary Lands was unpredictable, an internal customs boundary was instituted to protect them from the possibly unfavourable impact of Polish trade. Thus Galicia’s special status also served to smooth the path to a Galician-Polish trade treaty. Galician trade was to be assisted, not through prohibitions or embargoes but by encouraging foreign merchants to form trade links with Galicia. With this aim, the government provided them with information about conditions in the Province. Thus Prince Kaunitz, on receiving an inquiry about the wax trade in Galicia from [presumably Paulo] Tribuzzi, a businessman from Trieste, instructed the Governor’s Office to give detailed information about the extent

22 23 24

ami, v G 12/2968, ad 889 ex Junio 1774. Letter of 23 April 1774, ami, v G 12/2968, ad 763 ex Aprili 1774. The porcelain factory in Vienna was a state enterprise. The decree of 28 May 1774, quoted here, goes on to say that the marketing of porcelain from Vienna in Galicia has been taken over ‘by the Jewish tobacco merchants and by the two porcelain dealers Sieberin and Koberin, who have been granted the privilege’ and that ‘Porcelain from Vienna is already well regarded’ (ami, v G 12/2968, ad 889 ex Junio 1774).

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of the trade, prices, the main merchants involved, trade routes and transport costs. Kaunitz then sent the information he had obtained, through the medium of the Commercial Council, to all the Hereditary Lands.25 This succeeded as, apart from Tribuzzi, the managers of ‘all the civil trading companies’ in Graz contacted the government and said they were ready to take up trade relations with Galicia.26 The Hereditary Lands, for their part, took pains to distribute similar information to Galicia. Thus the Provincial Commissioner’s Office [Landeshauptmannschaft] of Gorizia had a table of its produce compiled ‘so that it can be communicated to the Governor’s Office in the Polish Province to assist in the business activities of the merchant estate there’.27 The application to Galicia of these milder measures, characterised by a more liberal spirit, is the more remarkable as, at that time (1772–3), the system of prohibition was in full force over the whole of Austria. During the 1780s a tendency favouring the replacement of the system of prohibition with a system of moderate protectionism did begin to emerge in authoritative Viennese circles.28 Its main advocates were Prince Kaunitz, Count Philipp Cobenzl, Karl Zinzendorf, the free trade advocate [Franz Karl] Hägelin, [Joseph von] Sonnenfels and [Franz Anton von] Raab. But at this time such ideas were merely projects and the new tariff of 15 July 1775 only softened the old system but by no means broke with it entirely.

2

The Organisation of the Customs Administration

Just as the Polish customs system, so the existing organisation of the customs administration was also retained. Initially, there was no separate customs administration. The whole administration and management of the customs system was directly dependent on the Governor’s Office. It was in the hands of Governor’s Office Councillor Splény and was provisionally transferred to him immediately after the occupation and 25 26 27

28

hka, Commerz fasc. 57, ad 2 ex Julio 1773. Letter, dated 26 October 1773, hka, Commerz fasc. 57, ad 7 ex Decembri 1773. This list, described as ‘Specificazione generale delle manufacture essitenti nello unite contee di Gorizia e Gradisca’, enumerates the type, price and manufacturers of the different commodities available (letter, dated 24 November 1773. hka, Commerz fasc. 57, ad 6 ex Decembri 1773). The Commercial Council’s draft proposal recommending this was laid before Maria Theresia in May 1773 (see Arneth 1876–79, 9, pp. 455 et seq.; Beer 1898, p. 113; and Beer 1894, pp. 88–93). Raab’s report of May 1774, which was imbued with the protectionist spirit, is printed in Beer 1898, pp. 113–4.

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before the provincial authorities had been established. He retained this control even after he left the Governor’s Office and was appointed Vice-President of the Lviv Supreme Judicial Tribunal [Obristen-Justiz-Tribunal].29 The authorities subject to Splény’s control continued to be divided among the three ‘Provinces’ [Provincia] of Galicia, namely Submontana, Civistulana and Russia. Each was headed by an ‘Intendant’, who received a salary of 1,266 florins.30 To assist them, they had six general inspectors [Revisores generales],31 with a fixed salary of 1,000 florins, responsible for supervising and auditing the amounts owed; further, as office assistants, one or two calculators, responsible for checking quarterly accounts; and one messenger [Cursor]. The superior authorities in each Province had ‘Chambers’ (Komory) subordinate to them. That is, tariff offices consisting of: one or sometimes two Customs Receivers (Tricesimatores) with an annual salary of 400 florins;32 two to three Customs Inspectors (Revisores camerales) with an annual salary of 200 florins each; several Agents on Horseback (Obequitatores) whose annual salary was 100 florins; and finally Agents on Foot (Pedestres) with 60 florins a year. At the end of 1774 there were 41 of these Customs Offices, in Galicia.33 The whole of this service personnel continued to consist exclusively of Poles.34 All the officials received the customary fee. They were also not dis-

29 30

31 32

33

34

Declaration of the Galician Court Deputation, 4 March 1774, hka, Commerz fasc. 57, ad. 27 ex Julio 1774. In addition to his salary, the Intendant received one sixth of the customs officers’ fee, which brought in 3,000 florins a year in the district of Submontana, for example (see Eder’s report of 15 January 1775, the section entitled ‘Über die dermalige Bestellung der Mauthüter und ihren Oberen’, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776). Divided as follows: one in Civistulana, two in Russia and three in Submontana. If the current income of a chamber exceeded 1,500 florins in a given quarter, they were granted a premium of 58 florins 20 kreutzers, which amount to 233 florins 20 kreutzers over the year. ‘Status Officiorum et Salariorum in Re Telonici Regnorum Galliciae et Lodomeriae cum fine Anni 1774 existens’, hka, Commerz fasc. 57, ad 27 ex Junio 1774: i County of Submontana (16): Oświęcim, Biała, Żywiec, Maków, Nowy Targ, Piwniczna, Sandecz, Grybów, Gródek, Gorlice, Żmigród, Dukla, Jaśliska, Szczawne, Jaworów, Skole. ii County of Civistulana (9): Wrsawy, or Dzików, Baranów, Szczucin, Uście Solne, Bochnia, Kazimierz, Spytkowice, Rzeszów, Jarosław. iii County of Russia (16): Lviv, Janiszów, Zamość, Woisławice, Dubienka, Kryłów, Sokal, Leśniow, Brody, Założce with Podkamień, Zbaraż, Grzymałów, Husiatyn, Zalishchyky, Horodenka, Śniatyn. ‘Status Officiorum et Salariorum in Re Telonici Regnorum Galliciae et Lodomeriae cum fine Anni 1774 existens’, hka, Commerz fasc. 57, ad 27 ex Junio 1774.

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inclined to extract other sources of income and Eder complained that ‘It is generally asserted and found by all carriers and trading parties that they are always trying to extort something. Here too, this evil custom is suppressed with difficulty or only by using the most rigorous measures’.35 It should still be noted, in fairness, that the situation was no worse in Galicia than it was in contemporary France, England or Prussia and that matters got worse rather than better under Austrian rule, something for which Eder himself bears the responsibility.

3

The Cost of the Customs Administration and the Income from Duties

The cost of the customs administration, in 1774, consisted of:

Florins Kreutzers 1

Salarium annuum simul et quartirium 58,458 summa36 2 Additional payments to the customs receiv- 9,090 ers of 39 chambers, at 233 florins each 3 Receipts of intendants and officials under 22,559 the heading of fee Total 90,107 4 Premium on the above amount received by 6,007 officials at the rate of 4 kreutzers per florin Grand total 96,115

33 0 18 50 10 037

Finally, in order to give a complete picture of the customs administration in the first years after seizure of the Province, their result is provided, in so far as it is expressed in the statistics on customs receipts. This result indirectly allows, in broad outline, a conclusion to be drawn about the extent of trade turnover.

35 36 37

From Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. [‘Annual salary plus total accommodation expenses’.] ‘Status Officiorum et Salariorum in Re Telonici Regnorum Galliciae et Lodomeriae cum fine Anni 1774 existens’, hka, Commerz fasc. 57, ad 27 ex Junio 1774.

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According to the following table, receipts amounted to 433,285 florins 40 kreutzers in 1773. But in order to grasp the full burden of customs on trade, as officially stated, we have to make further additions: the premium, charged at 4 kreutzers on each florin came to 28,884 florins 40 kreutzers and the fee came to roughly 22,559 florins 18 kreutzers, so that we then arrive at a total figure of 484,729 florins 38 kreutzers. ‘Tabella Proventuum officiorum Telonialium Regnorum Galiciae et Lodomeriae, Anno 1773’38

Province

Russia

Civistulana

Submontana

Total

General* Import Export Transit Deposit Drink tax Transportation money and copying fee Negative liquidation [Minus Liquidationis] Confiscation [Confiscationis] Total

20,317 55,419 23,897 30,390 916 6,733 9,304

8,165 13,615 35,846 1,314 32 794 2,418

41,758 48,915 12,252 30,717 21,896 64,910 266

70,240 117,949 71,995 62,421 22,844 72,437 11,988

483

195

501

1,179

573 148,032

946 63,325

699 221,914

2,218 433,27139

* ‘This rubric is to be understood in the sense that, in the first quarter, the export, import and transit duties were not charged [polletiret] separately but together in the appropriate charge books [Polleten-Bücher]. They are therefore grouped together in this extract’.40

In 1774, customs receipts in the other Hereditary Lands amounted to 3.14 million florins.41

38

39 40 41

[‘Table of Receipts of the Customs Offices of the Kingdoms of Galicia and Lodomeria in the Year 1773’. The figures are in florins. Grossman quoted all the table’s heading in the original Latin.] [The small arithmetical errors in the table’s totals have been corrected.] hka, Kameralakt, ad 312 ex Septembri 1776, appendix M. [Translator’s interpolation.] See Beer 1893b, p. 265.

chapter 2

The Reform of Old Polish Legislation, 1774 1

The Customs Administration

There were two paths the Austrian government could take in reorganising the customs system of the recently occupied Province. Either it could extend to Galicia the system of prohibition operating in the Hereditary Lands or it could retain the old Polish customs system. Choosing the second alternative did not, however, signify that the antiquated Polish tariff system satisfied all the requirements of trade. On the contrary, the inadequacies of the system were well recognised. It only remained in force provisionally. High tariffs, supplementary payments and burdensome operations occasioned numerous complaints. ‘The customs system in Galicia is in such a state that every part of it inescapably requires prompt alteration’.1 The Galician Court Chancellery gave the task of reorganising the Galician customs system to Carl Joseph von Eder, ‘the Imperial-Royal Councillor and Commissioner for Bohemian Bank Receipts’. In his detailed report of February 1774 he presented the problem from two angles. In the first section he discussed the reorganisation of the customs administration. He proposed the establishment of a customs administration with six regional offices, separate from the Governor’s Office. The Galician Court Chancellery had in mind Eder himself as the head of this administration, with the same salary of 3,500 florins which he had received in Bohemia. The Galician Court Deputation agreed but the final decision was postponed until Eder had travelled around the Province. That was the formal resolution of the matter. Empress Maria Theresia provisionally accepted Eder’s proposal and instructed him to ‘travel to Galicia in the capacity of a Commissioner [Commissarius] with a salary of 3,000 florins and, after acquiring local knowledge, to draft a full, practical plan of operations; to coordinate with the Governor’s Office; and then to finish the plan’. After the plan had been confirmed, a further decision would be made ‘about his appointment as the actual administrator’.2 1 Declaration by Count Wrbna on 4 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. 2 Declaration by Count Wrbna on 4 March 1774 and Resolution of 26 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774; extract from the minutes of the Galician deputation to the Court, hka, Commerz fasc. 57, ad 13 ex Aprili 1774.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_009

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In the second section of the report, Eder provided an outline of the principles to be applied to the Galician customs system. These do not offer much interest, however. As yet, he had far too little knowledge of the Province to be able to produce more than an abstract presentation of the general views which were current in the ranks of the bureaucracy at the time of Sonnenfels. His report therefore met with opposition from the Galician Court Chancellery, in whose hands the overall direction of Galician affairs lay, and which successfully represented the special interests of Galicia. Its views on this occasion can to some extent be regarded as an economic programme for the newly acquired Province.

2

Export Duties

As far as export duties were concerned, Eder and the president of the Galician Court Chancellery, Count Wrbna, agreed that Galician exports should be promoted as much as possible and that the old export duties of 10 and 12 percent, which were a direct obstacle to exports, should therefore be replaced by the lower tariff of 5/12 percent, which applied in the Hereditary Lands. An additional argument for this course was that in Poland, where the nobility was exempt from taxes and duties, merchants had the opportunity – extensively exploited – to export their goods under cover of a noble’s firm, thus in practice avoiding customs payments.3 Now, however, that the customs privileges of the nobility had been abolished in Galicia, the full severity of the tariffs first became apparent. As regards the time at which the new customs regulations should enter into force, Eder’s view was that they should await the conclusion of the trade treaty Eder remained in this position as customs administrator for ten years, until 1784. He was a gifted official and he gained a clear overview of conditions in the Province soon after his arrival. These became increasing familiar to him, thanks to his frequent journeys, and his sober and objective reports to the Court often contributed to the modification of the stereotyped regulations of the central government, which were often inappropriate for Galicia. His great services in this respect cannot be denied. Unfortunately, he possessed more understanding than he did virtue. He completely corrupted the customs administration and in 1784 he was, therefore, dismissed from office after his many abuses and violations of the law had been proved. He seems to have acquired a fortune from his office. Around 1788 he established a cloth factory in Galicia, a project in which his knowledge of the economic conditions of the Province was very helpful. 3 Korzon 1897, 2, p. 8. In 1602 the royal customs administrator, Cikowski, reported that at the annual fairs there were ‘two types of trade carried on, one in oxen, the other in letters of exemption’ (see Marchlewski 1897, p. 46; and Gargas 1905, pp. 238 et seq.).

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with Poland. Wrbna, however, regarded this as unnecessary, ‘since even if the trade treaty with the Republic did not come to fruition, the export of Galicia’s products to and through Poland should still be promoted in every way possible’. This conception met with the Empress’s approval. She decided that ‘the export duty should be reduced to 5/12 percent immediately’.4 This Resolution amounted to the complete abolition of the Galician export duties, since a 5/12 percent export duty can only be regarded as a statistical fee. How great and useful this revolution in the trade policy for Galicia must have been is self-evident. The still medieval principle of high export duties was replaced by their modern regulation and this made Galician products more competitive in foreign markets. Freed from the great burden they had previously suffered in their own country, they could more easily bear the imposts of neighbouring countries, whose markets had previously been closed to them. The influence of this lowering of duties in stimulating exports is made clear by the fear fears that in Galicia itself there might soon be shortages of some items, e.g. livestock. So Eder, who had himself suggested the reduction of export duties, proposed the re-introduction of many restrictions some months later. Thus the export duty on cows, calves and pigs should be increased from 5/12 to 2½ percent, in other words from 1¼ to 7½ kreutzers each and on oxen from 5 to 30 kreutzers each, etc., in view of ‘the number of livestock required for domestic consumption, since in the Republic the tariff was four times higher (10 percent) and their export had not, nevertheless, been retarded’.5

3

Transit Duties

The revolution in transit duties was as great as that in export duties. Mercantilist policy sought equally to facilitate exports and to draw in the transit trade, by setting low transit duties. The instruction to Court Councillor Kozian was formulated in this spirit.6 The Polish transit duties of 12 or 14 per-

4 Resolution, 26 March 1774, hka, Commerz fasc. 57, ad 13 ex Aprili and 27 ex Junio 1774. Edict of 11 April 1774. See Kropatschek 1786, p. 55. 5 The section of Eder’s report of 15 January 1775 headed: ‘Die antragende Abänderung des Ausfuhrzolles’, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. The question of Galician exports is closely connected not only with the duty on exports from Galicia but also the import duty on Galician products entering the Hereditary Lands. I return to this question in connection with the Galician import tariff. 6 See above, p. 114. See Sonnenfels 1771a, 2, paragraph 155, pp. 207–9.

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cent were as much of an economic curiosity as the high export duties. Eder therefore wanted them to be moderated. On the other hand, he did not want to go too far, because if transit was too strongly favoured it would pay the Moldovan and Russian merchants to take direct control of the trade without the involvement of Galician merchants. Wrbna, on the other hand, considered that Galicia’s geographical situation required support for the transit trade under all circumstances. ‘Transit through Galicia’, he explained, ‘goes from the ImperialRoyal Hereditary Lands to Poland and other foreign countries; or it goes from Poland and other foreign countries to the Hereditary Lands; or it goes from foreign countries to other foreign countries. As regards the first two types of transit, there is no doubt that it is in the interests of the old Hereditary Lands to facilitate them in any way possible’. ‘The third type of transit, on the other hand, such as the movement of Podillian cattle through Galicia to Prussian Silesia or the potential transit through Galicia of certain goods which now go through Gdańsk or the Prussian states to Poland, cannot be maintained or brought about in time except by the greatest possible reduction in customs duties’. ‘The imposition of obstacles to this transit trade, far from removing the trade from the hands of foreigners and turning it towards the locals, as intended, would have one effect: repelling the foreigners who at present control the trade from our country and compelling them to seek a route through foreign countries’. The Empress left this disputed issue undecided for the moment.7 But a few days later she fixed transit duties at ¼ percent, ‘in order to encourage the merchant to favour the route through Galicia over others’.8 If the foreign goods did not pass through immediately, but remained in the Province for some time they were subject to the customary import duty of 10 percent. On being re-exported, however, further duty was paid, since the previous export duty had been abolished and the newly-introduced export duty of 5/12 percent was only levied on domestic products.9 Special, extremely favourable transit duties for livestock were issued at the end of 1774.10

7 8 9 10

The Resolution of 26 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774 stated: ‘My decision on the matter of transit will be made later’. Handwritten letter of 4 April 1774. The transit duty was raised to 1 percent in the General Tariff of 1775, but was only once reduced. Edict of 11 April 1774, extract from the minutes of the Galician Court Deputation, hka, Commerz fasc. 57, ad 13 ex Aprili 1774. Quoted from Eder’s report of 15 January 1775, the section headed ‘The Impact on Livestock of the Regulation of the Transit Trade’, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776.

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The ‘Consumo’ (Import Duty)

The regulation of import duties, on goods both from the Hereditary Lands as well as foreign countries presented most difficulties. The status of Galicia within the Austrian customs system actually depended on how this question was decided. Before we examine the relevant reforms, however, we must first throw some light on the way the question of the importation of goods from the Hereditary Lands into Galicia has been treated in the previously literature. It is entirely comprehensible that the Austrian government shared the hopes of the industries of the Hereditary Lands that they might gain a new market for their products in Galicia. Immediately after he arrived, Count Pergen wrote to Prince Kaunitz: ‘What appears to me to be most important in dealing with trade in these Kingdoms is the advantages which could be obtained by the workshops and factories of the Hereditary Lands, where all the fashionable accessories, fine cloths and fine linens, all the felt, steel and iron products will be manufactured. At least for a few years this Province might provide a considerable outlet for these products’.11 It hardly needs to be emphasised, however, that expressing the hope that the Hereditary Lands might find markets for their goods in Galicia is entirely different from the assertion of the legend that the government did not want any industry in Galicia and even sought to prevent it by all possible means! For it is clear that given the economic condition of Galicia immediately after its occupation, as a purely agrarian region with no industrial life, almost all industrial products necessarily had to be procured from outside: glass and porcelain, metals and cotton, silk and cloth, drugs, fashionable accessories and small items of hardware, wine and spices, fine materials, elegant carriages and many other objects of both luxury and everyday use. Korzon’s remarks on this subject are instructive and worth reading.12 The Polish Republic also had to import practically every industrial product! We will see later on why this was so. Here it is sufficient simply to briefly indicate that the main cause of the lack of industrial development and urban centres in Poland lies in the reason for the tragic decline in Polish civic life in general: two hundred years of economic policy dictated by the short-sighted class interests of the Polish nobility!13

11 12 13

Pergen’s ‘Relation’ of 25 January 1775, Zakład imienia Ossolińskich 525, i, p. 48. Similar statements were made by Count Wrbna in February 1774. See below, p 144. Korzon 1897, 2, pp. 134–45. Also see above, p. 96. See in particular Balzer 1891, pp. 11–2 and 45–6. The nobility still resisted the industrialisation of Galicia during the second half of the nineteenth century. ‘In the first decades

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It is hardly necessary to demonstrate that such enduring deficiencies cannot be remedied at a single stroke; that years, if not decades, are required. Even the most energetic efforts of the Austrian or any other government could not alter this fact. It was impossible to call industry into existence with the wave of a hand in a country where every prerequisite for it, even the most primitive, was absent. If the Austrian government wanted to create an industry in Galicia, it had to be aware that this could only result from long years of effort. Until that point, Galicia was necessarily dependent on the importation of foreign goods. This and nothing else is expressed in the report by Pergen that has been referred to. It explicitly noted that the importation of goods from the Hereditary Lands to Galicia is only envisaged ‘for some years’. Innumerable other voices express the same thing, as we will discover.14 Immediately regarding every foreign commodity which came into Galicia as oppression, and that deliberate, of Galicia and its industry is not an objective judgement but one dictated merely by passion. Galicia and Poland, had to procure foreign goods because they needed them and could not produce them themselves. This fact is not to be explained as the consequence of Galicia’s or Poland’s political dependence on the neighbouring countries but solely with reference to economic causes. For nearly 100 years, until the mid-nineteenth century, England was after all almost the sole industrial workshop of the whole world and flooded other states, free or politically dependent, with its manufactures. The natural exchange of agricultural products with industrial products will always take place in given proportions between two countries, independently of the political relations between them. We can still learn much about this today by looking at the situation in the Balkan countries. There political influences certainly also play a part in deciding whether a particular Balkan state exchanges its agricultural products for French, German or Austrian manufactures. The fact of importation itself is, however, unavoidable given the lack of adequate domestic industry. If, therefore, the Austrian government was concerned to replace the productions of foreign factories, previously imported by Galicia, with its own, this was a matter of complete indifference from the point of view of the interests of Galician industry. To the extent that the interest of Galicia also came into play here – its interest, namely, that the foreign goods necessary to its transit trade should not

14

after the emancipation of the serfs, industrial development contradicted the interests of the great landowners, who preferred to reserve cheap labour for itself’ (Bujak 1913, p. 17). See in particular the remarks made at the meeting of the Council of State, on 4 May 1776, below, pp. 258–261, and Eder’s proposal of 15 January 1775, hka, Kameralakt, Mai– Dezember 1775, ad 312 ex Septembri 1776, below, pp. 269–204.

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be prohibited from entering – this was, as has been demonstrated, adequately protected, without any regard to the Hereditary Lands. And that remained the case in the future as well, i.e. Galicia would not become an exclusive market for the goods produced in the Hereditary Lands but rather – as I will immediately demonstrate – as well as these, foreign goods, as previously, continue to be admitted into Galicia, after the payment of customs duties set at a low level. There was, admittedly, no shortage of proposals to do the opposite. But it should be particularly emphasised that these were not directed against Galicia or its industries. Imbued with the centralising tendencies of mercantilism, whose goal was the creation of large and unified customs areas, in other words a ‘self-contained commercial [and industrial] state’, they logically had to place the interests of the state as a whole, over special local and provincial interests. Joseph ii’s memorandum of 11 February 1774,15 which dates precisely from the period of discussion about the future system of import tariffs and prohibitions for the Hereditary Lands, is a typical example of these mercantilist conceptions, which aimed to establish uniformity. The Emperor stated that, because of its unfavourable situation, being a great distance away from the sea, Austria cannot count on securing any foreign markets. But, as it produces almost everything necessary itself and possesses a population of 13 million people, it must attempt to be self-sufficient and procure nothing from abroad. To achieve this goal, all the Hereditary Lands would have to be regarded as a single unit, closed off from the outside world. Borders would have to be watched and every precaution taken to stop foreign goods at them. This would be a heavy burden for some districts or classes of people. Some mountainous areas of Bohemia, one hundred Viennese manufacturers, would go to the wall.16 Hungary, Transylvania and Galicia would have to provide themselves with domestic cloth and linens, for example, and if they suffered from this, it would have to be borne in mind that the Austrian Monarchy was a society of 13 million people. If two or three million inhabitants suffered some disadvantages, while 10 million enjoyed gains, the greater good would have to be preferred to the lesser evil. The necessary result of sealing off the country from the outside world would be the greatest possible increase in domestic production. To achieve this, internal trade must be freed from all customs barriers, monopolies, privileges, and guild and craft restrictions. The Emperor was conscious that such a system was tailored above all 15 16

See Beer 1894, pp. 95 et seq. The system of prohibition was equally burdensome for Gorizia, which obtained many goods available more cheaply from Venice than from Moravia, for example (see Beer 1894, p. 81).

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to the more industrially developed provinces. But the other, less developed or even completely agricultural provinces could also gain from it, he believed. If there was domestic free internal trade, without restrictions and monopolies, then nothing would stand in the way of the development of new industries and factories in these provinces too – protected by external tariffs. They would be regulated by nothing but the laws governing the competition of individuals with individuals and provinces with provinces. The number of merchants and factories would decline in one place but would emerge and rise in others. After that, however, with the development of industry and population growth, agricultural products, which were previously exported due to a lack of domestic consumption, would find a more appropriate use and the need for the export (of natural products) would disappear. A closer examination of this mercantilist programme, its basic justification and practical application, must await a later investigation into the Austrian government’s domestic economic policy in Galicia. In this context, it is only necessary to point out that this principal goal of Joseph ii’s economic policy with respect to Galician was, initially and for many years thereafter, just a proposal which was in no sense put into effect. The idea of unifying the previously separate Austrian provinces into a single economic entity was always dear to the heart of the Emperor. He wanted, however, to make his Empire an organic whole and not just to combine its parts mechanically by means of coercive measures. Galicia’s special interests were therefore spared centralising tendencies17 and the special status provisionally assigned to it within the Austrian customs system in 1772 was preserved in 1774 and continued throughout the following decade, until 1784! Despite centralisation – a special status for the Province. That is the problem with which the Austrian bureaucracy of the period dealt and, in fact, solved in relation to Galicia, as will immediately be demonstrated.18 We can now return to Eder’s report at the beginning of February 1774: 1) Eder believed that the import duty on foreign goods, particularly manufactures, should be set high enough to secure the Galician market for Aus17

18

Doblhoff wrote in 1764: ‘Genuine wisdom for a state requires that if a number of provinces stand under any ruler, they cannot be regarded as other than a single body in their totality and their interconnections; care must be taken so that one province does not harm another, also that the manufactures of one province do not ruin those of another’ (see Beer 1894, p. 21). [Grossman’s emphasis.] The Emperor took a similar attitude to Tyrol (see Meynert 1862, p. 144). This fact is a shining demonstration of a cautious Realpolitik, contradicting the frequent accusation that Joseph’s legislation was dominated by general principles and failed to consider concrete relations.

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trian industry. ‘The only thing to be considered here is whether Galicia’s requirements, previously satisfied from abroad, can be met from the Hereditary Lands’. To achieve this he wanted to apply ‘the same principles and measures in customs policy as are applied in the Hereditary Lands’. These principles, which did not take account of the special conditions in Galicia, should be softened by making sure that the tariffs in Galicia were not set too high. ‘However, duties should not be set so high as to give rise to smuggling’, he continued, ‘hence the highest duty should be set at 20 percent and only be 25 percent for a very small range of items’. Only where Galician industries required special protection should there be recourse to high tariffs and potentially prohibition. So, for example, the importation of cloths and linen should be prohibited. Products Galicia needed, on the other hand, should be charged at a rate lower than the general tariff. The correct level should be determined locally in accordance with concrete conditions by Court Councillor von Sorgenthal, whom it was intended to send to Galicia. Although these principles did not imply absolute prohibition, they still did not match Galician conditions and would have been harmful if put into effect. Eder himself changed his mind, when he came became familiar with the Province. But, in the short term, the danger that they would be accepted was increased by the support of an anonymous writer, who belonged to the highest official circles and sent a memorandum to the Empress demanding the ruthless application of the Hereditary Lands’ tariff to Galicia.19 ‘There appears to be no doubt’, he declared, ‘that Count Cobenzl’s tariff should be applied generally, without regard to the degree to which it is necessary in that place’.20 And this demand was based on the argument that this tariff was ‘established, in any case, without regard to the items which the Hereditary Lands do not produce in sufficient amounts, such as drugs, spices and similar goods’, their importation had, therefore, already been facilitated by this tariff. It is true that the anonymous writer was well aware that this measure had not affected the importation of manufactures. As far as these were concerned, he conceded his doubts about whether the products of Austrian industry would suffice ‘for such a large, newly acquired province’. But he allayed

19 20

‘Ökonomische Anmerkungen, die Einrichtung der Mäute in Galizien betreffend’ hka, Commerz, ad 27 ex. Junio 1774. Also see ami, Index, Galizien 1774, ad 1085. I suspect that the anonymous writer was Commercial Court Councillor Friedrich von Eger, who often expressed similar opinions about Galicia. Eger became an influential State Councillor in 1785.

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these doubts by remarking that ‘the factories of the Hereditary Lands ought to be extended’. The reference to Cobenzl in this memorandum, although inaccurate, was a clever touch. Philipp Cobenzl, a protégé of Kaunitz, was at just that time (March 1774) a new star, which rose during the Empress’s final years and who enjoyed her confidence.21 The Empress asked for expert opinions on the subject, from the president of the Galician Deputation, Count Wrbna and from the Commercial Council.22 Wrbna now came forward with sharp criticisms of both Eder’s and the anonymous writer’s proposals. At the same time, he opposed the Resolution of 26 March 1774, by defending the competence of the Galician chancellery to make autonomous decisions.23 The Commercial Council, he asserted, was not entitled to be involved in decisions on setting Galician tariffs on items imported from other provinces. ‘This is an internal Galician matter, therefore for the Galician chancellery alone’. The Commercial Council had a right to express a view when it is a matter of ‘reciprocity’, i.e. duties on Galician items in the Hereditary Lands. This standpoint cannot be reconciled with the centralising views of Joseph ii. On the matter in question, Wrbna emphatically pointed out the necessity of trade relations with the outside world for Galicia and the impossibility of applying Cobenzl’s tariff to Galicia: As far as I am aware, Count Cobenzl and Court Councillor [Franz Xaver]24 Gruber entertain other and better principles than simply the wish to treat all provinces equally and to lay down a rule that a tariff should be introduced universally, without regard to the extent to which it is necessary for a given province … For the consumption of its natural products, Galicia is absolutely dependent on its neighbours and they barter or turn elsewhere. It is impossible to escape from this fact. Wrbna concluded: ‘In general, I beg your Royal Majesty to exercise mercy and to allow the current tariff to remain in force in the Province until the truth of the matter is better understood, because otherwise very harmful measures could be introduced under the appearance of useful activity’.

21 22 23 24

See Arneth 1876–79, 9, p. 457. Quoted from Resolution, 26 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. Wrbna’s Report, 30 May 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. [Editor’s interpolation.]

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The Emperor therefore postponed his decision until ‘the necessary factual information has arrived from the Province’.25 Everything therefore remained the same. Foreign goods entering Galicia paid a relatively low import duty of 10 percent.26 It remained at this level until the introduction of the tariff of 2 January 1778, as the provisional tariff of 28 December 1776 only regulated the relations between Galicia and the Hereditary Lands and not its relations with foreign countries. Galicia had Count Wrbna and no-one else to thank for the maintenance of this extremely favourable tariff. The question of Galician duties on items imported from the Hereditary Lands, which was closely bound up with the issues discussed above, was more complicated and troublesome. Even though the government rejected the demands of its own industrial circles for the introduction of a prohibitive tariff in Galicia and permitted the importation of foreign goods, completely abandoning the Galician market to foreign imports would not have made sense. It was in the nature of the matter that the government wanted to facilitate the importation of goods produced by the industries of the Hereditary Lands into Galicia, by all possible means. It did not, however, want to concede a monopoly position to them. Hence the entry of foreign goods was permitted. It was impossible for the government to oppose freedom of competition between the industries of the Hereditary Lands and the industries of foreign countries. This question came to the surface when Prince Johann Adam von Auersperg27 raised the complaint that his products, despite their high quality, could not compete on the Galician market with foreign goods, particularly from Prussian Silesia. He gave higher freight costs as the reason and therefore demanded that, to compensate, ‘the Galician import duty on all manufactures from the Hereditary Lands should be removed completely, at least for a few years’.28 Count Wrbna supported this request very warmly: ‘One of the most significant advantages the acquisition of Galicia can offer the other Hereditary Lands’, he believed, ‘is unquestionably the way it promotes the con-

Wrbna’s Report, 30 May 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. Among foreign goods, a special status was given to those from Poland. These arrangements were under discussion with that country at the time (on this point, see below, pp. 177–180). He owned a factory which made fustian cloth on his manor of Tuppadl in Bohemia, where he employed more than 3,000 people. ‘Vortrag der galizischen Hofdeputation’, 22 February 1774, hka, Commerz fasc. 57, ad 13 ex Martio 1774.

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sumption of domestic manufactures’. Unfortunately, there was still no system of organising the mutual connections between Galicia and the Hereditary Lands. As a consequence, ‘every day that this is lacking, leads to real disadvantages for the manufactures of the Hereditary Lands’. Action on this matter should not, therefore, be postponed until a comprehensive determination had been made and a general tariff system created. The interests of the manufacturers of the Hereditary Lands demanded an immediate solution. He therefore proposed that the Galician import duty for all natural products of the Hereditary Lands should only be 2 percent and that ‘immediately, from now on, the Galician import duty should be reduced to 3 percent on all manufactured goods, as a concession to the manufacturing entrepreneurs of the Hereditary Lands’. He offered an added justification for this proposal, by saying that, according to the current negotiations over a trade treaty with Poland, Polish goods would pay a tariff of only 3 percent. Austrian products should not be treated more severely than goods from abroad.29 There can be no doubt about the justice of this demand. It was in the interests of Galicia to the extent that every measure facilitating its imports also automatically promoted exports, in view of the exchange character of Galician trade.30 This was not enough for Wrbna, however. He demanded that Galicia be placed unconditionally and formally on an equal footing with the Hereditary Lands. ‘In this case [if a reduction in tariffs on the importation of goods from the Hereditary Lands is accepted], however, since Galicia has almost no manufacturing industry, it would in fairness be justified in demanding reciprocity with the other provinces in regard to all of its natural products’.31 The anonymous writer, already quoted,32 objected vociferously to these demands. Of course, he had no objection to reducing duties on the importation of goods from the Hereditary Lands into Galicia. He went still further in this direction and demanded that the import duty on goods from the Hereditary Lands be set at only 2½ percent, on the pretext that

29 30 31 32

‘Vortrag der galizischen Hofdeputation’, 22 February 1774, hka, Commerz fasc. 57, ad 13 ex Martio 1774. [I.e. the countertrade/barter character of Galicia’s external trade.] ‘Vortrag der galizischen Hofkanzlei’, 4 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. ‘Bermekungen, den Handlungs nexum zwischen Galizien und den übrigen Erblanden betreffend’, in hka, Commerz fasc. 57, ad 27 ex. Junio 1774.

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this brought the Galician tariff into line with the Cobenzl tariff for the Hereditary Lands.33 But he regarded the reduction of tariffs on Hungarian products in Galicia to this level as questionable, calling for further discussions on the question. At most, he believed, the same reductions as Hungary enjoys in the German Hereditary Lands could be conceded in Galicia. This would have placed Hungary in a less favourable situation on the Galician market than Austrian factories and would inevitably have made its competition with them more difficult. He combatted the proposal to grant reciprocity to Galician products in the Hereditary Lands more strongly. ‘In general, these products could not be regarded as being from the Hereditary Lands until the customs provisions for foreign goods there have been introduced to the full extent of those in the Hereditary Lands’. He therefore made the reduction in tariffs on Galician products entering the old Hereditary Lands dependent on the removal of Galicia’s special status in tariff policy and its inclusion in the overall customs system of the state. He very cleverly sought to win the Empress’s approval for his views, by pointing to the danger that the free entry of foreign goods into Galicia posed to the Hereditary Lands and that ‘otherwise everything [will] creep in here by this route’. He therefore proposed that, ‘in general, Galician products [should] be regarded as foreign’ and that only ‘once equal customs arrangements have been introduced there … [should] all Galician products [be] treated in the Hereditary Lands in the same way as those of the Hereditary Lands’. The anonymous writer’s fears of were undoubtedly justified. A danger that the Hereditary Lands might be flooded with foreign goods arriving through Galicia and that the whole policy of prohibition and protective tariffs might become ineffective, to the great advantage of foreign imports, really did exist. In this respect, the interests of Galicia and the Hereditary Lands did not coincide and finding a solution favourable for both parties was not easy. The Empress did not reject this argument and her decision was influenced by it. ‘Henceforth, import duties in Galicia on all products of the German Hereditary Lands, whether artificial or natural and excluding Hungarian products, in regard to which there will need to

33

‘On the products of all German Hereditary Lands whether manufactured or natural the tariff is to be set at 2½ percent, in order to bring it closer to the general system adopted in the tariff of Count Cobenzl, in which no tariff of either 2 percent or 3 percent can be found’.

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be further consideration, are to be set at 2½ percent’.34 And at the same time she ordered that precautionary measures be taken, ‘so that foreign manufactures do not creep in with our own products, having only paid this low duty’. The decision on reciprocity for Galician products was left until there were further deliberations by Court Offices and the Commercial Council and was thus delayed by more than two years. The reduction in import duties on items from the German Hereditary Lands to 2½ percent came into immediate effect35 and the relevant customs regulations were issued on 11 April 1774.36 This partial implementation of Wrbna’s proposal had a completely different result from that intended. Wrbna had wanted a closer economic connection between Galicia and the Hereditary Lands and had therefore proposed reductions in Galician import duties on goods from the Hereditary Lands and conversely reductions in duties imposed in the Hereditary Lands on Galician imports. Now, only the first part of his proposal was adopted and thus the Hereditary Lands were favoured onesidedly. Wrbna repeatedly defended Galicia’s interests, criticising both the Empress’s Resolution and, hidden behind her, the anonymous author of the ‘Remarks’.37 He was not prepared to concede that ‘Galicia should mainly be consigned to being a market for domestic products, both manufactured and natural’. And, against the fear that a reduction in import duties on Galician items would lead to an excessive reduction in customs revenue, he asserted that ‘the main purpose in establishing a tariff’ should be ‘to improve the level of subsistence and not to increase the yield from customs duties’.38 Wrbna made similar comments a few weeks later, when court officials were working on the expert opinion which the Empress had demanded. In opposing the Commercial Council, he also advocated the interests of

34 35 36

37 38

Resolution, 26 March 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774. ‘Zirkular’, 28 March 1774 to all provincial authorities, hka, Commerz fasc. 57, ad 25 ex Martio 1774. ‘Das Konzept’ [draft], ami, v G 7/2940 ad 669 ex Majo 1774. It is not printed in the complete collection of Maria Theresia’s laws, see Kropatschek 1786, p. 55. The German lands were Bohemia, Moravia, Silesia, Lower and Upper Austria, Inner Austria (including Styria, Carinthia, Carniola and the County of Gorizia and Gradisca) and finally Tyrol, according to an added ‘Instruction’. [I.e. the author of ‘Bermekungen, den Handlungs nexum zwischen Galizien und den übrigen Erblanden betreffend’, in hka, Commerz fasc. 57, ad 27 ex. Junio 1774.] ‘Wrbna’s Report’, 30 May 1774, hka, Commerz fasc. 57, ad 27 ex Junio 1774.

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Hungary. Just as in the case of Galicia, he was opposed to worse treatment for Hungary than the Hereditary Lands. Hungarian products (with the exception of grain), he suggested, should also, therefore, be subject to a 2½ percent import duty in Galicia. All the more because ‘there is no conflict between Hungarian and Galician products and it is obvious, with regard to grain and other foodstuffs which should be regarded as objects of public administration rather than of commerce, exceptions made necessary by the circumstances can be introduced at any time by the Governor’s Office’.39 On the other hand, Wrbna insisted that Galicia should have reciprocity in the German and Hungarian Lands, and indeed not merely for natural products, as previously,40 but in general, for these and manufactured products. He supported this demand very cleverly with a new argument, evidently directed against the anonymous writer: if the tariff boundaries between Galicia and the Hereditary Lands were removed in the future, this could not take place at a single stroke but only step by step.41 The spokesperson of the Commercial Council, Court Councillor Degelmann, adopted a favourable attitude to these proposals. He too expressed support for a 2½ percent tariff on imports into Galicia from Hungary, Banat and Transylvania. ‘I have equally few reservations’, he stated, ‘about a similar reduction of the tariff on the entry of Galician products and manufactures into the German and Hungarian Hereditary Lands’. But Galician products would have to be proved to be such and not to belong to the list of those prohibited in the Hereditary Lands.42

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42

‘Note’, 19 July 1774, hka, Commerz fasc. 57, ad 24 ex Julio 1774. See above, p. 145. ‘On the third point: if one is in favour of conceding to Galician natural and manufactured products free entry into the German as well as the Hungarian Hereditary Lands for the present and temporarily, merely on payment of a duty of 2½ percent in reciprocity for the entry of the products of those Hereditary Lands into Galicia for the currently valid customs duty … then this … would be a first step to a closer trading connection between Galicia and the other Hereditary Lands, in the future’ (‘Note Wrbnas’, 19 July 1774). ‘Note an der galizischen Hofkanzlei’, 25 July 1774 [Grossman indicated that the full reference was above, although it was not]. The only alteration proposed by Degelmann was that instead of the tariff of 2½ percent, which was unknown in the Hereditary Lands, ‘they [Galician goods] should be regarded in the German lands as coming from the Hereditary Lands and consequently not be liable to higher duty than customary in the Hereditary Lands. But in Hungary, Transylvania and the Banat of Temesvár they would have to pay 3 percent … if this were not the case, much confusion could arise in applying tariffs’. The favourable position taken by Degelmann on Galicia is the more remarkable, as he was otherwise a prominent advocate of the system of prohibition (see Beer 1894, p. 76).

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The matter was delayed, however, until it was again brought to mind by the Cieszyn fairs and gave rise to further deliberations. The Wrbna-Degelmann proposals were only adopted to the extent that they granted goods from Hungary, Transylvania and Banat equal treatment on the Galician market with goods from the German Hereditary Lands.43 Shortly after, Milanese and Tuscan goods were also placed on the same footing.44 This reduction in tariffs gave goods from the privileged Hereditary Lands a great advantage over those from abroad, on which an import duty of 10 percent was imposed. Exempting the state’s Porcelain Factory in Vienna even from the moderate tariff, to overcome competition from the Saxon porcelain industry, was even thought desirable.45 It appears, however, that this intention was not put into practice. Many other subsidiary charges, which Eder described as ‘highly oppressive’ and as the cause of ‘even more many excesses by officials’, were also abolished: transportation money and the copying fee disappeared for the most part and the deposit entirely. The customs officials’ fee was now charged only on foreign goods, because otherwise ‘it would often have exceeded the tariff itself’. Three sixths of it went to lower customs officials, 1/6 to intendants, the remainder, of 2/6, flowed to the state Treasury.46

5

Customs Procedures

It was a prerequisite for the tariff reductions on goods from the Hereditary Lands which went directly to Galicia without any detour, conceded in the Edict of 11 April 1774, that they had to be distinguished from similar foreign goods. The Empress laid special stress on this point. To achieve this, she sent a ‘set of instructions for the customs authorities in Galicia and Lodomeria in relation to manufacturers and factory owners from the German Hereditary Lands (and

43 44 45 46

‘Interimal-Resolution’ 3 December 1774, quoted in the report of 6 August 1776 by the Governor of Galicia, hka, Mautwesen in Galizien, Fasc. 7 G, ad 40 ex Decembri 1777. ‘Interimal-Resolution’ 3 December 1774, quoted in the report of 6 August 1776 by the Governor of Galicia, hka, Mautwesen in Galizien, Fasc. 7 G, ad 40 ex Decembri 1777. ‘Hofdekret’, 38 May 1774, ami, v G 12/2698 ad 889 ex Junio 1774. ‘Relation Eders’, 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776.

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later also the Hungarian Hereditary Lands)’,47 the essential points of which it would be appropriate to reproduce here. Goods which entered Galicia were to be provided with an Export Stamp [Essito-Bollete] at the border, then a Certificate (or Stamp) of Origin. Four categories of commodity were distinguished under this system: foreign commodities were subdivided into prohibited and non-prohibited; domestic commodities into stamped and not subject to stamping: 1) Foreign commodities. Prohibited commodities, listed by name,48 had to be turned back at the border. The remainder were, as a rule, also prohibited but their importation by privileged merchants was permitted, on the presentation of their certificates. These goods were stamped with A (= foreign [ausländisch]). Since the high foreign import duty had already been paid on them, when they entered the Hereditary Lands, on entering Galicia they were only subject to a supplementary payment of 2½ percent.49 2) Goods from the Hereditary Lands. Goods subject to stamping had to be provided with a stamp indicating the Province in which they were produced. Exceptions were, however, permitted in favour of larger and betterknown factories, larger guilds and municipalities and larger towns, which were allowed to use their own stamps. This was the case for more expensive fabrics and luxury goods, in the manufacture of which great care was taken in the Hereditary Lands.50 Other goods from the Hereditary Lands were not required to be stamped. For these, an export certificate from the last border post was sufficient.51 47 48

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50

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‘Hofdekret an dem galizischen Gubernium’, 7 May 1774, ami, v G 7/2940 ad 669 [sic] ex Majo 1774. These were various types of: i. Silk, ii Wool, and iii Metal Goods (‘Verzeichniss der jenigen waren auf welche dermalen keine Pässe zur derselben Einführung aus der Fremde erteilet werden’, ami, v G 7/2940 ad 669 ex Majo 1774). Cases like this could clearly arise only exceptionally, since foreign goods went directly to Galicia without touching the Hereditary Lands, only had to bear an import duty of 10 percent. The following categories were enumerated: 1 fustian; 2 cotton and semi cotton, semi linen and semi silk fabrics and cloths; 3 silk lace, blond lace and chenille; 4 completely or partially silken, gold and silver Leon style trimmings and laces; 5 linens, and all cloth woven from flax, hemp and hair; 6 all richly sewn and smooth silk fabrics, velvets, silk cloths, fine cloths, silk and woollen gauzes and crêpes; 7 gold, silver and silk embroidery in separate pieces; 8 silk, lightly woven woollen and sheeps-wool stockings; 9 cloths; 10 woollen, half woollen and half linen, half woollen and half silk fabrics and fabrics worked with Angora thread; 11 woollen and half woollen handkerchiefs striped with silk and yarn, also printed linen (‘Verzeichniss der Stemplung unterliegenden Waren’, ami, v G 7/2940 ad 669 ex Majo 1774). These stamping regulations for foreign goods and goods from the Hereditary Lands were

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The Galician Customs Offices were expected to make themselves familiar with these stamps and in the case of imports of lesser value, where ‘the danger of fraud’ was therefore less, and also in cases where there was no suspicion of fraud, they were asked to be lenient in performing their checks, so as not to damage trade by making harsh inspections. It should finally be noted that the import, export and transit of goods was only to be permitted where there was ‘a Customs Office with the power to expedite or a formal customs post’ but not where there were only ‘border posts’. All travellers, without exception, were obliged to report to an office, whether they were carrying dutiable or non-dutiable goods.52 It is apparent that the characteristics of the tariff system and the regulation of customs duties in Galicia were by no means identical with those of the well-known, decidedly prohibitive and protectionist system in force in the Hereditary Lands, which placed obstacles in the way of trade. The system in Galicia was much more lenient. Despite this, it was circumvented by smuggling and the bribing of officials. In order to control corruption, merchants were forbidden from lending money to customs officials.53

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repeatedly reissued and made more rigorous, particularly after the trade treaty with Poland came into force (1 February 1777), because it required each side to identify goods (see, for example, the ‘Nachricht, durch welche die Waren-Sigillirung bekannt gemacht wird’, 18 February 1777, Edicta 1777, pp. 3–4). As no other stamping instructions were issued for Galicia in that year, this proclamation must be identical with the famous ‘Edicts of 1777’ referred to by Rutowski’s (see above, p. 95), on the basis of which, allegedly, the products of the Province’s factories ‘had to be sent to Vienna to be stamped before they were sold’. In contradiction to this, it should be pointed out that this Edict contains not a single word about the stamping of Galician items. These stamping regulations were aimed at identifying items from outside Galician, which enjoyed especially low duties when they were imported, from the Hereditary Lands, Poland and Turkey, to distinguish them from the other foreign items, subject to a higher tariff. Only imported, and therefore non-Galician items had to be stamped and the proclamation explicitly states ‘that duties will be regarded as not having been paid on those (imported) items found to be unstamped and they will be contraband’. Moreover, the stamping of these items was undertaken not in Vienna but by Galician customs officials. The legend of the famous Edict of 1777 is thus a legend in every sense (on the Edicts of 1781 and 1789, see below, pp. 396–400). ‘Avertissement, Den Adelsstand betreffend’, 4 January 1776, Edicta 1776, p. 3. ‘Patent. Das verbotene Geldleihen zwischen den Kauf- und Handelsleuten und Maut- und Zollbeamten betreffend’, 14 January 1775, Edicta, ‘Nachtrag zu der Sammlung der in denen Königreichen Galizien und Lodomerien ergangenen Patenten de Anno 1775 & 1777’, pp. 3– 5.

chapter 3

Special Privileges Granted to Improve Galician Trade, 1773–75 1

The Promotion of Brody in 1773 to the Rank of a City with the Privilege of Free Trade

The government made efforts to encourage Galician trade not only by implementing general reforms but also by granting special privileges, to the extent that these seemed to be justified by the material circumstances. The town of Brody, and the fairs of Cieszyn and Krnov, were favoured in this way. Just as Lviv was the main headquarters of money and credit operations (‘Lviv Contracts’ were signed in January after Twelfth Night), Brody was the seat of the Galician wholesale and transit trade. This town was the point of contact between East and West. Products came to Brody from Podillia, Volyn, Ukraine, Moscow and countries further to the east, such as Turkey, Persia and China. They were exchanged in Brody for commodities drawn from places in the west, such as Leipzig, Frankfurt, Wrocław and Gdańsk, or sold on to Little Poland, Hungary, Saxony and Silesia.1 Brody was a meeting-place for Armenians, Poles, Jews, Germans, Greeks, Hungarians,2 Turks and Tatars. There was a particularly close connection between Brody and Silesia. ‘Tallow, wax, rhubarb, saltpetre, Russian leather, raw hides and pelts went from Galicia to Silesia; and cloths, serge, stockings, wool and silk materials, linen,3 sugar and groceries went to Galicia. Trading connections with the German Empire, Italy, Holland, England, France, Spain and Portugal were built up on this basis’.4 Eder was certain that in 1778 the trade done in Lviv did not amount to even an eighth of the trade done in Brody, even though the former town developed extremely quickly under Austrian rule. 1 Eder’s report, in Polska Akademia Umiejętności 811. 2 When in 1726–28 the importation into Austria of foreign woollen goods was prohibited or burdened with a heavy tariff, the Hungarians who had previously obtained supplies from the market in Vienna began to travel directly to Wrocław and Leipzig and to smuggle them through Polish (later Galician) territory over the Carpathians to Hungary and Tranyslvania (see above, pp. 127–127 and Beer 1898, p. 13). 3 Only the better sorts of linen. The inferior varieties were exported from Galicia. 4 Fechner 1886, pp. 507–8.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_010

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The partition of Poland was disastrous for Brody’s trade. The customs barrier which now surrounded Galicia on all sides and in particular the fact that the customs line was drawn just outside Brody, threatened its trade with complete annihilation. The transit duties in Galicia were admittedly very low and amounted to barely ¼ percent on goods which passed straight through. But Brody was a staple5 and reloading point for this transit trade. Goods unloaded here were now charged import duty of 10 percent. Even this would have been tolerable if these goods, on their further journey in the hands of Jews from Brody, had not had to bear a Polish import duty of 10 percent at the Polish border, which was scarcely an hour away from the town,6 with the result that the movement of goods into Poland bore a duty of 20 percent, while the movement of goods from other countries through Poland was burdened with a duty of 24 percent, not to mention the difficulties arising from inspection and tampering at two borders. It goes without saying that the Brody transit trade suffered from this. It was no longer worthwhile for Polish merchants to go to Brody. They therefore set up depots on the Polish side of the border and they brought the goods from the west directly to them, avoiding [Habsburg] imperial territory. Trade began to move away from Brody to the Polish border towns of Berestechko and Radyvyliv. If Brody was not to be ruined completely, urgent assistance was required.7 5 [A port’s or market’s staple right required goods that passed through it be unloaded there and displayed for sale.] 6 After the partition, Galicia was treated as foreign territory by Poland and its goods were charged an import duty of either 8 or 10 percent, and a transit duty of either 12 or 14 percent. Degelmann mentions these duties in his report of January 1775, because the Lviv merchant Friedrich Preschel had complained about them. The Governor’s Office in Lviv had sent his complaint on to Warsaw. Degelmann writes on this subject in the section of his report entitled ‘Über die Transitzölle in Polen’: ‘Since the separation of Galicia, its products, as well as those commodities which are brought through Poland from foreign countries into it, are subject to a transit duty of either 12 or 14 percent’ (Zakład imienia Ossolińskich 525, p. 424). The version of this report in the Polish language demonstrates that the translator and editor, Chotkowski, does not understand its meaning correctly. Where the original text (we have emphasised the words) refers to ‘Galicia’, Chotkowski turns this into ‘Poland’, and where the original talks of ‘extortionate’ behaviour this is translated as ‘Prussian (!) behaviour’, thus depriving this important and interesting passage of all meaning (Chotkowski 1897, p. 62). Chotkowski, who is entirely under the influence of the legend, is simply unable to grasp that it was precisely against Polish exactions that Galicia was complaining! 7 With the restoration of the two Kingdoms [of Galicia and Lodomeria to the Habsburg Empire], the trade of Brody stands very close to collapse, because the boundaries of the lands on this side have been set at one hour away from the town … The Poles are no longer prepared to accept the goods from Brody, which have already borne a duty of 10 percent.

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Assistance was in fact given. What had to be done was clear from the kind of trade carried on in Brody. It did not serve the purposes of consumption in Galicia. It was purely transit trade. To impose a relatively high import duty on it was irrational. Instead of this, there had to be a transit duty. Count Pergen gave instructions to this effect, for the benefit of Brody’s merchants at the beginning of 1773.8 Subsequently, 1) ‘there would be a transit duty alone, instead of the established 10 percent import duty on all goods imported from other countries to Brody’, set at a) 2 ducats for each horse loaded with goods from Leipzig, Frankfurt and Turkey;9 b) 1 ducat per axle for goods from Wrocław and Gdańsk; c) 1/3 of the [general Galician] import duty for goods from Gdańsk, coming in by boat; while d) goods from Moscow would be admitted entirely free of charge.10 2) to the extent that these items were imported from Brody into Galicia, they had to bear the customary 10 percent import duty; the reduction in duty was applied only to the Brody wholesale trade.11 3) finally, the export duty on goods going abroad would be replaced by a lower transit tariff.12 It turned out that even though the latter duty was

8

9

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11 12

They expect them to pay a further 10 percent when they enter Poland. For this reason, the Polish merchants have begun to set up depots in the small towns on the other side of the border, and if this continues the trade in Brody will be reduced to a very small amount. Assistance is necessary (Eder’s report, Polska Akademia Umiejętności, 811). Eder’s report, Polska Akademia Umiejętności, 811. Also see the Galician Court Chancellery’s Address of 4 March 1774, hka, Commerz Fasc. 57, ad 27 ex Junio 1774; and Fechner 1886, p. 466. At that time the ‘Turkish’ merchants did not come directly to Galicia but through the Hungarian lands, because according to the Treaty of Passarowitz and later treaties they only paid a 5 percent import duty on entering Austrian territory, whereas if they went directly from Moldova to Galicia they would have to pay 10 percent. See below, Chapter 20, for further discussion of this question. The privileged status of Russian goods can be explained by the fact that when Brody was occupied by Russian troops, furs and other Moscow items were able to enter free of duty and when the Austrian government took possession of Galicia it maintained this situation, apparently for political reasons, but also in order to direct the Russian transit trade from Poland towards Galicia. Wax from Ukraine was also exempt from import duty in Brody. It was desirable to facilitate the importation of this, then so important item. While the export duty for goods travelling from Brody to the Hereditary Lands was only 2 percent, the export duty for goods travelling abroad was between 10 and 12 percent. ‘All goods going into Galicia were kept at the full import duty, to be paid without deducting the transit duty already paid’. ‘For the export of Turkish goods to Poland, the Brody merchants were obliged to pay a transit duty of ½ ducat for each horse’. At another point, Eder’s report relates that this should be understood to apply not just to Turkish goods but to all goods.

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small, it led to practical difficulties. On 1 December 1773 the Jews of Brody therefore agreed to replace it with an overall annual payment of 400 ducats. Thus transit duties were set as low as possible. The duty was calculated not by value or weight but ‘by wagon’ or by the size of the team of horses. This method was fairly widespread at the time. The average level of the duty seems to have been no higher than ¼ percent (apart from the duty on goods coming in by water from Gdańsk). This reform already removed the town of Brody from the Galician customs area and raised it in practice to the position of a free trade area, at the beginning of 1773. ‘Ever since the partition’, wrote Schönauer in his report, ‘Brody has been excluded from Galicia and is completely separate from it’.13 The Edict of 1779, which formally declared Brody to be a free city, did not therefore fundamentally change this situation. It just extended the area involved by including a number of villages in the vicinity. The privilege given to Brody was intended to maintain its transit and export trade with the east and to heal the wounds inflicted on it by the partition of Poland. The government was completely successful in doing this, as Brody’s later development demonstrates.

2

Reform and Extension of Brody’s Privilege, 1774

Many people objected to this decision to raise Brody to the status of a free trade zone. The merchants of Galicia complained about competition from goods which were smuggled into the Province after paying the low import duty charged in Brody,14 while the Galician authorities, for their part, pointed to the reduction in customs receipts, and finally the Jews of Brody themselves complained about the deficiencies of customs procedures in the Brody, while the

13

14

Report of 7 August 1784, hka, Mautwesen in Galizien, ad 169 ex Januario 1785. This exclusion covered a very small area at that time: the town itself within its walls and two gates. Exports to Poland were unrestricted, whereas Brody was cut off from the Galician side by a military cordon. As a result of a Resolution by Joseph ii, Brody had to be removed from private ownership before it was raised to the level of a Free City (see Kaindl 1911, p. 7). Furthermore, these lamentations were voiced repeatedly. In October 1775, for example, the Lviv merchant Friedrich Preschel complained that ‘owing to the favourable arrangements for transit to Brody, the Jews have an 8 percent advantage over the merchants of Lviv and other places, and they are able to sell 8 percent more cheaply’ (ami, v G 7/2940 ad 138 ex Januario 1776). We will become acquainted with many more complaints of this nature in another context.

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smaller merchants in particular observed with jealousy that the Brody privileges benefited the wholesale merchants first and foremost. But the government did not let itself be forced off course. There was no suggestion of rescinding Brody’s privileges. On the contrary, in April 1774 the commissioner for customs reorganisation, Eder, was entrusted with the task of regulating them afresh and was sent to the town for this purpose. His onthe-spot investigation led him to the conclusion that it was unconditionally necessary to retain Brody’s privileges in order to promote Galicia’s export trade to the east.15 All that was needed was to make certain improvements to the organisation of the customs service in Brody. Eder’s reform proposals were of three kinds: changes in customs procedure, reductions in the duty levied and certain technical arrangements. As far as the first was concerned, he justified it by saying that the easing of procedures conceded previously to the merchants of Brody had had an unfavourable effect on Galicia as a whole. Trade needs freedom, he said. The merchants of Brody, who had been freed from all difficulties arising from inspection and supervision at home, ‘were not attending the Galician markets, so as to avoid any detailed inspection of their goods either on their exit or their reentry’. Eder therefore proposed that all goods brought to Brody should pay on entry the customary 10 percent import duty just as goods brought to Galicia did. If these goods then go back to Galicia from Brody, they should receive a stamp allowing them to pass through without any kind of payment or customs inspection. If, however, they were transported further to foreign countries, then once the quantity and character of the commodity had been established, the import duty should be reimbursed after the deduction of a transit duty of 1 percent. Eder wanted the current Brody transit duty of ¼ percent to be retained only for those goods which went abroad directly, without having been unloaded in the town. All other goods would need to pay 1 percent, 3/4 of which would be earmarked to pay for an expansion of customs personnel and improvements in transportation.16 To meet the complaints of the small merchants in Brody, a reduction in customs duties would be instituted. Payments of duty were in general only reduced for wholesale items; but Eder wanted to make an exception for Brody in view

15

16

‘The Brody trade really does deserve to be taken into account and this town must receive extremely favourable treatment in order to preserve the dependence upon it of the neighbouring Polish provinces’ (Polska Akademia Umiejętności 811). This was only an apparent increase in the burden, since at the same time various subsidiary payments, such as ticket-money of 6 percent, transportation payment [Vecturisatio], etc. were abolished.

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of its special characteristics. The export trade there was not made up of a small number of separate items, which were dispatched in large quantities, but consisted rather in ‘the frequent sale of many small individual items’, because ‘the nobility purchases its clothing and other necessary items repeatedly and on a small scale’ and the small-scale merchants and Jews from Poland are accustomed to ‘take half or even quarter portions according to the level of their purchasing power’. Eder therefore proposed to reimburse not only the [duty on] wholesale items but also [on] the small, mixed consignments of a minimum estimated value of 25 florins (100 Polish guilders). Special tariff reductions were to be made with regard to the trade in fur products and wax. The trade in fur products had met with particular difficulties, because Jewish merchants were forbidden from entering Russia and therefore did not acquire goods directly from the suppliers in Archangelsk, etc. Another difficulty was that the duty on furs had to be paid immediately on receipt, whereas their sale took place much later, which required a larger working capital. Eder therefore wanted the merchants who took their furs directly from Archangelsk to receive a half-year credit on their import duty. As regards the trade in wax, this already enjoyed the concession that it could be brought into Brody free of duty and was only charged a 2 percent export duty when it was exported to the Hereditary Lands.17 But in view of the machinations of the King of Prussia, who wanted to take possession of this trade for himself,18 Eder advised in favour of a further reduction in export and transit duties on the trade with the Hereditary Lands. Lastly, he proposed a series of technical improvements. A fireproof customs warehouse, where the goods could be kept and examined, should be built. Proper wagons, uniform in weight and size, should be constructed. A principal Customs Office should be set up. Up to that time, Brody possessed in all three low-level officials19 and Eder reported that, ‘In the Customs Offices I have inspected so far, I have consistently found that business was conducted in a very lax way. It takes two or three months before the deliveries are entered into the account-books’ although the number of items delivered is far smaller here than in the Hereditary Lands. Monthly accounts and commercial tables are absent. 17 18

19

See above, p. 154, note 10. Representatives of the Prussian Maritime Trading Company [Preussische SeehandlungsKompagnie] were constantly present on the Polish side of the border, not far from Brody, seeking to purchase the above-mentioned item. Admittedly, they did not have much success, since the wax had to pay an import duty of 8 to 10 percent when it entered Poland, whereas it entered Brody free of duty. Namely Anton Sliwowski, scribe, who received an annual salary of 500 florins, and two inspectors who each received a salary of 200 florins.

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The deliveries are labelled in Polish, as the officials do not know the German language. Numerous errors have arisen from this, as the Jews of Brody in turn do not understand Polish. Eder therefore proposed that the number of officials be increased to five20 and that the deliveries be labelled in German. ‘In order to win the support of the Polish nation it would admittedly be desirable to favour Poles in appointments to these positions’, he added. But he doubted whether many Poles would be content with the moderate salaries on offer. With the exception of the idea of reimbursing the import duty, Eder’s proposals were ‘completely accepted’21 and Brody enjoyed the liberty it gained thereby until the reform of 1778.

3

Favourable Treatment of Exports from Galicia to the Hereditary Lands

The exclusion of Galicia from the Austrian customs system was advantageous and indeed necessary for its success in trade. It did, however, create certain obstacles, which were inherent in the nature of its special customs status. It followed from this special status that the Hereditary Lands would have to remain closed to exports from Galicia and that the dominant system of prohibition and protection in the Hereditary Lands would have to be directed against Galicia, as well as against foreign countries, to prevent the Hereditary Lands from being flooded with foreign goods which had taken the indirect route through Galicia, where they had freedom of entry. From this point of view there was an almost irresolvable conflict of interest between the two territorial groups, which were at differing stages of economic development. On the one hand, Galicia’s separate customs status meant that its closer economic relationship with the outside world was recognised; but on the other hand it thereby become a kind of foreign country in relation to the Hereditary Lands proper, it became ‘a separate Hereditary Land’.

20

21

Namely 1 Chief Collector with 500 florins a year in salary, 1 Chief Controller with 300, 1 Official Scribe with 150, and 2 Expert Inspectors of the dutiable items with 600 and 500 florins. It was envisaged that they would all receive in addition to their salary either a dwelling or a 15 percent supplement. Governor’s report of 6 August 1776, hka, Mautwesen, ad 40 ex Decembri 1777, p. 73. As regards the reimbursement of the import duty, ‘the wholesale dealers of Brody protested against this and asked that everything be kept as it was, owing to the difficulty of organising this change and keeping merchants in residence’. Eder also reported that ‘they decided not to proceed with the removal of the transit duty’.

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This had the uncomfortable result that, from the outset, Galicia had to remain excluded from the efforts of the central government to reform customs policy. Only Galicia’s provincial legislation could be reformed without affecting the customs system of the German-Slav Hereditary Lands. The far-reaching measures in favour of the transit of foreign goods through Galicia, the separation of the Province from the Austrian customs system, the trading privileges granted to Brody and finally the promotion of Galician exports through the almost complete removal of export duty, did not exceed the competence of Galicia’s provincial legislation. It would have been a different matter to change the transit and import duties charged on Galician products within the Hereditary Lands, in order to promote the export of Galician goods in that direction. This would have required a change to the customs legislation of the old Hereditary Lands and, for the present, that seemed neither sensible nor without risk in so far as Galicia remained a foreign country in terms of customs policy. When, on 15 July 1775, a ‘General Transit Tariff for the Bohemian and Austrian Hereditary Lands’ was issued, combining them to form a common customs area, the new law was not applied to Galicia, consequently the authorities did not apply the provision that transit duty should not henceforth be paid in every province but only a one-off payment would be made covering all the provinces. As a result, an item in transit from Leipzig via the Hereditary Lands through Galicia to Turkey was subject to transit duty in Galicia, although it had already paid once in the Hereditary Lands. It was considered in Vienna that as long as Galicia remained outside the overall customs system of the Hereditary Lands and excluded itself from the Empire as a whole in the name of its special interests, it had no claim to those special advantages which derived from membership of the unified customs organism. The situation was similar with the import duty charged in the Hereditary Lands. Galician goods, when they entered the Hereditary Lands, were subject to the high duty charged on foreign imports. Admittedly, a number of contemporary statesmen wanted to bridge over the conflict of interests we have described and wanted Galician products to have free entry into the Hereditary Lands, despite Galicia’s separation from the overall customs system. This was true of Count Wrbna and Court Councillor Degelmann, as we already know, and also of Emperor Joseph ii himself, as we will show later.22 There was a long road to travel, however, from these wishes and plans to their fulfilment. This depended on complicated empirical circumstances, in partic-

22

See above, p. 148 and below, pp. 179–180.

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ular on the shape of the Empire’s future customs relationship with Poland.23 The decision did not, therefore, lie exclusively in the power of the Austrian government. The above plans could only become a reality if the relationship with Poland was regulated in a specific way, namely on the basis of a free trade treaty between the two states. Political relations between the two powers developed in an unfavourable direction, however, and the attempt to provide Galician products with regular, constant access within the customs system operating within the Hereditary Lands was not crowned with success until 1784. The separation of Galician customs from the Hereditary Lands had consequences which it was impossible to erase. It was possible to do something to ease the export of Galician goods to the Hereditary Lands temporarily but no change could be made in the customs systems in force in both. Galician exports to the Hereditary Lands would be promoted not by the usual method of reforming the tariff, namely a lasting abolition of the duty on imports into the Hereditary Lands, but by extraordinary means: the holding of occasional fairs and annual markets for short periods. The task of these activities was to create a closer connection between Galicia and the Hereditary Lands.24 Achieving exports to Galicia was in the interest of the industries of the Hereditary Lands both from the point of view of markets and of production. This was because Galicia came into consideration both as an outlet for their manufactures and as a supplier of necessary raw materials. Trade with Galicia, which for the most part involved barter, promised a twofold gain and therefore made the Hereditary Lands twice as jealous of the outside world. Considerations both of Galicia’s export needs and the requirements of the Hereditary Lands’ industries soon drove the Austrian government to look for ways of effecting their reconciliation. This was not easy. What was required was to alter the traditional trade routes from Galicia to the outside (through Leipzig, Wrocław and Frankfurt) and to turn its exports away from them and toward the Hereditary Lands. Hence the idea of creating an ‘emporium’ for mutual exchange relations on the boundary between the two areas involved in Silesia. The geographical position of the part of Silesia which lies between the industrial west, on the one hand, and Galicia and the fruitful regions of Volyn, Podillia and Ukraine, on the other, had long ensured that it possessed outstanding

23 24

See below, pp. 205 and 256. This is confirmed by the fact that the Cieszyn fairs (from 1775 onwards) only took place while Galicia’s customs separation lasted. When, in 1784, Galicia was included in the overall customs system and all internal customs barriers were abolished, the main reason for holding the fairs ceased to exist and they became superfluous.

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commercial significance. For many centuries the entire trade from the west to Poland, Russia, Moldova and Wallachia, Tartary (South Russia), the Crimea and Turkey had passed through this corner.25 Wrocław was granted staple privileges as early as 1274, with the result that Polish merchants were no longer able to pass over the Oder and seek out trading locations further west, but were compelled to bring their goods to Wrocław and Frankfurt an der Oder.26 Trading relations between Poland and Silesia were particularly active in the fourteenth and fifteenth centuries.27 A privilege issued by King Władysław [ii] Jagiełło in 1417 indicated to the merchants of Wrocław that the route via Lviv was the one they had to take when trading with the Polish, Turkish and Russian provinces which lay beyond that town, as well as with the Crimean Tatars. In 1441 Władysław iii again renewed Wrocław’s privilege of carrying on trade freely with Poland and Russia. The town’s ancient contracts and privileges were subsequently confirmed by Albrecht ii [King of Germany] (1438–39), Friedrich iii [Holy Roman Emperor], Władysław Dobry of Poland,28 the Emperors Ferdinand i and Maximilian ii, Zygmunt [ii] August of Poland, the Emperor Leopold i and Jan [iii] Sobieski [of Poland].29 The advance of the Ottoman Turks and their conquest of the Bosphorus (1453) and the Crimea (1471) was particularly advantageous to Wrocław, because it cut off the Sarmatian area from the Black Sea and forced it into reliance on Germany. And while the old connection with the Black Sea decayed and Lviv declined in importance, Wrocław replaced it as the market-place for goods from the east and the south.30 From this time on, the importance of the German markets in Leipzig and Frankfurt also grew. In the second half of the seventeenth century, Gdańsk and the Prussian Estates complained very strongly about the tremendous increase in the number of Russian, Lithuanian and Muscovite merchants going to Wrocław.31 These centuries-old trading connections between Silesia and Poland became even more lively in the eighteenth century. The Treaty of Przebędowski

25 26 27 28

29 30 31

See Fechner 1886, p. 2. On Polish-German trade from the fourteenth to the sixteenth century see Schmoller 1898, pp. 22–7; and Kutrzeba 1902. Fechner 1886, pp. 4 and 465. Kutrzeba and Płaśnik 1910, p. 4. [It is not clear who Grossman means here, as there was no King Władysław of Poland known as ‘Dobry’, i.e. ‘the Good’. Grossman’s list of monarchs seems to be in chronological order but both Władysław i and ii died before Friedrich iii became Emperor, and Władysław iv was born after Emperor Ferdinand i died.] Fechner 1886, p. 4. Rachel 1909, p. 47. Lengnich, quoted in Rachel 1909, p. 48.

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between Austria and Poland over transit duty was signed in 1727. This restored the old freedom of trade in Wrocław and at the same time reduced the transit duty per wagon to a specific amount, thus doing away with the need for customs inspections.32 Under the Silesian tariff of 1739, some of the products of eastern countries (such as raw, untreated cloth and wool of the first shearing) did not have to pay any import duty, because the authorities wanted to provide the Wrocław merchants with certain advantages in this way. The Muscovite, Polish and Lithuanian merchants also did not have pay duty on certain goods imported from or through Poland: Russian leather, worked hides, saffian, Dublin leather and other kinds of leather. Other items imported from Poland, Russia and Hungary, which were entirely free of duty, were: the raw hide of oxen and cattle, raw elk leather, the raw skin of calves, sheep, lambs, capons, rams and she-goats, wax, tallow, Polish, Podillian and Hungarian oxen, cows and calves, wethers, sheep, lambs, rams, she-goats, pigs, wheat, grapes, vegetables, hops, Styrian scythes, knives, sickles, crab stones imported through Poland, castor, musk and rhubarb. The Polish and Russian goods had, however, to be traded in Silesia and no more ¼ of their value, or at most 1/3, could be exported in gold. These substantial advantages were given exclusively to benefit the trade of Wrocław.33 The important treaty of 1762 between Poland and Russia is also related to this trade. It fixed the duty on goods travelling through Poland to and from Russia at 4 ducats a horse, irrespective of their value.34 These trade relations, established for centuries and whose focus was Wrocław, were revolutionised in 1740, with the conquest of Silesia by Prussia. In losing Silesia, Austria lost not only a large outlet for its produce and its most industrially and commercially developed Province but also the organised trade system which it had possessed in the shape of the Wrocław merchants, who almost completely dominated Austria’s trade relations with the east. This circumstance was also, therefore, the starting-point for the government’s efforts ‘to appropriate Polish trade to the imperial Hereditary Lands’,35 with the objective of wresting its old ties with Poland from Wrocław and attaching them to the Austrian part of Silesia. A long and hard-fought battle flared up between Austria and Prussia over Polish trade, conducted alternately by means of tariff reprisals and inducements.

32 33 34 35

Fechner 1886, p. 465. Beer 1893a, p. 192. Fechner 1886, p. 465. Fournier 1887, p. 376.

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Count [Friedrich Wilhelm von] Haugwitz, the soul of the protectionist movement at the Court in Vienna, was already thinking in 1742 about inducing the Poles to make their way from Bielsko to Leipzig via Opava rather than via Wrocław.36 On 15 May 1744, the Bohemian customs administration, ‘in order to facilitate the movement of Polish trade through Opava rather than through Breslau [i.e. Wrocław] as previously’ was instructed to ‘take 2 florins per centner of leather to be imported from Opava but if it is imported from other places into the Hereditary Lands of the Empress 8 florins are to be taken in addition to the customary duty’.37 In 1752, duties on Polish trade via Opava were reduced and construction of a road from Bielsko was started.38 When, at the beginning of 1755, trade treaty negotiations which had been proceeding for three years ended in failure, it was decided to send Haugwitz and Prokop on a journey to Poland, Gdańsk and Hungary to gather information, enter into closer trading relations and ensure that Austria’s industries gained both markets and raw materials.39 The Polish side also made efforts to move the trade route towards Austrian Silesia and in 1756 an envoy sent by [Heinrich von] Brühl, a certain Dziembowski, asked the Austrian government in the name of the Polish government to reduce the transit duty on the movement of Polish livestock to the west.40 Later (1764), when the Prussian government laid heavier burdens on Polish transit trade, Prince [Stanisław August] Poniatowski suggested to Austria in a confidential memorandum that the duty on the movement of Polish products via Silesia to Saxony and in the reverse direction as well should be reduced.41 The matter had almost been decided when it was postponed for some years by disorders and troubles in Poland. Nevertheless, it was returned to the top of the agenda a little later by Prussia’s tariff policy. In 1770, that is, the old commercial route from Leipzig, Frankfurt and Wrocław to Poland via Zamość and further to the great centre of Polish trade, Brody was revolutionised by the increase in the Prussian transit duty from 4 percent to 12 percent.42 The Polish merchants now began to direct goods from Leipzig through Bohemia, Moravia and Austrian Silesia whereas goods from Frank-

36 37 38 39 40 41 42

Fechner 1886, pp. 219 and 229. Beer 1893a, p. 181. [Editor’s interpolation.] Beer 1893a, p. 235, note 77. Beer 1893a, p. 97. Beer 1898, p. 191. Beer 1898, pp. 91–2. hka, Commerz fasc. 57, ad 5 ex Majo 1784. The previous tariff was only retained for Russian merchants.

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furt and Wrocław went via Oświęcim. Both routes therefore passed through the whole of Galicia to Brody and this remained the case after Austria had occupied the Province. This accorded with Austria’s intentions and, when Galicia fell to Austria two years later, the matter became a pressing concern. The Austrians wanted to use the errors of Prussian tariff policy to their own advantage. They were concerned above all to secure this transit route through Galicia, by granting privileges to Brody. The next step was to organise a free market fair in Austrian Silesia. In this way, it was hoped to win the Galicia-Brody transit route, which had so far mainly served the industries of Saxony and Wrocław, for Austrian industry and gradually to force Prussia and Saxony out of the barter trade with Poland. In May 1772 Count Leopold Kolowrat raised the questions ‘Should a free fair be established in the part of Silesia on this side of the border and where should it be held?’ On Kaunitz’s proposal, however, a decision was postponed until the Polish situation had been clarified and it had been decided whether Galicia, which had only just been occupied by Austrian troops, would remain Austrian territory.43 In December 1773, Emperor Joseph ii took up the question again44 and instructed the Commercial Council to examine the project of holding a fair in Silesia, after tariff relations between Galicia, Poland and the Hereditary Lands had been regulated. During the subsequent trade treaty negotiations with Poland, the Polish Delegation, in conversation with the Austrian envoy in Warsaw, Baron [Carl Emmerich Alexander] von Reviczky, repeatedly expressed the wish – particularly in January 1774 – that trade be directed through Austria, to avoid high Prussian tariffs. This was especially important now that the Austrian government had established goods depots in Opava, Bielsko and along the Galician-Polish border.45 The need for these fairs was repeatedly stressed on other occasions as well. Not until August 1774, however, did the Empress decide on the organisation of free fairs in Cieszyn.46 A Krnov Company and a fair were established at the same time. The outline of events we have just given demonstrates that the Krnov and Cieszyn fairs were not artificial creations, called forth by transient moods and

43 44 45 46

Speech of 3 June, ami, v G 4/2920 ad 53 ex Majo 1772. Beer 1898, p. 193. On this point, see below, pp. 215 and 236. [Both the 1767–68 and 1773–75 sessions of the Polish Parliament appointed a body (‘Delegation’) to draw up legislation and treaties.] ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, of 9 September 1774, issued in Lemberg on 20 December 1774, Edicta 1773–74, pp. 142–6.

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interests, but a response to the real and important needs of trade in Galician and Polish products, on the one hand, and the industries of the Hereditary Lands, on the other. And there is more! It will also be demonstrated what a catastrophe the Prussian tolls on the Vistula constituted for the Galician and Polish export trades. The only way out of this emergency was to redirect the trade, which had thus been blocked to the north, to the south, into the Hereditary Lands. It would then pass through them to Trieste and the Mediterranean. The free fair on the Silesian border would thus become a major centre of trade between the north and south.47 This would, however, give it a more than local significance. If the idea had been put into practice to its full extent, it might have meant a revolution in the commercial history of north-eastern Europe. Unfortunately, however, that did not happen, despite all the government’s efforts to raise the status of the Cieszyn fairs. Numerous difficulties, connected in part with the Trieste trade but particularly with the obstacles placed in the way of the fairs by Galician (Jewish) merchants, prevented them from developing any further after the initial start and, in 1784 after ten years, they were abolished.48

4

The Economic Function of Free Fairs and Annual Markets49

Before I proceed with my discussion of the privileges of the fairs and their organisation, their function in the economic life of the period should be indicated, as the regulations in the edicts governing them would otherwise be incomprehensible.50 The privileged annual markets of the time were big international centres which brought supply and demand, buyers and sellers, into close proximity. Owing to the sparseness of the population and its low purchasing power, lar-

47

48 49 50

In a dispatch to Kaunitz from Warsaw, dated 21 June 1775, Baron Reviczky reported that the Poles wanted the Austrian government to establish a privileged fair at the Polish border, so that they could direct the flow of trade through Austria and avoid Prussian tolls on the route via Gdańsk (hka, Commerz fasc. 57, ad 10 ex Julio 1775. Also see below, pp. 215–216). By the Court Decree of 29 June 1783. See Kopetz 1829–30, 2, section 229. On the historical development of the Russian trade fairs (see Simson 1895, pp. 571 et seq.). The following information applies to all the privileged fairs or markets directly connected with Galician trade. In other words it covers the Krnov and Cieszyn fairs; the annual markets in Oświęcim and Zator; the livestock markets in Dembica, Żabno and Dombrowa; and finally the markets in the free cities of Brody, Podgórze and [word not printed in original].

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ger permanent warehouses were only worthwhile in exceptional cases and the larger merchants were a mobile class in the population.51 For industry, in contrast, the advantages of annual fairs was that they extended sales beyond limited local markets. Thus earlier legislation52 aimed to strictly separate industry from trade, to the advantage of the latter; the manufacturers and craftspeople were supposed to avoid engaging in trading activities completely. In this respect, a change in favour of industry was accomplished in the final years of Maria Theresia’s period but it was not until Joseph ii’s time that there was a decisive intervention. Under Maria Theresia manufacturers and craftspeople were permitted to market commodities they had produced themselves only in their own localities. Free and unrestricted attendance at trade fairs therefore guaranteed manufacturers new opportunities to sell their goods. And consumers, whose choices were otherwise restricted to what local manufacturers could offer, also found a wider range of products at the fairs.53 In this respect, trade conducted at fairs and markets of the time occupied the position now taken by exhibitions: they were a means of getting to know the products of different countries and factories; finally they functioned as exchanges, as they had a decisive influence on the formation of goods’ prices. The incorporation of the free fairs into the system of mercantilist trade policy gave them a further function. These were times when states set up barriers against each other, with prohibitions and very high protective duties; when foreign merchants or foreigners in general were looked on with suspicion, pursued, placed under armed guard and subjected to threats and actual infringements of their freedom or property;54 when even the state’s own citizens were confronted with a swarm of obstructive and oppressive regulations, dictated either by religious and national or fiscal considerations; and finally when the chaos of state-enforced restrictions was further heightened by the severe burden of private tolls and dues. In such times, free trade fairs formed a kind of privileged and protected oasis for merchants, marked by the absence of

51 52 53 54

This is a phenomenon which lasted until the mid-nineteenth century in Russia (see Schulze-Gävernitz 1899, p. 60; and Simson 1895, p. 573). For instance, the Commercial Edict of 1764, section 4. Kopetz 1829–30, 1, section 234; and Kopetz 1829–30, 2, section 446. These ‘customs’ lasted into the nineteenth century. As late as 1826, the trade treaty between England and Mexico had to specify freedom from forced loans, freedom from forcible military conscription, freedom of religious practice and even the inviolability of graves, which was evidently not yet a matter of course in Mexico. There are similar provisions in the Anglo-French treaty of 1786 (see Roscher 1881, p. 191). As late as 1702 Austria felt entitled in time of war to sequester all the private property, which had been left in the country by enemy citizens (Codex Austriacus 1748, p. 446).

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restrictions and barriers in relation to persons, places and commodities. In the dark forest of almost universal reciprocal barbarity in the sphere of trade relations, the fairs were freer clearings. Light shone out of them and, by mediating between state and people, they allowed more rational relationships to open up, at least temporarily. And just as in previous centuries the origin of towns and modern civilisation is to be sought in markets, so in the eighteenth century their leading role in stimulating cultural progress in eastern Europe was yet to be played out.55 The privileged trade fairs were free from duties and prohibitions. Everyone could move freely within them. Moreover, they also received their own commercial organisation, and special commercial and legal arrangements. ‘Liberties and benefits’ of this kind are also explicitly guaranteed in the Edicts which established the Cieszyn and Krnov fairs.

5

The Krnov Fairs and Trading Company

In 1774, it was announced that two fairs would be held in Krnov over the year. At the same time a trading company was founded. This began its activities on 1 June 1775. Its purpose – just as in the case of the Cieszyn fairs – was twofold: on the one hand to secure raw materials from Galicia and Poland for the industries of the Hereditary Lands; and on the other to secure a market for their finished produce. It was only under the force of circumstances that a limited quantity of Saxon products was admitted as well, for Austrian industry did not produce

55

This evaluation of the markets is of course only relative. It is conditioned by time and place. It is correct when compared with the prohibitive and protectionist tariff policy of the time and it is therefore perfectly possible to reconcile it with the unfavourable opinion of Turgot expressed in his article ‘Foires et Marchés’ in the Encyclopédie (1757), in which he wrote that ‘L’intérêt de l’état n’est donc point de créer de nouvelles foires, mais plutôt d’abandonner celles qui existent’. [‘It is in the interest of the state not to create new fairs but rather to abandon those that exist’.] [In fact this is from a summary of Turgot’s argument in Mastier 1862, p. 36.] Turgot’s critique, that is to say, was made from the point of view of free trade. In justification, he invoked the words of [Jacques Claude Marie Vincent de] Gournay: ‘Faut-il jeûner toute l’année pour fair bonne chère a certains jours? En Hollande, il n’y a point de foires; mais toute l’étendue de l’état et toute l’année ne forment, pour ainsi dire qu’une foire continuelle’. [‘Is it necessary to fast all year in order to live sumptuously on certain days? In Holland there are no fairs at all, but the whole extent of the state and the whole year are, as it were, a continuous fair’] (Turgot 2011, p. 94) [Grossman’s emphasis]. What had already been overcome in Holland and France naturally retained its full significance in eastern Europe, with its lower population density and backward economic conditions.

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the complete range of products demanded in Poland. The trading company, that is to say, had taken on the obligation to sell only Austrian and Saxon goods to Poland. Moreover, it was obliged to sell twice as many goods from Austria as from Saxony. Goods of any other provenance were excluded from the market. It was a further condition that the Polish goods purchased were to be resold not directly to foreigners but initially to Austrian citizens. When selling Polish goods to Austrians the company’s profit was limited to 7 percent. On the other hand, it was also given far-reaching privileges. The Opava Iron Company was henceforth forbidden to engage in direct trade with Poland and this helped the newly-founded trading company. There was to be no direct communication between Saxony and Poland. In other words, the [trading] company received a staple right. In addition, packages marked with its seal were exempt from all customs inspections. 50,000 florins were taken from the newly-established Factory Fund for the company and used to pay for the accounts office established in Krnov, two warehouses, one commissioner, some goods assessors, one cashier, one accountant, three experts and two apprentices.56 Finally, the objective of promoting the Galician-Polish export trade was achieved by the provision that although Poles would have to pay import tariffs at the (Silesian) border, they would be reimbursed for this (tariff refund).57

6

The Free Cieszyn Fairs

The Edict announced the establishment of two fairs a year in Cieszyn. Each was to last for two weeks and everyone, whether buyer or seller, Austrian or foreigner, without distinction of religion, was to be admitted.58 Those who participated in the fair were to be ‘exempt from all personal charges, taxes, body tax [on Jews] and conscription’.59 Those who visited the fair with their goods could be sure that during the period of the market they could not be pursued in law-courts or taken into custody for any debts contracted outside the market area. Their goods were also protected against distraint.60 It was laid down that there would be a legal armistice during the market period and any proceedings 56 57 58 59 60

See Fechner 1886, pp. 168–9. Fechner 1886, pp. 168–9. Section 2 of ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, Edicta 1773–74, p. 142. Section 3 of ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, Edicta 1773–74, p. 142. [Editor’s interpolation.] Section 4 of ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, Edicta 1773–74, p. 142.

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pending in the civil courts would be suspended. The only judicial actions that could be taken against participants in the fair related to debts incurred in the market, during the market period,61 although, on the other hand, for the latter purpose an accelerated procedure was envisaged, with elected judges in commercial courts. The dates of these fairs were intentionally set for 15 April and 15 September, just before the Wrocław and Leipzig fairs, so that those who visited the Cieszyn fair had the possibility of making their purchases before them. It was also calculated that many buyers, who would otherwise not visit the new and unknown fairs, might take the opportunity to enter Cieszyn on their journeys to Wrocław and Leipzig. Meanwhile, the seller who had not succeeded in disposing of his goods in Cieszyn would still have the opportunity to try his luck in Wrocław and Leipzig.62 In addition to these legal liberties and concessions, a number of important economic advantages were conceded to the Cieszyn fair: 1) As regards foreign63 goods it was provided that: a) all foreign goods which were otherwise prohibited were allowed to enter the Cieszyn market, provided they were sold wholesale.64 This did not mean that their importation into the Hereditary Lands was allowed;65 they were only allowed to enter for the purpose of being dispatched abroad.66 b) Foreign goods were free of any import duty when they entered Cieszyn and they paid the customary low transit duty. When they were re-exported, they paid an

61

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The Edict of 26 March 1782, establishing livestock markets in Oświęcim and Zator, contains similar provisions: ‘Both dealers in livestock and buyers shall not be charged with debts while the market is underway, nor may they be distrained upon for those debts except in the case of debts incurred in the market itself ’ (‘Nachricht in Betreff der Viehmärkte zu Oswiecim und Zator’, 26 March 1782, Edicta 1782, p. 31) [Grossman’s emphasis]. The fairs in Champagne had a similar interlocking system and this was also true in Russia until very recent times. There, the Great Russian and Little Russian fairs confronted each other as two self-contained systems (see von Schulze-Gaevernitz 1899, p. 64). It emphasised that, in view of the separate customs status of Galicia, its goods also counted as foreign. The merchants of Cieszyn could therefore make no use of this provision, because they needed to sell the foreign goods on a retail basis in the Cieszyn marketplace (‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, Edicta 1773–74, section 7, pp. 142–3). In contrast to this, the retail sale of goods from the Hereditary Lands was permitted (‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, section 6, Edicta 1773–74, p. 142). ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, Section 10, Edicta 1773–74, p. 143. Even so, they could still be smuggled into the Hereditary Lands. See above, pp. 150–151.

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export duty on leaving Cieszyn.67 If they were transported to the Hereditary Lands, however, they were free of exit duty in Cieszyn but when they reached the Hereditary Lands paid the high ‘foreign’ import duty.68 Duty was thus only paid on goods that were really sold. In this way, importation into Cieszyn of foreign merchants’ goods, as also those of Galician merchants, was facilitated by eliminating their risk of having to pay higher tariffs. The regulations we have quoted were unclear as far as export duty was concerned and, at the first Cieszyn fair, they immediately gave rise to misunderstandings.69 The only certainty was that the goods sold on to the Hereditary Lands did not have to pay any export duty in Cieszyn. The question of whether unsold goods leaving Cieszyn ought to be charged export duty remained open. According to Eger’s proposal export duty would only be charged on unsold goods which were removed from Cieszyn for the purpose of further speculation on the Wrocław, Leipzig and other markets. Goods which returned ‘as remainders to the place from which they came’ would be entirely free of export duty ‘for the good of the fair’.70 Moreover, the unsold goods could be stored in the official depot until the next fair, without paying any duty.71 As far as goods from the Hereditary Lands were concerned, these were favoured by the fact that export duty, instead of being paid when they were exported to Cieszyn, was paid when they left Cieszyn and only when they had been sold. Unsold goods were free of import duty when they were returned to the Hereditary Lands, after their identity had been established.72

This export duty was not high for commodities which were useful to Galicia. For example, skins were charged, according to quality, as 2 or ¼ percent; honey at 2 percent; wax at ¼ percent; Polish wool at 2 or ¼ percent; tallow at 2, 1 or ¼ percent; fur lining or peltry at ¼ percent; and so on (Report from à Sole, 6 October 1775, ami, v G, 4/2920 ad 17 ex Januario 1776). ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, section 8, Edicta 1773–74, p. 143. Eger’s report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775. This proposal was accepted, but a few months later the export duty was also removed from those goods which were transported to foreign countries for the purpose of sale, in the context of the General Tariff of 15 July 1775. ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, section 10, Edicta 1773–74, p. 143. ‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, section 9, Edicta 1773–74, p. 143.

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This concession was, however, only applied to certain commodities whose export was specially facilitated. Namely those ‘capable of being identified’. The other commodities, ‘not capable of bearing a mark of identification’ were subject to import duty on their return to the Hereditary Lands and they could only avoid this if they remained in storage in Cieszyn until the next fair.73 While the weight the government placed and had to place on its own export is apparent, the extent of concessions given to foreign goods is at first sight strange. Not only were Galician raw materials and the products of Galician agriculture favoured but also manufactures from Saxony, Prussia and other places. This phenomenon can, however, be explained by the continued failure of the industries of the Hereditary Lands to perform adequately. Foreign manufactures were necessary in order to induce Polish buyers to come to Cieszyn. If this is borne in mind, it becomes clear that the government had a deep understanding of the state of affairs and devoted tremendous energy to ensuring the success of the fairs.

7

The Harmful Influence of the General Tariff of 15 July 1775 on Galicia’s Exports to Cieszyn

The General Tariff of 15 July 1775 for the Austrian Hereditary Lands74 had, it is true, no direct relation to Galicia and indeed in paragraph 65 it formally confirmed the privileges granted to the Cieszyn fairs. Indirectly, however, it was likely to harm Galician exports to Cieszyn by establishing higher export duties than those prescribed by paragraph 8 of the Fair Edict on certain Galician items, when they were re-exported from Cieszyn. ‘The export duty’, complained à Sole, was ‘raised incomparably from the previous rate, precisely on those goods which were accustomed to being brought from Poland or Galicia for the barter trade’.75 The result of this blunder in tariff policy was that for foreign merchants it no longer paid to come to Cieszyn for Galician goods. They were better off when

73 74 75

‘Patent. In welchen die zu Teschen zu errichtende zwo freymessen angekündiget werden’, section 10, Edicta 1773–74, p. 143. Habsburg 1775. For example, the duty on the goods mentioned above (note on p. 170) was set as follows: for 100 skins 30, 20 or 16 florins; for a centner of crude honey 18 or 24 kreutzers; wax 15 and 20 or 12½ and 17½ kreutzers; tallow 2, 3 or 4 florins, and so on, which amounted to an export duty of between 5 and 10 percent.

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they made their purchases directly in Galicia, because then the goods would go directly from Galicia to their final destination, after paying the low transit duty and the minimal Galician export duty of 5/12 percent, without entering Cieszyn and would thereby be spared the Cieszyn export duty of 5 to 10 percent.76 À Sole therefore proposed that when Galician items whose export duty was notably higher than the transit duty were exported from Cieszyn, they should not be charged the export duty but only the lower transit duty, but items on which the transit duty was higher than the exit duty (such as silk) should be charged only the export duty.77 The Council of State,78 for its part, admitted the deficiencies of the General Tariff of 1775 but feared that the adoption of à Sole’s proposal would just produce confusion in customs procedures. It therefore went further still and proposed that foreign goods (and therefore also Galician goods) which arrived in Cieszyn should be freed from export duty completely when they were reexported either to the place of origin or to other markets.79 This proposal received the consent of the Empress80 and, as a result, Galician exports and business of the trade fair gained a new concession.

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‘If the export duty continues to be levied on foreign goods being transported from the fair to foreign countries, this will without doubt make it difficult for foreigners to trade at the fair … because they would be able to obtain the same goods without going to the fair simply by paying the transit duty at a much lower rate; as a result they would no longer have much reason to attend the fair in the hope of concluding … a barter trade there’ (Report from à Sole, 6 October 1775, ami, v G, 4/2920 ad 17 ex Januario 1776). ami, v G 4/2920 ad 113 ex Martio 1776, section 6. Council of State Sitting of 6 February 1776, ami, v G 4/2920 ad 113 ex Martio 1776, section 6. Another argument advanced in favour of this proposal was that Galician products continued to be subject to the high foreign import tax when they entered the Hereditary Lands and it should therefore at least be made easier for them to enter the country by removing the Cieszyn export duty temporarily. Resolution: ‘On point 6, paragraph 8 of the Cieszyn Fair Edict must be altered, and the public must be informed that foreign goods coming to Cieszyn, when they are in turn taken out of the country, should only be burdened with a simple transit duty and they should no longer be subject in any way to the payment of export charges’. The relevant Avertissement, ‘Die Errichtung zweyer alljährlich abzuhaltenden Freymessen in der Stadt Teschen betreffend’, dated 20 March 1776, was published in Lemberg on 2 April 1776 (Edicta 1776, pp. 31–2).

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The Significance of the Cieszyn Fair for Galicia

The government self-evidently planned to use the Cieszyn fair to open up Galicia and Poland as markets for the products of the industries of the Hereditary Lands. But, in addition, the concessions given to the fair would also inevitably make it easier to export Galician and Polish goods. It is true that these provisionally continued to pay the high foreign import duty – which was set by the General Tariff of 1775 at 20 percent – when they were imported into the Hereditary Lands. In compensation for this, however, the duty was not raised until the goods had actually been sold. The export of goods to foreign countries was further favoured by the low transit duty. Moreover, after 1776 Galician exports to the Hereditary Lands received strong support from the reduction of the import duty from 20 to 4 percent, for both Polish and Galician goods. Economic relations also worked in favour of the Cieszyn fairs and their role was even more important than the changes in the legal framework. For centuries the export interests of the south-western portion of what was then Poland but was later called Galicia, in particular, had exerted pressure in this direction. Under such circumstances the Cieszyn fairs necessarily became the outlet channel for Galician products. All the more because the Galician export trade was based on barter. The barter trade prescribed by the Silesian customs tariff of 1739 had almost became a universal practice and it retained this position even after the occupation of the Province by Austria, as it shown by the accounts of Count [Andreas] Hadik, Count Wrbna, à Sole, Eger and many others.81 The barter character of the trade between Galicia and Silesia is also stressed by [Hermann] Fechner. He sees the importance of this trade as consisting precisely in the way ‘goods were taken in exchange for (Galician) livestock’.82 In view of these facts, every importation of goods from the Hereditary Lands to Galicia at the same time promoted Galician exports. The majority of Austrian and foreign merchants who came to Cieszyn not only hoped to sell their manufactures there, they also hoped, in much greater measure, to be able to buy raw material and products needed by industry. They noted the absence of raw materials at the first Cieszyn fair with displeasure. The general view was expressed in this way: ‘If only the Jews had brought these items with them!’ They wanted flax, raw skins, honey and all-important wax. Above all, however, in view of the strict Prussian prohibitions of the export of wool, the Austrian

81 82

See above, pp. 128, 143 and 145, and below, pp. 177 and 257. Fechner 1886, p. 507.

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manufacturers wanted ‘the wool produced in certain regions of Poland’ and also flax seeds.83 What an immense demand there was for Galician livestock will be demonstrated below.84 The significance of the Cieszyn fairs for exports was also understood in Poland. This is clearly shown not only by the interest Poles expressed in the establishment of these fairs (as mentioned above)85 but also by the ‘Information in Regard to the Cieszyn Fair’ issued by the Treasury Commission of the Polish Republic.86 With reference to the ‘numerous obstacles and hindrances to trade’ erected on the Prussian side, this explained that, although it was not in the power of the Committee ‘to remove these obstacles’, it saw the ‘recently opened free fair in Cieszyn’ as ‘a new means which could serve to make possible the export of at least part of the products or commodities of this Kingdom’, and it also regarded the Fair Edict’s regulations as advantageous ‘for the importation of various foreign commodities and products which are needed for the consumption of this Kingdom’.

9

The Financial Result of the Reforms in the Galician Customs System. The Lack of Customs Income

It is clear and hardly needs demonstrating that the reforms in the Galician customs system, described so far, greatly facilitated and encouraged Galician trade. They were also regarded at the time as a privilege and a boon for the Province. In April 1775, when the Cieszyn fair was only sparsely attended by Galician Jews, von Eger, who had been appointed to run the fair, threatened that the privileges given to Galicia would be withdrawn ‘and the recovered Hereditary Lands [i.e. Galicia] would be placed on the same level as the German-Hungarian Hereditary Lands as regards foreign goods and the tariff on them’.87 The reforms were indeed only possible at the cost of financial sacrifices. As Eger declared, they resulted in ‘such an unexpected reduction in customs receipts that, when the District of Submontana was inspected, doubts were expressed with good reason as to whether they would be in a position to pay military salaries for the last quarter from the whole of the customs income’.88 83 84 85 86 87 88

Beer 1893a, pp. 86, 92–3, and 104. See below, pp. 177 and 309–322. See above, p. 164. Printed in Polish, Archiwum Książąt Czartoryskich, 1076, p. 143. Eger’s report on the Cieszyn Fair, ami, v G 4/2920 ad 1488 ex Junio 1775. [Translator’s interpolation.] Eger’s report of 15 January 1775, ami, v G 4/2920 ad 1488 ex Junio 1775.

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The customs receipts, which in the year 1773 … amounted to 433,285 florins 40 kreutzers, have fallen to half that amount and the total yield for the current military year of 1775 is no more than … 228,028 florins 51 kreutzers.89 There is, therefore, in the sphere of tariffs, no trace of the fiscalism for which the government was so often reproached. On the contrary, whereas trade had been neglected for centuries in Poland and brought to a state of collapse by the policies of the nobility, it was the Austrian government which first provided better protection, by introducing a more rational tariff policy, which was properly implemented and adapted to the needs of Galicia!

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Eger’s report of 30 December 1775, hka, Kameralakt, ad 328 ex Majo 1776.

chapter 4

Plans for a New System of Regulating Galicia’s Relationship with the Hereditary Lands, 1775–76 1

Efforts to Gain Galician Raw Materials for the Hereditary Lands. The Imperial Resolution of 2 September 1775

The dual character of the Cieszyn fairs, which were supposed to serve both the export of Galician products and the importation of the Hereditary Lands’ products, naturally brought the question of the future relationship between Galicia and the Hereditary Lands, which had not yet been settled, to the centre of attention.1 The reason for the government’s inability to reach a decision on this matter lay in the struggle previously depicted,2 between two lines of approach to the fundamental question of whether Galicia should or should not be integrated into the customs area of the whole state. If it was to be integrated, even the anonymous writer we quoted, who was not particularly friendly to Galicia, wanted to concede the Province complete equality of status with the Hereditary Lands.3 In his opinion, so long as the separate customs status of Galicia lasted, the Province could make no claim to any easing of the conditions of its exports to the Hereditary Lands and it would have to bear the same tolls as other foreign countries. The second approach, as represented by Count Wrbna, demanded that Galicia be granted unrestricted equality with the Hereditary Lands, despite its separate customs status, despite the danger that the Hereditary Lands would be flooded, in that case, with foreign goods and despite the fact that such an ‘equal position’ for Galicia would actually privilege the Province, since Galicia, unlike the Hereditary Lands, was connected not only with the internal Austrian market but with foreign markets. This was how the question stood when it was re-opened by the Cieszyn fairs, which led to its being illuminated from another angle. Previously, the problem of exports from Galicia had been considered chiefly from the standpoint of the interests of Galicia’s producers. The establishment 1 See above, pp. 147 and 149. 2 See above, pp. 142–143 and 145. 3 See above, p. 146.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_011

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of the Cieszyn fairs made it clear for the first time that exports from Galicia were also of vital interest to the Hereditary Lands, from the point of view of both their industries and their consumers. The industrialists needed raw materials from Galicia and, by carrying them on the return journey, they could also halve freight costs for manufactures. Consumers, again, because the western half of the Austrian Monarchy was already dependent on supplies of livestock, tallow, wax etc. from Galicia. So the Hereditary Lands began to make efforts to acquire raw materials and products from Galicia and the relationship between the newly-won Province and the old provinces began to be judged from this point of view. Whereas the reciprocity with regard to the import duties imposed by the Hereditary Lands on Galician products, as demanded by Count Wrbna, was previously viewed as a sacrifice by the old provinces to the benefit of Galicia, it was now pointed out that it was in the interests of the Hereditary Lands themselves to reduce the import duty levied on Galician goods. In his report on the first Cieszyn fair, Eger devoted a whole section to this question, under the title: ‘Concerning the Granting of Favourable Treatment to Galician Products, in Particular Natural Products’. In it, he called for ‘concessions in relation to the Hereditary Lands’ import duty’, to be granted to Galician raw materials ‘so as to facilitate barter between them and the manufactured products of the Hereditary Lands’. In another section of the report (headed: ‘The Plan to Convert the Livestock Markets of Silesia and Moravia into Special Markets for Polish and Galician Livestock’) he envisages bringing Galician livestock in greater quantities to the Cieszyn fair. A matter which will be address again below.4 À Sole raised similar demands and aspirations in his report on the second Cieszyn fair, also held in that year.5 ‘Domestic and foreign merchants’, he declares, ‘would have liked to see the arrival in the market of Galician and Polish products, particularly wax, honey, tallow and wool, so as to reduce their freight costs by back-loading or to be able to engage in a barter trade’. The Hereditary Lands had little prospect of realising their hope of gaining access to Galician raw materials, however. Very few of them went in that direction, as they were mainly destined for foreign countries. This was not due so much to the high duties charged in the Hereditary Lands, after all they were no higher than foreign duties, as it was to a number of other factors. These included the persistence of old-established customary trading relations, the

4 Eger’s report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775. 5 Report of 6 October 1775, ami, v G 4/2920 ad 17 ex Januario 1776.

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often higher quality and therefore better value of goods from abroad and finally the superior credit conditions that prevailed in foreign countries. The exchange rate also favoured imports from abroad to a considerable degree and Eder occasionally ascribed the weakness of the market for goods from the Hereditary Lands in Galicia to the fact that ‘the low price of the ducat at the present rate of exchange makes this trade 6 percent dearer’.6 Given the barter character of Galician and Polish trade, the level of foreign imports necessarily decided the direction of Galician exports, a fact which provoked various proposals for prohibition that were not helpful to Galicia. Eger pointed out that apart from calico, which was produced more cheaply in the Hereditary Lands, and silk, which was of outstanding quality in the Hereditary Lands, ‘almost none of the manufactured products of the Hereditary Lands, least of all woollen goods from Linz, are capable of standing up to competition from foreign cloth, medium and fine linens, drawn-work, textured cloth, fustian etc., since in most of these cases there is a price difference of 10 or 15 percent or even more’. The only way he could suggest of overcoming this problem, however, was to introduce measures of protection and prohibition, completely ignoring the interests of Galicia, as usual. In order to intensify the economic integration of the Hereditary Lands and Galicia, he proposed that goods from the Hereditary Lands ‘should receive extra privileges beyond the free entry and exit already granted to them by the Fair Edict, without damaging the imperial Treasury or causing any complaint from that quarter’. In addition it should be made more difficult for foreign manufacturers temporarily admitted to the Cieszyn fair (under pressure of necessity) to compete in Galicia by ‘raising the import duty on the foreign goods entering Galicia after the fairs to as high a level as there is in Hungary’.7 This duty would only be refunded ‘after the presentation of a genuine certificate of further dispatch (with transit duty) to another foreign country’.8 Soon, however, the issue was settled in Vienna in a way more favourable to Galicia and more in accord with its needs. When the Council of State9 met to discuss Eger’s proposals, a number of voices were raised in favour of establishing a completely reciprocal exemption from duty between Galicia and the German Hereditary Lands. In particular, the representative of the Commercial Council advocated the greatest possible

6 hka, Kameralakt, ad 312 ex Septembri 1776. 7 In other words, to raise it to 30 percent. 8 Eger’s report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775. After the second Cieszyn fair à Sole repeated this proposal. 9 See ‘Minutes of the Council of State meeting of 26 July 1775’, ami, v G 7/2940 ad 2166 ex Septembri 1775. The meeting was chaired by the Court Chancellor for Galicia, Count Wrbna.

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alleviation of duties on the importation of Galician products into the German Hereditary Lands. The Treasury and the Bank Deputation, on the other hand, were opposed to this, in view of the fact that in Galicia there would be no prohibition of the importation of foreign goods and therefore the Hereditary Lands would be exposed to the risk of smuggling.10 In view of this ‘division of opinion’, Wrbna gave up his previous standpoint, opposed the proposal for reciprocal exemption from duty between Galicia and the Hereditary Lands.11‘[I]n order to prove that nothing was closer to his heart than the attempt to use Galicia to bring about important advantages for the whole Monarchy’, he proposed a compromise, according to which the General Tariff would be introduced into the Province but lower duties would be fixed for certain important, itemised products which were indispensable to Galicia. This compromise seemed to the Council of State to be the best solution to a difficult question and it therefore found unanimous acceptance. Only Emperor Joseph ii was doubtful: he did not want to rush ahead with such an important and momentous reform. He did state that he agreed with Wrbna’s proposal for the future regulation of Galicia’s customs status on the main issue.12 But only ‘in principle’. For the present, the old system should remain in place.

10 11

12

See Beer 1893b, p. 303. The justification he gave was that, since Galicia traded more with Hungary than with the German Hereditary Lands, he would only agree to the removal of duties between Galicia and the Hereditary Lands on condition that a similar ‘reciprocal exemption from duties’ was put into operation between Galicia and Hungary (see ‘Minutes of the Council of State meeting of 26 July 1775’, ami, v G 7/2940 ad 2166 ex Septembri 1775). Imperial Resolution of 2 September 1775, hka, Commerz fasc. 57, ad 15 ex Septembri 1775: In the main I approve this agreed recommendation. But as soon as it is put into effect, it must be fundamentally assumed that all goods passing from Galicia into the other Hereditary Lands should be regarded as Galician or as foreign goods of a type which pay foreign duties, and therefore on their entry into these lands do not have to pay any further duties. It follows from this that in order to prevent the Hereditary Lands from being flooded with foreign goods on the pretext that duty has already been paid, not just the new Cobenzl Tariff but all of its collection procedures must be adopted in this Kingdom of Galicia, and the Chancellery must pay the closest attention to the introduction and implementation of these arrangements. In the last section, the Emperor discusses the exceptions to be conceded to Galicia, by reducing certain tariffs and removing certain prohibitions and extra charges. Then he states Before anything is put in hand regarding the removal of the Poor People’s Supplement [Armen-Leut Aufschlag] and the introduction into Galicia of certain prohibited goods after the views of the other provinces have been ascertained, we first have to provide the authorities with the means to prevent fraudulent transactions by which

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This decision ended the struggle we have described between the two currents of opinion on this question, as represented by Count Wrbna and the anonymous writer. On the one hand, the principles and duties laid down by the General Tariff of 15 July 1775 (the ‘Cobenzl Tariff’) were also to be applied to Galicia13 and this meant that, as a rule, the tariff barriers between the Hereditary Lands and Galicia would be removed and the majority of Galicia’s products would be allowed duty-free entry into the Hereditary Lands14 and thereby have the opportunity of gaining fresh markets there. On the other hand, Galicia’s special status would not be completely removed, since a number of important foreign items, either prohibited in the Hereditary Lands or subject to very heavy duties there, would continue to be admitted to Galicia at a moderate tariff. And, in view of this, Galicia would have to remain separated from the Hereditary Lands by a customs boundary, in order to protect them from foreign goods which enjoyed free access into Galicia. Further discussions would need to be conducted with the Galician Governor’s Office in Lviv over ways of implementing this protection.15 It would very soon appear that this was, in fact, an impossible task. Under the prevailing conditions, the compromise outlined above was theoretically the best way out of the Galician dilemma. The Emperor’s Resolution of 2 September 1775 represented an enormous step forward from his memorandum of 11 February 1774, in the direction of greater recognition of Galicia’s special economic interests. It would, of course, soon become evident that it was easier to arrive at a compromise around the negotiating table than to balance out the opposing interests in actual practice. Joseph himself was quickly obliged to revise his point of view again in favour of Galicia’s special status and, he was eventually forced to abandon his aspirations for uniformity for a considerable period of time.

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15

goods liable to high duties are allowed to penetrate into the country bearing the lower duty paid in Galicia and without bearing the Poor People’s Supplement, and then to find out how they intend to prevent the penetration into the Hereditary Lands of goods that are allowed to enter Galicia but are prohibited here. In accord with the Emperor’s memorandum of 11 February 1774 and in line with the advice of the anonymous writer (see above, pp. 140–141). Apart from general considerations of a principled nature, the Emperor’s attitude towards Galicia was also determined by his views on the economic relations between Austria and the Galician and Polish regions. It will be demonstrated below that during the negotiations over the conclusion of a trade treaty with Poland, the Emperor demanded complete freedom of trade between Austria and the Polish Republic in the interests of Galicia. He was all the more inclined to concede to Galicia what he thus granted to a foreign power. Beer’s presentation of the subject (1893b, pp. 303–4) is unclear and in part incorrect.

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Further Attempts to Move toward Abolition of Galicia’s Special Status

Despite the fundamental settlement of the questions in dispute, the uncompromising protectionists did not give way entirely and used every opportunity to make it difficult for foreign goods to enter Galicia and even to prohibit them completely.16 The fact that at the second Cieszyn fair more foreign goods were sold than goods from the Hereditary Lands induced à Sole17 and the Ministerial Bank Deputation18 to take up Eger’s proposals once more. The entry of foreign goods into Galicia and their further movement to the east should be obstructed by raising the transit duty and, in addition, direct trade connections between Galicia and foreign countries should be severed. Moreover, the Galician Jews who avoided Cieszyn and went directly to Leipzig, Wrocław and Frankfurt should be forced to visit Cieszyn and ‘in Galicia too a regulation should be issued, on the model of the Commercial Edicts customary in the Hereditary Lands, that the Jews are not permitted to trade in any foreign goods except those legitimated by the stamp of the Cieszyn market’. Then it would be possible to conduct all foreign trade exclusively through Cieszyn.19 These proposals found no support at the 5 February 1776 sitting of the Council of State.20 It was admitted that à Sole’s description of the situation was accurate. The purpose of the Cieszyn fair had been to promote closer trade connections between the Hereditary Lands and Galicia and the Poles and foreign goods were only admitted because this was unavoidable. It now turned out

16 17 18 19

20

On similar attempts to delay the operation of the General Tariff of 1775 and also the Tyrolean Tariff, see Beer 1893b, pp. 275 and 325 et seq. Report from à Sole, 6 October 1775, ami, v G, 4/2920 ad 17 ex Januario 1776. Extract from the minutes of the 7 December 1775 meeting, ami, v G 4/2920 ad 17 ex Januario 1776. It was hoped, incidentally, that by using the Galician Jews, who ‘by nature’ had long been associated by acquaintance and correspondence with the other Polish merchants, the Poles could be ‘drawn to Cieszyn of their own volition, without the slightest compulsion’. Minutes of the session on 5 February 1776, ami, v G 4/2920 ad 113 ex Martio 1776, under the presidency of the Head of the Court Chancellery, Count Blümegen. Also present: Count Wrbna, president of the Galician Court Chancellery, and the vice-president, Reischach; Court Councillors Cavirani and Evers, also attached to the Galician Court Chancellery; Degelmann from the Commercial Council; Court Councillors Sorgenthal, Gruber and Bodenthal from the Ministerial Bank Deputation; and Eger and Koch from the BohemianAustrian Court Chancellery.

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that it was precisely the foreign goods that had found a market. This role of the Cieszyn fair was very alarming for ‘the livelihood of the Hereditary Lands’ and the danger arising was by no means compensated for by the pleasure of seeing an annual growth in the flow of trade to and from the Cieszyn fair to the amount of several thousand guilders. Nevertheless, it would be harmful to adopt à Sole’s proposals because their main effect would be to force the westward flow of goods to move in the direction of Prussia, which was against the original intention of the Cieszyn fairs. Apart from that, it was very difficult to cut off the Jews’ trade with foreign countries, ‘because in Galicia there are almost no Christian merchants at all and, in particular, there are none who visit foreign fairs and markets. The proposed prohibition, therefore, would be equivalent to an almost complete prohibition of all foreign goods which did not arrive through Cieszyn’. The Council of State therefore concluded that there was no alternative to introducing the new customs system into Galicia, which had already been approved in principle by the Emperor. Under this system Galician products would be allowed duty-free entry into the old Hereditary Lands. Because, as long as ‘Galician products continue to be treated as foreign in the same way as Polish products are treated … and therefore have to bear the high import duty on foreign goods, it cannot be expected that such products will be imported in any considerable degree for the consumption of the Hereditary Lands’. The situation would be remedied automatically after the conclusion of the trade treaty with Poland, once the new customs system was put into effect in Galicia. ‘If such a system is implemented on the same footing as it has been approved at the level of the Emperor himself … the result will automatically be that in Galicia the foreign goods brought in from the Cieszyn fair will be treated on the same footing and not otherwise than they are in the German Hereditary Lands’. The Empress also declared that it was ‘unavoidably necessary for serious and well-directed action to be taken to regulate the Galician customs system and to bring it quickly into line’ [with that of the Hereditary Lands]. She accordingly ordered that the tariff be worked out as quickly as possible.21 Even so, the rejection of the protectionist thrust did not mean that the relationship between Galicia and the Hereditary Lands had been definitively settled. It only meant that the obstacles to carrying out Joseph’s Resolution of 2 September did not now come from the protectionist camp but from completely changed political conditions.

21

Resolution at the beginning of March, included in the Court Decree sent on 23 March 1776 to the Galician Governor’s Office, ami, v G 4/2920 ad 113 ex Martio 1776.

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The provisions of the Trade Treaty with Poland came into effect on 1 February 1777 and this created a completely new economic situation, which necessarily had an impact on the relationship between Galicia and the Hereditary Lands.22 The Resolution of 2 September 1775 proceeded from the assumption that foreign goods would be charged a high (foreign) duty in Galicia and it laid particular stress on official customs checks, in order to prevent the smuggling of goods into the Hereditary Lands.23 With the implementation of the trade treaty with Poland, it turned out to be technically impossible to make a distinction between Galician and Polish goods when they entered the Hereditary Lands. Under the trade treaty, Polish products were subject to a duty of only 4 percent; the scope of this provision now had to be extended to Galician items. This meant, in turn, that any hope of putting into effect the Emperor’s Resolution of 2 September 1775 had to be abandoned and a new way of regulating the relationship between Galicia and the Hereditary Lands had to be sought. Before examining attempts along these lines, up to the provisional tariff of 1776,24 however, it is first necessary to trace the history of the trade treaty with Poland.

22 23 24

See above, p. 179 and footnote. See above, pp. 180–180. See below, pp. 255 et seq.

part 2 Galicia’s Relationship with Poland, 1772–90

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chapter 5

The Significance of the Vistula Trade Route to Gdańsk for Galicia1 The exhaustive presentation, above, of the significance for Galicia of the forwarding and transit trade, as well as the export trade to the west and the Austrian Hereditary Lands, excludes in advance any accusation that I have failed to appreciate the importance of these branches of commerce sufficiently. It can hardly be disputed, however, that immediately after the occupation of Galicia this export trade with the west had hardly gone beyond its initial stages and would only develop thanks to Austria’s tariff policy. Moreover, the export trade to the west did not encompass the most important items produced by Galicia, namely grain, wood and linen. Whatever role it was to play in Galicia’s agriculture and industry in the future, at present its influence on the internal economic conditions of the Province was scarcely perceptible. The export interests of the large landowners, that is the basic element in the constitution of feudal society of the time, lay in a different direction, towards Gdańsk! [Abraham Jacob] Brawer is therefore wrong to ascribe greater significance to the carrying trade but to underestimate the export trade. Starting from the assumption that ‘the Province was only partially cultivated and utilised and that there were few natural products available for export’, Brawer came to the conclusion that ‘(Galician) trade and commerce would have been very insignificant if the merchants of the area had limited themselves to exporting the products of the Province and supplying the population with foreign manufactures’.2 Both the assumption which underlies this assertion and the conclusion drawn from it are undeniably false, as a glance at the history of Polish trade, the significance of Galician exports in general and the significance of exports to Gdańsk in particular demonstrates. Brawer’s opinion that Galicia’s exports cannot have been large, in view of the neglected condition of agriculture, turns out to be a purely a priori deduction. For the cereal exports of a country do not depend on

1 For Galicia, the most important neighbouring country from the point of view of trade was initially Poland and later Prussia as well, in view of the Gdańsk trade. As time went on, however, the trade with the Austrian Hereditary Lands and with Hungary gained increasing significance. Trade with Turkey, finally, also came into consideration. The government in Vienna tried to secure markets for Galician products in all these countries by concluding trade treaties. 2 Brawer 1910, p. 84.

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the level of its agricultural sophistication. The export of grain from Russia has been and continues to be massive, despite the indescribable neglect of agricultural practices there and its frightful and periodic accompaniments of famine among the rural population, resulting in hunger typhus, scurvy and other epidemic diseases.3 In Galicia too, the export of grain flourished during the eighteenth century and since time immemorial, despite the underconsumption of the great mass of the rural population and periodic famines every spring. This was possible because, as will be demonstrated, it was not the peasants but the lords of the manor who engaged in the export trade.4 This was a phenomenon closely connected with the constitution of rural society of that time. As is well-known, there were two types of economic exploitation through large-scale feudal ownership of land:5 land ownership [Grundherrschaft] and estate ownership [Gutsherrschaft]. The former took the form of a multiplicity of small enterprises, whose farmers were obliged to pay rent. In this case, the landowners either did not carry on production on their own account or did not produce more than their own private requirements. The estate ownership, on the other hand, was characterised by large-scale agricultural enterprises farmed by dependent peasants obliged to perform labour services. These enterprises produced for the market and therefore, by their nature, tended to expand. This expansion occurred, on the one hand, at the expense of peasantowned land and, on the other, with a constantly rising exploitation of the subject labour power working within the estate ownership system. Galicia was a province where the estate ownership system prevailed.6 Hence, here too, production on the large landowners’ manors was production of a surplus and accordingly sale was the aim of economic planning and this phenomenon occurred regularly. The fate of production was determined in the final analysis by the possibility of sale. If the market was deficient, the existence of the enterprise itself was placed in doubt. Gdańsk, however, was the channel through which agricultural surpluses found their outlet. For this reason, the trade connection with Gdańsk was of decisive significance for eighteenthcentury Galicia: the existence of agricultural production and everything that 3 Maßlow 1907; Lehmann and Parvus 1900; Wittschewsky 1905. 4 ‘If considerable quantities of grain and livestock could be sent abroad, this was only possible because the greater part of the subject people, the peasant serfs, had a miserable level of nourishment and hardly eat meat three times a year’ (Jekel 1809, 2, p. 38). 5 See Grünberg 1893, 1, pp. 36 et seq. 6 See Grünberg 1899, p. 2; Mises 1902, p. 17; and the 21 February 1782 report of Brigido, quoted by Mises, which states ‘that the income (of the landlords) consists chiefly of labour services and rents and small services are only very insignificant’.

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depended on it was inextricably bound up with its continuation. Nor was knowledge of this lacking in Vienna: Emperor Joseph himself was completely permeated by it.7 The proposition that Galicia’s export trade was of slight importance was just as untenable as, on the other hand, the view that Galicia had ‘few raw materials available for export’. We will soon have the opportunity to see what large quantities of grain, livestock, wood, linen, and potash8 were exported, not to mention other less important items, such as brushes, skins, wood and honey, as well as government-produced salt. If it is, perhaps, objected that this is not a large number of export items, it can be replied that a large number of traded items is only necessary for retail trade. World trade is different. ‘The foundation of the modern world economy is the specialisation of production and labour and even a small number of trade items can form the basis for the importance of a nation’.9 Galicia possessed such items; indeed, items that were in high demand on the world market of that period! These facts constitute the basis of the historical role of the Gdańsk trade for Galicia;10 and it is from this point of view that the steps taken and the efforts made by the Austrian government to conclude trade treaties with Poland and Prussia must be appreciated.

7 8 9 10

See below, particularly p. 206. See below, p. 233. See Gargas 1907. See on this point, in particular, Korzon 1897, 2, pp. 105 et seq.; Szelągowski 1902, pp. 57 et seq. and 102 et seq.; and Szelągowski 1904.

chapter 6

Attempts to Conclude a Trade Treaty with Poland1 1

The Views of the Austrian Authorities about the Value of Trade Treaties

The importance of the subject to be treated here cannot be stressed enough. Galicia’s status within the Austrian customs system and thus also the direction in which its economic development would proceed depended on the shape of its trade with Poland. From the very first moment, and even before the treaty of partition was signed, the Austrian government was thinking about securing freedom for export down the Vistula for Galician products. Hence its efforts to bring about a trade treaty with Poland, provided that this could be achieved with favourable conditions for Austria.2 It was also in this context that Austria put up very strong opposition to the plans of Friedrich ii either to occupy Toruń and Gdańsk or alternatively to convert them into free cities independent of Poland.3 Right at the start of the negotiations in Saint Petersburg, Prince Kaunitz, with great sagacity, had pointed out the disadvantageous aspects of Prussia’s planned acquisitions.4 The King of Prussia would obtain a completely free hand with regard to trade and tariffs along the Vistula. The grain trade, indeed the whole of Poland’s trade, would accordingly fall into Prussian hands and Prussia would be able to drain the Kingdom of Poland of all its resources. Kaunitz therefore wanted to include some provisions in the partition agreement to ward 1 Four phases can be distinguished within the long negotiations which preceded the conclusion of the trade treaty. The first, introductory phase ended with the signing of the act of cession on 18 September 1773. The second, until February 1774, was characterised by the desire of the Polish Delegation to reach an agreement with Austria, for fear of Prussia. During the third phase a reversal of public opinion took place in Poland and concerns about trade were forced into the background by fiscal considerations. This was a phase of wearisome and slowmoving negotiations with Austria, which lasted until the end of 1774, at which point the Viennese Court sent Court Councillor Degelmann to Warsaw to settle the matter once and for all. Finally, the fourth and most important phase covers the last six weeks before the conclusion of the treaty on 15 March 1775. 2 See ‘Commissions Protocoll vom 31. Mai 1773 über die zu bestimmende Gegenstände bei Eintheilung und Einrichtung der Creise, als seine Instruction für den dafür abgehenden Hofrat Kozian’, ami, iii A 5/197, ad 588 ex Majo 1773. 3 See Beer 1873, 2, p. 150. 4 Kaunitz to Lobkowitz, 11 April 1772, quoted in Beer 1873, 2, p. 182.

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off this danger. In particular, he wanted it agreed that no increase in customs duties should take place on the Vistula. The English made the same demand.5 Kaunitz did in fact succeed in preventing Gdańsk’s occupation by Prussia6 but his other idea did not come to fruition and the partition agreement unfortunately does not contain a single word about prohibiting an increase in Vistula duties. All these details demonstrate the improbability of Chotkowski’s assertion that ‘Baron Reviczky scornfully rejected the invitation of King Stanisław of Poland to conclude a trade treaty’.7 Moreover, such an assertion clearly contradicts the spirit of Austrian trade policy of that time. The conclusion of trade treaties did not only belong in the political armoury of decisive supporters of free trade.8 Advocates of the system of prohibition also saw them as an important instrument of trade policy and this view was almost universally held in authoritative government circles.9 ‘All cabinets’ today, Sonnenfels taught at the University of Vienna, are so aware of the great influence of trade that every nation must expect to find its enterprises obstructed by states with which it trades or through whose territory its trade passes. It is therefore necessary to take precautions against these obstacles and to secure advantageous conditions by way of negotiation. Trade treaties therefore form an important element of trade policy.10 This view was shared, as has already been shown, not only by the Governor of Galicia and the Council of State, but by Joseph ii himself.

5 6

7 8

9

10

Beer 1873, 2, p. 242. Lobkowitz received the comforting assurance from Panin that Russia would never permit Gdańsk to be occupied by Prussia (Lobkowitz to Kaunitz, 26 June 1772, in Beer 1873, 2, p. 182). Russia also acted out of consideration for the views of the maritime powers, above all England (Beer 1873, 2, pp. 149 and 241–2; Askenazy 1904, p. 228; also Archiwum Książąt Czartoryskich, 1174; and Kalinka 1895–96, 1, section 7, p. 51). Chotkowski 1897, p. 29, also see below, p. 199. The German physiocrat Schlettwein thought that the interests of Galicia would be served by the conclusion of trade treaties with Poland, Russia, Prussia and the Porte, initially for five to ten years (see Schlettwein’s ‘Reflexiones über die Verfassung Pohlens’ i.e. Galicia, June 1774, ami ii A. 2/5, unnumbered). Beer’s assertion (1898, pp. 73 and 179) to the contrary is accordingly wrong. The large number of trade treaties concluded under Charles vi, Maria Theresia and Joseph ii proves that the views of Chotek and Zinzendorf were isolated exceptions. See Sonnenfels 1771a, 2, paragraph 26, p. 28. [Grossman’s emphasis differs from that in the original.]

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As early as 1755, Haugwitz and Prokop, when reporting on their journey through Poland, had proposed as a means for increasing Austria’s trade with the country ‘a carefully planned commercial treaty’, which would form the basis for drawing Polish business to the Monarchy.11 Eighteen years later the same idea was naturally even more attractive, after a considerable part of Poland had become an Austrian province while retaining its close trading relations with the other parts of the country even after the partition.12 As far as the opinions of the Galician provincial authorities are concerned, the first information the new Governor, Count Pergen, received from ‘Crown Carver [Józef] Potocki’13 was that Galicia was in ‘the gratifying condition of having a trade surplus’, which means no more than that exports exceeded imports.14 11 12 13 14

Fournier 1887, p. 372. Also see Chłędowski 1880b, p. 321. [Crown carver was a feudal Polish title. Editor’s interpolation.] Pergen’s postscript of 25 January 1773, Zakład imienia Ossolińskich 525, i, p. 48. Chotkowski incorrectly writes ‘excellent’ instead of ‘gratifying’ condition, and he goes on to state in the Polish text that Pergen himself admitted that the condition of trade was ‘splendid’ after the occupation of the Province! (Chotkowski 1897, p. 31) All this is written with the intention of glorifying the old Polish situation and thereby placing the ruin of the country, allegedly brought about by the government of Maria Theresia and Joseph, in a far harsher light. As against this, it must be said that it is not even certain whether Pergen’s more moderate remarks were in fact justified. Thus the customs administrator Eder, although appearing to confirm Pergen’s report, also stated not only that Galicia’s overall trade position was in deficit but also that this was the case for the main branch of Galicia’s exports, the trade in grain, and that more grain was imported than exported. The only surplus branches of trade were in wheat and coarse linen, and Eder expressed apprehension that ‘the amount of money in circulation would decline progressively, because much more money is leaving the Province than is added by the export of the Province’s goods’ (Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776). Chotkowski’s ‘scientific’ method consists in trying to wipe the slate clean of all the results of extensive previous historical research on Polish economic conditions at the time of the partition, on the basis of a single word in a file, a word which is itself quoted incorrectly, surpassing everything in its tendentiousness he previously achieved in this sphere. For it certain, beyond all possible doubt that, at the time of the First Partition, Poland’s trade and Poland’s towns – not excluding the largest, towns such as Lviv, Kraków, Lublin, Posen and so on – had been in a state of complete decay for a century (see Korzon 1897, 2, p. 213). Primas, speaking at the opening of the Parliament of 1764, told the assembled senate deputies: ‘The towns, the ornament of the Kingdom … are without citizens, the citizens, to the extent that they exist, are without trade and their trade is of no advantage because it is in Jewish hands; in a word, the towns contain nothing: every street is empty, every marketplace is desolate’ (Minutes of the Parliament). In subsequent years this state of affairs only became worse. The country had suffered severely during the years of internal disturbances and it was oppressed equally by foreign troops and Polish confederates. Harvest failures, states

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In his report about this to the central government, Count Pergen expressed the hope that it would be possible to increase this ‘trade surplus’ and that ‘with well-chosen arrangements, it would not be difficult to attract the very considerable trade in grain from Podillia and Volyn to this Kingdom (i.e. Galicia), and thereby remain in control of the same right up to Gdańsk’. A proposal for ‘connecting the Dniester with the Bug’ had already been made for this purpose. But success in this enterprise could only be expected if ‘the King of Prussia does not burden shipping on the Vistula with excessive customs duties or indeed blockade them completely, because the whole of the prosperity of this Kingdom depends on making sure that does not occur’. Thus Pergen grasped the importance of the Vistula trade and he was able to draw the conclusion that complete freedom of trade on the Vistula, unrestricted by any customs duties, was desirable in the interests of the Province. He made similar comments in a further report on Galicia’s trade to the north, in May 1773, at the request of Prince Kaunitz. As regards free trade on the Vistula, he stated, the interests of Poland coincided completely with those of Galicia and opposition was only to be feared from the Prussian or the Russian side. Pergen was concerned, however, that the Poles might either fail to recognise their own interests or be prevented from recognising them by the intrigues of the Prussian or Russian Courts. He therefore advised that ‘nothing should be neglected and all means should be employed to direct the attention of the Poles to the necessity of free trade and to induce them to make a big noise about the matter without ourselves coming out into the open’. He hoped that Reviczky would ‘have sufficient opportunity to support the Poles on this question. Furthermore, [he] also expected help from Galician landowners who own manors on the other side of the border’.15 It was probably too early to reach an agreement on the individual tariffs at the next Parliament; for this additional factual information would be needed. Only the principles of mutual trade relations could be agreed and, even here, agreement should be limited to export and transit duties. It was known in general terms what would be expor-

15

of emergency and epidemics also made their own contribution to the decline of the country (see Wawel-Louis 1897, p. 16; Kalinka 1891, 1, pp. 190 and 225; Szujski 1894, p. 536; also see Panin’s letter, quoted below, p. 217). When Austria occupied the Province, towns were decayed and depopulated, fields were uncultivated, villages, haunted by famine, had been abandoned. This was a picture of universal misery and terrible neglect. It is not difficult to judge, in view of these historical facts, whether it is possible to make the assertion that trade was in a ‘splendid’ condition. Chłędowski 1880b, p. 322. The quotations in the text have been translated back from Polish, as Chłędowski did not identify the source, making it impossible to discover the original.

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ted and which Austrian manufactures would pass through Galicia to Poland. With imports it was different. He, Pergen, was convinced that, overall, in future Galicia’s exports would outweigh its imports. But at present there were some areas, such as Żydaczow, Sanok, Halych and Pokuttya, which imported large amounts of produce. Since the amount of these natural products Galicia would have to import could not be predicted, it would be advisable to retain a free hand in the matter of import duties.16 Pergen expressed these ideas once more, in a letter to Reviczky, who was in Warsaw and had asked for guidance.17 He, himself, did not yet know anything, since the Province had not yet been organised, and many products which could be exported from there were in a completely neglected state. He would therefore limit his advice to general principles: Je mets pour base, que n’y aiant aucun ou peu de fabrique, de consequence nous devons avoir toujours la balance pour nous, si le commerce reste libre sur la Vistule jusdqu’à Danzig, et que dans la vente du sel on ne Vous gêne pas par quelque stipulation, soit de la parte de la Republique, soit de la part du Roi de Prusse, puisque nous [Galicia] tirerons probablement nos besoins de manufactures de pais héréditaires au lieu que le fort de notre commerce actif sera toujours en grains et en sel.18 It was therefore advisable to demand complete freedom of trade for all goods, both overland and on the waterways of the Vistula and the Bug, ‘without entering into any detail’. Reviczky should seek to obtain a guarantee from the King of Prussia that the conveyances returning from Gdańsk to Galicia would not be compelled to bring back Prussian sea-salt, since this would damage the Wieliczka salt trade. Pergen finally recommended that Reviczky make use of

16 17

18

See Chłędowski 1880b, p. 323. ‘Copie d’une lettre à Mr le Baron Revitzky’, of the beginning of April 1773, Zakład imienia Ossolińskich 525, i, p. 103. Also see Chłędowski 1880b, p. 324: ‘Vous me demandés un plan de commerce pour ce pais-ci [Galicia], afin que Vous sachies comment Vous conduire à cet égard à la diête présente’. [‘You asked me for a plan of trade for this country [Galicia], in order to know what line to take in this regard at the present Parliament’.] [My basic point is that since there are no or few factories, we must always retain a positive balance if trade remains free on the Vistula as far as Gdańsk. Assuming that you are not obstructed in the sale of salt by some stipulation either on the part of the Polish Republic or on the part of the King of Prussia, the major part of our trade surplus will always be in grain and salt, since we [in Galicia] will probably meet our needs from the manufactures of the Hereditary Lands.]

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the influence of the Galician landowner [Tadeusz] Dzieduszycki in dealing with the Polish King.19 There was one point, however, on which special guarantees had to be demanded immediately – the salt trade. It was this matter, above all others, that induced the government to take up negotiations with Poland, as the sale of salt constituted an important source of income for the Treasury. The question of the salt trade (which will be dealt with specifically below) was therefore one of the main points at issue in the negotiations and their resolution depended on the way it was answered. Hence the largest battles were fought over it. The mines of Wieliczka and Bochnia were occupied by the Austrians on Joseph’s specific orders,20 even before the negotiations over the partition of Poland had been completed. Mining operations continued without interruption, though now they were of course conducted on behalf of the new government. The loss of Wieliczka was a blow to King Stanisław, who had drawn a large income from its salt works, in particular. It was also a blow to the Polish nobles, who no longer received the salt free of charge but were now forced to pay for it. The royal banker in Warsaw, [Piotr] Tepper, now took over this business, concluding a salt contract worth approximately 100,000 florins with the Galician Governor’s Office.21 During the negotiations, therefore, the Polish nobles were understandably very interested in making sure that the price of salt was set as low as possible. The King of Poland was also very interested in the salt question and, in 1773, tried to find out from the Austrian envoy, Baron Reviczky, whether he personally could be granted favourable terms and whether he could be given a monopoly on the sale of salt over the whole Kingdom, which would make it easier to bear the loss of income from the Wieliczka salt works.22 Austria’s interests clashed here with Prussia’s. Friedrich ii fought hard against Austria’s claim to the Wieliczka salt works.23 Prussia’s plans aimed to

19 20 21 22 23

See Chłędowski 1880b, p. 324. Handwritten note by Joseph to General Lascy, 25 May 1772. Chłędowski 1880a, p. 24. ami, iv T 4/2622 ad 478 ex Aprili 1773. Beer 1873, 2, p. 213. Beer 1873, 2, p. 188. On 3 April 1772 Friedrich ii wrote to Finckenstein: ‘L’observation que Vous me faites que les salines pourroient entre les mains de la Cour de Vienne porter un prejudice très considérable à mon débit du sel, mérite, qu’on y fasse une attention très seriése’. [‘Your observation that if the salt works were in the hands of the Court in Vienna they could considerably prejudice my sale of salt is worth our very serious attention’.] (Beer 1873, 2, p. 358).

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win a monopoly over the Polish salt trade and thereby gaining control over Polish trade in general.24 Friedrich ii seems to have approached Vienna either with the proposal that the Wieliczka salt mines be leased to him or a similar proposition, by which he would obtain a monopoly over the salt trade in Poland. On 16 April 1773 Kaunitz, insisting on the utmost secrecy, sent Reviczky a copy of a letter from Baron [Gottfried] van Swietlen in Berlin ‘from which Reviczky can see what an objectionable proposal had been made to our Court by the man in Berlin and how we replied to this with a very clear rejection’.25 Kaunitz was able to see through Prussia’s plans and was well aware that after the failure of one attempt, Friedrich ii would risk others. He therefore warned his envoy in Warsaw against such Prussian machinations and impressed upon him that: ‘it should not be particularly difficult to put a stop to all unfavourable efforts to work on the King [of Poland] and the Republic by making a cautious and fair valuation. For the decisive factor will be the difference in quality and price between our rock salt and the Prussians’ sea-salt’. As the former was of higher quality and also cheaper, and as the King of Prussia would not be satisfied with a moderate profit, it would ‘not be easy for him to persuade the King of Poland and the Republic to favour his sea-salt’. It was less certain that Austria would be able to introduce its inferior (southern) cooking salt, from Sambir, into Poland, though the attempt should also be made to secure favourable marketing conditions for it too. We will see that the skilful Prince did actually succeed in foiling Friedrich ii’s plans and that in the salt question he walked away with a brilliant victory over Prussian diplomacy, which served the interests of both Galicia and Poland. The method he employed and what was at stake, can be discovered from a further report Pergen sent him in May 1773.26 It stated that the most important point in the treaty to be concluded with Poland is precisely the question of salt exports. There are two kinds of competition which can endanger the sale of our salt: competition from Prussia, which exports sea salt to Greater Poland, Podlasie and Lithuania, and from ‘Tatar sea salt’ and Moldovan rock salt,

24 25

26

On Prussia’s attempts not only to become independent of the salt of Wieliczka but also to compete with it in Poland, see Wutke 1894. ami, iv T 4/2622 ad 478 ex Aprili 1773. Also see Beer 1873, 3, p. 249. On 9 October 1773 Kaunitz remarked that the Court in Berlin was dissatisfied ‘in part because we are not prepared to agree to the Polish salt monopoly’ (Beer 1873, 3, p. 260). See Chłędowski 1880b, pp. 323–4.

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which is exported into Ukraine, Podillia and the Bracław region. If we are entitled to toll-free water-transport on the Vistula and the Bug, we do not need to fear competition from the King of Prussia, because we can deliver salt to Podlasie and Mazowsze more cheaply than he can. Only in the Warta region would Prussia be able to gain the upper hand, because our salt can only come in by road. Since our salt is of a better quality than Prussian salt and will prevail in the market, all that is necessary is to ensure there are not too many obstacles to its entry, the Warsaw Parliament does not grant the King of Prussia any extraordinary advantages, and the people are not prohibited from obtaining salt from where they have always obtained it. ‘On the other hand, it would be useful if the Parliament renewed its laws forbidding the transport of sea salt, as, in that case, the King of Prussia would not be able to introduce his salt into Poland except as contraband and would thus fail, in view of our competition’. To achieve duty-free water transport for rock salt and such a prohibition of sea-salt, it would be worth offering the King of Poland a gift of 10,000 tons of salt a year,27 as the expected profit would quickly make up for this. It is not possible to establish from the documents whether Pergen’s suggestion that the King Stanisław should be bribed was actually followed. It is only certain that the Austrian salt trade was granted extremely favourable conditions. Authoritative Viennese circles had similar views on the trade treaty with Poland. The secret instructions sent to Reviczky on 22 March 177328 were written entirely in the spirit of Pergen’s arguments. ‘As far as concluding the treaty is concerned … it should be insisted that the Polish Republic must explicitly require, stipulate and guarantee that there should continue to be freedom of transport and trade on the Vistula, as before’. The same idea was expressed still more clearly by Kaunitz in a further set of instructions sent on 18 April 1773.29 In these, with reference to the impending meeting of the Parliament, he

27 28 29

See Chłędowski 1880b, 324. Beer 1873, 3, p. 242; also see Kaunitz’s dispatch to Lobkowitz of 11 April 1772, quoted in Beer 1873, 2, p. 182. ami, iv T 4/2622 ad 478 ex Aprili 1773. Also see Beer 1873, 3, p. 246: therefore, [the] greatest attention is therefore to be paid especially to drawing to our side the energy and zeal of Herr Poniński, and favouring him in the granting of monetary compensation to the extent that he is especially grateful to us … If the circumstances are favourable, he can also be given a title … because the Marshal of the

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advised the envoy in Warsaw to create a party and to try to win over the Marshal of the Parliament. Of the many matters which the envoy should not leave out of account, the following three economic questions were the most important: the sale of salt, free passage of ships along the Vistula and trade with the Polish Republic. In these matters, the interests of Austria and Russia are compatible, he added, but those of Austria and Prussia are entirely contradictory.30 As regards reciprocal trade between Austria and Poland, Reviczky should direct his attention to ensuring that the balance of trade remains in surplus and strongly weighted in Austria’s favour. As a result ‘the lower the level of reciprocal customs duties and the more they avoid placing burdens on trade, the more advantageous will the trade between them be’. Reviczky should therefore first seek to find out ‘whether and on what basis the Republic is inclined to engage in trade negotiations with us’. The Court in Vienna, in any case, reserved the right to ‘restrict the application of all agreements in matters of trade to Galicia alone and, by no means, to extend them to the Hereditary Lands’.31 As far as navigation on the Vistula was concerned, what was important was that ‘everything should be kept free’. Reviczky should therefore work to achieve a Prussian declaration to this effect and to guarantee all agreements concerning it. The Court in Vienna was hopeful that this demand would also be supported by the Polish side, since the Polish Republic itself had a real interest in the freedom of navigation on the Vistula.32 There is no doubt that the demands made by Vienna were of the very greatest importance for the Province of Galicia and that their implementation would have secured vast outlets for Galician trade. Above all, freedom of navigation down the Vistula to Gdańsk would have given Galician products access to the world market. But it would also have protected the trade in grain and linen (the cultivation of flax and hemp!) and therefore Galicia’s agriculture and industry from Prussian chicanery, thereby avoiding a crisis and directing Galicia’s economic development along a completely different path from the one it actually took.

30

31 32

Parliament can give its proceedings a push forward or hold it back and because he, above all, is capable of creating a significant party for us. According to the Instruction of 18 April 1773, section 2: ‘Our interests and those of Russia are not directly opposed; but in respect of the King of Prussia exactly the opposite is true, especially as regards the sale of salt, freedom of navigation on the Vistula and trade’. The clash of interests between Galicia and Prussia is very evident here. Kaunitz goes on to recommend, in paragraph 13 of the Instruction, that Reviczky should find out ‘what the Prussians have offered to the Republic as regards trade’, since it is necessary to react immediately to avert any disadvantages. Emperor Joseph was of a different opinion, see below, p. 206. Quoted from paragraph 12 of the Instruction of 18 April 1773. See Beer 1873, 3, p. 250.

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But what was the attitude to the question of the trade treaty in Poland? Chotkowski’s assertion that the Poles were definitely in favour of free trade and that Austria therefore bears the responsibility for the conclusion of the treaty on a different basis, is entirely arbitrary. The documents demonstrate the results of the previous presentation: the situation was exactly the reverse. Admittedly, the Polish side did initially offer to conclude a trade treaty with Austria on the basis of reciprocal freedom from duties, in August or September 1773. At that time, free trade opinions, favourable to the conclusion of trade treaties, were almost universally dominant in Poland.33 The plenipotentiaries who were appointed to conduct the negotiations with the three partitioning powers were instructed to demand ‘that both trade over roads and navigation on the rivers to the sea should be free from all suppression, taxes and infringements on the part of the Republic’s neighbours’, that free trade should be preserved in Gdańsk and, finally, ‘that the quantity of salt needed should be supplied at the lowest possible price’.34 A further condition was complete freedom from customs duties.35 In addition to this, the treaty had to be concluded not just with Austria but with all three partitioning powers simultaneously. This demand was certainly in the interests of Poland, as Emperor Joseph himself bore witness,36 since in this case the free passage of Polish goods through Prussia would have been secured. The other demands included low salt prices and, it must be emphasised, Poland wanted a promise from Austria that it would support its efforts to abolish Gdańsk’s staple right. We have already mentioned the Polish demands about Poland’s export trade through Austrian Silesia.37 Chotkowski was, however, mistaken in his claim that Baron von Reviczky ‘replied scornfully’ to King Stanisław August’s proposals.38 These proposals were, on the contrary, transmitted immediately to the Court and State Chancellery [Foreign Ministry] in Vienna; committee discussions were already being held in November on the subject; and Emperor Joseph soon expressed his views in a memorandum. The questions discussed in these meetings39 can be summarised in five principal points: 33 34 35 36 37 38 39

See on this point Korzon 1897, 2, pp. 14–28. Instruction to the delegates, articles ix, xi and xiii, in Protokol 1775, 1, p. 8. According to Szujski 1894, p. 554, this Instruction did not have the force of law. ami, v G 15/2975 ad 1368 ex Decembri 1773, section 2. ‘The identically worded treaties envisaged by the Republic are, of course, in its interest’ (ami, v G 15/2975 ad 1368 ex Decembri 1773, section 2). See above, p. 164. See above, pp. 191. ami, v G 15/2975 ad 1368 ex Decembri 1773.

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1) 2)

Was the conclusion of trade treaties in general to be recommended? In the concrete case under discussion, was freedom from duties or the imposition of duties to be preferred? 3) Should the treaty to be concluded with Poland cover only Galicia or should it extend to the other Hereditary Lands as well? 4) What should the relationship of the contracting parties to the other powers be? 5) The question of the freedom of navigation on the Vistula. The memorandum presented by Emperor Joseph on these questions is of the greatest interest in many respects and it is indispensable for the understanding of Galicia’s economic situation and the government’s related economic policies. At the same time it throws light on the Emperor’s economic views, showing them to be different from the version given in customary presentations of the subject. Joseph did not unconditionally maintain the doctrines of prohibition and protectionism. Instead, the ideal he had in mind was free trade, although this could not always be realised in practice. His protectionism was only a concession extorted by circumstances.40 Joseph knew that the diversity of real life could not be encompassed by general measures, even though these may be correct in the abstract. Just as he was able, here, to combine his free trade doctrines with protectionism and to speak of the favourable treatment ‘which budding industries need for their initial development’ so, on other occasions, he adopted measures of prohibition, not because they expressed his inner conviction but because they were forced upon him by circumstances and, in particular, by the policies of his opponents, that is Prussia. 1) As far as the first question was concerned, the committee declared that it was in favour of concluding trade treaties; and indeed, unlike the president of the Treasury, Count Leopold Kolowrat, who wanted a treaty of guarantee to be made among all the partitioning powers,41 the committee thought that, as the only concrete proposal on the table was from the Polish side, the discussions should be limited to it. The Emperor, for his part, declared42 that he too, in principle, favoured concluding trade treat40

41 42

Cobenzl also held similar views in principle (Beer 1893b, p. 259) and, among the Poles, Staszic. In practice they were, however, all protectionists. The opinion upheld by Korzon, (1897, 2, pp. 22 et seq.; Głabiński 1894, p. 143; and Marchlewski 1897, pp. 117–28) that Staszic was a free trader and a physiocrat is therefore entirely erroneous. He was the most influential mercantilist. ‘To enter into a trade treaty with Russia and Prussia under certain conditions could never be harmful to us’. ‘Gutachten Celsissmi über das Commissions-Protocoll … den von der Republik Pohlen

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44

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ies, which were useful under all circumstances.43 He therefore thought it would be advisable to conclude similar treaties with the other powers. To make the treaty with the Republic dependent on other treaties, however, would be a mistake, because that would not be in the interests of Austria, though it would be in those of Poland. Moreover, in view of the conflicts of interest among the powers it was impossible to hope for such an agreement.44 The committee unanimously decided against reciprocal freedom from customs duties, because to take such a step would ‘make it impossible to know whether trade was in surplus or deficit, and too many customs receipts would be lost thereby’. The proposal should be made to the Polish Republic that in the Hereditary Lands its products would be treated according to the same rules as applied to the Hungarian provinces. But the committee itself admitted that a proposal of this kind was too general, because even in Vienna they did not yet know how the future tariff would be applied to Hungary. If the Polish Republic did not agree to this proposal, the committee added, the following duties could be proposed: as far as imports were concerned, ‘not more than 3 percent per item would be levied on manufactured products, while natural products would mostly have to pay still less’. In the case of exports, however, ‘the duty would be reduced to ¼ percent, that is to say no more than the documentation fee [Schreibgebühr]’. These moderate duties would help to promote the manufacturing exports of the Hereditary Lands and improve the ‘food situation’. Customs receipts would not suffer as a result, because a loss

angetragenen Commercien-Tractat betreffend’, dated 15 December 1773, ami, v G 15/2975 ad 1368 ex Decembri 1773. A trade treaty with neighbouring powers, based on the interests of them all, is always useful, notwithstanding that we thereby tie our hands against our neighbours, our neighbours’ hands are also tied in exactly the same way and we are guaranteed against regulations made by them to the disadvantage of our trade. This guarantee appears to be much more advantageous to solid trade activities than the maintenance of our freedom to take whatever arbitrary measures we like against our neighbours, who also preserve the same freedom. I am of the opinion that, since the interests of the three powers as regards trade with Poland are so different, an identically-worded treaty of this kind could never come about. Least of all could our interests allow us to offer our signature to it and in this way expose the advantages, which are expected from the proposed conditions, to the uncertainties of delay and the jealousy of two neighbouring Courts. Our side should therefore continue to propose a trade treaty specifically with Poland and certainly not a treaty to be signed jointly with Russia and Prussia, and we should seek to induce the Polish Republic to conclude a separate trade treaty by making all appropriate representations.

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could only be expected on the import duty, while the export duty was already very low. Nevertheless, these regulations would only cover each side’s own natural and artificial products, and they must be on their guard against fraudulent transactions, so that no foreign goods penetrated into the country under the pretence of being Polish items. To achieve this, the demand should be made ‘that the Polish Republic provide a list of its various manufactured products, while assuring it that what it produced in the future would continue to be favoured to the same extent as before’. Under such conditions, a treaty would be advantageous and necessary. Firstly, because Poland possesses very few manufactures and its natural products can in part be viewed as advantageous to our manufactures and in part constitute items indispensable for our own consumption. Secondly, because it will prevent other nations from being victorious in competition with us in Poland and bringing a tremendous disadvantage to us since our trade with Poland is in surplus. The duties proposed by the committee certainly appear very moderate, in a period dominated by protectionism. It must also be pointed out that in rejecting complete freedom from tariffs, the committee was not guided by considerations of principle. Nor were the interests of Galicia’s trade decisive; it rejected free trade for short-term financial reasons and because it would make the compilation of trade statistics impossible. It was therefore only natural that these arguments found no support from Joseph, who always set a high value on decisions based on principle. In his critique of the committee’s proposals, distinguished by its logic and acuteness, he pointed out that all fiscal considerations and other sideissues must be subordinate to Galicia’s trade interests. It was extremely important to him that the treaty should be concluded quickly, as is shown by his concern to clear away all obstacles that might delay its signature. The Emperor started by concurring with the committee that treaty concessions should only apply to each partner’s own goods. Polish products themselves did no damage to the Hereditary Lands and indeed they were even desirable for industry and to improve the supply of food. The admission of foreign products, on the other hand, would have unfortunate consequences and would be incompatible with existing commercial and financial principles (section 3). Nevertheless, it was unnecessary to demand a catalogue of Polish products because the present treaty was not a specific agreement covering a small number of items but a general treaty which was expected to extend to all natural and manufactured

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goods, produced by both sides. In the case under consideration, a general enumeration in various ‘categories’ would be pointless. Precise and reliable information about ‘qualities, quantities and prices’, the location of production, and all other data needed for the conduct of trade, on the other hand, would be very desirable but it could not be assumed that the Polish negotiators would be able to provide them. Even so, this fact should not be allowed to obstruct the conclusion of a trade treaty. On the issue itself, the Emperor expressed his support for complete exemption from customs duties. If the [committee’s] proposal is correct in stating that our trade with Poland is in surplus … it is an unquestionable truth, which goes without saying, that the complete reciprocal exemption from duties proposed (in so far as this is restricted to each side’s own natural and manufactured products) cannot be other than advantageous to us. Hence this proposal should be grasped with both hands. The committee’s objections were not of a principled nature. As far as the need to construct statistics was concerned, ‘whether the balance of trade is in surplus or deficit can be established both for imports and for exports by imposing a simple documentation fee of ¼ percent on each transaction’. Nor were the financial objections in any way decisive. The loss of import duty would not be severe ‘since very few Polish goods and products were previously imported into our Hereditary Lands for the purpose of consumption’. If they were intending to rely on customs receipts, they should be sought not by imposing a 3 percent import duty on every commodity, without distinction, but rather by imposing ‘excises and import surcharges only on those categories capable of bearing them’.45 In other words, fiscal considerations would have to take second place to economic ones. There must be no deviation ‘from the great principle that the imposition of duties must always be more directed to improving trade, industry and the means of subsistence than to finances. Whatever contributes to this improvement is in any case the richest source of financial benefit’. Trade with Poland was in surplus, he added. If a 3 percent import duty were imposed, by ‘reciprocally imposing a tariff, the Polish Republic

45

Even in this case, he did not advise placing such a surcharge on Polish products alone but on all imported goods of the same type, without exception, because otherwise there would be Polish reprisals, which would damage exports from the Hereditary Lands to Poland.

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[would] receive more income from our subjects than we receive from its … The disadvantage arising from reprisals would therefore not only affect our Galician trade, but the whole of the trade of the Hereditary Lands with Poland’. The Emperor sought to give a clearer illustration of the case with a concrete example, then he continued his argument by saying that for merchants complete freedom of trade was most favourable. This also applied no less to the industries of the Hereditary Lands. For a 3 percent import duty would make their essential raw materials more expensive. The government should therefore offset the fall in customs receipts in some other manner. The Emperor finally concluded from all this that ‘from the commercial point of view, complete reciprocal freedom from customs duties would always be of advantage to us and, from the Treasury point of view, it would not be harmful’.46 The Emperor was still more strongly opposed to the committee’s second proposal, which was that the Hereditary Lands should treat the Polish Republic in the same way as Hungary was treated. It was true, he thought, that this was a treaty between the Polish Republic and the Hereditary Lands as a whole but Galicia was most affected, because it was ‘the only part of our inheritance which has a very long border directly with Poland and it is almost exclusively through Galicia that goods have to come from Poland to the Hereditary Lands and vice versa’. In these circumstances, the relationship between Galicia and Poland cannot be compared with that between Hungary and the Hereditary Lands, since, in view of Galicia’s centuries of close economic association with Poland, any excessively far-reaching change in the relationship could only be damaging. The large difference between the previous trade connection between Hungary and the German Hereditary Lands, and that between Galicia and Poland is self-evident. It would consequently be inappropriate for the trade, industry and the subsistence of the inhabitants of Galicia if their trade with Poland were treated according to the same principles as the trade between Hungary and the German Hereditary Lands. So it is absolutely self-evident that to dwell on this point at all would

46

To be consistent, however, all trade prohibitions should have been lifted as well, because they were, he said, only permissible ‘for political or other reasons, which had nothing in common with commerce’. When they were imposed, temporarily or permanently, it was essential that they applied not just to the treaty partner but to all neighbouring states in similar circumstances.

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be quite superfluous; not to mention various other considerations which heighten the differences between Hungary and Galicia still further.

3)

47

Another argument presented by the Emperor was that, in his view, trade relations with Poland should be made as uncomplicated as possible, with the establishment of a uniform tariff for all goods, whereas in Hungary there was a graduated tariff and each ‘category’ of goods was treated differently. The most important objection, however, was that tariff reform was about to take place in Hungary and it was not yet known how the resulting situation would look. The Polish Republic, however, had to be given an immediate and categorical answer. There were therefore two options. Either the Republic would be given the same treatment as Hungary at present and our hands would be tied for the future. Or freedom of manoeuvre should be preserved so that ‘we would have to concede the same freedom to the Republic’. An additional factor was that Hungary was constantly complaining that the German Hereditary Lands treated it badly in trade policy. ‘How in that case can we expect to impose upon or even to propose to the Polish Republic, which is certainly just as aware of its own interests as any other nation, a trade treaty based on such uncertain and disadvantageous principles?’ The question of ‘reciprocity’, that is the concessions which should be made to the Republic, was no less important than the others. What was at stake here, in practice, was the question of whether the treaty with Poland should cover Galicia alone or should extend to the other Hereditary Lands. The committee was of the latter opinion.47 Firstly, because it believed that the Republic would not regard the improvements in ease of access as a sufficient concession if they were limited to Galicia alone. Secondly, however, because to restrict the operation of the treaty to Galicia implied assigning a special status to it in tariff matters ‘and it would disadvantage Galicia itself if it were placed on a different footing from the other Hereditary Lands in terms of customs duties’ (sections 4 and 5). The Emperor also wanted the treaty to be extended to cover the whole of the Hereditary Lands. But he had a deeper grasp of the matter and

A fundamental change of mind had therefore taken place on this question, since the Instruction of 18 April 1773 to Reviczky, quoted above, p. 197.

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pointed out that the scope of the treaty’s application was very closely connected with its content. Everything depended on whether the decision was in favour of free trade or the imposition of duties. If ‘Poland’s proposal for complete reciprocal freedom (in all the Hereditary Lands)’ was accepted, ‘the equivalence of Galicia with the other Hereditary Lands would automatically be established’. But if the decision was against full freedom from duties, out of consideration for the Hereditary Lands, and duties were imposed on imports then an exception would have to be made for Galicia. Joseph declared himself completely convinced that Galicia must necessarily be treated on a different footing and that an attempt must be made to maintain complete freedom from customs duties for this Hereditary Land alone … Until now, Galicia has had almost no trade connections with the German Hereditary Lands and very few trade connections with Hungary, while with Poland it has had the closest and most direct trade connections. It has sent all its surplus to Poland and received everything through Poland. If even the slightest change were to be made in this trade connection … it would bring about the most adverse consequences, which could not be overlooked, not only for Galicia’s trade and industry but for its agriculture and its whole level of subsistence. All the advantages Galicia might receive from being treated identically with the other Hereditary Lands in tariff matters could not compensate for these disadvantages and are therefore not worthy of consideration.

4)

If Polish products were not to be conceded full freedom of entry into other Hereditary Lands, the Republic could at least be convinced that its requirements were being considered and that Austria was inclined to compromise with it, by conceding ‘preferential treatment in other Hereditary Lands which, although restricted, would be even-handed for both sides’. The very interesting question of ‘most favoured nation’ status and the relationship of the treaty partners to third parties was not dealt with in the usual manner. On the Austrian side it was not regarded as sufficient that the preferences already granted to other nations by Poland should simply be applied to the Hereditary Lands. The aim was, rather, to completely exclude all foreign competition! The committee wanted to include a clause in the treaty specifying that, with regard to Saxony and all other nations not mentioned in it, the old customs duties should remain unaltered, although it was certainly also convinced that Austria

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was defenceless against Prussia and that Prussian competition could not be forced out of Poland. The Emperor’s views were different. With his usual ruthlessness, he drew the ultimate consequences from premises he recognised as correct. On the one hand, he did not want to admit that Austria had to resign itself completely what Prussia was doing. On the other hand, he believed that the Polish Republic would not allow its hands to be tied in relation to other countries and would refuse to abandon the right to issue regulations in its own interests. A different lever would have to be applied. The only means of seeing off competition from Prussia and indeed from other countries too was free trade, which would secure greater advantages for Austria than other powers. As applied to Prussia, this would mean: if we decided for the complete freedom from duties proposed by the Polish Republic, two cases could be distinguished. Either the King of Prussia refused to accept this system and we would not need to fear Prussian competition because we would always be victorious over Prussia. This would be even truer the more Prussia distanced itself from reciprocal free trade with Poland, in other words the higher the duties it brought to bear. Or, alternatively, Prussia’s relationship with Poland was also placed on a footing of free trade; then we would be directly compelled to decide in favour of free trade, because Prussia’s situation was by its nature more favourable for trade with Poland. If we had the additional disadvantage of duties, while there was free trade between Prussia and Poland, we would be decisively defeated and obliged to withdraw completely from Polish trade. The situation vis-à-vis other nations would be the same. Finally, free trade would secure Austria another advantage in the competitive struggle with foreign states and with Poland itself, and this advantage would not be temporary but lasting. Namely, free trade would avoid any future competition arising from Poland itself. The exemption of Austrian manufactured products exported to Poland from duties would ‘prevent the Polish Republic from giving the kind of preference for their manufactures, against ours, which every industry requires when it is in its initial stages’. The question of the transit trade through Poland and the associated question of navigation on the Vistula had already been examined in part. The committee wanted complete freedom of navigation down the Vistula as far as Gdańsk to be guaranteed by all four of the Courts involved. Joseph also admitted that an agreement of this kind would result in great advantages. But he believed that it was rather a matter for the future.

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At present, the only issue under consideration was the treaty with Poland. Austria would therefore have to make do with obtaining freedom of navigation along the Polish stretch of the Vistula. Reviczky should also be instructed in this sense. The documents do not reveal the decision of the Empress on these proposals, put before her in the middle of December 1773. It can, however, be assumed with certainty that she concurred with the views of the Emperor, since his influence had been decisive from the start in questions relating to Galicia. This was confirmed by the acceptance of Joseph’s standpoint as the basis for future negotiations with Poland.

2

The Course of the Negotiations with Poland, up to the Treaty of Partition of 18 September 1773

The previous discussion has demonstrated that the Austrian government warmly defended Galician interests and that its attitude to Poland was characterised by friendship and political honesty. If one bears this in mind, the following questions arise: why was there initially no treaty between Poland the Monarchy, although there was agreement over principles and content? And also why, when the treaty finally came into existence after one and a half years, was it constructed on a basis entirely different from both the wishes of Joseph, as accepted by the Empress, and the proposals of the central Austrian authorities, and the provincial officials of Galicia, as well as the Polish Republic’s original proposals? Chotkowski, who was unaware of the extensive source material, apart from Degelmann’s report,48 makes the government in Vienna solely responsible for the failure to achieve at a free trade treaty. He could not praise Degelmann

48

In this report, dated early in January 1775 (Zakład imienia Ossolińskich 525, p. 424), it is again proposed to conclude a free trade treaty with Poland. The document is particularly favoured by historians and has been utilised no less than four times, although not once has it been subjected to critical analysis! It has been ‘discovered’ again and again, and each time the later discoverers knew nothing about their predecessors. It was first made use of by Ludwik Kubala in 1872, in the Kraków journal Kraj, edited by Ludwig Gumplowicz, in an article, ‘Trade and Industry at the Time of King Stanisław August’ (Kubala 1872). Then, in 1880, it was used by Kazimierz Chłędowski (1880b). Seven years later, in 1897, Chotkowski published it in full, although he was entirely unaware of the useful work done previously by Chłędowski. Most recently, in 1910, Brawer again brought the manuscript into the light of day, although it had already been known for almost forty years. He described it as ‘the main source of his observations’ on trade and commerce (Brawer 1910, p. 84).

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enough, saying he ‘knew his way around the subject’, was ‘an honourable political economist’ and ‘a historical witness of the first rank’, and that ‘his proposals were directed towards stimulating Galician trade and production’.49 On the other, hand Chotkowski asserted that ‘all these proposals were deliberately ignored in Vienna’ and that there ‘the opposite opinion was victorious, with the result that the export of Galician products to Gdańsk was even forbidden’. We have already mentioned his claim that industry in Galicia was deliberately throttled. In short, Chotkowski alleged that Degelmann’s opinions and actions were diametrically opposed to those of the governing circles in Vienna. This way of presenting matters placed Degelmann’s report in a completely false light and gives it an interpretation entirely contradicted by the facts I presented above. It is in any case generally known that Degelmann was a convinced supporter of prohibitions and that he had been pushing Austria’s trade policy in this direction ever since the establishment, in 1762, of the Monarchy’s Commercial Council.50 As far as the trade treaty with Poland is concerned, in his capacity as the representative of the Commercial Council. He was still rejecting the idea of a general regulation of import duties by treaty in July 1774, for reasons of principle, and he proposed that Austria should not ‘enter into any formal discussions in regard to import duties … but instead establish a number of concessions in favour of our own products advantageous to both states’. He justified this by saying that ‘in view of our still inadequate knowledge of the Kingdoms of Galicia and Lodomeria and also of the nature of Poland’s trade and manufactures, and the intentions cherished by neighbouring powers, it does not seem at all opportune to accept general principles with respect to import duties’.51 His report on his mission to Warsaw, written half a year later, revealed that he simply kept to the instructions he had received from Vienna and it requires no particularly astuteness to see that all his ‘honourable and wise’ proposals are merely an inferior and watered-down paraphrase of what Emperor Joseph formulated a year earlier with such profundity and precision. In any case, these were views which, as we have shown, can be regarded as the general opinion adopted by all the Austrian officials most authoritative in Galician affairs. The government in Vienna therefore by no means bore the guilt for the failure of the trade treaty with Poland to eventuate. But we can do more than arrive at this negative conclusion. We can make the positive statement, precisely on 49 50 51

See Chotkowski 1897, pp. 38, 80 and 82; and Chotkowski 1909, 1, pp. 48 and 51. See Beer 1893a, p. 161. Extract from the Minutes of the Commercial Council, dated 4 July 1774, hka, Commerz. Fasc. 57, ad 25 ex Julio 1774.

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the basis of Degelmann’s report, that the explanation for the failure of the treaty negotiations, which were conducted on a free trade basis, is to be sought in the policy of Prussia and also, not least, in the policy of the Polish government itself. Degelmann left no doubt that the Polish side withdrew its original proposals. In discussing the Polish proposals of 1773, he unambiguously declares: ‘Today (namely January 1775) they appear to have gone back on this idea’.52 All that remains to be explained, then, is the reason for this change of heart in Poland. That is the real problem of the Austro-Polish trade treaty. The wearisome course of the negotiations between the delegations of the powers during the summer of 1773 is well-known.53 The ministers of the three Courts were, needless to say, above all concerned to ratify the partition of the country. Baron Reviczky presented a draft of the treaty of partition. It included the condition that it must be adopted without alteration (3 August 1773). Nevertheless, the Polish Delegation ventured to oppose the draft and, in its reply of 7 August 1773,54 made a series of demands. Those relevant to our question were: in the interest of both sides a special trade treaty should be negotiated and it should be included in the general treaty (ii); a customs agreement should be made and transit through Poland and the passage of ships on the Vistula and its tributaries should be guaranteed (iii);55 the Wieliczka mines should be returned to Poland or at least the provision of the quantity of salt needed should be guaranteed at fixed and unalterable prices (iv); and, finally, the free export of livestock and ‘mutuality’ in matters of coinage should be granted and there should be no increase in Hungarian duties on wine. Contemporaries assumed that this opposition was serious. Unfortunately, it was not.56 It was, instead, an isolated case of Polish concern about the interests

52

53 54 55

56

It is extremely disturbing that Chotkowski, who by his own assertion published ‘a wordfor-word translation of the report’ (Chotkowski 1897, p. 38), quite simply left out this important passage, which of course did not fit in at all with his own version of events. See Beer 1873, 2, pp. 199 et seq.: ‘The negotiations in Warsaw’. The Delegation’s sessions began on 2 June, Szujski 1894, p. 556. ‘Die Artikeln der Hochlöblichen Delegation an den Hochwohlgeborenen Herrn Baron Reviczky’, Protokol 1775, 1, 23rd session, pp. 110 et seq. Also see the ‘Note in Vertragssachen seitens der Delegation dem Herr von Revitzky überreicht’, Protokol 1775, 1, 30th session, pp. 152–4, articles iv, v and vii. Article vii contains the statement that ‘the document ceding the Province, of which we have been deprived cannot be signed until a reciprocal trade agreement has been made as a separate article of the treaty and the free passage of goods by land and water through the neighbouring states has been guaranteed’. In February 1773 a communication by Saldern from Saint Petersburg was sent to the Court in Vienna, stating that ‘Il est hors de doute que tous les Polonois seront cruellement allarmés de la Conduite du Roi de Prusse vis-à-vis de Danzig et Thorn, de même

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of trade. In general, the members of the Polish Delegation lacked any understanding of the significance of the trade treaty with Austria. None of them raised the matter again during the negotiations which preceded the signing of the act of partition. It was forgotten and passed over in silence. It could not be otherwise in an assembly whose majority was venal and let itself be deterred by threats.57 Only the question of salt was, here and there, emphasised as important and, on a few occasions,58 the above-mentioned demand (iv) was repeated. Reviczky replied, however, on 13 August 1773, that ‘his Court had not seized the mines themselves but land which belonged to Austria’59 and limited himself to assuring the delegates in the next sitting that salt could be sold at the old price, provided the level of production did not fall. If production expanded it could be sold more cheaply. Other benefits, moreover, would be provided for Polish subjects in a separate treaty, which would regulate matters in a way most favourable to the interests of the Republic.60 On the matter of the trade treaty itself, Reviczky announced, in the same sitting, that On point vii. Nothing could be more justifiable than the demand made in this article … My Court, which does in fact wish to see trade flourish in the Republic, is willing to agree with all appropriate proposals to help it to do so, to the extent that they rest on the principle of reciprocity. But if we are to arrive at a separate treaty on this question, it is necessary for the honourable gentlemen of the [Polish] Delegation to make clear more precisely what they understand by free trade.61

57 58 59 60

61

qu’au sujet du Commerce le long de la Vistule; il n’est pas à croire que la Cession, qu’on demande pourra avoir lieu aussi lengtemps que l’Affaire du Commerce en general ne sera pas arrangée’. [‘There is no doubt that all Poles will receive a cruel shock from the conduct of the King of Prussia in relation to Gdańsk and Toruń, as well trade along the Vistula. It is impossible for the cession of the partitioned lands which has been demanded to take place as long as the business of trade in general has not been settled’.] (Beer 1873, 3, p. 153). See Beer 1873, 2, pp. 225 and 238–9; Kalinka 1891, 1, p. 205; and Szujski 1894, p. 555. Protokol 1775, 1, 14th session, p. 70 and 27th session pp. 131 et seq. Protokol 1775, 1, 27th session, p. 134. Protokol 1775, 1, 30th session, 21 August 1773, p. 153. This announcement was not particularly clear. But then, as on later occasions and until the conclusion of the treaty, the lack of clarity was deliberate. As Reviczky wrote to Kaunitz on 15 March 1775 from Warsaw, ‘I carefully avoided getting involved in the establishment of a fixed salt price, which I was pressed to do by the Poles, so that it remained open for the saltworks to determine their prices from time to time according to the requirements of competition’ (hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 1). Protokol 1775, 1, 30th session, p. 154. [Editor’s interpolation.]

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He finally gave an oral promise to a deputation sent to him from the [Polish] Delegation ‘that trade would be guaranteed and that [the Poles] would obtain salt at a rate cheaper than 2 ducats, without having to pay additional duty’.62 These explanations evidently calmed the Polish Delegation and in the very same sitting the negotiations over the cession of Galicia to Austria were brought to a conclusion,63 although the document was not actually signed for another month. This happened on 18 September, after the negotiations with the other Courts had been concluded. The opposition fell silent. Nothing more was heard of the threat not to accept the act of cession unless it was accompanied by a simultaneous trade treaty. Not until three weeks had elapsed after the conclusion of the negotiations did the Bishop of Lutsk, Paweł Turski, express the wish ‘to start negotiations over the trade treaty with the Austrian ministers before [!] other matters are dealt with’. Why, he added, should we begin negotiations over the form of government ‘before we have started with the trade treaty, on whose outcome our well-being or our complete ruin will depend?’64 Several speakers supported the bishop; the eloquent voice of Kazimierz Raczyński, in particular, was raised. He complained that ‘all provisions depriving the country of its rights are included in the act of cession, while everything which might be of advantage to the Republic is ignored in the act and is supposed to be regulated in separate articles later on’.65 This opposition came too late, however.66 It may be that a more favourable result for the Republic could have been achieved if a trade treaty had been seriously and emphatically demanded from the beginning and the necessary preparations had been made in good time. The Austrians would have had nothing against this and it can be seen from Reviczky’s instructions that they wanted a trade treaty. Now, however, it was too late to bring the question up again. In conformity with the limitations placed on the process, the Polish Delegation had to conclude its negotiations within a few days. But a prerequisite for settling the complicated problems raised by the trade treaty was the availability of extensive information on production and trade, on imports and exports, and a no less detailed knowledge about both sides’ legislation on tariff, tax and charges, about the organisation of trade and currency exchange laws. All these 62 63 64 65 66

Report of the Bishop of Vilna (Massalski), Protokol 1775, 1, 30th session, p. 165. Protokol 1775, 1, 31st session, p. 175. Protokol 1775, 1, 48th session, 13 September 1773, pp. 290 and 291. Protokol 1775, 1, 48th session, 13 September 1773, p. 292. In any case, it was not always meant seriously. ‘Even people who had been determined from the outset to recognise the force of accomplished facts could still at least give vent to their patriotism and proclaim their warm love for their fatherland in well-rounded orations’ (Beer 1873, 2, p. 233).

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were matters which the Austrian government had only just started studying in September 1773 and with which the Polish government was scarcely conversant. Reviczky therefore had good reason to observe that ‘The question of the treaty you have mentioned is so far-reaching and involves so many subjects that it cannot be dealt with even in a number of months, since various matters must be taken into account about which each Court needs to be informed in advance’.67 When the Prussian ambassador [Gédéon de] Benoît, who wanted no trade treaty at all, made this threatening observation ‘What is the point of this prolonged squabbling, when the obligations have to be fulfilled unconditionally in any case?’68 the Polish Delegation found it was compelled to abandon the idea of ‘extra articles’ in the treaty. With the signature of the act of cession, the first series of negotiations came to an end (18 September 1773). So Galicia continued to be treated as a foreign country by Poland and had to pay the high Polish tariffs. This applied to the import duty of 8 to 10 percent but particularly to the extremely steep transit duty of 12 to 14 percent. The Polish export duty of 10 to 12 percent was an equally severe hindrance to trade relations between Galicia and Poland, as was the toll paid on the Vistula, the burden of which was further worsened by the arbitrary way in which it was imposed. Individual commodities coming from Galicia were charged as follow:69

Florins Kreutzers Load

Ship’s pound Stone of wool Barrel of wine

white wheat coloured wheat red wheat rye best quality potash lesser quality potash

5 4 4 2 1 1

18 52 15 39 12 4 16

2

So that, together with the Prussian duties on wine came to 3 ducats in Gdańsk. A further obstacle to trade came from the rule that duty had to be paid in ‘good 67 68 69

Protokol 1775, 48th session, 13 September 1773, p. 296. Also see Szujski 1894, p. 560. Protokol 1775, 50th session, 18 September 1773, p. 307. Degelmann’s report, Zakład imienia Ossolińskich 525, p. 424.

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money’. Since the Polish currency was severely depreciated, the ‘deduction of a fifth part’ in ‘good money’ meant payments of 20 and 12½ percent respectively, which comes to 32½ percent.70 Apart from this, the arbitrary behaviour of the Polish customs officials towards Galician merchants was a frequent cause of complaint. This situation continued after 18 September 1773, when the treaty of cession was concluded, because the treaty71 merely ratified the occupation of a part of Poland by Austria but did not regulate trade relations between the two states, promising only in Article viii that a separate convention (pactum contrahendo)72 would be negotiated ‘tam quoad commercium utriusque Nationis generatim, quam speciatim quoad commercium salis’.73

3

The Further Course of the Negotiations until to the Imperial Resolution of March 1774

In view of the contradiction between the desire of both Austria and Poland to conclude a trade treaty and its constant postponement, there appears, at first, to be an almost insoluble mystery. The key to the solution, however, lies in Prussia’s policy, which was entirely opposed to the conclusion of a trade treaty with Poland and tried to prevent this at any cost. Prussia was able to paralyse the serious efforts of Reviczky through the no less energetic efforts of its ambassador, Benoît. The latter had much support among the Polish delegates and through his intimates he succeeded in repeatedly delaying negotiations over trade treaties. During the third series of negotiations with the Polish Delegation, the Bishop of Kujawy, [Antoni Kazimierz] Ostrowski, issued a warning to the deputies that ‘they should not let the time go by in inactivity’. Instead they should ‘hasten to reach an agreement over the separate articles and the trade treaty’.74 Delegates [Piotr z Alkantary] Sumiński and [Antoni] Lasocki supported him75 and delegate [presumably Tadeusz] Lipski also raised the issue. He would 70 71 72 73 74 75

The ‘fifth part’ was first demanded in 1738; previously only 10 percent was charged (see Rachel 1909, p. 48, and Degelmann, Zakład imienia Ossolińskich 525, p. 424). ‘Traité de cession entre l’impératrice Marie-Thérèse et le Roi et la Républic de Pologne’, Neumann 1855, p. 149. [‘Pactum de contrahendo’ means ‘agree to reach a future agreement’.] [‘in relation to the trade of both nations in general and in relation to the trade in salt in particular’] Protokol 1775, 3, 1st session of 31 January 1774, p. 4. Protokol 1775, 3, 1st session of 31 January 1774, pp. 6 and 7.

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‘not let any resolutions go through’ he said ‘if they did not hasten to conclude trade treaties with the foreign Courts’.76 These objections were voiced particularly loudly in the 33rd session and, in order to win over the deputies, the ministers of the three Courts were obliged to promise that there would be a ‘link’ between the projected Permanent Council and trade treaties.77 All this was in vain, due to Prussian machinations. Austria was the only hope of the delegates who were not directly in Prussia’s pay. Austria alone could open other trade routes to the Polish Republic, to replace the blocked route along the Vistula. Oppressive Prussian policies led a group of independent delegates to approach Reviczky (in January 1774)78 and present him a list of the goods they wished to obtain from or through Austria.79 They also proposed improving trade connections by setting up an [Austrian] imperial-royal trading company which would establish ‘warehouses along the border between Galicia and Poland in Bielsko, Jarosław, Lviv and Zamość’ as quickly as possible. But the settlement of the trade treaty question was once more postponed, this time for more than a year. The group of delegates who favoured immediate action lacked great and decisive influence and was also too small a part of the Delegation. Indeed, it is only with difficulty that records of its existence can be found in a few volumes of the Delegation’s minutes. They are islands floating in the sea of verbosity that characterised the Delegation as a whole. Whole weeks were wasted fruitlessly, because of the length of the proceedings and the

76 77 78

79

Protokol 1775, 3, 28th session, 29 March 1774, p. 167. Protokol 1775, 3, 33rd session, 18 April 1774, pp. 190 and 191. ‘The Poles, who already fear the consequences [of arbitrary action by the Prussians] and can see from their painful experience of previous Prussian tolls on the Vistula how disadvantageous it would be to continue to dispatch foreign goods along the customary route from Gdańsk, are beginning to look toward the Austrian provinces and some delegates have provided me with the enclosed list of questions, in order to find out, if possible, the prices we would charge to supply the Poles with the aforementioned goods from our provinces’ (Reviczky to Kaunitz, Warsaw, 5 February 1774, in hka, Commerz. Fasc. 57, ad 20 ex Februario 1774; also see above, p. 165). Another reason for the bitterness felt toward Prussia at the time was the way it repeatedly expanded its territory. The general view in Warsaw was that Prussia wanted to advance as far as the river Warthe. This would be almost equivalent to doubling the territory assigned to it in the agreement to partition Poland. ‘The fury which the delegates display towards Prussia can hardly be believed’, wrote Reviczky to Vienna. ‘They are even thinking of entering into open hostilities, in order to meet force with force’ (Beer 1873, 2, pp. 285–6). ‘Liste derjenigen Waaren, welche zu dem großen Pohlnischen und Nordischen Handel aus oder durch die k.k. Erblande herbeyzuschaffen wären’ (Minutes of the Galician Court Deputation, 23 February 1774, hka, Commerz. Fasc. 57, ad 20 ex Februario 1774).

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lack of parliamentary experience. Absence of understanding of trade matters gave priority to many other issues, in a chaotic jumble. There was discussion about the form of government, forage rights, religion and dissidence, former Jesuit manors, education committees, the proposed Permanent Council, financial projects, petty matters relating to hunting, the funding of hospitals and many other things of purely local or even entirely personal significance! Meanwhile, Vienna had once again shown that it was ready to go along with the wishes of the Polish Republic. Manufacturers and merchants were once again urged to make use of the information that had long since been gathered by the office of the Governor of Galicia on Galician products, their prices and the cost of transporting them to Poland. Indeed, they were asked to do this ‘with all possible speed, so as to take advantage of the goodwill currently being expressed by some delegates to the Polish Parliament and to conclude the trade treaty’.80 The lists of products and their prices were in fact sent to Warsaw,81 after discussions about the issue had ended.82 At the same time Kaunitz pressed for a binding instruction to be sent to Reviczky,83 which resulted in the Empress’s Resolution, at the beginning of March, that I would be inclined to conclude a treaty with the Republic, but with it alone, without the least involvement of other powers … since I am not in the least inclined to concede to the latter the same benefits as the Polish side would receive. But, before we can enter into commercial discussions with the Polish Republic, we must in advance demand that it inform us of the way in which the Hereditary Lands can be given the security that foreign goods are not smuggled in, under the name of Polish natural and manufactured products, and how these goods can be distinguished reliably from each other.84

80 81 82 83

84

Extract from the minutes of the Galician Court Deputation, 23 February 1774, hka, Commerz. Fasc. 57, ad 20 ex Februario 1774. Kaunitz to Reviczky, 23 March 1774, hka, Commerz. Fasc. 57, ad 11 ex Aprili 1774. Also see 7 ex Junio and 5 and 10 ex Augusto 1774. hka, Commerz. Fasc. 57, ad 20 ex Febr., 17, 21 and 27 ex Martio, 4 ex Aprili 1774. Report of the end of February to the Court and State Chancellery, quoted in the report of the Galician Court Deputation, dated 14 May 1774, hka, Commerz. Fasc. 57, ad 10 ex Junio 1774. Only the second part of this statement by the Empress was discovered in the source document, hka, Commerz. Fasc. 57, ad 10 ex Junio 1774. The first part is reproduced in Chłędowski 1880b, p. 326.

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217

The Course of Negotiations until Degelmann’s Mission to Warsaw

When the above directives reached Reviczky in Warsaw, a shift of opinion was already taking place there, which led the Republic to withdraw its own original proposals. Political considerations, in particular the influence of Prussia, were, above all, decisive in bringing about this unexpected change of mind. The Poland wanted a treaty with all three Courts. It was believed that this would bind Prussia to its word and hoped that this would be supported by Austria and Russia. That was mistaken. Austria wanted to make a treaty with Poland alone. Russia too made various difficulties.85 Prussia was opposed to any trade treaty whatsoever and tried to heighten the state of uncertainty, which was very advantageous for Prussia’s oppressive policies towards Poland, as much as possible. All sources agree on this: the Russian note, already cited, and the January 1775 report by Degelmann. Reviczky said the same thing earlier in his dispatch of 5 February 1774 to Kaunitz:86 ‘It appears that the King of Prussia refuses to be bound by any of the conditions in a treaty, although these were stipulated in the instrument of cession, wishing instead to subject Poland to arbitrary changes’. Moreover, the information we possess from Prussian sources is entirely along the same lines. Friedrich ii wanted to ruin the trade of Galicia and Poland, even if this might damage the interests of his own subjects. It was in vain that the Silesian merchants and the magistrates of Wrocław called for a free trade treaty to be concluded with Galicia and Poland.87 The Minister in Silesia, [Karl Georg von] Hoym also supported this proposal. He was of the opinion that there should be negotiations on the subject between all three Courts (28 August 1773).

85

86 87

See Degelmann’s report (Zakład imienia Ossolińskich 525, p. 424). In 1774 Russia had not yet reached a decision on its attitude to the question of a trade treaty. Not until the beginning of 1775 did it decide to support Poland against Austria, and both Poland and Austria against Prussia. At that time Panin wrote the following to Stackelberg in Warsaw: Poland is most endangered by Prussia. The Vistula trade is a matter of life or death for that country [Poland]. Urge Baron Reviczky to go forward jointly with the Poles and you yourself make identical representations to the Prussian minister, insisting that he offer the Poles tolerable conditions. Make clear to him the degree to which Poland has been weakened by years of disturbance and civil war and point out how many years Poland will need to regain its lost strength, adding that recovery is out of the question if its trade routes remain blocked … I understand how awkward your position with the King of Prussia will be, as his intentions are the opposite (Kraszewski 1902, 1, p. 100). hka, Commerz. Fasc. 57, ad 20 ex Februario 1774. See Fechner 1886, p. 466.

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But the King replied that there was nothing to be gained from this. It would be much better to send the memorandum to Benoît in Warsaw ‘so that he can keep a watchful eye out to ensure that in Poland at least the status quo is maintained. It was, however, out of the question to conclude a commercial treaty with Poland under present circumstances’.88 We do not need to repeat that the ‘status quo’ to which Friedrich ii refers was the direct opposite of free trade and signified nothing other than the maintenance of the immensely oppressive Prussian customs duties and the inordinately arbitrary way in which they operated. This oppressive policy, which exploited the existing state of confusion in Poland, was the foundation on which Friedrich ii built his whole plan to promote industry in Prussian Silesia. From time to time, he spoke quite openly about what he meant by the ‘status quo’, and what his intentions were. When disturbances resulted in a fall in industrial production in Poland, he instructed his officials on the way to make use of the situation: ‘You must devote your efforts to consolidating them [factories] and providing them with a larger market in Poland, which will be easier now that so many factories have gone under there. Many more will certainly share the same fate. They will perish if affairs remain on the present footing in Poland for a few more years’.89 Under such circumstances, the retreat of the Republic can be understood. Left to itself, without Austrian assistance, the Republic had no hope for the removal of Prussian duties or even of reducing them. Consequently, however, a trade treaty with Austria alone lost significance.90 Poland’s financial problems also contributed to the retreat, working in the same direction. It is true that the general opinion in Poland was in favour of free trade at the time. In practice, however, Polish statesmen, officials and parliamentary committees were not infrequently compelled to act in quite the opposite way.91 The income of the Polish Treasury had been severely reduced by the recent troubles and disturbances, the disorder that prevailed in the administration and, finally, by the cynical economic policy of [Adam] Poniński.92 For this

88 89 90

91 92

Prussian Cabinet Order dated Breslau, 30 August 1773, Fechner 1886, p. 467. Cabinet Order dated 28 August 1771. See Fechner 1892, p. 698. Friedrich ii’s desire to ensure continuing internal chaos in Poland is discussed in Beer 1873, 2, p. 307. At the last moment, Count Moszyński, a member of the Polish Delegation, adopted this standpoint and declared that the Republic was ready to accept Austria’s desire for a trade treaty, if it would only help ‘to achieve more bearable conditions for Poland from the Prussian side’ (see below, p. 228). Korzon 1897, 2, p. 30. See Korzon 1897, 3, pp. 140 et seq.; Beer 1873, 2, p. 309; and Szujski 1894, pp. 574–5 and 584.

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reason, the reform party regarded increasing the size of the army and bringing more money into the Treasury as its most important tasks after the treaties of cession. The abandonment of free trade proposals is understandable in these circumstances: new sources of income were sought, above all however, from the customs duties, so as to avoid affecting the nobility.93 Thus it came about that the Polish Deputation on the regulation of trade handed Reviczky a tariff proposal of a decidedly fiscal character. Under this, the export of all products, both local raw material and manufactured products (with the exception of cloth) would be subject to a fairly high export duty.94 In Poland, there was no concern about the fact that these measures would make trade relations between Galicia and Poland more difficult and have an extremely harmful impact on a region which had been tied to Poland by the closest possible bonds for centuries. On the contrary! With the general collapse of any sense of national solidarity, Galician fellow-citizens were abandoned to their fate. Galicia had after all now become an [Austrian] ‘imperial province’. Now that hopes for a free trade treaty with Prussia had been dashed and the Gdańsk route, so indispensable for Polish exports, was blocked by Prussian customs duties, the only concern was to extract the maximum customs income from trade with Galicia. Galicia, whose products were dependent on the Polish market for an outlet, would compensate for what Poland had suffered at the hands of Prussia.95 As Reviczky explained in a dispatch to Kaunitz, ‘In regard to the freedom from duties between Galicia and Poland, which is desirable, I have been unable to persuade the Delegation to give its consent, because it does not see any reciprocal advantage deriving for Poland but asserts rather that Galicia in its connection with Poland is approximately in the same situation as Poland towards Prussia, namely: it is a unique export route which it is almost impossible to bypass’.96 In this context, it is easy to understand Degelmann’s remark that in Poland, given the deficiency of state income, ‘the yield from the customs duties is desired more than the promotion of trade’.97

93 94

95

96 97

See Korzon 1897, 3, p. 173, and ii, pp. 146 et seq., and Szujsk 1894, p. 575. ‘Taxe de Denrée et Marchandises du Crû ou des Manufactures de Pologne à la sortie du Pays’. Ordered alphabetically, it indicated more than 350 items (Appended to a Note from Prince Kaunitz, dated 2 May 1774, hka, Commerz. Fasc. 57, ad 10 ex Junio 1774). Until the last moment, the Poles had continued to demand free trade from Prussia, and the Polish Treasury Commission was still making this demand on 6 February 1775, five weeks before the conclusion of the trade treaty (see Korzon 1897, 2, pp. 148 et seq.). Reviczky to Kaunitz, dated Warsaw 22 March 1775, hka, Commerz Fasc. 57, ad 10 ex Junio 1775, appendix 2. Degelmann’s report, Zakład imienia Ossolińskich 525, p. 424. Chotkowski also left out this passage!

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The above account of the events permits no doubt about the true state of affairs. Austria needed to break through both Prussian and Polish resistance and it is only thanks to Austria’s efforts that any trade treaty was made with Poland at all. This also explains the strange fact that this treaty, originally suggested by the Polish side, could only come to fruition after a long battle and an ultimatum from Reviczky. This result of our investigation is entirely in line with the arguments presented by Chłędowski: Whereas it was very important for Austria to conclude the trade treaty with the Republic very quickly, so as to make it possible for its Galician subjects to trade in grain and to provide a favourable outlet for its salt and for the manufactures of the Hereditary Lands, the predominant feeling in Warsaw was indifference. Initially the Republic had believed that its greatest interest lay in complete freedom of trade with the three Courts. [It] soon abandoned the original proposal, however, when in view of financial difficulties there was greater concerned about the income from customs duties than the future development of trade relations. Reviczky’s call for free trade was received with discomfort in Warsaw. There was deliberate delay in taking action on the trade treaty with Austria, in particular, as Prussia was also intriguing to postpone the conclusion of the treaties to the indefinite future. Reviczky alone put the whole of his energy into bringing about the conclusion of the treaty.98 Of course, this accurate account, written a generation ago, has not prevented other writers from repeatedly presenting matters in a completely different way. In Austria, it was not, at first, realised that the Polish point of view had changed. When the Polish tariff proposal arrived in Vienna, Prince Kaunitz could not understand at all how this communication could be harmonised with the Republic’s previous position. He believed that the purpose of the document was to list commodities under various headings: he disregarded the attached tariffs as a side-issue.99 He then started to be assailed by doubts and to ascribe

98 99

Chłędowski 1880b, p. 325. ‘In general I would regard this Polish communication as an answer to the question that was posed as to what kind of raw and manufactured products the Republic possessed. The list of tariffs appended to it appears to be an irrelevance, since it is not compatible

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blame for the Republic’s new position to Reviczky’s clumsy approach. With his customary caution, therefore, he expressed the desire to ‘place a man with practical experience in matters of trade in Warsaw for some time, to give Baron von Reviczky assistance … to take care of commercial details, which are not at all appropriately dealt with by an ambassador, and to gather useful information’. Since it was important that this attaché should possess ‘an understanding of the trading system and the connections between the states, and their trade and manufactures’, Count Kolowrat proposed as a candidate Court Councillor Degelmann,100 who was a member of the Commercial Council, and the Empress agreed with his choice.101 The next task was to provide Degelmann with a set of instructions on the basis of which a definitive treaty with Poland could be concluded. As Count Wrbna correctly pointed out, it was extremely regrettable that Reviczky had to consult Vienna over every little matter and then wait for months until an answer arrived. Further delay should be avoided, especially as it would be impermissible to ‘allow the Prussians to forestall us and bar the way to all advantageous commercial transactions in the future, perhaps for ever’.102 Instructions were only necessary with regard to import duties. As far as export and transit duties were concerned, they had already been fixed at 5/13 percent in Galicia and at ¼ percent in the Hereditary Lands. No exceptions could nor would be made for Poland and it was therefore ‘only necessary to demand full reciprocity from the Republic, without going into specific details’.103 The President of the Court Chancellery,104 Count Kolowrat, took the same view: ‘I see the current work for a trade treaty with Poland as a matter of the greatest importance, since there depends upon its results the welfare or the misery of several of our provinces and, above all the Kingdom of Galicia and Lodomeria’.105

100 101 102 103 104

105

with the original proposal to establish a reciprocal trade treaty entirely free of customs duties’ (Kaunitz to the Galician Court Deputation, 2 May 1774, hka, Commerz Fasc. 57, ad 10 ex Junio 1774). President’s Report of 11 July 1774, hka, Commerz Fasc. 57, ad 25 ex Julio 1774. Resolution of 16 July 1774: ‘Degelmann is to be sent to Warsaw to rectify this state of affairs’. Extract from the minutes of the Galician Court Deputation, 20 June 1774, hka, Commerz Fasc. 57, ad 25 ex Julio 1774. Statement by the Galician Court Deputation, 14 May 1774, hka, Commerz Fasc. 57, ad 25 ex Julio 1774. [In fact, Kolowrat was at this time the President of the Treasury and only later became President of the Court Chancellery, in 1782, when it took over responsibility for financial affairs and became the United Court Offices.] Report on 11 July 1774, hka, Commerz. Fasc. 57, ad 25 ex Julio 1774.

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In the autumn of 1774, therefore, Degelmann set out for Warsaw.106 On his way, he passed through Lviv, where he was planning to discuss the matter once more with the Governor of the Province, Count [Heinrich] Auersperg. In the session of the Governor’s Council, it was stressed once again that complete free trade was desired for Galicia.107 At the same time, the fear was expressed that the Republic would not want to accept this now, since transit duties formed a large part of its revenue. If that was the case, at least an attempt should be made to reduce Polish transit duties as much as possible, to facilitate Galicia’s exports. Having arrived in Warsaw, Degelmann proceeded to devote himself to the study of the country’s economic conditions. It is apparent from his report, drawn up in January 1775 and mentioned above, that he now abandoned his prohibitionist point of view in relation Galicia. Instead, he became convinced of the need for complete freedom of trade. This made no difference to the fate of the trade treaty, however. When Degelmann was writing his report, the way matters would stand in Warsaw could already be foreseen. Although the report was valuable in providing information about the state of affairs in Poland, the actual course of developments there had already rendered Degelmann’s plea for a free trade treaty out of date.

5

Before the Conclusion of the Treaty108

The Polish Delegation was expected to wind up at the end of February 1775. After this, the Polish Parliament was to re-assemble. But the issue of the trade treaties was still not placed on the agenda. Reviczky was unable to overcome the aversion of the delegates to his call for complete free trade. His embarrassment was all the greater in that [the Russian Ambassador to Poland] Count [Otto Magnus von] Stackelberg had received positive instructions from the Court in Saint Petersburg to bring the discussion of Polish matters to a conclusion and not to permit any fresh extension of the negotiations. Stackelberg in fact presented the Polish Delegation with the draft of a trade agreement as early as the beginning of February.

106 107 108

Chotkowski’s assertion that Degelmann stayed in Warsaw throughout the year 1774 is incorrect (Chotkowski 1897, p. 33). See Chłędowski 1880b, p. 327. The following is according to the file hka, Commerz. Fasc. 57, ad 10 ex Junio 1775.

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Reviczky now began to press Vienna to give him binding instructions, in case Poland did not agree to conclude a treaty merely with Galicia. Prince Kaunitz used his influence in the same direction. After all, he had advocated the issue of such instructions a year earlier.109 Now he again pointed to the damage that would be done ‘to the Galician export and transit trade in general, and in particular to the export of Wieliczka and Sambora salt’ if no treaty were concluded and the Republic retained a free hand to impose arbitrary duties on Galician goods.110 The Council of State now met in great haste. Baron von Binder called for ‘a missive to be sent Baron Reviczky, by tomorrow at the latest’. On the actual issue, Count [Karl Friedrich von] Hatzfeld presented the Empress with a proposal for a graduated series of measures, which would serve as general instructions for Baron Reviczky, at the same time. This envisaged different possibilities which could arise from the negotiations and formulated three levels of advantages that could be offered to the Republic.111 The essential points of this important instruction are: 1)

109 110 111

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First, that the commercial treaty with the Republic should not cover all the Hereditary Lands but Galicia alone. Second, that in Galicia complete freedom from import, export and transit duties should be granted to home-produced Polish manufactures and raw materials, in return for which the Republic will concede the same to Galician manufactures and products in Poland, with the result that unrestricted freedom of trade between the Republic and the Kingdom of Galicia will be established with regard to the domestic products of both parties.112 This removal of import duties affects only those imposts which every foreign commodity would otherwise have to pay when imported into Galicia; because those imposts which domestic products

See above, p. 216. Report of 16 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775. Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 7. Also see appendix 9 of the document, which contains an identical list of ‘points which the minister at present in Warsaw, Baron Reviczky, should follow in his commercial negotiations with the Republic of Poland’. Baron von Binder, indeed, wanted completely free trade between Poland and the other Hereditary Lands as well. Everyone else present rejected this idea, pointing to the tremendous loss of income that would result, but a much stronger motive was their fear that the Hereditary Lands would be flooded by a mass of foreign goods, not Polish but described as such.

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also have to pay on consumption, and which should actually be regarded as excises, should continue to be paid on Polish commodities. Reviczky is instructed to present this proposal to the Delegation first and to exert all his efforts to bring about its acceptance. If, however, the Republic is not prepared to reach agreement on Galicia alone, but demands some advantages for goods which are to be imported into, or exported from, the other Hereditary Lands, Baron Reviczky must then promise, thirdly, that the products of the Republic (on condition of reciprocity) would be regarded and treated as products of a most-favoured nation. Should the Republic not be satisfied with this general declaration and press for more specific details of this favourable treatment, he should declare, fourthly, that an import duty of only 5 percent would be charged on Polish natural and manufactured products,113 in return for reciprocal concessions, and on condition that the Republic provides a guarantee that goods imported into the Hereditary Lands are genuinely Polish.114

It can be seen that these instructions are entirely in accord with Emperor Joseph’s views. If the Republic was not prepared to make a trade treaty with Galicia alone, Polish goods would be charged moderate customs duties in the Austrian Hereditary Lands, but freedom of trade would in any case continue to exist between Poland and Galicia. The instructions were approved on the same day by Maria Theresia115 and were sent off to Warsaw by special courier on the following day. Three weeks later, their content was again impressed upon Reviczky.116

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Only in the Hereditary Lands. For Galicia completely free trade, indicated in paragraph i, would exist in any case. State Councillors Gebler and Löhr and also Court Councillor Degelmann, proposed ‘that Polish goods in the Hereditary Lands should always be treated, as regards import duties, in the same way as those imported from Galicia’. Count Hatzfeld and all the other members of the Council of State found this proposal too vague, since no-one knew what kind of customs duties would be imposed in the future on Galician goods imported into the Hereditary Lands. ‘Agreed, but take care to ensure there is freedom of trade for salt’. ‘One of the most important points continues to be the explicit stipulation that Galician salt should never bear a higher duty than any other foreign salt’ (Communication of 11 March 1775, in Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 8).

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In the meantime, the situation in Warsaw started to become clearer. Poland rejected a trade treaty limited to Galicia and demanded, as Reviczky117 reported, ‘a trade treaty which would extend to all the Hereditary Lands without exception’. In response, a final instruction was immediately sent to him, dated 15 March 1775.118 This was, in practice, just a repetition of the general instructions of 18 February 1775, but expressed in clearer language. What is interesting about them, however, is that they provide yet another proof that the government in Vienna adhered to Emperor Joseph’s standpoint to the last possible moment. ‘It is important’, wrote Kaunitz to Reviczky, that … what is to be stipulated for Galicia does not become confused with the stipulation for the other Hereditary Lands. Complete freedom from duties between Galicia and the Republic should therefore be clearly and plainly expressed in a separate article of the treaty. This complete freedom from tariffs between Galicia and Poland is not only best for Galicia’s trade and for the other internal affairs of the Province, it also favours the expansion of Galicia’s salt exports. Your excellency is therefore requested to take the greatest care to stipulate completely free trade between Galicia and Poland and to leave no room for doubt or ambiguity in expressing this. Since the Republic has itself urgently proposed that trade between the two states should be free of duty, I do not doubt that the Polish Delegation will be inclined to accept for a part of the country, namely Galicia, what we were unable to concede for the whole. This instruction unfortunately arrived in Warsaw too late,119 a circumstance that led Reviczky, who was conducting the negotiations by himself after Degelmann’s departure, to make a mistake which had far-reaching consequences. The Delegation was in a hurry to conclude the negotiations. On 8 March the Russian Ambassador Stackelberg120 suddenly and unexpectedly appeared and presented the Delegation with his draft trade treaty. He had it read out as an ultimatum and induced the 117 118 119 120

Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 3. Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 3. It is dated 15 March, the day the trade treaty was signed there. Reviczky’s dispatch to Kaunitz, dated Warsaw, 15 March 1775, Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 4.

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Bishop of Vilnius, who headed the Lithuanian Delegation, to praise it as a set of provisions very advantageous to the Grand Duchy, with the result that the Russian project was formally approved and signed in the very same sitting without any changes. Reviczky was now himself compelled to come forward with a draft treaty. He did this the very next day (9 March) and similarly couched it in the form of an ultimatum. But the distinction desired by Vienna between Galicia and the other Hereditary Lands was not mentioned in it. No reason for this omission has been discovered. Perhaps Reviczky misunderstood his instructions; perhaps he feared that the Republic would not accept any special provision for Galicia. Whatever the explanation, Reviczky’s proposal included, along with a 1 percent transit duty and 5/12 percent export duty, a single import duty of 5 percent for the whole of the Hereditary Lands, including Galicia.121 In Poland, where free of trade was not desired, there was actually great satisfaction with this. It had to be borne in mind, however, that the draft Prussian trade treaty, alongside a 12 percent transit duty directly imposed on Polish trade, included an import duty of only 4 percent. This would give the King of Prussia the opportunity to claim that out of the proposals from the three Courts, his was the most favourable for the Republic, since ‘even the duty on imports into Prussia is not set higher than 4 percent’. In view of this, ‘King Stanisław August and the delegates insisted very strongly that Reviczky make at least one change in his proposal, namely to reduce the import duty from 5 percent to 4 percent, to deprive the King of Prussia of this pretext’.122 After long resistance, Reviczky gave way on this point. As compensation, however, he demanded that Galician salt and Hungarian wine be given favourable treatment. He gave a specific reason for this: ‘The Russian treaty concedes complete freedom from duty on salt imported from Riga up the Dvina into Lithuania and the old salt duty has only been retained for salt arriving by the overland route’. Likewise, all salt to be shipped down the Vistula should be exempt from duties of every kind. The salt which comes from Galicia to Poland not on the Vistula but by the overland route should not be burdened with any duty 121 122

On this, see below, p. 229, note. Reviczky also made a number of errors later, during the negotiations over the demarcation line. See Beer 1873, 2, p. 302; and below, p. 235, note. Reviczky to Kaunitz, 15 March 1775, dated Warsaw, 15 March 1775, Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 4.

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higher than … the moderate impost which would be paid in Lithuania. The highest salt duty should therefore not be above two Polish guilders on a Riga ton. In short, Reviczky demanded for Austria the same level of duty as had been conceded to Russia in Lithuania. In the case of Hungarian wine, however, he called for the import duty to be reduced from 2 ducats to ½ ducat per barrel. On the Polish side, these demands were regarded as excessive compensation for the reduction of import duty by 1 percent, earlier agreed by Reviczky. There was ‘a great difference’ between the Dvina trade and the Vistula trade, it was said. Only an insignificant quantity of salt travelled up the Dvina to Lithuania, whereas ‘almost all the Wieliczka salt was transported to Poland along the Vistula’. Moreover, the salt on the Vistula went downstream, whereas the opposite was the case on the Dvina, so that the flow of the river was itself an obstacle to the import trade. Freedom from duties on the Vistula would mean a great loss of income for the Polish Treasury. In relation to Hungarian wine, it was admitted that the Polish import duties were considerable. But it was also pointed out that the customs receipts were the only benefit Poland gained from the substantial sums of money leaving the country every year and that this tariff ‘held in check to some extent the outflow of money from Poland for an item which was not a basic necessity’. Eventually, however, the representatives of the Delegation gave way and conceded the inclusion of the two points in Reviczky’s draft treaty, but without giving any guarantee that the Delegation itself would actually vote in favour of it. On 11 March the ultimatum was in fact placed [by Reviczky] before the Polish Delegation.123 When the Delegation met, ‘Prince August Sułkowski tried his best to praise Reviczky’s draft as being very acceptable from the point of view of Poland’s commerce. His words found few supporters, however, and a debate ensued which lasted for several hours’. This resistance, it seems, was supported by secret Russian influence, as the Russians hoped to be able to supply the Republic with their own salt sent through Lithuania. The sharpest criticism of the treaty came from Count [August Fryderyk] Moszyński, the most important member of the Treasury Commission. He declared that

123

This did not settle the question of the duties on Hungarian wine. Even after the trade treaty had been concluded, there were serious disagreements between Austria and Poland on the subject; see below, pp. 243–246.

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it is only from the point of view of Austria’s trade that the treaty is of advantage. It would, he said, lead to a painful reduction in Polish customs income. The reciprocity of which so much had been made would be no use to Poland, given the negative state of its balance of trade. As far as salt was concerned, he remarked that the Delegation had reckoned on an income of 2 to 3 million florins from the import duty when working out the new income of the country and set the crown’s expenditure accordingly. If salt was transported down the Vistula without bearing any duty, this stream of government income would be almost completely obliterated and an appreciable deficit in the resources allocated to cover the crown’s expenditure would be manifest. The situation with the duty on wine was no different. ‘He closed his speech with the reflection that if a trade treaty was not based on any real reciprocal benefits, Poland would do better to make no trade agreement at all with Austria, instead leaving both states with a free hand to regulate their duties, tolls and excises as they thought fit, unless it was thought that the example of the two imperial and royal Courts would induce the Prussian side to offer Poland more tolerable conditions, though there has been little hope of this to date’. ‘These objections’, remarked Reviczky about this speech, ‘made such an impression on the delegates that almost all of them declared that they would not make any treaty with Austria’.124 In this situation, Reviczky reminded the Delegation that the first request for a trade treaty by no means came from Austria. It was rather included in the treaty of cession at the demand of the Polish delegates themselves. The Delegation continued to be free to choose either to conclude no trade treaty at all or to accept the treaty in the form in which it had been laid before them. The salt question was a different matter, however. He was not prepared to allow his Court to be treated worse than the others. His demand for free transport of salt down the Vistula must be accepted. ‘This commodity is in competition with others and Austria must therefore receive the same advantages as were conceded to Russia, so Poland must concede to Austria the same advantages as

124

Reviczky to Kaunitz, 15 March 1775, dated Warsaw, 15 March 1775, Report of 18 February 1775, quoted in hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 4.

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Lithuania concedes to Russia. In a word, he can no longer make any change to his ultimatum in this respect’. Despite this declaration by Reviczky, resistance continued for some time, until Baron Stackelberg came to his assistance,125 pointing to the short period left for the Delegation to make its decision. His intervention had the effect that Austria’s ultimatum was accepted. Stackelberg congratulated Reviczky for achieving his demands. ‘He would never have imagined that they would oppose Austria’s right to duty-free transport on the Vistula, which was so important for the marketing of Galicia’s salt’. This was the final conclusion of the efforts to secure an Austro-Polish trade treaty, which had continued for almost two years. On 22 March 1775, when Kaunitz received the dispatch from a courier of the Papal Nuncio in Warsaw that the trade treaty had been signed on 15 March, he immediately reported to the Empress.126 He also expressed his astonishment that ‘the instruction given to Reviczky to stipulate complete freedom of trade between Galicia and Poland … was ignored in the final document and that Galicia was tacitly treated as identical with the other Hereditary Lands with regard to import duty, export duty and transit duty’. But he comforted himself with the thought that ‘Reviczky had his way over salt, the most important item of Galician trade’ and, in other respects, he also hoped that the treaty would offer great advantages both to Galicia and to the Hereditary Lands.127

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Similarly, Beer 1898, p. 97. This double game of Russian diplomacy, by which the Polish Delegation was secretly encouraged to resist Austria’s demands, while the Russians officially took a position in favour of the same demands, was by no means an isolated phenomenon. Report of 22 March 1775, appendix 11, hka, Commerz Fasc. 57, ad 10 ex Junio 1775. A number of interesting details in the above account could certainly have been clarified more fully on the basis of the records of the former Austrian Embassy in Warsaw. Unfortunately they were destroyed. On 7 June 1791, during the popular uprising of that year in Warsaw, Thugut instructed the representative of Austria at that time, de Caché, to destroy ‘all correspondence from the arrival of Count Reviczky up to the present moment’ (Vivenot and Zeissberg 1885, p. 257).

chapter 7

The Trade Treaty of 15 March 1775. Its Ratification. The Tariff of 1 October 1776 Three trade treaties were concluded simultaneously on 15 March 1775. The one concluded with Prussia dealt a practically mortal blow to Polish trade.1 The Austro-Polish treaty, on the other hand, appears in a quite different light.2 In terms of its content, it covered only the domestic products of the two signatories. ‘Duties on all foreign products and manufactures can therefore be increased or reduced at will’. In both Galicia and the Hereditary Lands, import duty was set at 4 percent of the value, in other words 22/5 kreutzers per florin, and could only be raised once.3 Export duty was set at 5/12 percent and transit duty at 1 percent (Articles ii and v), and in every case there would be complete and reciprocal equality of treatment. After payment of these duties prescribed by the treaty, Polish goods were not obliged to pay any further duties, whether imposed by towns, manors or private individuals, apart from ‘road and bridge tolls, and transit charges’, since these were also imposed on Austrian products, produced at home.4 For the convenience of merchants, customs clearance and inspection was not only permitted at the border but also at the destination, to avoid any delay or unpacking of goods. An easier inspection procedure was agreed on both sides.5 The merchant

1 Korzon 1897, 2, pp. 35–42. 2 ‘Acte séparé contenent tout ce qui regarde le commerce entre les deux Etats, de la même date que le précédent’, in Neumann 1855, pp. 169–72. 3 ‘Il ests convenu réciproquement que tout commerçant qui aura payé le droit de Tarif d’importation dans un seul de ces entroits, ne pourra plus être oblige à le payer une seconde fois dans un aucun autre’ (‘Acte séparé …’, article i, in Neumann 1855, p. 170). [‘It is reciprocally agreed that every merchant who has paid the import tariff in one place will not be obliged for any reason whatever to pay a second time in another place’.] 4 ‘… les péages ordinaires, pour l’entretien des grands chemins, tels que les payent les sujects même de Sa M. l’Impératrice Riene … Il y aura une réciprocité parfait à cet égard en Pologne’ (‘Acte séparé …’, articles v and viii, in Neumann 1855, pp. 170, 171). [‘… the ordinary tolls for the upkeep of the major roads, which are also paid by the subjects of her majesty the QueenEmpress … Completely reciprocal arrangements will operate in this regard in Poland’.] 5 ‘… Toutes les marchandises … ne seront point sujettes à être visitées ni leurs possesseurs au serment hormis au cas d’une fraude manifeste’ (‘Acte séparé …’, article v, Neumann 1855, p. 170). [‘… Not … all commodities will be subject to examination nor will their owners be obliged to take an oath except in cases of manifest fraud’.]

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_014

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was entirely free to decide whether to pay the duty in ducats or in the silver currency circulating in the country in question (Article xi). Currency conversion charges were set at a low level. Extremely important was the agreement that a detailed tariff of duties payable would be drawn up, ‘specifying the price, the weight, the measurements or the number of commodities according to their different qualities, to obviate any difficulty in interpretation’, in order to prevent arbitrary behaviour by customs officials in valuing goods and calculating duty payable. On the other hand, all prohibitions on imports and exports were retained, both those made before the conclusion of the treaty, by the Edict of 14 October 1774 and possible future prohibitions (Article iv), provided that they were not directed exclusively against Poland but were general, against all foreign states.6 Apart from these general provisions about customs duties, the treaty contained a number of more specific but not less important, elements: 1) there was an agreement that goods carried on stretches of rivers common to both countries would be entirely free of duty and would only become liable to duty when they were unloaded (Article vii). 2) Complete freedom to travel was guaranteed to merchants of both countries. They were free to come to Austria at any time to deal with commercial matters. This concession was by no means universally granted at the time, for mercantilist policy aimed rather at the exclusion of foreign merchants and they were granted the right of entry at most during the free fairs. This was the rule in Austria and continued to be even under the tariff regulation of 2 January 1788 (paragraph 44).7 3) It was mutually agreed that rapid legal protection would be provided to merchants and there would be an accelerated procedure for settling disputes among them on the model of the procedure for currency matters (Article ix). Merchants of both countries were guaranteed the right of free disposal over their property in the foreign country in question, so that their estates would be delivered to their heirs after the payment of the customary 10 percent which the state was entitled to deduct.

6 Committee Minutes for 3 April 1775, hka, Commerz. Fasc. 57, ad 10 ex Junio 1775. This article of the treaty held great future dangers for Poland, since Austria would only be bound to keep to it in relation to Poland as long as it retained the system of protection introduced in 1775. After the tariff of 1784 prohibitions directed against foreign countries started to increase and Austria could apply them to Poland as well – notwithstanding the trade treaty with that country, and indeed without breaching it – a circumstance which the Polish politicians engaged in the negotiations of 1774–75 had not foreseen. 7 See Kopetz 1829–30, 2, section 508: On the Movement of Foreign Merchants in the Austrian State.

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(Article xii.)8 Finally, 4) the question of salt, which was so important to both the contracting parties, was settled by Article vi, which determined the level of duty and also provided that the salt trade should not become a monopoly in Poland but should take place according to the principle of free competition, whereby everyone must be free to choose the source they drew on to satisfy their salt requirements. Salt freighted on the Vistula was proclaimed free of customs duties and excises, and only the salt transported on wheels would in future be subject to the same duties as had prevailed until then in Lithuania.9 This article meant that Austria’s wishes had been completely fulfilled and Stackelberg’s congratulations to Reviczky on the subject were thus entirely justified. It is true that the trade treaty with Prussia also contained an identical provision, since, as Reviczky reported to Kaunitz, ‘Herr Benoît has copied my salt article word for word in drawing up his trade treaty’. And, he added, with a certain degree of self-satisfaction: ‘There is a considerable difference, however, between the two situations, because, even leaving aside the inferior quality of Prussian salt and the disproportion between prices, Prussian salt would find it more difficult to compete with Galician salt, since it cannot be brought into Poland in any other way than by water, up the Vistula, and against the flow of the river’.10 In fact Baron Reviczky had gained a brilliant victory over Benoît on this point. On the whole, the treaty turned out to be advantageous for the Republic, even though it was far removed from the free trade draft drawn up by Emperor Joseph. The treaty Poland concluded with Prussia was incomparably worse. Admittedly, in the Prussian treaty the reciprocal import duty was set at only 2 percent, as against 4 percent in the Austrian treaty. This duty on the direct exchange between Polish and Prussian products was entirely without significance, however, in comparison with the transit duty, which was much more important for Polish trade. Every commodity passing through Prussia to Poland or coming from Poland through Prussia had to pay a duty of at least 12 percent

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‘… leurs marchandises, effets et tout ce qu’ils pourront laisser, seront remis sans en rien détouner, ou retenir sur quittance à leurs Compagnons, Parens etc.’. [‘… their goods, effects and everything they might leave behind, will be either returned without the removal of any item, or retained with the provision of a receipt to their associates, parents etc.’.] ‘… non payera que ceux qui ont été usité jusqu’ici dans le Grand Duché de Lithuanie, selon les différents qualiteés de sel, et l’on établira ces droits par quintal de cent livres de Varsovie’. [‘They will only pay those duties customary until now in the Grand Duchy of Lithuania, according to the various qualities of salt and they will be set at 100 Warsaw pounds for each quintal’.] Reviczky to Kaunitz, dated Warsaw 22 March 1775, hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 2.

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and, in fact, sometimes the percentages reached 24, 30, 50 and more, whereas the transit duty prescribed in the Austrian treaty hardly amounted to 1 percent and had been abolished completely on stretches of river common to both countries, first and foremost on the Vistula! It was no wonder, then, that after the initial agitation had died down and been replaced by a calm examination of what had been achieved, in Poland only the Prussian tariff was regarded as a real danger to trade, while Austria did not give rise to anxiety.11 This view is also shared by a modern scholar, who writes: ‘No intention either to destroy or to damage Polish trade is evident in this [Austrian] treaty’.12 The treaty was even more advantageous from the point of view of Galician interests than it was for Poland. After all, before the treaty was made Galician products had to pay 10 to 12 percent import duty, when entering Poland, and 14 percent transit duty, when passing through the country! The reduction of these duties to 4 percent and 1 percent respectively removed a tremendous burden from trade between the two in that era of prohibition. At that time, trade between France and England was blocked by a strict system of prohibition and even the Anglo-French Trade Treaty of 1786 only replaced earlier prohibitions with tariffs of 10, 12 and 15 percent!13 The complete freedom of trade proposed by Emperor Joseph for Galicia as an exporting province would have been much more useful, certainly. But, in view of Polish resistance to the idea, it could not be achieved. The agreement on duty-free transport down the Vistula did of course compensate for this failure to a considerable extent. At that time the Vistula was Galicia’s most important export route for cereals, wood, linen, potash and other products destined for the Gdańsk market. The Vistula route passed through Polish territory for long stretches, right down to Inowrocław and Toruń. These great advantages were admittedly very much reduced by the exorbitant Prussian duties which had to be paid a few miles further down-stream, at Fordon. It was hoped, at the time, that it would soon be possible to remove this obstacle. Free trade on the Polish stretch of the Vistula was only the first step taken by the Austrian government in its effort to achieve the same on the Prussian stretch. 11

12 13

The anonymous writer whose work is printed in Łoyko’s collection, Archiwum Książąt Czartoryskich, 1081, pp. 327 and 421), gives a list of ‘Rzeczy których taxa jest nadto wyciągniona w Taryffach Pruskiey, Austryackiey y nowey Polskiey’. [‘items from which excessive sums are extracted under the tariffs of Prussia, Austria and New Poland’] The author seems to have drawn on official sources. Korzon 1897, 2, p. 51. See the section on trade treaties in Roscher 1881; Levasseur 1911, pp. 540 et seq.; Necker 1784, 2, pp. 165–224; and Muret 1905.

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Viewed as a whole, therefore, the Austro-Polish Trade Treaty appears as an expression of the new [Galician] regime’s forward-looking concern to secure markets for Galicia’s agricultural and industrial products. The raising of Galicia’s economic level was in turn intended to neutralise the painful consequences of the policy of partitioning Poland.14 The treaty had hardly been concluded when Kaunitz started to press for its immediate ratification and implementation. ‘It will not help at all’, he stated, ‘if the advantages stipulated in the treaty are not actively … used, in good time, and effective care is not taken to identify how and in which principal branches a trade surplus with Poland can be initiated; the obstacles which need to be cleared away; and which means of support are to be selected’. He therefore drew the importance of the matter to the notice of the Empress, although it was not within his area of responsibility, ‘as, with our obviously positive balance of trade with Poland, we have far more reason than the Republic to concern ourselves with the rapid execution of this trade treaty’.15 The Empress ordered that the matter be dealt with at a special meeting of the Council of State, to which Court Councillors Degelmann and Raab of the Commercial Council were summoned and the former should deliver ‘a proper report on Polish matters’ to it. The session took place on 3 April. After Degelmann’s long report, the question of ‘whether the treaty with its present content should … be ratified’ was posed and, without lengthy debate, answered in the affirmative. What was hoped would emerge from the treaty is apparent in the Council of State’s belief that ‘this treaty, appropriately used, will provide a natural opportunity to turn the greater part of the Polish trade in the direction of the Austrian provinces’.16 These wishes and hopes were also expressed in Poland, as we will be demonstrated below. The only point on which there was any debate was the salt question. As we have seen, the treaty refers only to salt exported to Poland. The question now arose of how salt exported from Poland to Austria should be treated? It is true that Poland did not possess any surplus of salt. But Galician salt was sold there

14 15

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The Austrian authorities repeatedly confirmed the beneficent influence of this treaty on Galicia. Chłędowski 1880b, p. 320, makes the same judgement. Report of 17 March 1775, hka, Commerz. Fasc. 57, ad 10 ex Junio 1775, appendix 10. On the Polish side, ratification took place in the Parliament session of 11 April 1775, Szujski 1894, p. 581. ‘Protokollum commissionis habitae die 3tia Aprlis 1775’, hka, Commerz. Fasc. 57, ad 10 ex Junio 1775.

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at the moderate price of 1 florin 54 kreutzers, while in Galicia itself it was sold at 4 florins. This opened the possibility and the danger that it would be smuggled back from Poland into Galicia. It was also feared that Prussian salt and indeed foreign salt in general would be smuggled into Galicia. So it was decided to completely prohibit the importation of salt from Poland into the Province. In any case, the importation of salt into the other Hereditary Lands was already prohibited. The Empress ratified the treaty in the middle of April 1775. The relevant Resolution was that ‘I consent to the ratification. The effective introduction of the provisions is to be accelerated, so that the hoped-for essential advantages from this trade treaty, so ably concluded by Reviczky, can be enjoyed by the state as soon as possible’.17 As regards salt, in particular, it should be considered and Auersperg should be consulted about whether publicly imposing a prohibition might lead the Republic to retaliate and whether the feared reduction in income could not be effectively prevented in some other way. After ratification, the two states were obliged to institute the tariffs prescribed in the first article of the treaty. In Vienna, this task was given to the vice-president of the Management of the Bank Deputation, Count Cobenzl and Court Councillor Gruber. They presented their report as early as 29 May 1775. It was entirely in line with the provisions of the treaty.18 One very important provision was that goods – largely raw materials – which had been charged less than 4 percent in the Austrian General Tariff of 1775 should enjoy the same benefit when they came from Poland, because the Republic should in no circumstance be treated worse than other foreign countries. At the beginning of August, the Cobenzl-Gruber report and a draft edict dealing with commodities prohibited in Austria were sent by the Court Chancellery to Reviczky in Warsaw. There, no particular hurry was apparent. The draft Polish tariff was not handed to Reviczky until March 1776 and it arrived in Vienna in the second half of April.

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hka, Commerz. Fasc. 57, ad 10 ex Junio 1775. Baron Reviczky was appointed to the responsible but uncomfortable post of Austrian ambassador in Berlin in November 1779. In April 1785, he was made ambassador in London. Here he showed that he was not always capable of fulfilling his task. In December 1789 Joseph ii expressed his dissatisfaction about ‘Reviczky’s limited ability to negotiate’ (see Beer and Fiedler 1901, 1, p. xxi). ‘Protokollum commissionis habitae die 29 Mai 1775’, hka, Commerz. Fasc. 57, ad 8 ex Julio 1775.

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In the 27 April 1776 session of the Council of State,19 the Polish draft was accepted in general terms. But one point in the Polish draft provided striking evidence of the major shift in opinion about the treaty with Austria, which had occurred in Poland over the previous year. I have already mentioned the measured arguments of an anonymous writer on this question.20 Similar views were almost universal in leading Polish circles. There was now awareness of the possibility, created by the treaty, of procuring through Austria numerous items which had previously been obtained with great difficulty from Hamburg or France via Prussia.21 This explains why, in its draft tariff proposal, the Republic included products such as cocoa, coffee, cinnamon, spices and dyestuffs, French and other foreign wines and so on, although the treaty itself was limited to the domestic products of the two parties. ‘The evident advantage to be gained by the provinces on this side was also elaborated during this session of the Council of State; and the reason for such a procedure can be guessed at: the Republic hopes to obtain certain commodities more cheaply and with greater ease through the Hereditary Lands than through Gdańsk and the Prussian part of Poland’. For this reason, the Council of State decided not to object to the action of the Polish government, although it contravened the trade treaty. It simply considered the question of whether there was reason to fear a danger to the Monarchy if the Republic proceeded not to obtain the goods in question from Austria but rather, on the contrary, relied on reciprocal rights to export them to Austria at a moderate tariff. The Council soon abandoned this fear: ‘However much the whole Treaty is based on reciprocity, this reciprocity cannot be demanded in respect of more than what the content of the Treaty itself specifies’. On 1 October 1776 the tariff was published in Vienna and on 19 November in Galicia. It did not enter into force, however, until 1 February 1777.22

19 20 21 22

‘Protokollum commissionis habitae die 27 Aprilis 1776 sub. Praesidio Com. À Hatzfeld’, hka, Commerz. Fasc. 57, ad 2 ex Junio 1776. See above, p. 233, note. See above, pp. 164 and 215. Report of the Galician Court Chancellery, 5 December 1776, ami, v G 7/2940 ad 73 ex December 1776. See Habsburg 1776; as also ‘Patent. Die zu Folge des geschlossenen Kommerzien-Traktat mit der Republik Pohlen entworfene Tariff …’. Edicta 1776, pp. 197–200. In the tariff, which lists the items alphabetically, the duties are, with few exceptions, reckoned according to size, weight or item, so as to exclude any chicanery on the part of the customs officials. The practice of listing Austrian tariffs alphabetically continued until the years 1851 and 1853, when a new, systematic arrangement was adopted.

chapter 8

Supplementary Provisions 1

The Ukrainian Transit Trade

The path of the transit trade from Ukraine to Warsaw and Lublin ran across the north-eastern part of Galicia. It entered the Province at Kryłów and Ustyluh or Horodło and it left it only a few miles later, at Dubienka (later at Uchanie). This was the only possible route, in view of the large stretches of marshland which extended on the Polish side, and it was frequented by a not inconsiderable amount of transit traffic, carrying cereals, potash, tallow, fat, livestock etc., in spite of the double set of border posts (on entry and exit) which barred the route across this short stretch of the journey. This situation changed a year after the conclusion of the trade treaty, when Dubienka reverted to Poland as a result of the Demarcation Agreement of 9 February 1776. It was now easier and less time-consuming to pass the Austrian customs posts but it was no longer unconditionally necessary, as there was now another way into Polish territory via Dubienka. The large landowners of Ukraine now asked their carriers to take the latter route, even though it was three to four miles longer, in order to save having to pay the customs duties levied at the Austrian border. The consequences were soon apparent. The amount of transit traffic on the Galician stretch of the road quickly shrank, the town of Horodło was completely impoverished and the Galician Customs Office in Ustyluh painfully observed the four-in-hand carts which now passed over the Polish border at the Bug River. Every day, throughout summer, 50, 100 or even 160 of these vehicles could be counted. The annual freight traffic was estimated at least 40,000 centner, not counting the large vehicles which returned empty. At the beginning of August 1778, the Ukrainian carriers made a proposal to the Uściług Customs Office: they were ready to take the shorter and better Galician route and to pay the transit duty themselves, if only it could be set at a more moderate level.1 This proposal was energetically supported by the

1 Only the duty on grain was tolerable (1 kreutzer per Metz). As it was not, however, worth transporting grain alone, reductions were desired in the transit duty etc. per centner, as follows: potash from 6 to 3 kreutzers, fat from 10 to 5 kreutzers, tallow from 8 to 4 kreutzers; reduction in the road toll from 2 to 1 kreutzer, and transit toll on each team of oxen from

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Governor’s Office.2 The purpose of the high transit duties, the latter asserted, was to secure the domestic market for domestic products by preventing foreign competition. There was no reason to apply this measure to Ukrainian products which were on their way through Galicia to Warsaw and Lublin. Moreover, to gain this flow of goods in transit for Galicia would benefit both the Treasury3 and all the Galician villages in the area, because they would be able to sell all sorts of products to the people passing through. In any case, to guard against any reduction in income from import duties, the vehicles in transit could be escorted by customs officials, since it was only a short stretch, of three to four miles. On 21 November 1778, therefore, a Court Decree was issued ‘approving the reduction of the transit duties on Ukrainian goods’.4 On the Polish side of the border, however, they were quite capable of countering these measures, as Joseph ii had the opportunity to observe in 1780 during his journey through Galicia. While staying in Lviv, he had this to say: ‘Notwithstanding the low duties charged on our side of the border, the transit trade from Ukraine, Volyn and Podillia has to pay twice the amount in Poland and it therefore, for the most part, takes a route around the border of the Province’.5

2

Border Traffic

Specific provisions regulating border traffic between neighbouring states are a necessary component in modern trade treaties. The facilitation of movement by the inhabitants of border districts (usually to a distance of 10 kilometres on

2 3 4

5

2½ to 1½ kreutzers; finally, road tolls etc. to be charged only on entry, at 4 kreutzers for each draught animal. Report of Count Auersperg, 3 October 1778, ami, v G 7/2940 ad 31 ex Novembri 1778. Calculated at an average of 5 kreutzers per centner, the transit duties would bring in 4,000 florins, not counting the incidental charges and duties paid on draught animal. ami, v G 7/2940 ad 31 ex Novembri 1778 and hka, Mautwesen in Galizien, Fasc. 7 G, ad 236 ex Novembri 1778. The great concern the Austrian authorities had for Galician trade and the rapidity with which eventual obstacles to that trade were cleared away are demonstrated by the following chronology of events: the proposal of the Ukrainian carriers dates from the beginning of August 1778; the report of the Uściług Customs Office to the Zamość Customs Receipts Inspectorate is dated 22 August; the report of the latter to the Lviv Customs Administration is dated 29 August; the report of the Customs Administration to the Governor’s Office is dated 5 September; the report from the Governor’s Office is dated 3 October; the whole matter was finally settled by the Court Decree of 21 November 1778, after an administrative process of scarcely three months. Other, similar examples are not infrequent. ami, v G 7/2940, ad 51 ex Martio 1781.

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both sides of the border) is justified by considerations of the local situation or the need for economic activity to be conducted rationally.6 The Austro-Polish Trade Treaty of 1775 did not regulate border traffic and this was a heavy blow particularly to the inhabitants of the eastern border districts of Galicia. Precisely there, the border not infrequently passed right through Polish villages and farms,7 which often gave rise to complaints. In the summer of 1778, Count Moszyński, the Great Arbitrator of Lithuania [Referendarz wielki litewski], petitioned the Galician Governor’s Office to exempt cattle from duty, as well as all implements necessary for farming. This gave the Governor’s Office the opportunity on 7 July 1778, in view of the similar conditions prevailing in almost all villages ‘lying along the border’, to make a ‘proposal’, to Maria Theresia ‘that villages which have been divided accidentally by the drawing of the border be freed from customs duties, because they had to move their cattle back and forth to common pasture and for agriculture, and had to bring back the bound sheaves’. A few months later, on 16 October 1778, a Decree was issued declaring that ‘her Imperial Majesty has most graciously condescended to allow the divided villages to have this favour’.8 A year and a half later, later this favourable treatment was extended further by the Galician Governor’s Office, which reported to Vienna on 26 February 1780 that ‘the territories which stretch into Turkish Moldova have been permitted the same freedom from customs duties as enjoyed by the localities adjoining Poland but divided by the establishment of the border, subject 6 See Schraut 1884, p. 89. 7 Indeed, Kaunitz took care not to interpret the words of the Partition Treaty, according to which the border beyond Zamość was to run ‘in a straight line’, too literally, which would have meant not taking any account of private manors, woods, marshes and lakes and simply drawing a line on the map (letter of May 1773, Beer 1873, 2, p. 228). He was very concerned to correct the border in individual cases (Beer 1873, 3, p. 229). Emperor Joseph also wanted the Border Commission, whose members had not yet been appointed, to have as its task the making of ‘convenient arrangements between individuals’ and in doing this ‘it should be guided by the personal advantage of the various landowners or, better put, the avoidance of any injury to them’ (letter of 22 November 1773, Beer 1873, 3, pp. 70–1). These wishes were, however, not entirely taken into account by the Border Commission. For example, in the district of Zalishchyky, the manor of Josef Karsz, which lay on the Turkish border, was cut in two, so that while one part, particularly the woods, was placed in Galicia, the greater part of the manor, including buildings and breweries, remained in Poland. Similarly, while the manor of Starzyńska, who was a general’s widow, was almost entirely in Polish territory, the woods belonging to it were assigned to Galicia. Cases of this kind were not infrequent in the eastern part of Galicia. The situation in the south of the Province was better, because the Carpathian mountain border with Hungary had remained unchanged for centuries. The same was true of the north-western area, where the border was determined by the course of the Vistula. 8 hka, Mautwesen in Galizien, Fasc. 7 G, ad 205 ex Octobri 1778.

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to your approval’. The regulation of the Galician Governor was approved by the Court Decree of 21 April 1780. It made the reservation, however, that ‘this favour should not be extended if a specific proprietor has had possessions which belong to him cut off but they in fact constitute self-contained units’.9 The above Court Decrees did not settle matters completely. There were still cases which were not taken into consideration, where localities were not divided by the establishment of the border but local circumstances made it necessary to fetch items of daily use from places on the other side of the border. In the winter of 1780, several landowners of those districts directed a joint request to the Zalishchyky directorate, for exemption from customs duties for all items of daily use, such as firewood, hay and so on.10 They referred to the difficult situation of their subject peasants, owing to burdensome customs regulations and also to the danger that they might emigrate. The Customs Administration and the Governor’s Office, for their part, confirmed the existence of these grievances and of the burdens on the border region peasants. According to the tariff of 2 January 1778, they explained, the fixed duty on one guilder’s worth of imported or exported wood was one penny. Notwithstanding this, a peasant who transported a wagon of wood with a value of as little as 10 kreutzers across the border was compelled to pay the duty of the tiny fraction of a kreutzer which fell due.11 Although his hut was often only a few steps distant from the border, he was not allowed to take this short route but had to 9 10

11

hka, Kameralakt, ad 268 ex Aprili 1780. ami, v G 7/2940 ad 25 ex Martio 1781: ‘… Które drzewo po części do budowli, po części na winnice, do kurzenia gorzałki, chrust do ogrodzenia ogrodów y siano dla bydła y inney chudoby nieomylne potrzebuyą’. ‘Tak wspólnie łączywszy suplikacye nasze upraszamy, by Dyrektoryum raczyło mieć wzgląd na mizeryą tych teraz ze wszystkich stron obeisnionych Obywateli Krajowych i prosimy o ulgę jakową albowiem z tey przczyny już wiele poddanych na Słobodę za Kordon uszło y dalszey obawiać się trzeba Emigracyi ie żeli nie nastąpi Folga, Przeswietnego Dyrektoryatu nayniższe Podnużki. Kaz. Cieński, Ant. Popiel, Fr Weisback, plenipotent hrabi Lanckoronskiego’. [‘… Wood which is unavoidably required, in part for building and in part for vineyards and for burning in the distillation of spirits, brushwood for enclosing gardens, hay for cattle and other absolutely necessary items’. ‘We thus together make a united supplication and request that the Directorate deign to have consideration for the misery of those inhabitants of the Province who are now under pressure from all sides and we beg it to grant relief, because many subject peasants have got away across the border to Słoboda, and furthermore there is reason to fear emigration if no steps are taken. Signed, the very humble servants of the honourable Directorate, Kaz. Cieński, Ant, Popiel, Fr. Weisbach, the representative of Count Lanckoronsky’.] In practice the payment of 1/24 of a kreutzer was impossible, since such a small coin did not exist; incidentally, section 87 of the customs regulations fixed 1 penny as the smallest duty payment.

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travel 4, 6 and even sometimes 10 miles to and from the nearest customs post to make this petty payment. He exhausted his horses, wasted a lot of time and, in addition, also had to pay 16 kreutzers in cash as road toll. The central government responded to this appeal. By the Court Decree of 15 March 1781, it put a stop to these abuses, exempting from customs duties all items of daily use which were transported across the border.12

12

ami, v G 7/2940 ad 25 ex Martio 1781.

chapter 9

The Implementation of the Treaty. An Episode of Tariff War. The Extent of Austrian-Polish Trade Relations There do not appear to have been any disputes between Austria and Poland in the period before the trade treaty came into force, i.e. until 1 February 1777.1 It is true that Galician merchants often complained about high Polish tariffs and, in particular, about the Vistula tolls.2 The Galician Court Chancellery usually replied by saying that, with the entry into force of the trade treaty which would mean free transit down the Vistula, the difficulties complained of would automatically come to an end.3 A similarly calm atmosphere also prevailed in the period after 1 February 1777 and it can be confirmed on the basis of the files that, by and large, the trade treaty was observed to the letter by both parties. On the Austrian side, it was understood that Austria was bound by the treaty with Poland, even in cases which involved a relationship with third parties, e.g. Prussia, if the Republic’s interests might only be affected indirectly. When, for example, the Bank Deputation asked the State Chancellery whether items being carried on the Vistula from Prussian Silesia to Poland should be allowed to pass through free of duty, in view of the burdensome and oppressive customs duties levied by Prussia, the answer on 27 January 1778 was that, according to the trade treaty with Poland, transport by ship along the Vistula must be entirely free of duty and therefore all goods passing down the Vistula must be allowed to pass duty-free without exception.4 Such an interpretation certainly went far beyond Austria’s contractual obligations to Poland. In this period, there was also no lack of complaints about oppressive payments exacted by Polish customs offices, in breach of the treaty.5 All these 1 Also see Korzon 1897, 2, p. 51. 2 So, for example in November 1775, the Lviv merchant Friedrich Preschel (ami, v G 7/2940 ad 138 ex Januario 1776); in March 1776 the Jewish Trading Company, etc. (ami, v G 7/2940 ad 138 ex Januario 1776, ex Aprili 1776). 3 Reports of the Galician Court Chancellery on 29 January 1776 and 10 April 1776, quoted in the files. 4 hka, Mautwesen in Galizien, ad 12 ex Januario; and ad 307 ex Januario 1778. 5 See for example the report of 4 November 1777 from the Galician Governor’s Office, to which was appended ‘Ausweis der Pohlnische Consumo-Essito- und Transito-Expedition mit der

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matters, however, merely turned out to reflect minor frictions, such as were almost unavoidable at that time on the borders of two neighbouring states.6 There was, however, one point that led to years of dispute and eventually a customs war between the treaty partners, in which the Polish Republic was entirely at fault. The issue was that of ordinary Hungarian wine, which had long been consumed in large quantities in Poland, alongside French, Italian and Spanish wines, and constituted half the total of imported wine. According to the calculations of the Polish Treasury Commission,7 the annual importation of Hungarian wine was: 1773 1774 1775 1776 1777

7,118 tons 14,037 tons 11,116 tons 11,316 tons 12,608 tons

gegen die Conventions-Tarif obwaltenden Differenz, laut beygelegten 12 Stück Polnische Bolleten’ (hka, Mautwesen in Galizien, ad 308 ex 1777). On 23 December 1777 Friedrich Preschel complained ‘au sujet du Droit de Consumo que l’on a exigé a Niezawa … pour les marchandises qu’il faisoit passer de Danzig en Gallicie’. [‘on the subject of the import duty demanded at Nieszawa … for the goods he was having transported from Gdańsk to Galicia’] He complained at the same time about the treatment of goods he had sent to the annual market at Berdyczow in Poland (hka, Mautwesen in Galizien, ad 198 ex 1778). 6 The oppressions about which the merchant entrepreneur and industrialist Augustin Finsterbusch von Schutzbach complained were of a more serious nature. Instead of the transit duty of 1 percent laid down by the treaty, ‘we Galician merchant subjects of your Majesty must pay a duty of two percent or on some items three or even four percent’. ‘Further, we have to pay a deposit for these transit duties at the Republic’s entry office at Zawichost of four times the amount, to ensure that the goods really leave the country’. According to the regulations, this deposit had to be returned at the exit office of Nieszawa, which was 49 miles from Zawichost. Instead of that, the Polish authorities referred the merchants to Kraków, which was 73 miles away from Nieszawa, which meant that the smaller merchants were obliged to spend the whole of their profit on travelling expenses. Finally, in Poland there is the compulsion to pay ‘drink tax on top of the customs duties for alcoholic beverages brought from Gdańsk (champagne, French wine, English beer, liqueurs, etc.)’, although these commodities were only in transit to Galicia and were not consumed in Poland (Petition from Finsterbusch, 8 January 1784, hka, Commerz. Fasc. 57, ad 1 ex Februario 1784). 7 Note by Chancellor Młodziejowski, dated Warsaw, 20 February 1778; and a letter from Reviczky, dated Warsaw, 1 May 1778, in hka, Mautwesen in Galizien, Fasc. 7 G, ad 182 ex Majo 1778.

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To stem the heavy outflow of currency resulting, the importation of these wines was subject to a high duty of 2 ducats a ton, before the trade treaty was concluded.8 But after Reviczky had succeeded in reducing the duty to ½ a ducat (which was equal to 2 florins and 15 kreutzers, or 9 Polish guilders), the Polish government decided to achieve its objective by other means. Formally speaking, only the duty prescribed by the trade treaty was applied. In addition, however, every ton of wine was burdened with a further 32 Polish guilders,9 under the heading of ‘Drink Tax and Warehouse Rent’, which meant that the Polish exchequer received an average annual income of 369,000 Polish guilders from this source.10 Reviczky complained to the government in Warsaw, without success. The Galician Governor’s Office then proposed11 that, in reprisal, a transit duty of 15 kreutzers a cask should be charged on Hungarian wines in Galicia. This would also result in an increase of 7 to 8,000 florins in Galicia’s income, which had suffered greatly from the trade treaty with Poland.12 Similar proposals were made by the Bohemian-Austrian Court Chancellery and the Treasury,13 although both departments knew that, in principle, their proposals ran contrary to the trade treaty with Poland and that they could not be justified in the long term, either by the financial considerations advanced or by the actions of the Polish government. Nevertheless, it was believed that the transit duty proposed could be introduced provisionally, in order to force the Republic to alter its behaviour.

8 9

10 11 12 13

See above, p. 227. The reports of the customs administration and the Governor’s Office, of 4 October and 20 October 1777, give the following calculation, based on an original Polish schedule: the total amount paid on three barrels of Hungarian wine, imported into Poland via Połaniec by the Jewish merchant Wolf Baruch, was: Duty at 2 florins 15 kreutzers per barrel 6 florins 45 kreutzers Customs officers’ fee – 45 kreutzers Transport duty for 2 horses – 8 kreutzers Drink tax 15 florins 0 kreutzers Warehouse rent 9 florins 7½ kreutzers Total 31 florins 45½ kreutzers This amounted to 42 Polish guilders per barrel and, after the deduction of customs duty, almost 33 Polish guilders of extra fees (hka, Mautwesen in Galizien, Fasc. 7 G, ad 198 ex Majo 1778; and ami, v G 7/2940 ad 64 ex Julio 1780; also see above, p. 125). Archiwum Książąt Czartoryskich, 1176, p. 493, ‘Specyfikacya weszłich win węierskich’. hka, Mautwesen in Galizien, ad 82 ex 1777; and ami, v G 7/2940, ad 79 ex Julio 1777. Namely, through the provision that foreign goods in transit through Austria to Poland should only be charged duty once. Joint Statement of 26 June 1777, ami, v G 7/2940 ad 79 ex Julio 1777.

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But the Empress ordered her government to refrain from any measures of reprisal, because she lived in hope that the Republic would follow her example and voluntarily remove the contested addition payment.14 Instructions in this sense were then sent to Reviczky and the Galician Governor’s Office. The latter could already report on 30 September 1777 that the instructions of the Empress had been carried out precisely.15 The news from Warsaw, on the other hand, was less favourable. Maria Theresia’s moderation was not the way to induce the Polish government to reverse its policies. On 8 January 1778 [Andrzej] Młodziejowski replied, in the name of the Polish Department of Foreign Affairs, that Hungarian wine really did bear a duty of 42 guilders per barrel, but this did not conflict with the trade treaty in any way. The import duty simply followed the tariff prescribed by the treaty, amounting to 9 Polish guilders. The rest of the payments were extra duties on drinks (drink tax), introduced by the Constitution of 1768 and confirmed by that of 1775. He concluded by stating that ‘these payments fall on the final consumer and have nothing in common with an import duty’.16 The exchange of diplomatic dispatches dragged on for more than two years, without result,17 until finally a ‘warehouse and drink tax’ as high as the Polish tax on Hungarian wine was imposed on Polish spirits in Galicia, in reprisal.18 The Republic’s trade was hit hard by this measure. The annual importation of Polish spirits into Galicia fell from more than 32,000 casks in 1780 to approximately 8,000 in 1781.19 Despite this, the Polish government did not give way. The question of Hungarian wine almost became a national issue in Poland. And it was not, in fact, an easy matter for the Republic to give up what it received

14

15 16 17

18 19

The Empress’s decision, not entirely free of a certain sentimentality, was that Although the Republic has not previously brought the provisions of the said trade treaty as regards Hungarian wines to fulfilment, I still wish that the treaty in all its details be observed on this side. Accordingly, the present transit duty of 15 kreutzers on Hungarian wines passing through Galicia to Poland must be removed immediately; inasmuch as I am confidently of the opinion that the said Republic will also for its part fulfil the provisions of the trade treaty in all respects. (Joint Statement of 26 June 1777, ami, v G 7/2940 ad 79 ex Julio 1777) hka, Mautwesen in Galizien, ad 390 ex 1777. Reviczky to Kaunitz, dated Warsaw, 14 January 1778, hka, Mautwesen in Galizien, ad 182 ex Majo 1778. Notes from Cachés to Kaunitz, 23 July and 20 October 1779; from Ponińsky to Kaunitz, 4 September 1779; and from Poniatowski to Kaunitz, 18 October 1779, hka, Mautwesen in Galizien, ad 175 ex Novembri 1779. Court Decree of 29 July, on the basis of the Chancellery Report of 15 June 1780, ami, v G 7/2940, ad 61 ex Julio 1780. During the first half of the year 1780 the following amounts were imported into Galicia:

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from the wine duty, in view of Poland’s general shortage of income.20 On the other hand, in the literature of the time voices could be heard to the effect that the prohibition of Hungarian wine was a matter of national pride and patriotism.21 In any case, the landowners of Poland soon learned how to defend themselves against the Galician charge on spirits. On 18 November 1783, the Galician Governor’s Office reported that ‘it has been noted in the Dukla Customs Subdistrict that a number of Polish Jewish merchants are seeking to avoid paying this duty by sending the alcohol as a transit commodity through Galicia to Hungary and then bringing it back to Galicia as a Hungarian product’. As a result, the Governor’s Office was forced to extend the duty on the importation of spirits to cover its transit through the Province.22

Aquavitae Ordinary spirits Total

Casks

Maass

6,781 9,495 16,276

30 4 36

During the first half of the year 1781 the comparable figures were:

Aquavitae Ordinary spirits Total

20 21

22

Casks

Maass

4,075 103 4,178

30 43 73

(‘Bilance des eingeführeten pohlnischen Brandweins’, hka, Kameralakt, ad 638 ex Februario 1783). According to another account the annual import of spirits declined from 63,010 casks, with a value of 319,832 florins, in 1780, to 29,315 casks, in 1781 (‘Verzeichnis der 1780 aus Pohlen in Galizien pro Consumo eingeführten Pohlnischen Erzeugnisse’, hka, Mautwesen in Galizien, ad 144 ex Aprili 1781). See above, p. 227. So Staszic wrote: ‘What pains me most is this, that … we voluntarily send almost five million [Polish] guilders to the imperial lands for wine. If every Pole wished the fatherland as well as I do, they would have to say: better beer, which we can produce on our own soil, than wine from the hand of a foreign enemy, from whom we have to accept slavery at the same time’ (Staszic 1787, p. 157). Chancellery Report, 11 December 1783; Resolution, 8 January 1784; and Court Decree of 22 January 1784. The Imperial Resolution was made in the following words: ‘In the meantime, until the new customs system is in force, the increased duty already authorised by

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Even after this measure had been introduced, the landowners of southern Poland were still able to defend themselves. As they were too far away from the Vistula to export their cereals to Gdańsk but had no other market for grain, their only other way of making money was to distil spirits. The high Galician duties on spirits therefore had the effect that the grain itself was exported from Poland to Galicia in greater quantities, to be used in the production of spirits.23 This phenomenon explains the contemporary blossoming of this branch of industry in Galicia.24 If we leave aside this single episode, Austro-Polish trade relations were satisfactory throughout the period under investigation. Count Chotek, reporting to a meeting of the Council of State held on 28 December 1780, expressed the view that Austrian merchants were content with the situation and that there were no grounds for complaint. In his judgement it was ‘undeniable that this trade treaty was built on very moderate principles that are beneficial to trade’.25 This conviction was not without influence on the future relationship between the two states. Despite all the changes which took place in both the domestic and foreign economic policy of the Habsburg Monarchy during that epoch, the central authorities in Vienna held fast to the trade treaty with Poland. The provisions of the treaty were loyally observed and their future operation was confirmed in the Galician customs regulations of 2 January 1778,26 the Edict for Brody issued on 21 August 177927 and the general customs regulations for all Hereditary Lands of 16 September 178428 and 2 January 1788.29

23

24 25 26 27

28 29

the Governor’s Office on spirits in transit should come into effect’ (hka, Mautwesen in Galizien, ad 495 ex Januario 1784). ‘This considerable … import of grain from Poland … is to be ascribed to the low price of grain in Poland and to the circumstance that it is in part converted into spirits in order to avoid the import duty of 2 florins a cask on spirits’, Governor’s Report of 20 December 1782, in hka, Kameralakt, ad 609 ex Januario 1783. At the time of the Polish Republic, it was beer that occupied the first place among alcoholic beverages there (Bobrzyński 1888, p. 69). ami, v G 7/2940 ad 51 ex Martio 1781. Also see below, p. 247, note. ‘Patent. Die neue Zollverfassung der Königreiche Galizien und Lodomerien betreffend’, section 2, Edicta 1778, pp. 3–4. ‘Patent. Vermöge welchen die Stadt Body von den Königreichen Galizien und Lodomerien commercialiter ausgeschlossen wird …’, 21 August 1779, sections 7 and 14. The latter paragraph prescribed that ‘if products of the Republic are sent through Galicia to Brody and are then returned from there through Galicia, because of a lack of customers, they only have to pay the transit duty once’, Edicta 1779, p. 51. ‘Patent. Die neue Mautordnung betreffend’ 16 September 1784, Edicta 1784, p. 233. See Blodig 1863, p. xxvi.

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As a result, trade between Poland and Austria, including Galicia, expanded continuously. This was also promoted by a range of exactions which hindered Polish trade with Prussian Silesia.30 The success of Austria’s policy for trade with Poland is sufficiently confirmed by the figures below. Still, a number of judgements by contemporaries, which are the more valuable because made by opponents of Austria and bear an official character, will be provided. In the years 1780 to 1782, the merchants of Wrocław repeatedly complained about the decay of their trade with Poland,31 pointing to the competition they suffered from Austria. In response, Friedrich ii asked his Minister for Silesia, Hoym, to provide details of the Austria’s tariffs on Polish goods and for them to examined by the Prussian administration. The latter constructed a ‘Memoire mit zwei Balancen’,32 dealing with Poland’s imports and exports, and a comparative table of Prussian and Austrian tariffs. The Prussian bureaucrats, being blind tools of the King and his policies, tried ‘to demonstrate that the Poles pay much more for their exports to Austria than their exports to [Prussian] Silesia … so trade with Prussia is more advantageous than trade with Austria’.33 Hoym, however, contradicted these assertions in a memorandum to the King about the Cieszyn fair and, on the basis of detailed calculations, showed that, as a result of the privileges granted to the Cieszyn fair, the transit trade via Bohemia and Austrian Silesia was much cheaper and more favourable for Poland than the trade via Prussian Silesia.34 The criticisms of the Silesian Military Councillor Opitz were still sharper. Even the Austrian Cattle Tariff of 1775 was more favourable in many respects than the Prussian tariff: ‘One can therefore judge the side which is favoured in the balance, although the administration has taken great pains to extract from the Austrian tariff only those items which are charged at a higher rate than the new Prussian tariff charges in Silesia and cunningly to leave out the items which pay much more in Silesia than in Austria’.35 The Austrian tariff of 1778,36 he added, appears to have struck a mortal blow at the transit trade through Silesia, since it fixes extremely moderate duties on trade moving from Saxony to Little Poland, Ukraine, Volyn and 30 31 32 33 34 35 36

For this and following, see Fechner 1886, pp. 508–13; and Philippson 1880, pp. 101 and 268 et seq. See ‘Promemoria vom Verfall des Schlesischen Handels’, in Fechner 1886. [‘Memorandum with two balances’.] Fechner 1886, p. 512. Fechner 1886, p. 512; also see below, p. 337. Quoted by Fechner 1886, p. 512. Opitz refers to a tariff ‘published one and a half years earlier’ and can therefore only have in mind the tariff mentioned in the text.

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Lithuania through Austria and Galicia, which cannot even be compared with the 12 percent Silesian transit duty. ‘Moreover, customs inspections are conducted considerately in Austria and this procedure has a further appeal, because excessively sharp verification can often be more annoying than the duty itself’. And he concludes: ‘You can judge for yourself whether the Pole, who has finally learned to count, will be able to withstand so many attractive advantages and incentives’. Before we end this chapter, one further important question needs to be clarified. This is the question of the shape relations between Austria and Poland would take in the period after 1784, when Joseph ii was trying to use his trade policy to cut Austria off from the outside world. At that time, the most prominent personalities in Poland accused the Emperor of failing to fulfil the obligations taken on under the trade treaty. Staszic repeatedly points out that Austria was seeking to restrict imports from Poland.37 [Tadeusz] Czacki also complained, in a report made to the Polish government about Poland’s trade with Galicia,38 that the tariff of 1776 was not being observed by the Austrian government;39 that the tariff of 16 September 1784 increased Austrian duties on Polish products, which was against the treaty; that obstacles were placed in the way of Polish exports by the establishment of ‘entry-points for commerce’; and, finally, that everything possible was being done to increase Austrian exports.40 Czacki saw all this as a violent breach of a trade treaty which had been solemnly concluded41 and he wanted Austria’s chicanery to be answered by the threat of reprisals. These accusations were not, however, justified and Czacki was evidently carried away by excessive patriotic zeal into making an arbitrary interpretation of the trade treaty. There was no trace of an increase in the duties prescribed by the treaty and the tariff of 1784 explicitly stated that the provisions of the treaty remained in force. The import duty on Polish products continued to be under 4 percent, as before, and this applied in the Austrian Hereditary Lands

37 38 39

40

41

Staszic 1787, pp. 111, 157 and many other passages. Report of 29 September 1787, Archiwum Książąt Czartoryskich, 901, pp. 95–9. ‘Stała się w tym wszystkim czezą co Sąsiadowi [Austryi] pożytków przynieść nie mogło’. [‘With that it became completely futile; it was impossible to gain any profit from the neighbour [Austria]’.] ‘Nasz Handel pro Exito a Sąsiada pro Consumo neiążony, a ich Exito a Nasze Consumo wielce ułatwione’. [‘Our export trade has been cut off by the neighbour with its import duties and its export trade has been greatly facilitated by our import duties’.] ‘Znamanie tak uroczystych ukladów przez Cesarza’. [‘A breach of the treaty so solemnly concluded by the Emperor’.]

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and Hungary as well as Galicia.42 The tariff of 1788 made no change, in this respect, and duties were still being collected at the same level in 1792.43 What changed in relations with Poland after 1784 was not the level of customs duties but the number of import prohibitions, which increased tremendously after the introduction of the new system. This cannot, however, in any way be seen as a breach of the Trade Treaty of 1775. Although these prohibitions might have been uncomfortable and damaging for the Republic and its exports to Austria, unquestionably Austria still unambiguously had the right to issue them, under Article iv of the treaty.44 As a result of the conditions described, Galicia’s trade with Poland developed normally and, apart from the few exceptions mentioned, without let or hindrance. The extent of trade relations between the two states can be seen from the following figures. According to the Polish customs registers of 1776, they were:45

Austrian florins Exports from all of Austria to Poland Imports from Poland to Austria Transit trade from ‘from the borders of the Empire’ through Poland

42

43

44 45

Polish guilders

5,910,499 [23,641,996] 2,260,439 9,041,757 1,620,562 6,482,249

The Court Decree of 26 January 1786 ordered that ‘Thirdly, products of the Polish Republic … will be charged duty according to the Polish Republican tariff of 1776 in Hungary and Transylvania, to the extent that they are explicitly named in this tariff’. Products not named in the tariff, like other foreign goods, were to be treated according to the new general tariff, at 30 percent (Circular, ‘über einige zur Begünstigung des hungarischen und siebenbürgischen Handels mit Galizien getroffenen Anordnungen’, 14 February 1786, Edicta 1786, p. 40). Governor’s Report of 14 December 1792, hka, Commerz. Fasc. 57, ad 7 ex Decembri 1792. Podmanitzky, a member of the Hungarian Governor’s Council, remarked in 1791 that the government in Vienna had committed a ‘sin’ in its tariff of 1788 ‘aliquibus Poloniae Productis majorem, quam Hungarieis favorem, attribuit’ [‘by giving greater favour to Polish products than to Hungarian ones’] (Hock and Bidermann 1879, p. 570). See above, p. 231. ‘Summaryn: Tax wszelkich Towarów Zagranicznych z kraiów Cesarskich … Pro Consumo weszłych, iako teź Polskich pro Exito wyszłych, z Regestrów Celnych wsystkich Prowincyach komor na Tabelle distinctim Sortymentów z Roku całego 1775 wyciągniętych … ułożony’, Archiwum Książąt Czartoryskich, 1076, p. 343.

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The total value of Austria’s exports in 1776 is not known to me. But it can hardly have been higher than about 60 million florins.46 Exports to Poland thus represented a respectable 9 to 10 percent of total exports. For Galicia, in particular, the importance of the Polish market was still greater. From the sparse statistics that follow, the development of Galician trade between 1778 and 1787 is reasonably clear. In 1778,47 imports from Poland were worth 1,508,729 florins,48 while total imports were worth 4½ million florins. The value of exports to Poland is not known. As it was much greater than the figure for imports,49 it can be plausibly estimated to be roughly 1,700,000 florins. The relevant figures for 1787 were:50

Imports from Poland

2,576,267 florins

Exports to Poland 2,659,374 florins Transit through Galicia51 1,032,200 florins

In spite of the expanded prohibitions of imports after 1784, imports from Poland rose by almost 71 percent and exports rose in a similar proportion. The latter would have been still greater, if 1786 and 1787 had not been years of famine. Not until 1792 was there a radical change in the relationship. The collapse of Austro-Polish trade was simply a self-evident consequence of the war of 1792 and the reduction in Polish territory by the Second Partition of Poland in 1793.

46

47 48 49

50 51

This is a level not attained again by Austria’s trade (without Hungary) until 1830, after it had recovered from the devastations of the Napoleonic era. In that year exports were calculated to be worth 65 million florins in value (see Becher 1841, pp. 288–9). Precisely, between 1 May 1778 and 30 April 1779. hka, Commerz. Fasc. 57, ad 2 ex Decembri 1779. In 1781, the Court Chancellery noted the predominance of Galicia’s exports over imports, and remarked that ‘This trade surplus is strongest with Poland and the conclusion is selfevident: that we must keep our trading relationship with the Republic as healthy as possible, even when the items imported from Poland are in competition with Galicia’s own products and the products of the other Hereditary Lands’ (hka, Kameralakt Fasc. 7 G, ad 609 ex Januario 1783). Trade Tables for 1787, hka, Merkantiltabellen M 3 Fasc. 12,222. See Grossmann 1913, table, p. 230. Namely, 264,539 florins from Poland through Galicia, and 767,671 florins to Poland through Galicia.

part 3 Galicia’s Relationship with the Hereditary Lands and Hungary, 1776–84

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chapter 10

The ‘Provisional’ Tariff of 28 December 1776 The conclusion of the trade treaty with Poland on 15 March 1775 was not without influence on the relationship between Galicia and the Hereditary Lands. In the Hereditary Lands, the newly acquired Province continued to be treated as a foreign country, divided from the rest of the Monarchy by a customs barrier. This had uncomfortable consequences for Galicia in two ways. First, all the import prohibitions in the Hereditary Lands were also applied to Galicia, so that many Galician products simply could not be imported into the Hereditary Lands.1 Moreover, Galician items whose importation was permitted were subject to duties of 20 percent, 30 percent and even more. These duties were considerably reduced by the General Tariff of 15 July 1775. The previous prohibitions, except those retained under the Edict of 14 October 1774,2 were replaced by an import duty which was generally 20 percent but lower for many commodities.3 In comparison with previous conditions, this was a highly desirable change for Galicia. Fundamentally, however, Galicia’s relationship with the Hereditary Lands remained the same as before. As we know, there had long been suggestions that Galicia should be placed on a ‘German’ footing, i.e. included within the Austrian customs area. But as has also been demonstrated, discussions on this matter did not lead to any positive 1 In 1776, for example, when the Galician merchants Ptasiński, Kaniar and Ledecki brought a consignment of ‘drawn linen, coarse ticking and table-linen’ to Prague, it was confiscated on the ground that ‘the products of Galicia and Lodomeria which are imported into the other Hereditary Lands are still, at this time and until the possible introduction of a new customs system, regarded and treated as foreign’. When the importers excused themselves by referring to their ignorance of the customs regulations, the Court Chancellery sent an instruction to the Bohemian Governor’s Office: ‘this time’ it should allow ‘the sale of the imported 10 centner of goods in return for the payment of an amount of duty measured in accordance with the new tariff’ (note of the Court Chancellor Count Blümegen to the President of the Treasury Count Leopold Kolowrat, 26 October 1776, ami, v G 7.2940 ad 73 ex Decembri 1776; and hka, Commerz. Fasc. 57, ad 1 ex Octobri 1776). 2 Edict of 14 October 1774, section 64. 3 Among the other advantages of this important piece of legislation were: the removal of previous provincial transit duties, which existed in every Hereditary Land and were replaced by a single transit duty for the whole state; the removal of a various state consumption taxes, imposts and supplementary payments on foreign goods (section 7), likewise of all existing duties on trade within the Hereditary Lands and of all duties imposed by provincial princes, manors, towns and cities and manorial jurisdictions (section 8). The simplification of customs procedures was also of great significance.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_017

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result. On the contrary, the conviction had gradually ripened during the negotiations over the trade treaty with Poland that Galicia was closer to the Republic, in an economic sense, and that it was too early to attach this still very economically backward Province to the customs area of the other, industrially more developed Hereditary Lands. As a consequence, the important decision was made not to extend to Galicia the General Tariff of 15 July 1775, which applied to all the German and Bohemian provinces (with the exception of Tyrol).4 As before, Galicia continued to be separated from the other Hereditary Lands in terms of customs and, in fact, one paragraph of the General Tariff promises that special regulations will be issued for Galicia.5 This was the first concession made to Galicia’s special interests, although it was initially a purely negative one. Emperor Joseph’s Resolution of 2 September 1775, already discussed,6 was an attempt to regulate the relationship between Galicia and the Hereditary Lands in a positive way. It failed, because it was technically impossible to implement, and a fresh attempt had to be made to settle this difficult question, the more urgent because the trade treaty with Poland had made Galicia’s situation extremely difficult. While Polish products only had to pay the maximum duty of 4 percent as laid down in the treaty, Galician products in the Hereditary Lands were subject to the duties prescribed in the General Tariff of 15 July 1775, which were five times higher, a situation which was unsustainable in the long run. In the first place, it was unjust in principle to treat a constituent part of the Monarchy worse than a foreign country; moreover, this differential treatment was also impracticable from a technical point of view at that time, because Galician could not be distinguished from Polish products. The Treasury Decree of 27 September 1775 took account of this state of affairs. According to the preamble, the intention was to regulate the relationship between Galicia and the Hereditary Lands provisionally, without waiting for the promulgation of a general tariff which would determine relations both between Galicia and the other Hereditary Lands and between Galicia and foreign countries.7

4 Beidtel’s presentation of this subject is completely without foundation, 1896, 1, p. 145. 5 ‘We will also issue special regulations, announcing the kind of favourable treatment we will give in the future to … Galician products’ (section 3 of the General Tariff of 1775). 6 See above, pp. 180–180. 7 The Galician Governor’s Office is invited: ‘sixthly, to present without delay a report on the measures which are to be taken in the interim and provisionally for the indispensable promotion of the imperial service’ (hka, Mautwesen in Galizien, ad 312 ex Septembri 1776).

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On 4 May 1776, a session of the Council of State took place,8 with the purpose of establishing ‘the main principles and directive rules, according to which the Galician Governor’s Office elaborate tariffs and customs institutions, considering the trade treaty recently concluded … with the Republic of Poland’. The main topic of discussion at the meeting, in view of the impossibility of maintaining the existing status quo,9 was ‘How should Galicia be regarded in customs matters, in relation to the German and Hungarian Hereditary Lands? Should it be treated as a German, a Hungarian or a special Hereditary Land?’ The first of these possibilities was rejected, meeting with very strong opposition, based on a carefully constructed repetition of old arguments. It was pointed out10 that the General Tariff, with import prohibitions and duties which

8

9

10

Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776; and also hka, Commerz. Fasc. 57, ad 4 ex Junio 1776. ‘To treat Galicia as an entirely foreign country is just as inadvisable, because reciprocal arrangements in the relationship between Galicia and the German Hereditary Lands would then have to be specified, which would be excessively disadvantageous to the latter’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). Beer (1893b, p. 302) is completely wrong to say that it was agreed to regard Galicia as a foreign country. To the extent that the provisions adopted in the new customs tariff are highly beneficial to trade in the German Hereditary Lands and are best for the factories frequently found there, they are less compatible with the maintenance of Galician trade in most items. Galicia is almost entirely lacking in a manufacturing industry of its own and trade in that Province at present consists mainly of commercial exchanges with the neighbouring countries of Poland, Russia, Turkey and Tartary. Efforts have long been made to maintain and support this exchange, which is advantageous for the Province, and until now these intentions have been fulfilled, thanks to the keen foresight of the Governor’s administration. ‘The conclusion is obvious, that the introduction of the present tariff’ [i.e. the tariff of the Hereditary Lands] ‘would deprive this Kingdom [Galicia] of this highly beneficial wholesale trade’. [The second interpolation is the translator’s.] The chief reason why in the new tariff other foreign goods, particularly those of a type already manufactured in the Hereditary Lands, are subject to a higher import duty is in order to favour the factories of the Hereditary Lands and to make it easier for them to compete with foreign manufacturers in marketing their goods. In the case of Galicia, this consideration is almost entirely irrelevant since, on the one hand its manufacturing industry is still very insignificant and the Kingdom must obtain the greater part of its requirements for manufactures from outside, and it will also require a long time and more precise technical knowledge before industry there can gradually take shape. On the other hand, the factories in the other Hereditary Lands are not yet in a position to satisfy Galicia’s needs in addition to their own. From this point of view, then, the application of the General Tariff to Galicia also appears to be inappropriate, and this Province appears to require greater freedom to import foreign goods (Minutes of the

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amounted to as much as 20 percent, was right for the Hereditary Lands, with their higher level of industrial development, but for Galicia, which was completely lacking in industries, that appeared premature; the Province would continue to be reliant on imported goods for a long time to come. Further the dangers entailed in Joseph ii’s attempted compromise in the Imperial Resolution of 2 September 1775 were emphasised.11 The Resolution would have included Galicia in the overall general area but, to benefit the Province, prohibitions on the importation of certain goods would have been abolished and replaced by moderate import duties.12 Accordingly, the Council of State came to the unanimous conclusion ‘that the unification of Galicia with the German Hereditary Lands in customs matters was not to be initiated’.13 This vote was therefore particularly important, because it meant a complete victory for the standpoint defended two years earlier by Wrbna14 and no-one else. He was now joined by those like Eger, who had previously been the most emphatic advocates of centralisation.15 The second possibility considered at this session, to include Galicia in the Hungarian customs area, was also rejected, because it would have been still more harmful to Galicia than that just discussed. So long as Hungary enjoyed

11 12

13

14 15

Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). See above, pp. 180–180. ‘If one were to allow certain items to enter Galicia with a lower duty than is prescribed by the General Tariff and, in addition, allow items which are prohibited in the other Hereditary Lands to enter – on the principle that all duties between different provinces united together in a common customs system are abolished under the new arrangement – the Hereditary Lands would be exposed to the danger of being overwhelmed by a mass of foreign goods entering through Galicia’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). There may have been another circumstance which was also decisive: if Galicia were to be included in the general customs area, it would have been necessary to move the customs barrier along the Hungarian border, which was cheap because of the mountain ranges, so that it ran to the north of Galicia. Here the open border with Poland would have required the deployment of a large customs inspection force, at a cost of 290,000 florins, whereas the total customs receipts from Galicia in 1775 was a mere 228,000 florins. Even so, Beer is wrong to state that financial considerations were the decisive factor here (Beer 1893b, p. 304). See above, p. 143. The following were present at the sitting: Minister of State, Count Hatzfeld; President of the Bank Deputation, Count Kolowrat; Governor of Galicia, Count Auersperg; President of the Treasury, Count Khevenhüller; Vice-President of the Bank Deputation, Count Cobenzl; Barons Kresel, Gebler and Löhr; Court Councillors and the members of the Council of State Zach and Haan. The Court Chancellery was represented by Court Councillors Degelmann, Eger and Gruber.

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preferential political treatment over the German Hereditary Lands and the nobility and the clergy there were exempt from duties and taxes, that country could not expect to receive equal economic treatment from the government in Vienna.16 It had, rather, to remain a colony and a market reserved for the industrial products of the Hereditary Lands, which were burdened with heavy taxation. To achieve this result, all foreign goods entering Hungary were subjected to a 30 percent import duty, which was even higher than the duty levied in the Hereditary Lands. To unite Galicia with Hungary would therefore make this Province a colony for the industries of the Hereditary Lands. The Council of State was entirely against this. It already regarded the General Tariff, with its 20 percent duties, as harmful to Galicia; a tariff of 30 percent was bound to appear still more dangerous.17 Side by side with this, however, political considerations were also important. Unlike Hungary, Galicia had been politically incorporated into the system of the German Hereditary Lands. ‘The government had moved progressively towards applying this principle. The nobility and clergy had been obliged to pay the general tax [Contributio], military contributions and customs and excise duties, in short all public taxes’. If Galicia were to be united with Hungary in fiscal terms, ‘the coherence of the system would be destroyed’. This was because, in order to be consistent, they would have to free the nobility and clergy in Galicia from customs duties and, consequently, from all other taxes and public burdens. This was, however, far from being the government’s intention ‘and therefore any attempt to create parity between Hungary and Galicia … must be carefully avoided’.18

16

17

18

‘This advantage [enjoyed by the German Hereditary Lands] appears to be founded on fairness, since the Kingdom of Hungary does not bear the burden of state expenditure in the same manner as do the German Hereditary Lands and Hungarian manufactures might be prejudicial to those of the German Hereditary Lands’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). On the relationship with Hungary, see above, pp. 111; particularly pp. 204–205 and appendix 2. There are similarly decisive objections to the second proposal, to unite Galicia with Hungary in customs matters, which relate partly to the political side and partly to the commercial side of the question. As far as the commercial side is concerned, it should be borne in mind that the duties imposed in Hungary are almost all set at 30 percent, whereas in the German Hereditary Lands the highest tariff is only 20 percent. If one regards the latter as too high for Galicia … the Hungarian tariff of 30 percent is still less appropriate and still more detrimental to Galicia’s domestic trade activity. (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). This was also the reason why Joseph ii, when he was travelling around Galicia in 1773,

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The judgement of the [second]19 proposal was equally unfavourable. It was feared that, if Galicia were unified with Hungary in a common customs area but still received special treatment, the Hungarian market would be flooded with foreign goods arriving via Galicia20 and the Hereditary Lands would suffer an injury which would be the more painful in that ‘they sell their manufactured products to procure some return of the considerable amount of coin they are obliged to give up every year to Hungary for the natural products they receive from there’. In view of all these considerations, therefore, the only solution worth recommending was that Galicia should be granted a special, privileged status similar to that enjoyed by Tyrol, in order to avoid severing the Province’s connection from either foreign countries or the other Hereditary Lands.21 Notwithstanding this long discussion, the main difficulty in regulating trading relations between Galicia and the Hereditary Lands did not lie in the principle of the matter but in its practical implementation. On this question, the Council of State established the following rules: 1) As regards the importation of goods from the Hereditary Lands into Galicia, the import duty of 2½ percent laid down in the Edict of 11 April 177422

19 20

21

22

opposed the appointment of General Hadik as Governor of the Province. Hadik, he said, ‘was still somewhat influenced by Hungarian prejudices, which would be most damaging here, since he would want to treat the whole Province in exactly the same way as Hungary’ (Arneth 1876–79, 8, p. 419). [Grossman wrote ‘third’ here.] ‘If it was decided to alleviate the burden on this Kingdom’ with respect to customs duties ‘and not to prohibit foreign goods … it would not be possible to prevent the goods less heavily burdened in Galicia from breaking into Hungary, having paid lower duties’. In any case, ‘Hungary would soon start to derive the benefit from this, to the very great disadvantage of the factories of the German Hereditary Lands’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May– December 1776). After it had been decided to treat Galicia as neither a German, nor a Hungarian, nor a completely foreign land … there was no other alternative but to regard it as a separate Hereditary Land in terms of its customs system and its tariffs, like Tyrol … It seems rather … that the third proposal, namely to treat Galicia as a special Hereditary Land in tariff matters is the most natural solution and the one that is most appropriate for the other Hereditary Lands … By applying this measure … Galicia’s domestic trading activity would be maintained and the other Hereditary Lands would at the same time receive the appropriate preference in the sale of their goods in Galicia over goods from abroad. (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776) Beer (1893b, p. 302) is therefore wrong to assert that the Council of State decided against the proposal to treat Galicia as a special Hereditary Land with a separate tariff. See above, p. 147.

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for the German Hereditary Lands and later also for Hungarian goods in Galicia is to be retained as a general rule ‘with the exception of those items which are subject to special duties’. The same applies to goods which, though of foreign origin, purchased in the Hereditary Lands and which, although they had already paid the high foreign duty of 20 percent on entering the Hereditary Lands, they should now pay a further 2½ percent on entry into Galicia.23 Considering that the duty on such goods entering Galicia directly from abroad is only 10 percent,24 it would, evidently, only be worth buying them in the Hereditary Lands in exceptional cases. 2) As regards the export of Galician goods to the Hereditary Lands and Hungary, here the necessity of treating Galicia in the same way as Poland is recognised. This meant that all those items listed in the tariff on Polish goods would be liable to a duty of only 4 percent when they were imported into the German and the Hungarian Hereditary Lands, in so far as lower duties had not already been established in the General Tariff.25 As far as the products not mentioned in the Polish tariff were concerned, Galicia enjoyed an additional benefit, in the sense that these commodities were equated with those of Hungary when they were taken from Galicia to the German Hereditary Lands, so they only had to pay 10 percent.26 If they went from Galicia to Hungary, they had to pay half the duty on foreign goods, namely 15 percent.27 23

24 25

26

27

‘These goods, which have already paid the whole foreign import duty on their importation, are to be regarded as naturalised, so that their further movement should not be treated more harshly than that of products of the Hereditary Lands, hence they will only be subject to a duty of 2½ percent’. See above, p. 144. ‘Products of that place are to be equated with Polish products … and as a result all goods and products covered by the Polish tariff, when they are transported from Galicia into the German Hereditary Lands, have only to pay an import duty of 4 percent there … in part because it would be too hard on Galicia to view it as foreign and to treat it more severely, in this regard, than a foreign country; in part because it would be impossible in practice to distinguish between Polish and Galician products of this kind’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). ‘Galicia’s other natural or manufactured products, which are not included in the Polish tariff, are to be treated in the same way as products transported from Hungary into the German Hereditary Lands’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). The level of the tariff applied here derives from section 3 of the General Tariff of 1775: ‘Hungarian products and manufactures … provided their provenance is appropriately confirmed … only need to pay half of the import duty laid down in the general tariff’. ‘In the Hungarian lands … half of the duty on foreign imports is to be taken from goods

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The question of the Hereditary Lands’ import prohibitions, which had not yet been settled, was most closely bound up with the question of Galician exports in that direction.28 In principle the government was unwilling, even now, to alter its prohibition policy, with the exception of an item which was very important for Galicia: drawn linen. The decision to make an exception to the rules was a response to a petition of autumn 1776 from the ‘table linen manufacturers’ of Andrychów in the Zator Subdistrict, in which they begged the authorities to make it easier for them to export their goods to the Hereditary Lands.29 In view of the difficulty in exporting items to Gdańsk through Prussia, the central government responded to the petition from Andrychów by suspending the prohibition on the importation of Galician linen into the German and Hungarian Hereditary Lands, replacing it with an import duty of only 10 percent.30 The regulation of export and transit duties was less important than the question of imports. Because they wanted to promote exports, no more than 5/12 of

28 29

30

coming from Galicia which are not mentioned in the Polish tariff’ (Minutes of the Meeting of the Council of State on 4 May 1776 on matters of Galician institutions, hka, Kameralakt, May–December 1776). See above, p. 255. hka, Commerz. Fasc. 57, ad 4 ex Martio 1777. The matter was only dealt with a few months later, by a Report of United Court Offices (ami, v G 7/2940 ad 73 ex Decembri 1776), it is included here, however, because it falls within the context of this discussion. ‘It was unanimously decided that these prohibitions should continue to apply to Galician products … Nevertheless, since one of the main Galician products in the Wieliczka district and the mountainous areas on the border with Hungary is drawn linen and since its alternative export route through Gdańsk is subject to many obstructions, its import [into other Hereditary Lands] from Galicia is permitted … as an exception’. [Editor’s interpolation.] It was mainly the cheaper varieties of linen that were exported and duty on them was set at half the level established by the General Tariff of 1775:

Florins Bleached and unbleached also straw mattress covers and sail linen Sack and tent ticking Fine linen, with a value per ell of up to 16 kreutzers Fine linen, with a value per ell from 16 to 30 kreutzers Fine linen, with a value per ell from 30 to 45 kreutzers Fine linen, with a value per ell from 45 kreutzers to 1 florin Fine linen, with a value per ell of 1 florin and above

Kreutzers per

4

0

centner

5 16 30

0 0 0 36 48

centner centner centner pound pound

1

36

pound

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a percent was charged on them as a rule, with the exception of ‘raw materials or products necessary for our own manufactures, which must be charged a higher duty’, for example potash, which was essential for the linen and glass industries. The export of potash was made difficult, except to Poland.31 The transit duty was set at 1 percent, as under the General Tariff. There was, however, one important difference: ‘In line with the principle that Galicia is to be treated as a separate Hereditary Land, the transit duty which in other cases is only taken once for goods travelling between Hereditary Lands in a common customs area must be taken twice from goods in transit through Galicia and the Hereditary Lands into a foreign country, i.e. it must be taken once in Galicia and once on entry into the Hereditary Lands’.32 One exception was made to the 1 percent transit duty, in favour of Galicia’s livestock. The special duties appended to the General Tariff of 1775 on the transit of Polish livestock were more advantageous than this and it was now decided to grant the same favourable treatment to Galician livestock as well. All the customs administrations of the Monarchy would be informed that in future all the tariff regulations on Polish livestock were also to apply to Galician livestock.33 The Empress approved these proposals and the Galician Governor’s Office was instructed to act accordingly.34 With this, the question appeared to be settled for the moment, except that the advocates of centralisation tried, at the last moment, to hinder the implementation of these instructions, so favourable to Galicia, by means of various delaying tactics, as they did not dare to oppose the express wishes of the Empress and the majority of her advisers openly. Thus the head of the Treasury, Count Kolowrat, asserted that the attempt to differentiate Galician products according to whether they were mentioned in the Polish tariff or not would inevitably lead to fraud or confusion in the administration of the customs and the accounting system, especially as the Galician customs officials were not yet

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‘One single item, namely potash, forms an exception. In this case the existing duty of 1 florin is retained towards Galicia, in that if the potash is not directly sent to Poland, this florin is to be raised as an export duty, in view of the fact that in Galicia itself there is not likely to be much potash production, because of the decline in forests’ (quoted from the Report of 5 December 1776, ami, v G 7/2940 ad 73 ex Decembri 1776). Polish products passing through Galicia and the Hereditary Lands to foreign countries only paid transit duty once. Regulation issued by the Minister for the Bank Deputation on 28 December 1776, ami, v G 7/2940, ad 73 ex Decembri 1776. See below, p. 315. Report by Hatzfeld, 23 May 1776, and Court Decree, 24 May 1776, hka, Kameralakt Fasc. 7 G, May–December 1776.

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adequately trained. Moreover, this distinction had no significance for Galicia.35 Eger, for his part, again pointed out that the provisional solution in question would only delay the definitive establishment of a Galician customs system.36 The Empress did not allow herself to be diverted, however. She stuck to her decision,37 and the Treasury and the Bank Deputation issued the necessary orders to the Galician Governor’s Office, the Hungarian Treasury, the Transylvanian Treasury, the Provincial Administration of the Banat and all the customs administrations. The provisional tariff regulations of 28 December were scheduled to come into force at the same time as the Austro-Polish Trade Treaty, in other words on 1 February 1777. These provisional rules were the best way to regulate Galicia’s relationship with the Hereditary Lands. On the one hand, the Province retained all the advantages accruing to it from its close connections with foreign countries. It was able to obtain goods from abroad at the moderate duty of 10 percent, a privilege the Hereditary Lands did not possess. On the other hand it was not barred from the markets of the Hereditary Lands. Its products could be sent there on payment of an import duty of 4 percent and, where they did not enjoy this advantage, they were subject to a duty not of 20 or 30 percent but merely of 10 or 15 percent. Under the General Tariff, the duty on many items such as fresh meat, poultry (geese, ducks, chickens etc.), wood, fruit trees, garden plants and

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‘In itself, this distinction is of no particular relevance, since Galicia produces fewer kinds of item than Poland, not more … and consequently this Province suffers no disadvantage’ (note of 9 December 1776 to the President of the Bohemian Austrian Court Chancellery, Count Reischach, ami, v G 7/2940 ad 73 ex Decembri 1776). ‘… that no reason can be found for departing from general principles which have already been decisively established and approved by her Majesty, and embarking upon new arrangements which can only delay the decision on a Galician tariff system’ (note of 9 December 1776 to the President of the Bohemian Austrian Court Chancellery, Count Reischach, ami, v G 7/2940 ad 73 ex Decembri 1776). Resolution of 27 December on the report of the United Court Offices of 5 December 1776, ami, v G 7/2940, ad 73 ex Decembri 1776. I approve this joint decision in all respects. Nevertheless, on point 2, in respect of Galician drawn linen, it should be made clear that only linen from Galicia should be admitted at half the duty and it must be proved that it is genuinely produced in Galicia. For goods of this kind from [Prussian] Silesia can very easily come into Galicia, so that without this precaution the way would be clear for these prohibited Silesian goods to enter my Hereditary Lands on the payment of half the regular duty. Expressing the Empress’s particular wish, the Andrychów table linen manufacturers were instructed that, in order to establish the Galician origin of the linen ‘it would not be enough merely to present a Galician export certificate, since Silesian linen which had paid import duty could also gain an export certificate’ (note of 26 March 1777 by the Treasury, hka, Commerz. Fasc. 57, ad 4 ex Martio 1777).

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so on, was less than 1 percent. Polish livestock enjoyed especially favourable treatment. Last of all, the markets of the Hereditary Lands were accessible to the products of the largest Galician industry, the manufacture of linen. In order to evaluate the significance of these regulations correctly, we must keep the following facts in mind. The partition of Poland and the introduction of the provisional (Polish) tariff of 177238 had cut off Galicia from the economic and social organism with which it had been most closely connected for centuries. The obstruction of its existing trade routes threatened it with ruin, particularly because no alternative routes had initially been established and Galicia, as it were, hung in the air between Austria and Poland. With the reform of the Polish customs tariff39 and the creation of the free trade area in Brody,40 on the other hand, the interrupted trade links with the outside world and particularly with Poland began to be restored. The conclusion of the trade treaty with Poland41 signified a further improvement in this direction. There could of course be no suggestion of a complete restoration of the conditions prevailing before the partition. This was true not only because Galicia remained separated from the Polish Republic by a customs barrier but also because the route to Gdańsk was blocked by Prussia’s oppressive tariffs. Now, after previous attempts had been made to form a closer relationship between the Hereditary Lands and Galicia, by establishing the Cieszyn and Krnov fairs,42 Galicia’s route to the Hereditary Lands was finally opened by the provisional tariff of 28 December 1776. The authorities wanted to offer Galicia compensation within the Monarchy for what it had lost by ceasing to be a part of the Republic. At the same time, however, the introduction of these rules governing economic life was a visible sign of the closer political relationship between Galicia and the Monarchy which had started in 1772. Only now were the first steps taken to incorporate the newly-acquired Province into the economic system of the state, just as four years previously it had been forced into the its political system.43

38 39 40 41 42 43

See above, Chapter 1. See above, Chapter 2. See above, Chapter 3. See above, Part 2. See above, Chapter 3, Sections 5 and 6, pp. 167–171. ‘The partition of Poland was not completely accomplished until the regions in question were incorporated into three different customs areas’, Wagner 1870, p. 345.

chapter 11

The Galician Tariff of 3 January 1778 1

The First Draft

All customs regulations for Galicia previously mentioned were merely provisional. Attempts to replace the provisional tariff of 1773 with a definitive tariff had already begun in 1774. They were initially unsuccessful, however. All that was achieved was the regulation of issues which came to the surface in the course of the discussions by new provisional arrangements to replace the old ones. The first real customs system for Galicia was only created on 2 January 1778. To trace its history we need to go back to the moment when Joseph ii replied to Count Wrbna’s plea of May 1774 that, in the interests of Galicia no overhasty decisions should be taken on its economic organisation, by calling for precise ‘information on the current position’ in the Province.1 The Galician Customs Commissioner Eder responded by working out a detailed proposal for the organisation of the Galician customs system and this formed the basis for further deliberations.2 Like all the other administrative reforms made by the Austrian government in Galicia, this project proceeded from Joseph ii’s fundamental idea that the arrangement of the Province’s internal affairs should be adapted as much as possible to the system that already existed in Bohemia and Moravia.3 For the purposes of our later discussion, it is absolutely essential to gain a precise understanding of this concept, which has so often been misunderstood in the literature. Such measures are customarily regarded as the Emperor’s attempts to Germanise and centralise, directed against all provincial and national differences. Reference is especially made to Joseph’s well-known order that within a year and a day no-one should be seen in Polish clothing, except country people, on pain of punishment.4 Nevertheless, references to this and similar aberrations

1 See above, p. 144. 2 Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. 3 Arneth 1876–79, 10, p. 91. It was often stressed that Galicia should be organised ‘on a Hereditary Lands’ or ‘on a German’ footing. See above, pp. 182 and 255. 4 Arneth 1876–79, 10, p. 80; Łoziński 1872, pp. 57 and 126.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_018

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of enlightened absolutism are not a guide to understanding the real content of Maria Theresia’s and Joseph ii’s reforming efforts. Where the above-mentioned vestimentary regulations are concerned, these were very often based on considerations of amorality which appears to us to be incomprehensible and petty.5 Frequently, however, they were rooted in a serious idea. In these cases there can be no question of an intention to Germanise the population for the simple reason that vestimentary regulations were often issued for purely German provinces.6 Nothing could be more mistaken than to interpret the formula according to which Galicia must be organised on a ‘German footing’ or ‘like the Hereditary Lands’ merely from the point of view of centralisation and Germanisation. The formula had a completely different meaning for Galicia, much deeper and more important than the attempted centralisation which has been imputed to it. The Emperor certainly never lost sight of the goal of the unity of the state. But it is equally true that he took account of the special interests of Galicia as soon as it became apparent that in this Province, more backward economically than the Hereditary Lands, the conditions for uniformity of legislation were not yet 5 A regulation issued by Maria Theresia for Upper Austria instructed that: ‘the frivolous costumes worn by female persons’ are to be set aside within a year ‘without appeal’ and tailors, officials and clergy were threatened with a painful punishment ‘for every person who has not changed their way of dressing’ if they permit persons attired against the rules to make an oath, baptise their children, etc. (see Helfert 1860, p. 26). 6 The vestimentary regulations of the Josephine epoch were only the counterpart of similar estate-based norms of earlier centuries, in which sumptuary laws prescribed the clothing, the materials and even the colours each estate must wear. In Poland, for instance, the ‘crimsons’ (karmazyn of the magnates) were distinguished from the ‘grey coats’ (szaraczek of the lesser nobility). The Galician nobility had very little right to accuse Joseph ii of violating personal liberty with his regulations since they had themselves invented arbitrary clothing regulations for their subordinates – only to mention Princess Jabłonowska’s ‘law book’ for her subjects (Korzon 1897, 1, p. 365 and 2, p. 6). While the nobles’ regulations aimed to fix and maintain distinctions between estates, Joseph’s were dictated by the idea of erasing all estatebased differences in public life. For that reason, the Emperor himself renounced the pompous splendour of Spanish garb and simple clothing was introduced even at Court. Women were forbidden to wear ‘chamber clothing’ (Michiels 1861, pp. 84–5 and 234; and Mitrofanov 1910, 1, p. 106). This was the reason and no other for the instruction in the vestimentary regulations for Galicia already mentioned, that ‘All in the imperial-royal service [should] adopt French clothing sub conditione sine qua non they cannot be employed’ [‘sub conditione sine qua non’ means ‘as a condition without which … not’] (‘Instruction for Count Pergen’, section 67 [quoted in Łoziński 1872, p. 57, Grossman’s emphasis]). This appeared to be necessary to prevent citizens and peasants from regarding the personnel of the new government organs as identical with their former oppressors, as the Polish nobility had, after all, not been excluded from state service and in fact played a considerable part in the administration of justice and the customs service.

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present. Repeated comments in the literature about attempts to impose ruthless centralisation on Galicia can only be explained by a failure to distinguish sufficiently sharply between the interests and needs of the Province as a whole and the interests of the privileged estates. It is well-known that Joseph ii was not particularly enamoured of the privileges of the Galician nobility, as indeed of the nobility in general.7 But the nobility cannot be identified with the population as a whole! The nobility thought in terms of the needs ‘not of the whole Province but of its own class’, as Łoziński put it,8 and for this reason, pointing out that Galicia had been annexed ‘under the rights of the King of Hungary’, it demanded the same privileges as the Hungarian nobility.9 This was an idea it reverted to again and again10 and Maria Theresia was initially inclined to support it,11 until Joseph finally made clear, once and for all, that this proposal had no hope of success.12 If the nobility’s wishes had been met, Galicia would have been subjected to a double threat. First, the whole burden of the taxes, duties and other public charges, from which the nobility would have been exempted, would have fallen all the more oppressively on the other, economically weaker classes of the population. Second and still more important, Galicia would have been able to count on support for its industries and its trade from the government in Vienna just as little as Hungary and, just like Hungary, would have been condemned to the role of a colony, providing a market for the industries of the Hereditary Lands.13 7

8 9 10 11 12 13

After the occupation, when Count Pergen came forward with proposals to give some consideration to the previous privileges of the nobility and, for example, advised that an assembly of the clerical and noble estates be summoned, it was the Emperor who spoke out against this. He abolished their exemption from taxes on the basis of his own absolute state power, without consulting the nobility (Arneth 1876–79, 10, pp. 78– 9). See Appendix 1. Desideria of 1773 (see Łoziński 1872, p. 17). It was still calling for this in 1779 (see Arneth 1876–79, 10, p. 95). Arneth 1876–79, 8, p. 417. Arneth 1876–79, 10, p. 98. Also see Joseph’s letter to Maria Theresia from Lviv, dated 19 May 1780, in Habsburg 1867–68, 3, p. 244. See above, pp. 112–113, 204 and 260. Also see Appendix 2. This policy is also fiercely attacked by Głabiński 1906, p. 12. ‘Our forefathers’, he explains were unable to reconcile themselves with the duty of obligatory tax payments, which contradicted their ideas of anarchistic freedom … After Galicia was incorporated into Austria, they desired a constitution of the Hungarian type, not so much for reasons of national autonomy … as on account of the Hungarian nobility’s exemption from Land Tax. The Galician nobility wanted to achieve this for itself. The nobility has paid a frightful penalty for its political short-sightedness and indeed this has affected not only

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The dilemma over whether to organise Galicia on the basis of the German Hereditary Lands or Hungary, therefore, has nothing to do with the question of centralism. It has a meaning whose significance for Galicia can hardly be overestimated. Because Galicia was placed on a ‘German’ footing the nobility was compelled to undertake the same public duties and monetary obligations as other citizens but it was precisely because of this that it was drawn into the sphere of the Hereditary Lands, that is the provinces which, unlike the Hungarian provinces, enjoyed the full support of the government with regard to their industrial interests. An extremely important conclusion followed: the promotion of industry was never discussed in terms of whether to do it but only how it could be achieved. That was also the case in Eder’s memorandum, quoted above. It begins by outlining the actual economic situation in the Province. Galicia, he wrote, had a balance of trade deficit and ‘satisfied its requirements almost exclusively from Leipzig, Frankfurt, Wrocław and Gdańsk’.14 Admittedly, wheat, linen and a certain amount of coarse table-linen were sent to Gdańsk and Hungary. But more money was exported than imported, particularly because of the Prussian obstacles on the Vistula, and, as a result, ‘there must inevitably be a progressive decline in the amount of money in circulation’,15 which counted as an infallible sign of impoverishment according to the doctrines of mercantilism. It was therefore necessary ‘to think of ways in which this development could be alleviated, to some extent’. He went on to discuss these methods in the section of his memorandum entitled ‘How can the level of [Galicia’s] trade be raised?’ It can be easily understood that here, where there was a pressing need to find a way of restricting the outflow of money and increasing the amount circulating within the Province, well-known measures of mercantilist policy such as the prohibition of foreign imports and the development of local industries could not be of any assistance. The former, as has already been demonstrated, was directly harmful to Galicia, while the latter could not be achieved immediately and conjured up out of nothing, especially without the exclusion of foreign competition. ‘To set up our own factories within the Province seems

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the nobility but the fate of the whole Province … It is impossible to achieve autonomy, without making any sacrifices for it. ‘There was, so to speak, almost no trade conducted with the Imperial-Royal Hereditary Lands, apart from scythes and wrought iron’. Large quantities of wine, iron, tobacco and pigs came from Hungary to Galicia and with these items a barter trade was carried on between the two. See above, p. 199.

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to me to be inadvisable, since they would take a long time to reach the state of perfection the industries of the Hereditary Lands have already attained’. Eder did not mean by this that he was against the promotion of industrial production in general but rather that he was against the state promotion of branches of production whose expansion would have taken far too long. It was only the foundation of ‘factories’ that he regarded as premature for Galicia. At that time, ‘factory’ was chiefly understood to mean the kind of large-scale industry producing fine items and woven materials which existed in the industrially more developed countries, as opposed to the more primitive kinds of production and the simpler methods of working up raw materials. But it was the latter, because they offered the prospect of quicker and more satisfactory results, that were more appropriate to Galicia, which had yet to take its first steps in the industrial sphere.16 Eder therefore wanted to found copper works somewhere on the Vistula and settle coppersmiths there, because the Vistula offered the possibility of lower freight costs, both for procuring raw materials and for marketing the finished product.17 At the same time, he wanted all possible means of support to be employed for more advanced branches of industry, like the cloth industry in Biała, where the conditions were suitable.18 16

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On another occasion the Galician Court Chancellery spoke out against establishing industries and factories in Galicia, other than those appropriate to the Province, which could keep afloat without compulsion or artificial support and as a result do without import prohibitions (Beer 1893b, p. 302). At the time the general view was that success could not be achieved by forcing the establishment of every type of industry in each province; it was better for each province to concentrate on the industry which offered the best prospects, given the prevailing natural conditions. These ‘might be related to geographical situation, closeness of raw materials or superior dexterity of labour’ (Beer 1893b, pp. 269– 70). Besides, the establishment of factories making finer items inevitably appeared premature when Galicia lacked the crudest types of products. It was the latter to which the government paid the greatest attention (see Margelik’s report, quoted below, in Section 2 of ‘Final Observations’, pp. 451–457). Also see below, p. 282 and note on the promotion of the manufacture of linen and yarn. ‘Copper works could be established and coppersmiths settled in a district on the Vistula to which copper from Smolník could be shipped in the form of plate, along the Poprad and Dunajec rivers. This material would find a large market both in this Province and in Poland, since here copper is largely mined by hand and most of it is imported from Gdańsk where it is worked up at great expense’. Eder wrote that the town of Biała consisted of nothing but clothiers. ‘The cloth made there is of the better quality and it is sold at 1 or 2 florins for each Polish ell’. During Eder’s journey, the clothiers’ guild of Biała made ‘very melancholy comments’ to him. They were obliged to pay a 12 percent export duty when buying wool in Poland, then an import duty of 8 percent in Biała, which together amounted to 20 percent. Even when buying their wool in the Hereditary Lands, even in Bielsko the weavers had to pay 3 florins for each centner. Finally, they complained about competition from the clothmakers of Prussian Silesia,

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The main stress in Eder’s proposals to reduce the outflow of money naturally lay not on the process of production but on trade and the circulation of commodities. The support given to the transit trade in foreign goods was expected to create earning opportunities for the local inhabitants and to draw money into the Province.19 For this purpose, ‘wholesale’ merchants should be refunded the duty they paid for the imported foreign goods, up to 1 percent20 (the ‘refund’), once they have exported these goods abroad.21 This important concession, which, as we know, Eder proposed as a provisional measure to favour Brody after 1774,22 was now introduced as a permanent arrangement and also extended to the wholesale merchants of Lviv. Quite independently of this concession to the wholesale trade, moreover, Eder also wanted a moderate transit duty to be set. For goods coming from Poland he recommended the retention of the previous level of ¼ percent. For Muscovite goods the duty should be raised to 1 percent and for Moldovan goods he thought it should be increased even to the level of 2 percent, since the items coming from Moldova destined for the Leipzig and Frankfurt fairs necessarily had to travel through Galicia, so these customs receipts represented a certain income for the Province. Eder wanted special concessions for the important transit of livestock. The transit duties of 1 florin 15 kreutzers per ox, 1 florin per horse and 12 kreutzers for pigs, which had existed since 1773, should only be retained for those Podillian, Ukrainian and Moldovan animals which entered the Province via Sniatyn, Horodenka, Husiatyn and the areas around them, ‘and which were therefore driven through the whole length of the Province’. On livestock travelling all other routes, which were shorter (such as from Brody to Janiszów and from

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who had cheaper production costs and were in a position to damage ‘their livelihood’ by selling more cheaply in the markets on this side of the border (in Galicia), ‘although the people of Biała are not permitted to sell any items at all at the fairs held in Prussian Silesia’. Eder’s proposals for the support of Biała’s cloth industry were that ‘Residents of this town should 1) be permitted to import wool freely from Poland; and 2) be exempted from the 3 florins per centner payment levied at Bielsko; while 3) foreign cloth manufacturers are only to be allowed to visit fairs on this side of the border on payment of 20 percent’ (Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776, Section ‘Vorschläge zur Aushilfe der Tuchmacher in Biała’). ‘In order to bring more money into the Province, it would be of no little service, among others to introduce wholesale trade in foreign goods into the Province, as much as possible, for which purpose Brody and Lviv should be declared the main warehousing locations’. [Presumably point here is that the net transit duty would be no more than 1 percent.] On the system of ‘refunds’, a typical instrument of mercantilist economic policy (see Smith 1910, 1, pp. 396; and 2, 1–6). See above, p. 156.

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Horodło to Dubienka), the transit duty should be considerably reduced (30 kreutzers per head of cattle in the first case, 7½ kreutzers in the second).23 To make it easier to export, Eder wanted to keep the export duty at the level of 5/12 of a percent. He made an exception only for those items whose export needed to be made more difficult so that they could be consumed within the Province (livestock, wax etc.). Eder’s proposals about import duty, on the other hand, were less favourable to Galicia. He believed that the importation of foreign goods only deserved to be facilitated to the extent that they were destined for re-export. The importation of foreign goods for the purpose of personal consumption within the Province did not need to be favoured. On the contrary, it was better to restrict it. He therefore proposed that the import duty for Jewish merchants should be raised from 10 percent to 12 percent; while for Christian merchants it should go up from 8 percent to 10 percent. For certain items which the Hereditary Lands produced in quantity and were therefore specially protected, the import duty should be raised, by way of exception, to 20 percent.24 ‘This would provide the Hereditary Lands with a considerable market for their manufactures and, since all these items (apart from glass and mirrors) are obliged to be stamped officially, the strictness and precise application of the regulations will make it more difficult for them to be smuggled in from foreign countries’. Eder’s attitude to the Jews was ultimately unfriendly and completely out of date. It is true that in all trade relations with the Hereditary Lands Galician Jews 23 24

See the section ‘Die Transito-Regulierung in Ansehen des Viehes’. Here there were: ‘Mirrors and glassware, the products of foundries and majolica. They are traditionally imported from Gdańsk but porcelain was imported from Saxony. The source of ordinary cloth (at 2 florins an ell and less) is usually Poland; while finer linen, silk stockings and chintzes, coarse twills, table-linen, cotton, silver and gold trimmings, knitted items and large buttons mainly came from Leipzig’. Of these items, it was further stated that your majesty’s Hereditary Lands can supply all these goods, whose price and quality I have thoroughly investigated, in equal quantity and quality at the same prices or indeed more cheaply. As, however, merchants in this Province are already accustomed to visiting the fairs at Leipzig, Wrocław, Frankfurt and Gdańsk, have acquaintances and credit there and are immediately supplied with all their pressing needs when they visit, there is very little hope that, even if the duty on the goods of the Hereditary Lands is reduced to 2½ percent, they will visit the Hereditary Lands and try to bring back manufactures. This was made even less likely because, ‘to the present, merchants [have] enjoyed the advantage, given the exchange rate for the ducat, of being able to gain up to 6 percent in foreign countries as opposed to the Hereditary Lands, which reduces the burden of the foreign duties still further’ (see the section ‘Die höhere Belegung einiger Waaren zu Emporbringung jener, so in Erlanden fabricirt werden’ of Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776).

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were placed on an equal footing with Christians. All import, export and transit duties were governed by unified rules and there was no room here for distinctions which would inevitably work against freedom to trade and whose origin reached back into the depths of the Middle Ages. But in trade relations with foreign countries the situation was different. Here Eder simply retained the unequal treatment traditional in the nobles’ Republic, advising that all duties should be 2 percent higher for Jews than for non-Jews.25 He justified this by referring to the ‘frauds’ carried out by Jews, from which they drew big profits. He also pointed out that in Hungary too, when Polish Jews export wine ‘they have to pay the thirtieth at a rate half as much again as the Christians’. The true motive for the higher duty the Jews paid was entirely different, however, and Eder stated this quite openly when discussing the question of Hungarian wine: the purpose was ‘little by little to transfer the trade in this beverage from Jewish to Christian hands’. Eder’s proposal did not attain the force of law. Its weaknesses were subjected to sharp criticism from higher authorities and opinions more favourable to Galicia’s interests gradually emerged in the course of discussions, eventually winning a complete victory. The most prominent critic was Vincenz von Guinigi, who was a Specialist attached to the Galician Governor’s Office.26 He was, it is true, in agreement with the general tendency of Eder’s proposal. But he advocated the use of different means to achieve the intended objective. He was entirely in accord with Eder in advocating extensive support for industry in the Province, particularly in places where it was already clear that it had begun to develop, as in Biała.27 And, like Eder, he mainly directed his attention to the regulation of commodity circulation. From that point, however, their approaches began to diverge. 25

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See the section ‘Dass Juden im ausländischen Consumo-Zoll und Wein höher gehalten werten mögen’ of Eder’s report of 15 January 1775, hka, Kameralakt, Mai–Dezember 1775, ad 312 ex Septembri 1776. Governor’s Office Report of 14 February 1775, hka, Kameralakt Fasc. 7 G, May–December 1776 ad 312 ex Septembri 1776. Von Guinigi was for many years the Specialist in matters of Galician tariffs and trade and in this capacity gained much experience and a praiseworthy understanding of the economic conditions of the Province. … these then are the only cloth manufacturers in this Kingdom; their cloth, however, cannot be produced with the perfection, good quality and outstanding cheapness of that from the other side of the border, owing to this oppressive situation [see above]; they therefore deserve all possible consideration and, when the tariff is set, the necessary steps should be taken to help them, in line with the recommendations of von Eder, who wants them to be given all possible encouragement (Governor’s Office Report of 14 February 1775, hka, Kameralakt Fasc. 7 G, May–December 1776 ad 312 ex Septembri 1776).

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Guinigi thought that Eder’s recommendations for the alleviation of burdens on wholesale trade recommended (a ‘refund’) was not sufficient. The government must try to promote exports, since ‘products which are suitable for conducting a surplus trade, such as potash, skins, flax, hemp, yarn, tobacco and dried fish, which are available in considerable quantities, should not be ignored’. Guinigi’s main objections, however, related to two other major defects in the proposal: import duties on foreign goods and the treatment of Jews. As regards the first, he considered it inadvisable to increase and in general to fix a single tariff independently of the value or type of the commodity and he called instead for differential tariffs to be laid down in detail.28 On the other hand, Guinigi was entirely opposed to differential treatment in areas where it was superfluous, such as in relation to the Jews. The special duties imposed on the Jews were an expression of the medieval mentality which was incompatible with the development of a freer trading environment at the end of the eighteenth century. In Galicia, where foreign trade was almost exclusively in Jewish hands, Eder’s regulations were a threat to trade as such, since Eder was unable to give any guarantee that a group of Christian merchants could be created to replace the Jewish trading elements he proposed to drive out. ‘In trade’, explained Guinigi, ‘there can be no distinction between Christian and Jew, because such a distinction creates confusion both in trade itself and in the handling of the customs system’. The frauds committed by the Jews cannot be used to justify such exceptional regulations, because ‘alert police supervision is always necessary to combat such frauds’. The Treasury took the side of the Galician Governor’s Office in all the matters raised by Guinigi.29 It agreed to give active support to the Biała cloth industry.30

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To regulate and raise import duties in a uniform fashion, without distinctions, runs counter to all good commercial principles. We are of the opinion … that import duties should be determined according to the same fundamental principles as have already been adopted with a great deal of success in the other Imperial-Royal Hereditary Lands, the more so as this is perhaps the only means of making the manufactures of the Hereditary Lands acceptable and attractive to purchasers in this Province too, who at present are only accustomed to foreign goods (Governor’s Office Report of 14 February 1775, hka, Kameralakt Fasc. 7 G, May–December 1776 ad 312 ex Septembri 1776). Resolution of 12 July 1775, quoted in Governor’s Office Report of 14 February 1775, hka, Kameralakt Fasc. 7 G, May–December 1776 ad 312 ex Septembri 1776. ‘The complaints of the Biała cloth manufacturers about the duties imposed on wool will be remedied, in so far as they concern the Polish export duty and the Galician import duty, by altering both tariffs’. This refers to the tariffs envisaged in the trade treaty with Poland. ‘The export duty of 3 florins per centner on wool drawn from the German Hereditary Lands (Silesia) and Hungary should continue to operate against Galicia but it can be reduced for cloth-making in Biała to an export duty of 5/12 percent on an annual quota of wool from the

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It could not raise any enthusiasm for the idea of refunds, because it could give rise to abuses and also lead the smaller merchants of Lviv and Brody to make complaints. Even so, in view of the great importance of transit trade for Galicia, the Treasury tolerated refunds.31 On the other hand, it was against differentiating transit duties according to the destination of the product. It was also opposed to increasing import duty32 and equally opposed to any special regulations for Jews. ‘In the case of the future import duty, the distinction which has existed to the present, between Galician Christian merchants and Jews and foreigners, for which there is absolutely no good reason, is to be abolished and the level of duty is to be evaluated on the basis of the commodity and not the person’. The Empress appeared to be in agreement with these proposals, which were imbued with a modern spirit, and on 2 September 1775 she instructed the Galician Governor’s Office to work on them. How seriously she took into consideration Galicia’s particular conditions is shown by the fact that she expressly empowered the Governor of Galicia to regard the instructions from Vienna as mere suggestions and not as binding directives.33 It is the more astonishing that

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Hereditary Lands and from Hungary, to be determined by the Galician Governor’s Office. The export duty would amount to 7½ kreutzers on the centner of wool, according to the estimate of 30 florins per centner. In the section on the cloth industry we will see that the implementation of this concession did in fact contribute greatly to the development of this branch of industry in Biała. ‘If, however, a considerable trade in foreign goods of this kind can be expected, whereby they are transferred to another neighbouring foreign country, if they were not manufactured in the Hereditary Lands and if it was not easy to smuggle them in, the Governor’s Office, having taken all the necessary precautions, is to permit the allotment of a refund … or to establish some other method of preserving the wholesale trade of Brody’. ‘The imposition of higher duties on foreign goods necessary for the consumption of the Province, in view of the existence of Hereditary Lands’ products of the same type, is to be left to the Specialists the Governor’s Office to decide … The method of improving the relative position of goods from the Hereditary Lands by raising duties on foreign goods is not [however] regarded as advisable. In fact, improvement must [rather] be sought by reducing the duties imposed in the Hereditary Lands on certain items’. The Treasury therefore wished to reduce the 2½ percent import duty on goods from the Hereditary Lands entering Galicia (which amounted to almost 3 percent, when taken together with the export duty in the Hereditary Lands) to ⅔ percent, or 1 kreutzer per florin. ‘It has been agreed to send these proposals from the Treasury to the Governor’s Office, not as an instruction to be followed but to be taken account, if of use in the construction of the tariff or, to the extent that the Governor’s Office decides not to make use of them, it should explain its reasons and give its alternative views before establishing the tariff’ (hka, Kameralakt, ad 312 ex Septembri 1776). It was mentioned earlier that the General Tariff of 15 July 1775 was not extended to cover Galicia for the same reason (see above, p. 256).

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the Treasury Decree of 27 September 1775,34 which was issued to put this Imperial Resolution into effect, coincided neither with the Empress’s comments nor with the Treasury proposals to which they were a response. There was no mention of any agreement to consider Galicia’s special conditions and instead it stated ‘that almost no part of the system constructed by the customs administration can find any application’ and that the customs administration was therefore obliged ‘to work out a completely new tariff system in accordance with the Resolution of her imperial majesty’ (point 5). The Galician Governor’s Office was therefore asked to adapt to Galicia the new General Tariff issued on 15 July 1775 for the Hereditary Lands, but without making any substantial changes to it (point 1). And, as the Treasury Decree nevertheless permitted the importation into Galicia of certain foreign items, prohibited or subject to heavy duties in the Hereditary Lands, at a moderate tariff, this was an internal contradiction which made the whole instruction quite impossible to implement. For if the General Tariff were really to be applied to Galicia, the permitted exceptions could only be small and thus of little significance for the Province. If, on the other hand, these exceptions were meant to apply to all the items that were necessary for Galicia’s trade, the Treasury’s tariff rules thereby cancelled themselves out. Later on, in fact, this conclusion was actually drawn.

2

The Second Draft

On 30 December 1775 Eder presented the fresh proposal demanded by the Treasury.35 That this was merely an adaptation of the Hereditary Lands’ tariff, was already formally apparent in that it was not organised systematically but only a set of scattered comments on the individual paragraphs of the tariff. While formally submitting to the wishes of the Treasury, Eder continued to point out untiringly that to apply the rules of the General Tariff to Galicia was a dangerous and ruinous step, in view of actual conditions there. He accordingly proposed so many exceptions, which were of such a far-reaching nature, that the General Tariff was completely emptied of its prohibitive content. He expressed his opposition to most of the prohibitions of the export of raw materials, such as hides, skins in general, hare skins, horn, potash, hemp, glass

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hka, Kameralakt, ad 312 ex Septembri 1776. It was mentioned earlier that the General Tariff of 15 July 1775 was not extended to Galicia, for the same reasons, see above p. 256. ‘Gehorsamste Relation ueber die antragende Einführung des neuen Erbländischen Mautsystems’, hka, Kameralakt, ad 328 ex Majo 1776.

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shards and so on,36 since there are no factories in Galicia which would be able to handle these materials. He only wanted to retain the high duties on foreign goods where they ‘can be regarded as luxury products’. This applied, for example to English beer, heavily consumed in Galicia.37 Eder wanted the import duties on all other foreign raw materials (iron, copper, fodder, peltry, wax etc.) and for semi-manufactures and entirely manufactured products (cotton goods, bindings, woollens, silks etc.), whether needed for the Galician transit trade, for personal consumption or finally for further treatment, to be reduced in proportion to their indispensability.38 And in order to hammer his

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… no steel is manufactured here and very few, indeed so to speak, no factories are present in this Province, which would be in a position to work on the hides and skins produced in here. There is also a serious lack of craftspeople capable of handling hare skins, horn, potash and hemp, since in this Province there is very little work done on and very little use made of the first three products and, as for the last-mentioned, the shortage of master-craftspeople means that the vast majority of the hemp here is worked up by masters brought from Gdańsk. Glass shards are neither collected in nor exported from this Province. The same is true of ash. ‘Here this material is always thrown away and no-one ever thinks of exporting it’ (‘Gehorsamste Relation ueber die antragende Einführung des neuen Erbländischen Mautsystems’, hka, Kameralakt, ad 328 ex Majo 1776). For example, Eder wanted to increase the duty on English beer from the existing 24 kreutzers per barrel to 3 florins a cask or 3 kreutzers a bottle. Even so, this would hardly have amounted to 5 percent of the value, since a bottle of beer was sold for 1 florin. Since there was not much iron produced in the Province (either in the raw form or as bars, staves, wheels, hoops or ploughshares), Eder considered that foreign imports were unconditionally necessary, the more so because ‘moving Hungarian iron capable of being used for rods and hoops from the original producer to here costs 12 florins a centner’. Apart from this, only the parts of the Province bordering on Hungary could make use of it, while ‘the part of Galicia adjacent to the Vistula and Volyn’ had to do without Hungarian iron, owing to remoteness and because the cost of transporting it was too high. This lack of iron contributed greatly to the neglect of agriculture, the development of which was obstructed. Polish iron imports were therefore indispensable. ‘So long as our own factories cannot deliver material of a high enough quality and quantity, the existing import duty on worn out, old, broken iron, then on pig iron, no less than on cast iron, horseshoes and nails, whether the items come from Hungary or from Poland should be abolished and replaced by a duty of 5/12 of a percent’. He demanded a similarly low tariff on copper and, in this context, he repeated his earlier proposal: ‘to settle coppersmiths in the neighbourhood of Janiszów and to set up a works’, the products of which could be dispatched to the interior of the Province on the river San and to Poland on the Vistula and the Poprad (see above, p. 270, note). Eder wanted to maintain the previous transit duty of under ¼ percent on skins and furs imported by Russian merchants, since this low duty had proved to be very advantageous for the development of the trade in these items. ‘This trade takes place almost exclusively in Brody … To maintain this branch of trade, it is necessary to pay a refund on all peltry

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point home, he pointed out – referring to Galicia’s geographical situation – that special arrangements with regard to the importation of foreign commodities were not only in the interest of the Province but also of the Hereditary Lands.39

39

destined for foreign countries and for Hungary, by refunding the transit duty and treating these commodities purely as items in transit’. To secure a supply of wax for Galicia and the Hereditary Lands, a commodity very much sought after at the time, all duties on the import of this item from Ukraine, Podillia, Volyn and Turkey were abolished, while its export abroad was prevented by raising the export duty from 5/12 to 12 percent. Eder treated the question of importing foreign manufactures, for example cotton goods, according to the same principles. Among other similar items, some hundred thousand pieces of Chinese cloth, which are manufactured from cotton on the furthest borders [China] were imported from Moscow. All the Jews wear this material, since it is very long-lasting, and an ell of it only costs 15 kreutzers. It would hardly be possible to find replacements of sufficient quantity of this kind of item in the Hereditary Lands, much less of an equivalent price and durability. Eder therefore proposed to permit the import of Chinese cotton, ‘regarding it as something like a half cotton and as a necessary item, charging 10 kreutzers per pound or half that amount [i.e. 5 kreutzers] owing to the general need for it’. The extent to which this proposal would have breached the tariff currently operating in the Hereditary Lands can be seen from the following argument. If it is assumed that only 200,000 pieces of Chinese cloth were imported, each piece probably 30 ells in length and with an ell costing 15 kreutzers, this single item would already account for a total of 1½ million florins flowing abroad. He also wanted the import of foreign bindings to be permitted, because as regards quality, price and quantity ‘the Hereditary Lands are far from equalling foreign countries in the manufacture of bindings’. The Hereditary Lands did, it is true, manufacture other items in sufficient quality and at a reasonable price but they did not produce enough. This applied particularly to ‘silks, kid gloves, waistcoats and velvet’. The same was true of woollens. The Province itself did not need to consume all these items. ‘If [however] there was an inadequate quantity [of them] available or their prices were higher than foreign prices, the trade of Brody would thereby suffer greatly’ (‘Gehorsamste Relation ueber die antragende Einführung des neuen Erbländischen Mautsystems’, hka, Kameralakt, ad 328 ex Majo 1776). Eder considered that if the prohibitions in the Edict of 14 October 1774 were applied or if duties with a prohibitive effect were imposed on Galicia, the Hereditary Lands would be exposed to the danger that foreign goods would be smuggled in through Poland and Galicia. ‘The crafty Jews would most wickedly do this and, as the astonishingly extensive borders [between Galicia and Poland] cannot possibly be occupied so that the customs duties could be fully secured, it is to be seen that goods with a high duty, on which the Republic of Poland imposes an almost imperceptible tariff, would be conveyed into Poland through Gdańsk and covertly into these two Kingdoms [Galicia and Lodomeria] and subsequently freely introduced into the Hereditary Lands to the detriment of their public income’. This danger to the Hereditary Lands would not exist if Galicia were granted a special status and foreign goods could enter with a concessional duty of ‘at most a half’.

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The Governor’s Office and Guinigi, its Specialist on trade matters, both entirely agreed with Eder’s point of view.40 Guinigi also emphasised that ‘with this high tariff [of the Hereditary Lands] it would hardly even be worth thinking about wholesale trade here and it would have to be regarded as completely lost’, and he therefore also called for far-reaching exceptions to be made to the tariff regulations. Finally the head of the Galician Court Chancellery, Count Wrbna, expressed the opinion41 that the extension of the tariff system prevailing in the Hereditary Lands to Galicia would merely serve the interests of the Hereditary Lands and not those of Galicia.42 With this, the fate of Eder’s draft was decided. The opinions that had been voiced inevitably led the Empress to doubt whether the adoption of the tariff system of the Hereditary Lands by Galicia, as ordered on 27 September 1775, was advisable. In March or April she instructed her officials to engage in ‘further discussion on this question’.43 They took place on 4 May 1776 and the result has already been reported in another context.44 The Council of State pointed out the contradictions in Eder’s second draft proposal but realised that they were only a reflection of the contradictions in the Court Decree of 27 September 1775. The principles the latter laid down to gov-

40 41

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The worry that, in this way goods paying less [in Galicia] would be introduced into the Hereditary Lands, is infinitely smaller than the opportunity of bringing them into Galicia. The narrow pass [from Galicia into the Hereditary Lands] via Bielsko can be watched over and the [customs] payments required by a few officers. The mountains and the location of Customs Offices and supervisory personnel on both sides of the border with the Kingdom of Hungary are a major obstacle to smuggling in that direction. (‘Gehorsamste Relation ueber die antragende Einführung des neuen Erbländischen Mautsystems’, hka, Kameralakt, ad 328 ex Majo 1776). Information from the Governor’s Office of 9 January 1776, hka, Kameralakt Fasc. 7 G, ad 328 ex Majo 1776. ‘Anmerkungen der Galizischen Hofkanzley über den Bericht des Galizischen Landes Gubernii und des Mauth-Einrichtungs-Commisarii von Eder’, February 1776, hka, Kameralakt Fasc. 7 G, ad 328 ex Majo 1776. ‘The introduction into Galicia of the prohibitions on the import of foreign commodities existing in the Hereditary Lands and the prohibitions on the export of domestic commodities and products from Galicia is not aimed at benefiting Galicia but only the other Hereditary Lands. The intention is, namely, to prevent the introduction of prohibited foreign items into the other Hereditary Lands through Galicia and to prevent the export of our own [necessary] products’. His opinion was that, in Galicia, ‘the export and transit of goods should be favoured more than imports’ (‘Anmerkungen der Galizischen Hofkanzley über den Bericht des Galizischen Landes Gubernii und des Mauth-Einrichtungs-Commisarii von Eder’, February 1776, hka, Kameralakt Fasc. 7 G, ad 328 ex Majo 1776). Minute of the Council of State for 4 May 1776, hka, Kameralakt Fasc. 7 G, ex Majo 1776. See above, p. 257.

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ern the relationship between Galicia and the Hereditary Lands were therefore subjected to a precise examination and, after long debates, were placed on a completely new foundation. The decision was finally made to separate Galicia from the tariff system of the Hereditary Lands and to assign a special status to the Province. Under these circumstances, Eder’s second draft proposal now appeared to be entirely inapplicable.45 The often-mentioned Treasury Decree of 27 September 1775 was now explicitly set aside.46 It was positive, however, that the question ‘What kind of import duty should be charged on foreign items entering Galicia?’ was answered with the instruction that in Galicia ‘as a rule … no foreign item is to be charged less than 5 percent’. No maximum level was indicated. Nevertheless, the Council of State admitted the need to set the import duty in Galicia at a lower level than in the Hereditary Lands and to make up the difference only when the items in question entered the Hereditary Lands. The concrete determination of the duty was left to the Galician Governor’s Office,47 subject to a maximum of 5/12 percent for export duty and 1 percent for transit duty. In the latter case, the Council of State asked for special concessions to be made for items coming from the west, which had previously gone through Prussia to Poland and Russia, so as to divert their flow through Bohemia and Galicia. The Empress approved these proposals48 and the Governor’s Office was instructed on 24 May 1776 to work out a new draft proposal. With this, the idea of Galicia’s separate position had gained a final victory over all centralising tendencies.

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48

‘Most of these concerns, however, now lapse, because the whole of the proposal from the Governor’s Office is organised on the principle according to which it was desirable to unite Galicia’s customs system with that of the German Hereditary Lands. With the fundamental principles as now altered most of the previous proposals are no longer applicable’. By the Court Decree of 24 May 1776, ‘The Governor’s Office is informed that it … must completely abandon the decree issued on 27 September last year for the regulation of the new tariff system for Galicia and must regard Galicia as a separate Hereditary Land in customs matters’. ‘Every item needs to be considered separately and with knowledge of the internal trade of Galicia … The Governor’s Office will be in a position to judge which categories can bear a higher duty, without halting wholesale trade, and which should be charged a lower duty’. The Empress’s note of 23 May 1776 to the head of the Bank Deputation, Count Kolowrat, states that ‘In an appendix I give the minutes of the joint meeting with my Council of State in regard to Galicia’s tariff and customs system along with my Resolution. You should keep this in mind and you should instruct the governorial officials along these lines as soon as possible’.

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281

The Third Draft

The new draft was presented to the government within a few weeks.49 It placed in the foreground the principle that Galicia should occupy a separate position. There is no longer any mention of prohibiting the importation of foreign goods or the export of domestic products.50 The underlying thrust of this draft was rather ‘to seek all the advantages of maintaining and promoting the wholesale trade which is so useful and necessary for Galicia and also to clear away and end all obstacles which might impede the satisfaction of the indispensable needs of this Kingdom’. Accordingly, Galicia would not be faced with ‘excessively high duties of 20, 30 and more percent which are equivalent to import prohibitions or constitute, so to speak, a surrogate for these, thus placing barriers to wholesale trade which are almost as insurmountable as the prohibitions themselves’, but instead ‘no higher percentage should be imposed than is compatible with the maintenance of the wholesale trade and indeed the maximum duty should be no more than 10 percent’.51 It would lead too far afield if we entered into the complex tariff regulations that were proposed in more detail. It will simply be enough here to give a brief indication of their thrust. The normal rate of 10 percent was to be reduced in all cases where foreign imports consisted either of foodstuffs needed for domestic consumers, such as cereals, flour, poultry, and fruit,52 or of raw materials indispensable to industry, 49 50

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Governor’s Office Report of 6 August 1776 by Specialist Guinigi, hka, Mautwesen in Galizien, ad 40, ex Decembri 1777. Import prohibitions had previously been regulated under the Prohibition Edict of 14 October 1774, but new regulations were now issued under table F and section 62 of the Customs Edict of 2 January 1778. See, however, section 91. Therefore all the colonial wares, such as cocoa, chocolate, coffee, sugar etc., which according to the General Tariff bore duties of 20, 30 and 50 percent in the Hereditary Lands, were only charged 10 percent under this proposal. Apart from that, they were not charged any of the additional imposts exacted in the Hereditary Lands, such as the purchase tax or poverty relief supplement. The same rate of 10 percent was also fixed for foreign manufactures which the Hereditary Lands were also able to produce. The justification was that ‘it seems to us that the 10 percent maximum we have fixed is adequate since all the manufactures produced in the Hereditary Lands have to pay only 2½ percent, which leaves them a competitive advantage of 7½ percent’. One of the few exceptions to this rule was Swedish herring, which was charged a duty of 2 florins 12 kreutzers per ton, in other words 15 to 35 percent of its value, depending on the market price. It was heavily consumed in Galicia during the winter months and the customs inspector in Zamość reported that ‘most of the nobility and nobles in this district customarily receive Swedish herring in return for the grain they dispatched to Gdańsk in the spring of the same year and thousands of tons of herring are stored on the territ-

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such as iron, copper, hides and dyes, or, finally, items presented which formed important elements in internal or transit trade, such as furs and wax. Moreover, although the Court Decree of 24 May 1776, quoted above, lays down a minimum tariff of 5 percent for foreign goods,53 the draft proposal under examination goes much further and sets duties of 8, 5, 2½, 2, 5/6 and 5/12 percent for numerous items,54 in line with the mercantilist approach, which aimed to protect the ‘industrial’ gains of the Province which derive from the working up of raw materials. The draft proposal’s tariff suggestions consistently reflected the relative ‘tensions’ among raw materials, semi-manufactures and end products.55 Lastly, it was made easier to import the manufactures necessary for the transit trade because, on the initiative of the financial authorities the Austrian provinces which were not included in the Hereditary Lands, ‘only half the foreign import duty fixed for Galicia’, so that only 5 percent had to be paid for the importation of their manufactures.56 Conversely, a higher tariff than usual was to be introduced where necessary for the protection of Galician industry, e.g. linen production. In that case, protective duties would be imposed exclusively in the interests of Galicia and not in the interests of the Hereditary Lands.57

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ory of the Republic, on the banks of the Bug and the San hard by the Galician border … ready to be smuggled across in winter, when the rivers are frozen’, thereby evading the high tariff imposed in 1778 (Governor’s Office Report of 19 January 1779, hka, Mautwesen in Galizien, ad 274 ex Martio 1779). The reason for this high tariff was that the government viewed ‘herring as a luxury good’. This might have been true for the richer inhabitants of the Hereditary Lands but it did not hold true for Galicia. There, in view of the low level of agriculture and the lack of crop rotation, it was not easy to keep animals alive in winter, when there was little grass available. Unless the animals were exported, they were slaughtered and salted at the beginning of the cold weather and for many months even the wealthier nobles ate almost no fresh meat, apart from game and fish or, precisely, herrings, which played an important role for that reason. (On similar conditions in England as late as the end of the seventeenth century, see Macaulay 1953, p. 236.) The Court Decree of 25 March 1779 did, it is true, reduce the duty on herring to 1 florin but this did not solve the problem. See above, p. 280, note. See Appendix 3. For example: ‘Since it is impossible to supply all parts of Galicia with iron from the Hereditary Lands, owing to the great distances involved, and this material must be regarded as absolutely indispensable, we have … fixed tariffs at 2 percent for the first three ordinary types of foreign iron, 5 percent for worked iron and 10 percent for the finer items of wrought iron’. Resolution of 27 September 1777: ‘As regards goods from Milan, Mantua, Tuscany and Tyrol, the decision of the financial authorities should stand; and this will also apply to goods from the Netherlands’. Compare with this section 4 of the Customs Edict of 2 January 1778. ‘Only in those very special cases of cheap goods whose import would be disadvantageous

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For the authors of the draft proposal it was obvious, without further reflection, that all these foreign items which were charged a low duty on entering Galicia would have to make ‘supplementary payments, including purchase tax’ when they entered the Hereditary Lands, while items prohibited there would not be permitted to cross the intermediate customs barrier.58 As far as exports were concerned, the new draft pursued the same objectives as in the case of imports. Apart from measures to make it easier to export goods (the 5/12 percent export tariff), special tariff protection for industry was unnecessary, because industry simply did not exist in the Province. Prohibitions or restrictions on the export of raw materials were, therefore as a rule, superfluous in Galicia.59 To the extent that industries did nevertheless exist in Galicia (the Biała cloth industry and the linen industry) these were assured that they would receive several kinds of assistance to reduce the cost of their raw materials, including special tariff reductions on imported wool,60 measures to make the export of yarn, flax, hemp and timber more difficult,61 and also prohibitions on the export of necessary raw materials.62 The Governor’s Office wanted,

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to local industry [have we] set the import duty at 12 percent’. Thus, for example, the three finest types of linen, which are not produced in Galicia, are to be charged at only 10 percent. ‘The other four types should bear a duty of 12 percent, for the additional reason that here in Galicia an excess quantity of these types of linen is manufactured for the purpose of trade’ (Third draft proposal). Certain other items would be treated in a similar way: ‘If for, example, bleached yarn, both tow and flaxen, is imported from foreign countries and is charged a somewhat higher duty by virtue of the Customs Edict of 1778, this measure is aimed at securing the useful result that in future items of this kind will no longer be dressed outside the Province but within it’ (note from the Court Chancellery to the Treasury, 23 December 1780, hka, Mautwesen in Galizien, ad 190 ex Januario 1781). See paragraphs 61 and 62 of the Customs Edict of 2 January 1778. ‘In the case of exports, we have fixed a duty of 5/12 percent on all the items which bore a higher duty in the Hereditary Lands for the benefit of their factories, because we do not have any factories here which deserve such favourable treatment; and if raw materials are obliged to pay a higher rate of duty this would result in unjustly increasing this Province’s difficulty in importing or exporting, compared with the other Hereditary Lands’. See above, pp. 270, note; and 274 and note. The duty on exports of the following items was set higher than the standard level of 5/12 percent: At 2 ½ percent: Unbleached yarn, flaxen weavers’ yarn, hempen yarn, bleached flaxen yarn and tow, mussel-dye, oil of vitriol, common enamel (for goldsmiths). At 5 percent: waste from wax preparation [Bienenkeulen] or wax droppings, building timber in the form of boards, shingles, and posts, timber for shipbuilding, for masts, combustible wood of all types, coal. At 10 percent: raw, combed, and unworked flax, raw, combed and unworked hemp. The export of various types of ash, hare hair, rags, unworked hare skin, broken silver plate and saltpetre was prohibited (on this point, see below, p. 286, note).

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moreover, to facilitate the export of finished products and finding a guaranteed market.63 This applied particularly to the Province’s most important product, linen, which was to be promoted not only by keeping export duty low but also by reducing the duty on imports into Hungary. The Galician Governor’s Office therefore proposed that ‘in regard to coarse linen, which is a very important industrial product in Galicia, steps should be taken to increase its export many times over … and the Hungarian tariff should be set as low as possible, because it has, in any case, been made extraordinarily difficult to export this product to Gdańsk by high Prussian customs duties’. Finally, transit duties were set at the same level as in the Hereditary Lands, namely 1 percent. When the commodity in transit not only passed through not just Galicia but also the Hereditary Lands, the duty would be taken twice, as a consequence of Galicia’s special status.64 Even at this level it was still low enough and not particularly burdensome, especially because Polish goods formed the vast majority of the transit trade. On them duty would only be levied once, in accordance with the Austro-Polish trade treaty.65 Furthermore, numerous smaller subsidiary payments which had previously been required would be abolished, with the result that the small increase in duty envisaged was actually more in the nature of a simplification of the customs system.66 The Galician proposals were not initially well received in Vienna. On 23 November 1776, Court Councillor Degelmann provided his critical reaction, to be followed some months later by sharp criticism from the Bohemian-Austrian Court Chancellery and Court Councillor Eger, in particular. The latter strongly insisted on the need to establish a 20 percent import duty.67 The Empress,

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The Governor’s Office produced a list of various categories of item whose export ‘deserved particular attention from Galicia’ especially in commerce with Hungary: ‘F) raw lining material, such as fox skin; H) raw skins, such as the skin of oxen, cows, goats; K) calf skin; L) linen in the form of flax, tow and hemp; V) livestock such as horses, oxen, calves, sheep and pigs; Z) thread and spun yarn’. [Listed alphabetically in German.] (‘Auszug derjenigen Feilschaften, welche bishero aus den Königreichen Galizien und Lodomerien nach Hungarn am meisten essitiren’) See section 71 of the Customs Edict of 2 January 1778. Section 72 of the Customs Edict of 2 January 1778. A Treasury decree of 30 May 1781 conceded a similar concession to Russian merchants, in order to induce them to send conduct their transit trade through Galicia, ami, v G 7/2940 ad 26 ex Junio 1781. ‘In order to facilitate the flow of trade within the two Kingdoms of Galicia and Lodomeria, all the extra payments previously customary, namely customs officials’ fees, copying fees, transportation fees, drink tax, etc. and all private bridge and dam taxes are to cease completely’ (Section 7 of the Edict of 2 January 1778). Remarks of the Bohemian-Austrian Court Chancellery dated 7 March 1777, hka, Maut-

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however, did not want to decide this important question in the absence of the Governor of Galicia. The government had to hurry to set a provisional transit duty, once it became apparent that Galicia’s receipts would suffer a severe decline once the Austro-Polish Trade Treaty came into force on 1 February 1777. The Court Chancellery and the Treasury68 therefore called for the transit tariff of the Hereditary Lands, which was 1 percent, to be introduced as quickly as possible instead of the previous ¼ percent, because ‘the worrying decline in receipts can be made good at least in part by this measure’. The Empress accepted this argument.69 The Governor of Galicia, Count Auersperg, arrived in Vienna in the autumn of 1777. On his arrival he was summoned to a meeting of the United Court Offices, on 3 September, which was to make a final decision on the draft Galician tariff.70 On the question of import duty on foreign goods, the majority of the counsellors opposed the views of the Treasury and supported the Governor’s suggestions about both the normal tariff and his proposed exceptions to it.71 But they objected to the proposed tariff on goods from the Hereditary Lands. ‘The

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71

wesen in Galizien, ad 132 ex 1777; the Report of 5 December 1776 by the Court Chancellery, the Treasury and the Bank Deputation, ami, v G 7/2940 ad 73 ex Decembri 1776. Report of the Court Chancellery and the Treasury on 26 June 1777, Resolution of 3 July 1777, ami, v G 7/2940 ad 79 ex Julio 1777. ‘For the rest, it has been agreed that the [transit] tariff in the Hereditary Lands will be imposed in Galicia from now on’. This regulation was immediately given the force of law by the Court Decree of 31 July 1777 (Report of the Court Chancellery and the Treasury on 26 June 1777, Resolution of 3 July 1777, ami, v G 7/2940 ad 79 ex Julio 1777). ‘Protcollum Commissiomis habitae die 3. Septembris 1777 sub Praesidio Com à Kolowrat’. The following were present: the Governor of Galicia Count Auersperg; President of the Treasury Count Khevenhüller; Vice-President Count Cobenzl; and the members of the Court Chancellery Count Zichy, Baron Degelmann, von Eger and Zach (hka, Mautwesen in Galizien, ad 40 ex Decembri 1777). So, for example, the commission was ready to agree to the 12 percent duty on coarse linen: ‘We will not refrain from approving the Governor’s proposals, since linen of this kind is frequently produced in Galicia and especially in the Wieliczka district’. It also agreed that ‘foreign iron imports should have to pay 2, 5 or 10 percent, varying according to the degree to which the iron has been worked up’. The objection made by the Treasury that Galicia might be flooded with Prussian iron was not seen as a serious concern: ‘There is no need to worry that iron might break in through Prussian Silesia because Novitarg, which lies in the Wieliczka district and is close to the Prussian border, produces its own iron for this district, which is not only adequate but also less expensive, and this will keep out Prussian iron; moreover foreign iron, which is required in the parts of Galicia bordering on Podillia for the support of agriculturalists and peasants, can of course, depend on the tariffs of 2, 5 and 10 percent proposed by the Governor’s Office, the more so as the iron imported from the Republic must remain subject to a duty of 4 percent’.

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chief manufactures of the Hereditary Lands’, it was stated, ‘need more favourable treatment in Galicia than is offered by the proposed Galician tariff of 2½ percent, which with the export duty that had to be paid in the Hereditary Lands comes to no less than 3 percent’. The Council of State unanimously proposed a tariff of 5/12 percent on a list of the main items manufactured in the Hereditary Lands. On this occasion, a very interesting exchange of views, which once again casts a favourable light on the attitude of the government in Vienna to Galicia’s industries, took place. The issue was the duty on foreign items which already paid a very low duty under the General Tariff for the Hereditary Lands, namely less than 2½ percent. According to the minutes, this concerned ‘various raw materials from abroad, the so-called primary materials for manufacturers and craftspeople’. Under the Governor’s draft proposals these items were to bear the lowest possible duty of 5/12 percent. The Court Offices, on the other hand, were divided in their opinions. ‘The Bohemian-Austrian Court Chancellery [probably Eger], with Court Councillor von Degelmann concurring, insisted on a duty of 5 percent, adding that even then it would be much easier to import raw materials into Galicia than under the previous duty of 10 percent’. This proposal was justified by stating that, for the present, any active state support or establishment of factories in Galicia was still premature.72 The majority of the Council of State, however, took the position that, although no actual factories were yet envisaged [by the state] in Galicia, the individual manufacturer and craftsperson deserves all possible encouragement and consideration, so that they should not be prevented by tariffs from acquiring the necessary raw materials by transporting them from afar, which was in any case a very costly operation. For this reason, therefore, and because most of the items in question are also admitted into the German Hereditary Lands at the lowest possible tariff, the import duty on the raw materials under discussion should not be set at more than 5/12 percent, even when they come from foreign countries.73 72 73

Sonnenfels taught that ‘it is never advisable for rulers of a country to establish manufactures at their own expense’, Sonnenfels 1772, paragraph 52, also see Přibram 1907, p. 201. In 1780, when in response to Beekhen’s proposals the government began to think about accelerating industrial development in Galicia, ‘the Bohemian-Austrian Court Chancellery considered whether the import of raw materials should not be made even easier so as to stimulate the growth of manufactures appropriate to the Kingdom of Galicia’. Tariffs were examined in detail and it was concluded that ‘these materials are already subject to import duties which are so low that all possible desires of the manufacturers seem already to have been anticipated’ (note from the Bohemian-Austrian Chancellery to the Treasury,

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The Council of State likewise agreed with the Galician Governor’s Office on the question of export duty but also strongly opposed restrictions on the export of raw materials which were merely in the interests of the Hereditary Lands and not at all in those of Galicia, for example, making the export of potash difficult, ‘Since that would constitute a direct additional burden on grain which is being exported,74 an export duty of 5/12 percent must be conceded to it in order not to obstruct the grain trade’. When Cobenzl presented the Council of State’s report to the Empress, he called for an import duty of 5/12 percent on all items manufactured in the Hereditary Lands.75 The Empress decided in favour of this and, in addition, approved all the Council of State’s proposals.76 The question of the Galician tariff had thus finally been resolved. After the Resolution had been altered in a number of unimportant respects, the Galician Governor’s Office was instructed to have it translated into Polish.77 The new tariff law, which was published on 2 January 1778, came into force on 1 May of that year.

74

75

76

77

23 December 1780, hka, Mautwesen in Galizien, ad 190 ex Januario 1781). [Beekhen’s proposals are in his report ‘Von den Veränderung, welche der bisherige pohlnische Handel auf der Weichsel gegen die Ostsee seit der Zergliederung von Pohlen erlitten und von Einfluß deselben sowohl auf Pohlen überhaupt, als auch insbesondere auf die Königreiche Galizien und Lodomerien’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780.] Potash was sent down the Vistula to Gdánsk together with grain, to reduce relative freight costs, and also because the export of potash thereby helped considerably in maintaining the export of grain, which was made more difficult by the Prussian tariff. Report of 15 September 1777, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777. ‘I see no reason why the commodities mentioned in the list should be favoured more than others, such as cotton cloth, knitwear etc., but believe, rather, that all means should be employed in order to facilitate the sale of manufactures from the Hereditary Lands in Galicia. The Governor of Galicia, Count Auersperg, also shares this opinion, with the single exception of one item, linen, on which he wants to retain the duty of 2½ percent, because Galicia itself produces this’. Resolution of 27 September 1777. ‘An import duty of 5/12 percent is to apply not only to the items listed in the second appendix but, in general, to all industrial products and manufactures coming from the Hereditary Lands … I approve the advice given by the majority of the Council of State concerning the need to assist the entry of raw materials into Galicia. In all the other matters the agreed advice given by the Council of State should be accepted’ (Report of 15 September 1777, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777). Also see the Court Decree of 5 December 1777 to the Governor of Galicia (Report of 15 September 1777, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777). Minutes of the 13 November 1777 sitting of the Council of State, and Court Decree of 6 December 1777, ami, v G 7/2940 ad 14 ex Decembri 1777.

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The Significance of the Edict of 2 January 1778 and Its Relation to the ‘Provisional’ Tariff of 28 December 1776

Like the government’s tariff measures, previously described, this law had a double significance for Galicia. Making it easier for foreign goods to be imported served to maintain Galicia’s advantageous wholesale and transit trade. But, in addition, every step taken to ease imports into Galicia was immediately accompanied by an increase in exports, because Galicia’s trade was for the most part literally a process of exchange (barter).78 Formally, the law of 2 January finally entailed an important advance for Galician trade because it codified in one place all the provisions, ordinances and instructions that had previously been issued on the subject. They were now superseded and supposed to be null and void after 1 May 1778,79 with the exception, of course, of regulations guaranteed by treaties with foreign powers such as Poland and Turkey.80 There is, however, no doubt that, despite the explicit text of this law, the ‘provisional’ tariff of 28 December 1776 was by no means abolished. It formed instead a law which was complementary to the tariff of 1778. The formal explanation for this is that the ‘provisional’ tariff of 1776 was in actually not a ‘Galician’ tariff but a tariff for the ‘Hereditary Lands’, establishing as it did import duties of 4 percent, 10 percent and 15 percent on all goods imported from Galicia into the Hereditary Lands and Hungary. A more important reason, however, was that there were arguments for retaining it on the merits of the case. The Treasury Decree of 27 September 1775, which had envisaged the imposition of duties on goods imported into the Hereditary Lands from Galicia, referred to a merely ‘provisional’ tariff81 because it simultaneously demanded the adoption by Galicia of the General Tariff which applied to the Hereditary Lands.82 If 78

79

80 81 82

‘The Galician tariff of 1778 only imposes an import duty of 10 percent on foreign luxury goods, because these products, which enter mostly by barter, not only provide Galicia with an outlet for its surplus products but also encourage the important wholesale trade, allowing is to be conducted with very great success, an advantage about which the state is by no means indifferent’, Minutes of the Council of State on Galician tariff matters, 11 May 1781, ami H. A/6 Fasc. 320 ad 104 ex Majo 1781. ‘From this time onwards, all the former import, export and transit duties, orders, edicts, privileges, exceptions and differences in customs obligations are no longer valid’ (Customs Edict of 2 January 1778, section 2). This abolished the exceptional regulations directed against the Jews which had survived from medieval times, including in foreign trade, and established equality of rights (see above, p. 273). See sections 2 and 6 of the Customs Edict of 2 January 1778. See above, p. 256. See above, p. 276.

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Galicia were to be included in the customs area of the Hereditary Lands, as was intended, there could naturally be no question of imposing a duty on goods passing from Galicia into the Hereditary Lands and this meant that the tariff of 28 December 1776 could in fact only be in effect provisionally, until Galicia had adopted the General Tariff. But since – as we know – the customs union failed to take place and the Edict of 2 January 1778 therefore did not change the separate customs status of Galicia in any way, it continued to be necessary to regulate the importation of Galician goods into the Hereditary Lands by law. The 4 percent import duty was therefore retained, i.e. Galician goods continued to be subject to the same duty as Polish goods, from which they were difficult to distinguish. Nothing had changed in this respect since 1776, because, as long as the trade treaty with Poland remained in force, the Austrian government lacked freedom of movement. There was only one thing it could do: reduce the import duty where it was more than 4 percent in the Hereditary Lands, as was the case with linen, for example. That is what it really did. Originally, the importation of linen into the Hereditary Lands had been prohibited; then it was permitted, subject to a duty of 20 percent; then, under the tariff of 28 December 1776, this duty was reduced to 10 percent, or 8 florins per centner.83 Now, by an Imperial Resolution dated 29 October 1779, the duty on this industry, the largest in Galicia, was reduced to 4 percent.84 In December 1780 the Court Chancellery was ready to concede a similar reduction in duty in favour of other Galician products and it asked the Galician Governor’s Office to present ‘proposals for the modification of the tariff, on the same lines as was done last year with regard to the importation of Galician table linen into the other Hereditary Lands’.85 In February 1781, finally, the duty on Galician products going to Austrian Lombardy86 and the Netherlands was reduced to 1¼ percent. It is absolutely clear that the measures we have described here constituted a system for protection of Galicia’s commercial and industrial interests, which was extremely rational and consistently thought through. Galicia’s separate tariff status, which was at first only intended to be provisional, was placed on a 83 84 85

86

See above, p. 262. See Appendix 4. ‘On Point 6. In accordance with the instructions already given to it, the Governor’s Office should set its hand to measures which have the best prospect of leading to a useful promotion of rural industry and manufacturing’ (note from the Court Chancellery to the Treasury, 23 December 1780, hka, Mautwesen in Galizien, ad 190 ex Januario 1781). ‘The foreign import duty on Galician items and products taken into the districts of Milan and Mantua is to be reduced to half the previous figure of 2½ percent’ (regulation issued by the Governor of Milan, 24 February 1781, hka, Fasc. Commerz. 57, ad 4 ex Februario 1781).

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permanent footing under the Edict of 2 January 1778.87 There was, of course, little that was new in this. It represented rather a deepening and an extension of the principles and practical measures the Austrian government had put into effect immediately after taking possession of the Province. The Edict of 1778, which formed the basis of Galicia’s trade relations with the outside world until 1785, was therefore praised enthusiastically by Count Brigido, although as an emphatic advocate of the nobility’s interests he was not particularly inclined to favour trade and industry. He applauded the favourable impact of the Galician transit duties, which promoted the movement of goods from Leipzig and other foreign parts through Galicia. He was no less enthusiastic about the way the export and import duties had been regulated and stressed that, in drawing up the Galician Customs Edict and tariff for 1778 the connection between Galicia’s trade and Poland, which was … essentially … the creation of nature itself had been taken into consideration and, precisely for that reason, this Province had been treated according to principles which were completely different from those applied to the other Hereditary Lands. This customs system [had] an extremely favourable impact on commercial activity here and made the consequences of the obstruction of or the impediments to the Gdańsk trade far less painful.88

5

The Customs Administration and Its Costs. The Income from Duties between 1781 and 1784. Customs Procedures and Relief from Customs. Official Language. Supplementary Provisions concerning Transit Duty Charged on Eight Short Stretches

The introduction of a new tariff system was to be accompanied by a reorganisation of the customs administration. The Polish administration of three Intendancies [previously referred to as ‘Provinces’], which had been provisionally retained, was replaced by a central administration in Lviv. Another difficulty lay in the immense length of Galicia’s border. In his second draft tariff, which was presented on 30 December 1775, Eder made the point that to guard

87 88

Blodig 1863, p. xviii, is therefore wrong to maintain that the 1778 Edict introduced into Galicia ‘the same customs system as prevailed in the German-Austrian crownlands’. Report of the Governor’s Office, 27 December 1785, ami, v G 12/2968 ad 12 ex Februario 1786. Of course, Brigido did not make these comments until 1785, at a time when his main aim was to frustrate Joseph ii’s reforms.

291

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the 244 miles of the border89 in the manner of the cordon around Bohemia would require 1,064 customs officials, at a cost of 206,604 florins, while in addition the establishment of a central customs administration and the provision of accommodation would cost a further 83,625 florins, making a total of 290,229 florins, whereas the customs receipts would amount to only 228,028 florins, so that the exchequer would suffer a deficit of 62,200 florins.90 The government was therefore forced to adopt a different arrangement, which was estimated to cost only 112,828 florins 30 kreutzers.91 By the end of October 1778, after a 89 90

91

Made up of 101 miles facing Poland, 37 miles facing Turkish Moldova and 106 miles facing the Bukovina, Transylvania and Hungary. The high estimated cost resulted not just from the large number of personnel required but from the high salaries to be paid to the top officials. Eder justified this by saying that ‘anyone who went to Galicia would be separated from all his relatives and would have to procure all his furniture and much of his food at three times the normal cost’. The expected cost of the customs administration to be introduced on 1 May 1778 were calculated at:

A Central Directorate i Customs Administrator (von Eder) personal use First Assessor Second Assessor Third Assessor First Actuary personal use Second Actuary Secretary personal use Total ii Chancellery and Registry of the Administration iii Accounts Office, Main Cash Office and Inspectors’ Office Subtotal of i, ii and iii B Payment Towns Lviv Brody Jarosław C Boundary Posts at the Main Entry Points (Commercial Entry Stations) D Customs Offices for Accessory Trade Total

Salary (florins)

Accommodation (florins)

3,000 600 1,200 1,100 1,000 700 100 500 400 100 8,700 3,250 14,660

750 – 300 250 200 200 – 125 125 – 1,950 787 2,055

26,610

4,792

3,784 4,326 700 12,950

655 755 75 1,685

53,530 101,900

2,961 10,923

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number of economy measures, it proved possible to reduce the cost of the 380strong establishment to 101,344 florins (made up of 94,242 florins for salaries and 10,344 florins for accommodation).92 This rose slightly under Joseph ii, when he demanded more stringent surveillance of the borders. In the second quarter of 1782, the cost of the customs service came to 32,227 florins, which would amount to roughly 125,000 florins a year, while the customs receipts for the quarter were 68,924 florins. The Treasury expressed its dissatisfaction that ‘the cost of management and administration continues to be almost 50 percent’, 46 percent to be precise]. A Treasury Decree issued on 11 September 1783 therefore instructed the Galician Governor’s Office to manage its affairs more parsimoniously.93 This was in fact achieved. In 1783 the preliminary figures were

Customs receipts 315,859 florins Expenses Net income

131,207 florins 184,652 florins

So administrative costs were reduced to 41 percent of the gross receipts.94 If we now try to examine the actual level of customs receipts, we find that, for the first two and a half years after the introduction of the new tariff, exact figures have not been preserved. For the Military Years between 1781 and 1784, however, the figures are known: 1781 325,352 florins 178295 290,822 florins

92

93 94 95

Thus an overall total cost of 112,823 florins (‘Status der k.k. Maut-Gefällen Administration der Königreiche Galizien und Lodomerien wie des dahin untergeordneten Personalis’, hka, Mautwesen in Galizien, ad 4 ex Decembri 1777). ‘Status Personarum et Salariorum der k.k. Mautgefällen Adminstration in Galizien und Lodomerien samt dem mit dem neuen Systeme a 1 May 1778 dahin untergeordneten Personali dto. 2 November 1778’, hka, Mautwesen in Galizien, ad 353 ex Martio 1779, Besoldung. hka, Kameralakt, ad 272 ex Septembri 1783. hka, State Budget for 1783, Fasc. 227. D. Lit, P. ‘Summarischer Auszug über die k.k. Zollgefällen der Königreiche Galizien und Lodomerien mit dem Bukowiner Distrikt’, hka, Kameralakt, ad 339 ex Juni 1783

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178396 315,859 florins 178497 181,810 florins Apart from the absolute amount of trade activity, the level of Galicia’s customs receipts also depended on whether goods had been imported from abroad or from the Hereditary Lands, since in the first case the average duty paid was roughly 7 percent, while in the second case it was only 5/12 percent. The reader will find the attempt to calculate the scope of Galician trade, on the basis of the numbers stated, in the final chapter. It is also necessary give a brief account of the organisation of the Customs Offices and of customs procedures. These were determined by the fundamental ideas which informed the 1778 Customs Edict itself. Exports were to be encouraged as much as possible, while imports were to be observed closely and, if necessary, restricted. Customs officials were therefore free to permit ‘Galician products to be exported by every route on which a Customs Office had been established’.98 Imports were treated very differently. Only the most necessary foodstuffs and raw materials were allowed to pass through the ordinary Customs Offices (described as offices ‘pro commercio necessario’)99 and only on a

Category of income Import duty, foreign Import duty, Hereditary Lands Export duty, to foreign countries Export duty, to the Hereditary Lands Transit duty Supplementary receipts: Tax on general stores Weighing fees Document tax Transportation receipts Bridge toll Contraband and penalties Total 96

97 98 99

1781 (florins)

1782 (florins)

194,702 15,869 20,141 20,284 37,758

181,010 17,733 17,219 17,150 20,200

458 9,925 2,883 4,857 1,502 16,979 325,352

406 9,519 2,763 3,991 2,102 9,739 290,832

According to the State Budget for 1783, customs receipts for the whole Monarchy came to 8,525,054 florins (net receipts were 6,768,996 florins), while for the Austrian half of the Monarchy alone the gross amount was 3,952,212 florins. Thus Galicia contributed almost 8 percent of the total. hka, State Budget for 1784, Fasc. 227, D. Lit. K. This was the figure for net receipts. Section 11 of the Customs Edict of 1778. [‘Pro commercio necessario’ means ‘for essential trade’.]

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retail, not wholesale, basis.100 All other goods, such as manufactures, colonial produce and drugs, could only enter through ‘Commercial Entry Stations’,101 located in one of the three (later four) ‘Payment Towns’ [Legstädte] designated for the collection of duties. This certainly created much inconvenience for merchants. Even so, trade was subjected to much more serious restrictions in other countries at that time.102 There can be no question of any hostile intention towards Galicia in this respect, since these rules concerned commodities from abroad and from the Hereditary Lands, not from Galicia.103 Of the administrative simplifications only two, the granting of credit on duty payments and trade ‘on receipt’, are mentioned here. The first was forbidden in Galicia, as ‘very questionable in this Province … because trade is almost entirely in the hands of Jews’ and ‘because the tariff and therefore the burden of duties is very much less in Galicia than it is in the German Hereditary Lands’. Nevertheless, merchants who arrived in Galicia with large quantities of goods necessary for trade and did not bring with them ‘sufficient financial means for the payment of duty’ were permitted to pay the duty after a sale had actually taken place.104 The second point, trade on receipt, was allowed (but 100

101 102 103

104

Section 8 of the Customs Edict of 1778: ‘We permit the following items to enter our Galician Province through every Customs Office: fruits of the field, fresh meat and fish, fowl, game, beer and other small victuals, cattle in small quantities, coal, timber and building materials, raw and spun flax, hemp and soap, potter’s materials and also wood, woollen cloth, leather, foreign wine and brandy (in small quantities)’. In addition, cattle driven across the border to pasture were entirely free of duty (section 27 of the Customs Edict). Section 9 of the Customs Edict. Only the oppressive regulations which applied to the English wool trade at the time have to be considered! (See Smith 1910, 2, book iv, chapter 8, pp. 137–56). ‘The capital, Lviv, and the towns of Brody and Jarosław are hereby declared to be Payment Towns. Everything that enters in large quantities from abroad or from our other Hereditary Lands can therefore be assigned only to one of these towns, as the proprietor or carrier determines, for complete customs examination and payment of duty’ (Section 40 of the Customs Edict). The town of Podgórze was subsequently also raised to the dignity of a Payment Town, in response to Eder’s proposal of 6 June 1778: ‘at the request of the whole honoured merchant community of Podgórze and in view of the perceived circumstance that there has been a considerable increase in trading activity there’ (Governor’s Report by Guinigi, 5 July 1778; Court Decree of 5 November 1778. hka, Mautwesen in Galizien, ad 42 ex Novembri 1778). The Lviv Governor’s Office had originally only proposed to establish two Payment Towns. Only in Vienna was pointed out that this was too small a number and that it would force merchants to make extra journeys and impose heavy costs on them (Minutes of the Council of State, 4 May 1776, hka, Kameralakt, May–December 1776). ‘In this case, in the Banat and in other Hereditary Lands where money does not circulate so frequently, proprietors are permitted, after inspection has taken place, to sell one part or several parts of the goods, under the supervision of the customs authorities, and to con-

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only between Galicia and the German and Hungarian Hereditary Lands and vice versa, with the exclusion of foreign countries): duty on the item sent on receipt to the destination country ‘would only need to be paid to the extent that it is put into storage’.105 Finally, there was the question of the official language. Until the reform of 1778 there was no uniformity in this. Goods were dispatched in Polish, Latin or German, which produced considerable disorder. To correct this, all lower officials and higher officials too, called for the introduction of German as the official language and this was decreed by an Imperial Resolution dated 27 March 1778. Most interesting, however, is the fact that it was Joseph ii himself who opposed – on this occasion without success, of course – the introduction of German and supported the retention of Polish and Latin as official languages!106 To return once again to the Edict of 2 January, it should be noted that it also contains supplementary regulations about transit duty. These were improved under Joseph ii and on his initiative, to give Russian merchants, in particular, an incentive to choose the trade route through Galicia.107 Despite the danger of repeated smuggling, the regulations for the inspection of goods in transit were softened and stricter controls were only ordered where there was reason to suspect smuggling or fraud. In addition, the transit duty on goods which only passed through Galicia for short distances of two to three miles was reduced from 1 percent to 5/12 percent, a concession which was unknown in the Hereditary Lands.108 A Decree issued by the Treasury on 30 May 1781 instructed the Galician Governor’s Office to identify the stretches of territory which were to receive this favour. The Governor’s Office replied on 27 March 1782 proposing the following eight short, land routes: 1) the route for subjects of Spisz into the Hungarian county of Árva, which passed over Galician territory for a short distance (for the Hungarian transit trade.); 2) the route from Jabłonka in Silesia which was used by Silesian weavers to get from Galicia to Hungary (for the Silesian transit trade); 3) the three-mile stretch which went from Prussia via Oświęcim and Biała to Silesia; 4) the exit route for the Russian transit trade via

105 106 107 108

tinue selling until they are in a position to pay the whole of the duty’ (Council of State Minutes for 3 September 1777, hka, Mautwesen in Galizien, Fasc. 7 G, ad 10 ex Decembri 1777). Section 58 of the Customs Edict. See Appendix 5. See above, p. 284, note. See the minutes of the Council of State’s meeting of 11 May 1781 concerning Galician customs matters, ami ii A/6, Fasc. 320 ad 104 ex Majo 1781.

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Horodło, Gródek, Matcze, Buśno and Krylów into and through Uchanie; 5) the stretch from Sokal to Stoyaniv, through the neighbourhood of Mylyatyn and Zhuravnyky (for Polish goods); 6) between Pidkamin and Brody; 7) the route via Pidvolochysk, Orikhovets and Tarnoruda; 8) the stretch leading out of Moldova into Turkey via Tsuren and Boyany. Together the Treasury and the Court Chancellery requested that the Emperor to agree to this109 and he gave his approval on 31 May 1782; in addition he reduced the road duty [Wegmaut] by half on his own initiative.110

6

The Export of Cattle, Corn and Provisions. The Edict of 28 March 1778111

It is a truth which has long been recognised that the food producers of a country can do good business during foreign wars. That is how it was during the War of the Bavarian Succession, 1778–79, when large numbers of troops were gathered in Galicia (in the Tarnów District), Bohemia, Moravia and Silesia. The troops’ need for provisions meant that there was a sure opportunity for the Galician producers to market their goods, the more so because the Edict of 28 March 1778 contained the most far-reaching concessions to encourage the export of

109 110

111

Report given on 12 May 1782 by Degelmann, hka, Kameralakt Fasc. 7 G, ad 33 ex Junio 1782. ‘Now that the transit duty has been reduced to ½ percent, the concession of half Road Duty is to be extended to all small transit routes through Galicia’ (Report given on 12 May 1782 by Degelmann, hka, Kameralakt Fasc. 7 G, ad 33 ex Junio 1782). Tokarz (1909, p. 263) nevertheless sheds tears over the fate of the Galician peasants, because their earnings from carriage charges were allegedly reduced ‘as a result of the Austrian transit duties’, and he then paints the consequences of these duties in the darkest colours, pointing in this context to the superior conditions in Poland and arguing that these duties ‘brought about a considerable reduction in Galicia’s transit trade’, which ‘now passed entirely through the territory of the Republic and carefully avoided Galicia’. By making these comments, he himself provides the best demonstration that he was ignorant not only of the norms guiding the government’s actions, which I quoted earlier, but also of the transit regulations in the Customs Edict of 2 January 1778, which are published in Edicta. Tokarz’s further assertion, that the Austrian transit duties led to a severe reduction in the cattle trade (1909, p. 253), is equally without foundation. The figures demonstrate the opposite and we will later see how concerned the government was to assist the cattle trade (see below, Chapter 14, particularly 315). Tokarz appears to believe that the study of tariffs is irrelevant to economic history and can be replaced by patriotic phrases. 28 March 1878, Edicta 1778, pp. 168–70; and the proclamation ‘In Betref der freyen Zuführung des Hornviehes zu den k.k. böhmisch-mährisch-und schlesischen Armeen’, 8 April 1778 Edicta 1778, p. 70.

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livestock, grain and other agricultural produce.112 It is true that these concessions naturally only had an exceptional, temporary character and were in force for just 14 months.113 Even so, they were not without great significance, at a time when Galicia’s exports down the Vistula were suffering greatly from the duties imposed by Prussia and high wartime prices for livestock and cereals even made it possible to cover the cost of long journeys to the west.

112

113

1) In return for passes, issued free of charge by the authorities, producers were able to sell horned cattle entirely free ‘not only of all imperial duties, supplements, thirtieths and other payments but also of taxes imposed by the local rulers and by private individuals and from road and bridge tolls’. 2) Other livestock and meat products, such as ‘sheep and pigs, fat, smoked and salted meat’, and, finally 3) ‘all forms of grain, groats, flour, bread, hay, straw, green vegetables, dried fruit, lard, butter, cheese, brandy, vinegar and wine’ could be exported without a pass or any other form of permission and were entirely freed from ‘all duties and taxes imposed by local rulers or by other private proprietors’. Moreover, ‘carts returning empty were also entitled to benefit from the same concessions’. But as regards ‘the imperial duties, excises, supplements, thirtieths, and road and bridge tolls’ the abovementioned items would be subject to no more than ⅓ of all the above payments (Edicta 1778, pp. 168 and 170). Until the end of May 1779 (hka, Mautwesen in Galizien, ad 100 ex Majo 1779).

chapter 12

The Struggle over Brody’s Privileges, 1778–79 1

The Removal of Brody’s Special Status

The tariff of 2 January 1778 only represented a definite worsening of the situation for Galicia in one respect. As the tariff had taken account of the interests of the Province as a whole to a great extent, the provincial authorities and their Specialist Guinigi were of the opinion that it was no longer necessary to give special protection to the trade of Brody, especially because the merchants of Lviv were jealous of the way Brody had seized control of the greater part of Galicia’s trade.1 Guinigi therefore proposed the removal of Brody’s privileges, with the hardly ingenious argument that, ‘if Brody’s trade suffers, we can always change the constitution again in six months’ time’.2 Further, the existing transit duty of scarcely 1 percent should be replaced by the general Galician import duty. Clearly contradicting the principle lex retro non agit3 Guinigi even wanted to impose the new duty on stock already stored there.4 This ruthless approach was the more oppressive and unjust because, according to statements by merchants in Brody much of this stock had been acquired as early as 1773 and import duty on it had therefore already been paid, at the rate of 10 percent, which prevailed then. 1 As Eder wrote in 1776, ‘It is well-known that the trade of Brody is so large that it amounts to more than the rest of Galicia’s trade put together’ (Governor’s Office Report of 6 August 1776 by Specialist Guinigi, hka, Mautwesen in Galizien, ad 40, ex Decembri 1777. See below, p. 303, note). 2 Minutes of the Council of State, 3 September 1777, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777. He goes on to state that ‘Brody … could and should, in the future, be treated no differently from all other towns, because it will otherwise have too many advantages, in comparison with the rest of the trading community, and this leads trade in all other places to decline. And as they are all subjects of equal status, it seems fair that they should have the same advantages and burdens, particularly as it can easily be foreseen that, while a decline is to be feared in Brody [due to the removal of its privileges], an equal improvement in trade can be expected in other towns’. 3 [‘Lex retro non agit’ means ‘law does not operate retrospectively’.] 4 ‘But because, even so, the Jewish trading community deserves some consideration and it would hit it too hard if it were required to pay such a duty retrospectively, and the state Treasury cannot well demand this in fairness, we believe that it should be sufficient to insist on the payment of half the duty on the stock in question’ (Quoted from Governor’s Office Report of 6 August 1776 by Specialist Guinigi, hka, Mautwesen in Galizien, ad 40, ex Decembri 1777).

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_019

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The Court Offices were, in principle, of a completely different opinion from Guinigi, given the great importance of Brody as a centre of trade, and believed that the transit privilege was necessary for the town, if it was to attract the transit trade, for which it also possessed the best natural conditions.5 Despite this, they accepted the proposal to abolish Brody’s privileges. This apparently almost insoluble contradiction can, however, be explained very simply. The Governor’s Office was able to use small Brody retailers as an effective instrument for gaining acceptance of their proposal in Vienna. ‘Little people’ have always been the born enemy of large-scale capitalists and wholesalers. They looked with envy at the prosperity the wholesale dealers enjoyed, while they were barely themselves making a living, with the expenditure tremendous effort and toil. They were therefore ready, without further ado, to place their trust in the promises of the authorities, when they were assured that the fall of the big boys would bring better times for the ‘people in the middle’. Count Auersperg transmitted a petition, signed by 83 ‘traders and merchants of the Jewish nation’, to the central government.6 In it, the signatories assured the government that the privileges of Brody were not only disadvantageous to them but directly harmful and called for the low transit duty to be replaced by a ‘tolerable import duty’. In these circumstances, the Court Offices saw no

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In our view, it seems regrettable to risk any premature action against the existing organisation of trade in Brody, because trade cannot so easily be re-established after the failure of an attempt of this kind. The situation of Brody, in the vicinity of three foreign borders, appears to be the most convenient for wholesale trade in the whole of Galicia. The caravan merchants, who always try to accelerate their return journey as much as possible, would find it an intolerable burden to have to cope with the dilatory way in which import duty is assessed and collected. The important Brody wholesale trade can provide considerable advantages to the imperial-royal state in various ways and it would be a mistake to let it pass out of our hands and flow instead through one of the neighbouring places in the Republic. For this reason we are inclined to advise either to retain the transit duty for Brody or, better still, to declare the town of Brody a free trade centre, on the model of Trieste or Fiume (hka, minutes of the Council of State meeting of 3 September 1777, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777). 6 ‘Unterthänigst fußfälligstens Bitten von uns Kauf- und Handesleuten aus Brody’, dated Brody, 29 July 1777: ‘The transit duty, which was originally introduced with the best of intentions for the promotion of our business has now caused our trade to decline, something we did not foresee’. They were not in a position to support this assertion with any kind of proof, however. The sole motive for their action was envy of the rich. This is clear enough from their own words: they go on to assure the government that ‘although some of the bigger merchants might suffer some decline and have not, therefore, signed this petition, the situation of the whole of the rest of the community and particularly the suffering middle-ranking merchants will be improved by this measure’. The petition was signed by Juda Leibel, son of the rabbi of Wisznice and others (hka, Mautwesen in Galizien, ad 40 ex Decembri 1777).

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other option but to accede to the demands of both the Jews themselves and the Governor’s Office.7 They justified this decision by stating that the whole question depended on local circumstances, which they did not know. The Empress indicated her agreement in the Resolution of 27 September 1777. The Customs Edict of 2 January 1778 therefore annulled8 all previous special regulations for Brody, ‘with the effect that, in the town of Brody too, all goods and items for sale which arrive or leave or are in transit through the town are to be treated in no other way than according to the present customs system and the tariffs attached to it, relating to import into, export from and transit through the two Kingdoms of Galicia and Lodomeria’. It is true that a number of special privileges were retained for the wholesale trade.9 These concessions were, however, neither practical nor adequate. Brody’s merchants were threatened with complete ruin and the government soon found itself compelled to restore the old privileges and again declare Brody a free city.

2

The Restoration of the Old Privileges

The wholesale merchants of Brody understandably protested against the above reform, which had hit them very hard. In April 1778, they pointed out in a presentation that it was impossible for the exemption of Brody from customs duties to damage Galicia’s trade, because the town lay on the extreme eastern boundary of the Province and conducted its trade almost exclusively with Turkey, Russia, Poland and Lithuania, while it was deterred from trade with Galicia by the 10 percent import duty. Brody’s exemption also did no harm to the small

7 ‘In view of the desire personally expressed by almost all the merchants of Brody and the results of a visit to the town undertaken with the purpose of investigating local circumstances, the said Governor believes he cannot recommend any other step than to declare Brody a Payment Town for customs purposes and to the place the whole customs system there on the same footing as is customary in other Payment Towns’. Nevertheless, the stock already deposited there should not have to pay a heavy duty, he added. The Council of State only wanted to charge them ⅓ of the new import duty, to give merchants extra time to pay, to accept the voluntary declarations of the Jews as to the amount of their stock, and only to proceed with an inspection if there was a high likelihood of a false declaration (hka, Mautwesen in Galizien, ad 40 ex Decembri 1777). 8 Section 1 of the Customs Edict. 9 See, for example, section 57 of the Customs Edict, according to which ‘every well-known and reliable merchant is permitted to dispatch foreign goods to a Payment Town on a speculative basis and to deposit them there’. If the goods went abroad, they would not be charged the 10 percent import duty but only the 1 percent transit duty. Needless to say, the goods could not be unpacked.

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merchants. The interests of small and large merchants were bound together. This meant that the collapse of the wholesale trade would threaten trade as a whole with ruin, hence it would damage small merchants, craft workers, publicans and the peasants of the surrounding region. The Treasury, finally, would also be adversely affected by the reform.10 The privilege of being able to deposit goods in public warehouses for future sale11 was of no use to the wholesale trade in Brody, ‘because the curiosity of foreign buyers cannot be satisfied if the goods lie bundled up in packages in the imperial-royal warehouses’. They therefore begged the government to assist, ‘for the sake of our home town’, in ‘preventing the decline of trade and the collapse of the whole town that threatens us’. And in a further petition they called the government’s attention to the large customs receipts which the state derived from trade not only in Brody but in all the border towns of Galicia. Finally, if the government did not comply with their wishes, they threatened to respond to the call of the Polish Treasury Commission and settle on the other side of the border.12 Meanwhile, the Galician Governor’s Office moved towards implementing the Customs Edict of 2 January 1778, which was supposed to enter into force on 1 May. At the end of April Eder went to Brody to supervise the disclosure of goods deposited there. The Jewish merchants of Brody did their best

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If trade here is examined superficially, it appears that wholesale merchants were the only winners under the old tariff system, while under the new one all merchants have been placed on an equal footing and the town of Brody has been helped to a greater degree. Nevertheless, a precise knowledge of the workings of commerce and the close connections between all merchants in these parts makes it evident that the fall of the one would necessarily result in the collapse of the other. Even the members of the estate of small merchants, who previously appeared to desire the introduction of import duty, have now, with the appearance of the new Customs Edict, realised the folly of their wishes. Most of the small merchants pool together their tiny capital resources, take the resulting amount to Leipzig and Frankfurt and receive three quarters of their supplies on credit. If the credit of the larger merchants is weakened, the credit of the smaller merchants necessarily suffers a complete collapse. Signatures follow, written in Hebrew script (‘Unterthänig gehorsamstes Bitten von dem gesammten Handelsstande zu Brody’, dated Brody, 14 April 1778, hka, Mautwesen in Galizien, ad 183 ex Augusto 1778). See above, p. 300, note 2. ‘Gehorsamste Bitte von dem gesammten Broder Handels-Judenstand’, dated Brody, 12 June 1778, followed by 46 signatures, hka, Mautwesen in Galizien, ad 195 ex Augusto 1778. What is meant by the ‘call of the Polish Treasury Commission’ is most probably the proposal quoted by Korzon, to establish warehouses in all Polish border towns, namely Dubno, Volochysk, Berestechko, Radyvyliv, Chudniv, Bar and Nemyriv, under the heading: ‘Vorschlag, wodurch der Handel von Brodi abgwendet und zum Nutzen des polnischen Landes übertragen werden könnte’ (Korzon 1897, 2, p. 153).

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to delay this process, however. The community raised various objections.13 It was very difficult to organise the disclosure at that time, they said, since ‘the biggest market of the whole year’ took place in May; moreover, the disclosure of such items as spices, retail goods and Nürnberg goods would take at least 3 to 4 weeks, because otherwise they would have to close their shops in order to draw up the lists. Later on they made the further objection that they were absolutely incapable of complying with the law, because there were not enough warehouses available for the goods. This was indeed a problem that ‘deserved consideration’, in Eder’s view. Under the pressure of these representations, he not only extended the deadline for disclosure to 1 June 1778 but his report to the Governor’s Office sharply criticised the measures the government had imposed, saying that they were both harmful to Brody’s trade activities and impracticable in themselves. If it was desired ‘to maintain in the future all the advantages of this foreign trade, from which so many inhabitants of Galicia make a living and raise themselves to the level of taxpayers’, which was highly desirable, Brody must continue to be allowed to occupy a privileged position. This would mean that all goods destined for foreign trade would enter the town on payment of transit duty alone and would leave it without paying any further duty.14 Goods destined to be consumed by the inhabitants of the town, on the other hand, should be subject to the normal import duty or an equivalent payment,15 since there was no reason why the inhabitants of Brody should be treated more favourably than ‘other Galicians’. The costs of the cordon around the town would not be a burden on the state Treasury ‘because the merchants of Brody would agree to cover these without making any objection’. ‘These concessions would maintain foreign trade and increase the wealth of the town of Brody by bringing in foreign money’. They would not ‘disadvantage domestic businesspeople’16 and would 13 14

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‘Relation Eders’ of 14 May 1778, Polska Akademia Umiejętności 811, book 2; also hka, Mautwesen in Galizien, ad 183 ex Augusto 1778. ‘It would be my humble opinion, without wishing to prejudice any decision, that the only way to maintain and increase trading activity in Brody would be for Brody to be commercially separated from Galicia completely; for goods destined for Brody to be subject to very thorough inspections; for no payment to be imposed except for transit duty but for all goods subsequently returned to Galicia to have import duty levied, with the deduction of the transit duty already paid; and for all goods leaving for Poland to be exempt from duty in order to encourage trade’. ‘A lump sum could be worked out to cover the jewellery, dry goods, furs and grocery items consumed by the inhabitants of Brody personally’. The community itself would then decide how big a contribution each inhabitant of the town would have to make. Eder said that the complaints of Galician merchants (particularly the merchants of Lviv) about competition from Brody were without foundation. Goods from Leipzig or Frank-

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‘improve conditions over the whole area’, bringing about ‘highly favourable results’ for the state Treasury as well. If these concessions were withdrawn, Brody’s trade would inevitably fall victim to competition from the Republic and be ruined.17 The Provincial Office was, however, opposed to these views. It could not, indeed, contest the correctness of the facts stated by the Jews and by Eder. It thought, however, that it would be enough to order the establishment of a quarter just for the wholesalers, divided from the rest of the town by a wooden barrier, instead of completely separating the town from the Galician customs area, which was allegedly technically impossible. The small merchants living in this quarter would be compulsorily expropriated, but compensated with a state bond bearing 5 percent interest.18 The Court Offices in Vienna, on the other hand,19 adopted Eder’s position in full: the duties for Brody, introduced on 2 January, were inappropriate for the purpose20 and the remedy proposed by the Provincial Office was ‘worse than the evil itself’.21 There was nothing

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furt had a far greater distance to travel to Brody than to towns further to the west and this meant that the ‘Rzeszów, Jarosław and Lviv merchants would always be able to obtain goods more cheaply, owing to lower freight costs’. These high freight costs would be still greater if the commodities in question were to be transported back from Brody into Galicia. Bearing in mind the 10 percent import duty, ‘it would follow as a matter of course that the trade would never or almost never flow back into the Province but would go to the Polish areas lying further to the east, such as Podillia and Volyn or to Ukraine, Moldova, Wallachia, parts of Russia and Lithuania, with the result that the town of Brody would become, as it were, the warehouse for those provinces’ and thus ‘Brody’s goods would amount to no more than an eighth of goods sold in Galicia’. ‘So much depends on this wholesale trade, which has raised the town of Brody to such a high position by taking wealth out of the Republic, that the slightest increase in duties would make it impossible to continue competing with Polish enticements, by which the Republic tries with all its strength to draw trade away, such as the building of a large number of convenient storehouses, particularly in Radyvyliv and Berestechko in an area one mile from the border, in order to provide the Brody Jewish community in advance with a convenient place to deposit its trading goods’. Governor’s Office report by Specialist Guinigi, 30 May 1778, hka, Mautwesen in Galizien, ad 100 ex Junio and ad 183 ex Augusto 1778. Report by the Treasury and the Court Chancellery, 26 June 1778, hka, Mautwesen in Galizien, ad 183 ex Augusto 1778. ‘The imposition of import duty on all goods arriving in Brody would completely destroy its trade and thereby rob the Kingdom of Galicia of the circulation of money to the value of several millions and end the transit of foreign goods’. ‘There are so many disadvantages attending this proposal that it appears it could hardly be put into effect without damaging trade and provoking innumerable complaints on the part of the merchant estate in Brody … It should not be ignored that this proposal in

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more serviceable than ‘for Brody to be separated from the Galician customs area and treated like Trieste and Fiume … irrespective of the possible need for a larger number of inspectors and the loss of the import duty on goods consumed by the inhabitants of Brody themselves’. The example of these coastal towns proved that such a separation was possible; and it would have been expressed earlier22 ‘if the declaration by the Brody merchant estate had not altered opinions here’. The Empress also decided in favour of Brody.23 A whole year was to elapse, however, before Eder’s proposals came into effect.24 When this happened, section 1 of the Customs Edict of 2 January 1778 was overridden in so far as it related to Brody.25

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relation to the proprietors of stores of goods involves a degree of compulsion so odious that it would make the worst possible impression on a nation that has only recently been reconquered’. See above, pp. 298–300. The Imperial Resolution of 21 August 1778 reads: In the circumstances indicated by the Treasury and given its arguments, it is agreed that the town of Brody must be separated from Galicia in customs matters and treated in the manner of a free port. Nevertheless, great care should be taken to prevent goods arriving in transit through Brody from being introduced into the Province and consumed there without having paid a certain amount of duty. In addition, although the Brody merchants’ proposal to pay the necessary customs inspectors cannot be accepted, an attempt can even still be made to reach an amicable agreement with these merchants whereby they pay a lump sum towards the payment of the customs personnel and the Treasury will make the necessary arrangements to this effect. ‘Patent. Vermöge welchen die Stadt Brody von den Königreichen Galizien und Lodomerien commercialiter ausgeschlossen wird’, 21 August 1779, Edicta 1779, pp. 50–5. This was a verbal, rather than a real change. For in practice ‘the Edict of 2 January 1778 was never put into effect by the customs administration in the town of Brody and, as a result, customs revenue suffered a considerable loss, amounting to many thousands of florins’. Eder had, in fact, arbitrarily decided the question in favour of the Brody merchants on the spot. This was only discovered in Vienna three years later, when the Brody customs accounts were investigated (note by Count Karl von Zinsendorf, 21 December 1782, ‘wegen der von der galizischen Maut Administration der Stadt Brody vom 1. May 1778 bis 1. November 1779 mithin durch 17 Monate ohne ausdrückliche ah. Entschließung eigenmächtig eingerämten Zollbegünstigung’, hka, Kameralakt Fasc. 7 G ad 1 ex Januario 1783; Report of the Court Chancellery on 16 January 1778, Resolution of Joseph ii on 28 January 1778, hka, Kameralakt Fasc. 7 G ad 1 ex Januario 1783; Report by Schönauer on 7 August 1784, hka, Mautwesen in Galizien, ad 169 ex Januario 1785, appendix 8).

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The Edict of 21 August 1779. Supplementary Provisions on the Extension of the Brody Free Trade Area and the Ternopil Annual Fairs

After that, Brody, together with 18 villages in the immediate vicinity, with a total population of approximately 17,000,26 was separated from Galicia by a cordon nine miles long. Every item which was brought out of Galicia into Brody or out of Brody into Galicia had to pay the export or import duty on foreign goods, laid down in sections 4, 6 and 15 of the Edict of 1779. For Brody the advantage of separation was that all goods and products which entered or were exported, without passing through Galicia (goods from the east, from Poland, Russia and Turkey) enjoyed complete exemption from duty, both on imports and exports (section 5). Goods which went from Brody through Galicia, however (hence to the west) paid only the low transit duty when in Galicia (sections 1 and 2). These concessions were of advantage to the wholesale trade in particular. Other provisions, however, were aimed at protecting the small craftspeople and producers and finally even the consumers. For example, the regulation that all goods taken out of Brody into Galicia were subject to a 10 percent import duty, which was entirely understandable in relation to the wholesale trade, would have been disastrous for the craftspeople of Brody, who sold their own products in the fairs held in the surrounding towns of Galicia. There was therefore an exceptional regulation in their favour, to the effect that ‘goods made in Brody … if they can really be recognised as such’ will only bear an import duty of 4 percent in Galicia and the Hereditary Lands.27 The inhab-

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According to the military conscription figures for 1778, the inhabitants of Brody were divided as follows:

Gender Male Female Total Total Christians and Jews

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Christians

Jews

957 1,063 2,020 10,887

4,376 4,491 8,867

The rest of the population lived in the surrounding villages (hka, Mautwesen in Galizien, ad 169 ex Januario 1785, appendix 7). For that reason, ‘goods which are manufactured in Brody itself and can be stamped, will be provided with a domestic stamp and can be imported, following the example of Trieste, as goods from the Hereditary Lands into Galicia and the other Imperial-Royal Hereditary

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itants of Brody, for their part, were also protected as consumers by the rule that all Galician goods not earmarked for the wholesale trade but serving merely ‘day-to-day trade with Brody’ would be exempt from Galician export duty, in so far as the amount of the duty was ‘less than half a kreutzer on these victuals and other commodities of lesser value’, i.e. so long as the value of the commodity did not exceed 2 florins. A special Customs Office was even established in Galicia (Ponykovytsya) to make it easier to dispatch such items.28 Thus the Edict of 21 August 1779 addressed both the interests of large-scale trade and the needs of the local community. A splendid future was opened for Brody. Wholesale trade would continue to be conducted in the town, drawing in foreign money to the benefit of all its inhabitants, and would stimulate craft industry connected with trade. But, above all, Brody now had the opportunity of becoming an industrial centre. All raw materials and foodstuffs came into Brody free of duty, both from Galicia and from the east. Finished manufactures could be marketed not only in Galicia but in the whole state, once the moderate import duty of 4 percent had been paid, and there was no need to fear competition from foreign manufactures, which were burdened with high duties and freight costs.29 The idea of supplying the Hereditary Lands with items manufactured in Brody was a little too bold but it certainly made sense for Brody to dominate at least the Galician market. The government’s tariff policy created

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Lands … This proposal is directed toward future advantage; for although the manufactures of Brody are not yet significant, they could increase in quality and quantity in the course of time if trade is stimulated, crafts and business expand and industry is encouraged’ (Report of 9 January 1779 from the Galician Governor’s Office, hka, Mautwesen in Galizien, ad 149 ex Majo 1779, appendix 7). Draught cattle on the route to Brody were also exempted from road duty (Report of 9 January 1779 from the Galician Governor’s Office, hka, Mautwesen in Galizien, ad 149 ex Majo 1779, section 9). In 1780, during his visit to Galicia, Emperor Joseph ii wanted the export of Galician products to Brody to be made still easier. He called for large consignments of food to be exempt from export duty as well, provided that they were destined to be consumed within the town itself (Report of 9 January 1779 from the Galician Governor’s Office, hka, Mautwesen in Galizien, ad 149 ex Majo 1779, section 10). Count Kolowrat, however, pointed out that it was technically impossible to implement such a measure: ‘It is not possible to find a procedure to distinguish items that remain in Brody for local consumption from those that will travel further afield’ (Section 15 of Joseph ii’s note of 18 May 1780, ami, ii A/6 fasc. 320 ad 1 ex Septembri 1780; section 9 of Kolowrat’s note of 23 June 1780, ami ii. A/6 fasc. 320 ad 45 ex Decembri 1780). When Brody’s tanners and soap-makers complained that the Galician customs authorities were illegally demanding an import duty of 10 percent, both the Provincial Office and the Court Chancellery (Margelik’s report) responded to the representations and put an end to the abuse! (ami v G 7/2941 ad 27 ex Martio 1781).

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this possibility for the town. What happened after that would depend on the energy, the sense of enterprise and the initiative of individuals. It is hardly surprising, then, that the merchant estate in Brody was filled with joy over the victory that had been won and expressed its ‘feelings of unalloyed gratitude for this invaluable act of mercy’ in a ‘most humble declaration’.30 The Christian like the Jewish merchants declared their readiness ‘to take over paying the salaries of the customs officials here’, on condition that they themselves had the right to ‘find, allot and divide the funds for this payment’. It was characteristic of the attitude of the Austrian administration at that time that this offer was not taken up. Brody was not, by any means, expected to cover the cost of paying customs officials; all it was asked to do was to pay the increase in costs which resulted from the reform of 1779.31 In conclusion, the extension of the cordon separating Brody from Galicia, which was ordered by the Court Decree of 15 March 1781, should be mentioned. Owing to Brody’s topographical situation, only one free route led to the Polish border post at Radyvyliv. The Polish customs office exploited the predicament of Brody’s merchants by acting in an extremely arbitrary way. Not infrequently, when markets were being held, they had to wait for 4 or 5 days for a customs inspection and they were unable to find adequate accommodation in the local inns. Merchants found this chicanery so unbearable that they preferred to leave Brody via Leshniv, even though they had to pay transit duty there. In view of this, Eder proposed that Leshniv be included in the Brody cordon, in order to 30

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Declaration dated Brody 19 September 1779, hka, Mautwesen in Galizien, ad 149 ex Majo 1779. It was not just the Jewish wholesalers but the Christians too who expressed their gratitude in this way. The Christian wholesalers who added their names were: Johann Heinrich Klugsseel and Sons, M. Frantz Laskiewitz, (Cossa & Comp., per k.k. Privil. Nadlburger Fabriks-Niederlage) supervisor Carl Josef Hofmann, Emanuel Hochstetter, and J.J. Boesner. At the same time, they pointed out that the tariff separation of Brody from Galicia was not complete: while trade had been freed from customs inspections, it was not free from inspection by the holders of the tobacco lease. They therefore demanded that they should be freed from this as well and ‘excluded from all leasing arrangements of this kind that arose in the future’. On 9 April 1779, the Treasury and the Court Chancellery stated that ‘The declaration by the Brody merchant estate appears to offer … more than the Imperial Resolution requires, in that the meaning of the Imperial Resolution requiring a lump sum to cover internal freedom from duty is only intended to require the payment for increased personnel and is by no means intended to burden the Brody merchant estate with the all of the salaries of officials in Brody’. Before the reform, the salaries of Brody customs officials came to 4,900 florins; after it, the sum increased to 6,017 florins. Accordingly, the lump sum required, together with 6 percent interest on the capital needed to build the new customs building, was fixed at 1,500 florins (Court Decree of 11 May 1779, quoted hka, Mautwesen in Galizien, ad 149 ex Majo 1779).

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create a second, open exit route.32 ‘If they had a choice of exits from the town’, he commented, ‘the Republican customs officials would behave less officiously, since in Poland, where the customs officials’ fee is very large, owing to the high level of duty, every official, in order to continue to gain the benefit of this fee, would need to entice the merchants by more easy-going inspections, by taking less money and by reducing the length of time they had to wait’. This proposal was put into effect by the Court Decree of 15 March 1781. Finally, the provisions favouring the great Ternopil fairs, where most of the Podillian nobility made their purchases, are also connected with the separation of Brody from Galicia. For many years, these fairs had been maintained by the merchants of Brody but with the introduction of the 10 percent import duty it ceased to be worth their while to visit Ternopil. As a result, at the end of October 1781, the owner of Ternopil, Seweryn Potocki, sent to the imperial government ‘A petition from all the inhabitants of Ternopil for the grant of mercy by allowing all the merchants of Brody to attend the fair, which lasts for a whole month’, with the further request that the merchants only be obliged to pay import duty on goods that were really sold, ‘while the goods which are not sold and have to be returned to Brody should only bear a moderate transit duty’. Admittedly, such a system of payment on receipt of trading profits was prohibited as far as foreign goods were concerned by section 58 of the Galician customs tariff of 2 January 1778. But the Governor’s Office claimed (see its report of 16 November 1781) that this applied only to foreigners and that the Brody merchants should be allowed this concession, because ‘although they are commercially separated from Galicia, they are nevertheless subjects of your Majesty, who have a right … not to be excluded from all the commercial advantages applying to this country’. The Treasury sent an identical report to Joseph ii on 10 January 1782, and the latter signified his agreement on 15 January with these words: ‘The recent experiment of the fairs has confirmed that theoretical council-table declarations have no impact on trade, particularly on foreign trade. The Galician government’s proposal plainly needs to be approved’.33

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‘Relation des Mauth-Administrators von Eder, die Erweiterung des Broder Cordons betreffend’, Lemberg, 20 March 1780, ami, v G 7/2941 ad 27 ex Martio 1781. hka, Kameralakt Fasc. 7 G ad 272 ex Februario 1782. Also see hka, Commerz. fasc. 57, ad 5 ex Januario 1782.

chapter 13

Livestock Export Policy and the Organisation of the Cattle Trade 1772–90 The Galician livestock tariff was issued on the same day as the customs tariff of 2 January 1778. It is the capstone of Maria Theresia’s livestock export policies for Galicia; to understand it an account of the historical background seems necessary. For a predominantly agrarian province like Galicia, livestock and grain must clearly be the most important export items. After the partition of Poland, as we have seen, the export of grain to Gdańsk came to a standstill owing to the duties imposed by Prussia on transport down the Vistula. Galicia’s livestock exports, however, had never gone north. They always went west and they therefore remained independent of the tariff policies of the Berlin cabinet. During the crisis of trade and production which was brought about by Prussian customs duties, the export of livestock and the livestock trade in general seemed to be an appropriate way of bringing foreign money into the Province, which inevitably appeared to the authorities as the most urgent and important task, given the mercantilist character of Austrian economic policy.1 Another reason for the government’s particular concern about this branch of trade was the increasing consumption of livestock from Galicia by the western provinces of the Austrian Monarchy.2 This concern was heightened still further by competition from a number of German states, such as Saxony and Prussia. At that time, there was a significant increase in the demand for this item of consumption. The development can be traced back to the growing dissolution of the connection between industrial production and agricultural self-sufficiency, which was evidenced above all by the increase in the purely urban population. Vienna had a population of 196,221 in 1771 and six years later the figure had risen to 204,188.3 1 See above, p. 271. On the attitude of the government on this question, also see the instruction sent to Court Councillor Kozian in 1773 (quoted above, p. 116). 2 See above, p. 177. 3 ‘Cet accroissement est dû en grande partie à l’industrie qui y fait journellement desprogrés sensibles. Les Manufactures de toute espèce s’y multiplient’ [‘This increase in numbers is due, in large part, to the growth of industry, which advances perceptibly there with every day that passes. There are more and more manufactures of every kind’] (de Breteuil, quoted in Grossmann 1911, p. 57). Sonnenfels 1769, pp. 6, 21 and 75, complains about the flood of migrants to the big cities: ‘This overcrowding is the reason for the high prices’.

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In 1781 the Court Chancellery ascribed the inflation of the time to the increase in the city’s population.4 The same process is very likely to have occurred on a still greater scale in the industrial centres of Bohemia.5 In such circumstances the domestic livestock production of the western Hereditary Lands was unable to meet the needs of the population. Particularly in the larger cities, the shortage of livestock was a serious danger, to which the government repeatedly had to turn its attention.6 Sonnenfels made proposals for decentralisation, which were impossible to implement in that period.7 Even leaving these aside, the measures taken by the government were not always the most appropriate. Its irritation over the high price of meat was not seldom directed, in the first instance, against butchers: this happened in 17718 and also in 1782. In the latter year, when a shortage of meat became apparent in a number of towns, Joseph ii threatened to abolish the guild of butchers,9 because he thought that freedom for anyone to supply meat would be the way to prevent shortages and price-increases. Repressive measures of this kind, however, could at most do away with abuses by the butchers’ guild; they could not overcome the shortage of meat. In general, however, the administration did not lack a correct understanding. It wanted to get to the root of the matter and therefore tried to facilitate the importation of livestock from Galicia. Galicia’s significance for the Hereditary Lands as a livestock-exporting province depended on this effort. The Hereditary Lands were threatened by Prussian competition not only in the area of production but in that of consumption as well. The importation of industrial products from Saxony and Prussian Silesia into Galicia and Poland was not paid for in money but largely in livestock and raw materials. This

4 See Přibram 1907, pp. 451. 5 The extension of grain cultivation at the expense of pasturage is also connected with this development. ‘In Bohemia’, as Schweighofer remarked in 1785 (p. 11), ‘grain cultivation is driving out grass and therefore insufficient livestock are raised to cover the needs of the Province … The situation is similar in Moravia’. Přibram (1907, p. 462) is wrong to state that the shortage of cattle in 1782 should be ascribed only to temporary factors, such as a bad harvest of fodder crops etc. 6 In 1774 Count Wrbna expressed his regret that Vienna had suffered from a shortage of cattle for several years (see Beer 1898, p. 16. Also see Sonnenfels 1769, p. 46). Around the same time, the government sent the secretary of the Province of Lower Austria, Matt, on a fact-finding tour of the livestock markets of Prussian Silesia (see Chotek’s report of 1778, ‘Geschichte der schlesischen Viehmärkte’, ami iv E 7/1744 ad 94 ex Aprili 1782). 7 Since ‘an excessive number of inhabitants is the sole reason for high prices in the capital cities … we must make it our business to reduce the number of people in the cities’ (Sonnenfels 1769, pp. 75 and 79). 8 See Přibram 1907, p. 453. 9 See Kopetz 1829–30, 2, section 21, and Přibram 1907, pp. 463 et seq.

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situation forced Galician merchants to direct their livestock exports towards Prussia and Saxony, which the Council of State described as a very disquieting development ‘for the consumption of the Hereditary Lands’.10 There had long been large livestock markets in Brzeg. Since the sixteenth century, large numbers of livestock had been driven from Poland, Moldova and Bessarabia to Silesia, through the customs office in Kraków.11 In the second half of the eighteenth century, demand for them increased still further. Before the partition of Poland, there was a considerable increase in the trade carried on with Prussian Silesia in Podillian, Armenian, Cossack, Ukrainian and Moldovan cattle and pigs, as also in horses, some of which were sold on to Brandenburg, Saxony and Bohemia.12 As demand increased, the merchants of Brzeg no longer simply waited for the arrival of Polish cattle. They went in person to Poland and Galicia and were constantly to be seen at the weekly markets in Kraków, which took place every Tuesday and Friday. They also bought up livestock in villages.13 That a struggle between Austria and Prussia over this important commodity was bound to emerge is therefore easy to understand. Soon after the loss of Silesia, ‘the attempt was made to draw a part of this trade into the part of Silesia that remained Austrian … and to give the Hereditary Lands the advantages which until then had been enjoyed by the markets of Prussian Silesia’.14 As early as 1750, the export of cattle from Austrian provinces was made more difficult15 while, on the other hand, everything was done to secure supplies of livestock for Austria. ‘Markets were established in Bielsko in 1753 and provided with special privileges; the state Treasury supported this enterprise by making advances and buying livestock itself’.16 In addition, Polish, Austrian and even the Prussian cattle-dealers were excused half the transit

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See above, p. 182. See Szelągowski 1902, p. 147. Fechner 1886, p. 507. In his report on the ‘Geschichte der schlesischen Viehmärkte’, Count Chotek describes Wrocław, Świdnica and Namysłów as livestock markets, in addition to Brzeg. ‘The buyers in those markets include not only Silesians, Bohemians, Lausitzers, and Saxons but also Brandenburgers and people from many other districts of the Holy Roman Empire, particularly merchants from Nürnberg’ (ami iv E 7/1744 ad 94 ex Aprili 1782). Memorandum of 8 March 1787 on the cattle markets, from the minutes of the Kraków Congregation of Merchants, in Kutrzeba and Płaśnik 1910, p. 176. From Chotek’s report on the ‘Geschichte der schlesischen Viehmärkte’, ami iv E 7/1744 ad 94 ex Aprili 1782. The Prussian merchants in Moravia were obliged to pay 30 kreutzers on each head of domestic and 45 kreutzers on each head of Polish livestock (Fechner 1886, p. 231). Chotek’s report on the ‘Geschichte der schlesischen Viehmärkte’, ami iv E 7/1744 ad 94 ex Aprili 1782.

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and export duties when they went to Moravia instead of Prussia.17 But the privileged markets of Bielsko, Opava and Olomouc fell into decay. They were badly organised and lacked buyers, so that at the time of Galicia’s annexation by Austria, Prussia was decisively dominant in this respect. The fight did not end there, however. Soon after the occupation of Galicia (in 1772), the Austrian military authorities imposed duties on the export of cattle to Prussia and on 23 January 1773 the driving of Galician and Hungarian livestock to the Empire18 and into Prussian Silesia was even completely forbidden, with the result that in Upper Silesia there was a distinct shortage of livestock for slaughter.19 Instead, the government tried with all the means at its disposal to divert the flow of Galician cattle to the Hereditary Lands and particularly to Vienna. In Vienna, livestock from Galicia was given special concessions, and treated more favourably than livestock from Hungary.20 The organisation of Galician livestock duties served the same purpose. Since 1772 the importation of all types of livestock and horses ‘for domestic requirements’ had been free of duty in Galicia. In 1775, a duty of 45 kreutzers was introduced on Podillian, Moldovan, Ukrainian, Volynian, Muscovite and Cossack oxen. This had been proposed by Eder, after various abuses had become apparent.21 The import duty on Polish draught oxen was set at only 15 kreutzers, however, ‘because these are of an inferior kind and are necessary for the Province’. The export duty was reduced by the reform of 26 March 1774 to the minimum of 5/12 percent,22 which increased the number exported so much that Eder feared a livestock shortage might arise in Galicia itself.23 The transit duty, finally, was very much reduced, particularly over shorter distances.24 The goal pursued, however, was to be achieved principally by improving the organisation of the livestock trade.

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Fechner 1886, p. 230. [I.e. those parts of the Holy Roman Empire which were not Habsburg possessions.] Fechner 1886, pp. 466 and 470. In 1774, during the discussions on the general customs tariff, some voices were raised in favour of supporting the export of Hungarian cattle to Bohemia but the president of the Galician Chancellery, Count Wrbna, was firmly opposed to this: ‘Why should we favour Hungarian oxen?’ he asked (see Beer 1898, p. 16). To encourage the importation of Hungarian livestock into Bohemia would have made it impossible for Galician livestock to enter the Sudeten provinces, especially as the latter were of inferior quality. In order to avoid the transit duty of 1 florin 15 kreutzers, these livestock were purportedly imported for internal consumption but they were then exported as Galician livestock at the low export duty of 5/12 percent, in other words a mere 5 kreutzers. That is to say it was reduced to 5 kreutzers per head of cattle and 1¼ for each hog. See above, p. 136. See above, p. 137 and below, pp. 295.

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In October 1774, Eder pointed out that, ‘in order to restore the flow of livestock which previously passed through Galicia and to take them away from the livestock markets which have, in the meantime, grown up in Prussia Silesia, the best and indeed the only means is to establish public livestock markets in the towns of Oświęcim and Zator, and to hold them three weeks earlier than the cattle markets in Wrocław’.25 The Court Chancellery concurred entirely with Eder’s suggestions26 and the Empress confirmed her agreement in principle.27 The detailed proposals for the implementation of the measures planned were produced by Eger.28 On the basis of the idea that Galician cattle were necessary for the supply of the western parts of the Monarchy, he also especially proposed ‘to create some livestock markets in Oświęcim and Zator’.29 He did, however, consider it impossible to make a complete break with the old trade relations with Prussia. It would still be possible to achieve so much with the cattle markets of Oświęcim and Zator that ‘the buyers, who were accustomed to going to Brzeg, would have a reason to turn to them for their purchases’. In this way, at least the cattle which were left over could be secured for the Hereditary Lands. The failure of the Bielsko livestock market to survive was a result of its poor organisation, he wrote. Galician cattle were exported to Prussia because they could be exchanged there for manufactured items. To draw Galician livestock into the Hereditary Lands the same means needed to be used and the livestock markets would have to be linked with the Cieszyn fairs.30 Further25 26

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Report of 14 October 1774, ami iv E 7/1744 ad 147 ex Januario 1775. ‘These cattle markets in Oświęcim and Zator should be set up immediately. The Governor’s Office and the District Offices are to take the greatest care to ensure that the livestock are fed and watered and that the human visitors are accommodated, and that reasonable prices should be set for these services’ (Report of 5 January 1775, ami iv E 7/1744 ad 147 ex Januario 1775). ‘I approve the advice that livestock markets should be established in Galicia at Oświęcim and Zator, and the proposals concerning the provisional arrangements for import and transit duty on livestock entering the markets. The whole matter should be considered further and a joint report on the subject should be sent to me. A draft of the edict to be published in the future should also be submitted’ (Imperial Resolution of 13 January 1775, ami iv E 7/1744 ad 147 ex Januario 1775. Also see the Court Decree sent on 21 January 1775 to the Galician Governor’s Office, ami iv E 7/1744 ad 147 ex Januario 1775). Report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775. ‘There is just as little doubt that Bohemia cannot be supplied adequately from the resources of that Province itself, even with Hungarian assistance. It requires Polish and Galician livestock …. It follows … that it is necessary to give favourable treatment to Polish and Galician livestock … and to give priority to the trade in these livestock, above that for Hungarian livestock in the provinces in question’ (Report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775). ‘In our internal commerce it is necessary to favour the sale of our own products to our

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more, he recommended promoting the export of livestock with rational tariffs, i.e. replacing the tariff per animal with a tariff graduated according to the quality and weight of the livestock,31 and the distance they had to travel to their export destination.32 These were all well thought-out proposals, particularly suitable for increasing the export of livestock from Galicia. In December 1775, after the relevant provincial authorities and the Galician livestock-dealers, in particular the Bogdanowicz Company in Ivano-Frankivsk, had been consulted, everything was prepared for a joint session of Court Offices in Vienna to settle the matter. Then, however, ‘everything suddenly came to a standstill’.33 That is not to say that Eger’s proposals were thrown into the waste-paper basket. On the contrary, they exerted decisive influence on both the ‘Livestock Tariff for Bohemia, Moravia, Silesia, Upper Austria and the innerAustrian provinces’, issued on 15 July 1775, and on the Tariff Convention with Poland, of 1 October 1776. In both documents, duty based on the individual animal was replaced by a duty determined by weight and the export of livestock from Poland and its transit through Galicia also appears to have been given very differentiated treatment and even favoured above the export of Hungarian and Croatian livestock to the Hereditary Lands.34 These advantages initially

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own people rather than the sale of foreign products and it is also necessary to promote the barter trade. No more appropriate opportunity for achieving this intention can be found than to establish as close a connection as possible between the Polish and Galician livestock markets and the Cieszyn fairs’ (Report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775). ‘Favourable treatment of this kind would consist, above all, in establishing customs duties and other payments which are in fair proportion to the quality and weight of the Hungarian and Polish varieties of livestock and hence only charge them according to their true character …. Under the present system of evaluating the duty payable, the capital value of Hungarian and Polish or Galician oxen is assumed to be identical … Experience shows [however] that a Hungarian ox can by no means be equated with a Polish one as regards quality and characteristics, and the duty and other payments on each of them cannot, therefore, be determined as being the same … since, as is well-known, no class of Polish ox can surpass the Hungarian ox in weight, in the consistency of its flesh or the quantity and quality of its fat. In fact the average Hungarian ox is already of a higher value than the better type of Polish ox’ (Report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775). ‘… because, if the cattle markets are to flourish, this advantage should be extended to Republican, Ukrainian, Moldovan and Armenian livestock-dealers who, in any case, come a greater distance and, as a result, must bear heavier costs, and who would be attracted by this easing of the conditions’ (Report of 9 May 1775, ami, v G 4/2920 ad 1488 ex Junio 1775). Chotek’s 1778 report, ‘Geschichte der schlesischen Viehmärkte’, ami iv E 7/1744 ad 94 ex Aprili 1782. It is impossible at this point to give an account of the complex provisions of the livestock tariffs for Bohemia, Silesia etc. Their general tendency was to favour the direct movement

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benefited Polish livestock alone. But they were extended to Galician livestock as well, by the ‘provisional’ customs tariff for Galicia issued on 28 December 1776,35 thereby creating the best possible conditions for their export to the Hereditary Lands. The Livestock Tariff of 2 January 1778, finally, provided a further advantage to the Galician livestock trade, by setting very low duties on the export of livestock from the Province, and on the movement of livestock through it.36 The great significance of the reduced duties on Galicia’s livestock trade is clear. Its full extent can only be understood, however, if we look at the figures for the scale of the livestock trade from and through Galicia to the Hereditary Lands. For the present, a summary of the data will suffice. According to the official customs statistics, 150,901 head of livestock, with a value of 939,085 florins, were exported from Galicia in 1785. These figures must be increased by a quarter if the livestock from elsewhere in transit through the Province are included. According to the Galician customs statistics for 1787, 200,759 head of livestock, with a value of 1,457,693 florins were exported, to which a further 24,037 in transit through the Province should be added, with a value of 374,425 florins. The following year, the livestock exported increased yet further as a result of the large deliveries made to the armies fighting in the Turkish war. The importance of the livestock tariffs of 1775 and 1778 was even greater because they remained in force until the new customs tariff of 1788 (leaving aside a number of minor changes). This was because the customs reform of 1784, which removed the General Tariff of 1775 along with its internal tolls and created a unified customs area, did not apply to livestock.37 The internal tolls on the movement of livestock from one province to another were first abolished under section 8 of the tariff of 2 January 1788. The government did not, however, limit itself to issuing the tariff regulations of 1775, supplemented by the regulations of 28 March 1778.38 On the contrary, Chotek again took up the idea of establishing livestock markets in Galicia, that is an organisational intervention into the livestock trade. This demonstrates the deep insight into economic processes displayed by the administration of

35 36 37 38

of Galician and Polish cattle into the Hereditary Lands but also not to make their further movement out of the country impossible, since otherwise the Polish livestock-dealers could hardly have been persuaded to enter the Hereditary Lands. See above, p. 263. ‘Vieh-Tarif-Entwurf’, hka, Mautwesen in Galizien, ad 40 ex Decembri 1777. See below, Chapter 19, Section 2, pp. 385–391. See above, p. 296.

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that epoch. The establishment of livestock markets of this type would bring Galicia closer to its customers and the improved organisation of livestock supply would also offer the Galician livestock dealers an opportunity to influence price-formation, which had previously depended exclusively on the decisions of foreign purchasers.39 In Chotek’s view, the earlier collapse of the Bielsko livestock markets was due to their isolated position. For that reason, he advised that the authorities should not limit their action to setting up isolated markets in Oświęcim and Zator but should establish a chain of interconnected markets in the provinces of Galicia, Silesia, Moravia and Bohemia, so that unsold livestock could be driven from one market to the next, thereby guaranteeing that they would eventually be sold. A livestock market set up in Oświęcim alone would actually be harmful, because the town was not far from the border with Prussian Silesia, with the result that all the advantages of the Oświęcim market would redound exclusively to the benefit of Prussia.40 Chotek’s suggestions were initially ignored but, eventually under Joseph ii, the matter was settled with the establishment of five markets in Oświęcim and Zator,41 to which further markets were then added, in Bielsko, Cieszyn and Opava in Silesia, at Ostrava and Olomouc in Moravia, and at Hradec Králové, Nymburk and Prague in Bohemia.42 Finally, in response to the request of principal Armenian cattle dealers in Galicia,43 the establishment of a livestock mar-

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Some years after the establishment of the Galician livestock markets, the livestock dealers of Kraków called on the Polish government to set up similar markets in that city, in view of the fact that at the Brzeg markets they were compelled to accept any price offered to them, so as not to have to return home at considerable cost with their cattle unsold (Minutes of a meeting of the Kraków cattle dealers in 1787, quoted in Kutrzeba and Płaśnik 1910, p. 176). Chotek’s report on the ‘Geschichte der schlesischen Viehmärkte’, ami iv E 7/1744 ad 94 ex Aprili 1782. Court Decree to all provincial Governors’ Offices, 28 April 1781, hka, Commerz. fasc. 57, ad 4 ex Aprili 1781. The Edict which put this into effect was first published in Lemberg on 26 March 1782, ‘Nachricht In Betreff der Viehmärkte zu Oswiecim und Zator’, Edicta 1782, pp. 31–3. See ‘Nachricht, Wie die Viehmärkte in Oswiecim, Zator, Bilitz, Teschen, Troppau, Mährisch-Ostrau, Ollmutz, Königratz, Nimburg und Prag abgehalten werden sollen’, 3 May 1782, Edicta 1782, p. 41. ‘Kupey Miasta Stanislawowa Nacij Ormianskiey bydłem handluiący’ Deodar Bogdanowicz, Michael Bogdanowicz, Grzegorz Krzeczunowicz, Jakub Antoniewicz and others’ (Document appended to the Galician Governor’s report of 28 February 1783, ami iv E 7/1744 ad 70 ex Martio 1783). The Emperor’s agent in Ivano-Frankivsk, Nikorowicz, is also mentioned at another point as a wholesale cattle dealer.

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ket in Dąbrowa Górnicza was approved.44 Its role, in contrast to the other markets mentioned, was to satisfy the requirements of the Galicians themselves.45 In order to attract merchants, all these livestock markets were provided with considerable privileges, on the model of the Cieszyn fairs,46 and the tariffs, already favourable, were reduced still further. The report by Count Chotek on behalf of the Court Chancellery pointed out that the only foreign livestock favourably treated on importation were Polish. ‘The phrase “Polish livestock”’, he explained, ‘excludes from this favourable treatment all Ukrainian, Cossack, Moldovan and Wallachian cattle’. He therefore proposed that all foreign livestock delivered to Galician markets should be treated in the same way as Polish livestock and, in addition, the existing transit duty charged on livestock on their movement abroad should be reduced from 1 florin 15 kreutzers to 12 kreutzers. If the livestock were on their way to the Hereditary Lands, however, they should be entirely free of transit duty. If they were destined to be consumed in Galicia, they should pay an import duty of 1 florin 36 kreutzers at the market, while the unsold remainder would pay no export duty when they were driven to Prussian Silesia, because otherwise the merchants would avoid the Oświęcim markets.47 The Emperor not only approved these proposals but also added further provisions, on his own initiative. He decreed that import duty should be collected not at the markets themselves, from the cattle actually sold, but at the point of consumption.48 The burden of payment would thereby be transferred from the cattle-dealer to the butcher or the final consumer. 44 45

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Court Decree of 27 March 1783. ‘… there is no advantage here for the livestock trade of the Hereditary Lands owing to the great distances involved and, at most, we can see some gains for internal Galician consumption’ (Report by Guinigi for the Governor’s Office, 30 May 1778, hka, Mautwesen in Galizien, ad 100 ex Junio and ad 183 ex Augusto 1778). Thus special market courts were established in Oświęcim and Zator. While the market was in progress, debts could neither be sued for nor recovered; cheap fodder was provided for livestock at the market and on the way there, and good accommodation was provided for those involved in the trade. In the whole of Galicia and Silesia, livestock being driven to these markets were exempted from all road and bridge tolls and other payments to private individuals, finally at the market they were not liable to stall-money; the droving roads were to be improved and widened. Report by the United Treasury and the Court Chancellery, 25 January 1781, ami iv E 7/1744 ad 94 ex Aprili 1782. Imperial Resolution of 12 February 1781. I not only approve these well-drafted measures but have also decided that this trade would be even more effectively promoted if duties on livestock being brought into Galicia were completely abolished. Consequently, the rule should be established from now on that no duty or payment whatsoever should be taken for livestock driven to

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Further improvements in the treatment of Galician livestock exports to Moravia and Silesia followed on 6 May 1784,49 while in 1788 the oxen driven to the markets in Vienna were completely freed from both transit duty and import duty.50 The government showed its concern for this branch of trade in yet another important way. The difficulty experienced in finding fodder for cattle during the winter has already been mentioned.51 Turnips provide excellent winter fodder but their use was not customary. The government now succeeded in remedying the lack of adequate pasture-lands by calling on the Pope. Through his mediation, the Prince of Moldova, Alexander [Mavrocordatos], was persuaded to issue a declaration52 in which he guaranteed to lease land and pastures on favourable conditions to Armenian merchants and the largest Galician cattledealers, so they could over-winter their cattle, and to purchase oxen, horses, pigs, sheep and so on.53 All these efforts by the authorities to improve the situation did not succeed in reducing the enormous rise in the price of meat, particularly in Vienna. The main reason for this price-increase was rapidly rising demand. In Vienna alone,

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Galician markets and those to be established in Upper Silesia, which are sold on the spot or driven further. If, however, livestock bought in Galicia or Silesia for consumption are driven into the towns or villages of this Province, the normal import duty should only be charged on arrival. In the other Hereditary Lands, import duty is to be paid in the normal manner, as also, normally, the transit duty and the export duty. (Address by the Treasury and the Court Chancellery, 25 January 1781, ami iv E 7/1744 ad 94 ex Aprili 1782. Also see ‘Nachricht In Betreff der Viehmärkte zu Oswiecim und Zator’, 26 March 1782, Edicta 1782, p. 31). In response to a further report, of 4 March 1782, on this matter, the Emperor resolved on 12 March that ‘the customs posts are to be instructed not to indulge in any pointless chicanery which might frustrate our good intentions’ (Address by the Treasury and the Court Chancellery, 25 January 1781, ami iv E 7/1744 ad 94 ex Aprili 1782). The document is in the collection of Edicts housed in the archive of the Ministry of the Interior, ami. Court Decree of 21 April 1788, circular, ‘Bewilligung der Befreyung vom Ein- und Durchtriebszoll für die galizischen Ochsen, welche nach Wien getriebenwerden’, 1 May 1788, Edicta 1788, pp. 111–12. See above, p. 281, note. Dated Jassy, 9 March 1784, Neumann 1855, p. 337. In the text, I can only, without claiming to be exhaustive; indicate the government’s most important measures in the area of livestock tariff policy. Even so, it demonstrates the government’s constant solicitude for this branch of trade during the entire period under examination. This is not contradicted by the imposition of prohibitions on export during the period of famine in Galicia (see circular, ‘Bewilligung des Transito des fremden Borstenviehs gegen die übliche Transitogebuhr’, 17 November 1787, Edicta 1787, pp. 224–5).

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46,213 oxen were slaughtered and consumed in 1787, which had risen to 58,398 by 1800.54 At the end of 1790, in order to alleviate the distress caused by the food shortage, the importation of dried and salted fish into the Hereditary Lands was freed from duty.55 The following summer there were further concessions, which aimed to improve the supply of oxen for slaughter in Vienna.56 Despite these measures, the shortage of meat continued to have a painful impact. The specific reason was that Galician livestock production was unable to keep pace with rising demand from the Hereditary Lands, owing to the limited vision and lack of comprehension characteristic of the Galician nobility of that time. The government hoped that the policy of promoting livestock exports, which offered guaranteed and favourable markets and freed livestock raising of any risk, would encourage manorial landowners in Galician to concentrate more on this branch of agriculture when, precisely then, they were in a critical situation, as a result of the long-term decline in grain prices,57 Prussian tolls on the Vistula and, last but not least, the agrarian reforms of Maria Theresia and Joseph ii. In December 1780, when the Council of State was examining ways and means of raising the productivity of agriculture, it was Prince Kaunitz who made the sharp observation that it was necessary for the Galician landowners to adapt their agricultural system to the changed situation and engage in new branches of production.58 History offers numerous examples of changes of this kind. In France at the beginning of the sixteenth century, grain-producing land was converted to viticulture, when grain prices were too low to cover the cost of cultivation.59 In

54 55 56 57

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See Bisinger 1807, p. 141. Regulation of 22 December 1790. See Fechner 1886, p. 532; and circular, ‘Wegen des fremden Fischgattungen gestatteten Handels’, 27 December 1790, Edicta 1790, pp. 89–90. Regulation of 4 July 1791. See notice, ‘Wegen ereichterter Vorsehung der Stadt Wien mit den nötigen Schlachtochsen’, 4 July 1791, Edicta 1791, pp. 49–50. See Smith 1920, book iv, chapter 5, pp. 6–42. Smith explains the gradual decline in the price of grain during the eighteenth century, not only in England and France but in all of Europe’s trade centres, as a result of an unperceived rise in the real value of silver. ‘If it is not possible to find an adequate outlet for the sale of some of Galicia’s natural products, the only choice remaining is, through rational measures taken by the Governor’s Office, to orient agriculture there to other items, which can be brought to consumers in Poland and the Hereditary Lands without falling victim to the oppressive practices of the Prussians’ (hhs 1781, 7). Joseph ii was of the same opinion. In his well-known letter of 24 November 1783 to Count Kolowrat, he says that ‘the soil does not only’ produce ‘wine and grain’ but can also be used ‘best for raising livestock’ (Zanetti 1802, p. 464). The government was even compelled to act against this trend and, on 4 February 1567, to order that ‘Que soient toujours les deux tiers des terres pour le moins tenus en blairie, et que ce qui est propre et commode pour prairie, ne soit appliqué à vignoble’ [‘At least two

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the middle of the seventeenth century, Colbert complained about a similar trend, describing it as an ‘ardeur irréfléchie’.60 It is well-known that there was an agricultural revolution in England in the middle of the fifteenth century: when cultivation of arable land became unprofitable, it was converted into pasture for sheep.61 In Galicia, the improvement and expansion of livestock-raising could have been an important source of income, saving landowners from a critical situation. Incidentally, it would also have allowed them to make use of the byproducts of their distilleries. The Heads of Districts also acted to educate the Galician landowners about these advantages. But Tokarz62 points out, on the basis of Margelik’s 1783 report on his trip through Galicia, that, ‘although livestock were at that time a much sought-after item of commerce’, the Heads of Districts ‘were unable to convince the nobility of the important role of livestockraising for the economy or to persuade them to improve the state of their pasture-land or to plant fodder crops … Even on manors which possessed substantial pastures one very seldom heard that livestock were fed up for the market … Even in Districts where there was considerable pasture-land, landowners sold their fodder to troops or leased out meadows to livestock-dealers without having any desire to keep large numbers of cattle themselves’. Tokarz added that It might appear that, in this period of a partial reduction in grain export, the large landowners themselves might have recognised the necessity of reducing cultivation of wheat and rye, on the contrary increasing that of fodder crops and thereby also the raising of livestock. The change in legal relations with the peasants also exerted pressure in the same direction … That is how the Heads of Districts judged the situation. But the nobility [however] either did not want to adapt themselves to the new circumstances or were incapable of doing so. Instead, they sought their salvation by distilling their grain into spirits. In such circumstances, an unfortunate outcome was unavoidable. Already around the middle of the eighteenth century, grain export, which had been the most important source of the country’s income for two centuries, declined

60 61 62

thirds of the land should always be used for grazing and only land suitable and appropriate for pasture should be used for viticulture’] (Araskhaniantz 1883, p. 47). See Clément 1874, 1, p. 221. [‘Ardeur irréfléchie’ means ‘thoughtless enthusiasm’.] See Ochenkowski 1879, pp. 21 and 24–5. Also see Ashley 1893, pp. 328 and 338. 261–2 and 267–8 Tokarz 1909, pp. 322–3.

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sharply. During and after the partitions of Poland, it decayed still further and the distillation of liquor was the sole ‘industry’ still accessible to the Galician nobility, with its narrow horizons, and comprehensible to it in its spiritual impoverishment.63 This is how it came about that liquor, the only means of saving the nobility from ruin,64 was declared to be ‘noli me tangere’,65 raised against everything and everyone for a century, against every more important reform if it was not compatible with the liquor business.66

63

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65 66

Korzon also explained the miserable condition of agriculture in Poland, a typical agrarian country of that period, in terms of the fact that ‘the vast majority of the nobility was characterised by a low educational level; held fast to their old routine and they were terrified of any reform, improvement or innovation because, even if they chanced to find out about these things, they were incapable of understanding them’ (Korzon 1897, 1, p. 349). Defenders of the legend naturally like to point out that the well-educated and progressive ex-Chancellor Count Zamoyski also sat and spoke in the Galician Estates. It would have been really sad if a great nation, even during the period of its deepest spiritual and material decline, was unable to present a few outstanding exceptions. That it was a really just a matter of such isolated exceptions, however, as is shown by the description of the great mass of noble landowners given in 1788 by the anonymous author of the pamphlet O poddanych polskich [Pawlikowski 1788], who, it has recently been discovered, was none other than – ex-Chancellor Zamoyski! [Subsequent scholarship has demonstrated that the pamphlet was written by Józef Pawlikowski.] The point is also demonstrated by the fate of Zamoyski’s draft law, which he presented to the Polish Parliament of 1780, aimed at improving the position of the peasantry. The nobles tore the document to pieces, stamped on it and swore that no such law would ever be discussed in the Parliament (see Szujski 1894, pp. 630–1). On Zamoyski’s authorship of the pamphlet, see Smolenski 1912, p. 334. ‘Praecipuus fons’, as the Galician nobles themselves put it ‘unde possessor pecuniam paratam e villa sua trahere potest, est caupona. Illic advena et domesticus pro sua necessitate deponit pecuniam’ [‘The tavern is the principal source, from which landowners can draw ready money from their manors. Here both strangers and local people come to lay down their money so as to satisfy their needs’] (Section 24 of the Memorandum of the Galician Estates, 16 July 1783, ami, iv T 11/2657, ad 38 ex Februario 1784). ‘The income from the nobles’ monopoly on distilling alcohol’, remarks Tokarz (1909, p. 163), ‘amounted in some places to a third and in others even a half of their total income’. [‘Noli me tangere’ means ‘don’t touch me’.] According to the calculations of the statistician Marassé, in 1864 the income from the alcohol monopoly (spirits distilleries) still amounted to 25 percent of the total yield of private estates (the former manors). ‘The towns’ income from the alcohol monopoly amounted to between 63 percent and 99 percent of their total income, so that 31 towns covered their expenses almost exclusively from the profit on alcohol and 11 covered them in part from this source’. Marassé adds that The yield from the monopoly on distilling and selling alcohol is generally valued because of its regularity and reliability. It is easier to lease out this monopoly than the land itself, because the latter requires the investment of capital and skilled labour … The monopoly requires almost no investment and when it is leased to Jews it brings

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In such circumstances, all the concessions made by the government were bound to benefit livestock-dealing rather than livestock-raising because, while the lords of the manor refrained from more intensive livestock-raising, their peasant subjects were excluded in advance by their status from enjoying any greater share in the advantages conceded by the government.67 In this sphere, as in so many other areas of life at that time, it was clear that the only way out of the situation was to break up the existing agrarian system, which was already completely unviable and an obstacle to the government’s efforts to raise the economic level of the Province. This was also necessary in the interests of the whole community. Any attempt to support the cattle trade and the rearing of cattle in Galicia had to remain ineffective so long as peasants were not free farmers and landowners were able to secure income by exploiting their subjects’ labour, instead of being compelled to seek other sources of revenue.

67

a fairly fixed income etc. in ready cash … In short, it is bound up very closely with our whole economic system. After this apology for liquor, it is no wonder that the author ventures to reproach the government on the ground that ‘Austrian legislation has endeavoured from time immemorial to restrict the monopoly on distilling alcohol. A decree issued in 1788 allowed the peasants to draw the spirits they needed for their own use from any source they chose’ (Marassé 1887b, pp. 5–7). Subject peasants could and did not want to go over to the raising of livestock, because they could not increase the number of their cattle. They possessed neither the fodder nor the pasture-land that would have been necessary. Nor could they both buy fodder from their manorial lords and pay the livestock tax. It was impossible for them to draw any advantage from an improvement in raising livestock. Tokarz (1909, p. 250) does, it is true, write about ‘peasant raising of livestock’. But he is only able to provide evidence of peasants trading in livestock.

part 4 The Austro-Prussian Relationship and the Struggle for Supremacy in Germany between 1772 and 1790

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chapter 14

The Economic Background to the Antagonism between Austria and Prussia1 Before proceeding to examine the impact of customs policy on the trade relationship between Galicia and the Hereditary Lands in the second half of the reign of Joseph ii (1784 to 1790), it is necessary to gain a clear view of the development of relations between Galicia and the Monarchy, on the one hand, and Prussia, on the other. For, during this period, Joseph ii’s entire domestic economic policy was conditioned by his overall foreign policy. The one would therefore be incomprehensible without an understanding of the other. Attempts of the Court in Vienna to secure free trade on the Polish stretch of the Vistula were merely the introduction to similar steps in relation to the Prussian stretch. Indeed, complete freedom of trade on the Vistula would be meaningless for Galicia if it were limited to only part of the route and if the Province remained cut off from Gdańsk and the sea by the Prussian customs barrier. For this reason, during the summer of 1772, Prince Kaunitz expressed his wish to deprive Prussia of the possibility of raising tolls on Vistula.2 Some months later he told the Austrian ambassador to the Berlin Court that it was his task to secure free passage of ships down the Vistula.3 Emperor Joseph expressed the same sentiments at the end of December 1773.4 1 The following investigation of Austro-Prussian economic relations between 1772 and 1790 continues similar presentations by Ludo Moritz Hartmann (1901), covering the period 1720 to 1740, and Adolf Beer (1893a), covering the period 1742 to 1770, and therefore allows us to survey the reciprocal relations of the two states over a period of almost 75 years. 2 See above, p. 190. 3 ‘Instruction secrète pour le Baron von Swieten’, 21 January 1773. Von Swieten was instructed to inform the King of Prussia ‘qu’à l’instar de la pluspart des cours de l’Europe, vivement occupées dans ce moment-cy … du sort à venir des villes de Thorn et Dantzig, ainsi que de la navigation sure la Vistule’. [‘that the majority of the Courts of Europe are extremely concerned at this moment … with the future fate of the towns of Toruń and Gdańsk and with navigation on the Vistula’.] Consequently, the Austrian Court called for ‘d’autant plus un arrangement équitable à cet égard que ses nouvelles possessions en Pologne lui deviendroient presqu’entiérement inutiles sans la liberté de la navigation et la commodité du débouché de la Vistule’ [‘an equitable arrangement in this regard as its new possessions in Poland would become almost useless without freedom of navigation and an easy outlet from the Vistula’ Grossman’s emphasis]. It was expected of the King of Prussia ‘qu’il arrangeroit les choses à cet égard de façon, à ce que, comme on dit, tout le monde vive’ [‘that he would arrange matters in this regard, in such a way that everyone can live, as the expression goes’ Beer emphasised ‘tout le monde vive’] (Beer 1873, 3, p. 189). © Rick Kuhn, 2023 | doi:10.1163/9789004678590_021

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Prussian policy on the Vistula after 1772 is merely the final stage in the history of Prusso-Austrian relations during the eighteenth century and can only be understood correctly in the context of earlier developments. The effort to open a route for Austrian trade to the north was not accidental or transitory: it was rather a necessary consequence of the geographical situation of the Austrian state, whose economic interests had been closely bound up with the Baltic coast since the Middle Ages.5 The territorial development of Austria in the east and Prussia in the north appeared to make the two states potential partners rather than rivals. [Ludo Moritz] Hartmann remarks correctly that at the beginning of the eighteenth century ‘trade on the Oder and the Elbe was, as it were, the pivot of economic relations between Austria and Prussia’. It was the connecting link between Silesia, the wealthiest industrial Province of Austria, and Prussia. To keep the great waterway to the north open was a vital necessity for Silesia.6 After Galicia had been acquired, this question was naturally still more acute for Austria. Nevertheless, to the end of the eighteenth century there was no trade treaty between Austria and Prussia, although Vienna, under the pressure of economic conditions, continued to cling to the idea for years.7 The failure to reach agreement was a result of the fundamental divergence between the interests, political and economic, of the two powers, which were engaged in a struggle for supremacy over the territory of Germany. It would be superfluous to enter into any more detail about this rivalry, because it has already been the subject of brilliant research. It is necessary for the understanding of what follows, however, to quickly review the economic antagonisms which forced the two states into opposition from the beginning of the eighteenth century. It was the witty observer, [Schierendorff, Christian Julius] Schierendorff (the Younger),8 who was the first to devote particular attention to the riverine routes 4 5 6 7 8

See above, p. 200. At that time, Trieste played no role at all in sea-borne trade. See below, Chapter 21. See Hartmann 1901, pp. 2–6. See below, pp. 351–352. Christian Julius Schierl von Schierendorff (1661–1726) settled in Brünn in 1683, moved to Poland in 1693 and was appointed by August ii on 2 July 1698 to be his secretary. Two years later he appeared in Vienna as ‘Christian Chirly von Schierendorff, Royal Polish Councillor and Resident’. On 1 September 1705 he went over to the service of the Austrian Emperor, Joseph i. As the Polish Resident, he had familiarised himself with Polish conditions. The thirteenth chapter of his manuscript, ‘Parerga sive Otia Schierendorffiana’ is headed: ‘Singular Reflections on Various Matters of State that often Occur in Regard to the Kingdom of Poland, the Understanding of Which Concern Succession and Alliance Negotiations with this Kingdom’ (on Schierendorff, see Fischel 1906, pp. 141 et seq.).

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to the north in the interests of Austria’s trade and industry. Between 1704 and 1706 he wrote memoranda in support of directing the trade of the Emperor’s Hereditary Lands, particularly Silesia and Hungary, down the Elbe to Hamburg on the North Sea and down the Oder to Szczecin on the Baltic Sea. Trade between Central Europe and the Baltic and North Seas could be conducted with greater security and at less cost than by sending ships to sail around France and Spain. As a preliminary step in this direction, trade treaties should be concluded with Prussia, Hamburg, Sweden and so on. A trade treaty of this kind was actually made with Prussia in 1710, on Schierendorff’s advice.9 This was the sole occasion during the eighteenth century on which there was a trade treaty between Austria and Prussia. It is now known, however, that this treaty was not ratified, and in fact it was never put into effect.10 Precisely at this time the Baltic became more important for Austria, as Peter the Great of Russia made the peremptory decision to bring the old trade links between southern Russia (Ukraine) and the Hereditary Lands of Austria to an end11 and to concentrate the whole of Russia’s foreign trade on Saint Petersburg.12 Austria had no other choice but to direct the flow of trade blocked by Russia to another outlet: trade via Gdańsk or the river Oder to the Baltic. Prussia saw this as the appropriate moment to enter into competition with Austria and to bring the latter’s foreign trade into a position of dependence. The Prussians therefore worked to frustrate all of Austria’s efforts to restore Polish-Russian trade through Ukraine. In 1728 the Prussian representative in Saint Petersburg reported to Berlin that he would do his utmost to thwart these negotiations. [Presumably Karl Gottfried] ‘Hoffmann reported in similar vein from Warsaw’.13 The same was true of Gdańsk and navigation on the Vistula. In 1736, when Austrian trade to Hamburg was harassed by Prussia, attempts were made to transport Hungarian copper down the rivers Poprad, Dunajec and Vistula to Gdańsk and from there to Holland, England and France. Commitments were also made to divert extensive dispatches of wine and sulphur onto this route. Despite all these efforts, the attempts all failed because Gdańsk created obstacles. As the Imperial Resident in Poland, [Franz Wilhelm] von Kinner, reported in 1737, Berlin had stirred up feeling in Gdańsk against the Austrian Emperor.14

9 10 11 12 13 14

Fischel 1906, pp. 238–9. See Hartmann 1901, p. 29. See ‘Excerpta remonstrationum von dem Schlesischen Handelsstand das Moskovitische Commericum betreffend’, Hartmann 1901, p. 67. Hartmann 1901, p. 12. Hartmann 1901, pp. 56 and 61. Srbik 1907, p. 409.

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The Court in Vienna had no greater success in its effort to reach the Baltic via the Oder. In 1721, on Austria’s initiative, negotiations on the subject started with Prussia. Schierendorff, who was the Austrian representative, composed some ‘Reflections on Trade between the South and the North or between the Adriatic and the Baltic Seas and also the North Sea’,15 in which he pointed out that if Prussia did not abolish staple rights along the Oder, the Emperor would still be able to direct Austrian trade either through Regensburg and on to the Main or through Poland and down the Vistula to Toruń and Gdańsk. The purpose of this observation was clearly to exert pressure on Prussia.16 It has to be said that Austria’s proposals did not meet a hostile reception in Berlin but, despite the polite exchange of views that followed, the project came to grief on the divergent interests of the two states. In Prussia it was concluded that the Austrians ought not to be permitted to trade freely up and down the Oder, and to and from the Baltic.17 A memorandum on the trade of the Electorate of BrandenburgPrussia, written in 1725, throws some light on what lay behind Prussia’s policies: ‘The geographical position of the Electorate is such that Silesia, a great part of Poland, Moravia, Bohemia and Lusatia must all receive the goods they need from our hands. What prevents us from advantageously disposing of the grain bought cheaply in Poland at high prices in Sweden?’18 A few of years later (in 1727) when all kinds of obstacles to Russo-Prussian trade arose in Saint Petersburg, the Prussian side was more inclined to enter into negotiations with Austria. A project ‘for the establishment of a trading company for the Baltic and North Seas … which would be both advantageous to his Imperial Majesty and his subjects and useful to his Royal Majesty in Prussia and his subjects’ was worked on.19 Conflicts of interest, however, made it impossible to reach an agreement on this occasion as well.20 The year 1727 did at least see the signing of a special ten-year agreement on the Crossen Tariff.21 This tariff had the same importance for Silesians of the time as the Fordon Tariff had for Galicia later (after 1772), since navigation up and down the Elbe, to and from Hamburg, was their sole remaining import and export route.22 But 15 16 17 18 19 20 21

22

See Hartmann 1901, p. 14. See Hartmann 1901, pp. 14 and 17. Hartmann 1901, pp. 17–23. See Schmoller 1884, p. 382. See Hartmann 1901, pp. 56–7. Hartmann 1901, pp. 58–60. In 1737 the agreement was extended for a further ten years but it was rendered null and void by the events of 1740. [The Prussian tariff paid at Crossen in Silesia, now Krosno Odrzańskie in Poland.] See Hartmann 1901, p. 51.

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the agreement about the Crossen Tariff could only come into effect after Austria guaranteed to buy a certain quantity of salt every year, which was a conditio sine qua non for the Prussian side.23 This Treaty of 1727 also contained a reference to a future General Trade Treaty. But free passage to and from the Baltic was the point of a General Trade Treaty for the Austrians and the Prussians would not and could not concede precisely that, at any price. The negotiations failed. In 1737 the plan for a General Trade Treaty again surfaced.24 But before any treaty could be agreed, the conquest of Silesia by Friedrich the Great voided the negotiations. After the War of the Austrian Succession had been concluded by the Peace Treaties of Berlin (1742) and Dresden (1745), a fresh round of long drawn-out negotiations over a trade treaty began.25 These too collapsed and the outbreak of the Seven Years’ War in 1756 brought further negotiations to an end. It is not difficult to see why this had to happen. The conditions suggested by the Prussians put Austria in a quandary. In Vienna it was said that the Berlin Court had never made proposals more dangerous than these. On the one hand, to accept the Prussian proposals would have meant sacrificing the factories of Bohemia and Silesia and driving their goods out of the market in the Hereditary Lands.26 But to break off the negotiations, on the other hand, would have been a severe blow to these provinces, which had close trade links with Prussian Silesia, while Prussia would have experienced much less pain from the loss of Austrian trade, because other outlets were open to it.27 Admittedly, there was consideration given in Austria to securing new export routes which did not pass through Prussian territory. For this reason, representatives were sent in many directions: to Italy, Hungary, Poland and finally also to northern Germany. The geographical, logistical and political circumstances were so unfavourable, however, that no great successes could be expected. The purpose of these journeys was therefore, in part at least, to exert pressure on Berlin. It was hoped that the Court in Berlin would become aware of Austria’s intentions and consequently be more inclined to sign a trade treaty.28 23 24 25 26 27

28

Hartmann 1901, p. 43. [‘Conditio sine qua non’ means ‘essential precondition’.] Hartmann 1901, pp. 56, 61 and 64. See Beer 1893a, pp. 1–137. Beer 1893a, pp. 84, 89, 90 and 98–9. Beer 1893a, p. 90. Our customs area is today still dependent on Germany: in 1912, goods worth 829.7 million marks were exported from our Monarchy to Germany, while goods worth 1,035.3 million were imported from Germany into Austria-Hungary. But exports to or through Germany constitute 40.8 percent of our total exports, while Germany’s exports to our customs area amount to just under 11.6 percent of its total exports. Beer 1893a, pp. 91, 96–7 and 237.

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After peace was restored between the two states, customs reprisals continued on both sides, even though Article xiii of the Hubertsburg Peace Treaty of 15 February 176329 again envisaged the conclusion of a trade treaty. To the Prussians it seemed important to place obstacles in the path of Austria’s transit trade with Hamburg. In 1764 [Ernst Wilhelm von] Schlabrendorff gave instructions that it should be victimised in the Magdeburg area. The Governor of Magdeburg, Gossler, also called for this, on the basis that Austria is now at Prussia’s mercy, since Silesia has become a Prussian possession. He pointed out that the journey by sea from Holland to Trieste took six months. Austria’s threat to make use of Trieste and Frankfurt am Main was completely empty, he added; nor had Saxony succeeded in finding an alternative trade route. By means of transit duties, the Viennese Court could be ‘throttled’.30 Attempts to negotiate a trade treaty were not renewed until 1769.31 Again, however, there was no result. Economic conflicts between Austria and Prussia had still not been reconciled by 1772, when they joined together in the First Partition of Poland. Surveying the remarkable consistency and inflexibility of Prussia’s efforts to bar Austria’s economic path to the north, the question of why Austria did not look to other countries to find an outlet for its trade and industry arises. Now, as has already been mentioned, such attempts were actually made. But nothing is more instructive for the judgement of Prussian policy than to follow these efforts more closely. Whenever they were made, Prussia was able to frustrate them, to keep Austria’s trade in a dependent position. That was the case both in the east, in relation to Russia and Gdańsk,32 and in the west, in relation to Saxony. Austria’s negotiations over a trade treaty with Saxony had begun in 1750.33 But although the Austria’s exports to Saxony were already worth over a million florins, the Saxon market was not at stake. It is clear from the course of the negotiations that Saxony only came into consideration for Austria if no trade treaty could be achieved with Prussia and its export route through Prussia remained barred. In that case, a break through into North Germany by using the Saxon route was desired.34 The free passage of ships up and down the Elbe was much more important for Austria, by means of which Austrian and par-

29 30 31 32 33 34

See Neumann 1855, p. 35. See Fechner 1886, p. 486. See Beer 1893a, p. 156. See Beer 1893a, pp. 304–5. See Beer 1893a, pp. 137 et seq. Beer 1893a, pp. 140–1.

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ticularly Bohemian products would have found an outlet to the north, through Dresden and Magdeburg to Hamburg, than the Saxon market.35 But it was not possible to get to Hamburg on the Elbe without passing through Prussian territory. In 1751, therefore, the State Chancellery expressed its conviction that it would be pointless to reach agreement merely with Saxony on the free passage of ships down the Elbe without Prussia’s approval, because of the need to pass through Prussian territory.36 Then again, Saxony was not inclined to agree to Austria’s demands. In May 1754, Vienna asked for a treaty to be concluded for ten years, guaranteeing free passage on the Elbe for its own ships at least as far as Dresden and from there to Magdeburg in Saxon ships.37 Saxony, in part because of Prussian pressure, replied that it was impossible to do this. Vienna was convinced that Saxony had acted in agreement and after previous ‘concertation’ with Prussia.38 In 1756 Saxony rejected Austria’s proposals about free navigation on the Elbe. It was not even prepared to make any concessions about the stretch of river as far as Dresden, out of concern that ‘the King of Prussia would react by hardening his position over the movement of vessels from Magdeburg to Dresden’.39 So Austria failed to achieve its objectives in this direction as well. Prussia’s intentions with regard to navigation on the Elbe are also clearly revealed by later events. Although Austria had reserved for itself a free hand in trade matters in the Treaty of Hubertsburg (1763),40 it still wanted an agreement on the passage of ships on the Elbe to be included in the final text.41 This plan also failed to overcome Prussian resistance. [Ewald Friedrich von] Herzberg asserted that the matter could not be include in the peace negotiations. A separate trade treaty would be required.42 In 1764 Austria issued its Edict consolidating existing import prohibitions, covering a wide range of goods. This started a series of reprisals and counter-measures. In 1772, it is true, the Saxon side again undertook steps to conclude a trade treaty. For the Court in Vienna, however, a treaty which contained no provision guaran-

35

36 37 38 39 40

41 42

See Schmoller 1886, pp. 1033–40, on the earlier conflict of interests between Austria and Brandenburg, over the Elbe and the congresses of the sixteenth century, which negotiated about navigation on that river. See Beer 1893a, p. 243. Beer 1893a, p. 246. Beer 1893a, p. 143. Beer 1893a, p. 144. [The Treaty of Hubertsburg, signed by Prussia, Saxony and Austria, ended the Third Silesian War and also marked the end of the Seven Years War, confirming Prussia’s right to its Silesian territories and great power status.] Beer 1893a, p. 148. Beer 1893a, p. 149.

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teeing the free passage of its ships was worthless. According to the Austrian Commercial Council ‘the Saxon import duty is related to the Hereditary Lands’ import duty in a ratio of 1 to 7 and Saxony would therefore gain an advantage seven times greater’ than Austria from a treaty.43 The conclusion which emerges from the above account and will find further confirmation in later developments is that the struggle between Prussia and Austria, whether on the Oder, the Elbe, the Rhine or the Vistula, changed according to the shifting territorial configuration of the total possessions of the House of Hohenzollern. But the content and purpose of this struggle was always the same: to prevent Austria from gaining trade outlets to the north and thus to weaken the position of the Habsburg Monarchy on German soil. The partition of Poland only sharpened antagonism between Prussia and Austria. Every strip of sought-after territory of any economic significance became the object of reciprocal jealousies; endless litigation and conflict flared up over every one of them. Gdańsk and Toruń were the major objects coveted by Prussia during the partition period. The idea of conquering these two towns was the motivation and at the centre of Prussian policy over the following twenty years. And it was Austria, above all, which opposed the occupation of Gdańsk by Prussia, both in 1772 and later, with the support of the maritime states of North Germany. Friedrich ii, for his part, protested against the occupation of the Wieliczka Saltworks by Austria.44 He wanted to exclude the whole Kraków district, including the city of Kraków, where trade was flourishing most, from the Austrian share of Poland.45 He expressed his opposition to acquisition of Lviv, which Joseph ii described as ‘the only handsome city’ in Galicia, by Austria. Lastly, he objected to the occupation of the rich and prosperous town of Brody by Austria,46 although he would have had no complaints if Austria had occupied large, desolate and sparsely populated districts of Poland or Turkey. In reply to Berlin on this point, the Court in Vienna ‘wished it to be known … that the Most Illustrious Imperial House by no means lacks large stretches of mountainous, fertile but not yet populated or cultivated land and therefore does not regard such new acquisitions as of such great value that it would 43 44 45 46

Beer 1893a, pp. 160–1. Beer 1873, 2, p. 188, and 3, p. 217. Friedrich ii to Finckenstein, 3 April 1772, in Beer 1873, 2, pp. 357–8 and 226; and Kaunitz to Swieten, 5 July 1772, in Beer 1873 3, p. 183. Kaunitz to Reviczky, 9 October 1773, in Beer 1873, 3, pp. 259 and 261. Austria ultimately retained the town, because it had the support of Russia (Panin) and because the Polish landowners in the environs of Brody also called for the cession of the town to the Austria (see Benoît, writing on 6 October 1773, in Beer 1873, 2, p. 243).

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be worth … incurring the hostility of numerous Courts by acquiring them’.47 In Vienna, Prussia’s ‘uncommonly important’ new acquisition48 was regarded with envious eyes and Prussian expansion in the direction of Gdańsk and the mouth of the Vistula was contemplated with great nervousness. ‘The King of Prussia wants to extend the boundaries of his possessions; that is diametrically opposed, not only to our interests as a state, but to our economic interests as well’.49 It is safe to claim that the rapid rise of Russian power in Europe during the eighteenth century can be explained by the Austro-Prussian antagonism, just examined. Both states were ready to sacrifice anything to Russia if only they could gain its friendship. They would then be able to play Russia off against their opponent, if the need arose. Admittedly, Russia’s growing strength and its dazzling progress in eastern Europe did cause some concern in Vienna. At such moments of natural tension between Austria and Russia, a certain degree of rapprochement between the cabinets of Berlin and Vienna was selfexplanatory. This occurred in 1769.50 It happened again in 1771, as Vienna started to regard Russia’s military progress against Turkey with great disquiet.51 Sometimes the situation became so critical that the outbreak of war between the two Empires was contemplated.52 Vienna was, however, always able to conciliate tensions in time. The antagonism to Berlin was much deeper and more vigorous than the moods of irritation with Saint Petersburg. As Friedrich ii wrote to [Karl Wilhelm Finck von] Finckenstein, ‘Souvenés vous que celle [difference] de Vienna a toujours fait plus la difficile, vis-à-vis de moi, qu’envers la Russie’53 This Austro-Prussian antagonism also had extremely serious consequences for the economic development of Galicia.

47 48 49 50 51 52 53

Kaunitz to Swieten, 5 July 1772, in Beer 1873, 3, p. 182. Beer 1873, 3, pp. 182 and 183. Kaunitz to Swieten, 9 April 1774, in Beer 1873, 3, p. 194. Beer 1873, 2, p. 352. Beer 1873, 2, p. 332. Beer 1873, 2, p. 355. [‘Remember that this [disagreement] with Vienna has always caused more difficulties for me than my differences with Russia’] Letter of 13 June 1772, in Beer 1873, 2, p. 358.

chapter 15

Prussian Policy on Trade between Galicia and Silesia The interests of Galicia intersected with those of the Prussian state at two points: in the north on the Vistula and in the west, on the road which led from Brody through Lviv and Austrian Silesia to Wrocław and Frankfurt am Main. In the heyday of trade between Poland and Germany,1 during the fifteenth and sixteenth centuries, the Poles reached Germany not only by road but also by river, along the Oder, Warta and Noteć. But, because this trade had a natural tendency to flow towards Stettin, a policy of restricting the navigation down the Warta, directed against Stettin, began under Margrave Johann of Brandenburg. Poland and Prussia alternated in success in this struggle, from the sixteenth century, until the war between Sweden and Poland appears to have destroyed the last remnants of the trade on the Warta river at the beginning of the eighteenth century. Poland completely lost control of the river route. Soon afterwards its trade overland suffered the same fate.2 All the reprisals directed by Prussia against Austria3 inevitably had very deleterious indirect consequences for trade between Poland and Silesia, as products exported from Austria to Prussian Silesia were not destined to satisfy local needs but were, for the most part, intended to be re-exported to Poland.4 Nor was there a lack of direct measures against Polish trade. Prussia intended to teach the Poles that they should obtain their supplies from Wrocław.5 This policy culminated shortly before the partition of Poland, in Friedrich ii’s Regulation of 24 June 1771 which imposed a 30 percent transit duty on Galicia’s most important export items6 so as to promote the staple and transit trade of his own lands. This duty was applied

1 See Schmoller 1898, particularly pp. 87–93. 2 Water-transport via Gdańsk was only used to bring heavy goods to Galicia, from France, England, Holland, Hamburg and other northern states, while it was only the lighter French and Swiss products that were transported on the western land route, which passed through Frankfurt an der Oder and, to some extent, through Leipzig (Degelmann’s report, Zakład imienia Ossolińskich 525, p. 408). 3 For example the King’s Cabinet Order of 15 August 1764, in Fechner 1886, p. 481. 4 For example Styrian and Bohemian pig iron (see Beer 1893a, p. 56, and Fechner 1886, p. 483). 5 See Fechner 1886, p. 488. 6 Grain, wax, yarn, leather, sheep, pigs, mutton, horses, zinc ore and dyes.

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both to the route which led to Saxony and Hamburg, and to the route to Austria. In the former case, the aim was to force the Poles to sell Galician items in Wrocław and, in exchange, buy items manufactured there, while also forcing the Saxons to obtain their goods from Wrocław; in the latter case, to ensure that Polish products were not brought through Austria to Saxony and Hamburg.7 An even higher duty of 50 percent was imposed on wood, skins, hair and many other items.8 At the same time, Saxon manufactures on the way to Poland were charged a transit duty which was nominally 8 percent but much higher in practice. It is clear that this policy meant that a blockade had been erected by Prussia against Polish trade with the west, years before the First Partition.9 The situation was not changed at all by the Trade Treaty of 1775, in which Prussia conceded a nominal transit duty of ‘only’ 12 percent.10 Under these circumstances, the attachment of Galicia to Austria could only be seen as a liberation of the Province’s trade with the west from Prussian pressure. This feeling was strengthened by the adroit way in which the Court in Vienna was able to make use of errors in Prussian policy, to promote the trade of the Hereditary Lands. The efforts of Vienna to do this reached as far back as 1742, when the Court began the process of diverting Polish transit trade away from the Prussian route by instituting an appropriate tariff policy and constructing good roads. In Opava and a number of other Austrian centres of trade, as well as Kraków, warehouses containing Styrian iron and other manufactures were established after the Seven Years’ War, in order to attract Polish, Turkish and Jewish merchants and their goods away from Wrocław. The new Bielsko route had a perceptible effect in diverting trade through Austrian territory. Silesian

7 8 9 10

See Fechner 1886, p. 498; and Fechner 1892, p. 698. See Freymark 1898, p. 17. See Kalinka, 1895–96, 2, section 116. At the beginning of 1776 the merchants of Opava complained to Vienna that between 12 and 30 percent was demanded for the entry and exit of certain goods at all the Prussian borders with Poland and that, to prevent them from avoiding the payment of this burdensome duty, goods in transit via Wrocław to Austrian Silesia, Moravia, Bohemia, Austria and Hungary were obliged to use the road through the Klodzko district and Złoty Stok. The old route, on the other hand, which led through Nysa, Prudnik and Dívčí Hrad, was completely out of use, which detrimentally affected the Cieszyn fair (see Beer 1893a, p. 263). Another measure which was extreme inconvenient for merchants was the requirement to pay a deposit at the Customs Offices to cover a penalty four times greater than the duty owed and the obligation to provide letters of confirmation that the goods in question had arrived at their destination (see Fechner 1886, pp. 508– 9).

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trade with southern Poland was perceptibly impaired as a result, as was the transit trade through southern Poland from and to Russia, Tartary (Crimea) and Moldova.11 The Ratibor Customs Office in 1765 already reported an increase in the transit of Styrian iron, Bohemian glass and other commodities to Poland, avoiding the Wrocław staple. A few years earlier, moreover, in 1754, [Jacob Benedict] Neffzer suggested opening a second route through Hungary, in addition to the Opava and Bielsko routes. In order to achieve this, the Hungarian transit duty was reduced from 5 percent to 1 percent.12 The occupation of Galicia led to an increase in the government’s efforts to promote transit trade. The Prusso-Polish Customs Treaty of 1775 had the result that the Poles only brought as much to Wrocław as they needed to cover their purchases in Silesia. The stringent inspection and unpacking of goods by the customs authorities deterred foreign merchants from entering Silesia and induced them instead to take the route through Austria (Galicia), where they only had to pay a transit duty of 1 percent.13 The Austrian Council of State welcomed this development. It was delighted that the Prussian transit duties had ‘already severely interrupted the route of the goods coming through Leipzig … and [that] the goods of many merchants [have] started to prefer the route through Bohemia. This alteration in the route [is] advantageous for the road-transport industry of the Hereditary Lands’.14 The Council was also of the opinion that ‘concessions, according to different types of commodities, should be made to this trade flowing into Bohemia’, that is differential tariffs should be granted. In setting the tariffs, the Galician Governor’s Office should make sure ‘that, even in the case of a reduction in the Prussian transit duty in Silesia, merchants will continue to find the Bohemian route more convenient and less onerous’.

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See Fechner 1886, p. 507. See Beer 1893a, p. 56. See Fechner 1886, pp. 508–9. The silk trade was also affected by the introduction of the Prussian transit duty. Polish Jews now acquired their silk directly from Lyon, bringing it through Austria to Galicia and Poland, avoiding Silesia (Fechner 1886, pp. 508– 9). Minutes of the meeting of the Council of State on the integration of Galicia, 4 May 1776, hka, Commerz. fasc. 57, ad 4 ex Junio 1776. The Council of State added the explanation that ‘Leipzig goods enter into Bohemia through the Litoměřice District or the Boleslav District, pass through that Kingdom, through Moravia, through a corner of Silesia and are then directed via Bielsko to Biała and then farther through Galicia’. The older route, which was only a few miles shorter, led directly to the Republic from Leipzig through Wrocław without touching Galicia.

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The situation of the Galician export and transit trade, which had suffered severely from the burden of Prussian duties for years, was now considerably improved by these measures. The newly opened routes through the Austrian provinces were quite capable of replacing the paths through Prussian territory which had been blocked. In addition to the people quoted earlier,15 all other voices from this period, of whom we are aware, agree on this point. ‘Anonymous’, writing in 1780, stated that, In order to save themselves the 8 percent (Prussian) transit duty, it was worthwhile [for the Poles] to try a detour, even though it was long, through the Austrian states. The Emperor made this easier: he established military roads and carters took advantage of them … Austrian subjects visibly profit as a result; their trade with Poland [via Biała] becomes larger and larger; only the town of Wrocław suffers, gradually losing all its trade in Polish products. This commission trade seems to be insignificant in itself; but by the connections it affords and all the subsidiary occupations arising, it opens other channels for industry. ‘Since transportation into the Republic began to take place daily’, all the businesses along the trade route also prospered, because they had a guaranteed market.16 At the same time, Beekhen made similar comments: ‘Brody’s recent tariff arrangements have drawn Polish and Russian trade, which formerly passed through Frankfurt an der Oder and Wrocław, into Austrian Silesia and Galicia’.17 This was also the verdict of the Polish Treasury Commission,18 Joseph ii and Governor’s Office Councillor [Ernst Traugott von] Kortum.19 In 1782 the Royal Polish Chamberlain, [Aleksy Onufry] Husarzewski, commented about the effects of Prussia’s customs impositions: ‘Le Russe s’etant

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See above, pp. 248. See Anonymous 1780, p. 204. Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968, ad 56 ex Decembri 1780, section 78. ‘Doświadezenie nas nauczyło iż pomimo opisu traktatu 1779 r. kupcy nasi woleli obrócić towary Lipskie na Czechy y Morawę do Polski jak bliźszą nierównie drogą prowadzić je przez Szląsk lub Brandenburgią’ [‘Experience has taught us that, in spite of the provisions of the treaty of 1779, our merchants preferred to send goods from Leipzig via Bohemia and Moravia to Poland, rather than along the incomparably shorter route through Silesia or Brandenburg’] (‘Miśli od Delegowanych z Komisyi Skarbu Koron. względem zawreć się mającego z Dworem Berlinksim Traktatu handłowego’, Archiwum Książąt Czartoryskich, 1174, p. 455). See below, p. 363.

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payé le chemin par la Gallicie et par la Haute Silesie à Leipzig, s’y pourvoit des articles qu’il prenoit autrefois du Dantzicois’.20 In 1787, finally, it was officially admitted by the Berlin Court that trade through Prussian Silesia had collapsed.21

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[‘Russians now take the path through Galicia and Upper Silesia to Leipzig and there obtain the items they previously acquired from the Gdańsk’.] Archiwum Książąt Czartoryskich, 923, p. 958. See below, p. 372, note.

chapter 16

Prussian Policy on Trade between Galicia and Gdańsk 1

The Oppressive Prussian Customs Duties

Relations with Prussia were much worse in the north, on the Vistula, than in Silesia, because Galicia was the direct victim of the policies Prussia implemented against the Republic. It is well-known that Friedrich ii intended to seize control of the city of Gdańsk and Polish trade in general by imposing exorbitant duties on the Vistula.1 The Austro-Polish Trade Treaty of 1775 now threatened to frustrate his intentions. Polish products could now enter Galicia by paying the low import duty of 4 percent and could then pass freely down the Vistula from there as Galician goods. In order to prevent this, Friedrich ii extended his repressive tariff from the Polish Republic to Galician products.2 The Prussian duties imposed at Fordon, as will be demonstrated later in more detail, ranged over 20, 25, 30 and 50 percent of goods’ values, as quoted on the Gdańsk exchange. For some items they amounted to 100 percent.3 It can be easily understood that impositions on Galicia’s most important export items, such as grain, wood, linen, potash etc., at this level inevitably led to an economic catastrophe. The stagnation of the export trade with Gdańsk was for many years afterwards the core issue in the complaints of interested parties and in all government discussions about the way to improve the Province’s eco-

1 See Korzon 1897, 2, pp. 31 et seq.; and Kalinka 1895–96, 2, section 116. Also see Saldern’s report of February 1773, in Beer 1873, 3, p. 153. On the Polish side, there exists an extensive report, written in 1782 by the Royal Polish Chamberlain, Husarzewski, on Prussian customs impositions (Archiwum Książąt Czartoryskich, 923, pp. 951–1091). Beekhen’s report also provides rich material illustrating Prussia’s objectives at this time [‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780]. 2 Cabinet Order, dated Potsdam, 25 December 1775, in Fechner 1886, p. 499. Russian merchants, in contrast, only paid the ‘ordinary transit duty’, as provided by the Cabinet Order of 10 December 1775 (ami, v G 7/2940 ex Aprili 1776). 3 Degelmann’s report of January 1775, Zakład imienia Ossolińskich 525, p. 412; Fechner 1886, p. 499.

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nomy. It was only to be expected that agriculture, i.e. the large manors, was hit first by the high duties. Eder feared that, ‘if trade with Gdańsk in wheat meets with yet further obstacles from the Polish Republic and the King of Prussia, what has until now almost been our only source of foreign currency will be completely ruined, causing irreparable damage to the Province’.4 Similar fears were also heard from the ranks of the merchant estate. In October 1775 Friedrich Preschel, a wholesale dealer in Lviv, sent a petition to Vienna in which he warned that ‘business activity, which is in its infancy, will be suffocated because foreign potentates have imposed intolerable customs duties both on Galician products and on essential items required locally … with the result that the ruin of merchants here will be completely unavoidable, unless the highest degree of protection is provided’.5 Unfortunately, every hope of an immediate improvement in this situation proved to be in vain. The Court in Vienna was as powerless as the Polish Republic to exert any influence on Prussia’s customs policy.6 The Governor of Galicia, Count Auersperg, had an entirely accurate perception of the state of affairs. In January 1776 he declared that the above-mentioned complaints about the increase in Prussian customs duties from 14 to 30 percent were only too well justified: ‘There is no doubt that the increases in Polish and Prussian customs duties form a tremendous obstacle to the export of Galicia’s products, because the riverine route to Gdańsk is their only advantageous outlet’. And, in fact, the result of this lack of an outlet was that agricultural products previously exported were confined to the local market. During the current year (1775), he wrote, many landowners along the rivers San and Bug ‘had taken the risk of exporting their grain but in the future they would have neither the courage nor the enthusiasm to repeat the experiment’. The export and production of linen, potash etc. also suffered. On the other hand, as far as the Republic’s tariffs were concerned, the abuse would be removed once the treaty with Poland had come into force. ‘As regards the King of Prussia, however, a reduction in the excessively high tariffs is rather to be wished than hoped for’.7 It did not lie within the competence of the Governor of Galicia to deal with this matter. All he could do was forward the repeated complaints of local mer4 Report of 15 January 1775, hka, Kameralakt, ad 312 ex Septembri 1776. 5 ‘Vorstellung wegen Emporbringung der galizischen Handlung’, ami, vg 7/2940 ad 138 ex Januario 1776. 6 The Permanent Council of the Polish Republic had already protested to Berlin for many years about Prussia’s breaches of the treaties it had signed. Of course, without success, as it was well-known in Berlin that the Republic was in no position to back up its demands with military action (see Kalinka 1895–96, 2, section 116). 7 ami, v G 7/2940 ad 138 ex Januario 1776.

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chants to Vienna. He reported some weeks later on the sad situation of the Province, ‘where the … exorbitant duties, which the merchants here are simply unable to pay, has already barred the export of our products and has brought the circulation of foodstuffs among thousands of people to a standstill; consequently all the estates of this Kingdom look forward with the keenest anticipation to a remedy’.8 In March, finally, the Jews of Galicia sent a deputation9 to Prince Kaunitz with a request ‘for assistance, on account of the Prussian duty on coarse linen and other commodities’. Business, they said, had ‘come to a standstill because of the almost prohibitive duties and in the past year up to 30 ships had necessarily remained at home’. It was not just the agriculturalists who suffered, because they could not market their flax and hemp, but also ‘thousands upon thousands of yarn spinners’ and linen weavers, and lastly the merchants themselves and the ships’ crews employed by them. The merchants were neither able to deliver the goods for which they had received advances in Gdańsk to the wholesalers there nor to pay the producers of the Province for their work, and they had lost all credit. They therefore begged Kaunitz to intervene with the Court in Berlin. A dispatch from the French ambassador to Austria, [Louis Charles Auguste Le Tonnelier] de Breteuil, dated 12 March 1776, proves that these lamentations were not merely exaggerations by interested parties and that contemporary statesmen were generally aware of the vexations caused by Prussia. De Breteuil informed his government of the immense receipts derived by the Prussian King from the customs duties on the Vistula trade,10 adding that he predicts as a consequence the complete ruin of the Polish districts that are dependent on the port of Gdańsk.11 8 9 10

11

Governor’s Report of 24 February 1776, hka, Commerz fasc. 57, ad 1 ex Junio 1776. ‘Wolf Hersch and Hersch Löbl, representatives of the Galician merchants’, ami, v G 7/2940 ex Aprili 1776 (see Beer 1893a, p. 264). ‘Somme total de droits de transit que devra produire au Roy de Prusse le Commerce de Dantzig dans une année commune, non complis la Douane de mer, que ce Prince fait percevoir au Fahrwasser: 2,153,696 [Prussian] Ecus, 23 bons gros’ [‘The total income for the King of Prussia generated by transit duties imposed on the trade of Gdańsk in an ordinary year, not including the maritime customs payments that Prince orders to be collected on navigable waters: 2,153,696 [Prussian] Écus 23 Gulden Groschen’] (see Archives du Ministère des Affaires Etrangère, volume 329, pp. 119–23). De Breteuil to Vergennes: Je vous envoye un relevé du produit de douanes que le Roy de Prusse a établies prés de Dantzik. On m’assure la vérité du calcul et qu’il est tiré de l’original. La somme totale prouve que le Roy de Prusse n’est pas le plus mal partagé, quoiqu’il prétend prouver, dit on, par les lieues quarrées et le dénombrement des habitants, qu’il est au dessous des compartageans presque pour la moitié. Quoiqu’il en soit, Mr, on ne sauroit se dissimuler que l’énormité des imposition due Roy de Prusse sur le commerce de Dantzik ne

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At the end of 1780, it was finally decided in Vienna to send the Lviv Governor’s Office Councillor Adalbert Georg Beekhen to Gdańsk. His job was in part to investigate matters on the spot but above all to find out whether it was possible for the Austrian government to help in any way. The information he brought back from his journey was quite astonishing. Only now, in the light of the rich factual material he gathered, did the full seriousness of Galicia’s hopeless situation become apparent. The Fordon tariff, as applied to wheat, the most important export item of the Province, was set at 21 percent of Gdańsk prices and, if transport costs were added, this rose to 49.3 percent. That figure applied to wheat of the best quality. The cost for wheat of lower quality was even higher: 75 percent. Also taking accidents of bad weather into account made it clear that the costs of production could by no means be recovered. The shortfall was made even greater by the decline in wheat prices which took place after the publication of the Prussian tariff of 1775.12 In the case of rye and similarly rye-flour and oaten products, the cost of duties and transport was as high as 7/8 of their value, on linen the duty alone was 24 percent, on wood it was over 20 percent,13 and on calcinated potash 18 percent of the value. The

12

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ruine sans ressource le reste de cette malheureuse Pologne, si cette horrible vexation subsiste encore quelque temps. [I am sending you a summary of the receipts of the customs posts the King of Prussia has established close to Gdańsk. I am assured that the calculation is correct and that it is based on the original document. The total sum of money proves that the King of Prussia is not exactly badly off, although it is said that he is trying to show, by referring to square miles and the size of the population, that he has received no more than slightly over half the amount of Polish territory occupied by each of his co-partitioners. However this may be, Sir, it is impossible to conceal the fact that the magnitude of the King of Prussia’s impositions on the trade of Gdańsk will irremediably ruin the remainder of this unhappy Poland if this horrible vexation continues for much longer.] (Archives du Ministère des Affaires Etrangères, volume 329, p. 117). In 1775 a wagon-load of wheat of the best quality cost 375 Danzig guilders, but in 1780 the same amount only cost 213 guilders (12 florins = 1 ducat) (see Beekhen’s report ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 63). That export to Gdańsk was possible at all was thanks to the rise in prices of such items as wood, potash etc., caused by the American War of Independence (1773–83) (see Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, sections 48 and 49). Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 52. See ‘Auskunft des Holländischen Commissair Hr. Kaufmann Ross zu Danzig, über die Produktion mit welchen bisher der Handel aus Galizien dahin getrieben worden’, Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, appendix 14.

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tariff burden was raised still further by a number of incidental payments, such as the tantième [tax on profits] which was set at between 5 and 15 percent of the customs duty payable. The chicanery of the customs officials was an additional cause for complaint, as exemplified by ‘the long delays before Vistula ships were released, which meant that they often missed high water and subsequently had to remain where they were for many weeks before they could get down the river to Gdańsk’.14 The Galician wholesale merchant and industrialist Augustin Finsterbusch von Schutzbach provided new and important details on Prussian customs impositions at the beginning of the era of Joseph ii.15 He was the owner of a number of potash factories which exported shipbuilding timber and potash to Gdańsk from the forests of the imperial-royal Sandomierz manor. According to his calculations, the Fordon tariff, even without including the tantième, was in practice 30, 40 and 50 percent. The burden of duty was then further increased by roughly 13 percent, because of the way currency exchange rates were calculated.16 The peak of torment was reached, however, by the arbitrary behaviour of the customs officials, who in their own interests increased the duties, because they only received their fee once the so-called ‘allocation’ [‘etat’] of duty was covered.17

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17

Beekhen’s comments were fully confirmed in subsequent discussions in Vienna. In a statement made at the beginning of December 1780, on behalf of the Court Chancellery, Count Blümegen remarked ‘that the description the Galician manor-owners give of their miserable situation and of the arbitrary procedures of the Prussian customs officials is not exaggerated’ (ami, v G 7/2940, ad 51 ex Martio 1781). In a report presented to a sitting of the Council on 28 December 1780, Count Chotek noted that the Fordon tariff was formally 12 percent ‘but the duplicity and high-handedness of the holders of customs leases, the so-called tantième and the overestimation of the value of the goods together produce a considerable increase in the level of duty: what has to be paid in reality is not 12 percent but 24, 30 and even 40 percent’ (ami, v G 7/2940, ad 51 ex Martio 1781). Letter of 8 January 1784, hka, Commerz fasc. 57, ad 1 ex Februario 1784. The Prussian officials regarded a ducat as worth only 4 florins, although we previously received these in trade at 4 florins 30 kreutzers and it exchanges in all Prussian states for 3 Reichsthalers, which is equivalent to 4 florins 30 kreutzers … Moreover, a royal bank has been established at the Prussian point of entry, Fordon, and we are practically obliged to take from it the money we need to pay the duty in return for bills of exchange and thus accept a discount of 2 percent … For if parties do not take money from this bank and prefer to pay the duty out of their own resources, they have to carry quadruple the amount of cash [i.e. four times larger than necessary] as all the money is very precisely weighed and even if you possess gold of the highest quality scarcely one in four ducats is accepted as being of full value. (Schutzbach’s letter of 8 January 1784, hka, Commerz. fasc. 57, ad 1 ex Februario 1784). ‘It is not an infrequent occurrence, particularly when large amounts of wheat are being

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The full extent of the catastrophe which struck both Galician landowners and Galician linen manufacturing, the largest industry in the Province, can only be judged from these reports. Both the landowners and the linen-producers were cut off from the sea and the international market in Gdańsk, and deprived of cheap water-transport. This blockade, imposed from outside, was therefore one of the most important and lethal obstacles to the industrial, commercial and general economic development of Galicia, since the region had derived all its vitality for more than two centuries through the intermediary of Gdańsk.18

2

Gdańsk or Elbing?

There is a further question to answer: why was Galicia’s trade not directed towards a different Baltic port, Elbing for example? It is especially necessary to respond to this question because Friedrich ii, while barring the way for Galician and Polish trade to Gdańsk simultaneously opened the port of Elbing and informed every Polish skipper and Jewish merchant in Fordon that they could avoid high duties and pay no more than 2 percent if they directed their shipments there.19

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transported [but other products as well], that the officials tax the reported quantity as 4 or 5 loads [1 load of wheat = 27 Galician bushels = 54 Austrian Metz] larger than is actually on the ship … and paying the extra 12 or 16 ducats is preferred even it isn’t owed, … rather than have the whole shipment measured, with the consequent pointless loss of time’ (Schutzbach’s letter of 8 January 1784, hka, Commerz. fasc. 57, ad 1 ex Februario 1784). In the preceding, only Prussian duties on goods exported from Galicia are mentioned because, for our purposes, exports are the main concern. Even so, the duties on imports were no less oppressive, particularly because, apart from grain, salt and a few other items, almost all industrial and colonial goods were subject to them. ‘It would be too complicated’, writes the Dutch Consul in Gdańsk, Ross, ‘to enumerate all the items covered by this tariff but it is certain that the goods which are generally sent from Gdańsk to Poland bear a burden almost greater than Polish [export] products’. Reviczky reported to Vienna in February 1774 ‘that numerous goods arriving from France by land via Kraków do not cost as much, notwithstanding the gigantic detour they make, as products sent via Gdańsk, owing to the very heavy duties on Vistula transport’ (hka, Commerz fasc. 57, ad 20 ex Februario 1774). Just as in the case of export duties an exception was made for Russian merchants (see above, pp. 339–340), so here the same thing happened with the import of English goods, which, as a result of a commercial treaty between Prussia and England, paid a transit duty of only 2 percent, if they were accompanied by a certificate signed by the English Resident (hka, Commerz. fasc. 57, ad 13 ex Octobri 1775). Petition from Finsterbusch, 8 January 1784, hka, Commerz. Fasc. 57, ad 1 ex Februario 1784. Also see Korzon 1897, 2, p. 36.

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It is easy to understand why, for political and national reasons, the Polish merchants did not want to break off their relations with Gdańsk in favour of Elbing. But for Galician Jews, who dominated the Province’s trade in the eighteenth century, such considerations could hardly be crucial. For them, only greater profit was decisive. For Galicia both ports were equally ‘foreign’. Yet Galician merchants at this time also avoided Elbing because they considered that their very existence was threatened by the closure of the Gdańsk route. This assessment was certainly not the result of laziness or a lack of information. Given the well-known flexibility of the Jews, there can be no question of that. After all, when Friedrich ii obstructed the route through Silesia with his tolls, they were able to obtain silk directly from Lyon, avoiding Silesia entirely.20 The explanation for the phenomenon lies rather in Gdańsk’s financial and credit institutions, and the level of technical and commercial organisation which made the city an almost irreplaceable link in Galicia’s export trade with the outside world. Elbing entirely lacked institutions and organisational sophistication of this kind. The large commercial houses in Gdańsk, as well as the foreigners who commissioned mainly Jewish Galician merchants, provided them with long-term credit. But this credit was a necessary requirement for the conduct of Galicia’s trade. The great majority of Jewish merchants lived in the most extreme poverty and Galician trade operated almost exclusively with foreign money, since the money advanced in Gdańsk made its way to the shabby hovels of the Galician village weavers and peasants, through a long chain of intermediaries.21 In Elbing, now, there could be no question of credit, which is always built up on the basis of personal confidence and years of mutual relations. Besides, the town also lacked the kind of wholesale merchants who had direct connections with other countries and could thus provide a guaranteed market for the Galician merchants’ goods. They sold, rather, in the first instance to Gdańsk’s merchants and therefore had to reduce their prices. ‘In Elbing itself’. commented Preschel, ‘there would be little demand, hence the goods would have to be sold at a lower price because they could not be sent back again’.22 The merchant community in Elbing also lacked a secure financial basis. In 1783 alone

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See above, p. 336, note. The long duration of these credits was associated with the agrarian character of the Province, since payments could only be made once a year, after the harvest had taken place. Preschel’s petition of 1775, ami, v G 7/2940 ad 138 ex Januario 1776. There was a similar petition from Jews in 1776. Finsterbusch (1784) was of a similar opinion: ‘The merchant of Elbing never offers as high a price for the goods as the Gdańsk merchant’. He also adduced

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six of the biggest trading houses in Elbing went bankrupt … These bankruptcies so undermined the place that foreigners set down their goods with tremendous anxiety there, because they always have to worry about being involved in a bankruptcy … In this situation, Elbing is very risky for foreigners and … must therefore be avoided by merchants.23 Gdańsk’s technical and commercial organisation was a still more important factor. It was impossible for Galicia to have direct relations with the wider world. As is often the case with primitive lands at a low level of economic development, Galicia’s trade was uneven: sometimes Gdańsk was overloaded with Galician products, at other times nothing at all arrived. ‘The reason for this is not so much bad harvests as the uncertainties of maritime transport on the Vistula, the Bug, the San etc.’.24 The warehouses and storage facilities of Gdańsk made it possible for trade to be adapted to the requirements of foreign markets, notwithstanding the irregular arrival of goods from Galicia. The matter was the same with Galician-Polish supplies. [François Véron Duverger] Forbonnais had already noted that in Poland insufficient care was taken to dry grain before it was exported, with the result that the grain arriving from Poland was always damaged by dampness in transit.25 It was Gdańsk’s task to remedy this problem. As far as wheat was concerned, the finest variety came from the areas around Kraków and Sandomierz, but other varieties came from more distant provinces, indeed they even travelled down the Bug from Ukraine and Volyn. This wheat had been transported for such a long distance that it was often ‘overheated and fermented’ when it arrived ‘and even when it arrived in perfect condition the nature of Polish grain is such that it needs to be cleaned and aired in advance, and one kind of grain has to be mixed with another so that it is in a fit state to be sold abroad’.26 Wood, linen and potash needed sim-

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a further reason for the lower prices offered in Elbing: the fact that ‘in Elbing everything is sold according to Berlin weights and measures … which are 9 percent higher than those of Gdańsk … so that while in Elbing a load of grain consists of 30 [Galician] bushels, in Gdańsk there are only 27 in a load’ (Petition from Finsterbusch, 8 January 1784, hka, Commerz. Fasc. 57, ad 1 ex Februario 1784). Petition from Finsterbusch, 8 January 1784, hka, Commerz. Fasc. 57, ad 1 ex Februario 1784. Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 23. Forbonnais 1758, p. 185. Even at the beginning of the seventeenth century England imported better wheat exclusively from France. Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 19.

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ilar treatment etc. too.27 All these trading operations required special harbour buildings, machines for unloading and loading, storehouses and warehouses, which had all been built in Gdańsk by the city itself at great expense.28 Keeping all this in mind, it can be concluded that there were certainly other routes available for Galicia’s exports than the one to Gdańsk: to Elbing, to Sweden via the port of Libau, to the Black Sea down the Dniester, to the Mediterranean via Hungary and Trieste, and finally to the west via Cieszyn. Attempts were in fact made to transport Galician goods in all these directions.29 But a considerable amount of time was needed for the development of these new export routes to any significant degree. For the present, nothing could replace the Gdańsk market for Galicia’s large-scale exports.30

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‘Large quantities of boards, pipes, hogsheads and spirits staves, oak planks, pine planks, beams, table wood and round timber are brought to Gdańsk. All this wood must be sorted out into various categories, the healthy separated from diseased wood, and each piece must be marked, according to its type, with a special symbol’ (Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 20). The potash must be ‘beaten before it is shipped, divided into good quality potash and refuse, the damp ash separated from the calcinated ash, and divided into categories in a way acceptable to the buyer’ (Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 21). Beekhen, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 22. On this point, see below, pp. 361–366, and Chapters 21 and 22. After 1815, the Kingdom of Poland was in a similar plight, in relation to Prussia as Galicia was between 1772 and 1790. The attempts of the Polish Minister of Finance, Prince Lubecki, to gain access to the sea appear to be merely a repetition of Joseph ii’s similar efforts in the eighteenth century. Needless to say, the literature on the subject heaps a vast amount of praise on Lubecki’s trade policy (Smolka 1907, 1, pp. 205 et seq., 285 et seq.; and Smolka 1907, 2, pp. 329–404 and 590 et seq.), while misinterpreting and condemning the policy of Joseph ii.

chapter 17

Austria’s Attitude to Prussia. The Period under Maria Theresia, 1773–80 1

A Policy of Retaliation or a Trade Treaty?

It is impossible to deny that the government made very great efforts to free itself from the clamp of the Prussian customs duties. But these efforts were in vain. Galicia’s salvation could only be achieved either through a tariff war with Prussia, hence a policy of retaliation, or through a trade treaty. Both approaches were contemplated. During the reign of Maria Theresia, however, although the question of retaliation was often considered, each time the government ultimately shrank back from the idea, fearful of the powerful opponent. In January 1775, Eder raised the question: ‘What kind of reprisals could be ordered against Prussia?’ and he proposed that they should proceed in association with the Polish Republic, the interests of which paralleled Galicia’s ‘and, apart from other means of applying pressure or reprisals, consideration should be given to imposing a heavier export duty on oxen driven from Galicia into Prussian Silesia’.1 But the Galician Governor’s Specialist, Guinigi, opposed these proposals with the argument that ‘they would do most damage to ourselves’.2 Some months later, the matter was raised again, this time by Degelmann.3 But his proposal was removed from the agenda on the ground that it was not relevant. A little later the merchants of Opava asked the government to intervene with Berlin on the matter but they received the reply from the Court Chancellery that such an intervention would have no effect and might even be harmful.4 At the end of 1777, Guinigi once again placed the problem on the agenda, by asking the State Chancellery to determine whether section 7 of the separate treaty between Austria and Poland, concerning free passage for ships on the Vistula, covered ‘only Polish and Galician goods or all foreign goods travelling 1 Eder’s report of 15 January 1775, hka, Kameralakt, ad 312 ex Septembri 1776. 2 Governor’s Report of 14 February 1775, hka, Kameralakt, ad 312 ex Septembri 1776. 3 ‘How the reaction to the King of Prussia, who has subjected both exports down the Vistula and the imports necessary for Galicia to a severe financial penalty … by means of the transit duty mentioned should be managed and whether it would be more advisable to remedy this through negotiation with the King or to take the route of reprisals?’ Minutes of the sitting of the Council of State on 3 April 1775, hka, Commerz. fasc. 57, ad 10 ex Junio 1775. 4 Report of 1 February 1776. See Beer 1893a, p. 264.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_024

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on the rivers held in common by both countries, either to Poland or to Galicia’ and ‘if the latter must be free from transit duty’. If not, he called for duties to be imposed on fish, wood etc. passing through Galicia on the way from Prussian Silesia to Poland.5 Those aware of Austrian State Chancellor, Prince Kaunitz’s moderate policy and horrified rejection of radical actions, will not be surprised at his response. He admitted that the paragraph mentioned was unclear and that freedom from duty actually applied only to the parties to the treaty. But he allowed himself to be guided not so much by legal interpretations as by political considerations. His speech on 27 January 1778 explained his views: ‘It is undoubtedly correct to say that … the trade of Galicia has been damaged by the King of Prussia to a still greater extent [than previously] and all kinds of customs impositions have been manipulated in an entirely arbitrary manner, since no reciprocal commitments between the two states about trade and customs exist. It [therefore] by no means appears to be advisable to provoke, through measures by this side, the King of Prussia into making reprisals, which cannot be foreseen’.6 The feeling of powerlessness that prevailed in Austria in relation to Prussia, at that time, also emerges from a letter sent by the Empress to her son Joseph ii, in which she points out that Friedrich ii has a bigger army and many fortresses, whereas the Galician border is open, the Province is almost entirely denuded of troops and, in case of war, a rebellion by the Galician population is also to be feared.7 In the final years of her reign, the Empress almost had a panicked fear of the King of Prussia.8 Under such circumstances, it is understandable that she was not inclined to undertake any customs reprisals. But, even when he came to power, Joseph ii did not immediately challenge this sense of impot-

5 Governor’s Office report of 6 December 1777; and note from the Court Chancellery to the State Chancellery, 2 January 1778, hka, Mautwesen in Galizien, fasc. 7 G, ad 12 und 307 ex Januario 1778. 6 Governor’s Office report of 6 December 1777; and note from the Court Chancellery to the State Chancellery, 2 January 1778, hka, Mautwesen in Galizien, fasc. 7 G, ad 12 und 307 ex Januario 1778. A Court Decree issued on 30 January 1778 did in fact instruct ‘that all goods passing along the Vistula in transit from Prussian Silesia, without exception, must be allowed to travel free of duty’. 7 Letter of 14 March 1778, in Habsburg and Habsburg 1867–68, 2, pp. 187–91. 8 ‘Tout est à craindre avec ce monstre’ [‘Everything is to be feared with this monster’] (Maria Theresia to Joseph ii, in Habsburg and Habsburg 1867–68, 2, p. 300); ‘Tout est à craindre d’un ennemi pareil, sans foi ni loi’ [‘Everything is to be feared from an enemy like him, who has neither faith nor law’]. ‘Cela augmente mon aversion pour ce monstre’ [‘That increases my aversion to this monster’] (1779, Habsburg 1881, 2, pp. 181 and 188).

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ence. Fear of Prussia completely dominated the dispositions of the leading personalities at Court. This was demonstrated at a meeting of the Council of State, on 28 December 1780, both by the main speaker, Count Chotek,9 and the majority of the Council.10 Prince Kaunitz also made similar comments as late as 1784.11 There was no change in Austrian policy until the late 1780s, when the system of prohibition and protection was made more severe in the Hereditary Lands and extended to cover Galicia. The only result, however, was that

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ami, v G 7/2940 ad 51 ex Martio 1781; also in hhs 1781, 7. Since the customs Edict of the year 1775 and the change in the principles governing trade … have brought about a considerable easing of the burden of duties from which Prussian and foreign goods and Prussian trade, in general, have benefited … in fairness, in view of this, important favours in return not only for Galicia but also for other Hereditary Lands might be demanded and, in case of a negative reply the threat to reintroduce the previous strict regime might be made. The well-known Prussian trade maxims, however, lead us to assume that little good would come of this; excessive demands would be made and, if on this side we were to allow ourselves a more emphatic system of customs duties, the reply would be either the strictest possible laws of prohibition or tariffs of 100 or 200 percent, even to the detriment of his own country, as is shown by the documents, which until now have been chiefly ultimata issued by the King in trade negotiations. Without being completely prepared and insured against counter-reprisals, which would be even worse than the present strict treatment of customs duties, it would never be advisable to utter such threats, the less so in that, as is well-known, our own export and wholesale trade with the Prussian states is far greater than their trade with us. The Council took into consideration the fact that there is actually no [legal] basis for making complaints to the Court in Berlin, since the Trade Treaty of 1775 between Prussia and the Polish Republic concerns only Poland and not Galicia, and we cannot, therefore, refer to it in justification. Even the imposition by the Prussian side of still higher duties on Galician than on Polish products would not provide any cause for a legal objection. There is also the consideration that, if the government now appointed by your Majesty made a fresh demand of the Berlin Court, especially if this was put forward with a certain degree of emphasis, which would after all be necessary for it to bear fruit, this would cause no slight excitement and most likely be misinterpreted by a Court which, in any case, is accustomed to viewing everything in the most unpleasant light and painting everything in the darkest colours. The committee therefore believes that it should refrain, at the present, from any ministerial representations in Berlin which would in any case be unsuccessful, especially as there is no hope of any effective support from the Russian government. Reprisals are obviously to be regarded as dangerous (‘Protocoll der in Betref der Erleichterung der Ausfuhr der Galizischen Producten, den 28. Dezember 1780 abgehaltenen Zusammentrettung’, ami, v G 7/2940 ad 51 ex Martio 1781). In his decision on Finsterbusch’s petition, quoted earlier, the Chancellor stated that ‘In regard to the oppressive trade policies of Prussia, which it is impossible to remedy … no use can be made of the proposals made here since, in fact, no treaties or mutual obligations exist’ (note of 7 February 1784, hka, Commerz. fasc. 57, ad 1 ex Februario 1784).

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these measures, which were purely intended to defend the Austrian economy against Prussia’s trade policy, actually worsened the already miserable situation of Galicia’s export trade to Gdańsk. This only increased the eagerness with which the Austrian Court returned again and again to the idea of concluding a trade treaty with Prussia! Joseph ii accurately recognised the importance of the Gdańsk trade for Galicia as early as 1773 and he saw the need for a trade treaty.12 But the question did not become urgent until after 1775, when the hopes associated with the trade treaties signed by the Polish Republic with the three partitioning powers proved to be unfounded. Politicians of Kaunitz’s school were, of course, incapable of conducting an energetic and purposeful policy. A report of the Bohemian-Austrian Court Chancellery, on 23 March 1776, also warned in a statement ‘that the Court should not risk even a cautious step in relation to the King of Prussia, before adequate preparations have been made’.13 It also referred to the need to resume negotiations with Prussia, which had been broken off earlier, and posed two questions: what demands, concerning Galician trade with Gdańsk and in general, should be made of the King of Prussia and should an eventual treaty be limited to Galicia alone? It proposed making extensive inquiries among provincial authorities as well as ‘the cleverest merchants and manufacturers’ to find an answer to these questions. Joseph, meanwhile, wanted to avoid any kind of disturbance and therefore decided ‘that, for the present, the proposal to make enquiries should be held back’.14 Before anything else, the Berlin Court’s perspective should be studied and Joseph proposed to use Galician Jews to acquire this intelligence. The only body that would be asked to report on demands to be made on behalf of Galicia was the Galician Court Chancellery.15 12 13 14 15

See above, pp. 200. See Beer 1893a, pp. 264–5. See Beer 1893a, pp. 264–5. On 5 April 1776, Joseph ii issued the following instruction, dealing with the lamentations of the Galician Jews about the oppressive Prussian tariffs: To the Galician Chancellery. As regards the complaint about Prussian customs repression, from the deputation of the Galician Jewish Trading Company which has arrived here, the Chancellery should give them the answer that they ought themselves to go to Berlin and plead their cause there, though the Austrian Minister on the spot will not assist them any further than is appropriate in a purely private matter … I will also take the opportunity of instructing the Chancellery to inform me in secret of its views about what advantages should be sought from a commercial agreement with the Berlin Court, particularly the proposal for Galicia, and about concessions that should be offered to the above-mentioned Court, in return (ami, v G 7/2940 ex Aprili 1776).

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By 16 April 1776 Count Wrbna was in a position to present the required information from the latter body.16 Galicia’s direct trade relations with Prussia, it was stated, were not extensive. Apart from cattle and salt, Galicia did not have ‘any products or manufactures which were consumed in the Prussian provinces to any considerable extent’ and which therefore ‘deserved special consideration’. It was necessary to demand of Prussia neither export nor import concessions but rather reductions in transit duties on Galicia’s ‘own’ goods, shipped down the Vistula to Gdańsk for dispatch to foreign countries.17 It was harder to answer the other question: what could Prussia be offered in compensation? This was the sore point in Austro-Prussian relations at the time. They were one-sided, in the sense that, whereas an open route through Prussian territory was of tremendous importance to Austria and Galicia, the markets of Galicia and indeed the Hereditary Lands was much less valuable for Prussian trade than its ramified relations with the west, maritime and otherwise.18 Precisely this one-sidedness made it impossible for Galicia and Austria to free themselves from the yoke of Friedrich ii’s customs policy. Galicia simply had nothing with which to compensate Prussia for the concessions it was requesting. It therefore seems odd that the [Galician] Chancellery proposed that the Austrian ambassador in Berlin should make an effort to convince19 the Berlin Court that 1) ‘from the political angle, good neighbourliness and friendship’ require that Austrian subjects should not be treated more harshly than the subjects of other allied powers, particularly Russia; 2) ‘from the fiscal angle’, Prussia will not gain anything by its customs impositions since exports from Galicia will completely cease; and 3) ‘from the commercial angle’, the Galician

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ami, v G 7/2940 ex Aprili 1776. In the second rank, demands should also be made for reductions of duty on a number of items from the Hereditary Lands, particularly Hungary (wine, copper etc.), which it would be worth exporting down the Vistula if better connections by land and water were established between Hungary and Galicia. See above, p. 329. The ‘art of convincing’ and consequently the ability to cheat the opponent, played an important part in contemporary teachings on trade treaties, since the mercantilists did not understand that trade can provide lasting gains to both parties. Thus Sonnenfels taught that a good politician must be able to make use of ‘the limited insight of a nation with which the treaty is to be concluded … A skilful negotiator therefore seizes the opportunity and takes possession of those advantages his state can enjoy at least for a period of time’ (Sonnenfels 1771a, 2, paragraph 326, p. 396) [Grossman’s emphasis]. ‘Trade treaties’, he wrote at another point, ‘must at least appear as if they bring reciprocal advantages’ (Sonnenfels 1771a, 2, paragraph 327, p. 496) [Grossman’s emphasis differs from that in the original].

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transit trade cannot harm Prussia, since the latter does not export the same kind of goods and, in any case, its geographical position already gives it an advantage over Galicia. ‘The only real compensation’ to be given to Prussia would be the concession of a lower duty on imports from Prussia to Galicia than on imports from other countries. In that, however, two harms were to be feared. On the one hand, ‘direct or indirect disadvantages’ could arise for the ‘factories of the other Hereditary Lands’. The Galician Chancellery hoped, nevertheless, that it would be possible to make up for these disadvantages either by increasing the volume of exports passing through Galicia from the Hereditary Lands or by conceding a number of tariff reductions on products sent by the industries of the Hereditary Lands into Galicia. On the other hand, a reduction in import duties on Prussian manufactures going to Galicia would be a sacrifice from the point of view of the future promotion of domestic industry in the Province. Count Wrbna considered, however, that for the present Galicia’s most vital interest was trade, not industry. ‘As far as Galicia alone is concerned, all these concessions constantly demanded by the Prussian side will never outweigh the advantages accruing to this new Hereditary Land from free passage down the Vistula to Gdańsk, which will be gained thereby’.

2

The Failure of Negotiations. The War of the Bavarian Succession. Its Economic Background and Political Consequences

With great caution negotiations with Prussia were now initiated. Fearing that his efforts in Berlin might come to nothing, Kaunitz sought a rapprochement with Saint Petersburg, so as to use a joint intervention by Austria, Russia and the Polish Republic to render Berlin more pliable.20 In Poland too, there were 20

De Breteuil to Vergennes, 12 April 1776: ‘Mr. le Prince de Kaunitz m’a confié, qu’il avoit dejà pressenti la Cour de Petersbourg et qu’il l’avoit trouvée d’accord avec lui sur la nécessité d’engager le Roy de Prusse à faire avec la Russie, l’Autriche et la Republique de Pologne un traité de commerce assêz clair, pour ôter à Sa Mté Prussienne le moyen de pronôncer de genes arbitraries à tous les debouches qui lui appartiennent et qui sont necessaries au commerce des trios Puissances’ [‘Prince Kaunitz has told me confidentially that he has already approached the Court in Saint Petersburg and that he found them in agreement with him on the need to commit the King of Prussia to make a trade treaty with Russia, Austria and the Republic of Poland, which is precise enough to remove from his Prussian majesty the means of imposing arbitrary obstructions at all the outlets which belong to him and which are necessary for the trade of the three powers’] (Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 329, p. 152. On the rapprochement between Saint Petersburg and Vienna: Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 329, p. 152).

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discussions about the question of revising the trade treaty previously concluded with Berlin.21 Nevertheless, no treaty resulted. The reason for the failure of negotiations should be sought, above all, in the lack of appropriate compensations but also in the other parties’ distrust of the King of Prussia. It was strongly believed that even the most precise stipulations would offer no protection against his oppressive behaviour.22 In 1776 and 1777, there was still less reason to expect that a trade treaty would be concluded because political tension between Berlin and Vienna was intensifying at the time. Friedrich ii had agents trying to stir the people of Bohemia into revolt23 and, shortly afterwards, the War of the Bavarian Succession broke out. That conflict, it must be particularly emphasised, revolved around the central issue of trade relations between Austria and Prussia.

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De Breteuil to Vergennes, 8 July 1776: ‘Je seraie fort attentif Mr. au progrès du traité de commerce que cette cour [de Vienne] veut fair avec le Roy de Prusse conjointement avec la Russie et la Pologne … reste à voire quelles seront les moyens et les compensations qu’on présentera au Roy de Prusse pour le fair céder aux vues de trois Puissances dont il peut opposer le commerce’ [‘I would be extremely interested, sir, in the progress of the trade treaty this Court [in Vienna] wishes to make with the King of Prussia in combination with Russia and Poland … It remains to be seen the kind of methods which will be used and what compensations will be presented to the King of Prussia, to persuade him to yield to the wishes of three powers whose trade he is able to oppose’] (Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 330, p. 3). Apparent from a memorandum of 1778–79: ‘Treść Myśli względem ustanowienia nowego tractatu handlowego z Królem Pruskim y uwagi nad neimi’, Archiwum Książąt Czartoryskich, 1081, pp. 311 and 319; and Kalinka 1891, 1, p. 232. Vergennes to De Breteuil, Versailles, 26 May 1776: L’interêt de la Pologne de l’Autriche, et de Russie meme est sensible; mais il faut convenir que le Roi de Prusse se trouvant Maître de tous les debouches de Commerce, ne sacrifiera pas cet avantage immense … Il faudroit sans dout lui offrir des dedomagemens tout aussi onereux et même alors les vexations de détail pratiqués dans tous se Etats aneantiroient encore les effets qu’on se promettroit du Traite le mieux conçu et le mieux libellé. On se fera peut’être illusion sur ces reflexions tant à Vienne qu’en Russie … [Poland, Austria and even Russia all have sensitive interests; but it has to be admitted that the King of Prussia, finding that he controls all the trade outlets, will not sacrifice that immense advantage … He would without doubt have to be offered compensations just as onerous and, even then, the petty vexations practised in all his possessions would continue to destroy the effects the most well-conceived and well-drafted treaty might promise. There are, perhaps, illusions about these matters as much in Vienna as in Russia …] (Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 329, p. 183). Similarly Breteuil on 5 July 1776 (Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 330, p. 3). Reports of the French ambassador in Vienna to his government, Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 330, p. 256 et seq.

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Austria had long paid particular attention to Bavaria, not just out of political considerations but also and to no lesser extent for economic reasons.24 The incorporation of that Province into the Hereditary Lands would have been an important step forward in the effort to free Austria from the yoke of Prussian tariff policy. It was possible to cross over from Tyrol to Bavaria. The possession of Bavaria would have converted the Danube into an almost exclusively Austrian river.25 The Habsburg Monarchy would have extended its boundary to the Rhine, and would have been able to reach the sea without using the old routes through Prussia and Hamburg. Austria’s push further to the west was extremely worrying for the principalities that were threatened by this development. As the ministers of the Landgrave of Darmstadt commented some years later, It is well-known that Bavaria is the sole barrier and bulwark protecting the security of the less powerful states that border on Austria against the latter’s predominance and, if this defensive wall is destroyed, those states, which will be in no position to resist, will have to accept subordination to their excessively powerful neighbour … As a result, the Emperor of Austria would become the lord and master of the chief rivers of Germany – the Danube as well as the Rhine and the Main.26 Friedrich ii saw through these plans and was able to evaluate them correctly. ‘If Bavaria belonged to him [the Emperor]’, he was heard to say ‘the whole of the Danube river would run its course through the possessions of the House of Austria … All this added territory would create a kind of gallery, reaching as far as the mouth of the Rhine’.27 Thus Joseph’s effort to cut, by political means, the knot he had been unable to untie in the economic sphere was doomed to inevitable failure. Friedrich ii understood how Austria’s intentions threatened Prussia. He therefore rode into battle to defend the integrity of Bavaria against the Austrian threat. There is no need to describe in detail the course of the diplomatic negotiations during the conflict which became known as the ‘Fight over Plums’ or the 24 25

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Groß-Hoffinger 1835–36, 1, p. 293; and Paganel 1843, pp. 290–1. As early as 1721, Austria demanded that Prussia abolish its staple regulations in Frankfurt an der Oder, pointing out that if it did not do so the Imperial Court would be likely to contact Bavaria with a view to diverting its trade through that country (see Hartmann 1901, p. 18). Quoted in Mitrofanov 1910, 1, p. 178 [Grossman’s emphasis]. Groß-Hoffinger 1835–36, 1, p. 193. Mirabeau (1788, 7, p. 293) also judged Austria’s plans correctly. For the significance attached by Joseph ii to the Bavarian question, see below, p. 370.

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‘Potato War’. France, fearing that the Habsburgs would make an uncomfortable eastern neighbour,28 refused to give any assistance to Austria, despite its obligations under the treaty of 1756, and even supported Prussia secretly.29 Russia immediately placed itself on Friedrich’s side: 20,000 Russian soldiers stood on the Galician border, waiting to attack the Monarchy in alliance with Prussia.30 Thus Joseph’s plans ended in a complete fiasco and the Peace of Cieszyn, on 13 May 1779, entailed a humiliating diplomatic defeat for Austria. Mutual hostility between Vienna and Berlin increased, and there was even less prospect of a trade treaty between them. As a direct result of Austria’s failure in 1779, Friedrich began to pursue his restrictive tariff policy even more ruthlessly. A note from Count Stackelberg to Prince [Nikolai Vasilyevich] Repnin,31 written during the Cieszyn negotiations, very clearly expressed the expected impact of Friedrich’s policy on the territories which depended on the Gdańsk market: ‘Il arriva infailliblement de deux choses l’une: on le commerce se tournera du coté de Trieste, ou les Polonois deviant une horde de Tartares ne cultiveront plus que pour leurs besoins journaliers’.32 The government vainly sought a way out of this desolate situation. Joseph, who had just made a trip to Galicia, could only confirm the miserable situation there. ‘The situation of Galicia’, he wrote from Lviv in a note of 18 May 1780 to the Empress, ‘is very unhappy, since its largest item of trade, namely wheat, is entirely barred by obstacles on the Vistula, imposed by both Prussia

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‘Pour elle [la France] c’est un point essential que nous ne soyons maîtres du Danube; a leur place nous penserions de même’ [‘It is an essential point for them [the French] that we should not be masters of the Danube; we should take the same view if we were in their place’] (Maria Theresia to Joseph ii, 26 June 1778, in Habsburg and Habsburg 1867–1868, 2, p. 305). ‘Les attentions que le Roi de Prusse fait à la France, sont incroyables; il travaille à une amitié et commerce réciproque, entre la France avec lui et la Russie’ [‘The amount of attention the King of Prussia is paying to France is unbelievable; he is working to conclude an agreement for friendship and reciprocal trade between himself, France and Russia’] (Maria Theresia to Joseph ii, 4 June 1778, in Habsburg and Habsburg 1867–1868, 2, p. 313). ‘France is more Prussian than Austrian’ wrote Maria Theresia to Leopold in March 1778 (Habsburg 1881, 1, p. 38). Groß-Hoffinger 1835–36, 1, p. 399; and Habsburg 1881, 1, p. 41. The note is dated 21 February Old Style (4 March New Style) 1779 and is appended to Beekhen’s report, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780. ‘One of two things will infallibly result from this: either trade will change direction and go through Trieste or the Poles will become a horde of Tatars cultivating only for their daily requirements’.

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and Poland’.33 Nor could the Court Chancellery, which took the Emperor’s letter as the basis for its further deliberations, identify anything more comforting.34 It did envisage the creation of new export routes, by both land and water,35 and even undertook some action in this regard, as will soon be demonstrated. But it was aware that carrying out such a transport policy was not easy and its realisation would have to be postponed to a more distant future. For the moment, the Court Chancellery was unable to find a way to surmount the immediate crisis in the economic sphere. Its feeling of boundless despair led it to tell the Emperor that salvation should not be sought in economics but rather in politics: ‘Until then … unless a fortunate revolution changes the political situation in Europe, the Galician will have to bend under the iron yoke of Prussian customs duties and gratefully accept as an act of grace every penny of profit the customs offices located on the Vistula allow him to retain’. This lesson from the analysis of Prusso-Galician economic relations was not without consequences. In fact, after the death of Maria Theresia, it became the foundation of Austrian policy for the following decade.

33 34

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‘Wegen Verbesserung der galizischen Landesverfassung’, ami, v G 7/2940 ad 51 ex Martio 1781; and ii A, 6 fasc. 320 ad 1 ex Septembri 1780. ‘We regret that there is nothing very comforting to add to this accurate description of the dreadful condition of Galicia’s trade’ (‘Wegen Verbesserung der galizischen Landesverfassung’, ami, v G 7/2940 ad 51 ex Martio 1781; and ii A, 6 fasc. 320 ad 1 ex Septembri 1780). ‘Could this branch of trade be made to flourish again by making the rivers navigable and in particular by joining them together?’ But it also bemoaned the ‘considerable expenditure which large-scale undertakings of this kind would require’ and the ‘lack of truly skilled men, of creative geniuses, to whom the execution of such work could be entrusted’ (‘Wegen Verbesserung der galizischen Landesverfassung’, ami, v G 7/2940 ad 51 ex Martio 1781; and ii A, 6 fasc. 320 ad 1 ex Septembri 1780).

chapter 18

Continuation. The Period of Joseph ii, 1780–90 1

Discussions about a Trade Treaty. The Attempts to Open New Export Routes

A repeated wavering between politics and economics is characteristic of Joseph’s efforts to free his country from the yoke of Prussia’s customs duties. After the abortive negotiations of 1776 over a trade treaty with Prussia, he threw himself passionately into the hurly-burly of politics. As we have shown, however, this only brought him the diplomatic defeat of 1779. Then, in 1780, the question was again shifted to the sphere of economic policy. Attempts were made to open new trade outlets, both via Poland and other countries, but these failed in 1784–85 when they turned out to be inappropriate means either to solve Galicia’s economic crisis or even to significantly alleviate it. Once again, economics had to make way for politics and sword-rattling. The same sequence of events then took place a third time, when the treaty negotiations of 1786–87 were followed by the Turkish war of 1788, finally by new treaty negotiations in 1790. Initially, Lviv Governor’s Office Councillor Georg Beekhen was sent to Gdańsk, in August 1780, on a confidential mission. He finished his travels at the beginning of October. During this short period, Beekhen had traversed almost 300 German miles of territory, ‘while taking the greatest possible care to avoid drawing attention, in accordance with [his] instructions’. Now he had the honour of presenting the often cited, report about his journey to the State Chancellery, along with ‘proposals … to prevent Galicia’s trade from collapsing completely’.1 These proposals were to have a decisive influence on the government’s economic policy in Galicia. Trade occupied the central position in Austrian economic policy for Galicia under Maria Theresia. The dominant view was that, given the Province’s current condition, its most vital interests were bound up with trade, particularly through Gdańsk, rather than with industry, which had yet to be established.2 1 ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, with numerous appendices, ami, v G 12/2968 ad 56 ex Decembri 1780. In 1785 Beekhen was Court Chancellor at the Court Audit Office. 2 As shown by the views expressed by Joseph ii in 1773, see above, pp. 190; Eder in 1775, p. 340; Count Auersperg and Guinigi in 1776, pp. 340 and 341; and Count Wrbna in the same year, p. 353.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_025

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Beekhen’s proposals, however, marked the beginning of a reversal in this attitude. According to Beekhen, Galicia had now lost the export trade with Gdańsk, thereby also losing the main source of the flow of money into the Province. There was no hope of any improvement in this respect. On the contrary, the King of Prussia was directing all his efforts to lay his hands on the port. If he succeeded, he would gain absolute control of both Galicia’s and Poland’s trade. This had to be prevented, for both economic and political reasons,3 and support from Poland and Russia, and the maritime powers, that is Denmark, Sweden and Holland could be counted on. The latter wanted competition between the ports of Elbing and Gdańsk to continue, because it prevented Prussia from progressively increasing grain prices.4 There was, accordingly, a need to start pursuing a new economic policy. In the present situation, a) exports are prevented from going to Gdańsk; b) most of the nobility reside abroad, which means that they spend their money outside the Province; and c) many foreign goods are needed. All these things must naturally lead to a contraction in the amount of money in the Province. It is therefore necessary to curb the export of money as much as possible and to bring foreign money into the Province. Appropriate methods must be developed to combat each of the three evils mentioned. The export route via Gdańsk must be supplemented by new export routes via Poland and Lithuania to Sweden, and also via Trieste and to the Black Sea. These would by no means replace the Gdańsk route but it was still possible to create several smaller channels instead of one great stream.5 Beekhen does not, however, ascribe great significance to foreign trade. On the contrary, 3 Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, sections 86 and 87. In view of the dominant position of the Prussian Overseas Trading Company, it would also be dangerous, he considered, to declare Gdańsk a free port [porto franco], a proposal which is alleged to have received the support of Count Ossołinski in the Permanent Council on 3 April 1780 (Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 84). 4 Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 80. Also see Archiwum Książąt Czartoryskich, 1174. 5 Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, sections 88–92. The idea of gaining independence from Prussia’s impositions by finding new export routes was not new. As early as 1768, Kaunitz described this as the only salvation for Poland if Gdańsk fell into the hands of the King of Prussia. ‘If Gdańsk falls into his hands, will she not immediately lose two thirds

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he asserted that ‘foreign trade is always of very subordinate significance owing to the situation of Galicia. What is most important is internal commerce, the promotion of which deserves the very greatest attention in this Province … It is also required to strengthen Galicia’s internal commerce, to counter-balance the power of Prussia’. Beekhen proposes to deal with the second evil, the absenteeism of the nobility, by introducing a system of estates and by imposing double taxation on landowners living abroad. Finally, he recommended the working up of raw materials in the Province, which would prevent their export and the outflow of money as well as the importation of foreign manufactures. ‘These two objectives will most easily be achieved by promoting domestic factories and workshops’. The internal economic development of Galicia would make up for the damage from the blockade against the Province’s foreign trade.6 It is impossible to consider the details of Beekhen’s programme at this point. To the extent that it is concerned with industrial development, it will be examined more closely in the second volume of this work. Here we can only touch on Beekhen’s ideas and the discussions about them, in so far as they influenced the future form of Joseph ii’s trade policy. The Court Chancellery, which had shortly before7 described a ‘revolution in the political situation in Europe’ as the only hope, could only repeat this opinion in its comments on Beekhen’s report.8 For the moment, it declared, no more could be done than encouraging merchants to pass through Galicia, by building roads and providing security and convenience of travel. Emperor Joseph, however, was not satisfied with this programme of economic resignation. In his verdict on the Chancellery’s report, he ordered that ‘in consultation with the Privy Court and State Chancellery and the financial authorities, there should be consideration of the sort of means to be employed in order to overcome the obstacles to navigation and trade imposed by both the Polish Republic and, in particular, Prussia, and whether there is any hope of achieving this’. The report made by Chotek on the work of the committee set up by the Court Chancellery, the State Chancellery and the Treasury, in response to Joseph’s

of her credit? Will not the Poles, for whom Gdańsk is their outlet … take another route, if they have to pass through the hands of the King of Prussia?’ (Beer 1873, 3, p. 374). 6 Beekhen ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, sections 93, 94 and 100. 7 See above, p. 357. 8 ‘It was only to be regretted that – as one must at least presume – circumstances would not have permitted us to make use of this approach in the Cieszyn peace negotiations’ (ami, v G 7/2940 ad 51 ex Martio 1781).

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instructions,9 was mainly concerned with the question of ‘Whether there is any means available of inducing the Berlin Court to moderate its duties on Galician products?’ We already know that Chotek did not regard reprisals as an appropriate means to achieve this.10 But he also had little confidence in any other means, such as a joint diplomatic intervention, with Russia and Poland, or negotiations for a trade treaty with Prussia, although he did not want either of these approaches to be neglected. He proposed a thorough investigation of the condition of trade and industry in each individual Hereditary Land, as a way of preparing for the negotiations with Prussia, because ‘even if the only issue is how to facilitate the export of Galician products, it is entirely possible that the Berlin Court would demand compensations in return, not indeed in Galicia but in other Hereditary Lands’.11 Nevertheless, it was clear to him that, in view of the fact that the duties set by the tariff of 1775 were so low in any case, it would not be possible to take too many steps in this direction.12 Finally, like the Galician Court Chancellery four years earlier, he came to the conclusion that, on the one hand, an attempt should be made to convince the King of Prussia that he could not gain anything by his oppressive policies but would rather be out of pocket as a result,13 while, on the other hand, to remind him that the Austrian General Tariff of 1775 had abolished prohibitions on imports and exports and severely reduced import and transit duties, ‘decisions which were for the most part already in consonance with Prussia’s wishes, which have now been fulfilled, and therefore seem capable of moving the King’s sense of fairness so that he alters the unheard of tariffs which reach 100 and 200 percent of the value, in the case of the importation of wine, a burden to which our wines alone and no other foreign wines are subjected’. Chotek was certainly aware of the wretched weakness of these proposals. To make the economic future of Galicia dependent exclusively on the King of Prussia’s sense of fairness meant altogether abandoning the search for means of saving the Province. This awareness made him an enthusiastic proponent of Beekhen’s other proposal: to look for new export routes via Poland and 9 10 11 12

13

‘Protokoll der in Betref der Erleichterung der Ausfuhr der Galizischen Producten den 28. Dezember 1878 abgehaltenen Zusammentrettung’, ami, v G 7/2940 ad 51 ex Martio 1781. See above, p. 350. By saying this, Chotek, like Wrbna earlier, declared his readiness to gain the desired advantages for Galicia, in part, at the expense of the Hereditary Lands! (See above, p. 353). ‘It appears less possible to make new concessions in that, given the present customs system, they cannot be of any great importance; indeed some of these concessions could really damage our trade and, in addition, they could equally be demanded by other most favoured nations’. See above, p. 352.

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Lithuania to Sweden and other routes to the sea. An experimental consignment of government-owned rock salt and boiled salt should be sent, particularly since in Lithuania it bore only a moderate duty and it was permitted to pass the Sund entirely free of charge. Other Galician and Hungarian products, such as linen, leather, hemp, tobacco, wine could be exported to the sea. Likewise potash and grain even though the profit was small, if despite their low prices and greater volume their freight costs were bearable. Chotek gave a precise description of what he assumed would be the most convenient route for future exports.14 The success of the undertaking, he said, depended chiefly on keeping freight costs down. It was therefore necessary to build good roads and regulate the flow of the rivers, ‘which could be accomplished in many places without incurring excessive expense’. The support of the Lithuanian magnates would, however, be an indispensable requirement.15 ‘In order to prevent these ideas from remaining ideas and nothing more’, the Galician manors owned by the state which had a surplus of wheat should risk a small experimental consignment of goods. ‘Would it not then be possible to free ourselves from the Prussian yoke under which our trade languishes, by making do with a smaller profit?’ In any case, these experiments would also be useful indirectly. ‘Would not these attempts, if conducted with a degree of seriousness and publicity, perhaps have at least the one good effect of making the Prussian Finance Department more hesitant and worried, and thereby inclined to moderate its behaviour and even, perhaps, to instruct its officials to reduce the duties they exact?’ 14

15

‘Should it not be possible to travel with merchants’ supplies, on the one hand down the Vistula, as far as Warka or Warsaw then by land as far as Grodno, and on the other hand down the Bug, as far as Brześć or Mielnik then by land also to Grodno, and then, where the Niemen again becomes navigable, by water, until not far from the Prussian border, then finally, once again by land, in the direction of the ports? And would it not be worthwhile making experiments along these lines?’ This description, which envisages unloading and reloading six times during the journey, is itself clear evidence of the difficulties attending the whole project. It was necessary to win the approval of the Republic and particularly of the powerful Lithuanian magnates, in order not only to prevent any obstacles from being placed in the path of the passage of goods but also to persuade the same people to engage in effective actions to promote trade by explaining the considerable advantages they themselves can draw from it. The assistance of the magnates would mainly involve the freeing of bridges and roads from local tolls or, at least, their reduction, the building of bridges, roads and river crossing-points, the improvement of river-banks, the construction of hostelries and so on. These are all actions they cannot perform without a certain amount of monetary outlay, admittedly, but the work can be done, for the most part, by those who owe labour-services to them.

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The majority of the Council of State were of the opinion that negotiations with Prussia over a trade treaty would be pointless. Admittedly, Court Councillor [Anton von] Spielmann did ask whether ‘granting the salt concessions so strongly desired by the Prussian Trading Company, on its own admission, might not … incline the Berlin Court to lessen the very oppressive Fordon transit duties’. Count Hatzfeld made a similar point.16 Count Kolowrat, Court Chancellor Count Auersperg and Count [Joseph Franz Xaver Anton von] Khevenhüller objected, however. ‘They considered that it would be extremely dangerous to agree to Prussia’s demands on this point, inasmuch as the Berlin Court would thereby become for the first time the sole unrestricted controller of the whole of Poland’s trade, food supply and industry’. Moreover, in the course of time Galicia’s salt revenues would themselves be damaged by this measure. Finally Kaunitz himself spoke against any negotiations with Prussia at all, because, as yet, there was insufficient detailed factual knowledge.17 ‘The committee’, as the minutes of the meeting concluded, ‘must therefore advise that no action should be risked, but instead that everything should be postponed until a favourable moment’. The other proposal, regarding the opening of new export routes via Poland and Lithuania, had a more favourable reception. It was warmly supported by Count Hatzfeld in particular. He expected this approach would be the more successful as ‘a number of manor-owning Lithuanian magnates also have property in Galicia and would gain a double advantage’. The Austrian ambassador in Warsaw, [Johann Amadeus Franz von] Thugut, was asked to get in touch with these magnates. Emperor Joseph’s Resolution of 25 January 1781 supported this proposal, while passing over the question of negotiations with Prussia in diplomatic silence.18 16

17

18

‘If the Prussian Salt Company wanted to buy salt from Galicia … the opportunity could be taken of effecting a reduction in the Fordon duties, at least for Galicia. He believed, however, that the Republic of Poland would suffer from this; but, if the well-being of Galicia could be promoted by this measure, the former would have to be sacrificed to the latter’ (hhs 1781, 7). ‘Our experts have received no complete reports about foreign, indeed not even about our domestic objects of commerce, as regards price, quality, quantity, location, transport costs, marketing outlets, competition etc. As a result of this, no thorough investigation and comparison of benefits and disadvantages has been made; in a word, no balance of our imports and exports has been drawn, and we therefore have to operate entirely at random’ (hhs 1781, 7). ‘Since it has been intimated that, owing to Prussia’s imposition of a high transit duty, Saxon and Russian merchants are tending to make their way through Galicia more than previously, the greatest care must be taken to make use of this favourable circumstance by

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After the idea of a trade treaty with Prussia had thus been temporarily abandoned, nothing remained but to proceed to the implementation of the other proposal. Governor’s Office Councillor von Kortum composed a memorandum in French to be sent to the magnates of Poland and Lithuania.19 In it, he reminded them that the King of Prussia intended to bring the trade of Gdańsk under his jurisdiction, emphasised the importance of the port of Liepāja, both for imports and, more particularly, for exports, enumerated a series of ways in which the towns of Courland could be made more prosperous20 and, finally, encouraged them to emancipate themselves from dependence on Prussia, assuring them that Austria would not fail to give its assistance, since it too had an interest in destroying Prussia’s predominance.21

19 20 21

ensuring that these travellers are well treated particularly by the customs officials so that they continue to use this route … As far as the rest is concerned, the advice of the Council of State is accepted’. A Court Decree of 27 January 1781 transmitted the matter to the Galician Governor’s Office with the question: ‘What should be done to improve the position of Galicia’s trade and in particular to facilitate the export of Galician products?’ (ami, v G 7/2940 ad 69 ex Januario 1781). ‘Reflexions sur le Commerce de Pologne’, Archiwum Książąt Czartoryskich, 807, pp. 501– 20. ‘Reflexions sur le Commerce de Pologne’, Archiwum Książąt Czartoryskich, 807, pp. 501– 20, sections 3, 13 and 15. ‘Je n’ajoute que cela: que la Cour de Vienne même devra ce me semble, seconder les vues de la Republicque sur ces aperations de commerce; puisque les provinces nouvellement occupés n’ayant abolument d’autre débourché que le port de Dantzig, elle eprouvera les mêmes inconveniens de la Campagne du Commerce maritime [Seehandlungskompagnie], que la Pologne. Et comme depuis l’introduction des nouveaux impôts de Transit dans les Etats de Prusse la plupart des marchandises venant de l’Allegmagne passent actuellement par les Etats d’Autriche, ainsi cette Puissance voudra favoriser autant que possible cette nouvelle route … Et ces deux Etats, la Pologne et l’Autriche en se procurant a eux mêmes des avantages réels, auront l’honneur de contribuer en même tems au bonheur d’une partie considerable de l’Europe, qui souffre par le systeme d’un Roi au nom terrible et glorieux’. [‘I will only add this: in my opinion the Court in Vienna will itself have to support the views of the Republic on these trading operations, because, as the newly occupied provinces have absolutely no other outlet than the port of Gdańsk, Austria will experience the same inconveniences from the Prussian Overseas Trading Company as Poland does. Since the introduction of the new transit duties in the provinces of Prussia, the majority of the goods coming from Germany have started to pass through the provinces of Austria, and so that power will want to favour the new route as much as possible … And these two states, Poland and Austria, while obtaining real advantages for themselves, will also, at the same time, have the honour of contributing to the happiness of a considerable portion of Europe, which is suffering under the system of a King with such a fearsome and glorious reputation’.] (‘Reflexions sur le Commerce de Pologne’, Archiwum Książąt Czartoryskich, 807, pp. 501–20, sections 9 and 17).

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The success of the project depended on whether Poland was capable of creating an outlet to the sea other than Gdańsk and entering into direct relations with the outside world. Friedrich ii stood in the way of this effort, just as he had previously frustrated Austria’s intentions with regard to Russia, Saxony and Bavaria. With inflexible consistency, the King of Prussia opposed all attempts by Austria and also by the Polish Republic to free themselves, until he had arrived at his goal, which was to have the long coveted city of Gdańsk in his power. For the next few years, however, there was no hope of Poland taking any kind of energetic steps to promote trade, in view of the internal disorder prevailing there.22 Matters of trade were not given much attention until the period of the great Four Year Parliament of 1788 to 1792. At that point, the idea of forming direct trade connections with England, Sweden and Turkey was considered. The Polish ambassador in London, [Franciszek] Bukaty, presented a very thorough memorandum to William Pitt in May 1789, informing him of the existence of a harbour at the mouth of the Sventāja River, between Liepāja and Palanga. Pitt then sent [James] Durno to Berlin and Warsaw to gather the necessary information. But when the Court in Berlin made plain its displeasure at the prospect of direct trade relations between the Polish Republic and England, Durno was recalled to London and Pitt told Bukaty that he had been compelled to postpone the matter to a later date, out of consideration for England’s ally Prussia.23 Events took a similar course in Sweden, when in June 1790 its representative Count [Lars von] Engström proposed to conclude a trade treaty with Poland. In spite of the Polish Parliament’s readiness to support the idea, the representative of Prussia, Marquis [Girolamo] Lucchesini, was able to prevent the treaty from being signed. In his report, he informed Friedrich Wilhelm ii that a trade treaty between Poland and Sweden ‘would free Poland’s trade from the dependent position which it is in the interest of Your Majesty to maintain. I therefore regard it as my duty to prevent this treaty from coming into existence’. Friedrich Wilhelm ii (at that time, incidentally, an ally of the Polish Republic!) replied to his minister agreeing with him: ‘The whole of its [Poland’s] foreign trade must necessarily pass through my lands. Direct your efforts to ensuring that all trade negotiations with foreign powers are postponed’.24

22

23 24

The attempt undertaken by the King of Poland in 1782 to bring the decayed port of Palanga back into use was frustrated by the Russian ambassador, Stackelberg. [See Niemcewicz 1868, p. 70.] See Kalinka 1895–96, 4, section 137. Kalinka 1895–96, 4, section 135.

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The same comedy was played out again at the end of October 1790, when the Polish ambassador in Constantinople, [Fanciszek Piotr] Potocki, agreed on a trade treaty with the Porte,25 in which Turkey conceded free passage of ships along the Dniester, in the Black Sea and the Sea of Marmara as well as most favoured nation status. The treaty was about to be signed when suddenly the Foreign Minister [Reis Effendi] began to hesitate, declaring finally that he would only sign the treaty if the concessions granted to Polish trade … were acceptable to Prussia! The negotiations were broken off. This was clearly the work of Friedrich Wilhelm ii, who instructed his minister in Constantinople, [Friedrich Wilhelm Ernst von] Knobelsdorf, that: ‘As far as the trade treaty is concerned, I want you to get rid of it completely’.26 Last of all, a trade agreement with Prussia itself, proposed by Poland in the autumn of 1790, suffered a similar fate.27 Thus all of Poland’s attempts to free itself from economic dependence on Prussia remained unsuccessful. ‘The Republic’, writes Kalinka, ‘was unable to make an alliance with any state, particularly not over matters of trade, before it had signed a treaty with the Court in Berlin whose main provision was the transfer of Gdańsk and Toruń to Prussia’.28 This meant that Joseph ii’s hopes of opening up an export route through Poland for Galicia’s trade and its products were also frustrated. Everywhere, to the east and to the west, on the Polish border, as on the Bavarian border, he was confronted with his dreadful Prussian opponent who, using the iron chain of his policy, robbed large parts of the Monarchy of normal economic development.

2

The Re-orientation of Austrian Policy. The Alliance with Russia. Renewed Efforts to Annex Bavaria. Joseph ii Is Again Prevented from Gaining His Objectives by the League of Princes

Joseph ii’s Resolution of 25 January 1781, which ended discussion about prospects for a trade treaty with Prussia, was highly remarkable, not so much because of its content as what it passed over in silence. It expressed Austria’s economic powerlessness vis-à-vis Prussia, which was perceptible in the discussions of the Court Offices and was also confirmed, all too well, by events. This sense of powerlessness seems to have made a great impact on the Emperor’s 25 26 27 28

[I.e. the government of the Ottoman Empire.] Kalinka 1895–96, 4, section 134,. See Philippson 1880, p. 447. Kalinka 1895–96, 4, section 135.

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thinking. He was convinced, in agreement with the Court Chancellery, that the only hope of emancipation from the Prussian economic yoke lay in a change in the political situation. The current situation itself determined the direction from which change had to come. The defeat at Cieszyn was a result of Austria’s isolation in face of the Russo-Prussian alliance, just as previously the loss of Silesia and then the failure to reconquer it was a result of Russia’s hostile attitude to the Austria. It followed logically that this alliance had to be broken and a rapprochement with Russia sought. After all, Kaunitz had already declared in 1763 that, in view of the dangers that threatened Austria both from the Ottoman Empire and from Prussia, Russia would actually be the Viennese government’s most useful ally.29 Now the Emperor also drew this conclusion. When, after the Peace of Cieszyn, Count Ludwig Cobenzl was sent as ambassador to Saint Petersburg, he was given the task, in official instructions received on 24 September 1779, of seeking a rapprochement with Russia.30 Soon after, the Emperor began to engage in correspondence with Catherine ii. At the beginning of 1780, the two monarchs met.31 Joseph ii attempted to create an anti-Prussian alliance. To achieve this objective, he was prepared to pay what he regarded as the highest possible price: the betrothal of the Archduke Francis, the future Emperor and ruler of Austria, to Elisabeth, the sister of the Russian Grand Duchess Maria. He was able to inform his brother on 19 February 1781 of the impending conclusion of a defensive and offensive alliance with Russia.32 The alliance between Austria and Russia actually entered into force on 21 May 1781, for a period of eight years. Then, on 10 July 1781, a treaty of armed neutrality was signed between the two powers.33 In the economic sphere this later led to the conclusion of the AustroRussian Trade Treaty of 1785. The heavy obligations to its Russian ally that Austria accepted in the 1781 treaty are well-known.34 The question of why has often been raised and it was believed that the answer lay in Joseph’s thirst to conquer land from Turkey, an impression based on the well-known correspondence between the Emperor and Catherine ii.35 The real situation, however, was entirely different. A renewed attack on Bohemia by Friedrich ii was a constant fear in Austria; the 29 30 31 32 33 34 35

See Arneth 1876–79, 8, p. 24, and Jäger 1867, p. 222. Beer and Fiedler 1901, 1, p. viii. See Reimann 1869, pp. 652 et seq. See Habsburg and Toscana 1872, pp. viiii and 9. See Neumann 1855, p. 273. See Beer 1883, p. 52. Krones (1879, p. 458), for example, continues to maintain this. Similarly Kalinka: Joseph ‘unnecessarily accepted an obligation to go to war, merely guided by the idea that it would

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overthrow of Prussia was at the top of the Viennese cabinet’s agenda. The fact that the main thrust of the Austro-Russian Treaty was directed against Prussia is demonstrated by the indignation with which it was received by Friedrich.36 The main purpose of the alliance with Russia was to induce Catherine ii to support the Austrian Emperor’s plans in Germany.37 If the idea of expansion at the expense of Turkey played a role, it was a subordinate one.38 In order to win the friendship of the Court in Saint Petersburg, Joseph also spoke flatter-

36 37

38

be better for him to share the Turkish booty with the Empress than to allow Russia to enrich itself alone at the expense of Turkey’ (Kalinka 1895–96, 1, section 1). More recently, Mitrofanov (1910, 1, p. 185) repeats the assertion that ‘already at the beginning of the 1780s the policy of the Emperor towards Turkey began to become aggressive’. In this context, Mitrofanov employs the somewhat peculiar method of seeking information about the intentions and plans of Joseph ii, not from his own statements, but by drawing upon the gossip spread by various diplomatic intriguers. Thus Mitrofanov does not even take account of such an important source as the correspondence of the Emperor with his ambassador in Saint Petersburg, Count Cobenzl. The farcical nature of Mitrofanov’s account can only be explained by his use of such a method. First, plans for conquest directed against Turkey were ascribed to the Emperor. The Emperor then entered into peaceful negotiations with Turkey, in which he only secured ‘certain trading advantages’ on the Danube and in the Black Sea. Mitrofanov follows this by informing us that in Europe such unexpected disinterestedness on Joseph’s part could not be believed. Later on, he asks, in unison with the foreign intriguers, ‘what did Austria actually gain by this, since it spent so much money and took so much trouble to mobilise its troops?’ Finally it is asserted that the Emperor received a ‘bloody nose’ because he emerged from the Turkish disturbances of 1782–84 with empty hands. In reality, however, the Emperor was extremely disinclined to go to war with Turkey and Mitrofanov himself was unable to quote any mobilisation against Turkey, with the exception of an ‘observation army’ stationed on the Hungarian border. ‘It is not evident, even from his [Joseph’s] most intimate reports to his brother Leopold, that he ever gave much thought to the Orient’ (Beer 1883, p. 80). The Emperor’s main preoccupation was a war with Prussia! Beer already proved this thirty years ago (1883, pp. 23, 31, 83–4 and passim) and the point has been confirmed by the publication of the Emperor’s correspondence with Cobenzl (also see Jäger 1867, p. 221). See the well-known letter from Friedrich to Finckenstein about Catherine ii. [This is presumably the letter of 21 February 1784, in Hohenzollern 1913, p. 156.] Beer 1883, p. 78. Beer is not always consistent, however. So he thinks that ‘The two bosom friends [Joseph and Catherine] were agreed in principle on making an end of the Turkish Empire in Europe’ (Beer 1883, p. 60). The differences between them, according to Beer, related to the execution of the project and the division of the booty. In reality, however, these differences were deliberately pushed to the foreground by the Emperor in order to delay the Tsarina’s Turkish project. This emerges from the intimate correspondence of the Emperor with his brother Leopold, which is undoubtedly a much more genuine expression of his views than his exchange of diplomatic letters with a ‘Princess of Anhalt-Zerbst turned into Catherine’. [Quoted in Arneth’s footnote, Habsburg and Romanov 1869, p. 278.]

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ingly of Catherine’s ‘Greek projects’.39 But consent to support Russia in its war in the Crimea would only be granted on condition that the Tsarina championed Joseph’s Bavarian plans.40 It is true that Kaunitz was pushing strongly for a war with the Porte and the occupation of Moldova and Wallachia.41 The fact that there was no outbreak of hostilities in the Balkans was thus a result of the firmly held views of Joseph ii.42 The Emperor did not want a war with Turkey and he was absolutely unwilling ‘à jouer le role du chat pour tirer les marons du feu’.43 He feared that a war with 39

40

41 42

43

‘Mais il m’a paru, que pour obtenir un but aussi désirable que celui d’engager la Russie a contribuer elle même à l’abaisement du Roi de Prusse, il falloit de toute nécessité lui presenter souvent et de la manière la plus proper à la determiner, l’appas le plus flatteur pour elle, celui d’execution de ses vues contres les Turcs’ [‘But it seems to me that, in order to achieve a goal as desirable as enlisting Russia to contribute to the abasement of the King of Prussia, it is absolutely necessary to present the most flattering bait to her, namely the implementation of her views against the Turks. This must be done frequently and in the manner most appropriate to bring her to a decision’] (Cobenzl to Joseph, 30 May 1784, in Beer and Fiedler 1901, 1, p. 466). Joseph gave Cobenzl the task of persuading Russia ‘de s’engager formellement, que si le Roi de Prusse, à cause de ce troc volontaire, me faisoit la guerre, la Russie la reconnoitroit comme une injuste aggression et par conséquent pour le casus foederis et qu’elle s’obligeroit d’y prendre part, et de m’assister avec toutes forces, comme j’étois prêt à le faire, si les Turcs lui avoient fait la guerre pour la Crimée’ [‘to make a formal commitment that, if the King of Prussia made war on me because of this voluntary exchange of territory, Russia would regard this as unjustified aggression and consequently that it would constitute a casus foederis, and that it would agree to take part in the fighting, and assist me with all its forces, just as I would have been ready to do if the Turks had made war on Russia for the sake of the Crimea’] (Joseph to Cobenzl, 5 April 1784, in Beer and Fiedler 1901, 1, p. 460) [Grossman’s emphasis. ‘Casus foederis’ means ‘a situation in which an alliance comes into play’]. See Beer 1883, p. 62. ‘Il y a eu bien des choses à combattre, car le prince Kaunitz voulait absolument que je commençasse la guerre d’abord par marcher en Moldovie et Vallachie … Je ne puis concevoir comment cet homme d’esprit a pu se chausser cela dans la tête, mais il a fallu une volonteé positiv et le renfort de plusiers expéditions déja faites pour le fair plier’ [‘I had plenty of battles on my hands, because Prince Kaunitz was absolutely determined that I should start a war by marching on Moldova and Wallachia … I cannot conceive of how that intelligent man could have got that into his head but I needed to exert my will positively and to recall the many expeditions already undertaken before I could get him to bend to my views’] (Joseph to Leopold, 10 August 1783, in Habsburg and Toscana 1872, 1, p. 165). [‘To play the part of the cat and pull the chestnuts out of the fire’] (Joseph to Cobenzl, 22 November 1782, in Beer and Fiedler 1901, 1, p. 345). Hence his joy when he heard that the war had been avoided by the Porte’s appeasement of Russia (see Beer 1883, pp. 61 and 65). While he was staying in Kaniów in 1787, Joseph said this to Moszynski: ‘You will well understand that it was in my interest to work to prevent this war’ (Kalinka, 1891, 2, p. 48).

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Turkey would conjure up a great deal of danger and all that would be gained ‘à la fin de tout un miserable mourceau desert de Bosnie ou de Servie’.44 As he told his brother in confidence, what he wanted was a ‘grand coup’, an acquisition which would be worth the risks and costs of a war. Something like this, however, was to be sought not in the Balkans but on the opposite side.45 To be ready at any moment ‘pour faire tête au Roi de Prusse’,46 he assembled a large and wellarmed force in the north of Austria, on the pretext of the need for preparedness against the Porte. At the same time, Cobenzl was explaining the advantages both Courts would gain from the alliance to [Alexander Andreyevich] Besborodko in Saint Petersburg. Through it, each Court could ‘continuant d’agir seule de son côté, nous contre le Roi de Prusse, et la Russie contre la Porte … se promettre de part et d’autre un success complet’.47 Joseph returned again and again to the idea of opening a passage to the Rhine and the sea through Germany. Kaunitz now advised him to achieve this by peaceful means and to exchange Bavaria for the Netherlands. ‘Par là’, wrote Joseph, ‘j’aurois eu une agumentation de forces concentrées et réunies contre le Roi de Prusse’.48 It would be wrong to measure the Bavarian question with the same yardstick as so many other questions with which the Emperor was concerned. It lay, in fact, at the centre of his German policy and all his further political and economic plans depended on it.49 On 10 May 1784 Joseph reported to Leopold

44 45

46 47

48 49

[‘In the end, a miserable and uninhabited piece of Bosnia or Serbia’] Joseph to Leopold, 10 August 1783, in Habsburg and Toscana 1872, 1, p. 165. ‘Je veux conserver tous mes alliés et ma tranquillité, hors que je ne voie un grand coup à faire et une acquistioin à me procurer qui vaille les frais et hazards d’une guerre. Vous sentez bien que c’est d’un autre côté que je parle’. [‘I want to keep all my allies and retain my tranquillity, unless I see the opportunity of a great coup and the chance to make an acquisition which would be worth all the costs and hazards of a war. You will understand that I am speaking here about another side’] (Joseph to Leopold, 10 August 1783, in Habsburg and Toscana 1872, 1, p. 166). [‘To confront the King of Prussia’.] [‘Could continue to act alone on its side, us against the King of Prussia and Russia against the Porte … promising complete success for both’.] Cobenzl to Joseph, 17 December 1783, in Beer and Fiedler 1901. Also see Beer 1883, pp. 55–6. In Berlin, meanwhile, the situation was understood perfectly correctly. The Saxon ambassador in Berlin, Count Zinzendorf, announced on 9 February 1784 to his Court that ‘Secret war preparations are being made, out of fear that the Emperor of Austria might turn against him [Friedrich] instead of against Turkey’ (Wolf 1880, p. 102). [‘By doing that I would have augmented forces, concentrated and united against the King of Prussia’.] Joseph to Cobenzl, 12 November 1783, in Beer and Fiedler 1901, 1, p. 435. ‘This is a thing which, if it succeeds, will make a revolution in history and be an epochal event for the House of Austria’s political system’ (Joseph to Cobenzl, 13 May 1784, in Beer and Fiedler 1901, 1, p. 462).

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on his exchange project.50 Three days later he informed Catherine. She gave the impression that she was ready to agree to it.51 Agreement had already been reached with Karl Theodor, Elector of Bavaria and it did not seem impossible to achieve the consent of France, to judge by [Charles Gravier de] Vergennes’s personal statement at the end of 1784.52 But Joseph again came up against resistance from Prussia. In the spring of 1785 Friedrich ii organised the ‘League of Princes’ [Fürstenbund] against Austria.53 Thus as the end of his life, Friedrich had achieved the objective for which he had long striven: identification of the German princes’ interests with the survival and growth of his own state. By the second half of 1785 all the German princes had joined together against Austria.54 The further course of events is well-known and does not need to be rehearsed, because here my sole concern has been to account for the connection between this policy and the state’s economic policy. Joseph ii’s plans ended in complete failure. The struggle for supremacy in Germany ended with the expulsion of Austria in economic terms, which eventually had its political expulsion as a necessary consequence.

3

The Failure of Fresh Treaty Negotiations in 1787. The Turkish War of 1788. The Austro-Russian and Prusso-Turkish Alliances. Further Fruitless Negotiations over a Trade Treaty in 1790. The Collapse of the Export Route through Gdańsk

Friedrich ii died in August 1786. It might well have been thought that a new understanding between Austria and Prussia was subsequently not out of the question. The new King, Friedrich Wilhelm ii, received the Austrian ambassador in Berlin, Prince Reuss, almost immediately, on 5 September. He told him that ‘Je souhaiterais surtout qu’il puisse s’établir une communication moins genée et un commerce plus libre enter les sujects de S.M. Imp. et les miens’.55 50 51 52 53 54 55

Joseph to Leopold, in Habsburg and Toscana 1872, 1, p. 212. See Beer 1883, pp. 79–80, and Habsburg and Romanov 1869, 1, pp. 224–5. See Ranke 1875, p. 216. Cobenzl was informed of this in Saint Petersburg on 16 April 1785 (see Beer and Fiedler 1901, 2, p. 42). Later on, under Leopold ii, Austria made yet a third attempt to acquire Bavaria (see Beer 1883, p. 149). [‘I would very much like communications between us to be less constrained and trade to be conducted more freely between the subjects of his Imperial Majesty and my own’] Wolf 1880, p. 138.

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Joseph ii too, at the end of September, expressed the wish ‘to make it known to the Prussian Cabinet and [to] cause it to be insinuated that in many matters a better understanding could also be of particular advantage to both states’.56 He pursued this idea with enthusiasm in a letter of 6 December 1786 to Kaunitz. If both states trusted each other, he wrote, they would have much more leisure to work for the happiness of their subjects. Cobenzl and Spielmann shared this opinion.57 Friedrich Wilhelm was initially distrustful, taking the view that Joseph ii only wanted to make soothing noises with a view to involving him in his Turkish plans.58 Later on, however, reacting to conciliatory diplomatic moves by Austria, he felt similar impulses.59 This change in the political atmosphere brought with it a rapprochement in the economic sphere. At the end of 1786 the merchants of Wrocław were invited to send a deputation to Berlin to meet with the Prussian General Directorate and hold discussions on trade relations with Austria. These deliberations began on 30 December 1786. The merchants’ deputation called for a reciprocal reduction in customs duties and more relaxed trade relations.60 The Prussian government responded to this immediately, by changing its approach to the transit trade through Silesia.61 At the same time an attempt was made to start negotiations with Austria through Podewils, the accredited envoy in Vienna. The Austrian

56 57 58 59 60 61

Wolf 1880, p. 143. See Ranke 1875, pp. 210–11, and 497 et seq. Also see Cobenzl’s letter of 23 February 1787 to the Emperor, and Joseph’s reply of 25 September 1787, in Brunner 1871, pp. 60 and 66. See Mitrofanov 1910, 1, pp. 184–5. See Krones 1879, pp. 456 et seq. See Fechner 1886, pp. 523 et seq., and Philippson 1880, p. 447. The concession was made in the ‘Königliche Verordnung für das Herzogthum Schlesien wegen neuer Einrichtung des Accise und Zoll-Wesens’, dated Berlin, 16 April 1787 (Archiwum Książąt Czartoryskich, 1174). It is stated that ‘the transit trade has been affected adversely by the confused and ponderous proceedings of the previous administration’ and that ‘foreign trade has also suffered to the same degree through impositions and burdensome restrictions, in part determined incorrectly’. The purpose of the regulation was declared to be ‘to bring back to prosperity the trade which has been ruined … by all these vexations’. In order to achieve this, duties were to be reduced, a more tolerable system of inspection put in place and, furthermore, a provisional undertaking was to be given ‘that all prohibitions by virtue of which passage through our lands was entirely prohibited for various items are from now on completely lifted’. The Jews of Brody, who were delighted by the opening of a route which had been almost completely blocked for the past sixteen years, sent a letter of thanks to Berlin, to which the officials there replied by issuing a royal Cabinet Order promising ‘that they and their co-religionists’ would be ‘treated in a friendly manner as good neighbours at all Frankfurt fairs and that their trading activities … would be favoured in so far as possible’ (hka, Commerz. fasc. 57, ad 5 ex Decembri 1787).

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Court Chancellery, after diverse hesitations finally agreed, in April 1787, to take up the Prussian offer of negotiations. The Austrian side had also mentioned the difficulties experienced by the Galician export trade and described the duties charged at Fordon as exorbitant. They also wanted the transit duties on the Elbe in the neighbourhood of Magdeburg to be reduced.62 Once again, however, the negotiations ended without producing any results. In the name of their states’ interests, their advisors opposed the rulers’ intentions to reach an agreement. In Berlin, [Ewald Friedrich von] Hertzberg, with the inexorable logic of Prussia’s ‘reason of state’: Austria would never forget Silesia and it would never give up the aim of extending its control over Germany. ‘Prussia can and must continue to play the role of a first-rank power’. In Austria, Kaunitz, again criticised the Emperor’s decision sharply. Both states, he declared, were in a fight for supremacy in one and the same sphere of influence. The only possible outcome would be that one state ‘pushed the other so far down that it ceased to be a danger for ever’.63 He developed the same ideas in a letter of 30 August 1786 to the Austrian ambassador in Berlin.64 The ultimate purpose of Austrian policy, he wrote, was to prepare for a conflict with Prussia, ‘because the idea that our true state interests could ever be united with those of Prussia in any solid, lasting manner belongs to the realm of pious wishes’. ‘Your Excellency … should never lose sight of the fundamental principle that the Court there is always to be regarded as our most dangerous enemy, an enemy we must always view with the greatest mistrust. Count Cobenzl should also always seek to nourish this mistrust in Saint Petersburg’.65

62 63 64 65

See Fechner 1886, p. 527. On the Prussian side a reduction in transit duties on the export of Silesian linen to Trieste was sought (see Wolf 1880, p. 143). See Ranke 1875, pp. 213–14 and 502. See Krones 1879, pp. 456 et seq. See Krones 1879; and Wolf 1880, p. 141. At the same time, Count Cobenzl in Saint Petersburg received a ‘draft agreement’ [Punktation] from Vienna. Meant for the Russian Court, it was pointed out that ‘the Prussian Court is the greatest, most irreconcilable and most dangerous enemy of the two Imperial Courts’. To win over the Russian Court, the statement also referred to the ‘grand plan’ for the destruction of the Porte. But this was pushed into the background: ‘The execution of the grand plan requires the prior removal of its main obstacle. A start on it can therefore only be made once the power of Prussia has been reduced’ (Beer and Fiedler 1901, 1, pp. xiv and xvi). There is no better proof, however, of how the idea of the recovery of supremacy in Germany dominated the minds of the leading Austrian politicians than the ‘Instruction für den Grafen Reviczky als bevollmächtiger Minister am königlich großbritannischen Hofe’, dated 3 April 1786. In this document, all of Europe’s international relations and the attitude of Austria to all the European states were judged and tested exclusively from the point of view of their relationships with Prussia. The Court of Saint James was reproached for its ‘complete lack of interest in precisely

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Mistrust therefore continued to be the fundamental creed for politics on both sides. As one of the Austrian ministers expressed himself: ‘It is not good to have dealings with you, gentlemen of Prussia; you would like to pull the wool over our eyes, so it is better that everything remain as it is’.66 Just as the futility of the negotiations over a trade treaty with Prussia in 1763 and 1782–83 had led to a sharpening of the prohibitive and protectionist tariff policy and the issue of the 1764 and 1784 Edicts of Prohibition, so too the failure of the negotiations of 1787 called forth a yet further sharpening of the tariff system by the Customs Edict of 1788, and a still more drastic isolation of Austria from the outside world. For the moment there was no opportunity for any further negotiations. In both countries, it was again the diplomats who had the decisive word about policy. The military alliance between Austria and Russia followed. On 23 August 1787 Turkey declared war on Russia; Joseph was already assembling his troops and, on 9 February 1788, issued his declaration of war on Turkey. [Heinrich Friedrich] Dietz, Friedrich Wilhelm ii’s resident diplomat at the Porte, thought the moment had come to proclaim Hungary an independent kingdom and thus to paralyse the action of Austria and Russia by stirring up internal disruption.67 Herzberg turned his attention to parts of Bohemia with the same intention. The Emperor was already predicting a war with Prussia in the autumn of 1788.68 On 31 January 1790 a Prusso-Turkish alliance directed against Austria was concluded. By the terms of this alliance, the King of Prussia promised to wage war, with all his forces, on Austria in the spring of that year; in return, the Porte promised to support the demand for the restoration of Galicia to Poland in future peace negotiations.69 Herzberg calculated that Prussia would finally be able to gain possession of Gdańsk and Toruń, through this combination at Austria’s expense, and he also hoped for the support of the Cabinet in London, which favoured Prussia’s plans because it was uncomfortable about the rising strength of Russia. He intended to draw Holland into the Triple Alliance against Austria as well. At this serious moment, on 20 February 1790, Joseph ii died. He was oppressed by a veritably mountainous burden of political anxieties and finally

66 67 68 69

the thing that concerns us most’. England ought to help Austria ‘to recover our previous decisive predominance in Germany, the earlier the better … for unless this is achieved, we will never be able to be Great Britain’s useful, effective ally’ (Wolf 1880, pp. 210 et seq). See Fechner 1886, p. 528. See Kalinka 1895–96, 1, section 8, and Beer 1883, p. 113. See Beer 1883, pp. 111–12 and 134. See Hertzberg 1789–95, 3; Beer 1883, pp. 104 and 105; and Kalinka 1895–96, 4, sections 136 and 137.

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brought down by the fatal illness against which he had fought so heroically. It is not possible to examine here the negotiations which took place between Austria and Prussia under his successor, Leopold ii. Only one important fact should be emphasised, namely that even in these difficult circumstances, when Austria was threatened with war by its powerful opponent, the Court in Vienna demanded that Prussia reduce the duties levied on Galician products travelling down the Vistula to 6 percent (on 11 July 1790).70 Once again this did not happen, naturally enough, since the treaty concluded shortly afterwards on the basis of the status quo before the Turkish war neither affected nor altered questions relating to trade. Some months later there were renewed negotiations between Prussia and Austria. Friedrich Wilhelm ii instructed his envoy in Vienna, Baron [Constans Phillipp Wilhelm von] Jacobi-Klöst, to ask whether the Court there was prepared to start negotiations over a restoration of trade relations. He added the significant remark that Jacobi had a good enough knowledge of the close relations of Hungary, Bohemia and Galicia with Silesia to be able to enlighten Vienna about the mutual advantages of a trading connection among these provinces.71 Hoym hoped that the new Emperor of Austria would be inclined to favour a trade treaty between Silesia, on the one side, and Galicia and Hungary, on the other, despite the system of prohibition, because these provinces had no factories.72 The Austrian representative, Spielmann, was prepared in principle to accept the Prussian offer, as was Count Kolowrat, who stressed that Galicia had a need for haberdashery, which it had previously obtained from Tyrol, a province which suffered from the disadvantage of being a long way away, giving rise to high transport costs. Despite this support, no treaty was concluded, although on 22 January 1791 Prussia did reduce its duties on haberdashery.73 Austrian statesmen continued to be dominated by antagonism to Prussia and, despite the negligible results of the alliance with Saint Petersburg, their fear of Prussia led to its renewal.74 In spite of all its efforts over two decades, Austria was unable to reduce Prussian duties on the Vistula. The struggle for the free navigation on the Vistula was an episode of more than merely local significance. It was one

70 71 72 73 74

See Kalinka 1895–96, 4, section 128. Prussian Cabinet Order of 10 December 1790, in Fechner 1886, p. 531. See Fechner 1886, p. 547. See Fechner 1886, pp. 532–3. See Beer 1883, pp. 124 and 764.

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element in the long chain of efforts by both Prussia and Austria, over more than half a century, to win the struggle for supremacy in Germany, a struggle from which Prussia emerged the victor.75 Galicia’s exports to Gdańsk suffered frightfully as a result. ‘It is a truth, as well-known as it is deplorable’, a report issued in 1780 by the Galician Governor’s Office stated, ‘that these duties and obstacles have reduced exports to Gdańsk by more than two thirds’.76 The decline in the Gdańsk trade is confirmed, to some extent, by the available figures:77

Year Imports 1778 1787

75

76 77

Prussia (florins) Exports

180,000–200,000 136,454

140,000–150,000 86,484

Imports

Gdańsk (florins) Exports

50,000–60,000 24,255

600,000–800,000 261,088

Only after the collapse of the Prussian state, following the battle of Jena, did the possibility arise of changing its policies on navigation on its internal waterways. It was the Congress of Vienna which opened the navigable rivers of Germany to the merchants of all German states. In the Final Act of 9 June 1815 only fundamentals were agreed, which then led to the Elbe Navigation Act of 23 June 1821. The Vienna Treaties of 1815 and then Austria’s Convention with Prussia and Russia of 22 March 1817 and 17 August 1817 likewise first freed navigation on all the rivers of the former Kingdom of Poland in its boundaries before 1772. This initiated a kind of economic reconstruction of the old Polish Kingdom (see Zimmermann 1892, pp. 14 and 21; and Smolka 1907, 2, pp. 333 et seq. and 343 et seq.). For Galicia, of course, these decisions came too late. During the intervening fifty years of Austrian rule, new tendencies in the economic life of the Province had gradually asserted themselves. The old route to the north and Gdańsk declined in importance in comparison with the route to the markets of the west. This transformation had already been accomplished by the 1830s. The railway connection currently under construction between Vienna and Bochnia (the Nordbahn), with its proposed extension as far as Lviv, now appeared far more important than navigation down the Vistula. As Count Oetner characteristically stated at the time, ‘The course of the main rivers of the Province runs counter to its interests, it contradicts its present tendency to look westwards’ (see Cetner 1844, pp. 9 and 23; and Czynności Sejmu w królestwach Galicyi 1842, p. 17). Governor’s Report of 30 September 1780, hka, Commerz. fasc. 57, ad 1 ex Decembri 1780. See Grossmann 1913. In addition to the amounts mentioned, in 1787 transit goods to the value of 801,912 florins passed to and from Prussia through Galicia. Only the figures for 1787 are taken from an official table. I arrived at the data for 1778 by making estimates. My

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In spite of this negative outcome, our account has shown that it would be completely wrong to assert that the Austrian government was not concerned about Galicia’s trade. The failure of the attempts by to free Galicia from the oppressive weight of Prussian duties did not result from any errors made by it but happened independently of the government in Vienna and its economic policies and was closely related to the rapid expansion of Hohenzollern power during the eighteenth century. In order to illuminate Austrian economic policy from yet another angle, Polish conduct, during the same period and under similar circumstances can be referred to here, although we will pass over the sad story of the Delegation Parliament in silence.78 After the Four Year Parliament had broken with Russia and made an alliance with Prussia (29 March 1790) it did not even call for the regulation of the Vistula tolls, despite the urgent warnings of [King] Stanisław August and despite Poland’s experience with the Prussian Trade Treaty of 1775.79 In Article vii of the Treaty of Alliance, it was simply stated that negotiations will be started over a trade treaty.80 The Silesian border, West Prussia and the New Mark continued to be closed to Polish products81 and Prussian exactions on the Vistula continued to increase, despite the alliance. The Parliament was guilty of this negligence, precisely at a time when Poland’s trade on the Black Sea had fallen into complete decay due to the break with Russia and the Turkish war, and the country was exclusively reliant on the port of Gdańsk. Stanisław August was therefore absolutely right when he wrote that ‘having been unable to make use of the circumstance that Berlin demanded and needed our trade, we shall never again meet with a time so favourable to us’.82 To use Kalinka’s words, the

78

79 80 81 82

reference point for these was a report by the Dutch consul in Gdańsk, Ross, in which he calculated that the export value of Galician linen alone in 1780 was more than 600,000 florins (see appendix 12 of Beekhen’s report on his journey through Galicia, ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780). We will not, however, leave unmentioned the fact that the most important interests of the Polish Republic were given up at a ridiculously cheap price. In 1775 the Prussian representative in Warsaw, Benoît, obtained the agreement of the Parliament to the Prussian transit duty of 12 percent, which did incalculable harm to Poland, by bribing the Royal Grand Chancellor, the Bishop of Posen, Młodziejowski, with a sum of less than 4,000 ducats (see Niemcewicz 1868, p. 92). See Kalinka 1895–96, 4, sections 116 and 119. Kalinka 1895–96, 4, section 120, p. 76. Kalinka 1895–96, 4, section 120, p. 78, and Philippson 1880, pp. 430–1. Kalinka 1895–96, 4, section 120, p. 80.

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leading personalities of the Four Year Parliament ‘sacrificed the most important economic interests of the Republic without hesitation’ in order to achieve an alliance with Prussia.83

83

Kalinka 1895–96, 4, section 120, p. 81. The justification for this policy presented by Hugo Kołłątaj, the Royal Vice-Chancellor, who was the leading politician of the epoch and the author of the remarkable constitution of 3 May 1791, only appears to provide further confirmation for Kalinka’s harsh judgement (Kołłątaj 1868, 1, pp. 30 et seq., 35–6; and Kołłątaj 1868, 2, pp. 19–22). We should not be misled by the fact that it was the hired agents and supporters of Russia who demanded that a trade treaty be concluded simultaneously with the alliance treaty. The opposition was simply taking advantage of the errors made by the dominant, patriotic majority. The hope of extracting an advantageous trade treaty from Prussia in return for a political alliance only persisted so long as Prussia needed the alliance with Poland because of the general political situation. Once Friedrich Wilhelm had his alliance, he demanded an entirely different kind of compensation for the reduction of the Fordon duties: Gdańsk and Toruń. This was something the Republic was neither willing nor able to concede.

part 5 Galicia’s Relationship with the Hereditary Lands and Hungary, 1784–90

∵

chapter 19

The Tariff Reform of 1784 1

The Significance and Purpose of the Reform

We can confine the presentation of this period in Joseph ii’s trade policy to the bare essentials. After all, the Customs Edict of 1784, which re-introduced high levels of protection and a system of prohibitions, is perhaps the best known of all his trade policy reforms1 and a more detailed description of its impact therefore appears superfluous. From the specifically Galician point of view, however, the reform exhibits certain different features. For that Province it signified a complete reversal, not just in trade policy but in economic policy in general. The first question that suggests itself is why was the decision suddenly made to abandon Galicia’s special tariff status, regarded for the 12 years between 1772 and 1784 by the Austrian bureaucracy as an axiom with which it was impermissible to tamper, and to include Galicia in Austrian state’s universal customs area? This new approach certainly complied with the principles of mercantilist policy, one of whose essential features was the effort to create large, unified customs areas. In Austria the starting-point for this aspiration can be traced back to the beginning of the sixteenth century, when Karl v conceived the bold and ambitious plan of surrounding the borders of his Empire with a continuous customs barrier.2 Then, in the seventeenth century, a generation before Karl vi welded together the ‘Archducal House of Austria’ into a legal and political state unit, Leopold I sought to mould the whole of the Hereditary Lands into an economic unit.3 Particularly since the mid-eighteenth century, these centralising tendencies had asserted themselves more and more in Austria; all too comprehensible in a state in which the individual provinces had their own separate constitutional and administrative organs, despite the above-mentioned efforts. This was a state which did not even have a single name and in which

1 See Hock and Bidermann 1879, pp. 541–52, Blodig 1863, pp. xix et seq.; Jäger 1867, pp. 214–20; and Beidtel 1896, 1, pp. 390–1. 2 See Worms 1874, pp. 5–6; and Bosc 1907, p. 98. 3 By means of the Regulations of 1673 and 1674. See Srbik 1907, p. 100. Eugene of Savoy wrote at this time that ‘It will be absolutely necessary to turn, as much as possible, your Imperial and Catholic majesty’s extensive and magnificent Monarchy into a single whole’ (Fischel 1906, p. 139).

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_026

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the connection between the individual parts of the whole was only apparent in the form of the dynasty, the Court and the armed forces.4 By themselves, however, these tendencies do not explain the decision. Although the question of Galicia’s incorporation into the state tariff system had repeatedly been considered after the Province was occupied,5 it had always been allowed to retain an exceptional position, from the customs point of view, out of consideration for its special interests. And, from the very beginning, the most decisive advocate of this conception of Galicia’s exceptional situation had been none other than the Emperor himself!6 In 1773, although he held different views about the principles involved in the practical tasks of Austria’s tariff policy, he advocated giving Galicia a special status and allowing the Province to have complete freedom of trade with Poland and Gdańsk; and ten years later he continued to believe that the compulsory restriction of Galicia’s trade relations with foreign countries ran counter to its interests.7 The key to the mystery of why, just a few weeks later, it was nevertheless decided to incorporate Galicia into the unified customs area is to be sought not in the Emperor’s personal inclination to centralise (so often mentioned disapprovingly in the literature) but in the Province’s objectively given situation in the politics of trade, created by Prussia’s oppressive tariff measures. In his time, Joseph had given his support to Galicia’s special status and permitted foreign competition, despite the demands of Austrian manufacturers, who wanted to retain Galicia as an outlet for the products of the Hereditary Lands, and certainly, in his view, to the disadvantage of future local industries in the Province. This was because he was firmly convinced that there would be rich compensation available, in the form of the large advantages Galician agriculture and trade, branches of the economy which were of much greater 4 5 6 7

See Přibram 1907, pp. 6–7. See above, pp. 164 and 276. See above, p. 206. In 1783 the Chancellor, Count Kolowrat, drew the Emperor’s attention to the damage done to Austria by Prussian and Saxon trade, with reference to the trade statistics for 1781. In view of the way Galicia was being flooded with foreign manufactures, he proposed that Galician merchants be prohibited from visiting foreign trade fairs (Report of 16 January 1783). Joseph rejected this measure of prohibition in a Resolution reported on 25 January, saying: It is not at all advisable to prohibit Galician merchants from frequenting the Leipzig fair, because this measure of compulsion will only make the commodities which are allowed to be imported, according to the usual customs regulations, more expensive in Galicia without bringing any particular advantage to the manufactures of the Hereditary Lands. In general it is not through prohibitions, but only by introducing good commercial arrangements that the domestic merchant must be induced to stay away from harmful foreign commerce of his own accord. (hka, Kameralakt Fasc. 7, ad 609 ex Januario 1783).

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significance in Galicia at that time than industry, would enjoy. It was Joseph’s view that the close trade connections between Galicia and Poland, and freedom of navigation down the Vistula to Gdańsk, which might be achieved, were important enough for the economic development of the Province to outweigh both the disadvantages deriving from the reduction of Galician duties on foreign imports and anticipated advantages for Galicia’s exports from establishing a closer connection between it and the Hereditary Lands.8 He found that there was no comparison between the slight damage done by making it easy for foreign industrial products to be marketed in Galicia and the great advantages the Province seemed certain to gain from unfettered access to the sea. With this hope in mind, he entered into a trade treaty with Poland and vainly attempted to conclude a similar treaty with Prussia. A decade of painful efforts and experiences was needed to understand the utter ruthlessness and consistency of Friedrich ii’s policy on the Vistula. After Beekhen’s journey to Gdańsk finally made clear the impossibility of persuading the Court in Berlin to concede free navigation9 and, as we have seen, after the Court Chancellery thought that the only possibility of freeing ‘the Galician’ from the iron yoke of Prussian duties was ‘a fortunate revolution political situ-

8 See above, p. 204 and in particular pp. 205–208. For a similar statement by Count Wrbna, see above, p. 353. 9 Later, too, Joseph omitted nothing which might facilitate the Vistula trade, although he no longer had any hope that his projects would be successful. Early in April 1784, he made proposals on the subject to Catherine ii, writing at the same time to Cobenzl that ‘L’objet de la Vistule, que je touche à l’Imprice, seroit une chose bien glorieuse pour Elle, et bien avantageuse pour tout ce qui s’appelle, ou s’appelloit autrefois Pologne, s’il pouvoit s’arrange ansi, mais je doute, qu’elle aura le courage de le proposer, encoure moins de le soutenir efficacement vis-à-vis due Roi de Prusse; tentare licet’ [‘The objective of the Vistula, which I have mentioned to the Empress, would be a source of great glory for her, and it would also be of advantage to what is called, or used to be called, Poland, if it could be arranged, but I doubt whether she will have the courage to propose it, still less support it effectively, vis-à-vis the King of Prussia; one can only try’] (Joseph to Cobenzl, 5 April 1784, in Beer and Fiedler 1901, 1, p. 461). It was not until two months later that Cobenzl was able to learn anything more definite about the matter. ‘Besborodko’, he wrote to the Emperor, ‘m’assura que les ordres sont dejà parti pour le Comte de Stackelberg pour qu’il présente un projet d’accommodement au Roi de Prusse … qui retouché, ayant été concerté avec les Danzigois doit d’autant plus assurer leurs droits et la supériorité de leur commerce sur celui des Prussiens’ [‘Besborodko assured me that instructions had already been sent to Count Stackelberg to present a projected compromise to the King of Prussia … which, having been improved and worked out in agreement with the Gdańskers ought to give them greater guarantees of their rights and the superiority of their trade over that of the Prussians’ (Cobenzl to Joseph, 30 May 1784, in Beer and Fiedler 1901, 1, p. 470). These proposals did not lead to any positive results.

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ation in Europe’,10 the idea inevitably arose of abandoning the attempt to conclude a trade convention with Prussia.11 Instead completely separating from that power and rendering Austria independent of the outside world, by making it economically self-sufficient. Beekhen already presented this plan at the end of 1780.12 Two years later, when the Emperor’s hopes of freeing Galicia’s trade from Prussia’s geographical and financial encirclement had collapsed and he had convinced himself that, although Galicia had been flooded with foreignmade industrial products,13 the expected advantages of exports to Gdańsk, intended to compensate for the damage to Austrian industry, had not materialised, he decided to undertake a revision of his previous customs policy for the Province. If this was not done, he thought, the Province’s ability to consume would be permanently weakened and its economic ruin would be unavoidable in the longer term. He therefore resolved to act decisively to save the situation. Galicia’s trade route to the north had now been blocked. It would be completely replaced by opening new markets for Galicia in the Hereditary Lands and that would only be possible if the Province were incorporated into the Austrian customs area.14 This was then, in fact, done by the Imperial Resolution of 17 February 1783.15 10 11

12 13

14

15

See above, p. 357. Precisely at that point animosity between the two Courts was at its height, leading people to believe that a war between Austria and Prussia was unavoidable (see above, p. 368; also see Wolf 1880, p. 63). See above, pp. 359–360. This is the characteristic description given in the 7 August 1784 report of the Lviv Customs Administrator von Schönauer: ‘It is stated in all Eder’s administrative reports and there is not the slightest doubt that it is the market for Leipzig, Frankfurt, Wrocław and Gdańsk goods which has been promoted so far. The Saxons and Prussians are more our commercial than our political enemies; to favour the goods sent by our enemies is to keep up the prosperity and the finances of our enemies’ (hka, Mautwesen in Galizien, ad 169 ex Januario 1785). It was often asserted in earlier literature on the subject that Galicia was isolated from the outside world by the Customs Edict of 1784. This was to forget that Austria was forced into this step and the impetus to it came from outside, from Prussia, since for Galicia’s exports – and this is what chiefly comes into consideration here – the route to the north had, in any case, been barred for years by Prussia’s policy, and Austria was not in a position to provide a substitute market in the Hereditary Lands. It was forgotten that, although this Edict imposed certain severe restrictions on the import of foreign industrial items, it opened up fresh export routes for Galicia both in the Hereditary Lands and through them in to the Mediterranean coast. In any case, the Tariff of 1784 mainly dealt with imports from and via Prussia. The duties relating to Poland and Turkey and later also Russia, remained the same as before, and were determined by trade treaties. Also see below, p. 392, note. ‘The equalisation of Galician duties with those of the other Hereditary Lands must be

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This measure did not simply have a far-reaching impact on trade itself; it also signified a new era in the general economic policy of the Austrian Empire. Whereas, in the period between 1772 and 1784, the government’s primary interest had been trade policy, between 1785 and 1790 industry policy occupied the first place.16

2

On the Antecedents

The following is to be noted about the background to this change. In 1780, during discussions about the Hungarian tariff, financial officials expressed the view that, bearing in mind the number of foreign goods that were smuggled through Galicia into Hungary, ‘in Galicia too a higher import duty ought to be imposed on these foreign [luxury] goods’. Court Chancellor, Count Auersperg, objected to this proposal. He declared ‘that Galicia’s trading conditions made it necessary to retain the tariff system introduced in 1778 by all the governing bodies of Austria, which unanimously decided to maintain the status quo, because the wholesale trade in Galicia would be tremendously damaged by increasing import duties’.17 Some months later, when there was a discussion of the means to assist the recovery of Galicia’s trade from the blockade imposed by Prussia’s tariff regulations, the Emperor considered that the road to commercial salvation lay in giving yet further support to the wholesale (transit) and export trades. His Resolution was that In a province situated as Galicia is, the transit trade cannot be forced to prosper just by setting the lowest possible transit duties or even removing them completely but needs to be maintained and supported by giving it the best possible treatment. Moreover, the export trade, which has unfortunately faced such heavy burdens and restrictions18 must also be assisted and supported in every possible way. These two branches of commerce,

16 17 18

adopted as a fundamental principle in future general tariff arrangements. In the meantime, however, Galicia will have to retain the existing tariffs until improved tariff arrangements have been introduced in all the Hereditary Lands. I expect this point to be worked out in detail in the near future, in accordance with the principles I have stated’ (hka, Kameralakt Fasc. 7, ad 638 ex Februario 1783). See above, p. 360. These comments can be read in the minutes of the meeting of the Council of State held on 11 May 1781 to discuss Galician customs affairs (ami, ii A/6 fasc. 320 ad 104 ex Majo 1781). From Prussia.

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which are the sole means of bringing money into the Province, [must be] freed from duty as completely as possible.19 This expressed the desire to maintain the existing policy of free trade and to place even greater emphasis on it. He continued to regard the wholesale trade and the export trade as the sole sources of Galician prosperity. He did, admittedly, propose a slight increase in import duties but this increase was only intended as response to the purely administrative and financial need to compensate for the deficit caused by the reduction in the transit and export duties. ‘As regards import duty’. the Resolution continued, ‘the 10 percent could be somewhat increased, without causing concern, by raising assessments of goods somewhat, to compensate state income for the reduction in receipts from transit and export duty. But these are only general comments, to be used as guidelines for further analysis’. Joseph’s proposal was not implemented. In May 1781 a committee of the Council of State,20 chaired by the Chief Chancellor [Head of the United Court Offices], Count [Heinrich Kajetan von] Blümegen, declared its opposition to the Emperor’s views. It argued that ‘a direct increase in the duty on foreign imports is in the present circumstances not compatible with the best interests of the Province nor does it appear advisable to bring about an indirect increase in the duty by raising the valuation of imported goods’. Joseph signified his acceptance of this advice on 30 May 1781. On the very same day, a circular21 was issued to the Galician Governor’s Office ordering the retention of the existing arrangements ‘in regard to the import, transit and export duties which are at present in force’ but also the promotion of trade by a further easing customs procedures in line with the Emperor’s proposals. Instead of a general increase in duties, the Council of State ordered an increase on a number of imported luxury goods. The Galician customs administrator, Eder, was instructed ‘to provide a list of items whose import can be burdened with higher duties without damaging the Galician wholesale trade’. Eder now repeated all the well-known objections to the extension of the Hereditary Lands’ tariff system to Galicia.22 If, despite his opposition, higher tariffs were introduced, he wanted the chief reason for this to be the promotion of economic and specifically industrial interests, rather than financial ones. ‘If

19 20 21 22

See ami ii A/6 fasc. 320 ad 104 ex Majo 1781. Its members were Counts Hatzfeld, Kolowrat, Auersperg, Khevenhüller, Bathiany, Kresel, Gebler, Löhr, Chotek, Zichy, Brigido, Rosenthal and Vogel. ami, v G 7/2940 ad 26 ex Junio 1781. Report of 29 September 1718, hka Kameralakt, ad 638 ex Februario 1783.

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the receipts of the duty are regarded not as a fixed sum but as income which coincides with commercial principles, I am of the view that the main concern should not be to increase the burden of duties on imported goods but to promote the prosperity of the Province by increasing the number of domestic industries and accordingly increasing the inflow of money’. In Lviv there was no hurry to comply with wishes of Vienna. When Count Brigido23 took over the administration of the Province, the Galician Governor’s Office began a covert struggle against the reforming efforts of the central government, in which no means was eschewed. It was certainly not by chance that it took 15 months for the Office’s report on the subject to be finalised! In this document, issued on 3 January 1783, the Provincial Specialist von Guinigi stated that he completely agreed with Eder’s arguments. He added that it was also unnecessary to prohibit the entry of foreign goods into Galicia, from the point of view of the industries of the Hereditary Lands, ‘because the merchants of Galicia have in any case already made a good start with the purchase of goods from the Hereditary Lands … and they wish to continue the movement of trade via Trieste and from the other Hereditary Lands through Hungary, which has already begun, in order make the loss of the Gdańsk route less painful’. ‘The conclusion is that it would be better to await the results [of this connection] than to move to tariff increases which are perhaps premature, the more so in

23

In the Polish literature on the subject, Count Brigido has long counted as a benefactor of Galicia. ‘This high official’, we read in Łoziński (1872, pp. 104–5) ‘was a man of great uprightness and kind-heartedness. It was almost as if he had been deliberately sent by Providence to sweeten the poor Province’s first steps into slavery … There was one further quality which allowed him to acquire the confidence of the nobility: he did not belong to the camp of Joseph’s anti-clerical policies … and he often softened the impact of the repressive decrees directed against the priesthood and the monasteries’. Starzyński (1893 p. 61) wrote something similar and suggested further that Brigido’s attitude to economic questions displayed a certain benevolence towards the Province. In reality, however, Brigido’s role was completely different. The good opinion which Joseph ii initially had of Brigido (Joseph to Maria Theresia, in Habsburg and Habsburg 1867–68, 3, pp. 242 et seq.) did not last long (see Tokarz 1909, pp. 3 and 7). In 1782 he was accused of proceeding unauthorised in relation to the sale of salt (see Hock and Bidermann 1879, p. 118) and in 1786 Count Ugarte of the Court Chancellery accused him of giving false information about the behaviour of officials subordinate to him (Hock and Bidermann 1879, p. 131). Later, I will have the opportunity to prove that Brigido, as well as Governor’s Office Councillor Kortum, who held similar views and was an influential member of the Lviv Governor’s Office, fought against the central government’s efforts to industrialise Galicia, as ‘men enjoying the confidence of the nobility’, with all the open and covet means at their disposal. They engaged in defence, often disguised by all kinds of pretexts, of the large landowners’ interests, at every opportunity, and therefore resisted all reforms which favoured the peasantry, the bourgeoisie and the Jews (see below, pp. 446–451).

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that, given the necessary, yet to be granted support, a contribution from indigenous Galician industry might be expected’. In Vienna, meanwhile, the transformation of views, already familiar to us, now began. After making many, almost desperate attempts to shake free from Prussia’s chains, the Emperor now presented his ambitious programme for the industrialisation of Galicia, so as to make the Province independent of foreign imports. He wanted to turn all the Hereditary Lands into a complex, economically self-sufficient whole. To the extent that relations with the outside world might be necessary despite this, he wanted to shift the Monarchy’s economic centre of gravity away from the German north to the south and to direct imports and exports through Trieste and the Mediterranean.24 The need to bring Galicia closer economically to the Hereditary Lands was in the forefront of comments made by the United Court Offices, on 30 January 1783, about the Galician Governor’s report. On the one hand, wrote Count Chotek, ‘the equalisation of tariffs might extend the scope of Galicia’s trade with other Hereditary Lands’. On the other hand, the Hereditary Lands would gain a more protected export market in Galicia. For that reason, he would ‘advise the authorities to conclude in favour of the unification of Galicia with the German Hereditary Lands and the equalisation of customs duties’. After this, the issue was decided in principle by the Imperial Resolution cited earlier, in accordance with these arguments.25

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25

A shift in Joseph’s views about the Adriatic coast is also an aspect of the context of his change of heart. In Maria Theresia’s eastern policy, with which Joseph initially agreed, it was an axiom that no foreign power should be permitted to gain a foothold on the Danube. Under the Emperor’s Turkish plans after 1784, however, there is a much stronger emphasis on the need to establish a strongpoint on the Adriatic and, for this reason, he wanted to occupy Serbia, annex Dalmatia and compensate the Venetians for its loss by offering them parts of the Ottoman Empire (see Beer 1883, pp. 92 and 169). Nevertheless, it should not be forgotten that this policy was by no means consistently pursued. Joseph himself diverged from it. Later too and up to 1865, Austria’s trade policy was completely determined by its political struggle for hegemony in Germany; only after the war of 1866 and Austria’s resultant expulsion from Germany did Austria go over to independent action in trade matters ‘directed explicitly to the east’, undiverted by special concerns about Germany (see Bazant 1894, pp. 9 and 10; and Friedjung 1902 p. 542). [The quotation is from Friedjung.] See above p. 384. The new point of view is also reflected in the increased emphasis on ‘provincial trade’ in public discussions. Schweighofer stated in 1785 (pp. 138 et seq.) that Provincial trade deserves to be investigated most attentively by patriots, even more than foreign trade … Most writers have not considered it an important enough subject for their consideration … but it is the chief prop of industry in a province … The state can never apply too many resources to raise up provincial trade, to promote reciprocal communication between the provinces and by doing so bind them closer together … Where provincial trade flourishes, one province can send its surplus to another.

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The new customs area created by the legislation of 1784 comprised the German, Bohemian and Galician provinces, together with Bukovina.26 It excluded Tyrol and Further Austria,27 as well as the Hungarian lands. By this measure, Joseph ii was able to remove the barriers dividing the Austrian provinces from each other permanently and to bind them into a united whole.28 This was a goal France had been trying to achieve since the Estates-General of 1614 and Colbert’s period in office but did not come to fruition until after 1789. In this sphere of activity, as in so many others, Joseph ii anticipated the great French Revolution.29 26

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29

hka, Mautwesen in Galizien, ad 213 ex Septembri 1784. Mitrofanov’s assertion (1910, 2, pp. 446 and 454) that the tariff reform of 1784 applied neither to Galicia nor to Bukovina is fundamentally false (see Polek 1895, p. 63). The Estates of Tyrol had long claimed that the Province, which because of its geographical position was the scene of a lively transit trade between South Germany and Italy, was not suited to industry and they were able to insist on their special tariff status, in both 1775 and 1784 (see Hock and Bidermann 1879, pp. 564–9; and Baldauf 1898, pp. 33–4. For the separate commercial statistics for Tyrol see Baldauf 1898, p. 111). Beer’s confused explanations (1893b, pp. 278 and 289–99) make it impossible to grasp the essential fact that Tyrol was not included in the unified customs area in either 1775 or later. See Michiels (1861, p. 248) on the amount of transit trade which passed through Tyrol both before and after the reform of 1784. From that point on, there were no duties on trade between Galicia and the Hereditary Lands, with the exception of cattle duties (see above, p. 315). ‘On the other hand, the duties and also the customs posts dividing Hungary and Transylvania from Austria will remain in existence for the present’ (Court Decree of 12 August 1784, hka, Mautwesen in Galizien, ad 140 ex Augusto 1784). After the reform of 1784, Galician products in Hungary paid no more than 3 percent duty, irrespective of their character (Circular, ‘Wegen Verzollung der hungarischen Erzeugnisse bei der Einfuhr in Galizien’, 27 October 1785, Edicta 1785, pp. 174–5; and Circular, ‘Uber einige zur Begünstigung des hungarischen und siebenbürgischen Handels mit Galizien getroffenen Anordnungen’, 14 February 1786, Edicta 1786, p. 40). In 1784 Hungary raised its import duty on Galician linen from 48 kreutzers per centner to 1 florin 35 kreutzers per pound, which was particularly damaging for the Lisko District in Galicia (see the complaint of the Lisko merchants and linen dealers made on 2 December 1784). Schuppe, the local District Commissioner, objected to the Hungarian action and, thanks to the support of the Galician Provincial Trade Representative von Kuczera, who appealed urgently to Vienna, the Court Chancellery of Hungary and Transylvania was forced on 7 January 1785 to issue an announcement that ‘the duty prescribed in the new Hungarian tariff only applies to foreign linen and can have no application to Galicia, in regard to which the old tariff must remain in force’ (hka, Mautwesen in Galizien, ad 64 ex Februario 1785). I will later quote statistics which demonstrate how strongly the reform of 1784 contributed to increasing Galicia’s exports to the Austrian Hereditary Lands and Hungary. This point was already made in 1790 by Caraccioli (1790, p. 190). Also see Lustkandl (1881, p. 83). As late as 1787, when an Assembly of Notables was summoned in France, precisely to discuss a plan to remove internal customs barriers, the majority of those present rejec-

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If we now look back and consider the customs policy of the government in Galicia, it is apparent that it was dominated by the conflict with Prussia during the Josephine period. That was the real basis of the internal and external economic policy at this time. Nevertheless, while recognising this interaction between external and internal policy, it must, on the other hand, also be pointed out that the process of merging Galicia into the Austrian state as a whole, in terms of tariff policy, was not accidental nor was it a development which could have been avoided under more favourable circumstances. The federal form of state, which was peculiar to the Middle Ages, was already outdated, incompatible with the greater tasks with which states were confronted in the age of mercantilism and the Enlightenment.30 We can also observe that, during this period, despite strong counter-tendencies, the new form of state was beginning to prevail and prove its worth, above all in the economic sphere. Under Karl vi, special tariffs were still being issued for each province: for Upper and Lower Austria in 1725, for Moravia in 1731, for Bohemia in 1737 and for Silesia in 1739.31 When mercantilist tendencies took a firmer hold, under Rudolph Chotek, and the attempt was made to pave the way for a ‘universal trade policy’, a single tariff was issued for Bohemia, Moravia and Silesia in 1752. Even this did not create a unified customs area for the Bohemian lands, because separate levels of duty were specified for each province.32 In 1755 a joint tariff for Upper and Lower Austria followed.33 An attempt was made in 1762 to create a unified customs area. It was unsuccessful.34 The Empress was also unable to achieve her aim of ‘treating the whole of Inner Austria as a single province, as far the tariff system is concerned’: the customs regula-

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ted the idea in the name of support for provincial privileges and the reform did not take place (Levasseur, 1911, pp. 546–7). In Prussia, too, the old economic system continued to prevail, with its multiplicity of tariffs for each province: ‘Before the beginning of the nineteenth century, one could hardly speak of a unified Prussian trade policy’ (Zimmermann 1892, p. 1 and also pp. 7 and 13). Starzyński justifiably reproaches the nobles who demanded a constitution in 1790 with showing ‘a complete lack of understanding for the idea of the organic state and the unity of [state] power … A state in which all the provinces were organised in the above manner’, i.e. according to the demands of the Galician nobility, ‘would not be in a position … to accomplish the tasks inevitably pushed to the forefront by social development and the course of history’ (Starzyński 1893, p. 23). See Beer 1893b, p. 237. See Beer 1893b, p. 242. See Beer 1893b, p. 243. See Beer 1893b, pp. 244–51.

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tions issued in 1766 retained separate tariffs for each of the provinces of Inner Austria (namely Styria, Carinthia, Carniola and Gorizia-Gradisca).35 Centralisation was only achieved step by step, after long struggles and many failed attempts. Even the ‘General Tariff’ of 1775 encompassed neither Galicia nor Tyrol and Further Austria. The circumstance that the idea of centralisation arose anew after each defeat and finally, despite opposition, emerged victorious from the struggle36 appears to demonstrate the historical necessity of this phenomenon. The same point applies not only to the Hereditary Lands but to Galicia as well. The Province was politically incorporated into the Austrian state and for that reason could not, in the long run, lead a separate economic existence. It is true, of course, that the old conditions inherited from the period of Polish rule could not be transformed all at once; they had to be dealt with gently. The government therefore advanced step by step. During the first few years, the status quo was retained. Then the reforms of 1774 started the process of change, followed by the partial opening of the Hereditary Lands to Galician exports in 1776, although neither this reform nor the tariff of 1778 broke off Galicia’s connection with foreign countries. The final step, which brought the process to its conclusion, was the reform of 1784 and the incorporation of Galicia into the customs area of the whole state.

3

The Essential Character of the Reform. The Reorganisation of the Customs Administration. Meixner’s Accusations

It still remains to illuminate the contents this customs tariff, emphasising those aspects whose presentation in the previous literature require correction. The customs legislation of 1784 consists of three Edicts: 1) the Edict of 27 August on the prohibition of foreign goods;37 2) the Stamp Edict of 30 August, which regulated the stamping of domestic products;38 and 3) the actual Cus-

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See Beer 1893b, pp. 251–3. See, for example, the opposition mounted by Count Hatzfeld to the unified customs area, from the particularist standpoint of a member of the feudal nobility of Bohemia (Beer 1893b, p. 266). ‘Patent. Alle ausländische Waaren werden verboten, in die Erblande einzuführen’, 27 August 1784, Edicta 1784, pp. 199–203. ‘Patent. Alle Waaren von inländischen Erzeugnissen sollen gestempelt werden’, 30 August 1784, Edicta 1784, pp. 211–14.

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toms Edict of 16 September,39 which did not come into force in Galicia until 1 December 1784 for technical reasons40 although in the other provinces it came into force on 1 November. These three laws did not affect the export or transit trades. In fact both continued to benefit from favourable legislative treatment. The importation of foreign goods into the unified customs area, in contrast, was to be restricted as far as possible, by three kinds of obstacles.41 Where the Edict of 27 August 1784 did not prohibit them directly,42 they were obstructed by high duties, stamping regulations, and finally administrative rules on the number of points of entry into the country. Foreign items entering the country were divided into four categories by degree of indispensability. The so-called B-goods, which belonged to the first category, ‘could be imported via all roads through the small Customs Offices located on them’, customs offices for daily traffic.43 A-goods, which belonged to the second category, could ‘only pay duty at the Commercial Border Stations’.44 All other items – the third category – had to be presented at the Payment Town [Legstadt] of Jarosław.45 There was, finally, another category, the

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43 44 45

‘Patent. Die neue Mautordnung betreffend’ 16 September 1784, Edicta 1784, pp. 233–75. The extensive Patent was published in 14,000 copies, in German and Polish (!) and the publisher, Piller, was not able to produce them by 1 November (hka, Mautwesen in Galizien, 7 G ad 379, ex Octobri and 161 ex Novembri 1784). This was actually achieved. In spite of the immense increase in the tariff, receipts from customs duties were considerably reduced. According to preliminary results, they fell to 188,672 florins in 1785 and 205,952 florins in 1786 (hka, Staatsvoranschläge fasc. 227 D, Lit. S. and N. See above, p. 292, on this point). The following items were not prohibited by the Edict: astar (a Turkish fabric of linen mixed with cotton), bindings, fustian, cotton goods, purse cloth, Danziger Goldwasser [a herb liqueur] and liqueurs, fine cloth, iron and ironware, earthenware pottery, prepared fish, fancy goods, glass, hats, buttons, linen, brass and brassware, needles, wallpaper, porcelain, silk, lace, stockings, carpets, cloths, wine, and woollen fabric (see ‘Verzeichniß derjenigen Waaren, welche künftig aus fremden Landen nicht anders, als gegen Pässe und besondere Bestellungen einzuführen erlaubt sind’, ‘Patent. Alle ausländische Waaren werden verboten, in die Erblande einzuführen’, 27 August 1784, Edicta 1784, pp. 203–11). Exceptions to the rules on prohibition were granted, to some extent, for the benefit of those Habsburg provinces which had not been incorporated into the unified customs area. For example, Hungary, Tyrol and the Italian and Netherlands provinces paid only one sixth of the duty on prohibited foreign goods (‘Patent. Alle ausländische Waaren werden verboten, in die Erblande einzuführen’, 27 August 1784, section 3, Edicta 1784, p. 200). ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 2. See above, p. 292 for the analogous rules introduced in 1778. ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 1. There were 19 of these stations in Galicia. ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 15.

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so-called C-goods, items subject to duties of over 20 %, whose entry into the country was to be particularly restricted. They could only be presented to customs officials in the capital city of each province, thus only Lviv in the case of Galicia.46 It is important, however, that the above rules on points of entry were subsequently modified and adapted to the particular requirements of Galicia, to meet the wishes of the merchants there. The Jews of Brody complained that the obligation to send C-goods to the provincial capital increased freight costs47 and, resulting in Jarosław, Podgórze and Brody being added to Lviv as Principal Customs Towns for C-goods, as early as February 1785.48 And Jarosław was replaced as a Payment Town by four other towns: Tarnów, Ivano-Frankivsk, Zamość and Ternopil (later Chernivtsi).49 Manufacturers were furthermore, permitted to acquire the raw materials they needed from every Commercial Border Station, rather than exclusively from a Payment Town, to reduce freight costs.50 The importation of foreign goods was also to be made more difficult by imposing a stamping requirement. They had to be designated as foreign by being stamped at the border.51 Goods which were unsuitable for stamping could only be sold in the towns and markets of Galicia by officially certified Christian and Jewish merchants,52 who had to be able to show proof at any time that the required duty had been paid.53 Because of the danger of smuggling, all others were prohibited from trading in foreign goods which were unsuitable

46 47 48

49

50 51 52 53

‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 16. Petition of Marcus Hirschel and 11 other leather-dealers, dated Brody, 28 January 1785, hka, Mautwesen in Galizien, ad 582 ex Februario 1785. Report of the United Court Offices of 14 February 1785, Imperial Resolution of 22 February 1785. The report stated that ‘In Galicia, owing to the size of the Province and situation of the city of Lviv, it is really an onerous burden for merchants to be compelled to take all goods liable to duties of 20 percent and more to the capital city for assessment. For this reason, the Governor’s Office should be asked to produce a report on whether in addition to Lviv one or two other sizeable towns could not be added as places where goods of this type pay customs duty’. Circular, ‘Uber die Errichtung mehrerer Haupt-und gemein Legstädte’, 22 December 1785, Edicta 1785, p. 204; circular, ‘Wegen der, der Hauptzollegstadt Brody zugestandenen Begünstigungen’, 31 August 1786, Edicta 1786, pp. 312–13. Circular, ‘Die den Frabriken zugestandene Begünstigung’, 12 June 1785, Edicta 1785, pp. 100– 1. ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 33. ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 38. ‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, sections 35– 37.

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for stamping.54 Finally, a Decree of 8 June 1785 in favour of domestic industry forbade the peddling of foreign goods.55 The reorganisation of the customs administration was a necessary consequence of the new tariff system. The internal customs barrier separating Galicia from the Hereditary Lands was abolished, for the most part, but to compensate for this a closer watch on the borders to the north and east of the Province was ordered and this naturally resulted in a slight increase in expenditure.56 At the same time, there was also a change at the top of the customs administration, resulting from an inquiry conducted into the administrator, Eder, which brought to light such blatant irregularities on the part of the Governor’s Office that they cannot be passed over in silence here. Despite the many illegal actions of which Eder was guilty from the start of his period in office, he enjoyed the unlimited confidence of the Governor’s Office and, with its support, he received payments from Vienna every year, the final one being 600 florins at the beginning of 1783.57 During the years 1782 and 1783 a former Galician customs official, Josef Meixner, sent numerous denunciations, some directly to the Emperor, some to the Court Offices, of Provincial Secretary Schmelz and Assessor Wachendorf but, above all, against Eder.58 In these letters, Eder was accused of having corrupted the whole customs administration, having accepted gifts of money in return for official favours, in particular for appointments to official positions, and having carried on trading activities with goods he, as head of the customs administration, could easily import free of duty. As the administrator of Count [Severin] Rzewuski’s houses in Lviv he had leased them to the Treasury as customs buildings but had kept several rooms for himself; contravening an explicit 54 55 56

57 58

‘Patent. Die neue Mautordnung betreffend’, 16 September 1784, Edicta 1784, section 39. Circular, ‘Das Hausiren betreffend’, 1 August 1785, Edicta 1785, pp. 142–3. The amount expended over the year 1783 was 131,207 florins (as already indicated above, p. 292). The following expenses were incurred in the first quarter of 1785: 32,837 florins for the salaries of the 108-strong force of customs officials and 4,188 florins for accommodation. This would have come to 148,000 florins over the year (‘Entwurf mit welchen Chargen nachstehende Mautämter mit Ende January 1785 bestellt und denenselben an Gehältern fixiret gewesen’, hka, Fasc. 12.204). The Chancellery of the Customs Administration, the Accounts Department and the Main Payment Centre were at that time housed in Eder’s premises. After the customs contract with Eder expired, at the beginning of 1787, the various departments were accommodated in the buildings of the now defunct Bernardine Nunnery (‘Entwurf mit welchen Chargen nachstehende Mautämter mit Ende January 1785 bestellt und denenselben an Gehältern fixiret gewesen’, hka, Fasc. 12.204). hka, Kameralakt Fasc. 7, ad 306 ex Junio 1783. hka, Kameralakt Fasc. 7, ad 560 ex Februario 1784.

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prohibition, he had taken a lease on the Jaworów manors near Lviv. At the same time, grave accusations against the Governor of Galicia, Brigido, were made: ‘He had repressed honest officials like Beekhen etc. and supported ill-intentioned officials like Strasoldo, Wohlstein etc’. There followed 261 accusations, underpinned by such extensive and detailed proof that it was easy to guess that behind Meixner a well-informed person was concealed. Meixner finally called for a commission of inquiry to be established. In order to secure its objectivity, he added, it should include, in addition to Governor’s Office councillors, two army officers and a member of the accounting office, ‘so that what has been covered up can be brought to light more thoroughly’. Vienna did in fact order the Governor of Galicia to set up a commission of investigation. Nevertheless, it appears from a further letter of complaint by Meixner that Brigido merely appointed Governor’s Office Councillors Kortum and Count [Heinrich] O’Donell as members of the commission, thereby ‘defeating the purpose of the investigation’, because the two men had been, ‘as it were, appointed to the commission of inquiry only in order to save Eder’. When it set to work, the commission was concerned not so much to examine the accusations as to find out who had handed over the evidence for the accusations to Meixner. In one sitting O’Donell violently tore an important document out of Meixner’s hand. The record of the commission’s proceedings was composed arbitrarily and the parties were compelled to append their signatures to it. In such circumstances, there could be no doubt about the result of the investigation.59 The 261 accusations were dealt with at lightning speed ‘and the above-mentioned commission of inquiry [has] found that there was no particular ground for complaint against Eder, Wachendorf and Schmetz’. On the contrary, Eder had been ‘seriously slandered’ by the use of ‘defamatory expressions’ and therefore the accuser was liable ‘to punishment as a criminal’. Eder and the others ‘were to be declared not guilty by a gubernatorial decree and this was to be made public in the Province’. The perverse character of the commission of inquiry’s report was so obvious that it was not believed in Vienna. Even so, Court Councillor [presumably Elias Anton von] Unkrechtsberg for the Court Chancellery60 found Meixner’s accusations exaggerated, and that he ought to ‘make amends to the Governor

59

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Minutes of the Commission, Lemberg, 6 August 1783, Report of the Commission, 10 August 1783, signed by O’Donell, Kortum, and Brigido, hka, Kameralakt Fasc. 7, ad 580 ex Februario 1784; Chair’s Report by Count Brigido, 20 November 1783, hka, Kameralakt Fasc. 7, ad 560 ex Februario 1784. Minutes of the Bohemian-Austrian Court Chancellery of 24 January 1784, hka, Kameralakt Fasc. 7, ad 560 ex Februario 1784.

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and the two members of the commission of inquiry by suffering a punishment of at least incarceration for eight days’. On the other hand, he considered it a proven that Eder ‘had involved himself in profiteering and various side-deals … and had also taken part in other dishonest activities. It cannot therefore be said that Eder is as guiltless as the commission of inquiry and the Governor have concluded’. Eder should therefore be penalised with a reduction in salary and transferred to another province, to be replaced by ‘the energetic administrator of Moravia and Silesia, Schönauer’. It was impossible for the Emperor to be satisfied with these moderate proposals. Even if all of Meixner’s accusations did not turn out to be true, he had revealed so many abuses and illegalities committed by Eder that the Emperor, highly concerned, had to ask himself the question: what view should be taken of Governor Brigido and the commission of inquiry, who had tolerated these abuses and even tried to hush them up? The Emperor’s decision was therefore that The investigation has made it sufficiently plain, although people have tried to conceal this, that Eder deserves unconditional dismissal, which is to be done. Schönauer can replace him in Galicia, while an equally able person must be proposed to fill Schönauer’s place in Moravia and I grant Schönauer 800 guilders from the Treasury, as removal expenses. The accusers are not to be reprimanded but I grant them remuneration of 200 ducats. It is reasonable to reprimanded Count Brigido not only for failing to put a stop to Eder’s abuses, negligence and self-interested behaviour but also for trying to make him appear entirely innocent, which gives one good cause to fear for the future administration of Galicia, with which he has been entrusted, when he acts according to principles of this kind and is unable to make his subordinates do their duty any better than this.61

4

The Stamp Edicts of 1784 and 1789

In addition to the customs stamping of foreign goods, mentioned above, the Edict of 30 August 1784 ordered the commercial stamping of many domestic

61

Imperial Resolution of 20 February 1784, hka, Kameralakt Fasc. 7, ad 560 ex Februario 1784.

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manufactures. The purpose of these stamps was to confirm the domestic origin62 of goods in circulation, if they were of the same type as goods whose importation from abroad had been prohibited. In this way, domestic goods could be distinguished from similar foreign goods which were subject to prohibition. The in itself minor question of where this stamping should take place gains significance in view of the legend, already familiar to us, that Galician producers were forced to send their goods to Vienna to be stamped. It is therefore necessary to provide a response to it that is just as unambiguous as that to the stamping regulations of 1777.63 The Edict of 30 August 1784 distinguishes between goods of Galician origin, which are already available, and those which will be produced in the future. ‘The marking of goods already available should be performed in the towns by persons appointed for that purpose by our provincial authorities and in the countryside by the District Offices. In both cases this should be done free of charge. For goods to be produced in the future, marking officials or ‘stampers’ should be appointed and sworn to uphold their duty. The manufacturers of each District should be referred to them’.64 The very tenor of these instructions – and no other rules were issued – clearly demonstrates the incorrectness of the whole fantastic legend about a requirement that Galician goods had to be sent to Vienna for stamping. Since the number of stamping officials to be appointed was dependent on the scope of industries producing goods liable to be stamped, the first thing to do was to order an investigation into the status and the size of those industries in each of the 18 Districts into which Galicia was divided. Provincial Specialist von Kuczera made a report on 11 November 1784, on the basis of the results. He stated that ‘in the (8) Districts of Ternopil, Ivano-Frankivsk, Lisko, Stryj, Brzezany, Zalishchyky, Bochnia and Sambor, none of the manufactures liable to be stamped were produced and no stamping officials were therefore necessary’. In the other ten Districts, altogether 46 stamping officials should be appointed, distributed by District as follows: 19 in Myślenice, 11 in

62 63 64

‘Patent. Alle Waaren von inländischen Erzeugnissen sollen gestempelt werden’, 30 August 1784, Edicta 1784, section 9. Also see hka, Mautwesen in Galizien, ad 135 ex Octobri 1784. See above, pp. 150. ‘Patent. Alle Waaren von inländischen Erzeugnissen sollen gestempelt werden’, 30 August 1784, Edicta 1784, section 5. A moderate fee was to be charged for the latter form of stamping (see ‘Patent. Alle Waaren von inländischen Erzeugnissen sollen gestempelt werden’, 30 August 1784, Edicta 1784, section 8).

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Rzeszów, 5 in Nowy Sącz, 3 each in Zołkiew and Tarnów, and 1 each in Lviv, Przemyśl, Dukla, Zamość and Brody.65 Not the towns but District Offices were to supervise them, as the towns were not capable of performing such a task.66 That was not, however, sufficient: according to section 2 of the Edict, every moderately large factory or guild, provided it fulfilled certain legal requirements, was free to stamp its goods with its own symbol, without having to be sent off for stamping!67 Admittedly, when the law first came into force, there were no factories of this kind in Galicia.68 But it was precisely the task of the legislation of 1784 to stimulate the growth of industry in Galicia; the determination mentioned gave the producer the legal possibility of stamping his products right on the factory premises. Later on, when Preschel’s leather factory in Busk obtained a formal licence, it thereby automatically received the right to stamp its own products. The same applied to the Finsterbusch factory. Even where an industry did not have a formal licence the stamping regulations were applied very benevolently and indulgently, as is clearly shown by the cases of the Biała clothiers and the Dukla craft weavers. The matter was as follows. A Court Decree was issued in Vienna on 9 December 178469 asking the Galician Governor’s Office to state whether ‘the clothiers of Biała, who seem to be a fairly large group, can be entrusted with a stamp of their own under appropriate supervision?’ Governor’s Office Councillor Kortum replied for the Governor’s Office that this was impossible, because neither the Biała clothiers

65 66

67

68

69

hka, Commerz. fasc. 57, ad 1 ex Decembri 1784. There are numerous reports in the archives about the commercial stamping carried out on the spot by District Offices, in the Districts of Lisko and Sambor for instance (hka, Mautwesen in Galizien, ad 167 ex Januario 1785) On the progress of stamping in subsequent years see hka, Commerz. fasc. 57 pro 1787, ad 4 ex Septembri, 11 ex Augusto, 8 ex Decembri, and pro 1792 ad 3 ex Aprili, 4 and 5 ex Majo, 4 ex Junio etc. The District Offices often had reason to complain about the burden of these operations. In the Governor’s report of 3 January 1786, the wish was expressed ‘that the District Offices be completely freed from this mechanical task of stamping commodities, which is inevitably carried out at the expense of other important business’ (hka, Commerz. fasc. 57, ad 2 ex Januario 1786). ‘The symbols of those factories and guilds which are in possession of formal grants and privileges and have the necessary equipment to mark their goods are to be regarded as equivalent to the official stamp’. ‘There are no such factories or guilds in this Province in possession of formal grants or privileges’ (Governor’s Report of 17 March 1785, hka, Commerz. fasc. 57, ad 2 ex Aprili 1785). hka, Commerz. fasc. 57 ex Decembri 1784.

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nor the Dukla craft weavers possessed the legal prerequisites for this and they were therefore obliged to have their products stamped by the general stamping officials to be appointed for that purpose. It would however be possible, ‘in order to make things easier for these manufacturers’, for the task of stamping ‘to be entrusted to a member of their group’.70 Instructions were in fact given to that effect, as Degelmann proposed.71 This is how Joseph’s famous stamping regulations, previously decried in Galicia as the spawn of oppressive economic policy, really looked. In order to avoid returning to this question later, it is advisable to mention the Stamp Edict of 30 January 178972 at this point too. This new law, which replaced all previous stamping regulations, did not bring any essential changes, with one exception. From 1 April 1789 onwards, the stampers employed in the Districts would receive a salary from the state. The right of private stamping conceded previously to a number of privileged factories and guilds was abolished (section 5); the number of items subject to stamping was reduced (sections 3 and 4) and the District Regulation of 1 May 1789 reduced the number still further.73 The same Regulation also reduced the previous stamp duty of 1, 2 and 3 kreutzers an item by half. At the end of July 1791, under the Emperor Leopold ii, commercial stamping was ‘entirely abolished, because the benefits arising from it do not outweigh either the cost of the operation or the vexations suffered by the manufacturers’.74 This measure turned out, however, to be dangerous for Galicia’s infant industries and members of the merchant estate complained about an increase in smuggling. In response to their wishes, the government began to consider

70 71

72 73

74

Governor’s Office Report of 17 March 1785, hka, Commerz. fasc. 57, ad 2 ex Aprili 1785. Court Decree of 13 April 1785. ‘It is to be arranged that all possible facilitation shall be given to the said manufacturers in regard to the commercial stamping that has been introduced, to help them to gain a livelihood’. ‘Patent. In Betref der eingeführten Bezeichnung der in- und ausländischen Waaren’, 30 January 1789, Edicta 1789, pp. 29–42. Circular, ‘Die auf die Waarenstemplung ausgemessene Gebühr wird auf die Hälfte heabgesetzt, und einige Waaren von der Stemplung ausgenommen’, 1 May 1879, Edicta 1789, pp. 78–9. Treasury Decree of 30 June 1791, circular, ‘Dass die Kommerzialwaarenbezeichnung ganz aufgehoben sey’, 21 July 1791, Edicta 1791, p. 53. According to ‘Ausweis über … bey denen mit Ende July 1791 aufgehobenen galizischen Comercial-Stemplungsbehörden erliegende … Stemplungs-Requisiten’ the Payment Towns and Stamping Inspectorate Offices had 104 pairs of presses, 2 matrices, 1,505,403 lead rings and 1,503,599 lead pencils, hka, Commerz. fasc. 57, ad 3 ex Novembri 1792.

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reintroducing the system of commercial stamping. This took place on 1 January 1793 and, at the same time, 38 stamping offices were established to run the system.75

5

Transitional Provisions

It cannot be denied that such a far-reaching reform as the transition from the previous tariff organisation to a tariff system of extreme protection was a painful blow to the merchants who were subject to it. Such phenomena are an unavoidable accompaniment of any great reform. It should be mentioned, however, that those who assert that the government forced through its regulations with merciless radicalism are mistaken. In particular, the dramatic story told of the persecution of the merchants who were supposed to have been forced to deliver all their stocks of foreign items from the whole Province to Lviv within two months is highly exaggerated. In reality everything proceeded rather calmly. It is true that sections 5 and 6 of the Prohibition Edict of 27 August 1784 ordered the delivery of the goods whose future import was forbidden and which were currently stored in the Province to a state warehouse in Lviv (the Bernardine Nunnery) by 1 November 1784, on penalty of confiscation. Once delivered, they could only be sold under the supervision of government officials. The merchants of Lviv and Jarosław made representations against the decision to store the goods in Lviv, because this was likely to give rise to large freight costs, but these were rejected. The authorities did, however, respond to a complaint by the Lviv Customs Administration and set up four additional storage locations: in Podgórze, Jarosław, Zamość and Ivano-Frankivsk.76 And, besides, the severity of the law was lessened by allowing numerous exceptions, in favour of whole branches of trade and individuals. The wine wholesalers,77 for instance, were allowed to sell their stocks of wine and liqueur on the spot. Furthermore, the ‘Christian merchants dealing in peddler’s goods from Nierenberg and accessories’ were, at their request,78 given an 75 76 77 78

hka, Commerz. fasc. 57, ad 6 ex Januario 1793. Also see Kropatschek 1793, pp. 239–46; and Blodig 1863, p. xxi. Court Decree of 7 October 1784, hka, Mautwesen in Galizien Fasc. 7 G, ad 365 and 405 ex Septembri and 519, 521 and 522 ex Octobri 1784. hka, Mautwesen in Galizien Fasc. 7 G, ad 70 ex Novembri 1784. For other examples, see hka, Mautwesen in Galizien Fasc. 7 G, ad 476 ex Novembri 1784. Petition of 26 November 1784, signed: P. Skrzyszowski, President of the Lemberg Merchant Estate, hka, Mautwesen in Galizien, ad 483 ex Januario 1785. [‘Nierenberg’ was probably a typographical error and ‘Nürnberg’ was meant.]

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extended time-limit until 1 May 1785 for the sale of their stocks of accessories and fashion items. Finally, a Circular of 28 July 1785 granted various extensions of the time-limit in all localities where there were no official warehouses, namely until the end of July 1785, for dealers in accessories to sell their stocks of draperies, velvet and silk ribbons; and until 1 November 1785,79 later extended until 31 January 1787,80 for Nürnberg merchants to sell woollen, linen, thrown fleuret ribbons, crêpe, bindings and coarse cotton goods.

79 80

Circular, ‘Wegen Einlieferung der nach Verlauf der Termine übrig gebliebenen Waaren in die allgemeine Niederlagen’, 28 July 1785, Edicta 1785, pp. 141–2. Edicta report of 30 December 1786, p. 405. Kratter, in his letter ‘über das Verbot ausländischer Waren’ (1786), was the first to make the assertion, often repeated subsequently, ‘that this was certainly a very inappropriate and damaging prohibition for Galicia, at the present time … and should not, perhaps, be applied until twenty years hence’ (Kratter, 1786, 2, pp. 97 et seq.). Our discussion in this section has made it clear how little factual foundation there is for this opinion.

chapter 20

The Extension of the Reform 1

The Abolition of the Cieszyn Fairs. The Renewed Struggle over the Abolition of the Brody Free Trade Area

The immediate consequence of the tariff reform of 1784 was the decision to abolish the Cieszyn fairs. They now seemed superfluous, because their purpose, which had been to bring Galicia and the Hereditary Lands closer to each other economically,1 now appeared to have been achieved by different and more effective means.2 There was yet another consequence of the reform: the struggle over the removal of Brody’s exemption from duties started once again. After the Customs Edict of 1784 had been issued, the merchants of Brody panicked because they feared that the reform would affect not only Galicia but Brody as well. They therefore sent a deputation to the town of Chernivtsi, where the Emperor was about to arrive on a visit.3 At the same time, the Brody District Office was quick to inform Vienna that extending the scope of the prohibition Edict to Brody would result in the collapse of the transit trade there and that, in future, the transit trade would go to the rival Polish towns of Radyvyliv and Berestechko. But the aim of the reform was to prevent the marketing and consumption of foreign goods in Galicia, not their transit through the Province. In view of the policy of exempting Brody from tariffs, the Head of District considered that the transit of foreign goods through Galicia in the direction of Brody should continue to be permitted. This interpretation of the law was accepted by the central government and it was decided that ‘the order to deposit all stocks of foreign goods in a government warehouse from 1 November does not apply to Brody’.4 But the new customs administrator of Galicia, von Schönauer, raised a number of objections to this decision to privilege the trade of Brody,5 fairly obvi-

1 See above, p. 160. 2 ‘Fairs are incompatible with an imperial state which is engaged in a process of self-isolation’ (Hassel 1807, p. 161). 3 Report of Managing Director Schosulan, 27 November 1786, hka, Fasc. 12.204. 4 Court Decree of 5 August 1784, hka, Mautwesen in Galizien, Fasc. 7 G, ad 119 ex Augusto 1784. 5 ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 8, of 112 folio pages. The

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_027

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ously taking the side of the Christian merchants of Lviv in their competitive struggle against Brody. He based his criticisms on the point that the trade of Brody was dominated by Jews and did not, therefore, deserve state support. The arguments presented by Eder, in his time, favouring Brody’s exclusion from the unified customs area were invalid ‘because Brody’s trade is as strongly directed to the domestic market as to the foreign market, if not more strongly’. It followed ‘that the favours granted to the town of Brody since 1780 have contributed in large part to damaging other Galician merchant estates and in particular that of Lviv’. The assertion that there were 100 wholesale merchants in Brody who deserved to be supported was not less accurate inaccurate; rather, As is well-known, the number of wholesale trading houses in Brody does not exceed 8 or 10 … The trade of Brody has always been presented as if through a 20 times magnifying glass, with the result that 5 wholesale merchants turn into 100 … Is the private advantage of a few Jewish families sufficient reason to exclude a provincial Subdistrict of 20 geographical square miles from the area subject to customs duties? The exclusion of Brody was, in fact, nothing other than ‘preferential treatment given to a small number of merchants to the disadvantage of the Austrian state and its domestic trade, on the pretext of seeking what is best for state’. It was particularly inadvisable, he added, ‘to persist in excluding Brody from the forthcoming reform of the customs system’. The people dependent on the trade of Brody were mainly subjects of the Elector of Saxony and the King of Prussia; in Galicia, as is well-known, between 5 and 7 families of Jews have enriched themselves at the expense of the Treasury and the rest of the Galician merchant estate, and the so-called wholesale trade is actually nothing other than a few Jewish wholesalers in Brody acting as the agents of the merchants of Leipzig, Wrocław and Frankfurt and selling the goods they have largely obtained on credit at a profit of a few percent, domestically and abroad. It was true that much was consumed in Brody, as a result of the wholesale trade and the influx of foreigners. ‘On the other hand, however, the town of Brody is constant struggle of the Lviv merchants against Brody’s privileges is reminiscent of a similar fight conducted by the merchants of Tyrol against the privileges granted to Trieste (see Mayer 1882, pp. 85–6).

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inhabited almost entirely by Jews, who are a less useful class of citizen; as a result of the preferential treatment the earnings of other towns such as Lviv, Sokal and Tartaków have declined’. Finally, the state had lost customs income. It follows that ‘so many advantages should not be wasted at the expense of the state Treasury’. What is more, wholesale trade of this kind on dry land can only be regarded as temporary and its advantage can only last until the surrounding areas … [begin] to satisfy their needs themselves … In general, the only trade which [is] advantageous for the state and worthy of promotion is trade which involves promotion of domestic industry, including promotion of domestic routes for food, including promotion of the population and its own wealth, namely the working up and consumption of its own products. Brody’s trade, however, promotes the industries of foreign nations and the advantage it receives because it is excluded from the customs area has no relation to the welfare of the Galician public and not even the welfare of the excluded Subdistrict but only that of 5 or 6 Jewish houses … Experience since 1780 has [thus] shown … that neither the Christian nor the Jewish merchant estate is extensive there but rather that the former has been diminished by the bankruptcy of the firm of Cossa. When the new customs system is introduced, ‘yet more harmful consequences’ will flow from the exclusion of Brody, and the quantity of foreign goods smuggled through Brody will increase. It is evident that, in this document, Schönauer is combining all the arguments that might make an impression in Vienna. Even so, his protest was unsuccessful. The Vice-President of the Galician provincial administration, Count Aloys von Ugarte, voiced his opposition very strongly and ordered an investigation into the facts alleged by Schönauer. He called on the Brody District Office to provide details about ‘the kind of foreign merchants who did business in the town, how many Christian and Jewish wholesalers were present at that time, what kind of goods each wholesaler dealt in, where they came from and how much trade was done annually by each of them’.6 The District Office was able to reply7 that ‘in fact some sixty Jewish wholesale merchants are presently located

6 Opinion of Count Ugarte, Lemberg 14 August 1784, ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 5. Two years later Ugarte became a Count Councillor and a member of the Court Chancellery. 7 ‘Tabellarischer ausweis der christlichen und jüdischen Broder Großhändler, der Waaren-

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there and customs administrator Schönauer has therefore been misled by inaccurate reports’. The annual turnover of the Christian merchants was 220,200 ducats and that of the Jewish merchants 719,000 ducats. Taking both together: 939,200 ducats or 4,226,400 florins.8 So it seems that ‘the amount of money circulating means that this trade deserves attention and should not be sacrificed so unthinkingly’. The wholesale merchants’ profits are definitely worth protecting, ‘even without considering the benefits an increased circulation of money brought for the other inhabitants. These benefits can be demonstrated by looking at the conscription records, which show that the population of Brody has increased by almost 3,000 since 1778’.9 The loss of customs revenue could also not be the decisive factor, because the purpose of trade policy is not to make income from the customs. In short, the District Office concluded, Schönauer’s proposals should be rejected. The recommendations of the Head of the Brody District, [Ignacy von] Bujakowski, were along the same lines.10 He sought to refute Schönauer’s aspersions against the Jews of Brody, in particular, by stating that they lived exclusively from the carrying trade and brought in an annual contribution of 38,673 florins to the state from this source; the merchant estate in Galicia was, moreover, composed almost entirely of Jews and it would not be so easy to replace them.11

8 9

Articuln mit welchen sie handeln, woher sie selbe beziehen und wohin verschleissen’ dated Brody, 13 August 1784, ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 6. Schönauer had given a figure of 536,000 florins! ‘Population of the town of Brody according to the … assessment for the year 1783’

Christians Males Females Total Grand total

10

11

Jews

1,174 5,444 1,298 5,693 2,473 11,137 13,609

(‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 7). See above, p. 305, note for the figures for 1778. In 1791 Hacquet (1790–96, 2, p. 15) estimated the number of Jewish inhabitants at between 14,000 and 16,000. ‘Most of them are poor; but some possess about half a million guilders’. Bujakowski’s report, dated Brody, 15 November 1784, ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 12. ‘If it should be argued against this that these tax-payers are mainly Jews, who in some

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Finally, Provincial Specialist [Franz] von Kuczera added his voice to that of the Head of the Brody District12 and, with that, the matter was decided. The Court Decree of 3 January 178513 confirmed the exclusion of the town of Brody from the customs area for the future, notwithstanding the tariff reform of 1784.14 Brody, in the east of the Monarchy, and Trieste, in the south, were to form the two major channels through which domestic industry exported its products.15 To pursue the history of Brody’s tariff status any further would lead beyond the framework of this study.16 It should simply be mentioned that during Napoléon’s continental blockade, Austria lost all its seaports under the

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respects are not so useful to the state as Christian town-dwellers, I would only ask this: do we have a reserve stock of the latter group who would be able to fill the gap?’. ‘… [Bujakowski] who lives on the spot and has observed all aspects of the trade of the place for many years and we can assume has a more thorough knowledge of Brody’s trading activities than the Galician Customs Administrator, who has only just been appointed to the post and has only had the opportunity to cast a fleeting glance at the town of Brody during his current travels around the Province’ (Report of the Governor’s Office, 9 December 1784, ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 11). ‘Bericht über die Broder Kommerzialausschlüssung’, Lemberg, 7 August 1784. hka, Mautwesen in Galizien, Fasc. 7 G, ad 169 ex Januario 1786, appendix 1. The question was definitively settled by the Court Decree of 31 August 1785 (see circular, ‘Wegen der, der Hauptzollegstadt Brody zugestandenen Begünstigungen’, 31 August 1786, Edicta 1786, pp. 312–13; and notice, ‘Kenntnis von der Vortheilen welche die der Freystadt Brody von Sr. Majestät allergnädigst zugestandenen Begünstigung zur Folge hat’, 14 April 1787, Edicta 1787, pp. 83–7). Apart from a number of errors, Kratter’s letter about Brody (1786, 2, pp. 102 et seq.) offers no more than commonplaces. hhs 1787, 185. The actions of the Austrian government in dealing with this question recall the similar attitude taken by Colbert toward the people of Marseilles, who were against allowing Jews the freedom to settle in their town. This was the more objectionable to him in that he was convinced that the French were not always capable of replacing the Jews. On 30 November 1681, he settled the dispute with truly scholastic subtlety by saying that ‘que l’établissement des juifs n’avoit jamais été défendu pour le commerce, parce que, d’ordinaire, il augmentoit partout ou ils étoient, mas seulement pour la religion; et comme il n’étoient à present question que de commerce, il ne falloit point écouter les propositions faites contre lesdits juifs’ [‘the settlement of Jews had never been forbidden because of commerce, because it normally increased wherever they were, but only because of religion; and since, at present, the question at issue was only one of commerce, there was no need to take account of the proposals made against the said Jews’] (Clément 1874, p. 350). During the war against Turkey the danger arose that Poland might take advantage of circumstances and draw the Turkish transit trade into its territory and, indeed, various preparations were made for this in the border town of Radyvyliv. In response, on a proposal from the Galician Governor’s Office, the Turkish transit duty, established by

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Treaty of Vienna (1809).17 As a result, Brody achieved a greater role in the trade relations of western countries, thanks to its exemption from normal Austrian tariffs. The transit trade between Brody and Odessa was regulated by Article xxviii of the convention of 3 May 1815 between Austria, Russia and Prussia.18

2

The Promotion of Podgórze (1784) and Biała (1789) to the Status of Free Cities

The promotion of Podgórze to free city status was very closely connected with the transition to a policy of industrialisation, already mentioned. In the pre1784 era, when the government’s attention was devoted, above all, to the promotion of trade, it initially concentrated all its measures on Brody, with the aim of turning that town into a giant emporium for trade with the east, in the same way as Lviv was the centre for monetary and credit operations. The task assigned to the town of Podgórze, however, was quite different. It lay in the western half of the Province, and it was less suitable as a starting-point for exports to the east. On the other hand, its position in the neighbourhood of the Vistula and also between Poland, Hungary and Silesia meant that ‘it can only hope to prosper through manufacturing and working-up raw materials’.19 Manufacturers and craftspeople had long been settled there and it was proposed to strengthen this natural tendency by granting privileges:20 section 1 of the Edict of 26 February 178421 prescribed that the town ‘should enjoy the liberties and privileges of all the other royal free towns’. The government was also

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treaty, was reduced from 5 percent to 2 percent for the Brody market on 3 May 1789 (Governor’s report of 14 December 1792, hka, Commerz. fasc. 57, ad 7 ex Decembri 1792). Blodig 1863, p. xxxiv. See Kopetz 1829–30, 2, section 514; and Blodig 1863, p. xlv. The above account of events should be compared with the entirely imaginary assertions of Tokarz (1909, p. 336): ‘Brody, whose development was so splendid under the Polish Republic, was clearly heading for collapse under Joseph ii. Owing to the tariff policy pursued by Austria, the transit trade now moved away, to the Republic’. Other comments by Tokarz on the trade and tariff policies of Austria show how little he knew of economic history and its methods. I will have a further opportunity to return to his book in the second volume of this investigation. Governor’s report of 15 March 1788, hka, Commerz. fasc. 57, ad 1 ex Maio 1788. See Kaindl 1911, pp. 28–9. ‘Patent. Podgorze wird zu einer königl. Freistadt erhoben’, 26 February 1784, Edicta 1784, pp. 48–54.

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able to entice important merchants from Kraków to do business in the town and it made a start with the establishment there of branches of the Porcelain Works in Vienna and the Iron Works in Steiermark. ‘In short, the intention was to weaken Kraków and to make Podgórze a centre for trade between the Hereditary Lands and the Polish Republic’.22 These efforts by the government were not unsuccessful and, during the second half of the of Joseph ii’s sole rule, numerous factories were built in Podgórze.23 Some years later the Polish Treasury Commission reported that, in the three years between 1788 and 1791, 1,152 craftspeople emigrated from Kraków to Podgórze and that the factories of Kraków were unable to withstand competition from the nearby Galician town of Ludwinów (a suburb of Podgórze).24 By a Court Decree issued on 10 June 1789, finally, Biała was also raised to the rank of free city, the third in Galicia, alongside Brody and Podgórze.25

3

The Tariff of 2 January 1788 and the Tariff Enquiry of 1792

The ‘new tariff regulations’ of 2 January 1788,26 which entered into force on 1 February 1788, only changed the 1784 regulations slightly. In practice, they marked a decision to hold fast to the tariff policy inaugurated in 1784, about which the Emperor had an extremely favourable opinion.27 To us, the trade restrictions imposed by the Customs Edicts of 1784 and 1788 may appear burdensome. The literature of the 1860s, the era of free trade, is marked by particularly assiduous attempts to discredit Joseph ii’s tariff policy. Contemporaries, however, and above all the interested merchant estate, were by and large satisfied with it. This is apparent in the results of the Tariff Enquiry

22 23 24 25 26 27

Tokarz 1909, p. 297. See second volume of this study for further details. See Korzon 1897, 2, p. 295. See Kropatschek 1790, p. 436. See Hock and Bidermann 1879, pp. 556–9; and Blodig 1863, pp. xxii–xxiii. The Emperor’s Resolution of 12 June 1788 on Count Zinzendorf proposals was that ‘What is more, I am fully convinced of the correctness of the current prohibitive laws, serving the state to advantage in the experience of several years, and will never allow myself to be led astray by any reasoning which is merely built on words’ (Hock and Bidermann 1879, p. 557; also see Meynert 1862, p. 142). Beer’s opinion (1898, p. 119) that the tariff of 1788 fixed the duty on the import of Galician manufactures into the Hereditary Lands as a rule at half the export duty is totally erroneous. There was no duty on the import of Galician manufactures into the Hereditary Lands, because Galicia had been part of the unified customs area since 1784.

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of 1792.28 In submissions to it,29 both the Christian merchants of Lviv and Podgórze and the Jewish merchants of Brody made a number of petty proposals for alterations in the customs procedures for wax, coral, and the granting of credits. Above all the inhabitants of Lviv, however, turned in jealous zeal against ‘the overwhelming and vile nation of Jews’ and their bitterness over Joseph ii’s regulation of 7 May 1789 establishing equal rights for Jews. The only merchants who wanted a serious change in the regulations were those of Podgórze, who asked for the re-introduction of the 1778 tariff. Even this demand was only raised as a measure against smuggling, which had increased sharply since the tariff reform of 1784. How unseriously this demand is to be taken can, however, be gauged from the petitioners: the merchant houses of Laskiewicz, Haller, and Dzianotta and Son etc. were themselves involved in large-scale smuggling operations.30

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30

A circular sent to all provincial authorities on 20 July 1792 instructed them ‘to take evidence from the merchant estate in the more important Payment Towns about aspects of the present customs system they regard as burdensome or oppressive to trade’ (hka, Commerz. fasc. 57, ad 7 ex Julio 1792). From the Lviv Christian Merchant Estate, August 1792; the Lviv Municipal Authorities, 4 September 1792; the Podgórze Merchant Estate, 23 October 1792; the Brody Jewish Merchant Estate, 10 September 1792; Report from the Governor’s Office (by Specialist Bujakowski), 14 December 1792, (hka, Commerz. fasc. 57, ad 7 ex Decembri 1792). It has already been pointed out that Bukovina was included in the overall customs area by the Imperial Rescript of 19 June 1783, see above, p. 389. It should be added here that during his trip to Galicia in 1786, Joseph ii ordered the termination of the military administration in Bukovina and the unification of the Province with Galicia, with effect from 1 November. A letter of 6 August 1786 to Count Kolowrat, instructed that ‘8) With regard to customs duties, Bukovina must be treated in the same way as Galicia in all respects, the sole exception is to be the town of Suczawa, which is to be excluded from the customs barrier in the same way as Brody is’ (Polek 1895, pp. 73 and 138).

part 6 Galicia’s Trade Relations with the South and the South-East, 1772–90

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chapter 21

The Effort to Open New Export Routes through Trieste If the exceptionally favourable conditions enjoyed by Trieste,1 which formed the natural outlet from a broad and extremely rich hinterland, are considered then the tardiness of Austria’s realisation of the advantages that would arise from directing its maritime trade through that port is nothing short of amazing.2 Not the slightest attention was devoted to developing Trieste until Karl vi came to the throne.3 Austrian trade policy, burdened by the weight of tradition, continued to hold onto its old transport routes and connections with north Germany, even after the Thirty Years’ War when Prussia had already developed into the second major power in the German Empire and had successfully taken up the struggle with Austria for hegemony over the region. For the next 150 years, Austrian foreign policy was largely devoted to the struggle to maintain its previous influence in Germany. This also applies to the economic sphere. The government in Vienna was forced, almost against its will, to take up new transport routes through Trieste,4 because the north German states, particularly Brandenburg-Prussia, had since 1733 refused to allow the Austrian Empire’s goods to make the journey to Hamburg without paying customs duties. On the contrary, they now made it their task to ‘throttle’ the transit trade from the Habsburg lands.5 And Austria was to devote all of its attention to its relationships with the German states until the end of the century. That is not to deny the many and great achievements of both Karl vi and Maria Theresia in establishing Austria’s maritime position on the Adriatic. A consistent, organically constructed Mediterranean policy was, however, almost completely absent in the eighteenth century, as was any sense that this was the only possible way to fully develop the productive forces of the Habsburg lands.6 It was believed that

1 See Marx 1986, p. 141. 2 Compare this with the views expressed by Richelieu in 1633 on the importance of Levantine and Mediterranean trade (Richelieu 1776, pp. 126–41). 3 See Mayer 1882, p. 405. 4 See Srbik 1907, p. 405. 5 Srbik 1907, pp. 406–7; and above, p. 330. 6 As late as 1774, Joseph ii was of the opinion that Austria could not count on any foreign markets owing to its unfavourable situation, remote from any seashore. See above, p. 140.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_028

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the destiny of the Monarchy lay not in the south but in the north. Hence the state’s entire energies were primarily directed to the north. Like her father, Maria Theresia did, perhaps, grasp the latent importance of the Adriatic port. Nor did certain individual Austrian politicians lack insight. The Intendant of Trieste, [Johann Karl] Count Lichnowsky, did propose that the flow of goods should be directed away from Hamburg, Leipzig, Wrocław and Regensburg and to Trieste. The Commercial Council, however, was sceptical about the idea. It considered that as long as the Elbe flowed to Hamburg, the export route to the west through Hamburg was preferable to the route through Trieste. And, on another occasion (1765), the Council opposed measures favouring Trieste, in the conviction that Bohemia’s trade with Saxony and Prussia ‘was still indispensable at present’,7 although oppressive Prussian customs duties had already almost completely barred the route to Hamburg for Austrian goods. Three years later (1768), when the establishment of closer trade connections between the Hereditary Lands and the Netherlands was in question, Degelmann, as the spokesman for the Commercial Council, was extremely sceptical. It seemed to him that there were many reasons not to be cajoled by the sweet hope that Trieste would be able to assemble goods, either from the Levant or from the Hereditary Lands themselves, to be forwarded to Nieuport or Ostend.8 And, in 1770, when the shipowners of Trieste asked that domestic shipping be granted preferential treatment, on the model of the English Navigation Acts, these proposals did not receive a sympathetic response from the Commercial Council, even though they had the support of the town’s Intendant. The nation’s shipping, it said, had no great future before it, in the absence of the prop provided by colonial possessions. The customs system of the whole Monarchy could not be abandoned for the sake of a few ships on the Adriatic coast. Monarchies which had ports on several different coasts or were surrounded by the ocean, could base their whole commercial system on maritime trade; a state like Austria which only had one or two harbours at the furthest end of its territory, however, was in a different situation.9 A year later (1771), [Jacques Accarias de] Serionne renewed Count Lichnowsky’s proposal that the attempt to trade through Hamburg and France should be abandoned in favour of diverting goods to Trieste. The Empress, it is true, agreed with this idea, even adding that it was ‘an unalterable maxim of state policy’.10 The project itself

7 8 9 10

See Beer 1898, pp. 50–1. Beer 1898, p. 69. Report of 6 August 1779. See Beer 1898, p. 45. Beer 1898, p. 54. [Grossman and Beer refer to ‘Serione’ but it seems likely that the person is Serionne.]

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was, however, abandoned11 and the matter did not advance beyond deliberations and enquiries. Only intermittently, unwillingly and under the compulsion of events was attention in Vienna turned to the Adriatic during the eighteenth century. Only in moments of danger and diplomatic misfortune, when there was a threat that the customary trade routes to the north would be completely blocked, was the existence of Trieste recalled.12 Galicia suffered similar neglect. When the Province was acquired by Austria, the route to Gdańsk was blocked. The government in Vienna therefore found itself compelled to direct the flow of trade, which had been cut off by Prussian tolls, to Trieste, through the Hereditary Lands, and in particular through Hungary. The volume of foreign trade conducted by Hungary through Trieste had already increased during the Seven Years’ War. In 1763 it was decided to stimulate this trade by improving the road connection with Trieste.13 This now involved building a road between Galicia and Hungary, which would give the new Province a direct link with the Hungarian highway to Trieste. The instructions given to Count Pergen, on his appointment as Governor of Galicia (in 1772), and his associate Court Councillor Kozian (in 1773) were, among other things, to establish a road connection between Galicia and Hungary, over the mountains, and to make the Poprad river navigable.14 The general commanding in Galicia, [Karl Reinhard] Baron von Ellrichhausen, underlined the need for these improvements in transport in his reports to the Court Military Council.15 When a department for road construction was set up in Galicia in 1775, its first job was to complete the route to Hungary through Dukla. Moreover, in

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See Kopetz 1829–30, 2, section 516. The way Austria’s Adriatic policy originated also explains its indecisiveness. The officials of the Commercial Council were continuously involved in investigating how Trieste’s trade could be expanded. But years, even decades, often elapsed before a decision was carried out (Beer 1898, p. 37). No-one had the necessary energy to abolish the many manor and private tolls which hindered commerce (Mayer 1882, pp. 87 and 91 et seq.). Consequently, in spite of all the attempts to promote Trieste’s trade, as late as the 1760s, freight costs for the transport of goods to the north were still lower than for transporting them via the port on the Adriatic (see Beer 1898, pp. 51 and 53). See Arneth 1876–79, 7, p. 108. See above, pp. 113–114. ‘The steady improvement of roads through the Carpathian mountains for communication between Galicia with Hungary through three points of entry: from Veretsky in Hungary to Skole in Galicia, from Výrava in Hungary to Szczawne in Galicia and from Bardejov in Hungary to Dukla in this Kingdom can be fairly regarded as a necessity … bearing in mind that this route out of Galicia through Hungary to Vienna and Trieste will prove to be markedly shorter that the route through Upper Silesia and Moravia’ (Report of 14 December 1774, in Werenka 1892, p. 255).

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1773, Kaunitz supported the attempt of the Trieste businessperson Tribuzzi to establish trade relations with Galicia, arguing that: ‘Trieste will always be able to obtain its requirements [for wax] from this region’. The merchants of Trieste ‘ought [to send] a special commissioner to Lviv to provide the Governor’s Office there with the necessary impetus’.16 The question discussed here was given special attention in the following year, 1774. The delegates to the Polish Parliament had spoken to Baron Reviczky, expressing the wish to enter into closer trade relations with the Hereditary Lands, in order to receive via Trieste the goods they had previously acquired through Gdańsk.17 For this purpose, they ask the Austrian government to establish a number of warehouses to store these goods on the Polish-Galician border. The delegates drew attention to the epoch-making significance the accomplishment of this suggestion would have for the economic development of Galicia and Poland. The response in Vienna to the request was favourable and the government considered that the first and most important step to be taken along these lines was the establishment of the free fairs in Cieszyn.18 The anonymous writer, already familiar to us, gave impulse to further negotiations on the subject when, in February 1774, he submitted a ‘Memorandum’ to the Galician Court Chancellery.19 In it, he explained ‘how various items brought from the south, which at present go [through Leipzig, Hamburg, Wrocław etc.] to Poland20 without touching the territory of the Monarchy at all can be diver16

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See above, p. 129. The flow of Galician exports towards Trieste, encountered two-fold difficulties. Two routes led from Galicia to the south: directly through Hungary to Trieste and, longer, through Vienna to northern Italy and then on to Trieste. Kaunitz stated that Whether the goods are transported through Bielsko and Vienna or through Hungary depends on the circumstances and on how expensive forage is. If oats are dear in Poland, they go through Hungary, where the route is shorter, though more difficult … Another difference between the two routes is that many commodities are brought from Saxony to Brody and the waggoners are accustomed to loading up wax, in addition to other items, for the return journey. (hka, Commerz, Fasc. 57, ad 2 ex Julio 1773) Schweighofer (1785, p. 26) mentioned a ‘large commission trade’ in wax with the Hereditary Lands: ‘Every year 10,000 centners of wax are sent from Poland to Trieste and then, from that port, to all parts of the Italian coast. The attempt has even been made, successfully, to send wax candles to America’. In 1783 Margelik estimated the value of the annual turnover in Podgórze merchants’ trade in this item alone as roughly 100,000 ducats (‘Reiserelation’, ami fasc. ii.A.6 ad 108 ex Decembri 1783). See above, pp. 215 and 236. See above, pp. 164. Note of the Galician Court Chancellery to the Commercial Council, 16 February 1774, hka, Commerz. Fasc. 57, ad 12 ex Februario 1774. Two routes were taken by these commodities. Silk materials, pharmaceutical items, exotic fruits and spices passed through Genoa to Hamburg and from there on to Poland. ‘On the

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ted so that, in the future, they go almost exclusively through the Imperial-Royal Hereditary Lands to Galicia and from there to Poland’. And in addition to the ‘political and fiscal advantages of this system’, he also presented the argument that, in this way, especially the merchant and the Pole in general [would] find this advantageous: the route indicated is much shorter and most of the journey is by water; there is a single tiny customs payment in Graubünden and the transit duty in Tyrol and the other Austrian provinces is small; even in Bavaria it is fairly moderate. The freight costs and the customs costs would therefore be incomparably less than on the present route, which proceeds almost entirely on land and passes through the territory of many different lords and princes, large and small, particularly in Prussia, where the duties levied on Polish products have been increased. To initiate reciprocal commerce, it would be necessary ‘to establish a good trading house in Vienna and Krems, through which Poles could directly order

other hand comestibles such as cheese, sausages, truffles, rice, chocolate, preserved and candied fruits, and also various wool, linen, silk and semi-silk goods were sent through the territory of Milan. They made their way through Chiavenna/Cleven, and the Graubünden district, to Lindau and other trade towns in the German Empire and from there on to Poland’. This second route, at least, wrote the anonymous writer, ‘could be diverted so that it passed from Chiavenna to the new road, now made passable, from Graubünden straight to the boundary of Tyrol and from there through the Oberinnthal to Innsbruck, where the road is in very good condition; then by river down the Inn and after that from Passau on the Danube to Krems or Vienna, from there through Moravia and Upper Silesia to Galicia; goods could be transported from there by boat further into Poland, instead of what happens at present, where the goods pass from Hamburg to Gdańsk and from there up the Vistula to Poland’. A ‘description of the kinds of Milanese goods which go to Germany, Poland and the north’ was appended to this document. Despite the need to unload and reload goods repeatedly, the proposed route would be cheaper than the others, owing to the great difference between the cost of water-borne transport and land transport. In addition, the authorities attempted to make water transport possible on the next stretch of the route, from Vienna to Galicia. A report of 29 September 1781 from Eder states that, ‘If the route through Pest on the Danube [to Galicia] already initiated and made very difficult by the decline [sic] in the duty charged in Buda, were made more favourable and also if the freedom of the Viennese shipowners to arbitrarily determine freight charges as far as Pest were restricted, the manufactures of the Hereditary Lands would grow, particularly those which are heavy, which would be of very great advantage since the freight costs from Vienna to Lviv, if a single ship’s load is not exceeded, are already at present only half of what they would be to carry the same goods by road via Moravia and Silesia’ (hka, Kameralakt, number 7, ad 638 ex Februario 1783). [Editor’s interpolations.]

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Italian goods and have them forwarded to Poland’. ‘This can be done … given that goods from the Levant and others from Trieste are needed by the Poles’. But these arguments made little impression on the Commercial Council and its spokesperson Degelmann. ‘Trade in Poland’, he declared, ‘is mostly carried on by Jews, as far as we know here’. They trade with Leipzig and Frankfurt an der Oder because they can find long-term credits and a large choice of goods there. Accordingly, ‘the prospect for Polish trade in goods from the south and the Levant being diverted in a different direction, through the Hereditary Lands, is rather unlikely’. What is more, a certain amount of preliminary work would be necessary, such as the construction of roads and wagons, the establishment of a number of market towns, the regulation of the Galician customs system, etc. – all of which the Commercial Council promised to promote, by affording ‘all possible assistance’.21 In March 1774, dissatisfied with the way his proposals had been dismissed, ‘Anonymous’ tried once more. He asked ‘whether it might not be advisable for Galicia and, even more, for the Hereditary Lands, to initiate a system whereby the Province can be supplied, perhaps by Hereditary Lands’ own merchants, with goods, previously obtained from Gdańsk, via Trieste?’ This could be accomplished ‘by a skilful adjustment of the tariff … since some parts of Galicia are no farther from Trieste than they are from Gdańsk’.22 Once again, the president of the Galician Court Chancellery, Count Wrbna, was not particularly enthusiastic about the proposal. He naturally admitted the usefulness of opening a new route to the south. But he warned the government not to be too hopeful about the possibility of conducting trade through Trieste. ‘Goods from the north should not be confused with those from Italy and the Levant; the former would never circulate via Trieste and the latter are really beginning to go from Trieste to Lviv’.23 In a note written later, Wrbna stresses the need to make it as easy as possible for goods from Poland and Galicia to pass through the Hereditary Lands and Hungary, in view of oppressive Prussian customs duties. In justification, he referred to the mood among the Galician and Polish merchants, who wanted to export through Trieste and had already attempted to do so. In Poland, for instance, a trading company had already been set up for this purpose.24

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Note to the Galician Court Chancellery, hka, Commerz. Fasc. 57, ad 12 ex Februario 1774. hka, Commerz. Fasc. 57, ad 27 ex Junio 1774. Report of 30 May 1774, hka, Commerz. Fasc. 57, ad 27 ex Junio 1774. ‘A large proportion of Galician and Polish merchants’ have abandoned the old trade route, ‘being rather inclined to use the route through the Hereditary Lands, in particular through Hungary, to reach the two free seaports of Trieste and Fiume, and this inclination is sup-

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These efforts were also powerfully supported by two tariff laws that were soon issued. The General Tariff of 15 July 1775 abolished internal tolls which had previously existed in every Hereditary Land, replacing them with a transit duty of only 1 percent, which had only to be paid once. In addition, Poland proceeded to increase the number of items covered by the Austro-Polish Trade Treaty of 15 March 1775, with the tacit agreement of the Court in Vienna. Under the Polish tariff of 1 October 1776, numerous spices and colonial goods were exempted from duty, so that they could be obtained from Trieste, avoiding Hamburg and Gdańsk.25 The merchants of Bohemia considered that the cost of transporting goods to Trieste were higher than to Hamburg. In Galicia, however, matters were different, in view of the excessive Prussian duties on both imports and exports. Court Councillor Sorgenthal, in his report about the second Cieszyn fair, on the basis of information from Kraków, calculated that freight costs via Trieste were in fact higher than via Hamburg.26 ‘The severity of the Prussian duties has for some time, nevertheless, already led merchants there to obtain a considerable quantity of their goods from Trieste’. Under such circumstances, the superiority of the Trieste route rested not on advantages of geography and commerce but rather on the insecure basis of the exaggerated Prussian customs duties. The King of Prussia could have made the Trieste route unprofitable with one stroke of the pen, by reducing the duty charged on transit through his lands. Sorgenthal therefore pointed out the need to make the Trieste route independent of Prussian fiscal policies by further reducing freight costs.27

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ported by many Polish nobles of the Delegation Parliament in Warsaw. Not only have various Galician merchants really made the attempt to transport several trade-items for sale to Trieste by this route, a trading company has very recently been set up by Prince Franz Lubomirski on his manors in Poland and he has chosen to export and import as many goods as possible through Hungary, Trieste and Fiume, instead of using the route through Gdańsk’ (note from the Galician Court Chancellery to the Commercial Council, dated 19 July 1774. hka, Commerz. Fasc. 57, ad 24 ex Julio 1774). [Both the 1767–68 and 1773– 75 sessions of the Polish Parliament, appointed a body, ‘Delegation’, to act on its behalf.] See above, p. 236. ‘For they must pay 70 groschen [1 groschen = 3 kreutzers] per centner [from Trieste] to Vienna, 30 groschen from Vienna to Opava and 42 groschen from Opava to Kraków, that is 7 florins 6 kreutzers, their account is under a heavier burden than when they have to obtain the same items from Hamburg, from where a weight of 30 centners has to be unloaded and reloaded three times: from Magdeburg, Berlin or Wrocław to Racibórz, on the Oder paying 50 thalers, which according to imperial measures is 3 florins per centner; from Ratibor to Opava 30 kreutzers are paid and then from there to Kraków they have to pay the alreadymentioned 42 groschen [= 2 florins 6 kreutzers], so the cost per centner amounts to 5 florins 36 kreutzers’ (hka, Commerz. Fasc. 57, ad 13 ex Octobri 1775). ‘It is therefore to be hoped that if the ships coming from France to Trieste did not incur

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There is insufficient material available to present statistical evidence of the results of these efforts.28 Nevertheless, at the end of Maria Theresia’s reign it can be assumed that the Trieste route was already exerting a perceptible influence on economic conditions in Galicia and Poland. At the beginning of 1779, Count Stackelberg expressed the view that the diversion of Polish trade to Trieste was the only hope of saving that country from economic ruin.29 At the same time, the delegates of the Polish Treasury Commission confirmed that the flow of trade to Trieste had increased since the Gdańsk route had become impracticable.30 These new trade relations were pursued intensively. This can be concluded from the anxiety they provoked in interested Prussian circles. An anonymous Prussian patriot complained in 1777 that ‘Austria is drawing Polish trade to Hungary and Trieste … This seems to be an idea favoured in Vienna. Moreover, this Austrian project can now be pursued more easily, thanks to Brody’.31 Even greater attention was devoted to the trade link between Galicia and Trieste after Joseph ii came to the throne. In the account he wrote in December 1780 about his journey to Gdańsk, Beekhen again stressed the need to create at least a partial alternative to export through that port, by improving the road to Trieste.32 Count Hatzfeld took up the cause in the Council of State’s subsequent discussions. ‘It would be worth investigating’, he stated, ‘whether Galician products could not be brought down the Marosch and by means of that river to the San and the Kulpa and then on to Trieste?’33 This was probably the reason why the import duty on Galician products, both natural and

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such a high percentage write-off for damage in transit and if the road between Opava and Kraków could be improved, because the freight costs at present for that stretch of 24 miles are too high, this route would even be worth taking if the Prussians reduced their transit duty to 4 percent’. In 1778, at least, imports from Trieste can be established as being worth 26,972 florins and exports to Trieste 1,226 florins. These figures do not, however, include the transit trade to and from Brody, which was the main centre for Galicia’s foreign trade (see Grossmann 1913, p. 225). Dispatch to Repnin, see above, p. 356. ‘Gdyby Ministrowi Króla Pruskiego rozpatrzyć sie chcieli w Regestrach celnych, nalezliby bardzo wiele produktów zupełnie zaniedbanych, które dawniej Polska przez morze Bałtyckie dosławała; teraz woli je dostować Lądem z Triestu’ [‘If the ministers of the Prussian King cared to acquaint themselves with the customs records, they would find that a great many products, which Poland long obtained from the Baltic Sea, are entirely missing; in preference they are now obtained overland from Trieste’] (‘Mysli od Delegowanych z Komisyi Skarbu Koronnego’, Archiwum Książąt Czartoryskich, 1174, p. 455). Anonymous 1777, p. 188. See above, p. 359. hhs 1781, 7.

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artificial, entering Austrian Lombardy was set at the low rate of 1¼ percent in February 1781.34 Finally, by an Imperial Resolution of 7 June 1784, the products of Galicia’s largest export industry, linen, were completely exempted from duty when passing through the Hereditary Lands in transit to Trieste.35 The incorporation of Galicia into the unified Austrian customs area followed on 1 December 1784; consequently, Galician exports could now have completely free passage to Trieste, as far as tariffs were concerned. The difficulties confronting Galician exports to Trieste therefore had nothing to do with Austrian customs duties. They were of an entirely different kind, involving as they did various obstructions to transport in Hungary and Inner Austria. The Christian merchants of Lviv complained in the summer of 1782 that ‘because the trade route via Gdańsk had been blocked by excessive Prussian duties, they had now to take the route through Hungary to Trieste; in doing this, however, they met with various obstacles, such as 1) almost impassable roads; 2) lack of accommodation during the journey; 3) inadequate vehicles; and finally 4) local transit duties and urban tolls’.36 Given the Hungarian Parliament’s resistance to the removal of duties, the government in Vienna could do little. The Court Chancellery in Vienna stated in reply that ‘maintaining roads suitable for constant travel, good inns and the establishment of a regular carriage-service would certainly be of immense benefit both to commerce and to the Kingdom of Hungary’. But this task was ‘within the jurisdiction of the Hungarian Court Chancellery’.37 All that could be done was to remove the obstacles to transport within Inner Austria. Orders to that effect were given.38 The most important obstacle to the development of Galicia’s export trade via Trieste, however, was the lack of the town’s slight development as a trading port. Relations between Trieste and France had only just begun. Not until 1770 did ships from Marseilles start to appear in Trieste. There was very little freight to carry on return journeys. Links with Holland and England were extremely slight, although they were countries to which it would have been possible to

34 35 36 37 38

See above, p. 289. Proclamation ‘Die nach Triest essitirende Leinwand ist Transito-Zoll frey’, 24 June 1784, Edicta 1784, p. 125. Petition of August 1782, hka, Commerz. Fasc. 57, ad 2 ex Septembri 1782. hka, Commerz. Fasc. 57, ad 2 ex Septembri 1782. ‘As far as road improvements on the short stretch which falls within our own jurisdiction, namely from where the Ptuj road diverges from the Trieste road and leads as far as Nedelišće on the Hungarian frontier, are concerned the Governor’s Office of Inner Austria has been instructed to give serious consideration to remedying the shortcomings indicated’ (Court Decree to the Governor’s Office of Inner Austria, 13 February 1783. hka, Commerz. Fasc. 57, ad 1 ex Februario 1783).

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export far more of Galicia’s natural products, such as wood, grain, raw hides, potash and linen.39 Galicia’s trade through Trieste therefore had to contend with many difficulties. Even so, further progress was made under Joseph ii. In January 1783, Guinigi assured the central government that Galicia’s trade relations with Trieste were constantly increasing.40 In the summer of 1784, a large firm based in Lyon, Ludwig Bugnon & Co., bought roughly 200 centner of linen and yarn in the Dukla District for export via Trieste and intended to organise the regular export of linen via that port if the experiment was a success.41 The Jews of Brody obtained silk directly from Lyon.42 The brothers Pensa, silk manufacturers in Milan, were in constant communication with Brody.43 According to commercial statistics of 1787,44 trade with the south amounted to about 450,000 florins. Of this, 50,859 florins was the value of imports from Trieste; exports to Trieste were worth 21,419 florins; imports from Italy were worth 13,933 florins, exports to Italy 1,240 florins, finally the value of goods in transit from and to the south was fairly high, 357,948 florins,45 and amounted to 14.89 percent of the value of Galicia’s total transit trade, which was 2,404,326 florins. These figures, however, only included direct trade with Trieste and Italy. A much greater part of the Monarchy’s trade with the south must have occurred indirectly, through the market in Vienna and Hungarian merchants.

39

40 41 42 43 44 45

See Beer 1898, pp. 77–8, 72 and 179. Not until 1776 were plans made to establish a company to organise trade between the Netherlands and Hungary via Trieste (Barthèlemy’s dispatch, 23 December 1776, Paris Archives, Correspondance politique, volume 330, p. 267). See above, p. 387. hka, Commerz. Fasc. 57, ad 3 ex Junio 1784. See above, p. 336, note. hka, Mautwesen in Galizien, ad 361 ex Januario 1785. See Grossmann 1913, p. 230. This total was made up of the following items (in florins): Transit from Trieste: 2,753 Transit to Trieste from Brody 179,435 Transit to Trieste from Poland 86,842 Transit to Trieste from Turkey 21,206 Transit to Italy from Poland 18,451 Transit to Italy from Brody 48,340 Transit to Italy from Russia 134 Transit to Fiume from Poland 787 (‘Summarische Durchfuhrs-Merkantil-Tabelle der k.k. Königreiche Galizien und Lodomerien vom 1. November 1786 bis letzten Oktober 1787’, hka, Merkantiltabellen M 3 Fasc. 12.222).

chapter 22

Trade with Turkey and to the Black Sea. The Trade Treaty of 1 November 1785 with Russia When Poland was partitioned its trade with the Black Sea had long been in decay. The southern parts of the country – Podillia, Ukraine and a large part of Volyn – did not have the large markets necessary for the sale of their plentiful products and suffered from an acute lack of money, while simultaneously enjoying an immeasurable wealth of natural products. At that time, the Dniester river played no role in trade relations.1 In 1772, when Galicia fell to Austria, from this perspective, it therefore seemed that the new Province could look forward to a new and more hopeful future. Ever since the beginning of the seventeenth century, Austria had looked to the south-east, the Black Sea, Constantinople and the Levant. Under the Peace Treaties of Sremski Karlovci, (1699), Požarevac (1718) and Belgrade (1739) Austria’s trade had gained important concessions, both on the route down the Danube and overland, through Hungary and Moldova.2 Neither the merchants of the Hereditary Lands nor the Austrian state administration, nevertheless, understood how to make use of these advantages. Trade with the east fell entirely into the hands of Turks, Greeks, Turkish Jews and Armenians, and the Hereditary Lands’ balance of trade was always in deficit.3 Only when Joseph ii became joint ruler with Maria Theresia did the Austrian government start to narrow down the favoured position of the Turks and to strengthen the flow of exports to the east, while also persuading the Porte to agree to revise the trade treaties. For Galicia and for its exports, in particular, the trade with Turkey on the Dniester and on the Danube through Hungary could have been of great importance, if the preferential treatment granted to Austro-Turkish trade under Articles ii and iii of the Požarevac Trade Treaty of 27 July 17184 had been applied to

1 Korzon 1897, 2, pp. 2 and 54–5. 2 On economic relations between the Monarchy and the Ottoman Empire in the eighteenth century, see the introduction to Grünberg 1902; Grunzel 1892; Beer 1898; and Srbik 1907. 3 See Beer 1898, pp. 83 and 186, note 198; also Srbik 1907, p. 307. 4 ‘Traité de commerce et de navigation entre Charles vi, Empereur des Romains et le Sultan Achmet Chan, Empereur des Ottomans, conclu à Pasarowiz le 27 Juillet 1718’, Neumann 1855, pp. 2–9.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_029

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Galicia as well. After the occupation, the question was indeed raised in Vienna as to ‘whether and to what extent the Peace Treaty of Požarevac and the preferential treatment granted under it to Ottoman subjects in the Hereditary Lands and conversely to subjects of the Hereditary Lands in the Ottoman Empire were to be extended to Galicia?’ The State Chancellery5 believed that it should answer in the affirmative, for two reasons. Firstly, because ‘the claim to Galicia was based on the rights of the Hungarian crown … and it should therefore be seen as an appurtenance of that crown’. After all, the Treaty of Požarevac explicitly stipulated that it also applied to the Hungarian subjects of the House of Austria.6 Moreover, the provisions of the treaty, according to their literal meaning, appeared not to be limited to nations which were under Austrian rule at the time, it was concluded, but to extend to the inhabitants of eventual future territorial acquisitions.7 According to the State Chancellery, therefore, Galicia ought to receive all the treaty-based advantages in Turkey that the other Hereditary Lands already enjoyed ‘in which context, it goes without saying, that Turkish subjects [in Galicia] will receive the same advantages under the right of reciprocity’.8 Despite this, ‘the previous Polish customs system continued to be applied to Turkish goods and merchants in Galicia’ during the first four years after the Province’s occupation.9 Turkish goods were accordingly charged a duty of 10 percent in Galicia,10 whereas in

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hka, Commerz. Fasc. 57, ad 9 ex Aprili 1776. ‘Fra i sudditi d’ambi gli Imperi, del Romano cioè e dell’ Ottomano, fu stabilito il libéra ed universale commercio sui fiumi, per mare e per terra, di modo che sotto la denominazione di sudditi di sua Maestà Imperial-Regia Cattolica si comprendano i Tedeschi, Ungheresi, Italiani, Belgi di qualunque stirpe o religione …’ [‘It was established that there would be free and universal commerce between the subjects of both the empires, the Roman and the Ottoman, on rivers, by sea and by land, and that the description of subjects of his Imperial-Royal Catholic Majesty is to include Germans, Hungarians, Italians and Belgians of whatever race or religion …’] (‘Traité de commerce et de navigation entre Charles vi, Empereur des Romains et le Sultan Achmet Chan, Empereur des Ottomans’, article i, Neumann 1855, p. 2) [Grossman’s emphasis]. ‘… i quali attualmente soggiacciono al Dominio Cesareo-Regio, o vi devono soggiacere in qualunque tempo e modo e sotto qualunque titolo’ [‘… which are at present subject to the rule of the Emperor-King, or will become subject at whatever time, by whatever method, and under whatever title’] (‘Traité de commerce et de navigation entre Charles vi, Empereur des Romains et le Sultan Achmet Chan, Empereur des Ottomans’, article i, Neumann 1855, p. 2) [Grossman’s emphasis]. hka, Commerz. Fasc. 57, ad 9 ex Aprili 1776. Report by the Galician Court Chancellery, 12 February 1776, hka, Commerz. Fasc. 57, ad 9 ex Aprili 1776. ‘Ottoman subjects have so far been treated in this Province in the same way as all other foreigners and pay a duty of 10 percent on all the goods they import’ (Galician government

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the Hereditary Lands and in Hungary they only needed to pay 5 percent. As a result, direct trade relations with Turkey became more difficult. Merchants from Turkey did not come directly to Galicia through Moldova. Instead they bypassed it, reaching Galicia through Hungary.11 Things did not change in this respect until 1776, when an appeal was made by the Greek merchant Paul Popowitsch, who had imported some goods into Galicia from the first Cieszyn fair. He complained that he had been required to pay import duty a second time in Galicia, although he had already paid the usual Turkish duty of 5 percent at Zemun when he first brought the goods into the Hereditary Lands. The Galician Court Chancellery considered the complaint to be justified. ‘Turkish subjects with Turkish goods should also be obliged to pay no other duty in Galicia and no higher duty than the traditional 5 percent. To do anything else would be to breach the treaties and give rise to well-founded complaints from the Porte’. On the other hand, however, the ‘procurement of appropriate reciprocal treatment for Galician subjects who … conduct a considerable amount of trade with Turkey’ should be borne in mind. It therefore proposed not just that the illegally exacted duty be refunded, in this particular case, but also that principles should be established for the future: from now on, provided reciprocity existed, ‘a) Turkish merchants coming directly from Turkey or from foreign countries into Galicia with Turkish goods would no longer have to pay any more duty than the 5 percent prescribed by treaty; and b), merchants coming from another German or Hungarian Hereditary Land, who had already paid the customary Turkish duty would not be required to make any further payment’. The Empress approved these proposals and also instructed the Governor’s Office to keep a close watch to ensure that Galician merchants in Turkey were treated in exactly the same way as merchants from the Hereditary Lands. At the same time, she ordered that all the regulations recently issued in the Hereditary Lands for the purpose of restricting the privileged position of the Turkish merchants (such as the rules limiting their retail trade, administering justice and dealing with contraband) should be collected together into a single law and applied to Galicia.12 This command was already executed in May 1776.13

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trade Specialist, Guinigi, in the so-called second draft of the Galician tariff of 9 January 1776). See above, p. 153–4, note. ‘I approve the proposals of the Chancellery, which are to be implemented by the Galician Governor’s Office, to look very closely into whether Galician subjects in Turkey are treated in the same way as other imperial subjects or in the manner of Polish subjects … The [Galician] Chancellery is instructed to enclose herewith the rules that currently apply to

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The government’s efforts to revise its treaty relations with the Porte ran parallel with the above moves to extend the scope of the favourable treatment laid down in the trade treaties to the merchants of Galicia. Its aim was to achieve further concessions from the Porte, of a similar nature to those already granted to Russia by the Treaty of Kaynardzha of 16 July 1774.14 On 10 April 1775, with Hatzfeld in the chair, a meeting of the Council of State was held. Court Councillor von Raab, on the Empress’s express wish, delivered a report on the ‘establishment of an advantageous trade route down the Danube to the Black Sea and into Turkish territory’.15 Control of the Mediterranean had for years been a central objective of French policy.16 When the provisions of the Treaty of Kaynardzha brought Russian shipping exceptionally favourable treatment in the Black Sea, France began to fear that the Russian flag would acquire a monopoly position there. To counteract this danger, the French ambassador in Constantinople invited representatives of other foreign Courts there to join with him in a démarche17 addressed to the Porte, calling for freedom of navigation in the Black Sea. Raab referred to this in his report to the Council of State and pointed out the importance of the Black Sea trade to the Monarchy, despite the many difficulties it faced. Distant states like France and England regarded trade there as worthwhile; for the Hereditary Lands it would be even more advantageous. To gain these advantages, a position opposed to France’s proposal was advisable. Efforts must be made to convert the Black Sea into a mare clausum.18

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the treatment of Turkish subjects’ trade, which differ from the previous rules, in particular with respect to the types of goods, both wholesale and retail, that they are permitted to trade at market times, and how the question of contraband goods is treated according to the different cases’ (undated). Court Decree of 24 May 1776, hka, Commerz. Fasc. 57, ad 4 ex Junio 1776. ‘Consignation samentlicher bey der Böhm. u. Oesterr. Hofkanzley-Registratur vorfindigen Generalien, die Ausmessung der Handlungsfreyheit der Ottomanischen Unterthaner in den k.k. Erblanden, deren Behandlung in der Justiz-Pflege und Contrebande-Fällen, dann die Gleichhaltung der k.k. Unterthanen mit selben in der Mautbegünstigung betreffend’. This collection included regulations issued between 1767 and 1774 (see Kropatschek 1786, pp. 4 and 26). See Beer 1873, 2, pp. 264 and 268. On the significance of this treaty for Russia and Russian commerce, see Roepell 1854, pp. 14 et seq.; and Sorel 1898, p. 252. Minutes of the meeting of the Council of State held on 10 April 1775. The following members were present, in addition to the persons mentioned above: Wrbna, Reischach, Palffy, Cobenzl, Binder, Kresel, Gebler, Löhr, Degelmann, and Haann (ami, v G 12,2968 ad 1272 ex Majo 1775). Beer 1883, p. 32; and Richelieu 1776, pp. 126–41. [‘Démarche’ means ‘diplomatic petition’.] [‘Mare clausum’ means ‘closed sea’.]

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The government should therefore send a semi-official memorandum to the Russian minister in Constantinople proposing that the two states support each other in matters of trade and defeat the French ambassador’s proposal. So far, the Porte had given a dilatory reply to the French ambassador. But it was not out of the question that it would give way to the joint pressure of the foreign ambassadors and it was therefore necessary to find ways in which the two imperial Courts could exclude competition from rival powers by taking concerted action. It was not advisable to conclude a formal trade treaty because this would awaken the vigilance of foreign Courts.19 An agreement for reciprocal support of each other’s trade and shipping would be sufficient. Under the Treaty of Požarevac, Austrian ships were not allowed to pass down the Danube to the sea. Instead their cargos had to be unloaded in Vidin or Ruse and reloaded onto Turkish ships or, from 1774, onto Russian ships. On the Austrian side a reduction in the cost of carrying freight from the Hereditary Lands on Russian ships but also other improvements which would benefit trade were desired. (Construction of warehouses and the establishment of trading companies in Kerch or Yenikale etc.) Raab concluded his presentation by stating that if an agreement of this kind could be reached with Russia, it would be advisable to establish a joint stock ‘general chartered company’. For the present only an experimental consignment of goods should be organised and navigation on the Danube should be investigated. Action of this kind would mainly be of advantage to Hungary, due to its favourable situation. But other Hereditary Lands would also be in a position to gain an outlet for their goods down the Danube.20 The Empress then stated that she accepted Raab’s proposals. Later, in 1777, the firm of Baron Fries, Zowarovich et Co. received a ‘charter’ for navigation on the Danube.21 We do not, however, learn of any more substantial achievements.22 The decision to 19

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In spite of this caution, a dispatch from the government in Paris to Breteuil, dated 3 March 1776, demonstrated that France was able to perceive the intentions of the cabinet in Vienna. The dispatch tells Breteuil ‘que la cour de Vienne travaille à se procurer un débouché par le Danube dans la mer noire’ [‘that the Court in Vienna is working to acquire an outlet into the Black Sea via the river Danube’] (Archives du Ministère des Affaires Etrangères, Correspondence politique, volume 329, p. 89). This question was also important for Galicia, since it was possible to reach the Danube from that Province via the Pruth river. The discussions outlined in the above text are also mentioned by Beer (1898, p. 82) but he does not give any indication of their content. Also see Beer 1898, p. 86. According to Schweighofer (1785, p. 342), the first successful attempt to send ships down the Danube to the Black Sea took place in 1782. In 1787 a merchant called Brighenti was granted ‘the privilege of sending a vessel down the Danube’ (Joseph ii to Cobenzl, in Beer and Fiedler 1901, 2, p. 170).

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abolish the Galician Court Chancellery in 1776 and then the Commercial Council in 1777 contributed to the slackening of Austrian efforts to stimulate waterborne trade relations with the east. The government directed more attention to the development of the overland trade route via Bukovina and Moldova. Even during the negotiations over the partition of Poland, Joseph ii was already seeking to draw the boundaries of Volyn in such a way that he could control ‘all communication between what was left of Poland and Moldova, and all of its trade with Turkey, including the main road which goes to Kiev’.23 In spite of all the support it received, Galicia’s trade in this direction suffered great difficulties. This was not so much because of internal deficiencies, such as lack of capital and entrepreneurial spirit, or bad organisation but far more because of the insecurity of the situation in Moldova. The ruling ‘hospodars’ or princes of Moldova, who were obliged to pay tribute to Turkey and sought to recoup this money by exploiting foreign merchants.24 Beekhen regarded Moldovan difficulties as the main obstacle to the development of Galician trade with the Ottoman Empire.25 Energetic steps concerning Galicia’s exports to the Black Sea were first undertaken in the context of Beekhen’s journey to Gdańsk. In the report he delivered at the end of 1780, Beekhen pointed out that grain from at least the eastern parts of Galicia (Podillia) could be exported down the Dniester river to the Black Sea. The western parts of the Province would then also be able to command higher prices, in spite of the cessation of exports via Gdańsk, thanks to reduced competition.26

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Opinion delivered by the Emperor, 29 May 1773, Beer 1873, 2, p. 227; and Beer 1873, 3, p. 56. See the reports of Austrian representatives in 1774 about the exactions of the Moldovan princes, Werenka 1892, p. 166. The constitution of these provinces and the moral character of these peoples allow individual merchants almost no hope of conducting trade there on a large scale. It is well-known how corrupt the system of justice is in Turkey, particularly in provinces like Moldova, which are ruled by dependent princes. The ignorance of the Turks … their pride and their scornful attitude towards Christians and Jews, and the duplicity and cunning of the Greeks, all increase the difficulty of carrying on trade. The indebted prince needs to compensate himself for the tribute he pays to the Porte and gifts he gives to his ministers, and since he must spare the people he rules to some extent, it is foreign merchants who must pay dearest for justice or abandon hope of receiving it. (Report from the Galician Governor’s Office, 30 September 1780, hka, Commerz. Fasc. 57, ad 1 ex Decembri 1780). ‘Von den Veränderung, welche der bisherige pohlnische Handel …’, dated Lemberg, 1 October 1780, ami, v G 12/2968 ad 56 ex Decembri 1780, section 92.

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Count Chotek, in a report to the Court Chancellery ‘on the export of Galician products to the Turkish provinces and the Black Sea’,27 proposed that freedom of navigation on the Dniester should be demanded, since the Treaty of Požarevac did not cover this point. These diplomatic efforts took time, however. It was therefore decided that the support of a private initiative would also be helpful to the cause. Around about this time, the brothers Israel and Moyses Hönig, who were well-known financiers, wholesale merchants and shareholders in the Mährische Lehnbank, came forward with a project.28 They referred to the terrible suffering inflicted on Galicia by restrictions placed on exports down the Vistula and the stagnation of exports. Under these circumstances, they asserted that they had not made their proposal for their own benefit but ‘inspired by patriotic zeal … It would be very useful for the state to find a way to make Galician products exportable’. The commodities in question were grain, wax, hemp, tallow and, in addition, tobacco, frequently found in the east of the Province. In order to promote the export of these goods, the advocates of the proposal sought the exclusive privilege of founding a large shipping company, supported financially by the government, to send ships down the Dniester and the Pruth, and declared themselves ready to ‘devote an adequate sum’ to this purpose. Specialist Beekhen in the Governor’s Office enthusiastically welcomed this proposal.29 The kind of exclusive privilege sought by the proposers currently appeared impermissible in the economically more advanced Hereditary Lands, he advised.30 But in Galicia matters were different. There, it was necessary to start building up trade and finding new paths for it to follow. In this case, granting exclusive privileges would be of great service as a means to promote growth.31 Individual merchants, and even small companies, would not be capable of overcoming the obstacles which stood in the way of trade with Turkey and ‘the misfortunes of one individual are likely to deter a hundred others from

27 28 29

30 31

Minutes of the meeting held on 28 December 1780, concerning ways to facilitate the export of Galician products, ami, v G 7/2940 ad 51 ex Martio 1781. ‘Aller Unterthänigst Freygehorsamster Gedanke’, hka, Commerz, Fasc. 57, ad 1 ex Decembri 1780. The King of Prussia, he pointed out, was ruining Gdańsk, so that ‘after it was ruined’ he could ‘gain control of the whole of Poland’s trade through the Baltic Sea. In view of this, a proposal offering a new outlet for the flow of trade, which has been obstructed to the present, is even more welcome’. ‘The usefulness of such exclusive companies is very much disputed at the present time’. ‘We consider that an exclusive trading company should be viewed as the scaffolding of a building, which serves for its construction but, as soon as the building has been erected, it becomes useless and harmful and must therefore be broken up again’.

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the same undertaking’. Only a large undertaking would be able to protect its own interests adequately in matters of customs and justice, and to take on the task of making the Dniester and the Pruth in Turkish territory navigable. ‘This cannot [indeed] be the work of individual merchants; as [however] there is no hope that it will be done by the government of those provinces, it must be done by the company’. No-one would want to invest a large amount of capital ‘without being assured of a clear advantage’. But this ‘would be placed in doubt by fear of competition’. This reasoning also struck a chord with the Council of State. In the meeting of 28 December 1780, Hatzfeld stated that it would be ‘extremely fortunate for Galicia if a flow of export goods could be initiated’ to the Black Sea. He only ‘hopes that the company proposing this is reliable’. In that case, he has ‘no reservation about recommending [that it receive] a private privilege which was otherwise highly objectionable’.32 We know nothing more about the fate of this company. A failed attempt to export goods to the Black Sea in 1780 is mentioned in the archives.33 Another attempt, made two years later, in an extremely reckless manner, was also unsuccessful. This emerged from Count [Stanisław] Ankwicz’s Adrychów manor. With the count’s encouragement, a trading company was founded there, with the aim of manufacturing as well as exporting linen.34 A consignment of tablecloths, napkins and ticking, to the value of some thousands of guilders, was sent speculatively and ‘at very great risk’ to Constantinople, probably down the Dniester, without making sure in advance that the government would provide a safe conduct certificate. The expedition was shipwrecked at Aheloy, on the Black Sea coast and the cargo was stolen by the local inhabitants ‘according to their custom’. Since the company had not kept an inventory and was in no position to prove the extent of its losses, and since it could not be established who the guilty parties were, owing a lack of witnesses, it was not even possible to make a formal complaint to the Porte. The travellers, who were peasants from the Adrychów manor and only spoke Polish, were subject to a multiplicity of other dangers as well. They had not ‘made a start in a way which was particularly encouraging to their compatriots’. It was only with difficulty that the Austrian Ambassador, [Peter Philipp] von Herbert, was able to intervene with the Porte, gain compensation of 1,100 piastres for their loss and have them

32 33 34

hhs 1781, number 7. Chotek’s report to the Court Chancellery. ‘Unterthäniges Bitten deren Gebrüder Thadeus und Josef Grafen von Ankwisz, Erbbesitzer deren Güter Andrychów und Inwald in Galizien’, hka, Commerz. Fasc. 57, ad 2 ex Majo 1783.

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returned to Galicia.35 Referring to this experience, the Ambassador quite properly expressed the wish that ‘in future people who had a better understanding of business and spoke a few languages apart from Polish should be chosen for this journey’.36 So long as the European coast of the Black Sea was in Turkish hands, no surplus trade with the area could develop, owing to the conditions mentioned above. This situation changed in the 1780s with the advance of Russian arms, the foundation of the town of Kherson and the very far-reaching privileges conceded to Russian trade by the Russo-Turkish Trade Treaty of 10 June 1783, which even included the right to pass freely through the Dardanelles.37 Finally, by the Treaty of Aynalıkavak, on 8 January 1784, the ‘Sultan’s right hand’, the Crimea, became a permanent Russian possession and Russia domination of those waters appeared secure. The development of the Black Sea trade had a revolutionary impact on economic conditions in the southern Ukraine38 and only from that point on did Austria also have the opportunity of drawing any serious advantage from the trade in that direction.39 It was, however, with great apprehension that Austria observed the remarkable advantages Russia had obtained for its trade with the Near and Far East.40

35

36 37 38 39

40

‘Since I neither wanted to, nor could, abandon these poor and ignorant people, who kept no proper records of their business, spoke the Polish language and no other, and were constantly exposed to the danger of being betrayed by bad subjects who served them as interpreters and advisers; so …’ (Herbert to Kaunitz, dated Pera, 26 March 1783, hka, Commerz. Fasc. 57, ad 2 ex Majo 1783). Herbert to Kaunitz, dated Bujukdere, 24 May 1783, hka, Commerz. Fasc. 57, ad 2 ex Majo 1783. See Neumann 1855, p. 296, and Grunzel 1892, p. 13. See Korzon 1897, 1, p. 328. Schweighofer, in 1785 (pp. 302–3), stated that in view of the fact ‘that some Polish magnates are trying to conduct trade on the Black Sea’ and have successfully sent consignments of grain via Kherson to Constantinople and the Greek Archipelago, ‘this newly opened trade route also has important advantages for Galicia’. A secure export outlet to the Black Sea was now available to the merchants of Lviv and Brody. ‘This will be a way to compensate for the disadvantages Polish trade has suffered from the increased difficulty of exporting through Gdańsk’. Leopold to Joseph ii at the end of August 1783, ‘… la Crimée, le Cuban et l’île de Taman … ne sont point des objets si petits et si indifférents que l’Impértrice voudrait le fair accroire, vu leur situation, qui par là rend maître de toute la mer noire et de son commerce par le fait …. embrasse les deux mers noire et caspinne, lui ouvre à son temps directement le commerce de la Perse et des Indes par une voie plus courte’ [‘the Crimea, the Kuban and the island of Taman … are not the small and unimportant objects the Empress would like to have us believe, given their situation which gives them mastery over the whole of the Black Sea and of its trade, because … encompasses the two seas, Black and Caspian, at

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Kaunitz advised that they should declare war on Turkey, seize control of the Una District [in the northwest of the Turkish Eyalet of Bosnia] and only then open negotiations.41 Joseph ii, however, wanted a peaceful solution and was, in fact, able to report to his brother on 13 October 1783 that he had managed to achieve this.42 He secured a trade agreement by which the Porte granted Austria most-favoured-nation status,43 thus placing it on an equal footing with Russia, France, England and Holland. As far as Galicia was concerned, however, the most important provisions of the agreement did away with the obstacles and oppressive practices, already mentioned, with which merchants had to struggle in Moldova.44 It finally became possible to extract from the Moldovan Voivode [Prince], Alexander [Mavrocordatos], a declaration45 guaranteeing Galician merchants in Moldova (who were predominantly Armenians) moderate tolls and export duties, a 3 percent import duty and favourable conditions for the lease of pasture-land on which to winter their livestock. It was only on the basis of these international legal agreements that the removal of all the other obstacles on the Austrian side could begin. A Decree issued on 13 May 178446 completely freed Galician manufactures from transit duty and reduced the export duty to the normal level of 5/12 percent, if they were sent to Turkey or the Crimea through other Hereditary Lands (e.g. through Hungary).47 The Court Decree of 24 June 1784 promised protection and ‘all pos-

41 42

43 44

45 46 47

the same time directly opens a shorter route to trade with Persia and the Indies for it’] (Habsburg and Toscana 1872, 1, p. 167). Letter from Leopold to Joseph ii at the end of August 1783, Habsburg and Toscana 1872, 1, p. 165; and Beer 1883, p. 76. Letter from Joseph to Leopold: ‘Je me suis procuré pour mon commerce et pavillon … avec la Porte dans la mer noir … tous les avantages et sûretés possibles’. [‘I have secured … all possible advantages and guarantees from the Porte for my trade and flag on the Black Sea’] (Habsburg and Toscana 1872, 1, p. 173) ‘Je crois … que je me procurerai des avantages réels de commerce de la part des Turcs’. [‘I believe … that I will obtain real commercial advantages from the Turks’] (Letter from Joseph to Leopold, 17 November 1783, Habsburg and Toscana 1872, 1, p. 181). From the Porte’s Sened [i.e. note] of 24 February 1784. See Neumann 1855, p. 332. Also see Beer 1883, p. 77. See the Porte’s Ferman of 16 October 1783 to the princes of Wallachia, which guaranteed protection to Austrian merchants, Neumann 1855, p. 325. [‘Ferman’ means ‘royal mandate’ from the Ottoman Sultan.] The declaration was dated Jassy, 9 March 1784. See Neumann 1855, p. 337. Circular, ‘Den Essito-Zoll für die erbländische Manufacta, welche in die Krimm und Türkey ausgeführt werden, betreffend’, 3 June 1784, Edicta 1784, p. 120. In 1789 the Turkish transit duty for the Brody market was reduced from 5 percent to 2 percent. See above, p. 406, note.

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sible support’ to everyone who undertook ‘the export of local products such as grain, wax, salt beef, bacon, untanned hides, linen, etc. down the Dniester and further abroad’ and, in this connection, expressed the authorities’ willingness to take into account the wishes and proposals of interested parties.48 Most importantly, however, navigation on the Dniester was eased, indeed became possible for the first time. The Province lacked all the requirements for this. Just as the promotion of sea-borne trade via Trieste had to start with the establishment of a factory for the production of the simplest ropes and cables, by the Orientalische Kompanie, because no-one in the Province understood how to make such things,49 now the government found it was obliged to persuade two rope-makers to go to eastern Galicia and to promise them, in addition to other inducements for foreign settlers such as a ten-year exemption from personal taxes and exemption of their eldest sons from military conscription etc., travel expenses of 200 florins and, in addition, a bonus of 500 ducats (2,250 florins) for the delivery of good ropes and cables.50 The greatest difficulty the government had to overcome, however, was making the Dniester navigable.51 When Prince [Karl Heinrich] von Nassau-Siegen, who proposed to send grain and wood down the Dniester from his manors to Bilhorod-Dnistrovskyi responded to the Court Decree of 24 June 1784,52 his application was very warmly supported by Count Kolowrat and approved by the Emperor.53 The 48

49 50 51

52 53

Circular, ‘Diejenigen, welche die Ausfuhr der hierländigen Produkte auf dem Dniester unternehmen woollen, sollen ihre Plane dem Gubernio vorlegen’, 15 July 1784, Edicta 1784, pp. 154–5. See Mayer 1882, p. 48. [The Orientalische Kompanie was owned by the Austrian government.] ‘Nachricht, Wegen Ansiedlung fremder Seilmeister in Galizien’, 20 September 1872, Edicta 1782, pp. 121–3. The questions of hydrological work and road-building will be dealt with in the second volume of this study; making the Dniester navigable is touched on here only to the extent it appears necessary to illuminate the topic of the trade route to the Black Sea. Even on the Vistula, the largest river in the Province, which had been used for centuries, many rafts (called ‘byki’) perished every year (Dziennik handlowy y ekonomiczny, 1788, p. 84). Application made on 3 August 1785, ami, v G 5/295 ad 83 ex Augusto 1785. See Dziennik handlowy y ekonomiczny 1786a; and Dziennik handlowy y ekonomiczny 1786b. Report of 4 August; the Imperial Resolution of 3 August stated that ‘I approve the proposal from the Chancellery. A person thoroughly experienced in navigation must be chosen to accompany the journey, and this person must be instructed to keep a proper journal’. The Emperor ordered that his Court Decree of 15 August 1785 should be addressed merely to ‘Monsieur de Nassau-Siegen’ because the latter’s princely title was not recognised by the Reichsgerichtshof [Imperial (judicial) Court]. The Prince, an international adventurer who said of himself, ‘je ne suis d’aucune nation, cosmopolite’ [‘I am a cosmopolitan, I do

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Galician Department of Engineering and Navigation then very quickly appointed an outstanding Specialist, the Abbé Caspar Caspari, for the planned journey on the Dniester river and sent him, with 150 florins of travelling expenses, via Husiatyn to Nesteriwci, where he met the prince for the journey down the Dniester, which was to begin on 15 October.54 After it had ended, on 14 March 1786, Caspari presented the journal he had kept to the Emperor, who was delighted to receive it. Caspari was also probably responsible for the hydrographic map of the Dniester which was also presented, because Prince von Nassau-Siegen would have lacked the specialist knowledge needed to construct it. For the ‘careful and thorough way he had kept his journal’ Caspari received in addition to his travelling expenses a payment of 100 ducats (450 florins).55 Given the Emperor’s well-known thriftiness, this was certainly not a small honour. The conclusion from this expedition, as of Count [Walerian] Dzieduszycki’s, likewise in 1785, was that the Dniester was suitable for the transport of the Province’s products at least twice a year, at times of high water. Dzieduszycki also tried to persuade the government to grant him a concession to establish a company which would engage in navigation and trade on the Dniester.56 The Galician Governor’s Specialist [Ludwig Franz] Zunger also strongly advocated his case, because ‘the Count has his manors here and is absolutely capable of mounting this enterprise’. At the same time, however, Zunger viewed the usual government concession to conduct trade on the Black Sea as inadequate. It was necessary, he said, to get the Porte to issue a special ferman.57 The concession requested by Dzieduszycki was in fact granted to him, initially for one year, then

54 55

56

57

not belong to any nation’], played a rather shady role in the politics of the time (see Vivenot and Zeissberg 1885). Statthaltereiarchiv, Fasc. Comerciale, numbers 22.205, 25.374 and 26.220 ex 1785. Treasury Decree of 29 August 1786 (Statthaltereiarchiv, Fasc. Comerciale, number 24,404 ex 1786). The above account contradicts certain details in Askenazy’s (1904, p. 145) presentation of the subject, which needs to be corrected, in particular his assertion that the journey down the Dniester was connected with the attempts made by the French government to promote trade with the Levant. On the contrary, it was in France’s interest to obstruct navigation on the Dniester. Askenazy also has too high an opinion of Prince Nassau’s achievements, probably because it was as yet unknown that he had made his journey together with Caspari (also see Korzon 1897, 2, p. 667). Application made on 4 May 1787 ‘for a privilege by virtue of which he would be permitted to build ships, load them with cargo and pass up and down the Dniester, under the flag of his Majesty, and conduct commerce on the Mediterranean and Black Seas, under imperial protection’, Statthaltereiarchiv, Fasc. Comerciale, number 12479 ex 1787. Zunger’s recommendation, 24 May 1787, Statthaltereiarchiv, Fasc. Comerciale, number 12,479 ex 1787. The first passage down the Dniester was made by Schulz in 1782 (see Archiwum Książąt Czartoryskichs, 811, pp. 323–4).

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subsequently extended for another two (so that he held it between 1787 and 1790). Later it was transferred to a certain Muszyński, who had taken over the Dniester transport company from him.58 Hydrological works to facilitate navigation on the Dniester, were also undertaken. The first proposals for doing this were made in September 1787, by Niedermayer, who was mainly concerned to secure the export of Galicia salt from brine.59 In the summer of 1788 Caspari travelled down the Dniester once again. The government ordered that the necessary tools be supplied, such as axes, sails, winches and other machines to the value of 1,000 florins. The necessary serf labour for construction and towing was to be provided not only by stateowned manors but by ‘all those who own land on either side of the river, on the stretch bordering their land’.60 In addition to clearing the bed and shoring up its banks, a towpath was constructed along one bank ‘to enable movement against the flow of the river’. When the war with Turkey broke out, large deliveries for the army had to be shipped down the river and hydrological work was accelerated. By 17 February 1789 Caspari was able to report that ‘most of the difficulties’ have now been overcome.61 Finally, regulations were published threatening severe penalties for polluting the river with stones, poles etc. and forbidding the erection of even ‘the smallest structure in the water without informing the District Office in advance and receiving the permission of the director of building works’.62 But the results of this attempt by the government to promote exports by no means corresponded with its efforts. Trade increased, it is true, but remained one-sided. Imports to Galicia rose, from a value of approximately 800,000 florins in 1778 to 1,419,626 florins in 1787, an increase of 77 percent. Exports, on the other hand, only rose from roughly 209,000 florins to 227,679 florins, thus by not quite 9 percent.63 These figures

58 59 60 61

62

63

See Jaworski 1904–05, pp. 41–2. Statthaltereiarchiv, Fasc. Comerciale, number 21.997 ex 1787. Galician Governor’s Office regulation of 23 July 1788, Statthaltereiarchiv, Fasc. Comerciale, number 16,441 ex 1788 and number 19,810 ex 1788. Many manor officials who had distinguished themselves by their work on the project were awarded a large silver medal. Others received a gold medal worth from 10 to 12 ducats and it was proposed to issue a decree recognising the excellence of Caspari’s work (Statthaltereiarchiv, Fasc. Comerciale, number 4.447 ex 1789). Statthaltereiarchiv, Fasc. Comerciale, number 4, 447 ex 1789. For other regulations which dealt with the policing of the river, see circular, ‘Vorschriften um Beschädigungen und Unglücksfälle durch die Flossführer zu vermeiden’, 28 October 1789, Edicta 1789, pp. 189– 92; and Kropatschek 1790, pp. 439–45. See Grossmann 1913, p. 135.

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are, of course, incomplete, because they do not include trade in the Brody free trade area, which was precisely the main location of Galicia’s trade with the east and with Turkey. It is likely that trade with and particularly exports to the Black Sea also developed on the Danube, through Hungary. At least this is what can be concluded from the great increase in exports to Hungary.64 Needless to say, the outbreak of the war with Turkey restricted further development of trade links in that direction. Normal conditions did not return until the Treaty of Svishtov was signed, on 4 August 1791.65 In it, all previous trade treaties with Turkey were reconfirmed. The prospects for navigation on the Dniester were improved because, with the further advance of Russia, confirmed by the Peace Treaty of 9 January 1792, the Dniester became the boundary between Russian and Ottoman territory.66 The Trade Treaty with Russia, concluded on 1 November 1785 and intended to last for twelve years,67 should also be mentioned in connection with trade to the Black Sea. In section 3 of this treaty the parties agreed to grant most-favoured-nation status to each other. In addition, section 7 of the Russian Edict announcing the treaty granted Austrian merchants ‘a 25 percent reduction in duties [charged under the Russian tariff of 1782] for all goods and products which they import into and export from Black Sea ports, namely the ports of Kherson at the month of the Dniester, and Sebastopol and Feodosia in Crimea’.68 Moreover, a maximum level of import duties was fixed by sections 5 and 6: 10 percent on furs and leather, and 5 percent on caviar. The subjects of each empire, finally, were guaranteed ‘complete freedom of conscience’ by section 2. This was a particularly important provision for Galicia, where the most important wholesale merchants were Jewish. For the first time, Jews from Brody were now able to establish direct trade relations with Arkhangelsk,69 which they had been trying to achieve for some time.70

64 65 66 67

68 69 70

See below, p. 439. See Neumann 1855, pp. 454 et seq. See Beer 1883, p. 145. ‘Patent. Handlungstraktat zwischen Oestrreich und Russland’, 3 February 1786, Edicta 1786, pp. 12–25. Concerning it, see the letter from Cobenzl to Joseph ii of 14 May 1785 (Beer and Fiedler 1901, 2, p. 34; and Beer 1898, pp. 97 et seq). On Austria’s relations with Russia, see above, p. 427. A similar reduction for Russian and Chinese goods imported up the Danube was granted by section 9 of the Austrian Edict. See above, p. 157. Under section 26 of the Austrian Edict, Russian subjects were permitted to buy and build houses in all the towns of the Monarchy. In six towns – among them Lviv and Brody – they were exempted from the obligation to provide quarters for the military. Austrian

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Despite this mutually favourable treatment, both exports to and imports from Russia appear, from the trade figures for 1787, to have been quite negligible.71 The explanation is that Brody was the main centre for the Russian trade in Galicia, particularly the fur trade, and the statistics do not include Brody. Some years later, there was already a considerable degree of trade with Odessa. Grain, wood and potash were sent there, to be forwarded to Trieste and other Mediterranean ports.72

71 72

subjects were granted similar favours in Saint Petersburg, Moscow, Archangelsk, Kherson, Sebastopol and Feodosia under section 24 of the Russian Edict. See Grossmann 1913, p. 230. See Demian 1894, pp. 111–12.

Final Observations 1

The Result

Although there are serious gaps in the statistical material at our disposal,1 it still allows us to sketch the development of Galician trade during the two decades between 1772 and 1792, even if only in broad outline. The absolute correctness of the figures presented here is of course less important than their relative values, the rising or falling tendency they exhibit. As I have already repeatedly shown, commercial relations between Galicia and the Hereditary Lands were negligible when the Province was annexed to the Monarchy,2 as the focal point of Galician trade with the outside world lay above all in Gdańsk and to a lesser extent in Saxony and Prussian Silesia. The explanation for this is that Galicia gravitated geographically to the Vistula river and then on to Poland and the Baltic, and thus lay outside Austria’s geographical sphere of interest, which was concentrated along the Danube. The partition of Poland, however, altered this situation in two respects. On the one hand, Prussian tariffs largely blocked the trade route to Gdańsk; on the other hand, the Austrian government’s trade policy succeeded in compensating for the loss of the Gdańsk market by opening new markets in the Hereditary Lands. Trade relations with the latter accordingly were enlivened, as the rising values in the statistics demonstrate. Thus the approximate value of Galicia’s exports to the Hereditary Lands was, in 1778 1,046,146 florins 1781 4,868,160 florins 1782 4,116,000 florins In the last two years, exports to the Hereditary Lands already amounted to almost half of Galicia’s total exports.3

1 See on this point see Grossmann 1913. 2 See Joseph ii’s comments of 1773 (above, p. 206) and von Eder’s comments of 1775 (above, p. 269, note), as well as the discussions in 1775 about the success of the first two Cieszyn fairs (above, p. 177). 3 During the same years, the approximate value of imports from the Hereditary Lands was: 1778 1,398,366 florins 1781 3,808,560 florins 1782 4,255,920 florins

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_030

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There are great difficulties involved in tracing the further development of trade between Galicia and the Hereditary Lands, among other things because a new basis was created for the Province’s trade on 1 December 1784, by the introduction of the system of prohibition and the removal of the internal customs barriers between Galicia and the German-Slav Hereditary Lands. As a result, further identification of the course of trade with the Hereditary Lands is not possible. The large increase in Galicia’s exports to Hungary and Transylvania, however, demonstrates that those to the German-Slav lands also rose rapidly after 1784. In 1778 the value of its exports to Hungary and Transylvania was approximately 627,058 florins, while in 1787 it already came to 1,974,169 florins, which means that it more than tripled in the course of a single decade. During the same period the value of imports also grew, from roughly 629,666 florins to 1,114,929 florins (in 1787), almost doubling. This large increase in Galicia’s exports to Hungary also reflects, in part, greater ease of export to Trieste from 1784 and to Turkey, as well as the Black Sea,4 to the extent that these exports did not go directly but passed through Hungary. This proves, however, that the government’s trade policy measures had successfully made up for the losses Galicia had suffered from Prussia’s tariff policy, to the north, by opening new markets in the Hereditary Lands and Hungary, and by promoting the export of goods via Trieste and to the territories which were under Turkish suzerainty. In this way, despite all the difficulties, Galicia’s foreign trade did not, by and large, decline. On the contrary, it rose, although slowly! In 1779 the value of Galicia’s trade was Exports 4,499,000 florins Import 4,099,000 florins ‘Consequently, exports outweighed imports by 400,000 florins’.5 And these figures Court Chancellery Specialist von Eger ‘regarded with pleasure’ because ‘taken together’, they ‘demonstrate that Galicia’s wealth has increased and primarily from foreign countries’.

These figures and all the following import and export figures do not include the trade of Brody, because as a free city it does not appear in the commercial tables. The extent of its wholesale trade in 1784 is indicated above, on pp. 303, note and 405. 4 See above, pp. 422 and 436. 5 These figures are probably below the normal level, since 1778 and 1779 were years of war and large military deliveries inevitably hindered foreign trade.

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The figures for 1781 and 1782 also confirm the upward tendency in Galicia’s trade. According to calculations made on the basis of customs receipts during 1781 the value of trade was Exports 9,702,000 florins6 Imports 8,500,000 florins Exports therefore exceeded imports by roughly 1,200,000 florins. It must still be borne in mind that about one million florins of this came from the export of government salt. Thus the actual surplus in the balance of trade should be reduced to approximately 200,000 florins. Both the Court Chancellery and Joseph ii were satisfied with the development of Galicia’s trade. The Court Chancellery reported that ‘despite the unfavourable circumstances in Galicia at the end of 1781 and the beginning of 1782’ (the poor harvest), ‘the influx of money has been large enough to maintain circulation at a fairly constant level. Of course, the million florins devoted to salt have not exactly made for lively turnover; in the meantime, so much of [salt] production and transport is undertaken by private industry that the trade surplus arising therefrom can be ascribed to the Province itself’. The Imperial Resolution of 25 January 1783 confirms this impression: ‘The state of exports and imports indicated in the commercial tables for Galicia for 1781 is useful information for me and the observations made on the subject by you, the Chancellery, are certainly well founded’. The figures for 1782 show a fairly significant reduction in exports in comparison with the previous year. Exports in 1782 amounted to 8,248,560 florins in value, and imports were valued at 8,482,230 florins. There was thus a negative balance over the year of about 234,000 florins. Nevertheless, the previous picture was generally unchanged by this. The fluctuation in the level of exports was to be expected in an agrarian province, without industrial production, which is after all essentially more stable. The poor harvest of 1781 necessarily had an impact on following year’s exports. Imports, on the other hand, remained for the moment at the same level. Guinigi explained that this was because Galicia did not import luxury items but only the necessary items it required. Finally it was hoped that the consequences of a poor year could be covered by a good harvest in the future.

6 This almost incredible increase within a period of two years is to be explained, in part, by the fact that the figures for 1779 were extremely low because of the war.

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That trade did in fact recover the year afterwards (1783) is demonstrated by the customs receipts, which rise from 290,832 florins in 1782 to 315,859 florins. In 1785, a well-informed contemporary was able to provide assurance that Galicia’s foreign trade would ‘increase the sum of money circulating … by between one and one and a half million every year’.7 After Galicia was incorporated into the unified customs area, on 1 December 1784, the authorities noted that in 1786 ‘the surplus trade balance of this Kingdom stood at 1,600,000 florins’. This trade surplus was, however, probably not so much achieved by raising exports as by reducing imports, a necessary consequence of the system of prohibition and high levels of protection. A year later a positive balance in foreign trade of merely 553,880 florins was achieved. Even so, this figure still shows a favourable development of Galicia’s exports when it is borne in mind that in this terrible year of famine almost two million florins’ worth of provisions was imported. The expansion of Galician trade even after the reform of 1784 can be plainly seen from the commercial tables for 1787. From these tables, comprising only trade with foreign countries, including Hungary, it is apparent that whereas the value of exports abroad in 1781 was 4,833,840 florins, it was 5,553,755 florins in 1787. Thus within six years and even though 1787 was a year of hardship exports abroad had grown by almost 15 percent. Imports, on the other hand, rose from 4,692,485 florins in 1781 to 5,559,049 florins in 1787, in other words by only 11 percent.8 To the extent that we can come to a conclusion by critically examining the available statistical material, it seems correct to assert that Galician trade was in a state of normal and constant development after 1772 and in particular between 1775 and 1787. This is even more the case as the figures on the foreign trade of this Province after 1784 only cover a part of its total trade. In other words, while after 1772, Galicia’s trade relations with the Hereditary Lands were quite negligible and its domestic market was also of minor significance, so that the largest part of its trading activities were with foreign countries, the picture

7 ‘The yield from salt sent to Poland, Holland, Silesia and Saxony exceeds one million imperial guilders. Moreover, the coarse linen, leather, wax, honey, grain, potash, saltpetre and especially wood for making staves and barrels sent abroad contributed more than half a million florins’ (Schweighofer 1785, p. 227). 8 In relation to the reform of 1784, the question arises of whether the above export figures really comprise Galician products alone or include in addition products of the Hereditary Lands exported across the Galician border and whether it still remained possible to distinguish the provenance of these items after a unified customs area had been created. This question can in fact be answered in the affirmative, since the application of the regulations on commercial stamping (see above 396) make it possible to establish the provenance of the goods destined to be exported.

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gradually changed. Indeed, Galicia’s trade relations with the outside world did also grow significantly, despite serious obstacles, but as we have seen, a significant trade developed with the Hereditary Lands alongside these and in parallel, at an accelerated tempo. Only by adding to the foreign trade figures this kind of trade and, further, the large-scale military deliveries and the rising internal consumption by the population and civilian administration, can an approximately accurate picture of the Province’s overall external trade be obtained from the research results. Galicia’s transit trade also developed favourably, although it displayed great fluctuations from year to year.9 This development only appears to have been set back in the years 1791 and 1792, after Joseph ii’s death, when trade was trade was hit hard by political events and particularly the Second Partition of Poland and the subsequent unrest. A question remains, as to the size of Galicia’s trade in comparison with the other Hereditary Lands. The commercial tables for 1787, mentioned by [Carl Ferdinand von] Hock and [Hermann Ignaz] Bidermann,10 would have provided an important basis for an answer, because they would have been particularly suitable for comparison with the Galician trade statistics for the same year. Unfortunately, in their book, these are only provided in fragments that cannot be evaluated. There is therefore no other option than to find the relative magnitude of Galicia’s trade by using customs receipts. According to them, 6.42 percent of the total yield of customs duties on the Austrian side of the Monarchy came from Galicia in 1785 and 6.94 percent in 1786, while, for example, 7.8 percent in 1785 and 12.6 percent in 1786 came from Bohemia. Considering that Galicia had to catch up after over a hundred years of neglect, the success of Austrian tariff policy in this Province is apparent in these figures, achieved within a period of scarcely one and a half decades. This certainly cannot be described as unfavourable. Only in the critical years of 1791 and 1792 was there a decline in Galicia’s share in the overall trade of the Hereditary Lands. Its contribution at that time fell to scarcely 4.7 percent. 9

10

The following figures can be established for the period of Joseph ii’s sole rule 17813,775,800 florins 17822,920,000 florins 17833,658,870 florins 17872,404,326 florins In 1787 there contributed to this trade, in thousands of guilders: Brody 619; Prussia 612; Turkey 462; Hungary 440; and Poland 265. Hock and Bidermann 1879, p. 557.

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On the other hand, the general commercial crisis which followed the outbreak of the French Revolution and the naval war between England and France11 had the effect that the exports of the Hereditary Lands, deprived of their external markets, exerted greater pressure on the domestic market and this inevitably had a severe impact on Galicia’s young industries.

2

The Struggle over the Direction of Trade Policy

We have arrived at the conclusion that no aspect of the legend about Galicia’s trade, described in the introduction, is valid. After two decades of Austrian rule, Galicia’s trade was far from being in decline. On the contrary, despite the severe crisis it had to overcome, it displayed a not insignificant upswing.12 The role of the Austrian administration also appears to be different from the way it is presented in the literature. There is no doubt that the favourable development of Galicia’s external trade took place thanks to the energetic and uninterrupted efforts of the government, which embraced all sides of economic life. There is nevertheless no need to be surprised that, despite these results of Joseph’s trade policy, claims to the contrary were spread wide and believed. Joseph’s economic policy represented the interests of the whole Province and not just the small group of privileged landowners. This brought it into insurmountable conflict with the nobility, which felt deeply wounded by this ‘revolution emanating from the throne’13 and was never able to forgive the Emperor. In the well-known pamphlet on the downfall of Galicia, which is imbued with a spirit of repugnance to any kind of progress, the nobility attacked Joseph’s reform programme with ruthless rage and the same hatred that they displayed in response to Chancellor Zamoyski’s draft reforms, six years earlier in the Polish Republic.14 Was it to be wondered if this subversive pamphleteering, which

11 12

13 14

Zimmermann 1892, p. 1. Galicia, needless to say, did not become ‘rich’, any more than did the neighbours with which it had trade relations. ‘On ne s’enrichit pas avec des nations pauvres’ [‘With poor nations one does not become rich’], [Charles Gravier de] Vergennes wrote in 1783 (Levasseur 1911, pp. 537–8). Beidtel 1896, 2, p. 4. See above, p. 321. According to Observations on … the Decay of Galicia, ‘From the decision to make all estates equal and admit the common people to all honourable positions and, no less than this, the attempt to civilise the mob, it is agriculture that loses most … For if the mob is permitted to exercise general prerogatives, the number of agricultural workers declines’. The nobility particularly hated universal education:

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was incidentally stimulated by the subversive Prussian activity of Lucchesini,15 made assertions which glaringly contradicted the truth, without worrying too much about the choice of its arguments?16 It is easy to understand that the nobility had sufficient reasons to complain. Its claim to identify its own situation with that of the Province, however, needs to be rebutted. In section 68 of the pamphlet under discussion, for example, reference is unexpectedly made to the ‘general decline’ of the Province,17 although in all the previous statements the nobility had referred only to itself.18 The nobility’s attitude to the question of trade was no different. The crisis brought about by the Prussian tariffs could have had the most frightful consequences. It was only the government’s energetic action that softened its impact and even led trade to flourish. The nobility as a whole was, however, hostile to these efforts. No proposals, no desires, no suggestions about how to adapt to the new and difficult circumstances emerged from its ranks. Distilling spirits and exporting grain to Gdańsk were the two sources of its own welfare, tried and tested by tradition and routine. It therefore saw these as the characteristic features of the Province’s prosperity.19

15 16 17 18

19

The father wastes his resources on the education of his son … The peasant’s son forgets his destiny; he forgets that he is born for the plough and begins to think of ways of raising his estate … To civilise a nation means the same thing as enlightening it, so that it perceives its deficiencies and shortcomings. That is what the nobility regards as dangerous. ‘For even under the gentlest legislation, the peasantry will hardly stay contented when it sees the more fortunate ruling over it’ (Anonymous 1790b, paragraphs 63 and 64, pp. 333–5). The wish was expressed for landowners to be freed from the obligation to set up elementary schools (see Starzyński 1893, p. 10). Kalinka 1895–96, 4, sections 123 and 124. See below, Appendix 1. So, for example, it asserted that the population of Galicia had declined under Austrian rule (Anonymous 1790b, paragraph 48, p. 322). Actually it had increased. Anonymous 1790b, paragraph 68, p. 344. The anonymous author of Magna Charta [i.e. Anonymous 1790a], a pamphlet directed against the Observations [i.e. Anonymous 1790b], correctly brings the charge against the nobility that a generalisation of this type is only possible ‘if one begins with oneself and puts one’s own welfare at the centre of general welfare’ and if one shares ‘the prejudice … that the nation of Galicia is concentrated in your persons’ (Anonymous 1790a, pp. 226, 228). Wurzbach (1864, p. 472) ascribes the authorship of the Magna Charta to Governor’s Office Counsellor Ernst Traugott von Kortum. This claim has often been repeated since then (see for example Mises 1902, p. 141, and Tokarz 1909, p. 13). Its contents make this improbable, because Kortum himself was one of the most zealous advocates of the nobility’s interests. Whether, on the other hand, Kratter was the author of the pamphlet, as Starzyński (1893, p. 2) thinks, is a matter which can be left undecided. What demonstrates the prosperity of the peasants? Certainly the substantial income that Galicia derived from the tax on alcoholic beverages. For if the peasant, apart from providing for the upkeep of himself and his family, was able to sacrifice a sizeable part

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Since the export of grain to Gdańsk had declined in comparison with the ‘good old times’. this seemed to it to mean the collapse in trade as such. Imprisoned in its narrow caste mentality, the nobility was incapable of making any proposals that would serve general interests. In the second part of the pamphlet, which discusses the ‘means of helping the Province back onto its feet’,20 there is only a single demand about trade policy: the call for a reduction in the Vistula duties.21 Anything without a direct connection with the export of grain was a matter of supreme indifference to the nobility. And its lack of understanding of trade policy was matched by its incomprehension of the problems of industry and craft production.22 Even the Hungarian nobility – which was itself zealous enough about safeguarding its own interests as an estate – demonstrated a less narrow caste mentality and greater concern for general economic interests. At the Parliament of 1790, it formulated a series of requests relating to trade and industry policy, and elected a ‘Deputatio Comercialis Tricesimalis’ to examine the matter and present its proposals to the next Parliament.23 It would nevertheless be a completely inadequate approach to judge Joseph ii’s trade policy simply with reference to the greater or lesser percentage increases in Galicia’s foreign trade and to be satisfied with establishing that previous assertions about its decline are incorrect. The economic policy makers of Joseph’s time had a different conception of the tasks and purpose of trade policy and can be allowed to be assessed according to their own standards. To do justice to Joseph ii’s trade policy, it should not be artificially isolated from the Emperor’s overall work of reform. For it can only be understood and evaluated in that context. The skewed balance of trade doctrine was never an article of faith for the economic policy makers of Joseph’s time. Sonnenfels distinguished in his the-

20 21 22

23

of his income to the enjoyment of a luxury, it would have to be concluded (and this is in fact the case) that the considerable consumption of spirits and other beverages gives the impression that the Galician peasant was much better off than the peasants of other countries (Anonymous 1790b, paragraph 11, p. 288). Anonymous 1790b, paragraphs 70–96, pp. 345–65. Anonymous 1790b, paragraph 91, p. 361. The Galician nobility took a similar standpoint to that in the Observations [Anonymous 1790b], in two official texts of 1790. Neither the Exposé of 23 April [Zakład imienia Ossolińskich, 525, pp. 616–19] nor the so-called ‘Charta Leopoldina’ of 19 August [Ossoliński 1893] sets out an economic programme for the recovery of the Province. Nor do they contain a single demand which has any bearing on trade or industry (Zakład imienia Ossolińskich 525, pp. 616–19 and 633–46). See Grellmann 1795–1802, 2, pp. 153 et seq. [‘Deputatio Comercialis Tricesimalis’ means ‘Deputation Concerning the Tariff of a Thirtieth’.]

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ory between the merely numerical balance and the balance of advantage: ‘The numerical balance may be equal’, ‘even against a nation’, ‘yet the … balance of advantage … may be in favour of it’. A numerical balance of trade, even if positive, he pointed out, is not a goal in itself, if does not offer economic advantages at the same time. The purpose of trade is ‘to increase the employment of citizens … Money which is the basis for calculating the numerical balance, is therefore a subordinate goal and a state only possesses a balance of advantage if the goods it exports employ a greater mass of people’.24 Symptomatic significance was occasionally ascribed to the balance of trade, as well as to the balance of payments25 and attempts were made to influence both favourably. But the purpose and objective of Joseph ii’s reform work, in comparison with which all other measures only had subordinate importance, was to improve the balance of the economy, to raise the economic level of the country as a whole.26 The agrarian reform on the one hand and urban reforms and industrialisation of the Province on the other were the two poles of Joseph’s broad economic policy programme, in comparison with which tariff and trade policy must be seen as less important, merely one isolated element in his overall efforts. As a result of the shift of its emphasis onto the ground of industry policy, however, Joseph’s trade policy was caught up in the contentious area where there was a collision between the interests of one-sided agrarianism and industrialism, between the nobility, which lazily persisted in the conditions inherited from its ancestors and remained inaccessible to any progress or improvement, and the state administration, which was striving for more balanced economic development in the Province and the expansion of its productive forces. The issue, in brief, was whether trade policy should continue to serve purely agrarian interests or whether industrial interests should also be considered. The struggle opened by the noble landowners after the death of Joseph ii against his life’s work, which marked the beginning of the restoration period, was merely one final episode in the uninterrupted guerrilla war the nobility had waged against

24

25

26

Sonnenfels, 1771a, 2, paragraph 330, pp. 501–2. [Sonnenfels emphasised ‘numerical balance’, ‘equal’, ‘balance of advantage’, ‘to increase the employment of citizens’, ‘Money’, ‘numerical balance’, and ‘balance of advantage’.] ‘A province’, remarked Schweighofer in 1785 (p. 198), ‘can genuinely profit [from trade] and yet at the end of the year be no richer than it was at the beginning … Most of the income the land receives may perhaps be in the hands of persons who reside entirely outside the country. The conclusion to be drawn from this is that, notwithstanding its superiority in trade, the Province loses’. In order to influence the balance of trade favourably, Joseph ii took action against the absenteeism of the Galician nobility, by imposing a double land tax on manor-owners who lived abroad. See above, p. 360. See Heyking 1880, pp. 21–2.

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the Emperor’s reforms while he was still alive. In this struggle, the nobility was able to make use of a section of the bureaucracy itself, which was by no means unanimously devoted to the work of reform. In the Galician Governor’s Office in Lviv, there were also both friends of reform and powerful opponents, like Count Brigido and Governor’s Office Councillor Kortum, who ‘knew how to win the confidence of the nobility’ and in many respects supported ‘the demands of the Province’,27 which meant nothing other than blind opposition to the promotion of industry, as will soon be demonstrated. To describe this struggle goes beyond the limits of the present investigation. Here only those episodes, which throw an extremely interesting light on Austrian trade policy and its consequences and make its historical evaluation possible, will be singled out. It is highly significant that the development of Galician trade was very vigilantly followed in Vienna. The Lviv Governor’s Office made the incidental remark in its report of 6 June 1785 that ‘the trade of Galicia is growing ever less and the former sources of wealth and prosperity have almost dried up’. The Court Chancellery immediately sounded the alarm about this ‘extremely disquieting comment’ and instructed the Governor’s Office to explain ‘which items had declined from year to year and how far they had done so’ and to provide ‘reliable proof of this in tabular form’.28 Despite the tears shed by the Governor’s Office over the alleged decline in trade, it was as a matter of fact, in no great hurry to provide the elucidations required. It took almost half a year before its report was ready and when it was finally delivered, on 27 December 1785, it did not provide any proof of its assertion but was content to expatiating long-windedly ‘on the causes’ of the alleged decline. Provincial Specialist Kortum began his account with the innocent explanation that when referring to the ‘drying up of the sources of wealth’ he meant the loss of the Gdańsk export market. ‘The main items which formerly brought back such large sums of money to Galicia’. he said, ‘were grain, salt, cattle, skins, linen, honey, wax and potash, along with less important products. If salt and cattle are left aside, along with certain insignificant exports to Silesia, everything else passed down the Vistula to Gdańsk’. This ‘Galician trade, like the

27 28

See Łoziński 1872, pp. 58 and 105; Starzyński 1893, p. 61; and above, p. 387. Report of 20 June 1785, Resolution and Court Decree, 5 July 1785. This and the following are from ami, v G 12/2968 ad 12 ex Februario 1786. The Imperial Resolution is: ‘It has been agreed that the alleged decline in Galician trade is to be investigated thoroughly and the results of the investigation are to be laid before me in a detailed presentation as soon as possible’.

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Polish trade in general, had always (until the partition of Poland) been in surplus, which is certainly the most advantageous and safest kind of commerce’. It is true that inhabitants showed ‘a certain amount of inactivity and negligence, indeed complacency’. ‘They were unconcerned about the further processing of their raw products by a foreigner or about what he might gain if they imported their own products from abroad in an altered form’. Notwithstanding this, and despite the lack of factories and workshops within the Province, ‘the balance of trade was always very advantageous for Galicia’. With the partition of Poland, this situation changed, he wrote. ‘Gdańsk ceased to be the free market to which the Galician manor-owner could deliver the products of his estates, which cost him little trouble or money to produce, without incurring more than a few transport expenses … [Subsequently] the symptoms of decline were visible everywhere’ and profits declined. ‘The requirements [of the Province] and the return loads did not, however, decline, apart from a few so called imaginary needs for luxury goods … The adverse balance for Galicia soon became apparent; this was first and the most obvious cause of the decline in Galicia’s wealth’.29 Kortum was not, of course, able to comply with the central government’s request for statistical evidence for this assertion. He excused himself with the remark that from neither ‘information about goods entering and leaving the Province nor commercial tables can certain conclusion be drawn as to whether the balance of trade is advantageous or disadvantageous’. He did not indicate what other sources he had used to derive the news that Galicia’s balance of trade was in deficit. He soon abandoned the terrain of customs duties and trade, turning instead to make a fierce attack on the Emperor’s three great reforms, which, like Count Brigido, he never tired of combatting. The chief object of his hatred was the agrarian reform. The labour services [robot] of the serfs, he pointed out, had been reduced and various subsidiary obligations had been abolished. ‘Now the landowner can no longer produce from his manor the same quantity of produce as formerly, at least not as inexpensively as formerly. Still less can he have them taken to market and turned into money as readily’. And the damage done to the manor-owners was not even compensated for by corresponding benefits gained by the serfs. On the contrary, the good deed of agrarian reform ‘has unfortunately been misused by people who, like children, call for emancipation before they are strong enough to rule themselves, to look after themselves and to enjoy freedom without [it being] misused’. Consequently, ‘the amount of manor-owners’ produce [has]

29

[Editor’s interpolations.]

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declined, without being replaced by products of hard work by the serfs … Galicia, which previously conducted agriculture as a commercial activity, is coming ever closer to the condition of those countries which can only engage in it, the first source of wealth, as a means of subsistence … But if a state’s wealth consisted in the quantity of its products, particularly those of a province which nature itself has marked out for agriculture, this circumstance appears to reveal that a second source of Galicia’s former wealth has now been stopped up’. The long disquisition culminated in a piece of practical advice: it seemed desirable ‘that the peasant, who misjudges his own welfare should only be prepared to enjoy his good fortune in stages’. Even more tendentious was the part of the report where Brigido-Kortum opposed the industrialisation of the Province which the central government strived for, in other words its tariff policy and industry policy. Instead of greeting the abolition of tariff barriers between Galicia and the German-Slav Hereditary Lands with enthusiasm, as a reform which placed Galicia in a position to find a replacement for the loss of the Gdańsk market, they described the measure as ‘against nature’. ‘Nature [has], as it were, determined the course of Galicia’s trade because of high mountains [to the south and west of the Province] and the way the rivers run northwards and eastwards … The capital [Vienna] and all the other Hereditary Lands need almost no Galician products, apart from a few insignificant items’. To shut Galicia off from the outside world by the new tariff system would have the effect of excluding the Province ‘from all trade: to the north and the east by customs laws and to the south and west by the laws of nature’. Kortum did admittedly concede, contradicting his earlier assertion, that import prohibitions have led to an increase in domestic production and that trade relations with the Hereditary Lands have expanded, particularly since 1784. But, in his opinion, the fact that ‘the number of Galician Jews coming to Vienna to buy manufactured goods, since the new customs system was introduced, is not a reliable barometer of the state of trade and a merchant’s rosy countenance in the capital city does not prove that trade is healthy throughout the Monarchy … Every guilder that goes from Galicia to Vienna is just as certain to increase the wealth of the city as it is lost to Galicia’. Kortum fails to mention that the Hereditary Lands not only delivered goods to Galicia but received large quantities of goods from the Province. So he came to the curious conclusion that the new tariff not only failed to achieve the Emperor’s aim of curbing the outflow of money but actually facilitated it. ‘There is no flattering side’. he concludes ‘to the picture we are painting of Galicia’s trade’. And he expressed the fear ‘that owing to Galicia’s complete dependence on other provinces for all manufactured goods, both luxuries and, primarily, items of everyday necessity, it will gradually become entirely powerless and all cash

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will completely vanish’.30 With reference to the central government’s industry policy measures, Kortum argued that it did not just seek to counteract the outflow of money by prohibiting the importation of foreign goods. It attempted, rather, to make the importation of foreign goods unnecessary by establishing industries in the Province. At the same time, he, himself, referred to the Court Decree of 12 August 1785, in which the provincial Governor’s Office was directed to send reports answering these two questions: ‘a) What kind of factories are particularly necessary for Galicia?’ and ‘b) how can they be accommodated and made viable?’ In this context, it was mentioned that the Emperor was inclined to promote the settlement of Bohemian ‘manufacturers’ in Galicia. The reports of the Galician Governor’s Office, however, judged the project negatively. To bring foreign entrepreneurs into the Province, it stated, and to encourage them to set up factories by giving them advances was not advisable, even if these were honourable and reliable experts, because Galician entrepreneurs should be preferred in this respect.31 But since the Province lacked such people, Kortum’s advice amounted to a recommendation to abandon the promotion of industry altogether. That was clearly just what Kortum wanted. For years, in association with Count Brigido, he had been trying to divert the attention of the government in Vienna away from its great reforming tasks and to direct it towards another subject: the Jewish question. Once set in train, this would give the government enough to do and would certainly dampen its enthusiasm for reforms in other areas or at least delay them. Kortum him30

31

The report requests the alteration of the new tariff. It is clear that this would by no means be capable of stemming the outflow of money, even from the standpoint of the report. The sole result of such a measure would be to divert the flow of money from the Hereditary Lands to foreign countries. Kortum even admits that for the most part imports are essential industrial items. The word ‘manufacturers’ can either be understood to mean entrepreneurs who engage a large number of hands and machines to produce one or another kind of commercial goods; or those who are generally described as individual artisans and craftspeople working on their own account. We lack both … If the factory entrepreneurs are foreigners, they will either be people who only want to improve their bad circumstances by means of new enterprises and by receiving advances, and to try their luck abroad. These would never be the appropriate kind of people to enrich a new country by setting up factories … Or they will be well off, respectable and reliable people; although they may be better, they do not act or think in a purely patriotic way and they will always want to draw an advantage from changing their place of residence and transferring their industries to another province. They therefore demand active and generous support, and indeed rightly so. It is not advisable to give this support. If ‘Your Majesty [wants] to give support to factories and workshops in the Province, we would wish that this is mainly given to local entrepreneurs, whose advantages and disadvantages we would be able to distinguish’.

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self readily admitted this. Any attempt to promote industry, he asserted, would remain unsuccessful if the Jews were not previously driven from the towns and their economic roles.32 He therefore answered the question posed by the Court Decree of 12 August 1785 in this way: ‘in these circumstances … it was his bounden duty to advise against bringing in foreign manufacturers of whatever kind, because this was a measure whose favourable effects could never stand in any relation to the cost of employing it’. In order to remove any doubt at all about his real intentions, however, he formulated his economic policy credo as follows: ‘Assuming that after the removal of all these obstacles and the expenditure of large sums of money Galicia could finally, after many years, pride itself on possessing sufficient factories and workshops, the prosperity of the Province which it was hoped to achieve thereby would still remain extremely precarious’. In short, as a representative of agrarianism’s proponents, he not only believed that Galicia was destined ‘by nature itself’ to be exclusively agricultural, he also opposed industrialisation primarily because he thought that agriculture was a more productive source of wealth. The report from the Galician Governor’s Office had hardly arrived in Vienna before the United Court Offices energetically opposed the views presented in it. Specialist Baron von Margelik, who had himself travelled through Galicia shortly before and was thoroughly familiar with the situation there, bitingly pointed out that the Governor’s Office had ignored the instructions given to it and limited itself to general explanations and assertions;33 and he now cri-

32

33

As is well-known, the Jew is everything in Galicia. He is a burgher. He is the basis, the principal constituent of the urban population. His sense of solidarity makes him the only person in a position to ward off the advance of industry. That is what experience says. He was always an obstruction to the expansion of urban industry; and now that the Jews have been allowed to pursue all kinds of civil crafts (without means to reduce their numbers, so that it is overwhelmingly likely that their numbers will grow from year to year) the possibility of successfully settling foreign factory owners and craftspeople in towns where Jews live has also disappeared, even if they are given every support. In his report, Kortum did not present any specific demands. But these were well-known in Vienna. They were the ceterum censeo which Brigido and Kortum had been indefatigably repeating for years, the central point of which was to be the establishment of a numerus clausus for Jewish families. [‘Ceterum censeo’ is short for ‘Ceterum censeo Carthaginem esse delendam’ Cicero’s phrase meaning ‘furthermore, I propose that Carthage is to be destroyed’, in this context the call for the destruction of Galicia’s urban Jewry. ‘Numerus clausus’ means a ‘limit on the number’ of a particular category of people.] ‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei, Hofkammer und Banco Deputation’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786. ‘The

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ticised it, point by point so tellingly that his report can be regarded as one of the finest documents produced by the Josephine bureaucracy, fully aware of its lofty objectives and tasks. He naturally admitted the sad fact of the economic crisis following the loss of the Gdańsk market, which had been brought about by the partition of Poland.34 Was this a result of the government’s economic policy, he asked, or was it not rather a pre-existing condition and a starting-point for that economic policy? Poland also suffered from the consequences of the partition; the only difference was that the loss of the Gdańsk trade had far more adverse consequences for Poland because, unlike Galicia, ‘nothing has been done for the good of the country’. In Galicia ‘this nation is gradually being reconstructed by benevolent laws’, new sources of prosperity are being opened up, which will, ‘with time, compensate for the disadvantage imposed on the Province by the great political conflict’. If the effects of trade measures were to be assessed correctly, the interests of large landed property alone should not be considered. ‘It is clear to every person at first glance’, Margelik continued, ‘that this [previous] stronger trade and influx of money did not help the Province in any way and did not improve it in any respect. The countryman still lived in wretched wooden, smoke-filled hovels and shared his dwelling with his livestock’. The towns were neglected and consisted ‘almost exclusively of inferior wooden houses’. Galicia, Margelik continued, lacked everything which can make a human life enjoyable … Here and there, of course, one did find a few so-called palaces, built and decorated with taste, and even in the wooden country dwellings of the wealthier nobles one mostly saw French and English household equipment, which contrasted all the more with their surroundings but in particular with the peasant’s miserable hut and wretched equipment … It is precisely this situation which proves that the money brought into the Province by the Gdańsk trade only passed into

34

remarks of the Governor’s Office are erroneous, in part exaggerated, as they chiefly arise from isolated opinions and in part from local prejudices’. It would have been more desirable ‘if it had forwarded for our examination the tabular information … explicitly required’. ‘It is undeniable that the severing of a part of a country from the whole, as Galicia was from Poland, inevitably inflicted upon it a violent and long lasting shock, and disrupted all moral and commercial relationships. It is equally undeniable that the trade going to Gdańsk before the reacquisition was on a much larger scale, was far more advantageous, and brought more money into the Province’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786).

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the hands of the more powerful owners of manors and was then sent back abroad, chiefly for the purchase of luxury goods. As a result, this trade certainly brought little increase in resources to the Province itself. Now, of course, less was exported to Gdańsk. This was a consequence of Prussian tariffs and the Governor’s Office was wrong to assert that the reduction in exports to Gdańsk indicated a decline in production. According to the population tables, the population of Galicia had increased by some 300,000 since 1772.35 In addition, seven cavalry regiments and five infantry regiments were quartered in the Province, without counting the increase in civilian officials. And Margelik thus arrived at the conclusion that ‘Galicia is certainly richer in people and natural products than it was in [Polish] republican times; and if less grain, salt, linen, honey, wax and potash and fewer cattle and skins are sent to Gdańsk than previously, a much greater quantity of all these products is now consumed in the Province itself by the soldiers quartered there and the civilian officials’.36 Margelik also explained how the other assertion of the Governor’s Office, that Galicia was becoming monetarily poorer, was inaccurate. For, previously, the rich income from the royal manors and salt works went straight to Warsaw and the greater part of the other income from Galicia’s manors also took that path. The ducats brought by the Gdańsk trade into the Province, on the other hand, appeared temporarily in Lviv during the period when contracts were made and often passed through the hands of ten people in a single day, but then withdrew along with their final owners to Warsaw, Frankfurt and Leipzig, or to Italy, France, England etc. Now this money, for the most part, remains in the Province. The essential difference is that previously the ducats obtained in exchange for the Province’s rural products went straight into the purses of the landowners and their Christian and Jewish lease-holders, and from there were trans35

The population of Galicia was:

1776 1785 1790 36

Christians

Jews

Total

2,436,596 3,017,059 3,200,730

144,200 212,002 188,002

2,580,796 3,229,061 3,388,732

[Translator’s interpolation.]

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ferred abroad again … In contrast, a great part of this money now already flows to the poor countryman, who was previously mainly paid, in the end, with scorn, curses and blows for the contribution he made to the flourishing commercial activities of his lord by the sweat of his brow … Previously Galician country people actually received little for themselves and sometimes nothing at all … as the land owners regarded and treated everything that their serfs earned as their property, so that serfs were happy if they were only left with the most essential food and clothing. The view that the reduction in the turnover of money during the Lviv contract negotiations proved that the amount of money in circulation had fallen was equally false, wrote Margelik. Before the partition, credit business was conducted in Lviv not just for Galicia but for the whole of Poland. Now the landowners on the other side of the border conduct their business in Dubno. The reduction in the number of credit transactions in Lviv is a natural and obvious consequence, and is by no means a symptom of a shortage of money and a decline in trade. But, to the extent that this reduction in credit transactions had actually taken place, it is no cause for complaint but is, rather, desirable, as this kind of credit was unhealthy and only increased the indebtedness of the manor-owners and the oppression of the serfs. With equal incisiveness Margelik rebutted the second group of arguments, which made Joseph’s agrarian reforms responsible for the ‘decline’ in trade.37 He did not deny that the landowners were in a difficult position.38 But, he insisted, the nobility would, with time, be able to adapt itself to the new conditions with more intensive livestock-rearing and particularly by converting their

37

38

It was not difficult to guess that the Governor’s Office would seek to present the reduction in labour services as a reason for the decline in trade, given the continuing fervour with which it has endeavoured for some time, together with the deputies of the College of Estates, to contest and to reverse this reduction in labour services on every possible occasion … This new attempt to cast an unfavourable light, yet again, on the reduction in labour services, which was found to be necessary after much mature reflection and was repeatedly and expressly determined upon by Your Majesty, is, of course, the more remarkable in that the Governor’s Office previously, when the question of regulating labour services and rural relations in general was under discussion, proposed a much larger reduction in labour services (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘It can also be willingly conceded to the Governor’s Office that the landowners now no longer raise the previous quantity of produce and cannot take it to market and turn it into money as easily’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786).

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manors into smaller plots leased out for rent.39 On the other hand, the losses incurred by the nobility and by commerce as a result of the agrarian reforms would be recovered thanks to the immeasurable advantages gained by many millions of peasants. To say that the peasants did not know how to use their freedom was a one-sided exaggeration, of which the manors had also allowed themselves to become guilty.40 The grain of truth in this assertion, namely that peasants have, to some extent, not always made a proper use of their freedom, was an unavoidable transitional phenomenon and would not prevent the state from undertaking its intended reforms.41 The state was convinced that the country people would gradually develop into good farmers and based this conviction not on its faith in some kind of ideal motivation but rather on the expectation that their own interests will lead the peasants to pursue other and better paths.42 This hope was also justified by experience. For, in places where country people enjoy freedom, the results of their economic activity was grat-

39

40

41

42

Only … through sensible measures can the landowner [now] be helped in part and at least gradually. Extensive ways and means by which these manors, that have too much land and too few hands performing labour services, can be induced to engage in a more appropriate kind of agriculture and land use [have] been placed in the hands of the Governor’s Office. [On this subject], the Governor’s Office could gain much practical advice from the local administrator of the royal manors, who is at present busy with the complete abolition of labour services on all royal, ecclesiastical and monastic manors, and the Governor’s Office could impart this knowledge to the College of Estates, as well as to individual leading manors, which are complaining about the reduction in labour services. (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘These remarks were, in part, already made by the estates and provincial officials in a number of other Hereditary Lands as soon as work began against the domination of the landowners, which had been excessively favoured in some places, and to restore the poor countryman to his original and consequently incontrovertible rights, which are intimately and inseparably connected with the general welfare’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘This consideration of a lesser and transitory evil cannot prevent a wise government, with the best interests of the whole people at heart, from instituting laws which, even if they do not bring forth the expected fruits at the present moment, will after some time be truly useful to the future generation’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘For the state is the most certain guarantor of the country people’s gradually burgeoning diligence and of their future industry, of that effort, deeply imprinted in the heart of all people, to protect themselves and their families from deprivation and poverty, and the no less powerful yearning to promote their own and their families’ welfare’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786).

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ifying.43 And there was still more reason to hope for this in the future, once schools and education had awakened the souls of the later generation from their slumber.44 Kortum’s slanders against the new tariff system and the industrialisation of Galicia were full of many and obvious contradictions. They were so transparently biased, that Margelik limited his comments to simply pointing this out. The Galician Governor’s Office, despite its complaints about the outflow of money from the Province, was opposed to the tariff system which was intended to curb it. The new tariff had been in operation for too short a time to attribute the decline in trade to it. In any case, it was expected to produce an effect on industry rather than in the area of trade. Its objective was to increase industry and the number of factories,45 which the Governor’s Office certainly did not appear to desire. It was known in advance that the industrialisation intended would be costly and difficult to achieve.46 Did that mean agreement with the Governor’s Office when it ‘advised entirely against sending in foreign

43

44

45

46

The Galician Governor’s Office could also have completely convinced itself of this by perusing the reports of District visits and the reports on matters relating to the abolition of labour services, because both sources confirm that the serfs, wherever they have been completely freed from labour services or even where they have been simply treated more humanely and gently, have so distinguished themselves by their constant diligence and industry that their houses and fields stand out on first glance from those of the others. This is clear proof that proper freedom and moderate profit are always more powerful driving forces and always awaken the forces slumbering in human beings, always stimulate a person who has not sunk to the level of a chattel more than the cane and the whip! (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘Other essential measures, namely the improvement of schools and the clergy, who have so much influence on the national character, will have to proceed in tandem with the present regulations, in order to make future generations, at least, fully receptive to the benefits they grant their fathers’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘In Galicia, if the diligence of the artisans can be increased and workshops and factories, which are still completely absent, can be established and supported, so that this Province is freed from its former complete dependence on other provinces for luxuries and majority dependence for essential commodities; then the new tariff system will have the same beneficial consequences for this Province as for all the other Hereditary Lands’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786). ‘It was possible to know in advance that the settlement of individual manufacturers, and still more the construction of whole factories and workshops in Galicia, will always be very costly and involve many complications and difficulties’ (‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei …’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786).

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manufacturers’ and baldly asserted that Galicia would ‘never [be] able to count on lasting prosperity’? Instead of answering the central government’s question, ‘what manufacturers would it be best to send to Galicia and to allow to settle there?’ it had ‘tried to evade the issue’ with ‘completely exaggerated notions’ and contentless phrases. Margelik concluded by presenting ‘incidental information about the main goods which Galicia lacked’, remarking that this again confirms the long recognised truth that the Province mainly lacks the most common types of goods, such as cloth, woollen fabrics, glass etc., exactly the items in whose raw materials the Province is wealthiest and which become too dear because of the cost of transporting them from distant, though friendly Hereditary Lands … The government could at present give some attention to all these objects which have been provided by nature itself; encourage their production with sensible institutions and some support from the income of the Province; and in the course of time give this nation a gift, in the shape of the impulse towards diligence and the repression of idleness and crude self-indulgence, for which later generations will bless the government which first laid such foundations. Margelik’s arguments met with the approval not only of the United Court Offices, but also the Emperor, who said that he was ‘very well pleased’ with them.47 If we now consider Austria’s trade policy in Galicia as a whole in broader perspective, the following picture unfolds before us. All the historical changes in western European mercantilism, over a period of more than two centuries, can be observed in Galicia within the span of less than two decades in short phases, one rapidly following the other. First, the mechanical attempt to increase the prosperity of the Province by making sure that money did not leave it. Then efforts followed to increase the quantity of money by making profits from foreign trade. Finally the welfare of this Province was sought in industrial production. This was what the central government, with the Emperor at its head,

47

Resolution, 1 February 1786, and ‘Hofdekret an das galizische Gubernium’, 4 February 1786, in ‘Vortrag der vereinigten Östereichischen Böhmischen Hofkanzlei, Hofkanzlei, Hofkammer und Banco Deputation’, 19 January 1786, quoted from ami, v G 12/2968 ad 12 ex Februario 1786.

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wanted, as did German publicists. During the important year of 1785, which marks the beginning of this final phase of policy, [Johann Michael] Schweighofer wrote: The management of Galician … industry requires great care … there can be no question of whether they [factories] ought to be included in the Austrian section of Poland or not … the state cannot do enough to increase their number and promote their establishment … By increasing all kinds of crafts in Galicia … trade with Bohemia, Moravia and Austria will certainly be reduced because the Province will then provide for itself many of the commodities previously acquired from the above mentioned lands … This cannot and must not hinder the establishment of industry in Galicia. It is the duty of the ruler to love each part of his state equally and not to sacrifice the welfare of one Province to another. The inhabitants of each have the right to call on their ruler to care for them and to provide for their welfare … In Galicia and Lodomeria, therefore, crafts must be developed regardless of the consequences.48 The true character of Joseph’s trade policies for Galicia only becomes clearly apparent in the context of his general objectives. A greater contrast between the abandoned orientation towards agriculture and the new economic policy is scarcely imaginable. It cannot be denied that, from the standpoint of the Galician nobility, this change in the system of economic policy was almost equivalent to a social revolution. By the force and rapidity with which it set in, this policy threatened to displace large landowners from their previously dominant social position in favour of new elements. At that time, it was ‘perhaps easier for the nobility to get over the loss of a province than to accustom itself to the idea of the emancipation of the peasants and the restriction of the nobles’ privileges’.49 It is therefore not surprising that the noble landowners, who suffered all these blows after the incorporation of Galicia into the Austrian state, viewed the government alone as the source of their misfortunes. To our eyes, however, in historical perspective and at a distance of almost one and a half centuries, everything looks very different. When the First Partition took place, Poland was a feudal, agrarian state; the nobility was the sole repository of the state idea. Thanks to one-sided economic policy, towns were

48 49

Schweighofer 1785, pp. 229–31. Kraszewski 1902, 1, pp. 87–8.

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in decay, abandoned to the violence of the all-powerful nobility, having lost their previous autonomy and independence. They did not offer conditions in which industry and commerce could arise and develop, nor was any element to be found which could extract them from this hopeless situation. The Polish state fell victim to complete decentralisation. There was no central administration, so there was no independent judicial system or protection of legal rights, nor any legal security; state policies for industry and the promotion of trade were lacking; land transport was as imperfect as the organisation of credit; the educational system was as inadequate as the urban police force; all other social classes were ground down by the omnipotence and wilfulness of the nobility. And although this degeneration of the state organism was allegedly in the interests of agriculture, it was nevertheless in an extremely critical condition. The extensive economy of the latifundia, accompanied by boundless oppression of the peasantry, had the effect that agriculture was conducted ever more irrationally and thus became ever less profitable. Since the nobility itself suffered frightfully from the political disturbances, the confederations,50 the passage of foreign troops and, not least, the costly constitutional apparatus of the Republic, with its interregna and royal elections, its many national, provincial and local parliaments. These led to a level of debt which amounted to three quarters of the total value of its landholdings. The deplorable state of affairs was only worsened further by the usurious operations which were customary, in the shape of so called compulsory and lease contracts [obligatorische und arendatorische Kontrakte].51 Consequently, an unhealthy process of fragmentation, in the form of the division of estates on inheritance [Kompossession], began in the part of the Republic which later fell to Austria. As a result of this fragmentation of the nobility’s manorial lands, unfree servile labour, which originated and found its historical justification in the need to guarantee a supply of compulsory labour for large manors producing for export (Grünberg),52 now changed from being an historical necessity into an historical anomaly. The decline of agriculture, however, posed the threat of the inevitable decline of the Republic’s entire structure, as it was after all based on this form of agrarian organisation.

50 51

52

[Confederations were formed among members of Poland’s aristocratic elite in the pursuit, often armed, of specific goals against royal authority.] [Under obligatorische und arendatorische Kontrakte, manor-owers, in return for loans, gave over part or all of their estates to lenders to use as they wished, in payment of interest and/or repayment of the loan capital. This led manors’ assets to be run down and to the hyperexploitation of their serfs. See Edicta 1783, p. 12.] [For example, Grünberg 1893–94, 1, pp. 36–9.]

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Under these circumstances, a reaction against agrarianism had to emerge sooner or later. It occurred in the form of mercantilism. It would be superfluous to characterise this system in great detail. It suffices to recall that ‘The essence of the system lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws; but in … the total transformation of society and its organisation … in the replacing of a local and territorial economic policy by that of the national state’.53 And, as no social transformation can proceed smoothly, this was even less to be expected when a form of social organisation based on several centuries of tradition was being reconstructed. It is understandable that classes whose social positions were under threat defended themselves. ‘The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several Estates’.54 This was primarily a struggle waged by the central government ‘against the great nobility, the towns, the corporations, and provinces, the economic as well as political blending of these isolated groups into a larger whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform laws and uniform administration, for freer and more active traffic within the land’.55 This was the universal and inescapable course of development in the states and economies of western Europe. In Poland, this would necessarily also have happened, if the course of development within the country had not been obstructed from outside by political events. Is it possible to imagine, even for a moment, that Poland would have remained a feudal and agrarian state for ever? At that time, like modern capitalism, which encompasses ever broader groups of people and draws ever more states into its sphere of influence, mercantilism was expansionist. Sooner or later, it would have penetrated into Poland.

53

54 55

Schmoller 1895, p. 51 [Grossman’s emphasis]. Szelągowski 1902, has the honour of being the first to speak of mercantilism and a ‘mercantilist policy’ of the Polish nobility, as early as the sixteenth and seventeenth centuries. He himself admits that this consisted purely in easing the export of raw materials in order to bring money into the country; that there was no suggestion of promoting the country’s own industries or forcing out foreign manufactures; and that the policy was rather to restrict the rights of domestic merchants, to the benefit of foreign merchants (in 1565). If crude greed for gold is identical with mercantilism, there has never been a shortage of ‘mercantilists’ anywhere, from King Midas to Shylock. In reality, it is impossible to speak of mercantilism in Poland until the middle of the eighteenth century. Schmoller 1895, p. 50. Also see Bücher 1907, pp. 134–5. [Schmoller 1895, p. 51.]

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There too it would have come to state support for trade and industry; there too it would have become necessary to introduce and carry out centralisation, to create a bureaucracy, to reform the judicial system, to establish a fairer fiscal system, to remove the nobility’s immunity from taxation and to bring a modern military organisation into existence. In short, it would have been necessary to transform Poland into a modern state with a whole, complex bureaucratic administrative apparatus. Indeed, the first signs of this were not lacking in various spheres of public administration and literature. It was, however, clear that landownership, particularly the large manors underpinned by unfree peasant labour, could not offer an appropriate basis for such a transformation of the way the state was organised. Thus the state was everywhere compelled, first and foremost for financial reasons, to seek support from another direction and therefore to take up the struggle against the landed aristocracy. In Poland too, the course of events could not have been different. The full significance of this fact was also clearly recognised by the greatest Polish statesmen, such as Staszic and Kołłątaj. Only by bearing this in mind is it possible to understand the actual historical significance of the Austrian government’s mercantilist policy in Galicia. It is then apparent that changes which could not develop and ripen organically within Poland, due to political conditions there, were decreed from outside in the wake of the partition. They arrived ready-made, in the form of a fully elaborated, maturely thought-out and systematic programme of action, consequently with an all too powerful shock to existing relations. But the phenomenon itself was unavoidable. In Galicia and Poland, because for two centuries the interests of the agrarians had been exclusively dominant and urban and industrial interests had been repressed, a mercantilist state policy, by its very nature directed against aristocratic privilege, was more necessary than anywhere else.56 Accordingly, the Austrian bureaucracy of the period, so unsympathetically viewed by some, was in Galicia the instrument of an objectively unavoidable historical process. Examined without prejudice, it must be admitted that the mercantilist economic policy of the Austrian government in the newly acquired Province, taken as a whole and leaving aside minor errors, was historically inevitable and therefore justified. It had every possibility of success and was therefore useful in essence and desirable from the standpoint of Galicia’s own interests.

56

See Milewski 1888, pp. 63–70.

Appendices

∵

appendix 1, to page 102

Some Remarks on the Relationship between the State and the Nobility The historical research of the last 40 years has provided us with a vivid, tragic and almost brutal portrayal of the sad role played by the central pillar of the Polish state, the nobility, equally in the political, intellectual and economic life of the eighteenth century. Outstanding writers at home and abroad, such as [Wawrzyniec] Surowiecki, [Richard] Roepell, [Józef] Szujski, Kalinka, Korzon, Bobrzyński, [Oswald Marian] Balzer, [Adolf] Pawiński and [Nikolai Ivanovich] Karejew,1 have all devoted themselves to examining the wounds of this organism, riddled with disease in all its limbs, and with unquestionable courage and openness they have laid bare the miserable decline of the Polish Republic. It would be superfluous to paint yet another picture of its well-known maladies here. From whatever aspect the condition of the country at the time of the First Partition is viewed, the same hopeless anarchy and disintegration are apparent: the frightful demoralisation, oppression and poverty of the peasants; the decline and impoverishment of crafts and trade, urban life and even agriculture; the utter neglect of the noble ruling class’s own education; schools and universities in the hands of ignorant priests and monks. Since it had become traditional for the proceedings of the national and local parliaments to break up in confusion, the Republic had in practice ceased to have any legislation, administration or government; the small army was untrained and in a state of semi-dissolution; finances were in disarray; the courts were corrupt; instead of the rule of law, arbitrariness and violence in all strata and spheres of life. In a word, the Republic had been abandoned without resistance to the interests and party struggles of its great ‘lords’ and the neighbouring powers. Since the incorporation of Galicia into Austria – for some as yet unexplained mystery – at a stroke everything appears to have become good and healthy again. At least, the relevant historical literature tells us as little about deficiencies in the judicial system and the distribution of the tax burden as it does about the decay of trade, the oppression of the peasant and the burgher estates or the necessity for reform. According to this literature, there was nothing which

1 In addition to the works by Kalinka, Szujski, Korzon and Balzer, already mentioned, also see Surowiecki 1861; Roepell 1876; Bobrzyński 1879; Pawiński 1888; and Karejew 1893.

© Rick Kuhn, 2023 | doi:10.1163/9789004678590_031

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deserved to be improved when Galicia was occupied. On the contrary! Every step taken by the new government towards reform, all its laws and regulations are regarded as attacks on the rights of the nation, in which context the ‘nation’ is seen as embodied in the nobility. Those who, out of short-sighted egotism, had opposed even the most essential reforms in Poland throughout the eighteenth century, until the Polish state was robbed of all its vital forces and broke down from within even before being torn to pieces by foreign powers, were celebrated on Galician soil as heroes and martyrs to the national cause. Out of misplaced patriotism, it was thought necessary to glorify the interests of the feudal nobility in the face of the Austrian government, even though critical historians had long recognised it as an intolerable burden on the Republic. The literature in question portrays the Galician nobility as richly endowed with all the patriotic virtues and victimised precisely for that reason by Maria Theresia’s and Joseph ii’s orgy of reform. Finally, it is asserted that Joseph’s oppressive policies provoked such general discontent in the Province that in the Emperor’s final years it even threatened to turn into open resistance, on the Belgian model, and a secessionist movement. It is far from my intention to examine this backward conception of law, administration and economic history, more closely. What the proponents of this conception present as a policy directed against the Polish nobility was nothing other than the expression of mercantilist efforts, which surfaced in all western European states during the seventeenth and eighteenth centuries. Their ‘actual bearers were the enlightened rulers, who concentrated their activity entirely on economic measures and whose grand administrative reforms were directed against urban and provincial privileges, and aimed above all at the formation of large, unified economic bodies’.2 So, at this point, only the facts which underlie this conception will be examined more closely. The question to be answered before all others is, therefore, was the Galician nobility really so patriotic and ready to sacrifice itself for the common good? From what source did Galicia suddenly acquire such a wise and level-headed noble class, adorned with all the virtues? After all, we are well aware that it did not exist in Poland at that time! From the 1730s and the emergence of Jan Jabłonowski and Stanisław Leszczyński, an epoch did begin in which ideas of reform and then reforms themselves, in the sense of a transformation of the Republic on the model of neighbouring states, did

2 Schmoller, 1898, p. 38. The domestic economic policy of the government in Galicia will be examined more closely from this point of view in the second volume of the present investigation. In the meantime, on this subject see Grossman 1911b, pp. 29–42.

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slowly mature. The abolition of the provinces’ (wojewódstwa) financial administrations, the limits on the powers of the provincial parliaments and thus on the centrifugal, particularist tendencies of the nobility, and the strengthening of the unity of the state and the central government; the expansion of the central administration, the reorganisation of the financial system and above all the opening up of new sources of revenue by abolishing the nobility’s immunity from taxes and tariffs; increased protection for the burgher and peasant estates: these were the goals of domestic reforms, on whose success the future of the Republic and its very existence depended. Even so, these reforms failed, as a result of the nobility’s resistance. ‘The old, deeply rooted foundations of public life were not shaken. For that to happen, a hard, bloody struggle was needed. To succeed, more time was required and that time was lacking’.3 Under such circumstances, it is clear that the picture presented by the Galician nobility after the annexation was not and could not have been gratifying. Count Dębicki described how quickly the nobility forgot the Polish past and started to hold magnificent balls in the years immediately after the national disaster; how it attended the ceremony of homage with evident delight; how it ‘never attempted in any way, even purely legally and publicly, to demand that the nation’s rights be respected’; how in the National Guard it created ‘a courtly representation of the Polish nobility surrounding the Monarch’.4 Szymon Askenazy5 reported that the National Guard of the Galician nobility was founded with the conscious intention of political denationalisation and signified, ‘as it were, a voluntary sanctioning of the partition on the part of society there’. Even the extremely reactionary Count Stanisław Wodzicki, clerical to the point of superstition, who mounted frequent and vociferous accusations against the Austrian government, its administration and its administrative organs in his memoirs, admitted ‘that this oppressive Austrian system only developed over the years. Initially it [did] not make itself felt’.6 Rather, an attempt was made to win over the Galician nobility, which Wodzicki bitterly depicted in the blackest colours. While in Poland the partition was followed by a reform of the education system and later the Four Year Parliament brought a new and more rational generation onto the public stage, the nobility ‘in Galicia … sought positions at Court, royal decorations and the title of count, in order

3 Pawiński 1888, pp. 405–6. 4 See Dębicki 1887, 1, pp. 349–50, 358 and 362–3; Chotkowski 1909 1, p. 293. [The Galizische Adelige Leibgarde, (Galician Noble Life Guard) was established in 1782 and dissolved in 1791 after Joseph ii’s death.] 5 Askenazy 1905, pp. 7–8. 6 See Wodzicki 1874, pp. 88 and 90.

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to conceal under this frippery the wretchedness of their heads and the smallness of their hearts’. With deep displeasure, Wodzicki recalled these ‘petty lords created by Austria’, newly baked counts and dignitaries, who fawned on Governors, pushed themselves forward at Court and impressed the poorer nobles, who in their anxiety fell at their feet, asking for their favour and pleading for the advancement of their sons in the military or government service, or for a favourable verdict in judicial proceedings … If the nobility had demonstrated at least a passive dignity [in face of the new government], there would not have been such a collapse of patriotic sentiment. But that was necessary, in order to bear with humility such disdain and humiliation from the people who had not conquered this land with their own blood … There is no sign of a Galician opposition to the abuses of the officials, the confiscation of religious endowments, the abolition of the monasteries and the wretched arrangements made for schools. The only opponent, in her own manner, was the chatelaine, [Katarzyna] Koszakowska.7 Far from engaging in opposition, the nobility allowed itself to be easily won over to the government with money, decorations, honorary titles and promises of ‘advancement’.8 It rendered the oath of homage without hesitation9 and in words of hypocritical self-abasement it handed over to the first Governor of Galicia, Count Pergen, a voluntary collective address and gift of 6,000 7 Łoziński 1872, p. 37, makes a similar remark about Madame Koszakowska’s ‘opposition’: Today we know, however, that it was never to be taken seriously. Precisely the chatelaine, whose bighting comments allegedly made things uncomfortable for the German bureaucrats in Galicia, was in reality the first Polish gentlewoman who hasten to demonstrate her loyalty to the new government. She organised balls in honour of the Emperor and Empress and flattered the higher officials. Full of hatred for Stanisław August, she wrote to Reviczky offering to create a strong pro-Austrian party in Poland and assured him that she no longer regarded herself as a Pole: non habemus regem nisi Caesarem! were her words. All her alleged ‘bons mots’ are inventions which should be given no credibility. [‘Non habemus regem nisi Caesarem!’ means ‘Anyone who claims to be a king opposes Caesar!’ Bible, John 19:12. ‘Bons mots’ means ‘clever utterances’.] (See Wawel-Louis 1897, pp. 67–8, and Morawski 1908). Not without reason, Count Pergen asked Kaunitz to secure an imperial decoration for the chatelaine in return for her services (Łoziński 1872, p. 30). 8 Chłędowski 1880a, p. 48. 9 The burghers of Lviv showed more dignity in this regard. See Schnür-Pepłowski, 1895, p. 7.

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ducats (roughly 25,000 florins) with the justification ‘that nothing more fortunate could have happened to these Kingdoms of Galicia and Lodomeria than that the decision to entrust the office of governor to him and that he was the first to receive them, by their oaths, into the ranks of subjects of the illustrious Empire and to lay the foundation for their good fortune’.10 Of course, all this did not happen in the absence accompanying material and egoistical considerations. It was, after all, the time when the nobles still hoped that the new government would take full account of their wish to retain their position as a privileged estate. But it would be in vain to seek a single proposal in the interests of the peasant and burgher estates or the nation as a whole in the estates’ Desiderata of 1773.11 As Łoziński naïvely admitted, the nobility stated its wishes ‘with courage and just recognition of the needs, if not of the whole Province, at least of its own class’. These wishes culminated in the demand that the government confirm and preserve the old privileges and rights of the nobility under the Republic, along with the old laws and the old system of justice.12 What this meant from a social point of view needs no further discussion today, as the sad condition of the Republic at that time is well-known. For instance, the greatest Polish statesman of the epoch, Staszic, had this to say about the Polish system of justice: ‘in it, everything that an honest person might be ashamed of became a privilege of the nobility’.13 But intellectually the Galician nobility was at a still lower level. In the age of Voltaire, when in the west humanitarian currents already had a powerful influence, twenty years after Turgot’s famous letters on religion and toleration, the Galician nobles did not hesitate to call on a foreign government to raise its hand to punish their own confreres. According to one of the Desiderata of 1773, ‘We are confident that the building of dissident

10

11 12 13

Łoziński 1872, p. 33. Łoziński’s book is an example of the tendentious glorification of the nobility of that time. The nobles were portrayed as simply victims of Count Pergen’s Machiavellian policies, which deliberately exploited their ‘goodness’. ‘Count Pergen’. wrote Łoziński ‘was extremely skilful and dealt with nobles who were in no position to evaluate his fine words and courteous performance’. According to Łoziński, the Galician nobility’s only defect was its possession of too many good qualities: its ‘good natured readiness to trust people, the inherent naïveté of its character, which cannot imagine others doing wrong, because such a thing is alien to it, finally its honest obedience to those with the gift of making persuasive speeches under the mask of protecting the public good’ (Łoziński 1872, p. 24). At this time, the Archbishop of Lviv, Sierakowski, was thanking God ‘that we finally entered a safe harbour when … Maria Theresia took the Province into her possession, after the Province has suffered five years of trouble and devastation’ (Pastoral letter of 16 December 1773, quoted in Chotkowski 1909, 1, pp. 291–2). hhs 1774, 469. hhs 1774, 469, and Łoziński 1872, pp. 14 and 16–18. Staszic 1787, p. 83.

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prayer houses and schismatic churches will remain prohibited [in Galicia] by law for ever. And in order to prevent contamination we demand that apostates be punished ruthlessly with the death penalty and the confiscation of all their possessions’.14 Only this characteristic makes the attitude of the Galician nobility in 1790 intelligible. ‘When the Polish’ or, more accurately, the noble ‘public turned against Joseph’s policies in Galicia in 1790, its criticisms almost completely ignored the ecclesiastical reforms, touched only lightly on the question of Germanisation, laid more emphasis on the arbitrariness of the administration. But it was fiscal measures and legislation concerning the serfs that were mainly combatted, while the relations of serfdom, which had existed before the occupation of the Province, were enthusiastically defended’.15 The Galician nobility yearned to pay as few taxes as possible and to exploit the peasants without constraint. Using every verbal device, it tried to identify these objectives with the interests of the Province, ‘the public good’. Otherwise, it was not particularly inclined to take an interest in the common good, let alone to make any sacrifices for it. The well-known ‘constitutionalist movement’, to which the nobles gave their support at the end of Joseph ii’s reign and which was supposed to express their discontent and rebellion against Joseph’s regime, was nothing other than a pose, without any serious features, as I will now demonstrate. There is as little reason to deny that the Galician nobility felt injured by Maria Theresia’s and Joseph ii’s reforms as there is that these reforms were nevertheless unavoidable for Galicia and beneficial for the majority of its population. The mass of the Polish nobility was still too backward and intellectually debilitated16 for there to be any expectation that it would understand or even cooperate in the work of reform. Even in Poland, the moderate reforms introduced by the Great Parliament of 1788–92 found only minimal support. The Education Commission and, for the time, the admirable reform of the schools were the work of a relatively tiny band of progressives. It did find support in public discussions17 but was pursued by the conservative majority of the nation with blind hatred18 and was finally reversed by the Targowica Confederates, during the restoration.19

14 15 16 17 18 19

See Chłędowski 1880a, p. 49; and Tokarz 1908, p. 363. See Tokarz 1909, p. 191. See Smoleński 1891, pp. 364–5 and 368–9; Smoleński 1880. See Smoleński 1891, p. 276. See Smoleński 1891, pp. 382–394; Smoleński 1889. See Smoleński 1891, p. 399; and Kołłątaj 1872, 2, p. 6.

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Despite its unhappiness over Joseph’s reforms, by and large the Galician nobility, however, remained loyal to the new government and peaceful. After all, it had been richly compensated for its loss of political freedom and social prerogatives by the re-establishment of peace and ordered conditions in the Province. Far from the bustle of ‘high’ politics, which for it was bound up with large financial sacrifices and actually involved no more than punch-ups at the provincial parliaments and local assemblies [and] in the tribunals (courts), the nobility retreated to its villages, having more leisure now to look after its own manors. Hence its discontent was exhausted in the obsequious phrases of the Desiderata and the thick volumes of provincial parliamentary proceedings. It was not it that rose up against Joseph, but rather the reactionary and discontented right wing of the imperial bureaucracy – a very recent historical product and therefore with little discipline – in many ways too permeated with elements and traditions of the nobility, that did so. The records also very clearly demonstrate that the Emperor had first to create the instrument with which to erect his proud reform structure and that he had to wage a hard struggle for a decade against his own bureaucracy. It is true that in Galicia there was no shortage of people who supported the Emperor’s reform work most eagerly, in the Governor’s Office as well as the District Offices. But at the very top of the provincial administration there stood Count Brigido, steeped in the traditions of conservative agrarianism – a circumstance which gave rise to a secret, subterranean and ruthless struggle between Lviv and Vienna during the period of Joseph’s rule. Not until the end of 1789, however, during the war against Turkey and the crisis in foreign policy, did the opponents of reform venture to come forward openly, believing that the time had come to exert pressure on the mortally ill and despairing Emperor, by means of exaggerated presentations. Brigido took on this role in Lviv, Count Johann Anton Pergen, the Minister of Police, in Vienna. As the first Governor of Galicia, Pergen had shown an excessive partiality for the privileges of the nobility, thereby securing a claim to their gratitude.20 Declared unfit to administer Galicia by Joseph,21 he was appointed Minister of Police in Vienna and removed from all influence on government business during the period of enormous upheavals and extensive administrat-

20 21

See above, p. 268, note. ‘At every step, Count Pergen displayed all kinds of consideration for the nobility’ (Jaworski 1904–5, p. 778. Also see above, p. 469, note). ‘I do not know’, Joseph wrote in a bitter memorandum of 5 August 1773 sent from Lemberg to Maria Theresia, ‘whether his [Pergen’s] genius and talents are great enough to make it worth sacrificing the otherwise customary virtues of order, certainty and precision in affairs’ (Arneth 1876–79, 8, p. 48).

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ive reforms. It is therefore not surprising that in his address of 13 January 1790 to the Emperor he attempts to prove that these reforms were mistaken and that his main reproach of the Emperor is that he ‘refused to heed the advice of [his] most experienced servants’, instead pursuing a one sided policy aimed at ‘suppressing the nobility’.22 As in Galicia, this generated discontent everywhere in the Monarchy and provoked ‘the whole [Polish] nation into hatred for Your Majesty’. Like Brigido in his reports, Pergen hinted at the threat of an impending uprising by the ‘nation’ and suggested that, particularly in case of a war with Prussia, ‘a large section of the owners of manors, if not all of them’ will support the enemy. With real malicious joy, he asserted that, when he governed the Province, the Galician nobles were imbued with greater loyalty.23 What, however, were the real prospects of a Galician uprising? Despite all his deliberate alarmism, two days after Pergen’s address Brigido had to admit not only that the Province was completely calm but also that not a single ‘threat has so far been observed’.24 The ‘oppositional’ movement which appeared in Galicia some weeks later – already under Leopold ii – was exclusively the work of Lucchesini’s Prussian agitation.25 It was very closely connected with the policy of Hertzberg, the Prussian foreign minister, who regarded it as his task to prevent Russia and Austria from achieving excessive territorial expansion at the expense of Turkey, which would be dangerous for Prussia, and at the same time to gain Gdańsk and Toruń from Poland, in return for part of Austrian Galicia.26 This provision of the secret Prusso-Turkish treaty of 31 January 1790 aroused the hope of Galician Poles for reunification with the Republic. A hope that was

22

23

24 25 26

See Fournier 1885, pp. 168–9. In order to preserve the appearance of a certain objectivity, Pergen did mention the alleged discontent of the burghers and peasants. But there is no possible misunderstanding his principal concern. ‘The public [!]’, he stated ‘is even more dismayed because the relationships between the classes of subjects which together make up the state have thereby been disrupted’. ‘The nobility is justly dissatisfied because it has been an innocent party, extremely offended by the new civil and also the new criminal codes and by the new tax assessment of its property, and it has been brought so low that there is now no more than a very slight difference between its own position and that of the estate of burghers and peasants’ (Fournier 1885, pp. 169 and 173). ‘This nation … if not all at least the major part of it, counted itself fortunate to have come under the sceptre of the most illustrious archducal house by paying it homage and had begun to notice the superiority of normal and bearable treatment in a Monarchy over ideal liberty or rather licence’ (Fournier 1885, p. 175). Brigido’s report of 15 January 1790. See Kalinka 1895–96, 4, section 123. See Kalinka 1895–96, 4, section 123; and Jäger 1867, p. 304. See Philippson 1880, p. 291; Roepell 1854, pp. 24–5.

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assiduously nourished by Prussia, which set up a secret committee for Galician affairs in Warsaw, led by Lucchesini.27 The first thing to do was to ‘stir up’ Galicia.28 This task was undertaken by Kasimierz Rzewuski, who Stanisław August of Poland described as ‘a subject who would happily take it upon himself to intrigue in Galicia in the interests of Lucchesini’. Rzewuski did in fact proceed to Galicia, taking with him 4,500 guilders provided by Lucchesini for his three week mission. Following his instructions precisely, he fulfilled his task to the great satisfaction of his employer.29 Now ‘the alarm was sounded’ in Galicia. Committees were established30 to collect signatures for petitions Rzewuski had drawn up, which were soon adorned with 5,000 noble names. Needless to say, that was all anyone in Galicia was prepared to do for the cause. For the rest, reliance was placed on the aid of the Court in Berlin. Friedrich Wilhelm ii was expected to provide soldiers, weapons, cannons, munitions, carts, surgeons, field apothecaries, food supplies and, finally, money to pay wages. The Galician nobility itself contributed absolutely nothing.31 A deputation had already gone to see the Emperor Leopold, bearing the wishes of the ‘Province’. It was graciously received in Vienna. To Margrave Lucchesini, who was directing the whole movement of nobles, this was an extremely unwelcome development. If the Emperor complied with the nobles’ desiderata, Prussia’s intrigues would fail. Lucchesini therefore instructed his agent in Lviv that the delegation to Vienna should raise demands pitched so high that the Emperor would not be in a position to respond to them.32 Difficile est saturam non scribere.33 What a ridiculous appearance this ‘revolution’ and the pathos of the nobles’ desiderata as well as their complaints about oppression have, when it is known that everything was dictated from Warsaw by Lucchesini.34 No wonder, then, that Kalinka’s report on these events did not fail to level the sharpest reproaches against the Galician nobility: ‘it blindly followed the

27 28 29 30

31 32 33 34

See Kalinka 1895–96, 4, section 124. Kalinka 1895–96, 4, section 124. Kalinka 1895–96, 4, p. 120. Kalinka 1895–96, 4, p. 118, provided the names of the 30 members of the Lviv Committee. Prince Adam Czartoryski, however, told De Caché that his name was added to the petition without his knowledge. Kalinka suggests that the same is true of other signatures. Kalinka 1895–96, 4, p. 115. Kalinka 1895–96, 4, p. 120. [‘Desiderata’ means ‘things desired’.] [‘Difficile est saturam non scribere’ means ‘It is difficult not to write satire’, Juvenal 1829, p. 2.] Kalinka 1895–96, 4, p. 121. This did not, of course, prevent Starzyński 1893 from taking the nobles’ desiderata of 1790 seriously.

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instructions of the Warsaw Committee, in other words, of Lucchesini’.35 ‘The cabinet in Berlin’, he added, ‘wanted to use Galicia as the occasion for war … It incited the inhabitants to hostile acts against the government, it expected that they would rise up but did not dare to help in preparations and rather washed its hands of the matter, in view of the Austrian government’s energetic response … If Galicia had sought an understanding with its own government without looking to Prussia, it would have made better provision for its future’.36 Hardly had Prussia withdrawn from the game and composed its differences with Austria peacefully, in the Treaty of Reichenbach, than the ‘Galician agitation’ ceased. ‘Galicia calmed down and Hungary mellowed’.37

35 36 37

See Kalinka 1895–96, 4, section 124, p. 123. Kalinka 1895–96, 4, section 125, p. 147. Kalinka 1895–96, 4, iv, section 129, p. 183.

appendix 2, to page 112

Joseph ii’s Economic Policy in Hungary The government in Vienna often openly conceded that it did not want industries to develop in Hungary. Count Blümegen, for example, in 1774, believed that ‘Hungary does not deserve the favourable treatment which, according to the principles of commerce, should be accorded to the German Hereditary Lands. Indeed, it is political wisdom to place heavy tariffs on the entry of certain items into Hungary (such as the dyes needed in manufacturing) … because this is the only means of preventing that country from setting up factories’.1 At first glance this may appear peculiar and in contradiction with the mercantilist principles of the leading politicians in Vienna, who regarded industries as the strongest bulwark of the state and its finances. In reality, however, the attitude of the Viennese Court towards Hungary was a consequence of that Kingdom’s feudal constitution. The reasoning which underpins this economic policy for Hungary is very characteristic. Hungary, it is asserted, has no right to claim the same state support as the other Hereditary Lands, as long as the nobility of Hungary avoids performing the same duties as others. On 3 September 1774 Joseph ii sent a letter to Count Kolowrat instructing him that I want you … to inform the management of the Commercial Council that in establishing the future overall system of duties, not leave out of account the fact that there is a well-known obstacle to treating Hungarian manufactures in the same manner as those of the German Hereditary Lands, namely that the owners of Hungarian factories, as magnates and aristocrats exempt from taxes and other payments, possess a great advantage over the manufacturers of the German Hereditary Lands and that, on the other hand, since Hungary has such a strong trade surplus2 because of its indispensable natural products, we are inclined to create a counterweight for the German provinces by favouring their artefacts. For these two reasons, then, manufactures from the German Hereditary Lands have so far always borne lower duties than Hungarian manufactures.3

1 See Beer 1893b, p. 286. 2 Schweighofer 1785, pp. 161, 166, reports an annual surplus of three to four million florins in 1785. This agrees with the Hassel’s statement that Hungarian imports were 13.8 million and exports 17.8 million florins in 1787, Hassel 1807, p. 165. 3 See Beer 1898, p. 135.

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On another occasion Joseph expressed the same idea by saying that Hungary ‘must be regarded as a mere colony’, in which there should be efforts ‘to make the expansion of its manufacturing as difficult as possible by charging duties entirely out of proportion with those charged in the Hereditary Lands’. The Emperor was nevertheless ready to alter his attitude to Hungary immediately, as soon as the exemption of the Hungarian nobility from taxation had been abolished by his tax reforms. In that case he would show that ‘he had Hungary’s welfare at heart’, by placing that country on an equal footing with the Hereditary Lands, by lifting all tariff barriers between the two halves of the Monarchy and by ‘consenting to completely free communication between them by land, on rivers and along the coast’. Then, ‘in the future, when freedom of trade and movement had been established’, the factories of Hungary, which the Monarchy had not just failed to support but actively suppressed, as the Emperor himself openly admitted, ‘would expand there and make an unending contribution to the necessities of life and the inflow of money from abroad’.4

4 See Groß-Hoffinger 1835–36, 2, pp. 232 et seq. In 1784, when the Buda town council requested permission to erect a monument to the Emperor in gratitude for the concern he had shown for the town, Joseph sent a letter rejecting the idea, saying: ‘If I stimulate activity and industry [in Hungary], cause trade to prosper, cover the country from one end to the other with roads and navigable canals, as I hope to do, then, if the nation wants to set up a monument to me, I may perhaps have earnt it and will accept it with thanks’ (Wendrinsky 1880, p. 342).

appendix 3, to page 282

The Tariff of 2 January 1778 The following table provides the tariff rates set out in the ‘Draft of Customs Regulations and Tariffs for Galicia’ 8 percent 55 kinds of lining and treated skins 5 percent Turkish alum; red arsenic; raw, beaten and combed cotton; bee combs or wax droppings; black tin; iron plating etc.; fermented cattle fodder; bound and unbound books; carob beans (St. John’s bread); dates; iron wire (cast iron, nails, pans, scythes, sickles, steel etc.); coarse iron forgings, namely gimlets, files, hammers, pliers (fine forgings charged at 10 percent); polished and unpolished bedsprings; figs; files; fine files for goldsmiths; seal skins for bag-makers; zinc ore; yarn; cotton yarn for fustian; white and coloured bleached flaxen yarn; worked bleached yarn; garden products; poultry (geese, ducks etc.); grain (namely wheat, Turkish wheat, rye, barley, oats, buckwheat, millet, and vetch); dry goods; raw gypsum; pieces of glass; cow hair (for stuffing); deer hair; horse hair; glazed and unglazed pottery; isinglass; coarse wooden products (namely barrels, tubs, staves, hoops etc.); cheese (namely cows’, sheep’s and goats’ cheese); baskets and basketwork; crabs; better types of leather (namely carmesine, cordovan, saffian); malt made of barley, for brewing beer, and made of wheat; almonds; flour (wheat, rye and buckwheat); millstones; nuts; fresh fruit; uncultivated fruit; pitch and resin; rice; raisins; ordinary soap; American, Turkish, Levantine and Hungarian tobacco leaves (other kinds paid 10 percent); watch springs; other, unnamed victuals; carts of the better type; farm wagons and ploughs; Tyrolean, Tokay and Hungarian wine. 2½ percent Romanian alum; white and yellow arsenic; plasterer’s putty; common red dye; cow, calf and ox hides; lightly woven, unbleached yarn; unbleached flaxen weavers’ yarn; unbleached yarn of the coarsest variety; hempen yarn; combs (hair and beet combs); raw and molten tallow; oil of vitriol; printing paper; colouring; saltpetre; emery paper; emery stones; certain kinds of silk; oil soap for manufacturing; fine lace. 2 percent iron ore; pig iron; old, broken iron; iron beaten out into bars etc.

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better jewels, namely diamonds, pearls, amethysts, rubies, sapphires, emeralds, topazes etc. 5/12 percent raw materials particularly needed for industrial purposes, namely: potash; beaver skins; acetate of lead; borax; manganese (for glass making); lemon juice (for dyeing); cochineal; turmeric (yellow colouring); Frankfurt and black clay; hides and skins for red and white tanning, namely of goats, male and female, sheep, chamois, deer, calves, lambs, horses, pigs, and roe deer; cuttlefish bone (ossa sepiae) for goldsmiths; fish oil; raw and combed flax; fresh meat; common unpolished flintstones; fruit trees; untreated hare skins; zinc ore; binding yarn; mohair yarn; lace yarn; gum arabic; beaver hair; camel hair; royal hare hair; potter’s clay; raw and dressed hemp; oakum; seeds and grains; wood (for dyeing); joiner’s wood (for inlaying); builder’s timber, namely boards, shingles, hard and soft posts, timber for ships and masts; firewood of all kinds; indigo; valonia for tanning; charcoal; litmus; rags; cane (for weavers’ stools); sal ammoniac; cloth shears; grindstones; hog bristles; various forms of silk, white and yellow wax.

appendix 4, to page 289

The Promotion of Linen Exports Soon after the tariff of 28 December 1776 entered into force, 1777,1 Specialist von Guinigi of the Galician Governor’s Office stated in a report dated 1 March that ‘it is true that exports to Hungary have increased greatly but it is very difficult to increase exports to the German Hereditary Lands, not only because of the many factories that exist there … but above all because the path of Galicia’s exports has not been sufficiently smoothed by the 50 percent reduction in the general tariff’. In December of the following year, he repeated the call: ‘All the weavers on Count Ankwicz’s manor of Andrychów … should immediately be given a reduction of import duty … when their table linen is sent into other German and Hungarian, Hereditary Lands … from the present 8 florins per hundred down to 3 florins 12 kreutzers per hundred’.2 The investigation by the Court Offices and an inquiry directed to the Hungarian Treasury confirmed the fact ‘that such [linen] was always regarded as allowable [in Hungary] … because it has always had a need for linen from the Polish Republic’. A joint report of 14 October 1779 by von Eger on behalf of the Treasury and the Chancellery concluded that the export of Galician linen required facilitation, if only out of consideration for Hungarian demand. It continued, Another much more important argument arises concerning the Galician weavers. It does not accord with reasons of state that a province like Galicia, which is treated on roughly equal terms with the other German Hereditary Lands in all aspects of public revenue, should continue to be charged such high duties on the export of a manufactured item on which the ability to pay taxes and the livelihood of perhaps several thousand families depends. Precisely since the recovery [of Galicia] the item has been completely cut off from its foreign markets. Subjecting it to a tariff level which in the German and Hungarian Hereditary Lands now almost amounts to an import prohibition. The Court Offices therefore took the view that Galician products could be left at the 4 percent duty ‘without hesitation … as regards ordinary table linen (apart

1 hka, Mautwesen in Galizien, ad 356 ex 1777. 2 [Editor’s interpolation.]

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from pieces which form a set) … and 4 florins per hundred should be charged on inferior items, while linen valued at less than 12 kreutzers per Austrian ell should be charged 3 florins 12 kreutzers per hundred’.3 The Empress agreed to these proposals in a Resolution of 29 October 1779. Treasury Decrees of 21 January and 15 February 1780 informed all customs administrations in the German-Slav and Hungarian provinces accordingly. The importation of table linen and twilled linen from the Republic continued to be prohibited.

3 hka, Commerz, Fasc. 57, ad 2 ex Februario 1780.

appendix 5, to page 295

The Official Language Eder had already raised the question of ‘whether the Polish language should be retained for procedures or the German language should be introduced’ in the first two draft tariff regulations. ‘I myself am so well versed in both the Latin and Polish languages’, he added, ‘that I could supervise official customs procedures in both languages’. He nevertheless favoured the introduction of the German language, because reports to the Court Offices had to be written in German and it would be impossible to exert energetic control over lower level officials if they only spoke Polish. Consequently, Polish officials who did not know German should be dismissed and replaced by German officials. ‘It would admittedly cause hardship to the local people’, i.e. the Poles, ‘if they were to be excluded so flatly from these official positions. I myself am uncomfortable about making this recommendation, as the tariff system is by its very nature hated by everyone and … as I, as its head not without reason, have to be concerned about the aversion felt by the whole nation’. Eder had much to say in praise of many Polish officials. His conclusion, however, was that they would have to be helped in other ways: he could not make use of them in the customs service. The Galician Governor’s Office (Specialist Guinigi) was in complete agreement with this view and therefore instructed Eder to introduce German as the procedural language immediately, on a provisional basis. In a report of 15 December 1777, Eder provided a list of officials to be deployed from other Hereditary Lands.1 ‘The further question now arises of what to do with those Poles still in service who have no German but do at least know Latin?’ After all, ‘Poles who have separated from the service through no fault of their own’ cannot be ‘be left entirely without assistance’. He therefore suggested that on dismissal they be given a full pension. This would require the expenditure of 19,261 florins.2 In further discussions of the issue, the Governor of Galicia, Count Auersperg, was particularly keen to have the Polish officials dismissed. His only concern was whether they could be employed in some other capacity and, if not, how much their pensions should be.3 1 hka, Mautwesen in Galizien, ad 246 ex Februario 1778, (Besoldung). 2 ‘Status der in die Reduktion verfallenden polnischen Mautbeamten’, hka, Mautwesen in Galizien, ad 246 ex Februario 1778. 3 ‘Hofkammervortrag’ of 13 February 1778 by Count Kolowrat ‘über die vom Gouverneur Grafen

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Joseph ii, however, disagreed with this conception, in a Resolution of 27 February 1778. ‘There appear to be the following objections’, it stated, to the proposal to introduce German into the Galician customs system. First, not only would the majority of the nation’s officials, to their extreme distress, find that they were removed from the current service but their nation would also lose the hope of being employed in the customs service for many years to come. Secondly, there would be many difficulties in the way of providing an adequate number of German officials, as it would be hard to dispense with the abler officials in the German Hereditary Lands, while the less able ones would perform badly in Galicia and there would be few available who would voluntarily exchange their position in the German lands for one in Galicia. Their transfer could only be accomplished at great immediate cost, the burden falling on the exchequer. Thirdly, the difficulty of transferring German officials would be increased by the fact that they would also have to be familiar with Polish, because they would frequently have to deal with the lowest class of people and in Galicia these do not know German. In view of these important objections to the introduction of the German language, the Treasury, after taking evidence from the Galician Governor, should take into consideration and make a report on whether it would not be more advisable to prefer Latin for the Galician customs administration and only to dismiss officials, in the manner proposed, who do not have a sufficient knowledge of Latin. The introduction of Latin would perhaps be much facilitated if the Galician customs administration were provided with a number of drafters well versed in the style of Latin which is in customary use in Poland. That very day, a Treasury Decree in this sense was sent to the Galician Governor’s Office and the matter seemed to have been settled in line with the wishes of the Polish nobility. Now, however, Count Auersperg emphatically opposed the decision, invoking the far-reaching powers accorded to him when he took up his appointment.4 ‘Your Majesty was good enough to give

Auersperg antragende Entlassung und respective Jubilirung deren bey dem Galizischen Mautwesen angestellten und der deutschen Sprache nicht kundigen Beamten’, hka, Mautwesen in Galizien, ad 246 ex Februario 1778. 4 ‘Immediatschreiben an die Kaiserin’, Lemberg, 15 March 1778, hka, Mautwesen in Galizien, ad 341 ex Martio 1778 (Besoldung).

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me your most gracious permission, by word of mouth, to refrain from putting into effect proposals which appeared to me to be impossible and harmful, and instead to make my most humble representations on the subject to Your Majesty in person’. The introduction of Latin would place him ‘under grievous pressure’. The Empress responded by deciding in favour of his proposal: ‘The Auersperg plan for the German customs officials in Galicia is to remain in effect. Your Grace should give the necessary orders and decide when and how many people should be sent to the Province’.5 By the Court Decree of 28 March 1778, the dispatch of German officials to Galicia was in fact ordered and 30 percent of their salary was handed over to them in advance, to cover travel expenses. But there are also other ways in which the widespread view of Joseph ii’s unconditional Germanising efforts need to be corrected or at least examined more closely. Tokarz points out, on the basis of Margelik’s 1783 report on his travels,6 that under Maria Theresia and in the first half of Joseph ii’s reign, in Galicia a certain equality of rights prevailed among three languages: German, Polish and Latin. German was [however] primarily the official internal language; at that time not only ordinary officials but also District Commissioners, who only learned German once they were in office, were retained … Without exception they were Polish … Polish Commissioners were retained in their positions, even if, after a long time, they were still not capable of reporting in German, which generated much translating work for Heads of Districts and secretaries … Latin was only used in correspondence with the manors of the nobility when their officials did not know Polish. It was used exclusively in relations with the clergy and the courts … The Polish language was used most frequently of all in relations with the public. It was permitted to make applications in Polish with Polish attachments to the Governor’s Office and the District Offices … All gubernatorial regulations, circulars, etc. were, admittedly, issued in German; they had, however, then to be translated into Polish before they were transmitted to the parties involved.

5 Resolution, 27 March 1778, in the Empress’s own hand, quoted from ‘Immediatschreiben an die Kaiserin’, dated Lemberg, 15 March 1778, hka, Mautwesen in Galizien, ad 341 ex Martio 1778. 6 Tokarz 1909, pp. 60–4.

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A partial restriction of procedures conducted in Polish, in favour of German, first took place as a result of Margelik’s proposals of 1783–84 and German was introduced as the language of business by the Decree of 27 March 1788 but this was postponed until 1 November 1790.7 Here only a passing remark about the appointment of Poles to the judicial service is added. Arneth was already aware that the Emperor wanted judges in Galicia to be Polish.8 It is true that officials from other provinces, particularly Bohemia, were often appointed. The author of the article ‘On the System of Justice in the Kingdom of Galicia’, however, thought that this emergency situation was not the fault of Emperor Joseph. He would have willingly given all judicial posts to Poles, whom he valued and wished to win over to his side, if only they had responded to this and been capable of demonstrating the necessary capabilities … Anyone who had a legal education and command of German could be sure of appointment to the judicial service and rapid promotion. A series of Polish judges, such as Poletyło, Skorupka, [Piotr] Krukowiecki, Bobrowski, [Marcin Boleśta] Koziebrodzki, [Joseph] Jaworski, and Gorzębski among others, were awarded the title of count, although no special services or political considerations were involved.9 Of course, however obvious, indeed necessary these promotions to judicial posts might appear to us, the eighteenth century Galician nobility regarded them as an assault on its former prerogatives. It did not see the need for a professional bureaucracy with a specialist education. The author of the pamphlet on Galicia’s decline remarks with disgust that ‘anyone who wants to become a judge in Galicia needs only to possess knowledge. What I … want from a judge is rather virtue than schol-

7 This makes it necessary to correct Mitrofanov’s (1910, 1, p. 315) unfounded assertion, that in Galicia, shortly after the Province’s incorporation into the Monarchy, ‘a language was introduced with which only a few officials were familiar’ and that the government was compelled by difficulties in implementing this measure to reverse it in 1784 and again allow the use of Latin. 8 ‘Mais pour dieu, qu’on pense plus d’envoyer des Allemands ici, et que surtout pour les départements de justice l’on les laisse choisir parmi la noblesse du pais’ [‘But for God’s sake, let us not think any longer of sending Germans here and let us allow them to make appointments, above all to the justice departments, from the nobility of the Province’] (Joseph to Maria Theresia, 19 May 1780, quoted in Habsburg and Habsburg 1867–68, p. 243. Also see above, p. 101). 9 Wawel-Louis 1899, pp. 357 et seq.

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arship’.10 ‘For a wealthy nobleman cannot subject himself to the burdens of judicial office for his whole life’ and it would be questionable to leave this function to people ‘whose entire earnings are restricted to the income from their office’.11

10 11

Anonymous 1790b, p. 340 [Grossman’s emphasis]. Anonymous 1790b, p. 360.

section 5

The Beginnings of Capitalism and the New Mass Morality* Translated from German by Rick Kuhn

1 How does Franz Borkenau understand ‘the problem of a new mass morality’, which became acute when capitalism emerged and was the ‘fundamental problem of emergent capitalism’?1 The answer is not simple. Borkenau’s conceptual categories are so broad and vague that they can accommodate the most contradictory features and are invoked by Borkenau according to the need of the moment. This makes it necessary for us to crystallise his real ideas out of the confusion of his concepts through closer analysis. At first there is an inclination to conceive the problem of mass morality in the sense of a generally valid norm. ‘The construction of norms for the regulation of social life and individual behaviour is a compelling need of capitalism, so long as it wishes to proclaim itself as a universal form of social life’, writes Borkenau.2 It followed that the new morality had to be a mass morality, based on a universal norm. With the dissolution and disappearance of the ‘natural’, i.e. the traditional social order of corporate estates, it became necessary for capitalism to maximise moral demands to which individuals were subject. For, ‘as Max Weber has shown’, if capitalism is to function, ‘the masses must have a completely new, ascetic attitude to the labour process’, which ‘cannot be achieved through a legal compulsion to work in the form of serfdom’. It therefore ‘becomes necessary to supplement the legally established moral minimum with a religious or some other [!] normative, moral maximum’.3 This task was performed by Calvinism, which educated the masses in labour discipline. Which ‘masses’ does Borkenau refer to, when he writes about the new ‘mass * [Originally written as Grossman 1934. This translation from the manuscript benefited from reference to Eric Dunning’s earlier translation (Grossman 2006) and the published German text (Grossmann 2017).] 1 Borkenau 1971, pp. 152, 169. [Grossman’s emphasis.] 2 Borkenau 1971, p. 96. [Grossman’s emphasis.] 3 Borkenau 1971, p. 152. [Grossman’s emphasis.]

© Translated from German by Rick Kuhn, 2023 | doi:10.1163/9789004678590_036

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morality’ and ‘the masses’ completely new, ascetic attitude to the labour process’? The working masses come to mind. Borkenau occasionally states that, ‘for the bourgeoisie, Calvinism [was] an instrument of mass domestication’,4 that ‘religion is an indispensable means of mass domestication’.5 He writes of the ‘compulsion for the labouring strata to adapt to money capital’6 and of the ‘new, ascetic attitude’ which could not be ‘achieved by means of a legal compulsion to labour in the form of serfdom’.7 For that reason, legal means had to be replaced by a religious norm for the maximum performance of labour. And he writes of ‘exertion becoming unlimited’.8 On closer inspection, it is apparent that such an interpretation of the relationship between Calvinism and the problem of ‘mass morality’ is unsatisfactory. In fact, Borkenau has not even touched at all on the real problem of ‘mass morality’, namely the problem of the capitalist ‘education’ of the working masses in labour discipline, connected with the rise of capitalism. He does write about the new, ascetic attitude of the masses to the labour process. What he meant by that, however, is the ‘little people’, the ‘rising craft workers’, who have worked their way up to become capitalists through their exertion, which approached being limitless. He writes about the development of a new ‘mass morality’ and really means the emergence of a ‘capitalist morality’.9 Through its application to the working class, Borkenau’s characterisation of Calvinism loses all meaning, as do the doctrine of the ‘contingent nature of its success in relation to action’;10 the conceptual self-justification, i.e. the doctrine of ‘victory in the competitive struggle through rationalised and limitless exertion’;11 and, finally, the doctrine of ‘inner-worldly asceticism’ – which really means occupational asceticism. This characterisation, however, focusses on the situation of craftspeople who were – as Borkenau states – the chief bearers of Calvinism. Although Borkenau is writing about the origins of capitalist morality, his whole section on Calvinism shows that he tailors the problem of the new morality to this craft stratum.12 This problem of the new ‘mass’ morality – which Borkenau borrows completely from Max Weber13 – is only the logical and self-evident consequence of 4 5 6 7 8 9 10 11 12 13

Borkenau 1971, p. 169. [Grossman’s emphasis. Translator’s interpolation.] Borkenau 1971, p. 208. Borkenau 1971, p. 161. [Grossman’s emphasis] Borkenau 1971, p. 151. Borkenau 1971, p. 161. Borkenau 1971, p. 160. Borkenau 1971, p. 155. Borkenau 1971, p. 161. Borkenau 1971, pp. 153–70. [I.e. Weber 2001.]

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the theory, likewise taken from Max Weber, that capitalism originated among craftspeople. The complete intellectual dependence of Borkenau on Max Weber is revealed in this formulation of the moral problem of the age, tailored to the craft stratum, as the fundamental problem of emerging capitalism. His opposition to Weber’s thesis merely concerns details – important details no doubt, but it is still opposition conceptualised within Weber’s framework. Borkenau polemicises against Max Weber’s attempt to formulate ‘a positive refutation of the materialist interpretation of history’14 and against his idea ‘that capitalism was essentially conditioned by religion’.15 Weber’s interpretation, Borkenau shows, ‘is typical of the way in which the transformation of Marxist insights forces its way into non-Marxist science’.16 But, whatever the validity of the objections that Borkenau raises regarding Weber’s methodological procedure,17 the content of his expositions are typical of the way in which Weber’s petit-bourgeois ideology forces its way unaltered into Marxist science. What is the difference between Weber and Borkenau? Both start from the prior assumption that capitalism originated among rising craftspeople and that – together with the petty nobility – it was above all ‘the craftspeople whose guildlife was distressed’ who were ‘the principal bearers’ of the Calvinist religion in France, Holland and England.18 The error in Weber’s theory consisted, according to Borkenau, precisely in the fact that Weber thought that he had refuted the materialist conception of history by establishing this ‘fact’. According to Max Weber’s ‘mechanistic thinking’, ‘the bearers of a logically consistent capitalist religion’ ought to have been ‘the capitalistically most progressive stratum of the time’. If that was not the case, then the materialist conception of history was refuted. As the distressed small craftspeople adopted the Calvinist work ethic in order to ensure their own victory ‘in the competitive struggle, through rationalised, limitless exertion’, it is demonstrated that ‘this Calvinist work ethic preceded its application to the capitalist labour process’, that, therefore, ‘capitalism is essentially conditioned by religion’.19 Borkenau accepts Weber’s claims about actual events: ‘Max Weber’s thesis that these strata’s capitalist mode of thought preceded their capitalist way of life is thus correct’.20 Weber has ‘for the first time provided concrete and irre-

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Borkenau 1971, p. 154. Borkenau 1971, p. 158. [Grossman’s emphasis.] Borkenau 1971, p. 154. Borkenau 1971, p. 158. Borkenau 1971, p. 156. [Grossman’s emphasis.] Borkenau 1971, p. 158. [Grossman’s emphasis.] Borkenau 1971, p. 157. [Grossman’s emphasis.]

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futable proof of the connection between religious doctrines and economic action’.21 Weber’s conclusions are, nevertheless, wrong. By itself, the fact that non-capitalist strata are the bearers of capitalist ideology is no refutation of the Marxist conception of history. The problem is, rather, that of investigating ‘why these not yet capitalist strata adopted a capitalist ideology’.22 Borkenau comes to the following conclusion: ‘The relationship between a religion and the class which bears it hardly ever takes the form of the religion expressing the true life-conditions of that class’.23 As a mere reflex, religion would indeed be meaningless. The function of new religions consists of facilitating difficult social adaptations, as is the case with all ideological processes. ‘Initially, Calvinism is the denomination of non-capitalist groups which react to the capitalist process of decomposition with an adaptive shift’24 and, by striving ‘to assert themselves in the context of a changing social totality, these groups direct their energy towards a way of life that is not yet at hand’.25 This means that they become ‘more and more bourgeois’.26 Where capitalist society does not yet function ‘automatically’ and where unlimited exertion in the competitive struggle has not yet become the self-preserving drive, ‘it appears wholly irrational to the individual’. In such a society, ‘the code of the capitalist labour-process can only be irrational-religious’.27 This summary of Borkenau’s account already demonstrates that there is a gross misunderstanding or, rather, a whole chain of misunderstandings inherent in it. However correct his polemic against Max Weber and the latter’s supposed refutation of the materialist conception of history may be, it is nevertheless apparent that the issue here is not at all the ‘the fundamental problem of emergent capitalism’, conditioned by religion, but rather concerns a remnant of earlier economic formations standing outside the capital relation (capitalists/workers). It is a question, as Borkenau himself writes elsewhere, of the ‘adaptation of the middle strata’28 to the new mode of production. Calvinism is, therefore, neither a matter of capitalists’ morality nor mass morality but of the problems of petit bourgeois morality! It is only in this connection that Calvinism acquired meaningful significance, as the religion of the threatened middle strata and as their doctrine of self-justification, the effort to succeed in a changing society by means of ‘limitless exertion’. Only in this context does 21 22 23 24 25 26 27 28

Borkenau 1971, p. 154. Borkenau 1971, p. 157. Borkenau 1971, p. 159. Borkenau 1971, p. 157. Borkenau 1971, p. 159. [Grossman’s emphasis.] Borkenau 1971, p. 157. Borkenau 1971, p. 162. Borkenau 1971, p. 168. [Grossman’s emphasis.]

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the reason for these non-capitalist strata’s acceptance of the typically petit bourgeois (and not, as Borkenau thinks, ‘capitalist’) ideology of social ascent through limitless exertion become intelligible. Calvinism had nothing at all to do with the origin and development of capitalism. Historically, this is proved by the emergence of capitalism lying much further back than Calvinism and the Reformation in general. As we have already shown, the bearers of the capitalist mode of production were neither the ‘aspiring Calvinist little people’29 nor the ‘up-and-coming craftspeople’ but those who accumulated large capitals, through trade and usury, and employed the proletarian elements being displaced by the decomposition of medieval organisation in towns and on the land. In the putting-out system and later manufacture they created a superior economic form, although it was based on craft technology. Under the pressure of this massive, capitalist form of production, unhampered by guild regulations, backward, small-scale craft production, suffering from lack of capital, could only be preserved ‘by unlimited exertion’, i.e. by an unlimited exploitation of the workers employed, which has since become typical of craft production. This had nothing to do with ‘rationalised’ exertion.30 It has, rather, to be understood as an irrational, almost limitless waste of labour which is characteristic of petit-bourgeois morality. That Calvinism or a related religious current did not form a necessary precondition for the emergence of capitalism and that the ‘creation of a capitalist mass morality’ would only ‘succeed on the basis of religious irrationalism’31 is refuted historically by the emergence of capitalism two centuries earlier in Italy, without any help from religious irrationalism, without the help of Calvinism! Borkenau himself calls Italy the land ‘of religious indifference’, ‘of the most radical break with religious tradition’.32 The Florentines’ clear, rational, soberminded spirit during the fourteen and fifteenth centuries has been universally confirmed. And Italian capitalism could establish itself without the help of religious education, because capitalism in Italy and elsewhere, when it arose, had entirely different ‘means of instilling’ labour discipline at its disposal! This brings us to the second characteristic feature of Borkenau’s theory. Following Max Weber, he places exaggerated stress on the significance of Calvinism for instilling labour discipline into the masses and describes the new mass morality as a

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[Presumably Grossmann 2009, p. 115–6;] Borkenau 1971, p. 90. Borkenau 1971, p. 161. Borkenau 1971, p. 200. [Grossman’s emphasis.] Borkenau 1971, p. 101.

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necessary precondition33 for the emergence of capitalism. By asserting that ‘the masses’ new ascetic attitude to the labour process’, which was not be achieved by ‘legal compulsion to work along the lines of serfdom’, was necessary for capitalism to function,34 he places himself entirely on the ground of Max Weber’s petit bourgeois ideology, in which the history of emergent capitalism is an idyll. As [Karl] Marx has already shown, the ‘real history’ of the methods used to instil labour discipline was ‘anything but idyllic’.35 Brutal, direct violence was, on the contrary, the principal means used to compel people to work. In discussing accumulation, Marx distinguishes between ‘normal’, ongoing accumulation that takes place with the advance of capitalism and a ‘primitive’ form, which was the precondition for the emergence of capitalism.36 In the same way, in relation to instilling labour discipline into the working masses, as required by capitalism, the ‘normal’ process in the advance of already functioning capitalism has to be distinguished from the means used in the period when capitalism emerged. ‘The advance of capitalist production develops a working class, which, by education, tradition and habit, looks upon the requirements of that mode of production as self-evident natural laws’. The religious education about which Max Weber and Borkenau write is only a part of the general capitalist education about which Marx writes. As well as this education, the law of relative over-population and the ‘silent compulsion of economic relations’ operate ‘with the advance of capitalist production’.37 The combined operation of all these forces – and not just the religious education one-sidedly stressed by Weber and Borkenau – set the seal on the capitalist’s domination of the worker. These means, however, are sufficient ‘in the ordinary run of things’ in the ‘capitalist process of production, once fully developed’, to break all working-class resistance. But these ‘soft’ methods were insufficient in the period of capitalism’s emergence and the rising bourgeoisie still availed itself of ‘direct extraeconomic force’ to impose labour discipline.38 It is not the case – as Borkenau believes – that, with the disappearance of the traditional social order of estates, ‘a space emptied of law’ arose,39 which had to be filled by the new religious morality. Everywhere – in Italy just as later in England and France – ‘the agricultural folk [were] first forcibly expro-

33 34 35 36 37 38 39

Borkenau 1971, p. 169. Borkenau 1971, p. 152. [Grossman’s emphasis.] [Marx 1976, p. 874.] Marx 1976, p. 873. Marx 1976, p. 899. [Grossman’s emphasis.] Marx 1976 p. 899. [Grossman’s emphasis.] Borkenau 1971, p. 152.

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priated from the soil, driven from their homes, turned into vagabonds, and then whipped, branded, tortured by grotesquely terroristic laws, into the discipline necessary for the system of wage-labour’.40 It was not through ‘innerworldly asceticism’, not through Calvinist morality but through ‘bloody legislation against the expropriated’, ‘at the end of the fifteenth and during the whole of the sixteenth century throughout Western Europe’, that outlawed proletarians who had been driven from their land and soil and turned into beggars and vagabonds were ‘educated’ in labour discipline. ‘Legislation treated them as “voluntary” criminals, and assumed that it was entirely within their powers to go on working under the old conditions which in fact no longer existed’.41 Instead of outlining these real historical connections, Borkenau reproduces the idyll invented by Max Weber, from the standpoint of a children’s fable. Seen in the light of historical facts, this petit-bourgeois idyll evaporates without a trace. Here, as elsewhere, Borkenau characteristically contents himself with an ‘emphasis on the structural moment’, by means of which he renounces ‘descriptive historical accounts’.42 Precisely because he has devoted his principal attention to the French case, it is appropriate to present concrete historical material regarding France, in order to demonstrate how far religious education in mass morality really was created by ‘inner-worldly asceticism’.

2 The bloody legislation in England has been known about since Marx’s Capital. In France, too, the mass of the agricultural population was dispossessed and condemned to ‘idleness’, with the decomposition of the old feudal social order and the breakthrough of the money economy. Already from the time of Louis xi, the Kingdom strove to achieve a new labour discipline and, against ‘idleness’, undertook ‘une sorte de croisade, dont les appels retentissent dans chacune de ses ordonnances … C’est le Refrain qu’on entend depuis Louis xi, et dont l’écho incessant répercute de l’épocqe d’Henryi iv à celle de Colbert’.43 After four decades of religious wars, the process of decomposition had gone even further, economic life had been ruined, villages had been plundered by

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Marx 1976 p. 899. [Grossman’s emphasis.] Marx 1976 p. 896. Borkenau 1971, p. xii. Boissonade 1927, pp. 158–9. [‘a sort of crusade, whose appeals reverberated in every one of his ordinances … It is the refrain that was heard since Louis xi and whose echo reverberated incessantly, from the epoch of Henry iv until that of Colbert’.]

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marauding troops, the germs of industry had been destroyed and France was almost reduced ‘à l’état “de cadavre”’.44 Unemployment and mass begging ruled everywhere; diseases wore down the mass of the people. Much more dangerous for the ruling classes than this material damage, however, was the loosening of class discipline and the threat of social anarchy. [Prosper] Boissonade writes that ‘Toute discipline a disparu parmi les classes ouvrières, perverties par nos discords civiles, libérées de toute contrôle, livrées aux pires suggestions des instincts de désordre déchaînés. Le sentiment de l’autorité et de l’honneur professionnel s’est perdu chez les maîtres, celui de l’obéissance chez les serviteurs et compagnons’.45 This loosening of class discipline – the rebellion of the hitherto obedient, subordinate mass of the people – was described in all documents of the time. According to Barthélemy de Laffemas: ‘Les guerres civiles … sont cause que tous serviteurs, ouvrières et autres ne rendent point l’honneur et l’obéiessance qu’ils doivent à leurs maîtres’.46 The preamble to Henry iv’s Edict of August 1603, which was dedicated to the promotion of manufactories, provided the justification that their foundation, which rested ‘tant pour l’espérance qu’elles donnent d’enrichie ce royaume … que pour estre aussi un facile et doux remède de purger nostre dit royaume de tant de vices qui produit l’oisivieté’. Or, as [Alfred Des] Cilleuls commented, one should ‘occuper des bras qui devenaient dangereux, quand ils restaient sans travail … régulier’.47 The Edict of 1601 confirms the existence ‘d’un nombre incroyable de pauvres vagabonds’.48 Fifteen years later, [Antoine de] Montchrestien (1615) wrote of ‘ce “million de pauvre peuple” formé de “vagabonds, de mendicants, de batteurs de pavés, de coupers de bourse, de filles, de femmes, d’enfants”, d’ouvriers chômeurs qui languissent et prennent l’habitude de tous les vices … de 44 45

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Boissonade 1927, p. 157. [‘To the condition of a corpse’.] Boissonade 1927, pp. 157–8. [‘All discipline … has disappeared among the working classes, corrupted by our civil disorders, freed from all control, given over to the worst promptings of the instincts of unbridled disorder. The sentiment of authority and professional honour is lost among the masters, just as that of obedience is lost among the servants and journeymen’. Grossman’s emphasis.] Laffemas 1597, p. 13, quoted by Hauser 1927, p. 167. [‘The civil wars are … the reason that all the servants, workers and others fail to render the homage and obedience that they owe their masters’. Grossman’s emphasis.] Quoted by Cilleuls 1898, p. 14. [‘Entirely on the expectation that they give of enriching this Kingdom … and because it is also an easy and soft remedy for purging our said Kingdom of all vices that are produced by idleness’ ‘Occupy hands which are becoming dangerous, when they are without … regular work’. Grossman’s emphasis.] Hauser 1927, p. 172. [‘Of an incredible number of poor vagabonds’.]

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“l’oisiveté.”’. Only labour itself, Montchrestien assures us, can teach people that labour is a duty and hinder ‘“les seditions et les factions” ’ that derive from the wretchedness of the craftspeople.49 As early as 1604, Barthélemy de Laffemas made some suggestions for the ‘education’ of the unemployed and youth to labour in public workhouses. The means that he suggests to counter unemployment, writes Hauser, ‘are not public assistance but the suppression of vagabondage. He speaks of “punishment”, forgetting that unemployment is not always a crime’.50 Laffemas’s proposals concerned the erection of two public workhouses in every city, separating men and women. ‘Ce seront des traveaux forcés, les pensionnaires des ateliers de charité seront constraints par chaînes et prisons de “travailler”.’51 Together with the unemployed, criminals and public prostitutes, ‘enfants abandonnés’ should also be educated in these establishments. Following the already existing practice of the Grande-Aumône of Lyon52 and the ‘enfants rouges’ of Paris, Laffemas wants the workhouse to ‘emploiera ses pupilles à fournir les patrons de cette denrée précieuse et rare, des apprentis’.53 ‘Il prononce déja le mot terrible: prenez les enfants’.54 Ten years later, Montchrestien developed these proposals systematically, in his book of 1615. Montchrestien saw clearly that the money economy had completely undermined feudal society, with its old class structure and traditional morality, and that ‘profit particulier’ had become the new society’s driving force. ‘[L]e gain[: à] ce centre se reduit le cercle des affaires’.55 With regret, he asserted that, ‘qu’en matiere de profit il n’y a gueres de gens qui gardent fidelité’.56 Concerned about the prevalence of anarchy, he turned to the King with

49

50 51 52 53 54 55

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Boissonade 1927, p. 158, quoting Montchrestien. [‘This “million poor people”, composed of “vagabonds, beggars, loafers, purse-cutters, girls, women, children” and unemployed workers who hang around and acquire the habits of all the vices … of “idleness” ’. ‘ “The sedition and factions.”’] Hauser 1927, p. 177. [Grossman’s emphasis.] Hauser 1927, p. 178. [‘This was forced labour, the inhabitants of these charitable buildings were constrained to “labour” by shackles and imprisonment’. [Grossman’s emphasis.] [‘The Great Charity of Lyon’.] Hauser 1927, p. 178. [Grossman’s emphasis. ‘Abandoned children’. ‘Red children’. ‘Make its pupils available to bosses as that precious and rare commodity, apprentices’.] Hauser 1927, p. 12. [‘He was already uttering the terrible phrase: take the children’.] Montchrestien 1889, p. 39. [‘Private profit’. ‘Profit[: t]he circle of business is reduced to this centre’. Grossman fused the end of one sentence in the original with the start of the next. Grossman’s emphasis.] Montchrestien 1889, p. 90. [‘In matters of profit there are not many people who remain loyal’.]

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the request that he prevent the threatening misfortune of the ‘corruption des nostre ancienne discipline’. Quelle obeissance pour l’advenir aux superieurs? Qui prendra plus à gloire l’honneur d’estre comandé? Si Vos Majestez ne nous retirent de ceste confusion et indifference, c’en est fait[! T]ous generalement vont faire banqueroute à la vraye et solide vertu … La discipline sera bannie des troupes et de l’ordre des Armées … L’insolence croistra dans les villes, la tirannie dans les champs.57 ‘Idleness’ appeared to him as the greatest danger, for it was clear ‘que les hommes reduits à ne rein fair sont induits à mal faire … que l’oysiveté corrompt la vigueur des [hommes] et la chasteté des [femmes]’.58 By contrast, he emphasises the duty to work ceaselessly: ‘L’homme est né pour vivre en continuel exercice et occupation’.59 This gave rise to the most important practical task for the state, ‘de ne souffrir qu’il en demeure aucune partie oisive’.60 In this sense, he made suggestions about how the population should be employed. It was characteristic of Montchrestien’s position that – however much he complained about the operation of the money economy, he did not at all want to return to ‘the good old days’. On the contrary. It is apparent, in every aspect of his remarks, how strongly rooted he was in the money economy and how he emerged as a spokesperson for the capitalist, profit-making economy. He did not in the least want to abolish it but rather to serve it in the ‘general interest’, i.e. in the interests of the ruling classes. In former times – this is his train of thought – people could be forced to work. Now, however, slavery had been abolished in France. Montchrestien did not, as might be supposed, want to renounce means

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Montchrestien 1889, pp. 60–1. [‘Corruption of our ancient discipline’. What obedience towards superiors will there be in the future? Who will be proud of the honour of being ruled? If Your Majesty does not save us from this confusion and indifference, that will be it[! A]ll true and solid virtue will be bankrupted … Discipline will be banished from the troops and order of the army … Insolence will grow in the towns, tyranny in the fields. [Grossman’s emphasis. The interpolation is Grossman’s unacknowledged modification of punctuation.] Montchrestien 1889, p. 65. [‘That people reduced to doing nothing are induced into doing bad things … and that idleness corrupts the strength of [men] and the chastity of [women]’. Grossman’s emphasis.] Montchrestien 1889, p. 21. [‘People are born to live in continual activity and occupation’. Grossman’s emphasis.] Montchrestien 1889, p. 22. [‘Not to tolerate any idleness whatsoever’. Grossman’s emphasis.]

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of compulsion but rather to adapt them to new relations, based on the drive for profit. He taught that the new task consisted ‘d’employer les hommes à des artifices et travaux que joignent le profit particulier à son utilité commune’61 But in relation to the duty to work, people were not at all equal: ‘Il y a bien souvent autant de distance d’un homme à l’autre, que de l’homme à la beste’.62 Leadership fell to the upper classes, while the poor had to work. Montchrestien anticipated the doctrine, later formulated by Adam Smith, that if everyone pursues their own interests, the interests of society profit: ‘Le tout ne peut consister sans ses parties: il y en a qui commandent et remuent; et d’autres qui sont commandées, et remuées. Les mains qui font et les pied qui portent, sont aussi necessaires au ministére de l’ame comme les yeux qui voyent et les oreilles qui oyent’.63 With pathetic brutality, he addressed ‘do-nothings’ and proposed measures to compel the poor to work, without burdening the state: Ventres paresseux, charges inutiles de la terre, hommes nés seulement au monde pour consommer sans fruict! … c’est proprement contre vous que l’authorité du Magistrat se doit d’émployer! C’est contre vous qu’il doit armer sa just severité; pour vous sont les foüets et les carquans. C’est de vous que se provignent les coupe-bourses, les faux tesmoins et les voleurs. A telle sorte de gens on peut apporter une juste violence; on les doit faire travailler par tasche, comme font les Flamans en la ville d’Amsterdam, les hommes débauchés rebelles à leurs parens et faineans, à scier et couper du [bois] de brésil et autre bois de teinture en une certaine maison qu’ils appellant Fechtus [Werkhuis], où le labeur fait tous les jours quelque nouveau miracle …64

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Montchrestien 1889, p. 27. [‘Of employing people in skills and tasks that combine private profit with social usefulness’.] Montchrestien 1889, p. 37. [‘… very often, there is as much difference between one person and another as between a person and an animal’. Grossman’s emphasis.] Montchrestien 1889, p. 138. [‘The whole cannot exist without its parts: there are those who command and act, and others who are commanded and acted upon. Hands which make and feet which carry are just as necessary for the ministry of the soul as eyes which see and ears which hear’.] Montchrestien 1889, pp. 106–7. [Grossman’s emphasis.] [‘Slothful bellies, useless burdens on the earth, people born into the world solely to consume without producing! … It is rightly against you that the authority of the magistrate must be deployed! It is against you that he must fortify his justified severity; for you there are whips and stocks. It is among you that cut-purses, false witnesses and robbers multiply! Violence can be employed with justice against such people; they should be made to work on tasks, as the Flemings do in the city of Amsterdam, making debauched people, rebels against their parents and do-nothings saw and cut Brazil wood and other

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This education through forced labour must be initiated in childhood, so the children of the poor must also be locked up in compulsory workhouses. ‘S’il s’y [en France] trouve de pauvres enfans – mais il n’y a que trop à cause du mauvais ordre … On peut à l’imitation des Hollandais y remedier … les ramasser et de les renfermer en des maisons publiques, les garçons à part et les filles à part; y faire travailler les uns et les autres en toutes sortes de manufactures, drapperie, fillace, toile, lingerie etc’. They should wear special clothes, so that they can be caught easily if they try to escape. He cynically asserted that ‘Ces maisons … sont appellées par les Hollandois escholes; et à bon droit puisque l’on y apprend à vivre … Ces methodes sont bons pour employer ceux qui sont nés pauvres sans être à charge à l’Estat’.65 And these did not only remain as proposals. In 1612, at the beginning of Louis xiii’s reign, an ‘Hôpital des mendiants renfernés’ was founded.66 ‘Mais le labeur des prisonniers était imposé moins comme tâche utile à remplir que comme châtiment pénible a subir’.67 From the beginning of the seventeenth century, the so-called hôpitaux généraux68 were founded, for example – only to mention the most important – in Lyon (1613), Troyes (1630), Reims (1632), Marseille (1639), Dijon (1643), Montpellier (1646), Toulouse and Béziers (1647), Nantes et Rennes (1650), finally Paris (1656) and Bordeaux (1662). The Edict of 1662 demanded their foundation in every city and market town. A series of these buildings bore the revealing name ‘hôpital général de manufacture’.69 In fact, they had nothing at all to do with hospitals in the modern sense. Cilleuls writes that ‘Ce sortes d’établissement avaient pour but immédiate de réprimer la mendicité, en corrigeant, par le travail forcé, des habitudes de paresse’.70

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66 67 68 69 70

die-woods in a certain building, which they call the workhouse [Werkhuis], where labour performs some new miracle every day.’ Grossman’s emphasis.] Montchrestien 1889, p. 103. [‘If [in France] there are poor children – but there are only too many because of public disorder – this can be remedied in imitation of the Dutch … and gather them together and detain them in public buildings, the boys in one part, the girls in another, and make each and the other labour at all sorts of manufactures – drapery, bast, cloth, lingerie etc’. ‘These buildings are called schools by the Dutch and for good reason, because there one learns to live … These methods are good for employing those who are born poor, without burdening the state’. Grossman’s emphasis.] [‘Institution for reformed beggars’.] Cilleuls 1898, p. 25. [‘But the labour of the prisoners was imposed less as a useful and fulfilling task than as a painful to be suffered’. Grossman’s emphasis.] [These institutions provided essentials of life to and confined the indigent and required them to work.] [‘General manufacturing institution’.] [Cilleuls 1898, p. 25. Grossman’s emphasis.]

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The operation of these methods was not to be confined to those compulsorily detained in the institutions. The rest of the ‘layabouts’ were to be moved by the deterrent effect of these compulsory workhouses to take up labour voluntarily.71 The best known of these institutions was the Hôpital de Paris, founded by Pomponne de Bellièvre, the first President of the Parliament of Paris. It was, at the same time, a building for the poor, a workhouse, a prison and an orphanage. The craftspeople and citizens of the town turned to the institution when they needed boys of the youngest age as apprentices or to perform domestic tasks. In 1690, the Salpêtrière, an institution belonging to the Hôpital, had more than 5,000 inmates, among them 103 boys, aged 6 to 10, engaged in knitting, and 286 girls aged 8 to 10, who were employed in a laundry and a carpet-making factory. According to a report of 1665, old men and cripples were also employed; since labour had been introduced as a universal obligation, stricter discipline and piety reigned among the poor.72 Under [Jean Baptiste] Colbert, decrees were repeatedly enacted against idleness as the fount of all evil. Religious communities were required to teach the poor to work, since they no longer ought to support the idle with alms.73 A priest reported in 1687 that he had cleansed more than 100 villages of fainéantise (slothfulness) in the Diocese of Constance alone.74 Prison, compulsory labour in chains, the ruthless exploitation of child labour, in short, the brutal misuse and waste of human lives: these were the means which marked the path to ‘the strictest rationality in labour’75 during the period of manufacturing’s emergence. There were similar ‘manufactories’ in the cities of England, Holland and Belgium. The Copenhagen prison bore the revealing name of ‘Spinhuis’.76 On the occasion of the opening of such a manufactory in the Ghent prison, John Howard remarked that those who maintained that no industrial enterprise reliant on the labour power ‘bound in chains and forced to work’ could prosper and be profitable are mistaken.77

71 72 73 74 75 76 77

Cilleuls 1898, p. 25. Kulischer 1929, p. 153. Cilleuls 1898, p. 288. Cilleuls 1898, p. 290. Borkenau 1971, p. 157. [‘Spinning House’.] Howard 1788. p. 339, cited by Kulischer 1929, p. 154. [In Howard’s English text he contested ‘an idea, that no manufacture can be carried on by convicts to any valuable purpose’ (Howard 1792, p. 147)].

the beginnings of capitalism and the new mass morality

499

3 Once it is apparent that Calvinist morality did not have the function in the emergence of capitalism that Max Weber and Borkenau ascribed to it, once it is also apparent that it is in no way a ‘fundamental problem’ of emerging capitalism, the question nevertheless still remains of whether it played any particularly important role, not in the advance of capitalism but rather in first making its operation possible by means of ‘the ascetic attitude of the masses towards the labour process’. Even for this formulation of the thesis, however, Borkenau in his book neither provides historical documentation nor otherwise shows of what the ‘ascetic attitude of the masses to the labour process’ consisted. The doctrine of ‘unlimited exertion because of lack of certainty of success in the competitive capitalist struggle’,78 tailored for the petty bourgeoisie, cannot be applied to working class. It was not even the specific Calvinist doctrines which made it suitable for ‘keeping the masses obedient’ but rather the generally irrational presuppositions of predestined salvation through faith, which it shared with Lutheranism. For the ‘Calvinists accept their capitalist fate in life as a given. So they do not need to, indeed ought not grumble about it’.79 In this respect, Calvinism, just like every other religion, is an instrument for distracting the masses from the struggle for a rational structuring of their fate in life – an instrument of mass domestication. In the light of this conclusion, Weber’s thesis, which Borkenau accepts, of the special role of the Protestant ethic in the origins and development of capitalism appears to be the legend that it really is. Specific religious currents in Catholicism, not only Jesuitism in the form of Molinism, which was aimed directly at securing the obedience of the masses, but also Jansenism, were in principle better suited than Protestantism to become an instrument of mass domestication. The principle of irrationalism contained in every religion was explicitly formulated in Jansenism in the sharpest terms; at the same time, however, this irrationalism was given the appearance of rationality, because it assumed a rational relationship between this-worldly good works and their other-worldly reward: salvation.80 Renunciation, obedience, submission are rewarded because they smooth the way to other-worldly salvation. Precisely in this education of the masses in obedience, diversion of them from this world, from the struggle to improve their earthly fate and from the struggle against the corrupt superiority of rulers, is the

78 79 80

Borkenau 1971, p. 176. Borkenau 1971, p. 190. [Grossman’s emphasis.] Borkenau 1971, p. 253.

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role of religion in bolstering capitalism more clearly expressed than in its direct political-economic perspectives on questions of usury, interest, trade and wages. This is the visible spirit of capitalism, not only of the Protestant ethic but of every religion aiming to domesticate the masses. A single concrete contemporary document illuminates the innermost character of this mass morality better than all Borkenau’s abstract explanations, merely emphasising ‘structural moments’, of the currents which emerged with capitalism and aimed to create a new ‘mass morality’. According to the Jansenist scholar Father [Pierre] Nicole, the main concern of humans should not be life but death: ‘The important thing … “is to die well.” “Sufferings” … “whether long or short, great or small, vanish and are lost in eternity … Let us seek eternity in our hearts, and all will appear the same to us – riches, poverty, health, sickness, honours, lowliness, glory, ignominy”’. When Jansenists marry, the life of the married couple ought to become a ‘“Christian life, which is itself a sober life, a life of work and not of recreation, games and pleasure”’. Accordingly, the Jansenist does not strive for advancement, ‘knowing that “each degree of wealth, honour and grandeur increases our dangers, and renders salvation more difficult.” Therefore, too, he did not envy the great on earth …’81

81

Groethuysen 1968, pp. 155–6, 157. [Grossman’s emphasis. The sources of Groethuysen’s quotations, in order, can be found in Nicole 1688, p. 460; Nicole 1767, p. 40; and Nicole 1714, p. 135.]

References Grossman’s archival sources Archiv des k.k. Ministeriums des Innern (Wien), (ami) i A 3 Carton 3.023 Huldigung und Desiderien. ii A 2 Fasc. 5 Geometrische Aufnahme der Provinzen. ii A 3 Fasc. 31 Grenzberichtigungen. ii A 6 Fasc. 320, 321 Einrichtung neu akquirierter Provinzen, Landesbereisungen zur Feststellung der Gebrechen. iii A 4 Cartons 61, 62 Gubernium und dessen Instruktionen. iii A 5 Cartons 196, 197 Kreisämter. iv E 7 Carton 1744 Viehmärkte, Vieh-Aus- und Eintrieb. iv G 5 and 6 Rindvieh- und Pferdezucht. iv H 2, 3 and 4 Ständische Angelegenheiten. iv i Carton 2013 Städte in genere. iv T 4 Carton 2622 Schuldenwesen und Beschwerden der Juden. iv T 11 Carton 2657 Steuern der Juden. v G 12 Carton 2968 Handel mit fremden Staaten: Beförderung der Ausfuhr. v G 6 Carton 2936 Warenstempelung. v G 7 Cartons 2940 and 2941 Zoll- u. Mauttarife. v G 15 Carton 2975 Handelsvorschläge. Galizische Protokollbücher (Indices) und Patentensammlung.

Archiv des k.u.k. gemeinsamen Finanzministeriums (previously Hofkammerarchiv) (Wien) (hka) Mautwesen in Galizien, Fasc. 7 G, 1773–92. Kameralwesen Galizien und Lodomerien, Fasc. 72. [The original has ‘Kameralakten, Galizien, Nr. 7, 1776–1792’, and frequently in footnotes ‘Kameralakt 7 G’ or shorter variants. These locations do not currently exist in the Östereichisches Staatsarchiv and the foregoing is the likely location of the files.] Galizische Hofkommissionsakten, Fasc. 1772–92. Commerz, Fasc. 57, Ung. u. Galiz. Fasc. 5734–5737 (1773–1800). Merkantiltabellen, M 3 Fasc. 12.222 and 12.223. Merkantiltabellen, M 2 Fasc. 12.217. Manipulationssachen, M 4 Fasc. 12.226. Kassasachen, K 2 Fasc. 12.216. Viehausfuhr, Fasc. 12.202. Grenzbestellung, G Fasc. 12.203.

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Galizische Reiserelation ex 1786, Fasc. 12.204. Taxsachen, Galicia, T 1 Fasc. 12.211. Staatsvoranschläge, Fasc. 227 D (manuscript library). Staatsschuldenwesen, Fasc. 26.

Haus-, Hof- und Staatsarchiv (Wien) (hhs) Einzelne Staatsratsakten, 1774, 1781 and 1787.

Archives du Ministère des Affaires Etrangères (Paris) Correspondence politique, volumes 329, 330 and 331. Statthaltereiarchiv (Lviv) [Also known as Archiwum Namiestnictwa, now part of the Derzhavnyj Arxiv Lvivs’koyi oblasti] Commercialakten, 1774–92.

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Index Alberti, Mario (1884–1939) Italian economist 18, 502 Anderson, Perry (1938–) English Marxist historian 21–22, 502 Ankwicz, Stanisław (1720–1784) senior official of the Polish Commonwealth 53, 430, 479 Árva, Hungarian county, the town of Árva is Orava in Slovak, now in Slovakia 295 Askenazy, Szymon (1865–1935) Polish historian and diplomat 191, 434, 467, 503 Auersperg, Heinrich von (1697–1783) Habsburg administrator, Governor Galicia (1774–1780) 127, 222, 235, 238, 258, 285, 287, 358, 363, 385–86, 481– 83 Balzer, Oswald Marian (1858–1933) Polish political and legal historian, and archivist 103, 138, 465, 503 Banaji, Jairus (1947–) Indian Marxist social analyst, historian and theorist 22, 503, 509 Bardejov, Bartfeld in German, now in Slovakia 127, 415 Bavaria, Bayern in German 16, 51, 74, 80, 355, 365–66, 370–71, 417 Beekhen, Georg Adalbert von (1741–1801) Governor’s Office Councillor, later Court Councillor 51, 53, 286–87, 337, 339, 342– 43, 346–47, 356, 358–61, 377, 383–84, 428–29 Beer, Adolf (1831–1902) Austrian historian, public servant and politician 112, 123, 140–41, 162–64, 179–81, 190–91, 195– 98, 209–12, 239, 257–58, 325, 329–36, 367–71, 373–75, 388–91, 414–15, 422–23, 426–28, 436, 504 Belgrade, Beograd in Serbia 53, 423 Bellièvre, Pomponne de (1529–1607) senior French public servant 498 Benoît, Gédéon de (?–after 1776) Prussian diplomat 213–14, 218, 232, 332, 377 Berestechko, Beresteczko in Polish, now in Ukraine 153, 301, 303, 402

Bidermann, Hermann Ignaz (1831–1892) Austrian political scientist and statistician 250, 381, 387, 389, 408, 442, 504, 511 Bielsko, Bielitz in German, now in Poland 64, 163–64, 215, 270–71, 279, 311–13, 316, 335–36, 416 Bilhorod-Dnistrovskyi, Akkerman in Turkish, now in Ukraine 433 Blondel, (1856–1948) French historian of Germany and Austria 89 Blümegen, Heinrich Kajetan von (1715–1788) senior Habsburg public servant 181, 255, 343, 386, 475 Bobrowski, Polish judge 484 Bobrzyński, Michał (1849–1935) Polish historian and conservative politician 89, 247, 465, 504 Bodenstein, Gustav (1883–1962) archivist at the Austro-Hungarian Archive of the Finance Ministry 89 Bohemia, Čechy in Czech, Böhmen in German, now in the Czech Republic 83, 114, 140, 144, 147, 291, 296, 310–14, 316, 328–29, 335–37, 374–75, 390–91 Boleslav, Bunzlau in German, now in the Czech Republic 336 Borkenau, Franz (1900–1957) Austrian historian and commentator, later a cold war warrior 8–9, 23, 25, 486–92, 498–500, 504 Braşov, Kronstadt in German, now in Romania 127 Bratislava, Pressburg in German, now in Slovakia 127 Brawer, Abraham Jacob (1884–1975) AustrianIsraeli geographer and historian 32, 187, 208, 505 Breteuil, Louis Charles Auguste Le Tonnelier de (1730–1807) French diplomat and senior public servant 121, 309, 341, 353– 54, 427 Brigido, Josef Karl von (1733–1817) Habsburg administrator, Governor of Galicia (1780– 1794) 66, 69, 111, 188, 290, 386–87, 395– 96, 447–51, 471–72

524 Brühl, Heinrich von (1700–1763) senior Saxon public servant in Saxon-Polish service under Elector Friedrich August ii of Saxony/King August iii of Poland 163 Brzeg, Brieg in German, now in Poland 311, 313, 316 Buchlov, Buchlau in German, aristocratic manor in Moravia, now in Czech Republic 128 Buda, Ofen in German now part of the Hungarian capital Budapest 417, 476 Bujak, Franciszek (1875–1953) Polish economic historian and politician 18–20, 104–5, 139, 505 Bujakowski, Ignacy von, Silesian noble, Head of the Brody District 405 Bukaty, Franciszek (1747–1797) Polish diplomat 365 Büsching, Anton Friedrich (1724–1793) German theologian and geographer 30–31, 505 Carinthia, duchy, Kärnten in German, Koroška in Slovene, now in Austria and Slovenia 83, 147, 391 Carniola, duchy, Kranjska in Slovene, Krain in German now in Slovenia 83, 147, 391 Caspari, Caspar? Jesuit priest, public servant in Galicia, scientist, geographer 111, 434–35 Chernivtsi, Czerniowce in Polish, Czernowitz in German, now in Ukraine 393, 402 Chotek, Rudolf (1706–1771) Habsburg diplomat and public servant, president of the Commercial Council (1840–1860) 53, 112, 310–11, 314–17, 343, 350, 360–62, 386, 388, 390, 429–30 Chotkowski, Władysław (1843–1926) Polish Catholic priest, church historian, professor and rector of the Jagiellonian University 32, 96–97, 109, 113, 153, 191– 92, 199, 208–10, 219, 222, 467, 469, 505 Chudniv, Cudnów in Polish, now in Ukraine 301 Cieszyn, Teshen in German, now in Poland 56–57, 127, 149, 152, 164–65, 167–74, 176–78, 181–82, 248, 313–14, 316–17, 356, 367, 402, 416

index Cobenzl, Philipp (1741–1810) senior Habsburg diplomat, later State Chancellor 142–43, 146, 179–80, 235, 285, 287, 367–73, 383, 426–27, 436, 504–5 Colbert, Jean Baptiste (1619–1683) French statesperson and proponent of mercantilist policy 320, 389, 406, 492, 498, 506 Constantinople, Istanbul in Turkish 53, 366, 423, 426–27, 430–31 Crimea, Krim in Ukrainian and Russia, now contested between Ukraine and Russia 161, 336, 369, 431–32, 436 Crossen, in German, Krosno Odrzańskie in Polish, now in Poland 328–29 Czacki, Tadeusz (1765–1813) Polish administrator and economist, member of the Crown Treasury Commission (1786) 249 Dąbrowa Górnicza, Dombrowa in German, now in Poland 317 Danube river, Donau in German now in Germany, Austria, Slovakia, Hungary, Croatia, Serbia, Bulgaria, Romania, Moldova and Ukraine 20, 51, 53, 74, 127, 355–56, 417, 423, 426–27, 436, 438 Dębicki, Ludwik (1843–1908) conservative Polish journalist and author 102, 467, 506 Degelmann, Johann Bernhard, (about 1725– 1801) Habsburg Court Councillor 96– 97, 111–12, 148–49, 153, 208–10, 213–14, 217, 219, 221–22, 224, 234, 284–86, 296 Dietz, Heinrich Friedrich (1751–1817) Prussian diplomat and orientalist 374, 514–15 Dívčí Hrad, Maidlberg in German, now in the Czech Republic 335 Dniester river, Dnister in Ukrainian, now in Ukraine and Moldova 52–54, 193, 347, 366, 423, 428–30, 433–36 Durno, James (1751–1807) Scottish timber merchant and British consul in Memel (now Klaipėda in Lithuania) 365 Dzieduszycki, Tadeusz (1724–1777) Polish nationalist 195, 434 Dziembowski, representative of Poland in Austria 163

index Eger, Friedrich von (1734–1812) senior Habsburg public servant then factory owner 75, 111, 142, 170, 173–75, 177–78, 181, 258, 264, 284–86, 313–14 Elisabeth, presumably a reference to Dumbrăveni in Romanian, Elisabethstadt in German, now in Transylvanian region of Romania 127, 367 Engström, Lars von (1751–1826) Swedish diplomat 365 Fechner, Hermann (1834–1880) German historian 152, 154, 161–63, 168, 173, 217–18, 248, 311–12, 330, 334–36, 339, 372–75, 506 Feodosia, Theosia in Greek, in Crimea, now contested between Ukraine and Russia 436–37 Finckenstein, Karl Wilhelm Finck von (1714– 1800) Prussian diplomat and Minister, confidant of Friedrich ii 195, 332–33, 368 Finsterbusch, Augustin Galician wholesale merchant and industrialist 66, 243, 343– 46, 350, 398 Forbonnais, François Véron Duverger de (1722–1800) French political economist, public servant and contributor to Diderot’s Encyclopaedia 346, 507 Fürstenberg, Emil Egon zu (1876–1964) Austro-Hungarian diplomat 89 Further Austria, die Vorlande, later Vorderösterreich in German, designated Vorarlberg, now in the west of Austria, and small Hapbsburg territories now in south-western German and northern Switzerland 83, 389, 391 Galicia, Galicja in Polish, Halychyna in Ukrainian, Galizien in German, now in Poland and Ukraine 10–22, 30–39, 41–77, 93–104, 107–17, 121–29, 131– 56, 158–60, 169–83, 187–94, 221–26, 243–51, 253–320, 332–42, 344–53, 383–99, 415–33, 435–45, 447–54, 465– 74 Gdańsk, Dańzig in German, now in Poland 48–53, 74, 154–55, 187–91, 193–94, 198–99, 269–70, 327–28, 332–34, 338–

525 47, 351–53, 358–60, 364–66, 376–78, 383–84, 415–21, 428–29, 438, 447–49, 452–53 Gooß, Roderich (1879–1951) Austrian archivist, historian and later diplomat 89 Gorizia, Görz in German, now in Italy 140, 147, 391 Gorzębski, Polish judge 484 Gossler, Prussian Governor of Magdeburg 330 Gruber, Franz Xaver, Austria Court Councillor of the Ministerial Bank Delegation 143, 181, 235, 258 Grünberg, Carl (1861–1940) Austrian, Marxist historian and economic historian, Grossman’s academic patron 4–8, 18, 39, 89, 188, 423, 459, 508, 510, 517, 520 Guinigi, Vincenz von Habsburg public service trade Specialist in Galicia 72, 78– 79, 273–74, 279, 281, 294, 298–99, 303, 348, 422, 425, 479, 481 Hadik, Andreas (1711–1790) Habsburg general, military governor of Galicia (1774) 128, 173, 260 Harman, Chris (1942–2009) English revolutionary Marxist historian and leader of the Socialist Workers Party 21, 511 Hartmann, Ludo Moritz (1865–1924) Austrian historian, diplomat and social democratic politician 325–29, 355, 511 Hatzfeld, Karl Friedrich von (1718–1793) senior Habsburg state official 223–24, 236, 258, 263, 363, 386, 391, 420, 426, 430 Haugwitz, Friedrich Wilhelm von (1702–1765) senior Habsburg state official 163, 192 Heiter, Treasury Councillor under Maria Theresia and Joseph ii 43, 112 Herbert, Peter Philipp von (1735–1802) Habsburg diplomat, ambassador in Istanbul (1780–1788) 430–31 Hermannstadt in German, Sibiu in Romanian, now in Transylvanian region of Romania 127 Hertzberg, Ewald Friedrich von (1725–1795) Prussian diplomat and foreign minister 373–74, 472, 511

526 Hill, Christopher (1912–2003) English Marxist historian 24, 511 Hock, Carl Ferdinand von (1808–1869) senior Habsburg/Austrian public servant and economist 250, 381, 387, 389, 408, 442, 511 Hoffmann, Karl Gottfried Prussian diplomat 327 Hönig, Moyses Aron Löbl (1730–1787) Habsburg banker and wholesaler 53, 429 Howard, John (1726–1790) English philanthropist and prison reformer 498, 511 Hoym, Karl Georg Heinrich von (1739–1807) Prussian administrator, Minister in Silesia 217, 248, 375 Hradec Králové, Königgrätz in German, now in the Czech Republic 316 Humenné, Homenau in German, now in Slovakia 127 Hungary, Magyarország in Hungarian, Ungarn in German 15–16, 64, 73–74, 80– 82, 114, 125–27, 148–49, 178–79, 204–6, 250–51, 258–62, 268–69, 273–75, 277– 79, 374–75, 389, 415–16, 418–23, 439, 474–76 Husarzewski, Aleksy Onufry (1714–1782) Polish politician and propagandist 337, 339 Ivanić, Josef, archivist at the AustroHungarian Archive of the Finance Ministry 89 Ivano-Frankivsk, formerly Stanyslaviv, Stanislau in German and Stanisławów in Polish, now in Ukraine 314, 316, 393, 397, 400 Jacobi-Klöst, Constans Phillipp Wilhelm von (1745–1817) Prussian diplomat 375 Jaworski, Henryk, Polish historian 37, 95– 96, 435, 471, 484, 512 Jekel, Franz Josef (1762–1816) Habsburg lawyer and historian of Poland’s legal system 92, 97–98, 188, 512, 519 Johann, (von Hohenzollern) (1513–1571) Margrave of Brandenburg 31, 44–45, 80, 96, 111, 503, 506, 508, 517, 519, 521 Kalinka, Walerian (1826–1886) Polish Catholic priest, journalist and historian 31,

index 37, 89, 92–94, 97, 99, 103–5, 191, 339– 40, 365–69, 374–75, 377–78, 465, 472–74, 512 Kallbrunner, Josef (1881–1951) Austrian archivist, historian and anti-Semite 89 Kaps, Klemens (1980–) Austrian historian 20–21, 512 Karejew, Nikolai Ivanovich (1850–1931) Russian historian and philosopher, English transliteration from Russian: Kareev 465, 512 Karlstadt, in German, Karlovac in Croatian, now in Croatia 127 Karl Theodor, (von Wittelsbach) (1724–1799) Elector of Bavaria (1777–1799) 371 Károlyi, Árpád von (1853–1940) HungarianAustrian archivist and historian, Director of the Haus-, Hof- und Staatsarchiv (1909–1913) 89 Kaunitz, Wenzel Anton von (1711–1794) Habsburg State Chancellor (1753–1792) 164– 65, 190–91, 196–98, 215–17, 219–21, 225–26, 228–29, 232, 245, 332–33, 341, 349–51, 353, 369–70, 372–73, 416, 431– 32 Kinner, Franz Wilhelm von, Habsburg diplomat in Poland during the early 18th century x327 Kortum, Ernst Traugott von (1742–1811) public servant in Prussia, Scheswig-Holstein, Poland and Habsburg Galicia 45, 337, 364, 387, 395, 398, 444, 447–51, 456 Korzon, Tadeusz (1839–1918) influential Polish historian 30, 32–33, 35, 38, 41, 50, 52, 109, 135, 138, 199–200, 218–19, 301, 321, 465 Kossakowska, Katarzyna (1716 or 1722–1803) Polish political activist 512 Kozian (also spelt Koczian and Kotzian), Anton (1717–1780) 309, 415 Koziebrodzki, Marcin Boleśta, (?–1787) Polish judge 484 Kretschmayr, Heinrich (1870–1939) Austrian archivist and historian, Director of the Archiv des Ministeriums des Innern (1904–1918) 89 Kreyczi, Franz, Court Councillor at the Austro-Hungarian Archive of the Finance Ministry 89

527

index Krnov, Jägerndorf in Geman, now in the Czech Republic 56, 152, 164–65, 167–68, 265 Krukowiecki, Piotr (1722–1792) Polish judge 484 Kuczera, Franz von, Specialist in the Galician Governor’s Office 389, 397, 406 Laffemas, Barthélemy de (1545– possibly 1612) French economist 493–94, 514 Lasocki, Antoni (around 1727–1799) Polish pro-Russian politician 214 Lefebvre, Georges (1874–1959) French Marxist historian 22, 514 Lelewel, Joachim (1786–1861) Polish historian, geographer and politician 31, 514 Lemberg, Lviv in Ukrainian, Lwów in Polish, now in Ukraine 337, 339, 342, 346–47, 356, 358–60, 395, 400, 402, 404–6, 482–83 Lenin, Vladimir Ilyich (1870–1924) Russian Marxist, most influential leader and theoretician of the Bolshevik Party and the early Russian Communist Party 22, 514 Leonhard, Rudolf (1879–1918) German economist and political scientist 18, 514 Leopold i, (von Habsburg) (1640–1705) Holy Roman Emperor (1658–1705) 381 Leshniv, Leśzniów in Polish, now in Ukraine 307 Leszczyński, Stanisław (1677–1766) Polish King (1704–1709, 1733–1734) 466 Lichnowsky, Johann Karl (1730–1788) Habsburg public servant, Intendant of Trieste (1764–1765) 414 Liepāja, Libau in German, now in Latvia 364–65 Liesganig, Joseph (1719–1799) Habsburg Jesuit, theologian, astronomer and practical geographer 35–36 Lipski, Tadeusz (1725–1796) Polish litterateur and politician 214 Litoměřice, Satz-Leitmeritz in German, now in the Czech Republic 336 Lower Austria, Niederösterreich in German 83, 310, 390 Lucchesini, Girolamo (1751–1825) Italian noble and Prussian diplomat 365, 444, 472–74

Lusatia, Lausitz in German, region now in Germany, Poland and the Czech Republic 328 Lutsk, Łuck in Polish, now in Ukraine 212 Luxemburg, Rosa (1871–1919) Polish-German revolutionary Marxist theorist, leader of the Social Democratic Party of the Kingdom of Poland and Lithuania, the German Social Democratic Party, the Spartacist League and the Communist Party of Germany 21–22, 513–14 Lviv, in Ukrainian, Lwów in Polish, Lemberg in German, now in Ukraine 6, 45–46, 97–99, 131, 152–53, 155, 271, 290–91, 294, 387, 393–95, 400, 403–4, 409, 416–18, 453–54, 468–69, 471, 473, 502 Mamalyha, Mamaros in German, now in Ukraine 127 Margelik, Johann Wenzel (1750–1805) senior Habsburg public servant 45–46, 111, 270, 306, 320, 416, 451–54, 456–57, 483–84 Maria Theresia (von Habsburg) (1717–1780) sole ruler of the Habsburg lands (1740– 1765), co-ruler (1765–1780) 10–12, 14, 17–23, 34–35, 37–38, 87–88, 100–101, 107–8, 166, 191–92, 267–68, 348–49, 356–58, 413–14, 469–71, 483–84, 504, 510–11, 520–21 Minasiewicz, Franz von, Galician lawyer and author 98, 515 Montchrestien, Antoine de (1575–1621) French poet, dramatist and political economist 493–96, 516 Moravia, Morava in Czech, Mähren in German, now in the Czech Republic 128, 140, 147, 310–12, 314, 316, 318, 328, 335– 37, 390, 396, 415, 417 Moszyński, Fryderyk Józef Jan Kanty (1738– 1817) Polish military commander and senior state administrator 218, 227, 239 Muszyński, businessperson who took over Dniester transport company 435 Nassau-Siegen, Karl Heinrich von (1743– 1808) French naval officer of disputed aristocratic lineage, in Russian service (1786–1792) 54, 433–34

528 Neffzer, Jacob Benedict (1705–1785) Habsburg public servant 336 Nemyriv, Niemirów in Polish, now in Ukraine 301 Nesteriwci, Nestorowce in Polish, now in Ukraine 434 Nicole, Pierre (1625–1695) French priest, theologian and propagandist for Jansenism 500, 516 Niedermayer, Habsburg Head of District and subsequent advocate of exporting Galician salt via the Black Sea 435 Noteć, river, Netze in German, now in Poland 334 Nysa, Neisse in German, now in Poland 335 Opitz, Prussian Military Councillor 248 Orikhovets, Orzechowiec in Polish, now in Ukraine 296 Ostend, Ostende in Flemish and French, now in Belgium 414 Ostrowski, Antoni Kazimierz (1713–1784) Polish priest and politician, Bishop of Kujawy (1763–1776), archbishop of Gniezno (1777–1784) 214 Palanga, Połonga in Polish, now in Lithuania 365 Pawiński, Adolf (1840–1896) Polish historian and archivist 38, 465, 467, 516 Pergen, Johann Anton von (1725–1814) senior Habsburg diplomat and public servant, Governor of Galicia (1772–1774) 31, 35, 44–46, 111, 113, 138–39, 192– 94, 196–97, 267–68, 468–69, 471– 72 Pidvolochysk, Podwołoczyska in Poland, now in Ukraine 296 Pistiner, Jakob (1882–1930) Bukovinian/Romanian lawyer and social democratic leader 18, 516 Pitt, William Younger (1759–1806) British Tory politician and Prime Minister (1783– 1806) 365 Podewils, Friedrich Werner von (1741–1808) Prussian diplomat 372 Podillia, Podolya in Polish, region of the Republic of Poland until 1793, then

index annexed by Russia, now in Ukraine and Moldova 44, 46, 52, 152, 160, 193, 197, 278, 285, 423, 428 Poland, Polska in Polish, Polen in German 1–8, 37–44, 48–50, 106–9, 135–39, 151– 55, 160–64, 189–210, 213–39, 242–51, 255–58, 263–65, 277–78, 325–30, 334– 37, 346–50, 357–59, 363–66, 416–20, 458–61 Poniatowski, Stanisław August (1732–1798) Polish prince, King Stanisław ii of Poland (1764–1795) 163, 245, 503 Poniński, Adam Poniński (1732–1798) Polish Treasurer and pro-Russian politician 197, 218 Ponykovytsya, Ponykovycja in Polish, Ponikwiza in German, now in Ukraine 306 Popowitsch, Paul, Greek merchant in Galicia 425 Potocki, Józef (1735–1802) Polish Crown Carver and member of the Polish Treasury Commission, owned estates in Galicia 192 Požarevac, Passarowitz in German, now in Serbia 53, 423–24, 427, 429 Preschel, Friedrich Galician manufacturer 153, 155, 242–43, 340, 345, 398 Přibram, Karl Eman (1877–1973) Austrian-US economist and statistician 5, 18, 43, 112, 286, 310, 517 Prokop, Habsburg public servant 163, 192 Prudnik, Preußisch-Neustadt in German, now in the Czech Republic 335 Prussia, Preußen in German, now in Germany, Poland and Russia 10, 15–16, 48– 52, 162–64, 189–91, 193–201, 207, 214–15, 217, 219–20, 232–33, 311–13, 325–35, 339–42, 347–56, 358–61, 363–71, 373– 78, 383–85, 472–74 Pruth, Prut in Romanian and Ukrainian 53, 427, 429–30 Pszczyna, Pleß in German, now in Poland 128 Ptuj, Pettau in German, now in Slovenia 421 Raab, Franz Anton von (1722–1783) senior Habsburg public servant, responsible for land reform 234, 426–27

index Racibórz, Ratibor in German, now in Poland 419 Radyvyliv 153, 301, 303, 307, 402, 406 Repnin, Nikolai Vasilyevich (1734–1801) Russian diplomat and general 356, 420 Reviczky 48, 164–65, 191, 193–99, 205, 208, 210–17, 219–29, 232, 235, 243–45 Rhine, river, Rhein in German, now in Switzerland, Austria, Germany and the Netherlands 88, 332, 355, 370 Rizzi, Hans (1880–1968) Austrian economist and public servant 28, 30, 87, 517 Roepell, Richard (1808–1893) German historian and National Liberal politician 426, 465, 472, 517 Roscher, Wilhelm Georg Friedrich (1817– 1894) German economist 87, 166, 233, 517–18 Rutowski, Tadeusz (1852–1918) Polish journalist, statistician and democratic politician 94–95, 99–100, 121, 151, 518 Rzewuski, Severin (1725–1811) Polish general 394, 473 Sandomierz, Sandomir in German, now in Poland 343, 346 Sarmatian, region, north and north-east of the Black Sea 161 Schierendorff, Christian Julius Schierl von (1661–1726) senior Polish then Habsburg public servant 326–28 Schlettwein, Johann August (1731–1802) prominent German physiocrat 31, 191 Schmelz, corrupt Galician Provincial Secretary 394 Schmid, Leopold Friedrich von, Habsburg author and public servant in Galicia 98, 518 Schönauer, Ferdinand von, senior Moravian then Galician customs official 79, 111, 155, 304, 384, 396, 402, 404–5 Schweighofer, Johann Michael (1755–1812) Habsburg public servant and publicist whose writings supported Joseph ii’s political and economic reforms 310, 388, 416, 427, 431, 441, 446, 458, 475, 519 Sebastopol, Sevastopol in Ukrainian and Russian, in Crimea, now contested between Ukraine and Russia 436–37

529 Serionne, Jacques Accarias de (1706–1792?) French lawyer and commercial journalist associated with Habsburg officials including Johann Ludwig Joseph von Cobenzl and Empress Maria Theresia 414 Siemienski, Wilhelm (?–1789) Polish aristocrat and Habsburg public servant 65 Silesia, Śląsk in Polish, Schlesien in German, a region now in Poland, Germany and the Czech Republic 50, 57–58, 74, 80–81, 152, 160–64, 217–18, 248, 270–71, 295–96, 310–14, 316–18, 326–30, 334–39, 345, 348–49, 372–73, 375, 390, 417 Skole, Skola in Polish, now in Ukraine 131, 415 Skorupka, Polish judge 484 Smith, Adam (1723–1790) preeminent Scottish theorist of classical political economy 5, 271, 294, 319, 496, 519 Smolník, Schmölnitz in German, now in Slovakia 270 Sole, à, Galician Governor’s Office Councillor 170–73, 181 Sonnenfels, Joseph von (1733–1817) Habsburg public servant and influential academic 116, 135–36, 191, 286, 309–10, 352, 445– 46, 514, 519 Sorgenthal, Conrad von (1733–1805) Habsburg public servant, including as head of state-owned factories 45, 62, 111, 127, 142, 181, 419 Spielmann, Anton von (1738–1813) Habsburg Court Councillor 114, 363, 372, 375 Spisz, Zips in German, now in Poland 295 Splény 1774 Governor’s Office Councillor, 125, 131 Sremski Karlovci, Karlowitz in German, now in Serbia 53, 423 Stackelberg, Otto Magnus von (1736–1800) Russian diplomat 217, 222, 229, 232, 356, 365, 383, 420 Starzyński, Stanisław (1853–1935) Polish lawyer, academic and conservative politician 92, 102, 387, 390, 444, 447, 473, 516, 520 Staszic, Stanisław (1755–1826) Polish Enlightenment polymath, Catholic priest, philosopher and political commentator 42– 43, 91–92, 96–97, 106–7, 200, 246, 249, 461, 469, 520

530 Stöger, Michael Franz (1796–1834) Habsburg lawyer, statistician and political scientist 31, 520 Stoyaniv, Stojanów in Polish, now in Ukraine 296 Strasbourg, Straßburg in German, now in France 5 Strasoldo, corrupt Galician official 395 Styria 57, 74, 83, 147, 391 Sumiński, Piotr z Alkantary (1751–1801) proRussian Polish politician 214 Surowiecki, Wawrzyniec (1769–1827) Polish economist, historian and anthropologist 465, 520 Sventāja, river, Šventoji in Lithuanian 365 Swabia, Schwaben in German, region now in Germany 75 Świdnica, Schweidnitz in German, now in Poland 311 Swieten, Gottfried van (1733–1803) Netherlands-Habsburg diplomat, librarian and public official 325, 332–33 Szamosuywar, Gherla in Romanian, Szamosújvár in Hungarian, now in Transylvanian region of Romania 127 Szczawne, Scavne in Grossman’s source, now in Poland 131, 415 Szczecin, Stettin in German, now in Poland 327 Szczepanowski, Stanisław (1846–1900) Polish economist, engineer, entrepeneur, and politician 63, 99–100, 520 Szujski, Józef (1835–1883) Polish historian, politician and poet 193, 199, 210–11, 213, 218, 234, 321, 465, 520 Szumowski, Władysław (1875–1954) Polish medical practitioner, academic and historian of medicine 15, 42, 106–8, 520 Targowica, Confederation (1892) alliance of reactionary Polish aristocrats, sponsored by the Russian government, opposed to the reforms of the Great Parliament, it precipitated a Russian invasion of the Polish Republic 470 Tepper, Piotr Fergusson (1713–1794) Polish banker 195 Ternopil, Tarnopol in Polish, now in Ukraine 33, 305, 308, 393, 397

index Thallóczy, Ludwig/Lajos von Privy Councillor (1857–1916) Austro-Hungarian archivist, historian and public servant 89 Thugut, Johann Amadeus Franz de Paula von (1736–1818) Habsburg diplomat, ambassador to Poland from 1780, eventually State Chancellor (Foreign Minister) 229, 363 Tokarz, Wacław (1873–1937) Polish-Galician, nationalist historian and army officer 32, 63, 103–4, 296, 320–22, 387, 407–8, 444, 470, 483, 521 Törek, treasury councillor under Maria Theresia and Joseph ii 43, 112 Toruń, Thorn in German, now in Poland 190, 211, 233, 325, 328, 332, 366, 374, 378, 472 Transylvania, Siebenbürgen in German, now in Romania 48, 58, 73–74, 80, 82, 127, 140, 148–49, 250, 389, 439 Tribuzzi, candle manufacturer in Trieste 129, 416 Turski, Paweł (729–1792) Bishop of Lutsk (1771–1790) Bishop of Kraków (1790–1800) 212 Ugarte, Aloys von (1749–1817) Habsburg public servant, promoted from Bohemia to Galicia to Vienna, later Governor of Moravia and Chief Chancellor of Austria 387, 404 Unkrechtsberg, Elias Anton von (1722–1802) Habsburg Court Councillor 395 Upper Austria, Oberösterreich, earlier Österreich ob der Enns in German, province now in Austria 83, 147, 267, 314 Veretsky, Vereckei in Hungarian, Veröczkö in Grossman’s source, now in Ukraine 415 Vergennes, Charles Gravier de (1719–1787) French diplomat and Foreign Minister (1774–1787) 341, 353–54, 371, 443 Vienna, Wien in German 4–6, 13, 18, 89– 90, 191, 198, 326, 331, 333, 388–89, 417, 419 Vistula, Wisła in Polish, Weichsel in German, now in Poland 15–16, 48–50, 74–75, 190– 91, 193–94, 197–98, 207–8, 210–11, 215,

index Vistula, Wisła in Polish, Weichsel in German, now in Poland (cont.) 226–29, 232–33, 242, 269–70, 325–28, 332– 34, 339, 348–49, 352–53, 375–77, 383 Vlasics, Galician Governor’s Office Councillor 111 Volochysk, Woloczysk in Polish, now in Ukraine 301 Volyn, Wołyń in Polish, region of the Republic of Poland until 1793, then annexed by Russia, now mainly in Ukraine 44, 52, 115, 152, 160, 193, 238, 248, 277–78, 423, 428 Wachendorf, corrupt Galician Provincial Assessor 394–95 Warsaw, Warszawa in Polish 7–8, 21, 33, 115, 194–98, 209–11, 215–26, 228–29, 232, 235, 237–38, 243–45, 362–63, 453, 473– 74 Warta, Warthe in German, now in Poland 197, 334 Weber, Max (1864–1871) influential German sociologist 2, 9, 23–25, 486–89, 491–92, 499, 502–3, 507, 520–21 Wielhorski, Michał (1730–1794) Polish public servant and politician 94 Winiarz, Alojzy (1868–1912) Polish-Galician legal academic and historian and director of the Statthaltereiarchiv in Lwów 89

531 Wodzicki, Stanisław Karol Piotr Cyprian (1764–1843) conservative Polish politician 467–68, 521 Zalishchyky, Zaliszchyki in Polish, now in Ukraine 131, 239–40, 397 Zamoyski, Andrzej Hieronim Franciszek (1716–1792) liberal Polish reformer, Great Crown Chancellor (1764–1767) 92, 97, 321, 443 Zannoni, Bartolomeo Giovanni Antonio Rizzi (1736–1814) Italian cartographer and geographer 28, 30 Zemun, Semlin in German, now in Serbia 425 Zhuravnyky, Drużkopol in Polish, now in Ukraine 296 Zinzendorf, Karl (1739–1813) Saxon and Habsburg public servant, including as Governor of Trieste (1776–1781) and head of the Court Audit Office 191, 370, 408 Zunger, Ludwig Franz (around 1748–1817) senior Galician administrative official 434 Zyblikiewicz, Mikołaj (1823–1887) PolishGalician lawyer and politician, speaker of the Galician Sejm (1881–1886) 103