Political and Financial Background

ships would have been the enlarged copies of the British Queen Elizabeth class fast battleships. Most probably the units of the Francesco Caracciolo class were the “super-dreadnoughts” in the 1913 October article of the “Neue Freie Presse” which criticized the Navy’s 24,500 ton battleship design.393

Political and Financial Background

Th e struggle of the Navy for securing the money for the new battleship class started in March 1912. Marinekommandant Admiral Rudolf von Mon tecuccoli presented a very ambitious (in fact, the most ambitious in the history of the Navy) program in March 1912: he asked a grant of 464 million Kronen. Th is sum would have allowed the construction of four 24,500 ton battleships, fi ve cruisers, a dozen destroyers, six submarines, three colliers, a new 40,000 ton fl oating dock, four Danube monitors and four Danube patrol boats. Th e Emperor, Franz Joseph was realist and advised him to present his program at a more favorable time.394

At the 9 July meeting of the common Council of Ministers, Montecuccoli asked only 24 million Kronen for starting the construction of one new battleship. Th e Hungarian members, Prime Minister László Lukács and Finance Minister János Teleszky, rejected even this modest sum. On 3 October, Montecuccoli asked 170 million Kronen for the construction of two 24,000 – 25,000 ton battleships. On 8 October, Lukács and Teleszky told him that they would assent to the costs of the new class only if the precedent one would be paid, but they promised to bring forward the payment from 1916 to 1914. Th e Hungarian government approved only the construction of two colliers.395 Anton Haus as the newly appointed Flotteninspektor on 25 July 1912 visited Franz Ferdinand in Chlumetz. At this introductory meeting, the Heir of the Th rone expressed his wish to start the building of the new battleships as soon as possible. He told Haus to convene a common Council of Ministers and to build the battleships even if fi nancing was “from the air”.396

In February 1913, the old and compromised Montecuccoli was succeeded by Anton Haus. In March 1913, Archduke Franz Ferdinand, who wanted to repeat the method to start the construction at the formal own risk of the shipyard STT before the voting on the expenses of the battleships like in the case of the Tegetthoff class, urged Haus to order the new dreadnoughts secretly without informing the Austrian and Hungarian politicians.397 Despite the great pressure from the Archduke, Haus did not want to go behind the backs of the politicians and in April he started negotiating with Austrian and Hungarian ministers on this method of building.

On 18 April 1913, the STT, the Škoda Works and the Witkowitz Ironworks in a joint letter offered to start the construction of a battleship on designs provided by the Navy at their own risk. Th e three fi rms asked for orders, claiming otherwise they should begin to dismiss qualifi ed employees from the second half of the year. In the offi cial documents this method was called “Spekulationsbau”. Th e Navy made two preliminary draft replies. Th e fi rst was an enthusiastic version for the case if both governments would assent to the building at formal own risk. Th e fi rst line of this variant is the following: “My predecessor already expressed before the delegations in December 1912 that the Monarch class should be replaced with dreadnoughts.” According to this variant the Navy would have provide the three fi rms with the plans of the 24,500 ton battleship for price calculation. Th e second version was less enthusiastic. In this variant the Navy emphasized that under the circumstances they could not give an order or could not make a commitment. Both variants included a paragraph which called the attention of the three fi rms to the orders to be provided for the Hungarian industry.398

On 20 April 1913, Haus met Lukács in Vienna and gave him an exemplar of the abovementioned letter of 18 April and the less enthusiastic version of the preliminary draft reply. Th e Hungarian Prime Minister thanked the fairness of Haus. Lukács told Haus that he was hearing rumors of this matter since a month, and the members of his cabinet were very anxious about this matter. Haus felt that he was justifi ed and the secret-mongering pressed by the Heir of the Th rone was a blunder. Th e common ministers, common War Minister Krobatin, common Foreign Minister Berchtold and common Finance Minister Biliński supported the plan of building at the formal own risk, but the Austrian Prime Minister Stürgkh and Finance Minister Zaleski were not too enthusiastic. Zaleski

— 115 —

told that under such demands the budget easily could collapse.399

On 25 April, Teleszky in a letter to Biliński refused the plan and said no to the Spekulationsbau.400 Th e Hungarian Finance Minister said that the Spekulationsbau would violate the legislation’s budget rights. He added that this method of ordering without legal authorization a battleship to be constructed to the Navy’s own design and specifi cations could be very risky because she could be sold to a foreign power. He said that the temporary lack of orders of the three fi rms had been caused by Montecuccoli’s policy, when the Navy had ordered the fi rst two units of the Tegetthoff class before the voting of the expenses of the class. Finally, he remarked that this matter was also dangerous from economic point of view because both in Austria and Hungary at that moment the credit market was under strain.401 On 28 April, Biliński informed Haus of Teleszky’s letter. An angry Haus noted in his diary: “Stürghk is a windbag, Biliński is a kind, good, optimistic nobleman who bids more than he can accomplish, Teleszky is a Jew, Lukács is disingenuous, cunning, a dog.”402

On 30 April, Franz Joseph promised Haus that he would speak about the battleships with Teleszky. On 1 May, even the Emperor tried to convince the Hungarian Finance Minister in vain. After this audience Haus negotiated with Teleszky who only repeated his former arguments. Haus told Teleszky that starting the construction of the new battleships as soon as possible was very important, because in three or four years the Dual Monarchy would likely struggle for its life. Teleszky replied him that with the changing of the fi scal year the delegations could vote for the battleships in the spring of 1914, so the diff erence of the legal and the extralegal start of the construction would be only eight months. A decision was made in 1913 to change the Austro-Hungarian fi scal year from January-December to July-June. Th e fi rst full fi scal year on the new calendar would begin in July 1914. On 7 May, Lukács sent a letter to Haus in which he explained that the political and economic situation in Hungary did not make it possible to support the construction of a battleship at the formal own risk of the shipyard. He added that any kind of orders given to the shipyard from the Navy should be considered as a formal order, thus the violation of the legislation’s budget right.403

At the 14 May meeting of the common Council of the Ministers, Haus made a last eff ort to have his plan accepted. Th e common and the Austrian ministers supported him, but the two Hungarian ministers refused the plan again. Beside the economic arguments Lukács enumerated political ones. He said that even in his own Party (Nemzeti Munkapárt404) would not be able to defend the building at the formal own risk. Teleszky repeated his promise to bring forward the new credit from 1915 to 1914. Haus asked Lukács, what would be the consequence if the Navy tried to start the construction. Lukács replied: he and Teleszky should resign.405

At the 19 May audience Haus informed Franz Joseph about what had happened at the common Councils of Minister on 14 May. Th e Emperor advised the Marinekommandant not to provoke the Hungarian government. Franz Joseph agreed with Haus about not going behind the backs of the politicians and not to compromise the Navy.406 Th e matter of the new battleship class came to a standstill which lasted until October 1913.

Haus, as Marinekommandant, had many troubles with Archduke Franz Ferdinand who was the chief patron of the Navy but who was always interfering in the aff airs of the Navy in a narrow-minded manner.407 Th e greatest friction between them was caused by the question of battleship building. After the fi asco at the meeting of the common Council of Ministers, Haus, who in these times played with the idea of resignation,408 wrote a long letter to the Heir of the Th rone in which he explained away his report. He described in all details the events of April and May and pointed out that the delay of the construction in fact should be only one month instead of six or seven, because the time needed to draw up the detailed plans for the new battleships. Haus added that even the Emperor had advised not to provoke the Hungarian government because their resignations could rebound on the Navy.409 Th e latter argument due to Franz Ferdinand’s negative feelings toward the Hungarians possibly only angered him.

During the summer of 1913, important changes occurred in the Hungarian politics. It turned out that Lukács as fi nance minister in 1910 had received 4 million Kronen from the Magyar Bank which he had given to the Nemzeti Munkapárt for funding the campaign of the Party in the 1910 election.

— 116 —

Zoltán Désy, an opposition MP called Lu kács the “Greatest Panamist of Europe410”. Lu kács lost a libel action against Désy and he and his government resigned. Franz Joseph appointed István Tisza to prime minister in June. Tisza appointed Teleszky to fi nance minister again. Tisza, in contrast to many of his countrymen, considered the development of the common armed forces important because he knew well that the Great Power status of the Dual Monarchy was a key factor of the conservation of the Hungarian supremacy in the Carpathian Basin. It was evident also that the Hungarian government would expect lucrative industrial orders in exchange for the support of the Navy’s program.

At the 1 October 1913 audience Haus informed the Emperor about the particulars of the extraordinary credit. Th e moment of victory for Haus came at the 3 October meeting of common Council of Ministers. All the ministers, including the new Hungarian Prime Minister, Count István Tisza and Teleszky approved the new extraordinary credit of 426.8 million Kronen which included the cost of a new battleship class of four units. It was decided that credit should be lent from the 19141915 fi scal year to the 1918-1919 fi scal year. Th e 426,836,000 Kronen extraordinary credit provided the costs of four 24,500 ton battleship (Schlachtschiff VIII-XI) at 81.5 million Kronen for each unit, three 4,800 ton cruisers (Kreuzer K, L, M), six 800 ton destroyers, two 520 ton monitors and a food transport ship. Th e full cost of these ships was 400 million Kronen. Th e greatest part of the remaining 27 million Kronen was intended for land constructions in the Arsenal, 4 million for naval aviation and 1.1 million for the Radio Station Pola.411

After the 3 October meeting of the common Council of Ministers, the news of the extraordinary credit and the new battleships should have remained in secrecy, but the always well informed Vienna newspaper “Neue Freie Presse” published an article on the second dreadnought class along with some criticism. Th e author of the article wrote that the Dual Monarchy built only “dreadnoughts” while other powers laid down “super-dreadnoughts”. Haus felt that he had to defend his battleships. In a short communiqué he explained that the 35 cm main caliber of the battleships was the result of a compromise because in contrast to other naval powers the Austro–Hungarian Navy did not possess limitless resources.412

For the privately owned shipyards, the question of the design was only a question of prestige, from the business point of view the real important question was: who should build these ships? Hearing the news of the voting of credit the representatives of the three shipyards hurried to Vienna. In the second half of October the Navy sent the designs to the STT, the CNT and the Ganz and Co. Danubius for price calculation.413 Th e agents of the CNT were the most aggressive. Seeing this, the Hungarians were afraid of being left out of the battleship building program. But their fears proved to be baseless: the Navy knew full-well that due to the political system of the Dualism the price of the Hungarian votes for the credit was that an order of battleships must be awarded to the Danubius shipyard, despite the problems with the construction of the Szent István. Hungarian Finance Minister Teleszky in 1913 clearly let the Navy know what the Hungarians expected in exchange of voting for the credit.414 In January 1914, Hungarian Prime Minister István Tisza asked Haus whether the CNT would participate in the battleship building or not. On 27 January, Haus reassured Tisza that the Navy would order battleships only from the STT and the Danubius.415

Before the voting for the credit in May 1914, in February-March the Navy made a study on the possible sharing of the industrial orders of the new program between Austria and Hungary, respective to the Quota (Austria 63.6 %, Hungary 36.4 %). According to that study two battleships, one cruiser and six destroyers and two monitors, or two battleships and two monitors should be ordered from Hungarian industry. Th e Navy liked neither variants, the fi rst one contained too high a number of ships to be ordered from Hungarian shipyards, while in the second one was too high a volume of orders to the Hungarian iron industry. In the case of the fi rst variant, the Navy feared that the Danubius would be unable to keep the time limits and the Hungarian shipyard would siphon off experienced workers from the Austrian yards. In the case of the second variant, the Navy knew that without a huge order to the Hungarian iron industry as compensation (17 million Kronen) it would be unacceptable for the Hungarians, but they also feared, not entirely without cause, that the Hungarian iron industry would not be able to deliver steel in time and of suitable quality.416

— 117 —