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Updated: June 28, 2025
Simultaneously the work of the Serbo-Croat coalition in Dalmatia, Croatia, and Slavonia made considerable progress in spite of clerical opposition and desperate conflicts with the government at Budapest.
Croatia has been exploited economically by the Magyars, and the narrow interests of Budapest have prevented railway development and hampered local industries by skilful manipulation of tariffs and taxation. Serbo-Croat Unity. Parallel with the new era instituted in Serbia since 1903, a strong movement in favour of national unity took root among her kinsmen across the Austro-Hungarian frontier.
The imperious force of circumstances brought the interests of Roumania and Serbia into line; for it was obvious that any blow aimed against Serbia's independent existence must threaten Roumania also, just as any weakening of the Serbo-Croat element in the Monarchy must react unfavourably on that of the Roumanians and other nationalities of Hungary.
The treason trial by which Baron Rauch hoped to split the Serbo-Croat coalition, and which was to furnish the cause of a war with Serbia on the annexation of Bosnia in 1908, collapsed. It rested on forgeries concocted within the walls of the Austro-Hungarian legation in Belgrade where Count Forgách held forth.
In spite of all these disadvantages, however, the Serbo-Croat provinces of Austria-Hungary could not be deprived of all the benefits of living within a large and prosperous customs union, while being made to pay for all the expenses of the elaborate imperial administration and services; and the spread of education, even under the Hapsburg régime, began to tell in time.
The so-called Serbo-Croat Coalition round which all the younger elements speedily rallied, put forward an ambitious programme of constructive democratic reform as the basis of joint political action on the part of both races, and held stubbornly together when the inevitable breach with the Magyar oligarchy occurred.
The last Austrian budget, for 1921, assigned a sum of seventy-one milliards of crowns for expenses, and this for a poor country with 7,000,000 inhabitants. A detailed examination of the financial situation of Czeko-Slovakia, of Rumania, and of the Serbo-Croat States gives results which are at the least alarming.
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