th foreign countries to
be negotiated, not, as hitherto, by the joint minister for foreign affairs
alone, but also by a nominee of each government. (10) The quota of Austrian
and Hungarian contribution to joint expenditure to be 63.6 and 36.4
respectively--an increase of 2% in the Hungarian quota, equal to some
L200,000 a year.

The economic dispute between Hungary and Austria was thus settled for ten
years after negotiations lasting more than twelve years. One important
question, however, that of the future of the joint State Bank, was left
over for subsequent decision. During the negotiations for the customs and
commercial treaty, the Austrian government attempted to conclude for a
longer period than ten years, but was unable to overcome Hungarian
resistance. Therefore, at the end of 1917, the commercial treaties with
Germany, Italy and other countries, and the Austro-Hungarian customs and
commercial treaty, would all lapse. Ten years of economic unity remained
during which the Dual Monarchy might grow together or grow asunder,
increasing accordingly in strength or in weakness.

(H. W. S.)

During this period of internal crisis the international position of the
Dual Monarchy was threatened by two external dangers. The unrest in
Macedonia threatened to reopen the Eastern Question in an acute form; with
Italy the irredentist attitude of the Zanardelli cabinet led in 1902-1903
to such strained relations that war seemed imminent. The southern Tirol,
the chief passes into Italy, strategic points on the Istrian and Dalmatian
coasts, were strongly fortified, while in the interior the Tauern,
Karawanken and Wochein railways were constructed, partly in order to
facilitate the movement of troops towards the Italian border. The tension
was relaxed with the fall of the Zanardelli government, and comparatively
cordial relations were gradually re-established.

[Sidenote: Balkan crisis.]

In the affairs of the Balkan Peninsula a temporary agreement with Russia
was reached in 1903 by the so-called "February Programme," supplemented in
the following October by the "Muerzsteg Programme" (see MACEDONIA; TURKEY;
EUROPE: _History_). The terms of the Muerzsteg programme were observed by
Count Goluchowski, in spite of the ruin of Russian prestige in the war with
Japan, so long as he remained in office. In October 1906, however, he
retired, and it was soon clear that his successor, Baron von Aerenthal,[12]
was determined to take advanta