Structure and name
The realm's official name was in German: Österreichisch-Ungarische Monarchie and in Hungarian: Osztrák–Magyar Monarchia (English: Austro-Hungarian Monarchy), though in international relations Austria-Hungary was used (German: Österreich-Ungarn, Hungarian: Ausztria-Magyarország). The Austrians also used the names k. u. k. Monarchie (English: "k. u. k. monarchy) (in detail German: Kaiserliche und königliche Monarchie Österreich-Ungarn, Hungarian: Császári és Királyi Osztrák–Magyar Monarchia) and Danubian Monarchy (German: Donaumonarchie, Hungarian: Dunai Monarchia) or Dual Monarchy (German: Doppel-Monarchie, Hungarian: Dual-Monarchia) and The Double Eagle (German: Der Doppel-Adler, Hungarian: Kétsas), but none of these became widespread either in Hungary, or elsewhere.
The realm's full name used in the internal administration was The Kingdoms and Lands Represented in the Imperial Council and the Lands of the Holy Hungarian Crown of St. Stephen.
German: Die im Reichsrat vertretenen Königreiche und Länder und die Länder der Heiligen Ungarischen Stephanskrone
Hungarian: A Birodalmi Tanácsban képviselt királyságok és országok és a Magyar Szent Korona országai
The Habsburg monarch ruled as Emperor of Austria over the western and northern half of the country that was the Austrian Empire ("Lands Represented in the Imperial Council", or Cisleithania) and as King of Hungary over the Kingdom of Hungary ("Lands of the Crown of Saint Stephen", or Transleithania). Each enjoyed considerable sovereignty with only a few joint affairs (principally foreign relations and defence).
Certain regions, such as Polish Galicia within Cisleithania and Croatia within Transleithania, enjoyed autonomous status, each with its own unique governmental structures (see: Polish Autonomy in Galicia and Croatian–Hungarian Settlement).
Emperor Franz Joseph I in 1905
The division between Austria and Hungary was so marked that there was no common citizenship: one was either an Austrian citizen or a Hungarian citizen, never both. This also meant that there were always separate Austrian and Hungarian passports, never a common one. However, neither Austrian nor Hungarian passports were used in the Kingdom of Croatia-Slavonia. Instead, the Kingdom issued its own passports which were written in Croatian and French and displayed the coat of arms of the Kingdom of Croatia-Slavonia-Dalmatia on them. It is not known what kind of passports were used in Bosnia-Herzegovina, which was under the control of both Austria and Hungary.
The Kingdom of Hungary had always maintained a separate parliament, the Diet of Hungary, even after the Austrian Empire was created in 1804. The administration and government of the Kingdom of Hungary (until 1848–49 Hungarian revolution) remained largely untouched by the government structure of the overarching Austrian Empire. Hungary's central government structures remained well separated from the Austrian imperial government. The country was governed by the Council of Lieutenancy of Hungary (the Gubernium) – located in Pressburg and later in Pest – and by the Hungarian Royal Court Chancellery in Vienna. The Hungarian government and Hungarian parliament were suspended after the Hungarian revolution of 1848, and were reinstated after the Austro-Hungarian Compromise in 1867.
Despite Austria and Hungary sharing a common currency, they were fiscally sovereign and independent entities. Since the beginnings of the personal union (from 1527), the government of the Kingdom of Hungary could preserve its separate and independent budget. After the revolution of 1848–1849, the Hungarian budget was amalgamated with the Austrian, and it was only after the Compromise of 1867 that Hungary obtained a separate budget. From 1527 (the creation of the monarchic personal union) to 1851, the Kingdom of Hungary maintained its own customs controls, which separated her from the other parts of the Habsburg-ruled territories. After 1867, the Austrian and Hungarian customs union agreement had to be renegotiated and stipulated every ten years. The agreements were renewed and signed by Vienna and Budapest at the end of every decade because both countries hoped to derive mutual economic benefit from the customs union. The Austrian Empire and Kingdom of Hungary contracted their foreign commercial treaties independently of each other.
Austria-Hungary was a great power but it contained a large number of ethnic groups that sought their own nation. The Dual Monarchy was effectively ruled by a coalition of the two most powerful and numerous ethnic groups, the Germans and the Hungarians. Stresses regarding nationalism were building up, and the severe shock of a poorly handled war caused the system to collapse.
Vienna served as the Monarchy's primary capital. The Cisleithanian (Austrian) part contained about 57 percent of the total population and the larger share of its economic resources, compared to the Hungarian part.
Following a decision of Franz Joseph I in 1868, the realm bore the official name Austro-Hungarian Monarchy/Realm (German: Österreichisch-Ungarische Monarchie/Reich; Hungarian: Osztrák–Magyar Monarchia/Birodalom) in its international relations. It was often contracted to the Dual Monarchy in English, or simply referred to as Austria.
The Austro-Hungarian Compromise of 1867 (called the Ausgleich in German and the Kiegyezés in Hungarian), which inaugurated the empire's dual structure in place of the former Austrian Empire (1804–1867), originated at a time when Austria had declined in strength and in power—both in the Italian Peninsula (as a result of the Second Italian War of Independence of 1859) and among the states of the German Confederation (it had been surpassed by Prussia as the dominant German-speaking power following the Austro-Prussian War of 1866). The Compromise re-established the full sovereignty of the Kingdom of Hungary, which was lost after the Hungarian Revolution of 1848.
Other factors in the constitutional changes were continued Hungarian dissatisfaction with rule from Vienna and increasing national consciousness on the part of other nationalities (or ethnicities) of the Austrian Empire. Hungarian dissatisfaction arose partly from Austria's suppression with Russian support of the Hungarian liberal revolution of 1848–49. However, dissatisfaction with Austrian rule had grown for many years within Hungary and had many other causes.
By the late 1850s, a large number of Hungarians who had supported the 1848–49 revolution were willing to accept the Habsburg monarchy. They argued that while Hungary had the right to full internal independence, under the Pragmatic Sanction of 1713, foreign affairs and defense were "common" to both Austria and Hungary.
After the Austrian defeat at Königgrätz, the government realized it needed to reconcile with Hungary to regain the status of a great power. The new foreign minister, Count Friedrich Ferdinand von Beust, wanted to conclude the stalemated negotiations with the Hungarians. To secure the monarchy, Emperor Franz Joseph began negotiations for a compromise with the Hungarian nobility, led by Ferenc Deák, to ensure their support. In particular, Hungarian leaders demanded and received the Emperor's coronation as King of Hungary and the re-establishment of a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary.
From 1867 onwards, the abbreviations heading the names of official institutions in Austria-Hungary reflected their responsibility: k. u. k. (kaiserlich und königlich or Imperial and Royal) was the label for institutions common to both parts of the Monarchy, e.g. the k.u.k. Kriegsmarine (War Fleet) and, during the war, the k.u.k. Armee (Army). There were three k.u.k. or joint ministries:
- The Imperial and Royal Ministry of the Exterior and the Imperial House
- The Imperial and Royal War Ministry
- The Imperial and Royal Ministry of Finance
The last was responsible only for financing the Imperial and Royal household, the diplomatic service, the common army and the common war fleet. All other state functions were to be handled separately by each of the two states.
From 1867 onwards, common expenditures were allocated 70% to Austria and 30% to Hungary. This split had to be negotiated every decade. By 1907, the Hungarian share had risen to 36.4%. The negotiations in 1917 ended with the dissolution of the Dual Monarchy.
The common army changed its label from k.k. to k.u.k. only in 1889 at the request of the Hungarian government.