I am an Austrian in 1866 who travels and does business in Hungary. How does the Ausgleich of 1867 affect me?

by Mositius
k_hopz

Glad to see someone else is celebrating the 150-year anniversary of the Ausgleich! My own research focuses more on the political and military effects of the Ausgleich, but I can share what I know.

Austria and Hungary had already existed together with in a Customs Union since 1851; prior to 1851, the Kingdom of Hungary had enforced its own customs. Since 1804, the lands of the newly-minted Austrian Empire used the Gulden. Before 1867, travel between Austria and Hungary was also very easy. A striped pole marked the border between Austria and Hungary (along the Leitha River), painted red, white and green. The most trafficked passage between Austria and Hungary was the bridge at Brueck-an-der-Leitha, which you can see here. There was no big ado about crossing from one side to the other, at least compared to international travel in and out of Austria-Hungary.

The biggest change you might see would by a macroeconomic one, and only perceptible by astute businessmen or readers of economic journals. The division of Austria and Hungary in 1867 placed the local governance of the two halves of the Monarchy in the hands of national parliaments in Vienna and Budapest. Internal development, infrastructure, and taxation issues were decided in these national parliaments. If you were an industrialist from Austria who invested in or owned industrial plant in Hungary, the post-1867 era would have been a boon for you. The Hungarian Diet after 1867 increasingly turned to supporting local industry through direct subsidy. Hungarian nationalists had once decried the situation of Austria and Hungary as one of internal economic colonization by the German Austrians against the Hungarians; in other words, they accused the Austrians of suppressing the development of Hungarian industry so that a) Austrian manufactured goods would remain highly-priced in Hungary and b) Hungarian economic life would continue to center on foodstuffs. This latter part is key; after 1867, the Austrian half, and particularly the imperial capital of Vienna, depended on Hungarian grain. Thus, when Austrian and Hungarian politicians met every ten years to renegotiate the political and financial finer points of the Compromise, the Hungarians were able to extract favorable concessions from the Austrians in return for continued access to cheap Hungarian grain. So if you were an early industrialist with business in Budapest, you stood a good chance of making a quick Gulden off the favorable conditions established by the industry-minded Hungarian Diets of the post-1867 era.

One final point, if you were Jewish (likely, since Jews made up a large portion ~12% of Vienna's population, and an even higher proportion of its financial/professional class), the 1867 Compromise was a big deal, since it finally did away with all restrictions on Jews' choice of career; previously, Jews had been excluded from owning land or entering the legal or civil service. After 1867, Jews increasingly flocked to the universities, the diplomatic service, and the financial institutions of the Monarchy.