From 1843 in 1868 the Servian government undertook the carriage of letters in Servia itself, while the Austro-Hungarian consulate in Belgrade forwarded correspondence to and from central and western Europe.
But the Austro-Hungarian government, profiting by the weakness of Russia after the war with Japan, and aware that the proclamation of Bulgarian independence was imminent, had already decided to annex Bosnia and Herzegovina, in spite of the pledges given at Berlin, and although the proposal was unpopular in Hungary.
One obvious sign of a crisis was the demand for loans against security from the Austro-Hungarian Bank, which was the result of the unfavourable position of investments on the bourse.
In March 1908 Mr Hallo laid before the Hungarian parliament a formal proposal that the charter of the Austro-Hungarian Bank, which was to expire at the end of 1910, should not be renewed; and that, in the event of failure to negotiate a convention between the banks of Austria and Hungary, a separate Hungarian Bank should be established.
Navy.-The Austro-Hungarian navy is mainly a coast defence force, and includes also a flotilla of monitors for the Danube.
The suspension of cash payment by the Austro-Hungarian Bank was continued, but the bank was bound to provide, by every means at its disposal, that the value of its notes as quoted on foreign bourses should be permanently secured in proportion to the parity of the legal mint standard of the krone currency.
It accepted the Brenner as a fair strategic line on the north, but argued that the Treaty of London was no longer applicable in respect of Italy's eastern frontier, since the line which it traced was designed to secure Italy against future Austro-Hungarian aggression, and AustriaHungary had by now ceased to exist.
The present constitution of the Austro-Hungarian monarchy (see Austria) is based on the Pragmatic Sanction of the emperor Charles VI., first promulgated on the 19th of April 1713, whereby the succession to the throne is settled in the dynasty of Habsburg-Lorraine, descending by right of primogeniture and lineal succession to male heirs, and, in case of their extinction, to the female line, and whereby the indissolubility and indivisibility of the monarchy are determined; is based, further, on the diploma of the emperor Francis Joseph I.
In the December of this year AustriaHungary indeed decisively interfered in the war between Bulgaria and Servia, for at this time Austrian influence predominated in Servia, and after the battle of Slivnitza the Austro-Hungarian minister warned Prince Alexander of Bulgaria that if he advanced farther he would be met by Austro-Hungarian as well as Servian troops.
The action of the Supreme Council in Paris in prescribing the frontier line of the secret treaty of London as the line of occupation under the Austro-Hungarian armistice was keenly resented by the Yugosla y s as a breach with Wilsonian principles.