The result of the second Balkan War was so far favourable to Austria-Hungary that it broke up the Balkan League, but it left as the predominant State in the peninsula Serbia, which aspired to be the Piedmont of the Southern Slavs, and had long pursued a pan-Serbian agitation in Bosnia, Herzegovina, Croatia and Dalmatia, which had become very formidable with the prestige gained by the Serbian victories. The danger to the very existence of the Empire, seeing that Serbia was secretly encouraged and supported by Russia, was patent, and there was a general feeling in Austria-Hungary that the only way to avert it was to compel Serbia by force of arms, if necessary, to cease her agitation in the Austrian provinces on her border. The Austrian and German Emperors had combined in the previous year to prevent what might have become a European war (A.R., 1913, p. 34), but the assassination of the Austrian heir to the throne by a Serbian, with arms furnished by a Serbian officer, precipitated a crisis which was bound to come sooner or later. One of the outcomes of the pan-Serbian agitation was the attempt on May 20 on the life of Baron Sterletz, Ban of Croatia, by two Serbian students, who were sentenced on October 8 to five and eight years' penal servitude respectively.
The trial of the persons accused of promoting an agitation among the Ruthenians of Eastern Galicia and Hungary with the object of their conversion to the Russian Church as a first step towards the annexation of their country by Russia, which had been begun in the previous year (A.R., 1913, p. 329), was concluded on March 3, and thirty-two of the accused were sentenced to various periods of imprisonment, combined with fines, varying from six months to four and a half years. A similar trial began at Lemberg on March 9. The accused, who were all Ruthenians, were a journalist, two "Orthodox" priests, and a law student, and they were also charged with espionage in favour of Russia. The jury before whom they were tried was composed entirely of Poles, who acquitted them because, it was said, they wished to avoid interference with the internal affairs of the Ruthenians.
The racial struggle in Bohemia (A.R., 1913, p. 328) continued to make the assembling of the Diet impossible, and the Czech members of the Reichsrath retaliated by obstruction in the Reichsrath, which was consequently adjourned sine die early in March. It was not summoned again even after the outbreak of the war.
The Austro-Hungarian Delegations were opened by the heir to the throne, the Archduke Francis Ferdinand, on April 29, after a meeting, described as "very cordial," between Count Berchtold and the Marquis of San Giuliano, accompanied by their diplomatic staffs, at Abbazia. The estimates for the financial year from July 1, 1914, showed that the naval expenditure for the year would amount to 7,386,083l., of which 2,000,000l. was set down as a first instalment of a new naval programme to be completed in five years at a total estimated cost of 17,781,830l. An explanatory note attached to the Estimates stated that the object of this programme was "to make provision against the marked shifting of naval power in the Mediterranean which recent changes in the Near East may be expected to bring about." Four battleships, each of 24,500 tons displacement, were to be substituted for the three old vessels of the Monarch class and the Hapsburg, and were to form the second Dreadnought division of the Austro-Hungarian Navy, besides which three fast cruisers were to be built of 4,800 tons each, to take the place of the three cruisers of the Zenta class built in 1897, and six torpedo gun-boats of 800 tons each and two new gun-boats for service on the Danube. Provision was also made for the extension of the arsenal at Pola and the naval base at Sebenico, about half-way down the Dalmatian coast, which has a good natural harbour, is the headquarters of a rear-admiral with a command extending from Zara to Cattaro, and possesses a torpedo station, though it is not, like Pola, a naval base in which the ordinary necessaries for a modern fleet are to be found, and it was proposed to make it such a base in order to provide for a partial decentralisation of the Fleet, the necessity for which was alleged to have been shown by the recent crisis in the Balkans. Baron Engel, the Assistant Finance Minister, succeeded the late Minister, Count Zaleski, on October 21.
Among the prosecutions for espionage, which were frequent this year in Austria-Hungary, as in other countries, were those of three former officers of the Austrian Army on February 24 and March 6 and 10, who were sentenced to three, nineteen, and seventeen and a half years' penal servitude respectively for espionage in favour of Russia.
An important statement as to the foreign policy of Austria-Hungary was made by Count Berchtold to the Delegations after the President of the Austrian Delegation had expressed the hope that "while preserving the non-aggressive policy of the monarchy, steps might be taken to put a decisive check upon the anti-Austrian propaganda carried on in the frontier districts." Count Berchtold, speaking of the mutual relations of the Triple Alliance and the Triple Entente, noted "a certain slackening of the tension" between them, which he attributed to the policy of Great Britain. "In the attitude adopted by England at the decisive moments of the Balkan crisis," he said, "and more recently, we can perceive efforts to prevent in the future dangers to European peace similar to those threatened in the events of the most recent past. Such a policy is capable of removing misunderstandings which may arise between the two groups of Powers, and thereby to compensate in some measure for the defects which attach to the practical translation into activity of a rigid system of equilibrium"—a hint that such a system is only too likely to produce a European war. The Count also spoke in friendly terms of the relations between the Dual Monarchy and Russia, which he hoped would develop still further in the direction of mutual confidence. Turning to the Balkan States, he referred especially to the desire for closer commercial relations between the monarchy and Bulgaria, the negotiations as to the section of the Orient railways in the new Serbian territories (A. R., 1913, p. 359), the visit to Vienna of the Greek Premier, M. Venizelos, "which showed that the friendly feeling of Austria-Hungary towards Greece was reciprocated at Athens," and to the political and economic interests of the monarchy in the Ottoman Empire, which "could be best served by the continued development of friendly relations with the Porte." As to Roumania, he said that "no serious Roumanian politician could think of risking the loss of the great advantages which the hitherto close and friendly relations with the monarchy had brought to the country."
Francis Kossuth, the head of the Hungarian Independence party, died on May 25. Brought up as an engineer, he had none of the qualities of a great political leader, and he owed his position mainly to his name; he did not inherit even the oratorical gifts of his celebrated father.
The murder of the heir to the Austrian throne, the Archduke Francis Ferdinand, and his wife, which was the immediate cause of the war, took place at Sarajevo, the capital of Bosnia, on June 28. The Archduke, who was Inspector-General of the Army, was on a tour of inspection, and as his car was driving to the town hall a bomb was thrown at him, but without effect. Half an hour later, as the Archduke was returning from the town hall, another bomb was thrown which did not explode, and the man who threw it, a Serbian student of the high school, then fired three shots with a pistol, two of which hit the Archduke and the third his wife. Both expired shortly after. It was stated that this was not the act of isolated assassins, but of a Serbian conspiracy, as widespread as that which had brought about the murder of King Alexander of Serbia and his Queen (A.R., 1902, pp. 322-3), and an outburst of horror and indignation followed all over the Empire. At Sarajevo the Croats, who, though of the same race as the Serbians, are Roman Catholics while the Serbians are "Orthodox" Greeks, and are consequently separated by deep religious as well as political differences, marched through the streets together with a large contingent of Moslems who are Serbian by race but Mohammedan by religion, and broke the windows of houses belonged to "Orthodox" Serbians; and at Agram, the capital of Croatia, large crowds of Croats marched in procession crying, "Down with the Serbian murderers." The general belief was that the conspiracy had its source in Belgrade, and the chief of the police at Sarajevo was said to have arrived at the same conclusion from the examination of the men who had taken part in the murder. According to the evidence taken at the trial of these men, which took place in October, they were the paid agents of a conspiracy whose leaders were Ministers and other functionaries of the Serbian Government, officers of the Serbian Army, and even, as was suggested by one of the witnesses, possibly the Crown Prince of Serbia himself, whose father was alleged to have been in correspondence with the assassins of King Alexander and Queen Draga, and had loaded them with honours on his accession to the throne. Five of the accused, said to have been furnished with arms and bombs by the Serbian Government for the express purpose of the murder, were condemned to death, one to imprisonment for life, and ten others to various periods of imprisonment, from three to twenty years. A dramatic incident in this connexion was the sudden death of M. Hartwig, the Russian Minister at Belgrade, while on a visit to Baron Giers, the Austro-Hungarian Minister, for the purpose, it was said, of defending himself against the charge which was freely made at the time, of his having been an accomplice in the murder. The funeral of the late Archduke took place on July 8, and on the same day the aged Emperor issued a patriotic message to his people, expressing his profound affliction at a crime which "had taken from him a dear relative and faithful helper and robbed his children, still of tender age and still in need of protection, of all that was dear to them on earth," and declaring that as through sixty-five years he had shared joy and sorrow with his people, remembering even in the hours of deepest gloom his high duties and responsibility for their destinies, he was only strengthened by this fresh painful trial in the resolve to follow to his last breath the way he knew to be right for their welfare.
The new heir-presumptive, the Archduke Charles Francis Joseph, was the late Archduke Francis Ferdinand's nephew, a young man twenty-seven years of age, very popular, especially with the Poles and Ruthenians, among whom he served for some years with his cavalry regiment, but more through his pleasant manners and those of his wife, the Archduchess Zita of Bourbon-Parma, than by any special qualities of character or ability, while his uncle was impetuous and quick-tempered, with very strong opinions, chiefly in an Ultramontane direction; and an enthusiastic champion of the idea of a politico-religious conquest of the Western Balkans by Hapsburg influence, if not by Hapsburg arms, and by the propagation of Roman Catholicism among the Southern Slavs—an idea which was of course abhorrent to the Pan-Serbians, and was probably the cause of the conspiracy to which he fell a victim. The murder of the heir-presumptive of a great European State by the members of a conspiracy in a neighbouring country called for immediate and vigorous action. Accordingly, on July 23, the Austrian Minister at Belgrade presented a peremptory note to the Serbian Government, demanding a reply before 6 o'clock on July 25. The Note began by recalling the statement made by the Serbian Government on March 31, 1909, and drawn up by Great Britain (A.R., 1909, p. 346), to the effect that it would alter its policy with regard to Austria-Hungary, and live in future on good neighbourly terms with her. So far from fulfilling the engagement thus contracted, the Note proceeded, "the history of recent years has shown the existence in Serbia of a subversive movement with the object of detaching a part of Austria-Hungary from the monarchy—a movement which had its birth under the eyes of the Serbian Government, and was carried out by a series of acts of terrorism, outrages, and murders." The Serbian Government had "done nothing to repress this movement"; it had permitted "the criminal machinations of various societies and associations," had "tolerated apologies for the perpetrators of outrages and the participation of Serbian officers and civil officials in the movement," and had "permitted all the manifestations which have incited the Serbian people to hatred of the monarchy and contempt of its institutions." Passing to the murder of the Archduke Francis Ferdinand, the Note stated that the depositions and confessions of perpetrators of the outrage had shown that it was "hatched in Belgrade, that the arms and explosives with which they were provided had been given to them by Serbian officers and civil officials belonging to the society Narodna Oprava, and that their passage into Bosnia was organised and effected by the chiefs of the Serbian frontier service." It was therefore impossible for the Austro-Hungarian Government "to pursue any longer the attitude of expectant forbearance which it had maintained for years in face of the machinations started in Belgrade and thence propagated to the territories of the monarchy"; and in order to put an end to these machinations, "which form a perpetual menace to its tranquillity, it demands from the Serbian Government a declaration, to be published on the front page of the Official Journal for July 26, and communicated to the Serbian Army as an Order of the Day by the King, stating that it condemns the movement whose final aim is to detach from the Austro-Hungarian monarchy territories belonging to it," that it "regrets that Serbian officers and civil functionaries have participated in the movement and thereby compromised the neighbourly relations to which Serbia was solemnly pledged by its declaration of March 31, 1909," and that "henceforward it will proceed with the utmost rigour against persons who may be guilty of such machinations, which it will use all its efforts to anticipate and suppress." The Note also made the following demands of the Serbian Government: 1. The suppression of all publications inciting to hatred and contempt of the Austro-Hungarian monarchy or whose tendency is directed against its territorial integrity. 2. Immediate dissolution of the Narodna Obrana and confiscation of all its means of propaganda, also of all other societies with the same objects. 3. Elimination from public instruction in Serbia of everything serving to foment the propaganda against Austria-Hungary. 4. Removal from the service of all officers and civil functionaries guilty of such propaganda whose names and acts shall be communicated by the Austro-Hungarian Government to that of Serbia. 5. Representatives of the Austro-Hungarian Government to be accepted by Serbia for the purpose of collaborating in the suppression of the above propaganda. 6. Judicial proceedings to be taken against accessories to the plot of June 28 who are on Serbian territory, and delegates of the Austro-Hungarian Government to take part in the investigation relating thereto. 7. The immediate arrest of Major Jankasitch and the Serbian State functionary, Ciganovitch, who were found to be implicated in the plot at the official inquiry at Sarajevo. 8. The prevention by effective measures of the co-operation of the Serbian authorities in the illicit traffic in arms and explosives across the frontier, and the dismissal and severe punishment of the officials of the frontier service who had facilitated the passage of the frontier for the perpetrators of the outrage of June 28. 9. Explanation of the utterances of high Serbian officials, both in Serbia and abroad, who notwithstanding their official position did not hesitate after the crime of June 28 to express themselves in terms of hostility to the Austro-Hungarian Government. 10. Notification to the Austro-Hungarian Government without delay of the execution of the measures comprised under the preceding heads.
The general feeling at Vienna was that notwithstanding the hard and uncompromising tone of the above Note, Serbia would yield as she did in 1909 and 1913. Everything depended, now as then, on Russia, and the Tsar was known to be strongly opposed to a European war. The Serbian reply, however, which was delivered by M. Pashitch, the Premier, to the Austro-Hungarian Minister within the time stipulated, after a busy exchange of telegrams between Belgrade and St. Petersburg, though it accepted "in principle," but with reservations, nearly all the Austrian demands, protested against the claim that Austro-Hungarian officials shall take part in the judicial inquiry into the complicity of persons on Serbian territory in the murder and in the suppression of the propaganda against Austria-Hungary, and suggested that the matter should be settled by arbitration. At Vienna the Serbian reply was regarded as merely a device to gain time for Russian and Serbian mobilisation, and a request on the part of Russia that the period in which the reply was to be given might be extended was similarly interpreted. Diplomatic relations between Austria-Hungary and Serbia were at once broken off, orders were given for a mobilisation of the Austro-Hungarian Army, part of the Landsturm was called up for service, and all ordinary traffic on the railways was stopped. In reply to Sir Edward Grey's proposal for the mediation of the four Powers, the Austro-Hungarian Government, while expressing entire agreement with him as to the desirability of localising the war, stated that "things had proceeded much too far" to allow anything to be done for the suspension of military operations; both Russia and Serbia had been mobilising for some time, and Austria-Hungary could not risk being behindhand, especially if the outcome should be a European war.