On October 7, 1908, Austria-Hungary exploded a political bomb-shell by declaring her resolve to annex Bosnia-Herzegovina. Since the Treaty of Berlin of 1878, she had provisionally occupied and administered those provinces as mandatory of Europe (see p. 238). But now, without consulting Europe, she appropriated her charge. On the other hand, she consented to withdraw from the Sanjak of Novi-Bazar which she had occupied by virtue of a secret agreement with Russia of July 1878. Even so, her annexation of a great province caused a sharp crisis for the following reasons: (1) It violated the international law of Europe without any excuse whatever. (2) It exasperated Servia, which hoped ultimately to possess Bosnia, a land peopled by her kindred and necessary to her expansion seawards. (3) It no less deeply offended the Young Turks, who were resolved to revivify the Turkish people and assert their authority over all parts of the Ottoman dominions. (4) It came at the same time as the assumption by Prince Ferdinand of Bulgaria of the title of Tsar of the Bulgarians. This change of title, which implied a prospect of sovereignty over the Bulgars of Macedonia, had been arranged during a recent visit to Buda-Pest, and foreshadowed the supremacy of Austrian influence not only in the new kingdom of Bulgaria but eventually in the Bulgar districts of Macedonia[523].

Thus, Austria's action constituted a serious challenge to the Powers in general, especially to Russia, Servia, and to regenerated Turkey[524]. So daring a coup had not been dealt by Austria since 1848, when Francis Joseph ascended the throne; it is believed that he desired to have the provinces as a jubilee gift, a set off to the loss of Lombardy and Venetia in 1859 and 1866. Certainly Austria had carried out great improvements in Bosnia; but an occupier who improves a farm does not gain the right to possess it except by agreement with others who have joint claims. Moreover, the Young Turks, in power since July 1908, boasted their ability to civilise Bosnia and all parts of their Empire. Servia also longed to include it in the large Servo-Croat kingdom of the future.

The Bosnian Question sprang out of a conflict of racial claims, which two masterful men, the Archduke Francis Ferdinand and the Austrian Foreign Minister, Aehrenthal, were resolved to decide in favour of Austria. The Archduke disliked, and was disliked by, the Germans and Magyars on account of his pro-Slav tendencies. In 1900 he contracted with a Slav lady, the Countess Chotek, a morganatic marriage, which brought him into strained relations with the Emperor and Court. A silent, resolute man, he determined to lessen German and Magyar influence in the Empire by favouring the law for universal suffrage (1906), and by the appointment as Foreign Minister of Aehrenthal, who harboured ambitiously expansive schemes. The Archduke also furthered a policy known as Trialism, that of federalising the Dual Monarchy by constituting the Slav provinces as the third of its component groups. The annexation of Bosnia would serve to advance this programme by depressing the hitherto dominant races, the Germans and Magyars, besides rescuing the monarchy from the position of "brilliant second" to Germany. Kaiser William was taken aback by this bold stroke, especially as it wounded Turkey; but he soon saw the advantage of having a vigorous rather than a passive Ally; and, in a visit which he paid to the Archduke in November 1908, their intercourse, which had hitherto been coldly courteous, ripened into friendship, which became enthusiastic admiration when the Archduke advocated the building of Austrian Dreadnoughts.

The annexation of Bosnia was a defiance to Europe, because, at the Conference of the Powers held at London in 1871, they all (Austria included) solemnly agreed not to depart from their treaty engagements without a previous understanding with the co-signatories. Austria's conduct in 1908, therefore, dealt a severe blow to the regime of international law. But it was especially resented by the Russians, because for ages they had lavished blood and treasure in effecting the liberation of the Balkan peoples. Besides, in 1897, the Tsar had framed an agreement with the Court of Vienna for the purpose of exercising conjointly some measure of control over Balkan affairs; and he then vetoed Austria's suggestion for the acquisition of Bosnia. In 1903, when the two Empires drew up the "February" and "Mürzsteg" Programmes for more effectually dealing with the racial disputes in Macedonia, the Hapsburg Court did not renew the suggestion about Bosnia, yet in 1908 Austria annexed that province. Obviously, she would not have thus defied the public law of Europe and Russian, Servian, and Turkish interests, but for the recent humiliation of Russia in the Far East, which explains both the dramatic intervention of the Kaiser at Tangier against Russia's ally, France, and the sudden apparition of Austria as an aggressive Power. In his speech to the Austro-Hungarian Delegations Aehrenthal declared that he intended to continue "an active foreign policy," which would enable Austria-Hungary to "occupy to the full her place in the world." She had to act because otherwise "affairs might have developed against her."

Thus the Eastern Question once more became a matter of acute controversy. The Austro-Russian agreements of 1897 and 1903 had huddled up and cloaked over those racial and religious disputes, so that there was little chance of a general war arising out of them. But since 1908 the Eastern Question has threatened to produce a general conflict unless Austria moderated her pretensions. She did not do so; for, as we have seen, Germany favoured them in order to assure uninterrupted communications between Central Europe and her Bagdad Railway. Already Hapsburg influence was supreme at Bukharest, Sofia, and in Macedonian affairs. If it could dominate Servia (anti-Austrian since the accession of King Peter in 1903) the whole of the Peninsula would be subject to Austro-German control. True, the influence of Germany at Constantinople at first suffered a shock from the Young Turk Revolution of July 1908; and those eager nationalists deeply resented the annexation of Bosnia, which they ascribed to the Austro-German alliance. The men of Berlin, however, so far from furthering that act, disapproved of it as endangering their control of Turkey and exploitation of its resources. In fact, Germany's task in inducing her prospective vassals, the Turks, to submit to spoliation at the hands of her ally, Austria, was exceedingly difficult; and in the tension thus created, the third partner of the Triple Alliance, Italy, very nearly parted company, from disgust at Austrian encroachments in a quarter where she cherished aspirations. As we have seen, Victor Emmanuel III., early in his reign, favoured friendly relations with Russia; and these ripened quickly during the "Annexation Crisis" of 1908-9, as both Powers desired to maintain the status quo against Austria[525]. On December 24, 1908, the Russian Foreign Minister, Izvolsky, declared that, with that aim in view, he was acting in close concert with France, Great Britain, and Italy. He urged Bulgaria, Servia, and Montenegro to hold closely together for the defence of their common interests: "Our aim must be to bring them together and to combine them with Turkey in a common ideal of defence of their national and economic development." A cordial union between the Slav States and Turkey now seems a fantastic notion; but it was possible then, under pressure of the Austro-German menace, which the Young Turks were actively resisting.

During the early part of 1909 a general war seemed imminent; for Slavonic feeling was violently excited in Russia and Servia. But, hostilities being impossible in winter, passions had time to cool. It soon became evident that those States could not make head against Austria and Germany. Moreover, the Franco-Russian alliance did not bind France to act with Russia unless the latter were definitely attacked; and France was weakened by the widespread strikes of 1907-8 and the vehement anti-militarist agitation already described. Further, Italy was distracted by the earthquake at Messina, and armed intervention was not to be expected from the Campbell-Bannerman Ministry. Bulgaria and Roumania were pro-Austrian. Turkey alone could not hope to reconquer Bosnia, and a Turco-Serb-Russian league was beyond the range of practical politics. These material considerations decided the issue of events. Towards the close of March, Kaiser William, the hitherto silent backer of Austria, ended the crisis by sending to his ambassador at Petrograd an autograph letter, the effect of which upon the Tsar was decisive. Russia gave way, and dissociated herself from France, England, and Italy. In consideration of an indemnity of £2,200,000 from Austria, Turkey recognised the annexation. Consequently no Conference of the Powers met even to register the fait accompli in Bosnia. The Germanic Empires had coerced Russia and Servia, despoiled Turkey, and imposed their will on Europe. Kaiser William characteristically asserted that it was his apparition "in shining armour" by the side of Austria which decided the issue of events. Equally decisive, perhaps, was Germany's formidable shipbuilding in 1908-9, namely, four Dreadnoughts to England's two, a fact which explains this statement of Bülow: "When at last, during the Bosnian crisis, the sky of international politics cleared, when German power on the Continent burst its encompassing bonds, we had already got beyond the stage of preparation in the construction of our fleet[526]."

The crisis of 1908-9 revealed in a startling manner the weakness of international law in a case where the stronger States were determined to have their way. It therefore tended to discourage the peace propaganda and the social movement in Great Britain and France. The increased speed of German naval construction alarmed the British people, who demanded precautionary measures[527]. France and Russia also improved their armaments, for it was clear that Austria, as well as Germany, intended to pursue an active foreign policy which would inflict other rebuffs on neighbours who were unprepared. Further, the Triple Entente had proved far too weak for the occasion. True, France and England loyally supported Russia in a matter which chiefly concerned her and Servia, and her sudden retreat before the Kaiser's menace left them in the lurch. Consequently, the relations between the Western Powers and Russia were decidedly cool during the years 1909-10, especially in and after November 1910, when the Tsar met Kaiser William at Potsdam, and framed an agreement, both as to their general relations and the railways then under construction towards Persia. On the other hand, the rapid advance of Germany and Austria alarmed Italy, who, in order to safeguard her interests in the Balkans (especially Albania), came to an understanding with Russia for the support of their claims. The details are not known, neither are the agreements of Austria with Bulgaria and Roumania, though it seems probable that they were framed with the two kings rather than with the Governments of Sofia and Bukharest. Those sovereigns were German princes, and the events of 1908-9 naturally attracted them towards the Central Powers.

In 1909-10 France and England also lost ground in Turkey. There the Young Turks, who seized power in July 1908, were overthrown in April 1909, when Abdul Hamid II. was deposed. He was succeeded by his weakly complaisant brother, Mohammed V. This change, however, did not promote the cause of reform. The Turkish Parliament became a bear-garden, and the reformers the tools of reaction. In the four years 1908-12 there were seven Ministries and countless ministerial crises, and the Young Turks, copying the forms and killing the spirit of English Liberalism, soon became the most intolerant oppressors of their non-Moslem subjects. In administrative matters they acted on the old Turkish proverb--"The Sultan's treasure is a sea, and he who does not draw from it is a pig." Germany found means to satisfy these dominating and acquisitive instincts, and thus regained power at the Sublime Porte. The Ottoman Empire therefore remained the despair of patriotic reformers, a hunting-ground for Teutonic concessionnaires, a Hell for its Christian subjects, and the chief storm-centre of Europe[528].

The death of King Edward VII. on May 6, 1910, was a misfortune for the cause of peace. His tact and discernment had on several occasions allayed animosity and paved the way for friendly understandings. True, the German Press sought to represent those efforts as directed towards the "encircling" (Einkreisung) of Germany. But here we may note that (1) King Edward never transgressed the constitutional usage, which prescribed that no important agreement be arrived at apart from the responsible Ministers of the Crown[529]. (2) The agreements with Spain, Italy, France, Germany, and Portugal (in 1903-4) were for the purposes of arbitration. (3) The alliance with Japan and the Ententes with France and Russia were designed to end the perilous state of isolation which existed at the time of his accession. (4) At that time Germany was allied to Austria, Italy, and (probably) Roumania, not to speak of her secret arrangements with Turkey. She had no right to complain of the ending of our isolation. (5) The marriage of King Alfonso of Spain with Princess Ena of Battenberg (May 1906), was a love-match, and was not the result of King Edward's efforts to detach Spain from Germany. It had no political significance. (6) The Kaiser's sister was Crown Princess (now Queen) of Greece; the King of Roumania was a Hohenzollern; and the King of Bulgaria and the Prince Consort of Holland were German Princes. (7) On several occasions King Edward testified his friendship with Germany, notably during his visit to Berlin in February 1909, which Germans admit to have helped on the friendly Franco-German agreement of that month on Morocco; also in his letter of January 1910, on the occasion of the Kaiser's birthday, when he expressed the hope that the United Kingdom and Germany might always work together for the maintenance of peace[530].