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(or Austro-Hungarian Monarchy), the dual state created in 1867 as a result of the reorganization of the Austrian Empire (the Hapsburg Monarchy) on the basis of an agreement between the ruling classes of Austria and Hungary. The agreement, the so-called Austro-Hungarian Compromise of Feb. 8, 1867, was concluded in the midst of a political crisis in the empire, aggravated by its defeat in the war with Prussia (Seven Weeks’ War of 1866). It represented a concession by the ruling circles of Austria to the landowners of Hungary.
The Hapsburg Monarchy was divided into two parts along the Leitha River. The first part was the Austrian Empire (“the kingdoms and lands represented in the Reichsrat”), or Cisleithania, comprising Austria proper and a number of primarily Slavic areas—Bohemia, Moravia, Silesia, Istria, Dalmatia, Bukovina, Carniola, Glicia, and others. The second part was the Kingdom of Hungary (“the territories of the Hungarian Crown”), or Transleithania, comprising Hungary proper, Slovakia, Croatia, Transylvania, and other areas. Like Austria, Hungary was recognized as a sovereign part of the state.
At the head of the dual Austro-Hungarian Monarchy stood the emperor of Austria, also the king of Hungary, whose powers were formally limited by the Austrian Reichsrat and by the Hungarian Diet. Three joint ministries—the ministries of foreign affairs, the armed forces, and finance—were set up for all of Austria-Hungary, but the last two also existed in the two component parts of the monarchy. The other ministries were autonomous for Austria and Hungary. Joint expenditures were divided proportionally between the two parts of Austria-Hungary, were regulated by an agreement between the Reichsrat and the Diet, and were the subject of constant strife. Austria-Hungary possessed no joint constitution. Legislative power for the empire as a whole was exercised by the so-called Delegations, consisting of 60 members from the Reichsrat and 60 from the Diet, that convened annually.
In establishing the Austro-Hungarian Monarchy, the Hapsburgs sought to make use of the union between the large Hungarian landowners and the Austrian bourgeoisie to suppress the national liberation and democratic movements within the country, to eliminate the danger of a complete break with Hungary, and to reach a compromise with the Austrian bourgeoisie by granting it certain constitutional rights. The Austro-Hungarian Agreement of 1867 was the cornerstone of the Hapsburg Monarchy’s national policy at the turn of the 20th century. Relying for support on the ruling classes of Austria and Hungary proper, the government of Francis Joseph oppressed the other, primarily Slavic, peoples that inhabited the multinational Austro-Hungarian Monarchy. Defeated in World War I and faced with an upsurge of the working class and national liberation movements that were gathering momentum under the influence of the October Revolution in Russia, Austria-Hungary fell apart at the end of 1918. The bourgeois states of Austria, Hungary, and Czechoslovakia were created from its territory. Part of the territory went to Yugoslavia, Rumania, and Poland.