Patriotism Used to Finance War: Austro-Hungarian War Loans with Specific Reference to the Territory of Banal Croatia

Abstract

Austria-Hungary covered more than half of its war-related expenses by issuing separate Austrian and Hungarian war bonds. In Banal Croatia, one could buy both Austrian and Hungarian bonds. In order to secure higher payments, i.e. to borrow more money from its citizens, the government enacted a series of legal measures that were intended to encourage the population to make higher contributions. The issuing of each series of war bonds was accompanied by omnipresent and intrusive propaganda. In addition to printing slogans, using the image and reputation of Field Marshal Boroević, and publishing articles in which war bonds were interpreted as a good, or even the best possible investment, the names of those who bought war bonds, particularly distinguished citizens, were often published, together with the amount they contributed. It is estimated that contributions in Croatia and Slavonia reached approximately 210 million crowns in the period from 1914 till 1918. It should be noted that state war bonds were, to an extent, more favourable for legal persons and enterprises, which could use loans as business deposits, for taking out loans, or for resale to third parties. On the other hand, citizens could make fixed-term deposits or receive dividend payments twice per year. It is possible to discern several incentives for war loan payments. Propaganda, which highlighted patriotism, with emphasis on the profitability and security of the investments, must have had a great influence on citizens who wished to assist the state and the army. One can presume that, through this propaganda image, the government to some extent also singled out and pressured poorer citizens (teachers, students, retired persons) with the goal of increasing contributions. Besides patriotic reasons, some individuals probably subscribed to the bonds with the goal of making a profit. However, due to the deepening economic crisis, the Austro-Hungarian crown’s value kept dropping, which also made the bonds less valuable. At the end of the war and the collapse of Austria-Hungary, the bonds became worthless, and all who had bought them lost their investment. Thus, after the end of the war, war loan payments began to be seen as forced. The opinion that the State of Slovenes, Croats and Serbs should not take up the debts incurred by Austro-Hungarian war loans was voiced in the Zagrebian Gospodarski list (Economic Paper).