68795347 Kosta Stojanovic Economic Problems of Serbia

5/24/2018 68795347 Kosta Stojanovic Economic Problems of Serbia

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ems

COSTA STOYANOVITCH

1Q1Q,1 PRIMER] RAJ HIQUE

Rue Saint-Gil


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ECONOMIC PROBLEMSof

SERBIAby

COSTA STOYANOVITCH

BIBLIOTEKAHKONOMSKCG INSTITUTA

1919I.MPRIMKRIK --(iHAI'llI^X i;

i.^. Rue Sainl-( lilies, i5I 'A HIS


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Introduction.

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INTRODUCTION,BIBLlKONOM. INJ fill

Kor centuries Serbia struggled and succeeded toacquire her independence after surmounting enor-mous difficulties. In the beginning, during thewhole Middle Ages, the terrible struggle of rivalrywith Bulgaria, and, at the end of the i/ith century,the struggles with Byzantium, and just at themoment when all Serbian efforts were on the pointof being crowned, Serbia succumbs in the strugglewith Turkey, first on the VJaritza and then atKossovo in i38


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justice, the principle of nationalities, as \\ell as thequestion that the solution of the frontier problemmust not include offended sentiments - - neithernational nor political - - which could be the germof future conflict- - in that case, we are convincedthat our national aspirations shall be realised andthat our nation's future will have all elementsnecessarv for the full expansion of all vital forces.\\hich will be put into action. Yougoslav Serbiawill then be able to give to culture all that a nationcan give, a nation which has already given so manyproofs, under so many hardships., of its powerand determination.The economic problem of Serbia in the past hasoften encountered great difficulties, in consequence

of Serbia's geographical situation as well as of theambition of those who had to become Turkey'sheirs. The whole rgth century is filled with Serbia'sstruggles against Austria-llungarv . in economic aswell as in political questions. \ustria-IIungary '


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tin1 downfall of the Bulgarian nation which \vas anally of Central Europe, although this downfall wasonly a consequence of her unnatural aggressionagainst Serbian arid Balkanic interests, Italy indemanding the Eastern Adriatic littoral and Fiumeis completely neglecting the principle : TheBalkans for the Balkanic nations .

Europe always interested herself in the Balkans.For the last fifty years Austria-Hungary and Ger-many have practically monopolised the Balkans.Commerce, industry, credit, communications by-land and by sea, tariffs, all were controlled by thosetwo States. The same States controlled the develop-ment of all interior important questions with thehelp of the German dynasties in Roumania, Bulgariaand Greece, which were only branch offices oi'Berlin, so that Germany's domination was quiteexclusive and unbearable. After the European \\ arthe conditions of life forbade every foreign influenceand allowed work with foreign countries v only onthe principle of reciprocity and common oblig-ations.

\ougoslavia especially, thanks to her geograph-ical situation and to the extent of her territory

>.(>(>.ooo square kilometers with i4 million of in-hahitants) is becoming an important factor for I herelations betv\een East and West, for the Balkanicbalance and for the junction of Europe with theother- Balkanic States. The natural production,the necessity to repair all the damages which shehas sustained during this v\ar and to create allthose conditions \\hich ha\e failed us till now at 1 ; 1guaranteed to us by the intensified work of ^ ougo-slavia in connection with all our Allies, \ougo-slavia possesses the conditions which will allo\\her to suffer on her territorx all the traffic which


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\\ont, up till now, through Central Europe, andwhich favoured Germany's and Austria's railwaysand roads and created the power of these Stateswhich had disturbed the world's peace and hinderedhumanity's progress.The essays which I am publishing in English nowand which have been printed, in i


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Serbia and Austria-Hungary.


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Serbia and flusiria-Huogary.

\ustria is 110 more. The State, which causeddiscontent among the majority of its subjects, whichterrorized the existence of the small Balkanic States,in the first place of Serbia, sank in the Europeanwar, in this wordly struggle, which it had pro-voked.The history of Serbia in the past century until

the present times, represents a chain of struggles,chiefly against Austria.

\\ith the liberation of Serbia from the Turks asequence of efforts was terminated, but themonarchy of the llabsburgs continued a struggleagainst Serbia, still harder and more terrible. Ifthere were no reasons for armed conflicts, politicaland economic conflicts were invented, which ex-hausted Serbia and prevented every independencein the expansion of her vital forces.

I begin this book with the chapter on the rela-tions of Serbia and \ustria-l lungary . The historianswill find, seeking for- the reasons of the ruin ofStales and nations in the World's War, in theconflict between our interests and the Germanexpansion, whose vanguard v\as Austria-Hungary,many motives for the phenomena which escape theeye of the ordinary observer. In this part \\e dealwith the events which enter history, but it islegitimate to mention the earliest past, with whichthe future will certainly riot have anything in


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common. New problems, new Stales, and thefrontiers of the enlarged former States indicate it\ the greater prosperity, on the principle ofinsuring the mutual interests h\ renewing allancient programs, which had their source in themegalomania ideas of racial domination and pre-servation of mediaeval States.


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Political andEconomical Intercourse


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Poliiical & Economical Intercourse

i.

1804-1878Since the insurrection oi' iHo'i and until 1876.Serbia \vent througli yarious reyolutionary phases

to obtain firstly a half-soy ereignty and then hercomplete liberation. As a half-soy ereign Staleunder the su/.erainty ol' the Sultan, she had rightsguaranteed >\ \arious international treaties.

During this period. Serbia enjoyed no autonomy,neither political nor economic'. Kroin the point ol\ieyy oi international commerce, the half indepen-dent Stales of the Danube \\ere a part ol theTurkish Kmpire. The capitulations \\ere the baseof commercial and political lights of Europeansubjects in the Balkans, in case of the liquidationof Turkex, Serbia, on account of her geograph-ical situation \\ould hau- found herself enclosed inthe /one of the interests of \uslria. although racialand religious relationships placed her more underthe protectorate of Hussia.In the \l\-th century, Hns>ia and Vuslria-llungary had, by a common action, lii'st against,NapoK'on, then against Turkey, and following secretor public international treaties, to assure in theBalkans their political tendencies, \\hich were oftenin opposition y\ith the Balkanic aspirations.


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The awakening of national conscience in the\J\-lh centurs and the formation ol tiie Germanand Italian units, have born new currents and havebrought up a conflict between the Russian andAustrian action on one side and the national move-ments of the Balkanic nations on the other.Out of this there arose contrasts between thepolitics of these States and the engagements con-cluded between them, engagements which weregenerally secret. The ideals of Russia and Austria-Hungarv , concentrated towards the conquest ofConstantinople and Salonica and towards the in-heritance and occupation of Turkey, were opposedto the national awakening and to the foundation otthe independence of the Balkanic States. Thestruggles of Roumania, Serbia, Greece, arid laterBulgaria, for their economical and irredentist ex-pansion, were reflected in the tendencies shown inthe treaties between Austria and Russia. And thatis win frequent fluctuations in exterior politicsbetween pro-Austrians and pro-Russians occurredin the Balkanic States.The Occidental States, especially England and

France, divided into two camps for a long period,favoured alternatively one or the other currentand thereby caused much trouble amongst theBalkanic States. On the other hand Germanyguided by Bismarck, appeared also with a fixed goaland a methodical armament for the fulfilment ofher designs. She found for her Balkanic politic-the assistance of three Germanic dynasties, andwhile the other European Powers relied on senti-ments of gratitude of the racial and religious rela-tionship, and the necessity of a union of the BalkanStates, which was in favour of their interests, Ger-many on the contrary established at the basis of


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her action, real bonds with the courts of the Balkan-Stales and brought in thai way her allies to thepresent conflict.Germany forced humiliated, weakened, isolatedAustria-Hungary, to conclude an alliance, \\ilh her.In Berlin, in 1878, she opened to her the perspectiveof indemnities through occupation of Bosilia-Hei'-xego viua.But Ihe interior problem of tlie dual Monarchy,so difficult to resohe, did not give Austria thepossibility to execute her plans. This Monarchyneeded, to maintain herself, \arious abilities inall branches of political, customs, administrative,legislalne, commercial, juridical, military, nnivers-itary life 1 and external economy . Considering thepreponderance of the Hungarians and Germans,\us1ria-l lungary met the opposition of all the othernations of her Krnpire, and in provoking thedevelopment of the Italian, Slenenc and RumanianIrredenlism. proceeded towards her n\\ n disaggreg'-alion. Her economical development could notattain the degree corresponding to her geographicalposition and to the numeric importance of her in-habitants. Germany, using- to her benefit, the\arious racial conflicts in Vustria-Hungavy, suc-ceeded to \anqnish in hei general economic politicsnot only on the markets of Vustria-Hungary, butaho in the Balkans, which she designed to Austriaas being a territory for conquest and coloni/ation.During the period from 1870 to HIO'I. \uslria hasbeen a toy in the hands of Germany. After theGongress of Berlin, when under \mlrassy, Iheperiod of Hungary's expansion began with Hie helpof Germany, \ustria has been hindered in all hera tempts, by the action of the Hungarians \\liowanted to secure their preponderance in the general


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economical politics. The hatred of races betweenHungarians and . Slavs was tolerated and evenencouraged, specially in Austria. It is the Magyarswho have imposed to the Monarchy the basis of thecommercial treaties with Europe and specially withthe Balkans ; the same was done for the traffic andcommercial treaties by which they were regulated.Bosnia, Herzegovina, Croatia and Slavonia, withthe Dalmatian coast formed an economical regionable to create an outlet for the Austro-Hungarianindustry. The safeguard of the Hungarian agricult-ure had to enter for a great part into the protection-ism of Austro-Hungarian treaties. Over thesetendencies of the Hungarians, Austria placed thedesires of conquest of the Habsburgs on the Balkanicterritories, politics which were however opposed toHungarian interests.

II.

1878-1903After 1878, after the Serbo-Turkish war and the

formation of Bulgaria, Serbia wanted to manifesther independence by the conclusion of commercialtreaties with one of the European States. For thatpurpose, she chose Great Britain. Austria at onceprotested against this treaty, which led to thedemission of Mr. Yovan Ristitch Serbian Prime-Minister. The new minister for Foreign Affairsmade with the neighbouring Monarchy a secret con-vention according to which Serbia could not con-clude any treaty without the consent of Austria(1881). This convention warranted to Serbia herintegrity and her dynasty but it obliged her to give


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up her aspirations on Bosnia-Herzegovina. But onthe instance of the Serbian Cabinet some alterationsconcerning commercial treaties \vere made in thisconvention (1882) and formally, Serbia, which wasthen a kingdom, was allowed to conclude autonom-ous treaties.

I say that this right was given to Serbia onlyformally, for from 1882 to 1906, Serbia, in fact,regulated her relations of international commerceonly through her commercial treaty with Austria-Hungary. All the treaties were drafted on that oneuhich alone contained customs tables including theparagraph of the most favoured nation. All ourcommercial treaties included conventions on navi-gation, veterinary conventions, conventions on theacquisition of nationality, also articles of theTurkish capitulations. According to these treatiesSerbia was a vassal of Austria or rather of Hungary.The market where our products were sold wasBudapest, All the imported goods came fromHungary or Austria. Our importation and export-ation depended by 90 o/o upon the markets of theneighbouring monarchy. The railways, the naviga-tion, all the outlets of our external commerce,according to autonomous tables and decisions,belonged to Austria-Hungary, Serbia had no directcommunications with the Austro-Hungarian pro-vinces, such as Bosnia-Herzegovina, Dalmatia,Croatia or Bohemia. She could not any morecommunicate directly with Europe, for the trans-portation of our goods were made in Pest andVienna. Serbia had no relations with the BalkanicSlMlos either firsl on purely political reasons, andbecause natural products of the.se countries were ofsuch a nature that thc\ could not induce 1 a moreintensive commerce. B\ the lack of v\a\s of coin-


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municalion in the Balkans, to whose establishmentVustria \\as always hostile, Serbia's dependencev\ith regard to the neighbour State was still in-creased.

Nevertheless, according to the Congress of BerlinBelgrade had necessarily to be connected \\ithConstantinople by way of Sopha. The junctionof Serbia with Salonica was accomplished muchlater. To increase the importance of Finnic.Hungarian harbour, obstacles were constantlyraised to the instalment of anything that could havehelped the commerce of Salonica : moles, wharfs,exchanges,

connection of the harbour to the rail-road, etc... The construction of a transversal rail-road, which could have given Serbia an outlet onthe Adriatic sea, has never been allowed. On thecoast of that sea all the Dalmatian harbours hadtheir importance diminished, equally Trieste, whilethe creation of any harbour, liable to compete withFiume, be it on the Austro-Hungarian, Monte-negrin, Albanian or Greek coast, was hindered.

All these measures had their repercussion on theexpansion and the economical development ofSerbia. Our country, with a surface of /iS.ooosquare kilometres and a population of about3 million inhabitants, according to the statisticsof 1906, hindered in its decisions, was very weakfrom the economical point of view. Our agricul-tural, industrial and fiscal resources brought hardly80 million dinars to the State budget. Our export-ations did not reach 70 millions and importationsvaried from 60 to 65 million dinars. Serbia, afterher loans for the liquidation of the wrars of 1876-1878 and of 1 885, and after the construction of therailroad Belgrade-Vrany and Belgrade-Pirot couldnot for at least 20 years contract a loan


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an\v\here. Tin 1 budget, otherwise limited, had tostand from year to year a larger deficit ; to balanceit, we had to contract temporary loans, short dated,at interest rates of yo to 'to o/o in Vienna andBerlin.

Serbia under so disadvantageous conditions ordevelopment, interested no one in Ibe Occident andRussia did very little to help her. One tried howeverto deliver her from Austria-Hungary hut littleenergy was found in the dynasty of the Obino more did one find a sufficiently assured aid ofsome great State of Europe. In that period ourgreat Allies of to-day did not yet see clearly fheproblem put by the European war of i


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III.

1903-1912The alliance of Germany, Austria and Italy was

counterbalanced only by the alliance of France andRussia. The abnormal situation of Italy in thatalliance of the Central Powers resulted in the factthat her national and economic antagonism had afavourable influence on the autonomous develop-ment of the Balkans. The crossing of the interestsof Italy and Austria-Hungary in the Adriatic con-tributed to make the former of these powersencourage all the attempts of economical emancip-ation of Roumania and Serbia. England, far fromevery alliance, followed step by step her traditionalpolicy, rising during a long period against anyexpansion in Europe and in the Balkans, and favour-ing all anti-Russian politics, specially in Bulgaria,Roumania and Greece. After the Russo-Japanesewar, English politics changed and a new current forthe isolation of Germany developed. The policy ofEdward Ml was crowned at the eve of the Europeanwar by an understanding between England andFrance. By this fact the Russo-French alliance wasreinforced. The isolation of Germany then showedclearly the intentions of Austria-Hungary and herpolicy of conquests in the Balkans in general, butspecially and in the first place in Serbia. Once thetime of the commercial treaty between Serbia andAustria-Hungary was up (190/1), Austria in usingher ancient methods, undertook to adjoin politicalstipulations to the conditions of purely com-mercial transactions. That is why, at the endof 1906, she asked Serbia to denounce a preliminary


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treaty for customs with Bulgaria in order to enableherseli to start at once negotiations of a treaty withher. After the change of a cabinet and the refusalof Serbia to sign a convention with Bulgaria, whichhad, by the premature publications of that con-vention, rendered the international situation ofSerbia difficult, the latter engaged in May negotia-tions with Austria which were interrupted twomonths later ; and the country, not being ruled byany treaty, was nearly thrown into an economicalwar with the neighbouring monarchy. The con-clusion of the treaty was mostly hindered by the fact,that Serbia would not accept the stipulation that allthe military supplies should be ordered in Austria.

In this difficult and hard economical struggle,which Serbia had to stand, she was sustained byall our actual friends and especially by Italy, thenmember of the Triple-Alliance.To find new markets and new outlets for herexportation was difficult for her, and rather gravecrises followed in this new situation.The essential point Avas that Serbia succeeded in

her attempts and that by Salonica and Sulina shefound access at new markets on the Mediterranean,in \sia Minor, in Egypt, in Greece, in Italy, France.Spain, and that she found the means to have directcommunications with Belgium, England, Swedenand Xorwa\ without .passing through Pest or\ieima. In the course of this struggle Serbia wasaided by France from i in everythingconcerning loans and credits.Up to the eve of the Ba-lkan war. Serbia contractedtwo national loans in Paris : one of 96 million,

the other of i f)o million dinars, and finally a loanof (io millions contracted by the OupravaFondova (TTypothecarv Bank).


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After l\\o >ears oi a painful effort, from lyoO to1908, antl until the annexation of Bosnia-llerzego-\ina, Serbia entered a period of political and finan-cial revival. The State budgets balanced i>\ sur-pluses. \nd it is in thai \\a\ that at the e\e of the\>ar against Turkey in 1912 Serbia had cash in handto the amount of \o million dinars. The export-ations amounted to more than 200 millions. The.new railway material and the supplies in armamentsare worth 2^0 million dinars. Serbia at theannexation of Bosnia-Her/egovina, entered theGreco-Bulgarian alliance, economically strong andperfectly armed for the military action which wassoon performed with success.From 1006 to 1912, Serbia succeeded, after :meconomical struggle of about four years, in securinga treaty, or more to say a veterinary conventionwith Austria, which constituted earlier the esseiili ilpart of her treatv . \ccording to the rie\\ stipula-tions, the meat was prepared in our slaughterhouses and it is from there that the exportation ofall the products was made. This new conditionsafeguarded the elements of our industrial develop-ment and gave us the liberty to take measures withregard to all questions of national economy. Serbia. \navigation, veterinary police, the trafic with otherBalkanic and European States were not any moresubdued to a control as before.

It is then that the first Franco-Serbian Bank vvisformed in Serbia, which by her credit helped Ser-bian commerce and industry. Up to the foundationof this bank, Serbian credit was exclusively in thehands of the branches of Austro-Hungarian Banks.

In the period of the economical struggle withAustria, a complete alternation occurred in eour^exportation and importation as well as in our com-


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mercial intercourse \vith England. Italy and othercountries. During that struggle the exportation^and importations \\ere made on an entireh differentpercentage. In their repartition, Austria, whichheld the first place, cedes her rank to German) andfalls back to the fifth place ; our exportation andimportation reach hardly 3o o/o. No country attainsthe proportions of 90 o/o which Austria had reachedbefore. The intercourse of Serbia and the BalkanicStates concerning commercial traffic, the com-munications and credit were also completely altered.The relations of Serbia with lioumania, Bulgaria,Turkey and Greece, relations \\bicli had previouslyno importance, were closely resumed and becomemore and more solid. The navigation and the rail-roads of the Balkanic States play a great part in theexportations and importations of Serbia.

In this period measures are taken to create closerrelations I >et \\een Serbia and Bulgaria, Serbia andItaly, Serbia and France. Independent economicalcommittees formed hehveen Serbia and the abovementioned States precede political understandingswhich prepare the Balkanic alliance under the pro-tectorate of our present Allies.

After the annexation of Bosnia-Herzegovina thequestion of the construction of the \driatic Rail-road presents itself again and the question of thecreation of a Serbian maritime navigation with thehelp of the legislation of one of the Allied Stateswhich was most favourably disposed for us.


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IV.1912-1914

Apart from the evident enterprises of Austria-JJungary against Serbia and her economical in-dependence, and apart from the expectation in viewof conquering her politically, new events occurredafter 1908 which were evidently prepared in Berlinand organized without the concourse of Austria.The revolution of the Young Turks has as a con-sequence the development of the German influencein Constantinople, which was already considerablethere. All this produced as a counter effect thecreation of the Balkanic Alliance of 1912. InSeptember of that year the Kingdoms of theBalkanic Peninsula entered the war against Turkey,while Germany and Austria-Hungary were notprepared to rise against this conflict. The victoryof the Allies and the nearly complete disparition ofEuropean Turke\ let Germany feel the urgentnecessity of an European war.

Already at the beginning of the Balkan warAustria, which expected a defeat of Serbia, wassurprised at our successes and tried at variousoccasions to find an excuse for an interventionopposing several times her veto ; firstly at theProhaska-affair, then at the moment when ourarmies were on the Adriatic Coast, and finally whenScutari was occupied. As we on our side avoided toprovoke an ultimatum, Austria-Hungary made ef-forts to find in Bulgaria favourable circumstances todestroy the Balkanic alliance by flattering theBulgarians in their megalomanic desire for thehegemony in the Balkans. She expressed then


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clearly that she did not consider Serbia's success tobe a (( fait accompli . Germany which uses, in herpolitics, entirely different methods, stopped thediscussion at Bucarest in 191 3 'and never took intoconsideration the remarks of the Austrians andRussians.Two months after the peace of Bucarest, therevolt of the Albanians gave Austria-Hungary anopportunity to protest against Serbia. The SerbianGovernment withdrew to avoid being the cause ofa conflict. When the question of the purchaseof the Turkish railroads in the liberated regions wasdebated Austria tried her best to provoke on thisquestion, which in i.lself was, in no way a politicalone, a conflict with Serbia. Austria opposed alsoher veto to the Greco-Serbian convention made inthe first part of 191 A, and asked Greece to apply toher the clause of the most favoured nation, andaccording to the sense of this convention, every-thing Greece had reserved for Serbia. Naturally,following the order of things, the exigences of\ustiia were illusory, for the principle itself of thesaid convention on veterinary regulations concernedthe importation and exportation of cattle andproducts b> Saloiiica, and could in no case be ap-plied to the external commerce of Austria via Salo-nica.

Austria-Hungary, seeking at am cost an excuseto provoke a conflict with Serbia, was impatiently\\aiting for an attempt like the one of Sarajevo inJune i{)i/i. Helped by Germany she hastened todeclare war on Serbia, for the successes of ourcoimtr> in the Balkan war- had exalted all thenations oppressed by Austria, and especially thoseof our race. Never have the claims for the rightsof the Sla\ nations been expressed more strongly


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I haa after I lie success of the Balkan war. Germansequally hastened to enter the war. becair: thodeath of the Archduke Ferdinand, Austrian Cn;v\n-IVince, had deprived her of one of her most preciousassistants for her territorial conquests. On oneside the isolation of Germany, on the other handthe democratic awakening fortifying the idea of analliance in the small nations, the armaments of th^rival great Powers as well, meant that ever\ da\deferred was for Germany equal to a lost hatl-le.The Aiislro-Gerinaii appetite and the fear to fin themselves some day in front of better preparedrivals have provoked the declarations of war onSerbia, Russia and France. The prophecies of theone and the other State were not exact and A\ith ourAllies, in spite of all the catastrophies we under-went, we are at the eve of a favourable solution.

Serbia, from the end of 1912 to July 191 1\, whenthis world war burst out, has riot had the time todevote all her efforts to the regulations of thepolitical, financial and economical relations in theliberated provinces.The first budget established for enlarged Serbiacould riot be executed in its entireness in the currentof the year, as half of 191/1 was spent in war.According to the budgetary plans for enlarge.Serbia, this country with a surface of 82.000 squan. 1kilometres and a population of 4 million and a halfinhabitants would have had a budget of 282 milliondinars ; too millions, less the amortisation of thedebts, wrere intended for the liberated regions. Oneexpected a commercial balance of 35o to 4oo milliondinars for the importation and exportation. Thewealth of enlarged Serbia amounted to 8 milliardsreal estate, cattle, instruments and other valuesincluded.


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II real plans of studies for the development of rail-loads in old and liberated Serbia were elaborated.The construction of a railroad ending at an eventualharbour on the Adriatic was especially dealt with,harbour whose creation had been recognised by theLondon Conference, but whose establishment washindered by the European war.Measures were taken for the liquidation of thewars oi 1912 and i 9 i.3 and for the completion of thearmanr.Mit. \ part of these designs was accom-plished with a loan of a5o million dinars, concludedin July i()i3, and we began negotiations concerningrailroad and armament. A loan of 3o million dinarswas also contracted, as hypothecary credit, in viewto arnelioi^ate agricultural industry.

Serbia, surprised in the course of these enter-prises in 191,4, entered ill-prepared this war whichwas imposed upon her. Being at the side of thegreat nations, France, England, Russia, her Allies,she was able in this struggle to reinforce herself, toget armed and to stand the assaults until the endof 1 9 1 5 . She gave way under the common blowsof the two empires and of the kingdom of Bulgariaher secular rival.


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Serbia's Commercial Movement


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Serbia's Commercial Movement

1804-1814The period of Serbia's resurrection which began

in 180/1 \vas (UK led b\ the Turkish reoccupation ini8i3. Serbia never had the time, during the un-ceasing \\ars against the Turks, in the above periodto consolidate her economical and commercial life\\itli her neighbours. After the second revolutionof 18]; ), commercial relations in Serbia we elegulaled on tariffs based upon commercial treatiesbet \\een \nstria and Turke\ provided in PojarevaU(Passaro\ilx) in 1718. These tariffs taxed mer-chendise with 3 o/o (id valorem augmented l>\ \>. o/oof additional tariffs. Uler the Peace of Adrianoplein i8y.i) \\here b\ a a Ilatlisheriff Serbia's auto-nomy \vas recognised ii8.'Jo, .Inly i/jtlu, Serbia,Tnrk o/oduty on foreign merchandise. In iS->.'i. i8.'{(> as in1899 the regulations of commercial intercoursehelv\een Serbia and \nsl ria-Mungar\ \\ere made ona ba-is of . > o/o at nilorcin. Serbia had tried toi-ai^'thal . > o/o rate in \X'\^. \\hich \ustria throughMelternich had pi -e\ent(Ml from being applied, hii8M. \usli -ia-lluni:'ar\ concluded a lreal\ of com-


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merce with Turkey on a basis of 8 o/o ad valoreminstead of 5 o/o which she would not apply toSerbia, which remained with the rate of 5 o/o to-wards Austria-Hungary. The treaty of Paris in 1866which warranted as a principle to the Danubianprincipalities the economical autonomy, had notconsiderably changed Serbia's situation as to hercommercial independence and Serbia 's right to con-clude treaties of commerce as a sovereign State wasnot recognised by the neighbouring Empire.To enable herself to escape this slavery in whichAustria intended to maintain her, Serbia created aspecial law

r

(1868), law for consume (trocharina) ,wrhich taxed the merchandise with a consume-taxof 6 to 8 o/o ad valorem.The treaty of Berlin (1878) which recognisedthe independence of the Serbian State in itsarticle XXXVIII, had given Serbia the right toregulate her economical relations like the independ-ent European States, by which Serbia came out ofthe regime of capitulations in force for Turkey.

II.

1881-1906In 1879 Serbia had concluded with Great Britain

a provisional agreement on the principle of the mostfavoured nation and this was the first commercialtreaty of independent Serbia. By this fact Serbiahad put into opposition the arrangments of theagreement with Austria-Hungary, by which the


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neighbouring empire \ie\ved a custom-union withthe Serbian State and the domination over theeconomical life of the young independent principal-ity. After the Austrian protest against the aboveSerbo-British treaty, she asked that Serbia shouldmake special advantages for her and threatened Loincrease custom-taxes to 10 o/o on Serbian import-ation and refused to take up the negotiations for acommerce treaty. The fall of Mr. Ristitch's cabinetwas the great consequence of these vexations andhis successor Mr. Teh. Miyatovitch, aGth October1880, satisfied the Austrian exigencies.The 7th of May 1881, the first commercial treatybetween Serbia and Austria-Hungary was con-

cluded, which had its matcb in a secret conventionbetween the Serbian State and the neighbouringKmpire (i88ij and prolonged in 1889 before theabdication of King Milan. The notice of tbis cou-\onlion expired in 1891), but the return of KingMilan to Serbia guaranteed sufficiently its force fora long time.The capital articles of that convention were : that

Serbia did not have the right to conclude any treatyof commerce without the assent of Austria-Hungary.Pirochanatz hardly obtained the modification of thi-article that Serbia keeps her right to determinatefreely in the conclusion of treaties of commerce buteverything that occurred in Serbia between 1881until 1906 proves that this right was only a fiction.Thus Serbia started in her political independencewhich was in reality only an Austrian economicalslavery and vassalage.

After tbe expiration of the first treaty of 1881, thesecond of 1898 was concluded. Both wrere concludedon the principle of the secret convention, these two


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treaties include the customs-union with Austria-Hungary and realize the idea of that Empire to haveSerbia under tier domination, an idea exposed in thefirst da\s which followed the Berlin treaty. In thefrontier traffic asserted to Serbia in those twotreaties, the rights of other foreign countries whichhad commercial relations with Serbia on the basisof the most favoured nation, were actually baffled...the other States wrhose treaties were not tarifftreaties and which should benefit by the advantagesof low custom rates for Austrian importation did notbenefit on account of two reasons : the reason ofproximity and the reason of privileges in the front-ier-traffic between Serbia and Austria-Hungary\\herein the goods were exempted from custom-taxes.

In the period from 1881 to 1906 the exportationof live cattle wras guaranteed under the system ofthe two above treaties by the prescription of theveterinary convention ; these conditions were \eryhard and were the reason that the frontier was oftenclosed as soon as Serbia's politics showed ten-dencies to escape the Austro-Hungariaii sphoiv.Reduced tariffs and the proximity of the Monarchyexcluded any serious competition from otherforeign countries, the production of the Serbiannation, her exploitation during more than 20 yearswas in a state of stagnation and everything waslimited to the most coarse raw-materials : fruit,cattle and cereals. By the Austrian seixure of ourexportation and importation, which attained80 o/o of the total amount, Austria had monopol-ized also our credit, our railway -tariffs, the tariffsof our river navigation on the Danube and the Sava.She was mistress of our economical and politicalindependence and succeeded in isolating us com-


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-3 7 -pletely from all the neighbouring States and fromall Europe. Austria-Hungary by conceding Serbiathose two commercial treaties was always prolong-ing five advantageous conventions for herself, theconsulary convention and the conventions concern-ing fluvial navigation, successions, recourses in jur-idical matters and extraditions of criminals.

Ill

1906-1912\\ hen the delay of the second treaty of commerce

expired, it was prolonged until the end of KJOO.\\ hen the negotiations were started for the con-clusion of the new treaty, I he \ustrian exigencieswere great hut circumstances were much better forSerbia and more favourable than the system of thr>secret convention, which had ceased to exist. Serbiahad already elaborated laws of tariffs for autonomiccustoms \\hich served already as a basis for thetreaty concluded with Germany, treaty of commercewith a tariff for a restrained amount of articles(ioo/i). Serbia was at the time negotiating withBulgaria for the conclusion of a customs union,which was accepted by the Bulgarian Assembly inSofia in 1908. Austria had broken up the negotia-tions with Serbia in Vienna towards the end of ino5pretexting motives of the Bulgaro-Serbian con-vention asking her to withdraw them so as to con-tinue the negotiations with Austria-Hungary.The negotiations taken up in February i


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38

treaty, into a modus rivcndi for the regulation ofthe commercial relations until the conclusion ofthe (iclinilixc treaty. This state of affairs lasteduntil the end of June 1906.

\< Vustria wanted to secure, by according acommercial treat \ to Serbia, for ever special politic**adxantagvs. particularly the guarantee of the princ-iple that for Government supplies Austrian productson egality of prices and qualities would not heexcluded, which viewed the supplies of guns, Serbiacould not treat under such conditions, and thenegotiations for the treaty of commerce were inter-rupted. From the 2 ,4th of June 1906 until theist of September 1908, the frontiers of Austria-Hungary were closed for the greater part of ourexportation and transit. The cattle, poultry andanimal products were prohibited during thatperiod. In this period our efforts for our econom-ical emancipation were crowned with success.Serbia, obliged to go to new and ancient marketswith her products by new ways underwent theproductive transformation in quantity and qualityand confirmed the vitality of the Serbian nation i.ithe exterior world and proved that she could dowithout the markets of Austria-Hungary.

In this interval Serbia had improved her treatiesof commerce almost with all the European Statesexcept with Austria-Hungary.The negotiations with Austria-Hungarx vseivstarted, several times from 1906 to 1908 and theywere much improved in the beginning of 1908. Inthis treaty, the ancient veterinary convention doesnot exist any more and there was no more export-ation of live cattle : only the exportation of freshmeat was allowed of a determined contigency ofhorned cattle and swine, the counter-balance of


40/238


41/238

COMPARATIVE TABLESof the exterior commerce of Serbia

i in million francs .

1864-1880YEARS


42/238


43/238

1906-1911YE \KS


44/238

43 -1881 - 1893

YK I'.S


45/238

- 44 -

1906 - 1912

YEARS


46/238

- 45-COMPARATIVE TABLE

of exported goods from 1 884 to 1 91 2Average of exportation in million francs.( ioods


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of 1884-1893 the \alue of the exportation of entilewas of 1 6, 5 million francs on 42,6 million francs o(the total exportation, 38 o/o.

In the period of 1893-1900 the exportation ofcattle reached 27 million francs on 68,8 uiUiiafrancs of the total exportation, about 4o o/o. Inthe first epoch of 1804-1882 cereals were not orhardly not exported ; the exportation of fresh fruitplayed a most insignificant part and so did theanimal products. From 1882-1905, when the twotreaties of commerce were in force, the export ofcereals augments, with fruit and animal products,whose repartition to the disadvantage of the Ihecattle exportation, takes the upperhand since 1906when the percentage of the total exportation is thefollowing : for live cattle 10 o/o, cereals 39,7 o/o,fruit 17,7 o/o and for animal products 10,0 o/o.

fndustry begins to assert itself in 1906. Thelowest tariff of duties for the industrial articles ofthe neighbouing empire; the exemption of customsfor cereals and other Serbian raw -products exportedinto the frontier zone to supply the Austrianmills and factories (Mahherkehr) did not allow tliocreation of our industry before 1906.Exportation of live cattle into Austria-Hungary :

Periodof the second

treaty of


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47

Custom-war.


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- 48 -vxhich allowed regular exportation only from the8th of January 1886. Always under the pretext ofepidemics the frontier 1 was closed to swine and hor-ned cattle on various occasions. In 1890 this chi-canery was often repeated, several times for disea-ses and other times because the provenience of Ser-bian swine was supposed to he Roumanian. Onthe 24th of May 189/1 cattle exportation was tem-porarily prohibited until the i/Uh of October 1898 ;1 9th of February 1896, the prohibition struck theswine and meat, and was extended until the 2 2nd ofAugust 1896.

In 1898, 1901, 1902, 1906 the exportation ofcattle was hindered several times yearly -under thepretext of porcine and bovine diseases whichconsiderably impeded the rational breeding of ourcattle. The definitive results of Serbia's wealth mcattle on account of the abnormal commercialrelations with Austria-Hungary are the following :


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- 49 -

The period of the custom-war, which lasted fromI he second half of 1906 until 1911 viz. nearly fiveyears, has obliged the Serbian breeders to abandonflie exportation of live cattle and to devote them-selves to the industry and preparation of half-ma-nufactured exportation articles.

Slaughterhouses, factories, steam-mills, etc...were created, cereals were replaced by flour, Ihecattle by fresh meat, salt-meal, etc. In this waywe avoided to gravitate exclusively towards theAustro-Himgariaii markets, for the transformedproducts could choose longer ways towards distantmarkets.

Serbia, once having found outlets via Salonikaam iieAY ways for her international traffic, after thesuccess of the Balkan wars, hoped to consolidateher position if she were not hindered by the brulalaggression of Uistri;i-Hungar\ .

I add herewith the fluctuations of the principalcategories of our products of exportation from 1906to, 1 9 1 2 .

190619071908Exportation in million francs.

Cattle is, 3 3,0 1Cereals 22,0 31 :>7,7Fruit lo,l 22 ] >Animal products 1->,0 10 10

1906 1912

Annual average in million francs and 0/ on total exportation.Cattle 8,. > 10 /Cereals 33,0 39,7 /,Fruits 14,0 17,77Animal products . 13,1 l-v>,5/


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DO

COMPARATIVE TABLEof the commercial movement by countries ofprovenience and of destination during 1911.

(in million francs).

Country.


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5i

Repartition of the exportation of the year of 1 91 1by categories of merchandise.

First Category. - Products of agriculture.

Products.


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Third Category. Other products.

Products.


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- 53

Denomination.


55/238

Denomination.


56/238

Qc.c2COoooo73CCti

CO0)

5s*1

|. 5s--

CO_CDJ2cd*jCD>IBJQ.EoO

3


57/238

56

_


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The Serbian products of exportation are : cereals,fruit, fresh or dried, animal, mineral, woodenproducts and other raw or half-worked materials.Articles of importation are : clothing, textures, ironproducts, engines, tools, etc...The commerce we have dealt with herewithconcerned the Serbian territory of before the Balkanwar- which took place in 1912. The surface of thisSerbia amounted to #8.000 square kilometers with3.ooo.ooo inhabitants. After our successes in thewars against Turkey and Bulgaria in 1912 and 191 3the stir-face of enlarged Serbia v\as of (Sy.303 sq.kilometers with 4.000.000 inhabitants. \ot havingbeen able to collect statistics for the period of H)i3and i()i4 Ave remain on the probable previsionsof an exportation of i()O millions and of an import-ation of 100 million francs, of a total of 3io millions,as, in M)i i , the exportation was of 27,6 and import-ation 5 1,3 million francs for the newly liberatedregions of Serbia. The importation for the newprovinces was divided up, regarding countries, inthe following way : Austria-Hungary had one quar-ter, Germany one fifth, the rest was divided betweenTtirkey, Italy, Serbia. Rournania, England, etc...

Serbia in her- frontiers before i


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58

good as the needs of a nation \\ould require tliern tohe, \\ hose historical mission is not yet fulfilled. Thetruth, \\hieh heeanie a palpable evidenee for thewhole ANorld, that Serbia cannot VIM* \\ithoul hercoast, \\ithoul an outlet on the sea, had conqueredall spirits \\ith us and our efforts of the last years\\ere concentrated upon the realization of that ideal.Owe preventions upon Dalmatia and the other Serh-ian, (Iroatian and Sknene countries ai %e justifiednot onl\ b\ national motives but also by reasons ofexistence and guarantees necessary for the vitalinterests of a nation \\ Inch seeks in stubborn strug-gles since centuries, to secure her political and eco-nomical independence.


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The Economical relations ofSerbia with the AlliedCountries before and afterthe War.


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6i

IN TRODUCTION.

When I published my Conference held in Panson the ()th January 1918 at the Hotel des SocietesSavantes on the future economical relations olYougoslavia \\itli the Allied countries, I thought ilwould be good to add the article concerning thecommercial routes of the Balkans. The subject ofllic last \vork \vas bound to interest the ParisCongress of the month of October 1918 which w;i^only the prolongation of the Congress of Rome of1918 of the nations oppressed by Austria-Hungary.Thanks to the happy events which arrived on thefronts this Congress never took place in consequent?of the sudden downfall of the Habsburg Empirebut, the actuality of that problem has not lost itsworth.


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Toe Economical relations of SeroiaWITH THE

Hilled Countries liefore and after me War,

INTRODUCTION (I).

I.

In these gra\e moments, after' three full \ears ofwar when, since the United States joined the othernations, all the civilised world came on the battle-fields to har the road to the successes of Germanbarbarism, notwithstanding the condition, theconfidence that victory is ours, Humanity feels thenecessity of beginning- to reflect on the hasis ol' I hepeace, its future duration and the new conditionsof life between nations and States. There are quitea lot of problems in the past which have provoke;frictions hel \\een nations. During' the last centuryand at the beg'inning- of this century two great cur-rents prevailed on other' courses which NNC'^

ii An extract of this work has been the object of my Con-ference, held the nth January IUK>, at the Hotel des SocieU'-s.Savantes, in Paris, under the Presidency of Dr. Chervin.


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- 64 -threatening to light the fire out oi' which tliis con-flagration had sprung. The socialist theories, coin-prised hetween pure Utopia and the justified claim.ithat societ) v\as hound to provide for the necessitiesof labourers, of workmen and of all those \vho ha\eno resources, had rallied the political parties, thepeoples, the authorities and the Governments thatwere doing all in their power to prevent the socialrevolution. And one can say that evolution hadtaken the place of revolution. The amelioration ofthe workmen's situation was great, enormous, al-though far from being perfect, but the labour ques-tion preoccupied the intellectuals as well as the sal-aried persons, and the legislative bodies of all Statescontributed with many promulgated laws to th-jsolution of problems and of social questions b\ wayof evolution. The struggle between the nations andthe States for the national union of the subjugatednations, maltreated and oppressed, took place at thesame time as these tendencies, and thus thecampaign of the last century was prolonged. Acampaign which had begun and had been crownedby success in Italy and in Germany. Besides thesetwo currents the iriveterated ambitions of an ancientpast were dragging along, The Middle Age covetousness for supremacy, imperialistic wishes andviolent domination were the unique aim of certainnations and certain States. One was only awaitingthe favourable moment in order that this conflict\\hich was brooding, did not burst in commonmassacre. Even in this war which has proved theclassical qualities of abnegation, duty and stoicismparallel with unheard of atrocities^ barbarous des-tructions which human dignity will be ashamed offor ever, we see the entanglement of extreme ideasand actions. In front of us wre see the marriage of


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German militarism and the social anarchy of RussianBolsheviks. The true Barbarians who unite them-selves with brutes in order to vanquish moral rightand justice ; those that have neither pity nor soul,that were massacring women, children and oldmen, that were drowning- innocents and taking menaway like the Satrapes of Assyria and BabyloniaAxero clasping the principles of equality betweenmen in order to be able, disguised thus, to avoidtbe impartial critics of history.

In the war one must think of peace, as well as inpeace one must riot forget that war can break out.One is already proposing the solutions which are tosecure us the duration of peace. One of these istbe Society of Nations, if one gives it sufficientsanctions. The union between the great and thesmall for the respect of other peoples' right willbe a strong guarantee. The creation of sure meanssupposes complete victory but, in order to have it,one is bound to exhaust not only the resources wehave actually at our disposal but also to uniteall efforts in future. If the Society of Nationsallows, after the war, that the nations be exploitedin the same way as this had been before the war;ui(l if, under the control of tbe great who ougbtto watch over the order of things and of States inthe world, and if under this control certain ambi-tions could produce themselves and attack others,we-hall always be next door to events similar to thesewhich are happening to-day still. We will, in thisConference, examine a problem whose equitablesolution could perhaps augment the means of sanc-tion within the power of such an Institution as theSociety of Nations will be. If we succeed to have inthe East of Europe, homogeneous, solid and strong,States among wrhom a natural federation could be


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66

intuit 1 , Europe would have, in this block, not onhan obstacle for the German invasion towards theEast, hut also a power which would always he reatlvto prevent interventions towards the West. TheNations, free to dispose of themselves, developed,civilised, instructed in their own countries, freefrom strangers who used not to care for the des-tinies of the nations which they were governing,are again for the World's progress and for a forcecapable of preventing all attempts of a party whichdesired, by disturbing order and peace, to make aprofit for a nation or a caste.

\Miat interest our Allies will lur\e to see greatand strengthened Serbia and the other small Bal-kanic States, which are trodden down now hv theGermans and their Mlies will be seen by I hoexpansion which the Balkanic States could reali/eunder the new conditions. If one creates frontierscorresponding to the legitime wishes and aspirationsof all, one could give to these nations everythingthat would make them great and independent. ( )ii'>must neither bargain nor operate with halfmeasures ; one must not stop at solutions whichcannot live ; one must look for and find radicalsolutions which can alone bring us the remedies tothe evils which this war lias brought upon us.With solutions which would satisfy the rights ofthese nations, the future States can be stable andtheir reciprocal collaboration could constitute anefficacious sanction for the preservation of futurepeace against all those who would wish to trouble it.The latest speeches of Lloyd George and Wilson,at the beginning of 1918, are advocating an endof the war with the maintenance of Austria-Hung-ary's integrity and with the idea of giving tlu>mi ions belonging to this Empire different auto-


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nomies, instead of the idea already put forward bythem to form neu States on the principle of thefree self-determination of these nations. Thenational autonomies in Austria-Hungar\ are absurdideas which have provoked so man\ remits in thepast and \\hich have been the germs of the actualconflagration. The best equilibrium after the war.the menace of future conflicts, the triumph of moraland just ideas, require a new Kurope created on thebasis of respect to national sentiments \\hich onehas not the right to neglect. Jt is easier to find areparation for material damage than for sentimentsor moral damage which passed from generation togeneration with nearh irreparable evils andsufferings.

II.

\fter the I3alkanic wars, Serbia had onlv finishedone part of her national mission. Through OldSerbia and Macedonia, two purely Serbian coun-tries, which were expecting their liberation fromTurkish yoke and which had become integral partsof the Kingdom of Serbia, we have come out of thepainful situation in which we had been placed be-tween Montenegro and Greece since the arrival ofthe Turks in the Balkans. The issue to the AegeanSea, the economical issues, on the coasts of theAdriatic Sea, promised by the Great Powers, wereopening new perspectives to the development of allcountries. The Austrian domination had sufferedmuch from our successes which the victory gainedon the Turks gave us. Time lacked us to unite all ourforces and to utilise all the advantages resultingfrom the circumstances after the war with Turkev.


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68

Scarcely ten months passed between the end ofthe Balkanic wars and the commencement of theWorld war. During this interval Austria-Hung-ary did everything in her power, in provokingtroubles, to hinder our attempts of consolidation.During the war of 1912-18, Austria-Hungary placedSerbia in front of an ultimatum several times, inconsequence of the questions of Prochaska, Scutari,our invasion of Albania. By the purchase of theoriental railways Austria pushed the confusion ssfar as to nearly break up diplomatic relations withSerbia. As she could not find any plausible reasonsfor a war with Serbia, the attempt of Sarayevo gaveher a welcome pretext to declare on us the warwhich had been desired and premeditated so longalready by Germany which was backing up Austriain this infernal game.

Since i8o4 to the Serbian defeat of 191 5, the lifeof the Serbian State has only been an atrociousstruggle for its existence aginst diverse Austrianmeasures and ambitious aims. The interference ofthe neighbouring Empire in all Serbian affairs fillsup all our new history. With the Treaty of Con.-merce, the Convention of Navigation, the SecretMilitary Convention, Austria was opposing all ourwrork tending to acquire our economical andpolitical independence. Austria-Hungary protestedagainst our loans contracted for the railways linesof our country, against our Steamship Company,against the Trans-Balkanic Railway, our issue tothe Sea, our intention to conclude a Customs Unionwith the other small Balkanic States. Austria wasonly satisfied with her situation in Serbian duringthe period 1892 to 1906 because, notwithstandingeconomical relations based on Treaties of Com-merce, Serbia was in reality a party in a Customs


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-69 -Union with Austria-Hungary. The bad cause of theSerbian State's development in that time \vas morethan evident. The country was producing verylittle. This production could not entertain theBudgets of 3o to 4o millions of francs. Year after\rar we had deficits of 5 to 20 millions. Theforeign commerce had not attained, at the end ofthis period, i f\o millions of francs, importation andexportation together. The attempts to create anational industry did not succeed. One could nol;think of any productive transformation and all wecould do was to extend as far as possible our agri-culture and our breeding of cattle. The Serbianmarkets were submerged by the Austrian industryand our products went only to the Hungarianmarkets where the frontier traffic was playing thegreatest part.

After the above mentioned period comes theepoch of the economical emancipation and of arm-ament. But the Austrian ambitions again attemptedto prevent Serbia, in crushing her like she has doneto-day, of fulfilling her historical mission.


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7O

The geographical conditions of Serbiain view of her political and economical development.

Till the end of Serbia's independence in themiddle of the loth century, the relations betweenSerbia and the other Balkanic countries, Bulgaria,B\/antium and Roumania, \vere \er\ important. Inthe Middle \ges the principal commercial routes ofthe Balkanic countries passed through Serbia. \ish.Skoplye, Monaslir, Sarayevo, Fotcha. Vni Bazar,Ragusa, Scutari, were the junction points of theroutes and markets for the exchange of goodsbetween Serbia and her neighbouring countries.The exportation of the articles belonging to the in-ternational traffic \vas being made on the coast ofthe \driatic and the Aegean Seas. Venice, Geneva,Byzantium dominated European commerce at thatepoch, even after the Turkish invasion. Till Serbiaagain became independent at the beginning of thei()th century, the importance of Ragusa and theother Dalmatian towns was very great for the trafficwhich was operated between the Serbian provincesunder the Turkish domination and the othersubjected countries : Byzantium, Roumania. Hung-ary, etc....The great States of Western Europe based th^ircommercial and political relations with the OttomanEmpire on the capitulations. The modern discov-eries, new routes, and the new means of exchangevxhich stimulated the World's traffic, modified thetransit markets, and the Balkanic Peninsula lostmuch of her importance in the exchange of products


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between Europe and Asia, between East and West.The new problems of the great European Statesabandoned the Ottoman Empire to its ruin,|no\oked on one side by the machinations of theneighbouring powers which were coveting the suc-cession of the Turkish State very long already. Allthe i


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- 72 -

kanic nations to draw nearer to each other werethwarted by Austria and their isolation was practic-ally complete till the World's war. Serhia had nocommunications with Bosnia and Herzegovina, wasisolated from Montenegro and Greece, and unite; Iwith Bulgaria and Roumania only by such routeswhich were serving more the European transit thanthe intense relations between these countries.The Adriatic ports did not exist for the Serbiancommerce. The port of Salonica could not play agreat part because it was not, till 1907 united to therailway station and could not in consequence be agreat resource for the exportation of our products.In consequence of this Austrian policy Serbia veget-ated between 1887 to 1906 under the regime of twoTreaties of Commerce with the neighbouringEmpire which obliged our country to be exclusivelybound to the markets of Budapest and Vienna. TheTreaties of Commerce which Austria had qualifiedas Treaties of good -will and of privileges grantedto Serbia had nearly caused an atrophy of all ourlife and extinguished all our progress.About 1906 begins the period of our economicalemancipation. The exceptional measures appliedby Austria in order to prevent Serbia from reachingthe ancient markets of the neighbouring Statesobliged our country to look for new markets and toarrive to these as well as to the ancient ones by quitenew routes. Since, Serbia drew the attention of\Yestern Europe, by her efforts to liberate herscli'from Austria-Hungary. By Salonica and themouth of the Danube, by sea, Serbia arrives withher products to the markets of Italy, Greece, France,England, Belgium and Holland. The successesarrived at by our sacrifices and our efforts put upthe question of our issue to the sea. The principal


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- 73-lever of our economical and political independence,the annexation of Bosnia-Herzegovina which fol-lowed the second year of our customs war withAustria is only a second example and one proofmore of the new means employed by Austria againstour vitalit) .The successes in the Balkanic wars made themdouble their measures against us. The sea-coast,the national organisation in all Serbian, Croatianand Slovene countries began to move after thevictories of Kumanovo, Monastir and Bregalnitxa.Liberal Europe was pleading for us and Germanyhastened to provoke the general conflagration afterhaving sufficiently excited Austria for a war againstSerbia so that she was ready to become a Germansatellite for the Germanic ambitions which wereonly awaiting the favourable moment to e?^plode.The World's War is one of the natural consequen-ces of the Germanic discontent of the successeswhich Serbia gained in 1912 and 1918. The con-solidation of the Balkanic situation, according to theTreaty of Bucarest of 1918 and, of a strong Serbia,seriously threatened the German ambitions forhegemony. They felt bound to risk anything inorder to break the equilibrium and to hinder therealisation of the idea of a Balkanic Federationwhich the Austro-Germans had succeeded to pre-vent, during the wars, in pushing the Bulgariansagainst their Allies. These were the causes of theactual conflagration, and not the pretexts frxmcl inthe attempt of Sarayevo.


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74 -

The commercial movement of Serbiawith the Balkanic Countries and Austria-Hungary

during the period 18S4 to 1905.

Till 1876 when Serbia \\illi Montenegro declaredwar on Turkey for the liberation of her oppressedcountrymen she had been living like an oppressedprovince of the Ottoman Empire. The EuropeanGreat Powers trafficked with Turke\ according Jothe capitulations ; the same reyune was Applied,without great modifications, to Serbia. The neigh-bourhood of the Austrian Empire handicapped allthe other countries with which Serbia had econom-ical relations. Bosnia-Herzegovina, Montenegro,Macedonia, Bulgaria and the other regions of theOttoman Empire in Europe which entertainednarrow relations with the Serbian State, in realitywere not an integral part, with Serbia, of theTurkish State ; the production of the Serbian prin-cipalities was primitive but intensive during thatperiod, it was based on the customs of the country,which was only beginning to come out of a stateof centennial slavery. The exchange with foreigncountries wras small, nearly nil. The products uhichthe Serbians exported were only live cattle and themost primitive articles of agricultural products ;cereals, fruits, or articles which the country wasproducing thanks to its natural richness more thanto the technical capacity, the industrial, or a modernadministrative organisation. The rural populationwas prevailing at that epoch. The towns which


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existed on the ])rijicipal routes of commerce uhereartisans and merchants were serving as intermed-iaries between the country and foreigners, were themarkets for international exchange. The domesticindustry and tiie agricultural work, based on theexploitation of handicraft l>\ family communities(Zadrougas) were satisfying the greater part ofthe country s yyants. Credit was nearly primitive.At that period there were no institutions of credit,no banks, no emission bank, no cheque business,no bills of exchange etc. The other means neces-sary for the economic development of the coun-try had only jusl been created. Serbia had neitherpublic debts nor great economical institutions oradministrative and technical organisations. All herlife \yas consuming itself between the different in-ternal troubles. Austria-Hungary had no justifiedreason to interfere in Serbian affairs, in the affairsof a country which in reality , was Austria's econom-ical \assal. and which was undergoing a period oftrouble and laborious reorganisation. Since theCongress of Berlin where Bismarck couriered theinfernal plan of the German domination and when\ustria-I lungarx was authorised to penetrate in theBalkans in taking possession of Bosnia and Iler/eg-oxina afflictive and hard years began for Serbia.The acknowledgement of the Serbian indepen-dence is in reality only the beginning of Serbia'sdevelopment when an intolerable neighbourly super-yision slai'led which characterizes I he period of i88:>.to i()oh'. \\ e will show, by the commercial mov-ement of the Serbian State, the fatal consequenceof the \nstro-llungarian influence on all our coun-tr\ 's economical life which was miserable andwhich did not allow us to rivalize with the otherindependent Balkanic countries nor to prepare our-


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70

selves for the historical missions which were await-ing us in the future.During this period of 1882 to 1906 Serbia, as an

independent State, was trading with foreign coun-tries, thanks to commercial treaties based on auton-omous tariffs and on the clauses of the most favour-ed nation. In order to consecrate her right whichhad been formally guaranteed to her by the Treatyof Berlin and which Austria-Hungary had neverwanted to respect, Serbia concluded her first treatywith Great Britain. Austria-Hungary protestedagainst this quite natural fact and was only satisfiedby the concession which King Milan made her witha Secret Convention which was published muchlater. Serbia could publicly conclude Treaties ofCommerce with other States but in reality she nevermade any real Treaties with Tariffs except withAustria-Hungary. The other States with whichSerbia had Treaties of Commerce were only grantedthe clause of the most favoured nation. TheTreaties of 1881 and 1902 were concluded under theregime of the Secret Convention, both comprisedthe idea of a Customs union which Austria-Hungaryhad demanded immediately after the conclusion ofthe Treaty of Berlin in 1878 and which was in realityrealized in the frontier traffic granted to Serbia.These two Treaties granted the exportation of ourcattle under the prescriptions of a veterinary con-vention according to which this branch of ourexportation always depended of the goodwill of theAustro-Hungarian Government. The first Treaty,drawn-up by the Austro-Hungarian delegates with-out our collaboration was accepted by our delegateswithout discussion by the special order of theSerbian Government ; the second Treaty was notvery much different from the first.


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Before 1880 the commercial movement of Ser-bia with Austria-Hungary was the following.

Austria-Hungary and Serbia with Bosnia andI lercegovina before the occupation:

In millions of francs.Import. Export.

IKr>;> ... 36.4 221870 . . . 32.4 33.21875 . . . 29.8 241879 . . . 4H.4 38

In the same period the commerce of Austriaalone with Serbia was :8 ... 17-7 15.41870 . . . 27.9 30.51875 . . . 21.2 20.02187 ) . 4 l.l.'i 36.8

The exterior commerce between Serbia andthe Balkanic countries in 1880 to 1905, during theperiod when Austria-Hungary dominated our com-merce :

I.

Exterior commerce between Serbia and Bulgaria.In thousands of francs.

Import. Export. Transit.1888 ....1893 ....1898 ....1903 ....1905 .

127


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II.

Exterior commerce between Serbiaand Ronniania.

In thousands of francs.Import. Kxport. Transit.

18881893


80/238

V.Exterior commerce between Serbia

and Bosnia-Herzegovina.In thousands of francs.

Import. Kxport. Transit.1884 .... 338 4 )2188 > .... :; >.


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80

Exterior commerce of Serbia.In thousands of francs.


82/238

81

.5'/i

O

s03CQ~ (0o*ft zt_ ocS b.

ed(A

E

r~


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The commercial relationsof Serbia with Austria-Hungary and other States

outside of the Balkans.

Now \ve will consider these relations in the period1881-1906 and since that moment up to the Europ-ean war.The second period, which is characteristic, is the

period of our attempt in view of our economicalemancipation where we shall expose the repetitionof our exportation and importation with diversecountries. The period King between our liberationof 1 80 '\ till 1 88 1 does not present any interestwhatever in regard to the other countries whichgenerally did not take a great part in the Serbiancommerce. Serbia then was exclusively reserved forAustria-Hungary. Even the second period is ad-vantageous only for the neighbouring Empire.

Period 1881-1905.In thousands of francs.From Serbia.

Import. Export.

1881. . . .I88r>. . . .1890. . . .189?). . . .I9o:i. . . .1905.

43.173


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83

In thousands of francs.From Austria-Hungary.

Import. Kxport.188-1. ... 30.000 24.0001885. . . . 20.700 30.7001890. . . . 22.800 35.4001805. . . . 16.60(1 38.7001903. . . . 33. 400 50.3001905. . . . 33.300 (14.700

In thousands of francsFrom other countries.

Import. Kxport.1881. . . . 13.000 JO. 0001885. . . . 11.000 7.0001800. . . . -16.000 (i.OOO1895. . . . 12.000 5.0001903. . . . 23.000 9.0001905. . . . 22.000 7.200

More than 80 / of the Serbian exportation andimportation belongs to the Austrian market.

The Customs war with Austria-Hungary(Commerce with Serbia)In thousands of francs.

Import. Export. Total. Transit.

1 9ll(i . 44 . 328 7 1 . 607 1 15 . 932 48 . 6451907 . 70.583 81.997 152.580 55.9031908 . 70.000 77. 754 147. 75 iThis was the situation of Serbia's foreigncommerce in 1906 when the Customs War began ;

this commerce is compared with the year 1905when the treaty of commerce with Austria wastiU in force.


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- 84 -In thousands of francs.

Difference1906 1906 in 1906

America .... 0.012 + 0.012Austria-Hungary . 31.272 64.71233.139Belgium .... (i.2 0.323 + 3. l3(iBosnia 0.00 1 0.157 - - O.O'.MiBulgaria .... 3.0 >4 1.220 + 2.474Greece 0.420' + 0.420England .... 0.005 + O.OG5Italy. . . . . . 0.572 -f 0.372Germany-. . - - 19. 03:* 2.11(1 - Hi. 937Norway .... 0.040 + O.oir,Roumania. . . . 2.334 1.097 + 2. 237Russia . . . .' .. 0.131 0.03(1 1 .703Holland .... 0.087 0.03(5 + 0.087Switzerland ... 0.024 0.003 0.021Montenegro ... 0.008 0.002 + O.ooii

71:599 71 .09(5 0.396.435Repartition of the Serbian exportation in

In thousands of francs.Germany ............ 32.842Belgium............ 13.010Austria-Hungary......... 12.939Italy ............. 3.443Turkey . . . , ........ 4.418Russia ...... ...... 3.113France ............ 2.698England ............ 2.337Bulgaria............ 1.994Roumania ........... 1 . 1 87Egypt............. 1.037Switzerland .......... 310Norway............ 233Sweden ............ 204Bosnia ............ 103Greece ............ 59Denmark ........... 5America............ 1Montenegro ...... .... 1Other States .......... 10

81.997


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85

Exportation in 1908 :In thousands of francs.

Austria-Hungary 2Belgium. 1(1.075Bosnia-Herzegovina 05Bulgaria. I . 2IItaly 3.UH)Egypt 7oGermany . 14.018Roumania 3.00. )Turkey I0. >(7France 3.04;>America . 1.985Other States 1.073

77.754All what has been exposed above shows us that

the absence of a treaty of commerce with Austria-Hungary has provoked a great modification in theexportation of our goods. The traffic with theBalkanic and with those European States hasbecome more intense, with which \ve only had re-lations by the medium of Austria-Hungary. Becauseof the length of the routes a transformation had beenmade with the articles of commerce. The raw-products had been replaced by semi-manufacturedmaterials ; cattle by fresh or salted meat as well as1)\ animal products etc. Our Allies of to-day helpedus very much to come out victorious of this econom-ical struggle with Austria-Hungary, and it is onlywith their help that wre hope to see our count ryreconstituted and enlarged according to our nationalaspirations and when all necessary elements willhave realized our complete economical and politicalindependence.


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86

Repartition of the Serbian exportationin

during theeconomical war with Austria-Hungary.In thousandsof francs.Allied States :

Belgium......... -l.'Italy .......... o.UMRussia ......... 3.1 1 3France ........ * . 2.WNEngland ......... '2.331Roumania ........ 1 . 187Egypt.......... 1 . o:n28.823Enemy States :Germany ........ 3'2. 842Austria-Hungary...... \2.U32Turkey ......... 4.418Bulgaria......... 1 . 991

) 1.187Neutral States. 1.988

Total. . . 81.991

Germany was the country which profited most ofthe new situation thanks to her proximity, the roadsof central Europe and the transit through Austria-Hungary. The percentage is in favour of our Allies;before the Customs War it amounted only to3 o/o ; since it was raised to 33 o/o. Austria hasfallen from 80 to 16 o/o.The annual average of the Serbian commercialmovement in this period, was :

I. \\ithout treaties of commerce with Austria-Hungary 1800 to 1879 :


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-87 -In millions of francs

Importation Exportation Total Transit.29.6 29.9 Bg./i l5.20

II. - - With treaties of commerce with Austria-Hungary since 1881-1906 :

46.2 54- 100.2 67.III. - - Customs War (1906-1911) with Austria-

Hungary :89. 92. 181. 97.

The progress which Serbia had made, in hereconomical development, during the period inwhich she was emancipated of Austria-Hungary, isquite evident. The figures mentioned above arethe symptom of the expansion of all productiveforces which have given faith to Serbia in orderthat she may be prepared to accomplish her histor-ical mission, began during the war with Turkeyin 1912.


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88

The economic state of Serbia beforethe Balkanic wars.

The area of Serbia amounted then to /i8.000 squ.kilometers with about 3 millions of inhabitants.Till 1900, 91.59 o/o of the population was in pos-session of houses and other immobilia. Agricultureis the principal occupation of the people ; with thebreeding of cattle it attains more than 80 o/o of thetotal production of the land. The third part of outterritory is cultivated, of which 2 millions ha.belong to private people, while the rest, 2.800.000ha. belong to the State and to municipalities 83 o/oof the Serbian population is rural, while the urbanpopulation represents only 17 o/o. The greatestpart of the land is composed of small properties :89 o/o between 5 and 20 ha., and among the rest,the properties between 100 and 3oo ha. are veryrare.

Of 117 millions of francs of the exportation in1912 the repartition is the following .

Millionsof kilos of francs.

Cereals 124 21Indian corn IIS 14, >Fresh fruit 14 2Prunes 33 Hi..-;Marmelade of prunes. ... 0,22 2.1Other agricultural products :beans, tobacco, hemp, etc. ) i.li


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- 89 -II In millions

of franls.Breeding products :Oxen . 17.788 heads 4,8

Pigs 7.707 0,6Poultry 1.108.000 kilogs 3,5Meat, lard .... Hi. 7011. 000 11,7Eggs 1 . 055 . 000 3Grease I .287.000 1 .7Skins -1.361.706 3.3Others (horses, mutton, cocoons, etc.). . 2.0

Ill

kilogs francsOther products :\Vheatilour. . 7.128.717 1.813.260Sugar 1.275.000 503.940Bran 11.611.000 1.175.000Copper 6.826.502 9.000.000

All other products :82.000.000

20. ooo heads 5.488.00066.000 me.

Totals. . . 437.873.081 kgsi 10.283 heads in. ooo. ooo

If one understands that the exportation is aboutthe eighth part of our total production, one willestimate the latter to 1.600.000.000 of francs. Thisrepresents the rough benefit, 20 o/o of the totalvalue of the country, 8 milliards.The importation of 1912 amounted to 8/1.222.000\\liose repartition will be exposed later.


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The Commercial Movement -icith theother countries 1910-1911.

The third Treaty of Commerce with Austria-Hungary, without the veterinary convention, hasproved its effects in the first two years 1910-1911.The following table showrs us the repartition of thecommercial movement with the other countries :

I. - Balkanic Countries :In millions of francs.

IMPORTAT.ON EXPORTATIONH)I(> KM I 1


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Til. -- Central Empires :In millions of francs

IMPORTATION EXPORTATION19IO K>I I 1910 _ 191 I

Germany 35 31.3 22 29Austria-Hungary 1'. . . 16.2 47.4 17.8 48.2

Total ....:; 1.2 78.7 39.8Other countries . . . 3,1 2.1 2.8

Totals. . . . 84.7 115,4 98.4 118I will add here three tables of the commercial

movement with the different countries, in cate-gories and showing the special commerce of Serbiawith France during the year 1911, under the re-gime of the last Treaty of Commerce between Ser-bia and Austria-Hungary, in the period immediate-ly after the Customs War.

Table of the Commercial Movement with thedifferent countries for 1911.

In francs.IMPORTATION EXPORTATIONAmerica ....Austria-Hungary .Belgium ....Bosnia


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Carried forward.Norway ....Portugal ....Roumania . . .Russia . ,


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- 93 -

Carried forward. . 84.221.000 10(1.986.000Wooden works and fur-niture 1.071.000 lid. 000Paper 2.210.000 9.000Books and pictures. . . 392.000 19.000Works of stone, asphaltand cement 313.0011 43.000Works of terracotta .. 1.303.000 109.000Glass and works ofglass 1.520.000Precious metals and

jewelry 843.000Ordinary metals . . . . I9.ilil.ooo 9.037.000Machines, electro-tech-

nical articles 1.801.000 28.000Objects ofartand science 489.000Watches, arms andtoys. 1.138.000

Totals. Ho. 425. 000 116.916.000

Special commerce between Serbia and France.Products of agriculture mPORTA^oNExPORTAT ONand ol commercial

plants ....... 80.000Animal products (cattle,\vool, skins andcocoons) ...... 119.000 338.000Forest products . . . . 6.000Products of agriculturalindustries, flower-mills ........ 363.000

Products ol alimentation 71.000Mineral raw materials. 14.000Wax ........ . 32.000Chemical products . . 1.007.000Textile material and

their products. . . . 954.000Leather and furs. . . . 497.000Caoutchouc and gutta-percha ....... 16.000 _To be carriedforward. 3 . 1 59 . 000 338 . 000


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94Carried forward. . 3.139.000 338.noo

Manufactures plaitedwith vegetable mat-ters 2.000Brushes . 3. (MM)Matters to be cut . . . 54. (MM)Paper . 21.000Books and pictures . . 15.000Works of stone, plasterand cement 2.000Works of terracotta . . 11.000Glass and \vorks of

glass 29.000Precious metals. . . . (i.OOOOrdinary metals and

their products. . . . 1.987.000 l.:i MJ.OOOMachines, electro-tech-nical articles andvehicles 35N.OOO

Objects of art andscience 47 . OIMIWatches, arms and toys .V>0 . 000Totals . :i. 7 ir.. ooo I .934. ooo

Special commerce in 1911 (in 1000 francs)IMPORTATION


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Exportation and Importation 1912.

Balhanic War after the annexation of Bosnia.In the course of 1909 the traffic between Serbiaand Austria-Hungary was regulated by a treaty

without a veterinary convention which had favour-ized the exportation of live pigs and oxen. Instead,special clauses regulated the exportation of freshmeat, but in fixed quantities in order to protect theHungarian agrarian interests. This new treaty,establishing a normal commercial situation betweenSerbia and Austria-Hungary, immediately grantedevery advantage to the commerce of the neighbour-ing monarchy which is, of all European States, thenearest to Serbia. Insufficient means of transport,the commercial credit depending on the AustrianBanks, the difficult utilisation of the new routes bySalonica and the mouth of the Danube, the relationswith our friends of to-day which were only justbeginning to be established, - - all this worked infavour of Austria-Hungary's prevalence. The fol-lowing table shows us the repartition of the Serb-ian commerce for 1912 :

Serbia with : IMPORTATION EXPORTATIONAustria-Hugary . . 32.659.000 36.076.000Germany 31.117.000 18.279.000

Total 63.776.000 54.355.00055 yn 65 yn


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II

IMPORTATION EXPORTATIONItaly 3.631,000 3.783.000France 3.713.000 2.978.000Great Britain . 8.511. (ion 2.01)0.0011Total i5. 895. 000 8.765.000

13 % 10 %III

Other countries. . 37.329.000 21.102.00039 o/ 23 VJ /O '' /O

Total . 117.903.000 84.222.000


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-98-Serbia after the Balkanic war.

The Serbian territory was enlarged, by Old Serbtiand Macedonia, with 89.000 km2 and the populationwith i. 200.000 inhabitants. At the eve oi' theEuropean war Serbia had, with her new frontiers.87.833 km2 with 4.200.000 inhabitants.

But, in this proportion of Serbia's enlargement,the economical and intellectual standard of the newcountry did not rise. The agricultural production inthe villages under the Turkish domination, liber-ated by the wars, the commerce in the Turkishprovinces, all was behind-hand. The feodal systemin Turkey did not allow the free scope and flightwhich are so necessary for the development offorces. The provinces annexed by Serbia werehardly cultivated (8 o/o and 10 o/o in the vilayet ofKossovo and

7.3 o/o in the vilayet of Monastir).The cultivated surface in the new provinces is 3 or 4times smaller than in Serbia as she was before thetreaty of Bucarest, and the density of the populationamounts only to 3o per squ. km., twice less than inthe ancient kingdom of Serbia. If one takes intoconsideration the means of transport (railway,roads, etc.) of establishments of credit (banks, cor-porations) professional and popular elementarySchools and other institutions necessary for the reg-ular and prosperous life of a country, it will notseem strange when we say that the state which wefound the new provinces in is absolutely more thanprimitive, and that we shall want much time,efforts and initiative to equalise the standards be-tween Macedonia, Old Serbia and the kingdom ofSerbia as it was before the Balkanic wars.The exportation of the new provinces, before the


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union to Serbia (1912), amounted to 20 millions offrancs, and the importation to 5i millions. Presum-ing that this constitutes 1/7 of the total production,the latter can hardly attain Boo millions, whichrepresents a rough benefit of 20 o/o on a capital of2.5oo millions, a figure which may represent theworth of the riches of the new provinces. Theeconomical value of Gr

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68795347 Kosta Stojanovic Economic Problems of Serbia

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