Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

The corporative aspect of the new constitution was a complete fraud. In many activities no corporations were set up; where they were set up, members were appointed and not elected as provided in law; and, in any case, they did nothing. Instead, the whole banking and industrial system was filled with the petty bureaucrats of the Fatherland Front. Because of mismanagement and the world depression, the banks of Austria collapsed in 1931-1933, precipitating the world banking crisis. The Austrian government took over these banks and gradually replaced their personnel, especially Jewish personnel, by party hacks. Since the banks controlled about 90 percent of the country’s industrial corporations, these party hacks were able to place their friends throughout the economic system. By 1934 almost nothing could be done in the business world without “friends” in the government, and anything could be done with “friends.” Such “friendship” was best obtained by bribery, with the result that periodical payments were being made from business to political figures. Early in 1936 the scandal broke when it was revealed that the Phoenix Insurance Company (of which Vaugoin, ex-chancellor and leader of the Christian Socialist party, was now president), had lost 250 million in gifts and “loans” corruptly given. The government had to admit this, and published a list of political groups and politicians who had received a total of less than 3 million schillings. This left most of the loss unexplained. It remained unexplained to the end. Legal proceedings were begun against twenty-seven persons, but the Schuschnigg government never brought any of them to trial.

This corruption spread through the government until finally a point was reached where, as Starhemberg put it, “No one knew whom he could trust, and there was justification for habouring the most amazing suspicions.” Outrages by the Nazis increased in May and June 1934, to the point where bombings were averaging fifteen a day. On July 12th, by decree, the government fixed the death penalty for such bombings. The Nazis threatened a Putsch at the first such sentence. This first sentence was carried out on July 24th, but against a twenty-two-year-old Socialist after a summary trial. The same day the police and the Fatherland Front were notified by their spies that the Nazis were going to attack the next day. All the details were given to Fey, but he and Dollfuss spent the evening discussing a possible Socialist uprising. The Cabinet meeting of July 25th was postponed because of the warning, but no effort was made to protect the ministers. About 1:00 p.m. 154 Nazis in eight trucks rushed into the chancellory without a shot being fired. They at once murdered Dollfuss and locked themselves in. Another group of Nazis seized the radio station of Vienna and announced a new government with Rintelen as chancellor. There were also sporadic Nazi uprisings in which scores were killed in the provinces. The Nazi “Austrian Legion” in Germany and the German government did not dare to move because of a stern warning from Mussolini that he would invade Austria from the south if they did.

After six hours of negotiations in which Fey and the German miniter acted as intermediaries, the besieged men in the chancellery were removed to be deported to Germany. When Dollfuss was found to be dead, thirteen were executed and a large number imprisoned; all the Nazi organizations were closed and their activities suspended. At the same time, those who had tried to warn the government against the plot or to prevent it were arrested and some were killed (including the police spy who had sent the specific details the day before the crime).

Schuschnigg and the Heimwehr split the government between them after Dollfuss’s death. Each took four seats in the Cabinet. Schuschnigg was chancellor in the government and vice-leader of the Fatherland Front, while Starhemberg was leader of the Fatherland Front and vice-chancellor of the government.

From July 1934 on, Schuschnigg sought to get rid of the Heimwehr, especially Starhemberg, to create a purely personal dictatorship with only one party, one trade union, and one policy, to satisfy the Nazis without yielding any essential power or positions, to keep the Socialists crushed, and to get as much support from Mussolini as he could.

We have said that Dollfuss and Schuschnigg were faced by three opponents in 1932: the Socialists, the Nazis, and the Heimwehr. They sought to destroy these in this order by mobilizing against each the power of the ones not yet destroyed, plus the Christian Socialists. As the effort progressed, they tried to destroy the Christian Socialists as well, by driving all groups into a single amorphous and meaningless political party, the Fatherland Front. This party’s purpose was to mobilize support for these two leaders personally. It had no real political principles and was completely undemocratic, being bound to accept the decisions of the “leader.” All persons, no matter what their political beliefs, even Nazis, Catholics, Communists, and Socialists, were forced to join by political, social, and economic pressure. The result was that all political morale was destroyed, public integrity was wrecked, and many among the politically active portions of the population were driven to the two underground extremist groups, the Nazis and the Communists, to the former in much larger numbers than to the latter. Even the Socialists, in order to prevent the loss of their angry members to the Communists, had to adopt a more revolutionary attitude. Because everything was driven underground, and the field was left to meaningless slogans, crass materialist advantages, and pious expressions of righteousness, no one knew what anyone’s real thoughts were or whom they could trust.

The loss of Italian support for the Heimwehr and for an independent Austria after the Ethiopian affair made it possible for Schuschnigg to get rid of Starhemberg and his militia and made it necessary to conciliate the Nazis. Fey was dropped from the government in October 1935. A political supplement to the Rome Protocols was signed by Austria, Italy, and Hungary on March 23, 1936; it provided that no signer would enter an agreement with a nonsignatory state to change the political situation of the Danube area without consultation with the other signers. In April Austria copied Germany, and further alienated France and the Little Entente, by decreeing the establishment of general military service. In the same month, Schuschnigg ordered the disarmament of the Catholic militia. In May 1936 three Heimwehr members, including Starhemberg, were dropped from the Cabinet, and Starhemberg was removed as leader of the Fatherland Front. A week later a series of decrees ordered the disarmament of the Heimwehr, created an armed militia for the Fatherland Front as the sole armed militia in the country, ordered that in the future the leader of the Front and the chancellor must be the same person, gave the chancellor the right to appoint the heads of all local political units and to approve their appointments, prohibited all parades and assemblies until September 30th, and declared that the Fatherland Front was “an authoritarian foundation,” a legal person, and “the sole instrument for the formation of political will in the state.”

Thus “strengthened” in Austria, and under pressure from Mussolini to make peace with Hitler, Schuschnigg signed an agreement of July 11, 1936, with Franz von Papen, the German minister. According to the published portion of this agreement, Germany recognized Austrian independence and sovereignty; each country promised not to interfere in the domestic politics of the other; Austria admitted it was a German state; and additional agreements to relieve the existing tension were promised. In secret agreements made at the same time, Austria promised an amnesty for political prisoners, promised to take Nazis into positions of “political responsibility,” to allow them the same political rights as other Austrians, and to allow Germans in Austria the same rights to use their national symbols and music as citizens of third states. Both states revoked financial and other restrictions on tourists. Mutual prohibition on each other’s newspapers were lifted to the extent that five specifically named German papers could enter Austria and five named Austrian papers could enter Germany. Other paragraphs promised mutual concessions in regard to economic and cultural relations.