THE WORLD WAR: PERIOD OF AMERICAN NEUTRALITY 655



  American exchange is ruling at 7 crowns and 85 hellers, meaning
that for a draft on New York one receives in local currency prac-
tically the equivalent of $1.50 for the dollars.
  It is estimated that this season's crops will have an acreage of but
70 per cent. of normal. And it is admitted that fields tilled by women,
children and Russian and Servian war prisoners do not yield as
bountifully as when worked by native men whose occupation has
never been other than farming. There are few cattle and horses in
the country, and consequently little manure for the properties of
small farmers. Farming utensils have long been uncared for, and
factories usually producing agricultural machinery are occupied with
war munitions.
  There is no longer talk of Austria-Hungary receiving an indemnity
from any of her foes. Hitherto it was the mode to predict that
Austria-Hungary would recoup the cost of the war by the indemnities
received.
  It seems more than rumor that Austria-Hungary means to weld
conquered Montenegro and the Belgrade section of Serbia into the
Hungarian government of the Monarchy. This would be a political
step of decided merit, as it would unify under a single control most
of the so-called "Sud-Slavs" a race believing it has political
griev-
ances and whose untiring agitation has ever been baneful. The as-
sassination of the Archduke Franz Ferdinand at Sarajevo was
claimed by many as directly traceable to the machinations of the
"Sud-Slavs."
  I am [etc.]                             FREDERIC C. PENFIEL)

763.72/28031
The Ambassador in Austia-Hungary (Penfleld) to the Secretary of
                             State

                                     VIENNA, June 3, 1916.
                                           [Received June 19.]
  My DEAR MR. SECRETARY: I feel I should write you of the Austrian
opinion on the subject of bringing the war to a close, a theme that
a fortnight ago dominated the speech of almost every human being
in the Habsburg capital. All seemingly wanted peace, while many
believed it was certain to come in a few months and through the
efforts of President Wilson.
  Newspapers rang with these opinions, and the man in the caf6 was
as certain of early peace as the man in the street. That was im-
mediately following the President's North Carolina speech.2

'For the text of President Wilson's remarks at Charlotte, N. C., May 20,
1.916, see the New York Times, May 21, 1916.