In 1900 the Austro-Hungarian Empire was economically strong, with an excellent manufacturing and banking base. Although the absolute ruler was the Austrian Emperor, Franz Josef, it was run by a dual monarchy, with Austria and Hungary having their own governments and internal autonomy. Described as a ‘multinational democracy’, with all nationalities granted freedom of thought, movement and belief, the Empire was created in 1867 as the consequence of a compromise agreement with an increasingly separatist Hungary, who were given co-rule with the Austrian Germans. Tensions continued to persist between the different national groups with, for example, the Germans refusing to speak Czech as a compulsory second language. In Hungary, there was a rise in southern Slavic nationalism, particularly amongst the Serbs. Meanwhile, the Imperial Army was beset with problems, including poor conscription rates and lack of funding, with many of its soldiers unable to speak either German or Hungarian.