The serfs were all emancipated from feudal vassalage, and thus, in an hour, the slavery under which the peasants had groaned for ages was abolished.  He established universities, academies and public schools; encouraged literature and science in every way, and took from the priests their office of censorship of the press, an office which they had long held.  To encourage domestic manufactures he imposed a very heavy duty upon all articles of foreign manufacture.  New roads were constructed at what was called enormous expense, and yet at expense which was as nothing compared with the cost of a single battle.

Joseph, soon after his coronation, made a visit to his sister Maria Antoinette in France, where he was received with the most profuse hospitality, and the bonds of friendship between the two courts were much strengthened.  The ambition for territorial aggrandizement seems to have been an hereditary disease of the Austrian monarchs.  Joseph was very anxious to attach Bavaria to his realms.  Proceeding with great caution he first secured, by diplomatic skill, the non-intervention of France and Russia.  England was too much engaged in the war of the American Revolution to interfere.  He raised an army of eighty thousand men to crush any opposition, and then informed the Duke of Bavaria that he must exchange his dominions for the Austrian Netherlands.  He requested the duke to give him an answer in eight days, but declared peremptorily that in case he manifested any reluctance, the emperor would be under the painful necessity of compelling him to make the exchange.

The duke appealed to Russia, France and Prussia for aid.  The emperor had bought over Russia and France.  Frederic of Prussia, though seventy-four years of age, encouraged the duke to reject the proposal, and promised his support.  The King of Prussia issued a remonstrance against this despotic act of Austria, which remonstrance was sent to all the courts of Europe.  Joseph, on encountering this unexpected obstacle, and finding Europe combining against him, renounced his plan and published a declaration that he had never intended to effect the exchange by force.  This disavowal, however, deceived no one.  A confederacy was soon formed, under the auspices of Frederic of Prussia, to check the encroachments of the house of Austria.  This Germanic League was almost the last act of Frederic.  He died August 17, 1786, after a reign of forty-seven years, in the seventy-fifth year of his age.

The ambitious Empress of Russia, having already obtained the Crimea, was intent upon the subversion of the Ottoman empire, that she might acquire Constantinople as her maritime metropolis in the sunny south.  Joseph was willing to allow her to proceed unobstructed in the dismemberment of Turkey, if she would not interfere with his plans of reform and aggrandizement in Germany.