Under the Hapsburgs, public honors (Berufstitel) rewarded people for distinguished service to the state: Kammerrat (Chamber Counselor) for services to finance and business, Regierungsrat (Government Counselor) those to administration, Medizinalrat (Medical Counselor) to medicine, etc. The system was preserved after 1918. For services to education and academia, the appropriate title was Hofrat (Court Counselor) ‒ e.g. Josef Marx, theorist and composer, Director of the Vienna Akademie (= Conservatory) 1922‒25.
At a lesson with Schenker on January 15, 1927, Anthony van Hoboken broached "the question of the honor (Ehrenzeichen)" [LB 1926/27, p. 16]. A month later, he elaborated: Karl Kobald, official at the Ministry of Education, wished, on the recommendation of Otto Erich Deutsch, to put Schenker forward for an "Honor for Art and Science," to be conferred on the occasion of the Beethoven Centennial Festival (Vienna March 26‒29, 1927, for which Guido Adler invited Schenker to join the organizing committee ‒ accepted ‒ and give a lecture ‒ declined ‒ [OJ 9/3, , ]), and in anticipation of his 60th birthday on June 19, 1928.
Schenker's immediate reaction: "It was not fitting for me to accept an honor from the Republic, since I am an ardent friend of aristocratic institutions" [diary pp. 3037‒3038]. Deutsch and Hoboken begged him not to turn the opportunity down, and Schenker consulted his old friend Moriz Violin [OJ 6/7, ; 14/45, ].
After deliberation, Schenker wrote a letter to Otto Erich Deutsch asking him to convey his refusal to Karl Kobald, and enumerating his reasons: — He knew he deserved such a distinction, but Brahms and Dvořák had previously received the distinction in the days of Empire, and he felt unable to share it with them; — Under the Republic, such distinctions would become devalued "as a result of a downright soviet-style inflation"; — Whereas a composer or poet was in the public eye, a theorist such as he himself was not (although he believed the time would come when his works would be regarded as "art"); — His appointment would create embarrassment, resentment, and intrigue; — At the same time (inconsistently!), it would be forgotten the day after it was announced. Then the sting in the tail: — "Alas, even a distinction would be unable to make up for the terrible injustice that I have suffered specifically in Vienna, where I have been robbed of so much work ‒ but that is all water under the bridge." [OJ 5/9, ]. — In Biblical terms, Schenker saw himself as a "prophet not without honor except in his home town" ‒ Vienna.
Another proposal was made for his 60th birthday: Hoboken reported that he and Schenker were both put up for an honor; but Hoboken "insisted that I [Schenker] be accorded a higher commendation ‒ as a result the entire matter came to naught." [p. 3216, June 20, 1928].