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CHAPTER XVI.

THE TRIPLE ALLIANCE AND ECONOMIC REFORM.

1878-1887.

HE year 1878 forms a turning-point both in internal and in external politics. Up to this year Prussia has been allied with the two Eastern monarchies; the Empire has been governed by the help of the National Liberal party; the chief enemy has been the Clericals. The traditions of the time before the war are still maintained. After this year the understanding with Russia breaks down; instead of it the peace of Europe is preserved by the Triple Alliance with Austria and Italy. In internal affairs the change is even more marked; the rising power of the Socialists is the enemy to be fought against; for this conflict, peace has to be made with the Catholics—the May laws are modified or repealed. The alliance with Liberalism breaks down, and the efforts of the Government are devoted to a far-reaching scheme of financial reform and social legislation.

When, in April, 1877, the Emperor refused to accept Bismarck's resignation, the whole country