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desired to bring about a peace by agreement, which should be incompatible with acquisition of territory by force and with political, economic or financial measures of coercion. The declar- ation further condemned economic blockades and the crea- tion of enmity between nations, and demanded that the " free- dom of the seas " should be secured, and that the readiness of Ger- many to promote the organization of international law should be manifested. So long as the enemy Governments refused to entertain a peace of this kind the German people would resolutely stand together like one man and fight for their right of existence and development. The new Chancellor, Dr. Michaelis, declared, on the subject of this peace resolution, that Germany had only gone to war under compulsion, and that she would not continue to fight a day longer merely for the sake of making conquests by force of arms. He hoped to be able to achieve the aims of Germany within the four corners of the Peace Resolution " as he understood it." The Chancellor further expressed his readiness to appoint men who enjoyed the confidence of the principal parties to leading positions in the Government. His words, " As I understand the resolution," gave rise to lively discus- sions in the press and contributed to the immediate creation of a hostile feeling against Dr. Michaelis among the parties of the Left. The Chancellor himself modified the effect of his saving clause by stating that, in using it, he had had no intention of putting himself in opposition to the Peace Resolution of the Reichstag. The Resolution was passed by 216 votes against the 1 26 votes of the Right and the Independent Socialists, who were joined by a few members of the Catholic Centre party. Mich- aelis arranged for the Kaiser to meet a number of members of the Reichstag. This meeting took place at a social gathering at the official residence of the Secretary of State Helfferich, at which the Kaiser was present. This was doubtless the first occasion on which the Emperor William came into personal contact with the leaders of the Social Democratic party; among those present were Ebert, David and Scheidemann.

On August 5th Michaelis's new Cabinet was formed. Dr. Helfferich became Vice-Chancellor, vacating the Secretaryship of the Interior. A new economic department was detached from the Department of the Interior and entrusted to the burgomaster of Strassburg, Schwander. The chief burgomaster of Cologne, Wallraf, became Secretary of State for the Interior. The chief government president of Pomcrania, von Waldo w, was placed at the head of the War Food Department, with the Social Democratic trades union leader, August Miiller of Hamburg, as his under-secretary. Von Krause became Secretary of State for the Department of Justice, and von Kiihlmann, at that time ambassador at Constantinople, became Secretary for Foreign Affairs. The National Liberal deputy Schiffer, was appointed under-secretary of state to the Treasury. Maj.-Gen. Scheuch was made head of the War Ministry in the place ^of Groner. Simultaneously with the reconstitution of the Cabinet of the Empire, that of the Prussian Government took place, from which the Ministers von Lobell, Bescler, von Trott zu Solz, von Schor- lemer and Lentze, who were opposed to the introduction of uni- versal suffrage, had resigned. The leader of the Catholic Centre, Dr. Spahn, was appointed Minister of Justice; Dr. Schmidt, up to that time ministerial director in the Ministry of Public Wor- ship and Education, became Minister; the Minister of Agricul- ture was Landeshauptmann von Eisenhart-Rothe; Minister of Finance, Government President Dr. Hergt.

From the first the parties of the Left severely criticized these appointments on the ground that the desired parliamentariza- tion of the Government had not been sufficiently carried out by them. The Social Democrats in particular immediately disso- ciated themselves in the most vigorous terms from Dr. Michaelis, and he found but few supporters either in the Progressist or the Catholic Centre parties. The adjournment of the Reichstag, however, gave Dr. Michaelis some respite. No actual crisis oc- curred until Oct. when the Reichstag reassembled. Early in 1917 there had been a case of mutiny in the navy. In the course of an inquiry into this case it had transpired that the mutineers had, previously, had dealings with the deputies Haase and Dittmann,

members of the Independent Socialist, party, and that these politicians had advised them " to be extremely prudent." Michaelis mentioned the matter in his speech in the Reichstag on Oct. 9, making it the text for a bitter attack on the Inde- pendents in the Reichstag, who, he said, had overstepped all permissible bounds because their aims were such as to endanger the existence of the Empire. The Secretary of State for the Navy, von Capelle, seconded the Chancellor's attacks. This parliamentary action against the Independent Socialists, which had not been very skilfully managed by Michaelis, as there existed no definite material for the prosecution of the deputies Haase and Dittmann, created an unfavourable impression among the Right also, as deputies on that side of the House considered that the disclosure of the fact of the mutiny had seriously dam- aged the prestige of the German navy. Michaelis himself ulti- mately realized that, under such circumstances as these, he could no longer remain in office, and he resigned.

On Nov. 2 the President of the Bavarian Ministry, Count Herding, for many years leader of the Catholic Centre in the Reichstag, was appointed as successor. Hertling, who was over 70 years of age, was regarded as a man of diplomatic talent; his long parliamentary experience was in his favour, so that he entered upon his new duties with good prospects of success. He at once discussed the Government programme in detail with the different political parties and agreed to undertake the further development of the parliamentary system. He immediately con- firmed this promise by appointing the leader of the Progressist People's party, von Payer, to replace Dr. Helfferich, who had retired as Vice-Chancellor. The leader of the National Liberal party in the Prussian Diet, Professor Dr. Friedberg, was simi- larly appointed vice-president of the Prussian Ministry. At the end of Nov. the Secretary of State of the Economic Department, Schwander, retired, and the under-secretary, Stein, was appointed in his stead. Hertling further made a number of concessions to the Social Democrats, such as the institution of Chambers of Labour and an extension of the trade-union right of combina- tion to political associations. On Nov. 29 Hertling laid his pro- gramme before the Reichstag. He emphasized the fact that Germany's war aims were confined to defending the Fatherland, preserving her territories intact, and maintaining the freedom and independence of her economic existence. He gave proof of his endeavours to obtain peace by referring to the answer given to the Pope on November ipth in reply to his transmission of an alleged overture for peace, a reply in which Germany's readiness to enter upon peace negotiations was expressed. Hertling closed with the exhortation: " Wait, endure and persevere." He managed to avoid any collision with the various political parties, so that he soon gained their confidence, and by the end of 1917 stable conditions had once more been established in the Government of the Empire.

On July 24 1917 there died Ernst Bassermann, for many years the leader of the National Liberal party. On Sept. 2 a number of leading personalities founded the German Valerlandspartei, with Duke Johann Albrecht of Mecklenburg as hon. president and Adml. von Tirpitz in charge of the practical conduct of the party. The programme of this party was to stand above all parties and to unite within itself members of any of them. Its purpose was to strengthen the resolution of the people and to leave nothing undone in order to create the conditions necessary for perseverance to the bitter end. Internal politics were not to be its business: nevertheless it was precisely in this sphere that it was destined soon to exercise a determining influence. It became the centre of all those who attempted to infuse into the people a spirit of victory and to oppose in the most resolute manner all thoughts of a disadvantageous peace. At first cer- tain members of the Social Democratic party had joined the Vaterlandspartei; but soon the Social Democrat press opened the most vigorous campaign against it, charging it with wrecking every chance of peace. Then developed a bitter struggle which soon played a large part in the various German Parliaments and in the widest public circles. The Vaterlandspartei had large funds at its disposal, conducted far-reaching propaganda, and