"That

the old Republican faith." This called up M. Gambetta. is a lie, Monsieur." When called to order, he said, "On account of the regulations, I withdraw the expression," which, being understood to mean more emphatically even than before that M. Gambatta distinctly held that M. de Fourtou had told a lie, though, out of respect for "the regulations," the expression was withdrawn, a duel with pistols followed at Plessis Piquet, near Paris. M. de Fourtou chose the pistol; and after each had fired a shot at thirty-five paces, the combatants retired unhurt.

In the Senate, on December 14, M. Waddington, in reply to a question by M. Gontaut-Biron, made a statement of some length respecting the foreign policy of France.

That policy, he said, had not varied since the close of the Congress. It was embodied in the instructions given to the French Plenipotentiaries at Berlin. They were to defend the interests of France, to maintain peace, to do nothing to compromise French neutrality, and to avoid all engagements concerning the future. These conditions had been scrupulously respected, and France left the Congress as free as she entered it. She had constantly supported the execution of the Berlin Treaty. No doubt there were difficulties, but with the accord of the Powers they must soon be settled. With regard to Greece, M. Waddington said, in the action which France had initiated to secure for that country a sufficient frontier she would not be isolated, but would act in concert with all the Powers. France still hoped to secure for her "the shores of Volo and Arta, half of Thessaly, and a portion of Thrace." M. Waddington so far supported Lord Beaconsfield, that he declared his belief that all parties to the Treaty of Berlin intended to execute it, so far as their power went; but he admitted that in relation to the boundaries of East Roumelia, the definition of limits is "less advanced, and cannot be carried on at all points in the winter, but we hope it will be terminated next spring. Great difficulties still exist, resulting from the distress of the country, after the chronic antagonism of the Mussulmans and Christians; but negotiations are being held on that point, and I hope that, thanks to the good-will of the Powers, they will be successful.”

A last collision between the two chambers, at the close of the year, on the Budget, was averted by the unconditional surrender of the Senate on the question of the item on which they had disagreed; and M. Gambetta was able to declare, at a banquet given him by the commercial travellers of France, that the era of fear was over, and that the Republican majority in the Senate would. be much greater even than was expected. He disclaimed in a very marked way any ambition of quitting his post as Deputy, a statement intended to reassure both M. Dufaure and the Marshal, and renounced on behalf of France any idea of propagandism. Other countries must choose the governments which suited them, the business of Frenchmen was to make a government for themselves. "We have a constitution of our own, manners of our own, property

based on immutable foundations, which the world may envy us." "Let us make a model government, a government really for the French, and for them alone." "These sentences were intended, no doubt," said the Spectator of this speech, "to reassure Madrid and Rome, where some dread exists of French Republican Ambassadors, but they probably also express the conviction of M. Gambetta that the error of the first Republic was its propagandist spirit. Nevertheless, a solid Republic in Europe of the first class, peacefully reorganising its strength, cannot be without an appreciable propagandist effect. It is stated that the commis-voyageurs throughout France are Liberals, and have repeatedly been of the greatest service to the Republic."

So the year closed in France in peace and promise; and though the Republic did not escape the prevailing commercial depression, she escaped it better than others. There was so much said in many quarters in favour of the policy of Protection, and of the evils of Free-trade, that it is worth noting that at the end of the year a grand Free-trade demonstration was held in Paris, when telling speeches were delivered by M. Frédéric Passy and M. Raoul Duval. The former directed his speech to refute the assertion that what might be good for one nation in this matter was very bad for another. If that were to be applied to Free-trade, he said, it might as well be applied to chemistry. It was just as true that chemistry, though very good in England, was not applicable to France, as that Free-trade, though very good in England, was not applicable to France. M. Raoul Duval appealed to experience. In 1860 it was said that France would be ruined by the competition with England, but in fact, France had sent to England, as the result of the Commercial Treaty of that year, twice as much as England had sent to France. Supposing England were to close her markets against France, by way of reprisals for French Protection, the calamity to France would be frightful.

CHAPTER II.

GERMANY AND AUSTRIA-HUNGARY.

Germany.-Roman Catholic Petition-Opening of the German Parliament-Royal Marriages-Prince Bismarck on the Eastern Question-The Budget-Resignation of the Finance Minister-Railway Scheme-Resignation of the Commerce Minister-Attempt on the Emperor's Life - Betrothals-Anti-Socialist BillClosing of the Reichstag -Resignation of the Minister of Public Worship— Enquiry into the Tobacco Tax-Second Attack on the Emperor-Dissolution of Parliament-Measure of Repression in Berlin-The Pope and the Crown Prince-The Elections-New Anti-Socialist Bill-Dr. Virchow on the Chancellor-Debates on the Socialist Bill-Imperial Visit to Cologne-Opening of the Prussian Diet-Prussian Budget-The New Law in Berlin-Negotiations with Rome--Prince Bismarck on Protection. Austria-Hungary.-The Eastern Question-Revenue Returns-The ParliamentsGrant of Six Millions-Parliamentary Discussion-Death of Archduke Charles -The Budget-Herr Tisza and Count Andrassy on the Eastern Question-Hungarian Quota-Collection of Troops-Closing of the Hungarian DietResignation of Austrian Ministers tendered-The Occupation of Bosnia and Herzegovina-Mobilisation-Proclamation to the Inhabitants-War in the Provinces-Hadji Lodja-Hungarian Elections-Austrian advance-Engagements and Victories-Operations on the Save-Collapse of the resistanceMinisterial Crisis-Turkish Circular and Austrian Reply-Opening of the Parliaments Amnesty to the Insurgents-Debates on the Address-Outrages in Pesth-Occupation Expenses-Commercial Treaty with Germany.

GERMANY.

JUST before the opening of the German Parliament, a monster petition from the Roman Catholics in Silesia was presented to the Emperor. It was headed by Count Ballestrem and eighteen Silesian deputies, and contained 158,000 signatures; the whole was bound into seven volumes. The burden of the petition was abrogation of the May laws and restoration of the status quo ante. The Emperor handed over the volumes to Dr. Falk, who replied that the evils complained of in the petition were the result, not of the laws themselves, but of unjustifiable opposition to the laws, and the Minister was authorised to mention that the Emperor, in sending him the petition, observed that the memorialists would have done better to address the ecclesiastical authorities who had caused the present distress, rather than him. This unusual intimation was intended as an answer to Dr. Windthorst and others, who alleged that the Emperor was not in accord with the policy of his Ministers in ecclesiastical matters.

The German Parliament was opened on February 6, by a Message from the Throne, most of which was devoted to internal subjects, such as the introduction of a stamp-tax and an increase of the tobacco-duty, the preparation of a Bill permitting the Imperial Chancellor to depute his functions, the failure of the negotiations with Austria-Hungary for a renewal of the existing

Treaty of Commerce, and the amending of certain laws affecting industry; but there was a long paragraph on the Eastern Question. The Emperor hoped that the principles of the Conference would be consolidated upon the conclusion of peace, and that peace would not be long in coming; and observed that Germany, not being directly interested, "can disinterestedly facilitate an understanding between the Powers, and promote the welfare of the Christian populations." The "policy prescribed by the Emperor has been so far successful, as it has materially contributed" to the maintenance of the general peace. On the occasion of M. de St. Vallier, the new French Ambassador, presenting his credentials, the Emperor strongly expressed his own peaceful views towards France, and his desire to number her among his friendly neighbours. When the marriage of the Princess Charlotte, the eldest daughter of the Crown Prince of Germany, to the Hereditary Duke of Saxe-Meiningen, and the marriage of Princess Elizabeth, a daughter of Prince Frederick Charles, to the Hereditary Grand Duke of Oldenburg, had been solemnised at Berlin, the country had leisure to listen to Prince Bismarck's views of the Eastern Question. The great Minister had been very ill, and spoke for the most part sitting. Referring to the Russian conditions, he said that the delimitation proposed with regard to Bulgaria was not of such importance as to imperil the peace of Europe. German interests were not affected by the arrangements proposed for Montenegro, Roumania, Servia, Bosnia, and the Herzegovina. With regard to the Dardanelles, more apprehensions had been raised than were justified by actual possibilities. The regulations respecting ships of war were scarcely so important as those respecting commerce. Germany's chief interest in the East was that the Danube and the Straits should be free as heretofore. In conclusion, Prince Bismarck said he did not believe in European war. Germany was in favour of hastening the meeting of the Congress, and it would perhaps meet in the first fortnight of March, probably at Baden. Germany, the Prince said, had no wish to act as arbiter in the pending conflict. All her ambition was confined to the modest task of a broker who settled a bargain between different parties. In a second speech, replying to Herr Windthorst, Prince Bismarck said that German relations with Austria were excellent. "The two Emperors (he said) have real confidence in each other, and I have much pleasure in regarding myself as a personal friend of Count Andrassy." He warned Austria, however, that, though Germany would not resist her action, the Powers which drove Russia out must take charge of the Balkan Peninsula, which he thought Austria unprepared to do. With this speech the Agence Russe expressed itself content.

Herr Hofmann, President of the Imperial Chancellery, in introducing the first debate on the Budget, made the customary financial statement. The Minister stated that at the close of the current financial year there was a deficit of 19,022,000 marks, and

the new Budget under discussion would bring up the deficit to upwards of 28,000,000 marks. To cover this deficit the Government proposed, instead of increasing the matriculatory contributions of the several States, to raise the revenue receipts of the empire itself. After a long discussion, the House resolved to refer the most important items of the Budget to the Budget Committee, and the estimates for the postal, telegraph, and railway services to a Special Committee for preliminary discussion. When the tobacco-tax and the Imperial stamp duties came on for discussion, after a long debate, in which most of the speakers opposed the Tobacco Tax Bill, but nevertheless spoke in favour of a reform of the taxation, and the appointment of a responsible Finance Minister for the Empire, Prince Bismarck addressed the House, and argued that a reform of the Imperial taxation in the direction of an increase of the indirect taxes and Customs had become a necessity. He described the present Bills, in regard to which he had yielded to the better judgment of his colleagues, as only a transition stage towards the end aimed at. He openly admitted that he aimed at a tobacco monopoly-a system by which the Treasury would benefit without injuring the consumer. Finding the proposed increase of the tobacco duty resisted by a large majority, he told the House that he could not deem himself responsible for the details of the measure, as the finances of the Empire were virtually directed by the Prussian Finance Minister, Herr Camphausen. On February 23 Herr Camphausen made a statement, in which he said that after the views uttered upon the Tobacco Bill in various quarters, it was hardly worth his while to attempt its defence. He had, he said, repeatedly offered the Imperial Chancellor his resignation in case their views were not in harmony. He did not intend remaining at the head of the financial administration unless he was assured of the willing support of political parties. Prince Bismarck confirmed what had fallen from the last speaker as to his having repeatedly, and again quite recently, expressed a wish to resign. The Imperial Chancellor added, "I shall only consent to Herr Camphausen's wish if it should be grounded upon some special question of difference, and then only resistingly. No difference exists between us, and I have felt the necessity of stating to the House that consequently I regard the present not as a moment for us to separate, but rather as one for hoping that we may continue to pursue our paths together."

The estimate for the establishment of a Central Bureau of the Imperial Chancellery was agreed to after some discussion, by a large majority. Prince Bismarck maintained that the bureau was indispensable. He said he hoped that the substitute whom it was intended to appoint would represent him in all respects, but for that purpose a bureau was necessary. The Imperial Chancellor added :- "Let us assume that the Prussian Finance Minister should become my substitute; he would not be thoroughly conversant with several branches of the administration, and the conse

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