During the year 1922 the problem of reparations dominated the whole public life of Germany even to a greater extent than in the preceding year, whereas the two other questions which previously had been a similar source of anxiety and unrest - disarmament and the trial of war culprits - receded more and more into the background, though they are still, so to speak, in the air, and from time to time remind the world of their existence. The question how Germany was to carry out the reparation obligations laid on her by the Treaty of Versailles and reduced to definite figures in the London ultimatum of May 5, 1921, had already at the beginning of the year reached a critical stage owing to the perils of the economic situation in Germany. As a practical precaution, Germany sent in a request for a postponement of the reparation payments. This gave rise in a short time, i.e. after the change of the ministry in France on January 12, to a regular battle for the moratorium; and owing to the failure to obtain this, and the complete collapse of the exchange, the year closed amid a general feeling of hopelessness.

During 1921, after the first reparation payments had been made, the financial stability of the country and its currency had rapidly deteriorated. The government consequently had not been surprised, on applying to the Bank of England for a loan of £25,000,000, to receive from the governor the reply that no credit could be given to Germany so long as she was saddled with her present load of reparations debt. Accordingly, her last step in that year had been to turn to the Reparations Commission with a declaration that she would be able to pay only in part the next two reparation instalments due on January 15 and February 15. She joined to this statement a request for a postponement of payment. This forced the Supreme Council of the Allies to seek a new solution of the reparations problem. The first subject discussed by the conference of the Supreme Council convened at Cannes by the French premier, Aristide Briand, was the question of reparations; and in the course of the deliberations German delegates were invited to attend in order to explain the situation of Germany. No decision, however, was reached on the subject of the moratorium. Walther Rathenau, the head of the German delegation, set forth the extent of Germany's capacity to pay in a statement which was highly commended at the time, but owing to the cabinet crisis which supervened in France, and the declared aversion of the new head of affairs, Raymond Poincaré, to conferences and oral discussions, the conference was prematurely broken off. Still, on January 13, immediately before the dissolution of the conference, the Reparations Commission granted Germany a temporary postponement of payment, on condition that it should pay 31,000,000 gold marks every ten days, and within fourteen days submit a complete plan for emending the German budget and guaranteeing the paper currency, and also a scheme for cash payments during 1922.

In its reply of January 28 the German government, taking its stand on the discussions in Cannes, proposed that Germany during 1922 should pay 720,000,000 gold marks in cash and 1,450,000,000 in kind, at the same time asking that the cash payments should be reduced to the lowest figure possible. In regard to the amending of the budget, it pointed to the agreement just arrived at between the government parties and the People's Party for the better collection of existing taxes and the introduction of new ones, both direct and indirect, the proceeds of which were expected to increase the revenue from taxation from the 55,000,000,000 paper marks raised in 1921 to 100,000,000,000 in 1922, and the chief constituent of which was a forced loan anticipated to yield 1,000,000,000 gold marks. Notice was given of a bill to secure to the Reichsbank - in accordance with the demand of the Reparations Commission - complete freedom from interference on the part of the Reich chancellor, and a promise was held out that everything which could be reasonably required should be done to lessen the floating debt and to check the activities of the note press.

The government's attitude on the reparations question was explained by the chancellor in a speech in the Reichstag on January 28, in which he repudiated as utterly groundless the charge brought against Germany by Poincaré, in a speech in the French chamber, of maliciously avoiding the fulfilment of her obligations. The Reichstag showed its approval of the attitude of the government by rejecting a vote of censure brought forward by the Communists.

The Reparations Commission answered on March 21 in a note in which it fixed the obligations of Germany at the figures proposed by the German government, but attached to this concession certain stringent conditions which would have to be carried out by a fixed date, at latest by May 31. The taxation arrangement - which the Reparations Commission considered quite unsatisfactory, and incommensurate alike with the obligations and the capacities of Germany - was to be put into effect by April 30. In addition, by May 31 new taxation to the extent of 60,000,000,000 marks would have to be imposed. A number of measures for securing strict control over German finances and the German budget would have to be introduced at early dates, and the scheme for an internal loan submitted by April 30.

In a speech in the Reichstag the chancellor pointed to the rapid depreciation of German currency which had been the immediate effect of the note, and rejected the suggested measures for controlling German finances as an intolerable infringement of German sovereignty. By 248 votes to 81, with 43 abstentions, the Reichstag on March 30 passed a resolution protesting against the intolerable demands made of the German people in the note of the Reparations Commission, and approving of the declarations made by the government in answer to it.

The government accordingly besought the Reparations Commission to reconsider its decision of March 21, and proposed that Germany's capacity to pay should be investigated by experts. The exchange of notes was for the time being closed by an answer of the Reparations Commission deploring the obstinacy of Germany and warning the government of its possible consequences, but at the same time expressing readiness to examine every practical suggestion which might be put forward by Germany for removing her difficulties.

Meanwhile there had met in Genoa the great World Economic Congress, the convening of which was the one positive result of the conference of Cannes. The congress, it is true, lost much of its significance for Germany owing to the fact that France had consented to take part in it only on condition that the question of reparations was not officially raised. Nevertheless, the German government, as the chancellor had stated in the above-mentioned sitting of the Reichstag of January 26, regarded the convoking of the congress as a moral victory for Germany, as it hoped that "investigation of the world economic problems and their interconnection will help to put the question of reparations more and more in its true light, and so favour the reasonable and practicable solution of the problem advocated by Germany." This hope was fulfilled only to a limited extent. It is true, the admission to the congress on equal terms of the German delegation (consisting of Dr. Joseph Wirth, the chancellor; Walther Rathenau, who had been foreign minister since the end of January; and Dr. Andreas Hermes, the minister of finance) as representatives of Germany was a moral triumph, and the question of reparations was discussed in private conversations; but very little actual progress was made. The German delegation, however, became the object of general and by no means welcome attention when, on Easter Sunday (April 16), it concluded in Rapallo with Georgy Chicherin, the Russian foreign minister, a political and economic agreement which had been drawn up in Berlin, but had been laid aside before being finally adopted. This agreement was of a far-reaching character. It established peace finally between the two countries, waived on both sides all claims arising from the war, and, on the side of Germany, also all private claims of German subjects arising out of Russian measures of socialization, on condition that other states would do the same; finally, it restored diplomatic relations. In this way open recognition was accorded to the Bolshevist government, to which the former Russian ambassador's palace in Berlin, after being empty for years, had already been handed over. To a certain extent this step rendered more difficult the negotiations of the Great Powers with the Moscow government, which was already obstinate enough. The assurances of the German delegates that no disloyalty had been intended to the congress by these agreements, and their assertion that they had reliable information that the other powers were about to conclude arrangements with Russia which would put Germany in a tight corner if she did not act quickly, were rejected with scorn. The French delegation showed itself particularly indignant, but the president of the congress, British Prime Minister David Lloyd George, also read the German delegation a stiff lesson. The affair was closed by the delegation being debarred from participation in the commission for Russian affairs; but the representatives of the Great and Little Ententes had the last word with the assertion that the German statements had not "a shadow of justification". The allegation, made with particular insistence in French quarters, that the agreement, in addition to its published stipulations, contained a clause of a military and political character, by which the firm of Krupp's obtained the right of manufacturing war material in Russia, was categorically denied by Dr. Wirth in an interview with journalists. That no legal objection could be taken to the agreement was afterwards expressly admitted by the Reparations Commission.

This crisis was followed by others in settling which the German delegates again did good service. On the whole, however, the only economic questions decided by the congress were of secondary importance. Of more consequence to Germany was the approach of May 31, with the threat of dire happenings if the obligations fixed by the Reparations Commission were not carried out. Poincaré had already in his first speech in the Chamber set forth the programme of pledges and sanctions with which he meant to overcome the alleged "bad will" of Germany. Accordingly, the financial minister, Dr. Hermes, went himself to Paris, and as a result of his discussions with the Reparations Commission, the government was able to make a proposal with which this body declared itself in substantial agreement. The government promised to take measures for balancing the budget, and undertook to keep the floating debt at the figure of March 31 (272,000,000,000 marks), and to counterbalance any unavoidable increases by increases of revenue, on condition that an international loan was arranged "in due time". The Reparations Commission thereupon consented definitively to a postponement of payment for 1922, but with the proviso that the moratorium would be annulled if Germany failed to carry out its obligations, or if, owing to the failure of the international loan, it should be found impossible to keep the floating debt down to the stipulated level.

In order to examine the conditions under which it would be possible to raise an international loan such as had thus been declared necessary, a special Loan Committee met in Paris, composed of authorities in the financial world, such as Pierpont Morgan and Benjamin Strong, director of the Federal Reserve Bank in New York. The committee got as far as asking the Reparations Commission the question: "Is Germany bound to pay the instalments fixed on May 5, 1921, in London?" All the members of the Commission, with the exception of the French, were prepared to answer that the committee was empowered to investigate all the conditions requisite for securing an international loan without regard to the London ultimatum. But the French premier stated in the Chamber that, as head of the government, he had informed the Reparations Commission that the question of an international loan was not to be made dependent on any modification of the French demands. Owing to this, and the fact that France was the power most concerned, the Loan Committee adjourned indefinitely, at the same time expressing its readiness, if invited, to meet again, should conditions become more favourable.

Now followed the most terrible event in the history of the German republic during the year - an event which put its stability to a severe test. The minister for foreign affairs, Walther Rathenau, whose abilities and knowledge of affairs were a valuable asset and source of hope to Germany in the critical times through which she was passing, was on the morning of June 24 shot dead in front of his house by assassins, immature, excited Nationalists, who saw in him only the hated Jew. The horror which this shocking crime evoked, even beyond the borders of Germany, could not fail to shake confidence in the future of the country. Whereas on June 20 the mark was still at one sixty-seventh of its par value, on June 27 it had sunk to one-eightieth, on July 3 to one hundred-and-fourteenth, and on August 1 to one hundred-and-fiftieth. Owing to this new development the German government on July 12 made a fresh application for postponement of those payments which had been fixed for 1922, and at the same time for a reduction of the monthly payments for the clearing of private prewar claims from £2,000,000 to £500,000. The Reparations Commission promised to reply, if possible, by August 15. But France returned an abrupt negative to the request for a reduction of the clearing payments, and even threatened reprisals if Germany did not carry out its clearing obligations by August 5. These reprisals - consisting in the expulsion of 500 Germans from Alsace-Lorraine, the confiscation of the income and property of German companies in Alsace, and the complete suspension of the clearing system - were actually commenced by the French government, but soon countermanded on sharp protests being made by the population of the whole district, especially the business community. Negotiations thereupon were instituted, in which an agreement was reached with regard to the clearing system.

For dealing, however, with the main question - the request for a moratorium for 1922 - a conference of the Allied governments met on August 7 in London. The deliberations were again fruitless, as Poincaré demanded, before granting a moratorium, "productive pledges", viz. the confiscation of forests and mines, and participation in the German dye industry in the occupied district, whereas the representatives of the other governments were willing to grant only the control of such pledges, but not their confiscation. The request was accordingly referred to the Reparations Commission, which opened new negotiations with the government in Berlin for the voluntary surrender of suitable pledges. Owing to the persistent refusal of Germany, these led to no result, and the Commission, in order to avoid an impasse, accepted a compromise which had been proposed by the representative of Belgium, the power which stood to gain most by it, to the effect that Germany should issue treasury bonds of six months' currency for the rest of its payments due in 1922. The decision in this case was unanimous, whereas the German request for a moratorium had been rejected only by a majority, according to a preconcerted agreement. The German-Belgian negotiations regarding the period and guaranteeing of the treasury bonds led, with the assistance of the Bank of England and the German Reichsbank, to a result satisfactory to both sides, and Germany was thus released from further cash payments for 1922.

By this arrangement Germany virtually secured a moratorium for 1922, but the fundamental question was not settled. The main cause of Germany's inability to pay, the steady depreciation of the mark, was still at work. Towards the end of the year it assumed a disastrous rapidity. On August 1 the dollar still stood at M. 643 and the pound at M. 2,850. But on September 5 the dollar had already risen to M. 1,440 and the pound to M. 6,525, and in December the pound was worth between 30,000 and 40,000 marks and the dollar between 7,000 and 9,000. The German currency, which at the beginning of the year had already fallen to one forty-fifth part of its par value, was towards the end of the year worth at times only one two-thousandth part, and only for brief intervals rose to one sixteen-hundredth part of its previous value. In such circumstances it was impossible to exercise proper supervision over the national finances. The budget submitted at the beginning of the year had provided for an ordinary revenue and expenditure of 103,208,000,000 marks. The expenditure included, in addition to the costs of the administration, 16,500,000,000 for reparations. The extraordinary budget balanced at 4,945 million marks, of which 3,100,000,000 were for loans for productive objects. The state services (posts, railways, and printing press) required in the ordinary budget no supplementary estimates, but in the extraordinary budget the railways claimed 6,800,000,000 for new capital and the posts 2,100,000,000, so that the loans for productive objects would have totalled about 12,000,000,000. For carrying out the terms of the peace treaty there were required, with the mark at one forty-fifth of its par value, 187,531,000,000 marks. Of this sum 16,500,000,000 were provided by the ordinary budget; the other 171,000,000,000 would have had to be raised by a loan. As soon as the mark fell to a sixtieth of par the deficit became 210,000,000,000 instead of 171,000,000,000; and it swelled to fantastic dimensions with the further depreciation of the mark which actually followed. The floating debt, which at the beginning of the year amounted to 247,000,000,000, had risen by March 31 to 272,000,000,000, by the first week of December to 962,000,000,000, and by the end of the year to 1,494.9 milliards.

The depreciation of the currency, which caused such confusion in the public finances, led also to a nervous and often arbitrary raising of prices with which salaries and wages were quite unable to keep pace, so that large sections of the population were rendered destitute. Alike, therefore, for the external and the internal situation, the stabilizing of the mark became the chief thing needful. The government sought to prevent the further fall of the mark by a regulation forbidding dealing in foreign currencies. The measure, however, was not well conceived and proved wholly ineffective; it met with sharp opposition, and soon had to be altered. A project for a gold reserve loan was seriously mooted for a time, but was dropped owing to party differences.

At the beginning of November the Reparations Commission went to Berlin in the hope of there finding a way out of the impasse. Simultaneously a conference was held in Berlin of economic and financial authorities who had been asked to give reasoned opinions on the possibility of stabilizing the mark. Both conferences ended without positive result. The Reparations Commission failed to find in the note of the German government, which it took with it to Paris as the result of the conference, the concrete proposals which it had looked for; nor did the answers of the experts, who in substance had declared the stabilization of the mark to be feasible, granted the cooperation of the Reichsbank, help from abroad, and reduction of the burden of reparations, lead to any action of the government in the direction indicated. The causes of this inactivity were to be found partly in the personality of the members of the government, partly in obstacles from without. These consisted, on the one hand, in the reluctance of the Reichsbank to risk a part of its gold reserve in an attempt to reform the currency; on the other hand, in the objections of a section of the industrial world, speaking for whom Hugo Stinnes, while expressing in the Central Economic Council his approval in principle of the attempt to stabilize the mark, considered that for this purpose financial measures were less important than the increasing of production through lengthening the hours of work. Ultimately, on November 13, the Wirth government, in a note to the Reparations Commission, made definite proposals regarding stabilization and reparations. These were, to fix the German reparation obligations definitely at a tolerable figure, to release Germany for three to four years from all payments in cash and kind, to summon without delay a conference of international financiers to consider the granting of a bank credit to Germany, and, finally, to support Germany's demand for complete equality of treatment in trade and commerce.

Immediately after the despatch of this note the Wirth cabinet found itself compelled to resign owing to party dissensions. In order to secure a broader basis for his government in the critical situation which faced the republic, Dr. Wirth had sought to gain the adherence of the German People's Party, which represented the property-owning classes. Previously to this, in September, the moderate socialist party had reunited with the Independent Social Democrats who had seceded during the war, while as a kind of counterpoise the bourgeois parties in the government coalition had formed a "working agreement" in Parliament with the German People's Party. The united Social Democrats objected to the entry of the German People's Party into the government coalition, and Dr. Wirth, having made this a question of confidence, felt himself compelled to resign. The president entrusted the formation of a new cabinet to Dr. Wilhelm Cuno, manager of the Hamburg-America Line, who with some difficulty accomplished the task. As the Social Democrats refused to join, Dr. Cuno formed a so-called business ministry, which, however, was largely composed of deputies of the bourgeois coalition. These parties did not by themselves form a majority in the House; consequently the cabinet depended on the good will either of the Social Democrats or the German Nationalists. The offices were filled as follows: chancellor, Dr. Cuno (no party); vice-chancellor and minister of justice, Dr. Rudolf Heinze (German People's Party); finance, Dr. Andreas Hermes (Centre); labour, Dr. Heinrich Brauns (Centre); Board of Trade, Dr. Johannes Becker (German People's Party); defense, Dr. Otto Gessler (Democrat); communications, Wilhelm Groener; posts, Karl Stingl (formerly state secretary in the Reich ministry of posts); ministry of the interior, Rudolf Oeser (Democrat); treasury, Heinrich Albert (formerly secretary of the Reich Exchequer); food, Dr. Hans Luther (formerly mayor of Essen); foreign affairs, Frederic Hans von Rosenberg (formerly ambassador in Copenhagen).

The new government continued the reparations policy of its predecessor, taking its stand unreservedly on the latter's note concerning stabilization and reparations which had been approved of by the vast majority of the Reichstag. When a conference of the Allies met in London to consider the German request for a postponement of payment, the new government made fresh proposals on matters of detail regarding the periods and the application of the loans it had in view. The conference rejected the proposals as inadequate. The London negotiations brought no solution of the reparations question. Poincaré's plans for the seizing of "productive pledges" and the occupation of the Ruhr valley met with the opposition of the other powers, while Poincaré on his side was not to be moved from his designs, which were of a military and political rather than economic character, by any offers of England for a mutual cancellation of debts.

Thus the year ended with a situation full of ominous uncertainty. In the occupied Rhineland, as in the rest of Germany, the "pledge" policy, behind which people saw only a plan for the piecemeal detachment of the Rhineland from the mother country, after the manner of Louis XIV, had wounded national susceptibilities most acutely. The press both in England and in Germany had divulged the contents of a secret memorandum drawn up by Adrien Dariac, president of the Financial Commission of the French Chamber, which demanded, as the programme of French policy in the Rhineland, the prolongation of the period of military occupation, the removal of Prussian officials, a customs barrier between occupied and unoccupied Germany, a separate Rhineland budget, a separate Rhineland militia, extension of the powers of the Inter-Allied Commission, and the election of an assembly to meet this commission. The official policy of pledges and sanctions seemed to the Rhinelanders to bear a fatal likeness to this programme. So in the last months of the year there arose from all sides, from the political parties, municipalities, middle class and Socialist organizations, and the clergy of the great religious bodies, sharp protests against any attempts at dismemberment, which was advocated openly only by a small group of protégés of the Rhineland Commission. The administration of the Rhineland Commission in the occupied district was dominated by French ideas, and was not calculated to win adherents for this policy. Expulsions of private individuals and officials; protests against the appointment of officials from unoccupied districts; interference with the curricula of Rhenish schools; the deposition and expulsion of high officials, like the Wiesbaden Regierungspräsident Momm; the arrest of the Regierungsassessor Dr. Prange in Wiesbaden and his sentence by court-martial to five years' imprisonment; prohibition of the German courts from carrying out of the sentence of imprisonment passed on Joseph Smeets, the separatist and French protégé; the prohibition of the celebration of the fiftieth anniversary of the founding of the German Empire; prohibition of the German national hymn, and restriction of liberty of speech and writing - these steps on the part of the French had created a feeling of bitterness against their occupation the like of which had never before been known. The situation was such that it was regarded as an actual misfortune by the Germans when America, which had withdrawn part of its garrison in the summer, announced its intention of withdrawing the rest, because the German public, in its own helplessness, looks on the presence of English and American troops as a kind of protection. Numerous unpleasantness with coloured and white troops - among which certain affairs with Belgian detachments in Hamborn and Oberkassel have left behind particularly disagreeable recollections - have served to accentuate this feeling of unjust treatment. A further grievance is that the occupation and the officials connected with it consume sums of money which seem wantonly extravagant in face of the slender incomes of the German officials, employees, and workmen. The payments made by Germany in cash and kind up to March were estimated by the Reparations Commission at 11.4 milliards of gold marks. Of this sum, according to the same reckoning, 2.86 milliards of gold marks were left for reparations, while 4.42 milliards of gold marks were expended on the occupation.

Similar feelings were occasionally aroused by the control commissions which were still at work in the unoccupied territory, and which had not yet been abolished, as the commission for aircraft was after Germany had delivered up or destroyed all the air material left from the war. The process of disarmament continued on the whole smoothly during the year. The fortresses on the West front, as also those of Friedrichsort, Kiel, and Heligoland ceased to exist, and the assertion that Germany was preparing a new war of revenge in the dark after the style of Scharnhorst was characterized by the minister of defense, Gessler, as a senseless fabrication. The few complaints which were made were attended to through the usual channels, without creating any stir. Only in Stettin, Passau, and Ingolstadt did the visits of Allied officers so far work on public feeling as to provoke the rougher elements of the population to an exhibition of violence, which the Allies made the occasion for demands of special reparation and apologies; and these had to be complied with by the government, although in the German view no blame attached to any officials.

With her neighbour on the East, Poland, Germany succeeded in making good progress towards coming to terms on the question of Upper Silesia. Through the mediation of the Swiss deputy Felix Calonder, the two countries in April came to an agreement for fifteen years, which gave prospect of a lasting settlement. The most difficult questions were those of the liquidation of German private property in the portions of Upper Silesia assigned to Poland, and the protection of minorities. In regard to the former the difficulty was due to the fact that Poland claimed an unrestricted right of liquidation, and did not recognize the right of the chairman of the Mixed Commission to arbitrate. A compromise was arrived at which gave Poland a limited right of liquidation, without inflicting too great hardships on the German owners. On July 17 commenced the transfer to Poland of the parts of Upper Silesia assigned to her; it was accompanied by the flight of large portions of the population from these districts into the part which remained German. A few weeks later a vote was taken in this part on the question whether it should become an autonomous federated state, or remain incorporated with Prussia. The result was: 513,126 votes for Prussia, 50,400 for autonomy. It was now possible to hold the elections to the Reichstag and the Prussian Landtag which had been postponed on account of the occupation. They ended unfavourably for the Poles, who won no seat out of five in the Reichstag, and one out of eight in the Landtag.

Great dissatisfaction was caused in Germany by the fact that five villages on the east bank of the Vistula, which had formerly belonged to West Prussia, which were inhabited almost entirely by Germans, and which had voted for Germany, were nevertheless, in spite of the protest of the inhabitants, of the Reichstag, and of the Prussian Landtag, assigned by the boundary commission not to East Prussia but to Poland. The Prussian premier Otto Braun, in the most emphatic manner, stigmatized this decision as a "scandalous breach of the peace of Versailles". The protest was in so far effective that the execution of the decision was postponed, and had not yet been carried out at the end of the year.

A number of treaties were concluded with various states - with Switzerland, the United States, Italy, Latvia, and Finland. Most of them were economic in character, and served to clear away the debris left by the war. The extension of the Russo-German Treaty of Rapallo to the Soviet republics federated with Russia - the Ukraine, White Russia, Georgia, Armenia, Azerbaijan, and the Republic of the Far East - took place as a matter of course, and aroused no attention.

Internally the position of the republic was somewhat weakened by the unrest arising from the uncertainty as to the war debts and the despair to which large sections of the population were being reduced by economic straits. Communist agitation, it is true, had little success. A strike engineered by the more reckless elements among the railway employees in February paralyzed traffic for six days in North Germany and a part of Baden, but it then collapsed, and was followed by disciplinary action against some of the instigators and also those participators in the strike who had been guilty of acts of violence and sabotage. The government, supported by public opinion, held that state employees had no right to strike, and received a vote of confidence on this point in the Reichstag. A frivolous strike of the Berlin municipal workers, which left the capital without light, water, and electricity, ended after three days with an unconditional resumption of work. Food disturbances broke out at some places in the summer, but they were easily suppressed.

More sinister and more dangerous were the subterraneous movements which were fomented in anti-republican circles, and which commanded the services of numerous existing organizations, some secret, others public. As the preceding year had been marked by the murder of Matthias Erzberger, so was this year by the already mentioned murder of Walther Rathenau, an attempt, on Whit Monday, to poison Philipp Scheidemann, the lord mayor of Kassel, with prussic acid, and the stabbing of Maximilian Harden on July 3 - acts engendered by an atmosphere impregnated with political and moral poison. Public opinion was shocked in the highest degree by these crimes, and the feeling aroused found vent in great demonstrations on the part of the republican section of the population, especially among the working classes, and led in certain places, e.g., Zwickau, near Magdeburg, Freiburg, Darmstadt, etc., to violent exhibitions of popular resentment, at times accompanied by bloodshed. The danger to the republic was perhaps not quite so great as it seemed at the first moment. The republican authorities acted with great energy, and proclaimed relentless warfare against the "Right", provoking from the other side the taunt that it was misusing the resources of the state for party purposes. An order was issued investing the government with extraordinary powers to cope with the emergency. A few days later it was withdrawn in favour of a bill "for the protection of the republic", increasing the penalties for attacks on republican institutions and officials, establishing a special State Court within the Reich Court, and laying down regulations for the strict control of societies, meetings, and printed matter. This was followed by an amnesty bill, a crimes bill, and a supplement to the officials law. The Reichstag passed the bill for the protection of the republic after a long discussion by 303 votes to 102. The other bills were also passed by large majorities. Only the German Nationalists, the Bavarian People's Party, the Communists, and certain members of the German People's Party voted against them.

But Bavaria, which, since the overthrow of its soviet republic, had been pervaded in its administration and legislation by a spirit of indifference both to the republican constitution and the unity of the Reich, and which had already in the previous year come into conflict with the Reich government over the question of the disbandment of the militia, announced from the very first in the Reichsrat its opposition to the bill, which was characterized in the Bavarian Landtag as a piece of arbitrary legislation, an offense against democracy, and an infringement of Bavarian sovereignty. Acting on its rights under the Reich constitution and in accordance with the sentiment of the majority of the Landtag, the Bavarian government issued an "emergency order" which reproduced the bill with omissions. The Reich government and the Reichstag did not remain passive under this defiance of the authority of the Reich, and demanded the promulgation of the bill without alteration. Negotiations were thereupon opened; in northern Bavaria the majority of the population took up the Reich standpoint; and finally, through the intervention of the president of the Reich, a compromise was arrived at by which Bavaria did indeed promulgate the Reich law, but as a concession to its particularism a special South German department of the new court was established.

The Bavarian premier, Count Hugo von Lerchenfeld, who had adopted a somewhat wavering attitude in this conflict between the Reich and Bavaria, retired a few weeks later, as he had lost the confidence of the strongly particularist Bavarian People's Party, which had the majority in Bavaria. He was succeeded by the minister of education, Eugen von Knilling.

In virtue of the Law for the Protection of the Republic a whole number of "right revolutionary" organizations, which were known to be nurseries of anti-republican sentiment, were dissolved. But the expectation that the trials instituted on account of the above-mentioned crimes would afford a clue to the original instigators of these crimes was not fulfilled. Thus in the trial of ex-Captain Manfred von Killinger in May for abetting the murder of Erzberger it became apparent that there must have been parties behind the scenes, but who these parties were remained dark, and the accused was acquitted, although his connection with the murderers of Erzberger was not in doubt.

The actual murderers of Rathenau, the engineer Hermann Fischer and Naval Lieutenant (retired) Erwin Kern, had escaped arrest and condemnation by suicide. A number of persons who were accused partly of complicity, partly of abetting or assisting, were brought before the new court in October. Ernst Techow, a student, only twenty-one years of age, who had driven the motor car in which the actual murderers of Rathenau had been sitting, was sentenced to fifteen years' imprisonment and loss of his civic rights. The rest of the accused received lighter sentences, or were acquitted.

Of quite a different character was a political trial held at Munich - the trial for high treason of the author Freiherr Hubert von Leoprechting. This man had been in the pay of the French envoy in Munich, Dard, who left the city for good a few days before the trial. It came out in the trial that Dard had acquainted the accused with the plans for separating South from North Germany, and that these plans were, if necessary, to be assisted by an advance of French troops through the Main valley; and Leoprechting, who belonged to several Nationalist anti-republican organizations, while at the same time he had pretended to the Reich government to be perfectly loyal to the Empire, had been receiving large sums of money for acting as a French agent. He was condemned to imprisonment for life and loss of civil right.

Wolfgang Kapp, the instigator of the notorious Kapp Putsch of March 1920, voluntarily offered in the summer to stand his trial before the Reich Court. He was suffering, however, from an affection of the eyes which necessitated an operation, and as a result of this he died before his trial opened.

The anniversary of the establishment of the republic was celebrated throughout the Reich on August 11.

The president of the republic, Friedrich Ebert, had on various occasions asked that, now that Upper Silesia was restored to Germany, an election of a president by the people should take place, as laid down in the constitution. He repeated the request in the autumn. In order, however, to avoid disturbances in the country, the majority parties came to an agreement to amend the constitution in such a way as to allow the present president to remain in office till June 30, 1925. The German Nationalists and Communists objected, but were outvoted by 314 votes to 76. Ebert declared himself satisfied with this arrangement.

Except in Bavaria no great political changes are to be registered, although elections have taken place in several of the states. The unity of the republic was not threatened. Certain movements for autonomy, the most noticeable of which were in Hannover and the importance of which could not yet be gauged, were directed not against the Reich, but against the Prussian administration. Complaints were made by Heligoland with a somewhat similar object, and were met by Prussia's conceding a certain measure of autonomy to Heligoland within Prussia, so that the island was now really administered by its inhabitants.

A few words must be said on the Saar district, which has been separated from Germany and placed under a commission representing various governments under the control of the League of Nations, but which by state and international law belongs to Germany. The population was highly dissatisfied with the rule of the commission. It addressed one complaint after another to the League of Nations, and this body sent a deputation to the district; but the deputation heard only the version of the commission officials, not the population, and the discontent was not allayed. The inhabitants sent a deputation to Geneva to lay their complaints before the League of Nations, and these were reinforced in May by a long memorandum. Complaints were made of the despotic character of the whole system, of the frequent expulsion of marked individuals, of the system of espionage in vogue, of the preference of French newcomers over natives, of the illegal presence of 7,500 French troops, of the purely advisory character of the local parliament, of the French instruction in the elementary schools, and of the bare-faced attempts made to misrepresent the purely German character of the Saar district. The German government also raised a protest against the presence of the French garrison. The policy of the commission, of which the only member who enjoys any confidence in the country is the one proposed by the British government, Richard Deans Waugh, formerly mayor of Winnipeg in Canada, was not altered by this flood of complaints.