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Lorraine, and, in respect to that with England, stated that the French Government had resolved to denounce the Treaty as it stood, leaving the Protocol open, however, till February, 1873, for possible modifications. He notified that the ordinary and extraordinary budgets would reach a total of 2,742,000,000 fr.; that it was proposed to reduce the floating debt to 628,000,000 fr. by gradual redemption ; that in consequence of the monetary crisis the Bank of France should be authorized to issue small notes and to increase the circulation by from 400,000,000 fr. to 600,000,000 fr.; that, with regard to the army, Government proposed compulsory service in time of war, and in time of peace an annual contingent of 90,000 men, to be levied by lot, the whole force to consist of 800,000, of whom 450,000 to constitute the standing army on the peace footing. On some of the most “burning questions of the moment the Message preserved a disappointing silence. Nothing was said as to the admission or non-admission of the Orleans princes to their seats in the Assembly. Nothing was said as to the question of national education, as to which Gambetta and Dupanloup, the former in a recent speech at St. Quentin, and the latter in an angry retort by letter, were waging war. Nothing was said as to the removal of the Assembly to Paris. Very little was said as to the most exciting question of all—the long-expected settlement of the Constitution. But a significant reference to it was introduced just before the end of the Address. The President told the Assembly that it had the sovereign right to decide on the definitive form of government, and advised it not to take an initiative precipitée." It was evident that he desired still to drift along, to keep himself free to act on all questions as they should arise, and above all to prevent the nation from committing itself to any premature decision as to its destinies. The Message pleased neither the Right nor the Left benches of the Assembly. Their disapprobation was loudly and rougbly expressed. The Centre alone seemed passively content. There was a special passage in the Address, which had reference to a very painful subject :- While awaiting the definitive liberation of the country, we have applied ourselves to separate the population from the German soldiers, who are now quartered in barracks. We ask the people to restrain their resentment, which would not abridge their sufferings, but mighi compromise the safety of France. The life of a foreigner is as sacred as the life of a countryman.” The covert apology was not tendered too soon. The very morning on which Thiers delivered his Message a despatch was sent by Prince Bismarck to Count Arnim, the German Ambassador in Paris, complaining in harsh and bitter terms of the recent acquittal of two Frenchmen who had been guilty of murdering German soldiers at Melun and at Paris. “In future,” the Imperial Chancellor declared, “should the French authorities refuse to give up assassins, the Germans would be compelled to seize French hostages, and in extreme cases even have recourse to more stringent measures in order to enforce their demands." What made the offence greater was that the verdict in both cases had been applauded or abetted by office-bearers, by society, by the populace, and by even the gravest organs of public opinion. Bismarck's despatch only gave rise to a fresh burst of newspaper defence of the acquittals and denunciations of the Germans. It was, in truth, a heavy cloud to gather over the Christmas horizon; and the circumstances, when taken in conjunction with the large increase proposed in the army, and with the addition of more than three millions sterling to the War Budget-notwithstanding the heavily-burdened state of the country, and notwithstanding Thiers' known desire to pay off the Prussians quickly—seemed to betoken a longing for revenge on the part of the French, and on the part of the Germans an unyielding sternness, which would too probably precipitate another outbreak of war at no distant period.

Meanwhile the Orleans princes were determined to bring the question of their seats to an issue. On the 18th the Journal des Débats published two letters, addressed by the princes to their constituents, pronouncing it as their own opinion that their promise of abstention was no longer binding, and claiming to have the case settled by a higher tribunal. These letters became the subject of debate in the Chamber on the very day of their publication. M. Brunet interpellated the Government. M. Casimir Perier, in reply, declared that the President had not released the princes from their engagement, simply because he considered that engagement as not taken to himself, but to the Assembly. This surrender of his position both confused and enraged the Left. M. Pascal Duprat blamed the abrogation of the laws which had permitted the princes to return to France. An obligation, he said, had been taken by them, and they were now seeking to throw it off. If not taken to Thiers, it had been taken to the Committee appointed to ratify their elections. Upon this M. Batbie and the Duc de Broglie, two witnesses appealed to, denied that any such engagement had been made to the Committee. Finally the Chamber, by 646 voices against 2, adopted a motion proposed by M. Fresneau, to this effect :-" Thé National Assembly, considering that it is not responsible for, and has no advice to give with regard to, certain engagements in which it did not participate, passes to the order of the day.” The princes, thus finding no answering party to their contract, held themselves fairly released from its consequences, and on the following day proceeded to take their seats in the National Assembly.

A stormy incident took place on the 9th, in reference to recent measures taken with reference to the Communist prisoners by the Committee of Pardons. M. Ordinaire, a violent member of the Left, declared that as a member of the Assembly he declined all responsibility in such measures; and in reply to violent protests from the Right, shouted, “You are stained with blood! The Commission is not a Commission of Pardons, but a Commission of Assassins !" Great was the uproar at such outrageous language, and when the President M. Grévy proposed that formal censure should

be inflicted by the Assembly on its unruly member not more than thirty of the extreme Left opposed the vote.

On the 15th M. Thiers spoke for an hour and a half in favour of the return of the Assembly and the Government to Paris, and was heard with much deference. He laid stress upon three principal considerations : First, that Paris had become the capital of France by the work of time and circumstances, not through the acts of the old monarchies; secondly, that it was a real intellectual and artistic focus, shedding its rays over the provinces ; thirdly, that a return to Paris would confer strength upon the Government of France in its relations with Europe, and would deprive the Bonapartists of one means of agitating the country. He asked to be heard again by the Committee when it should have deliberated upon the matter. The prospects of a return to the capital seemed, however, likely to be materially affected by a personal question which occupied the Assembly five days later. M. Raoul Duval, a young member, stepped forward to question the Government as to the immunity enjoyed by M. Ranc, the noted Communist, now quietly occupying a seat in the Municipal Council of Paris, while so many ignorant and misguided adherents of his former party had been brought to justice. He read the various decrees of the Commune to which Ranc had been a party ; decrees of confiscation, of dismissal from office, of hostage reprisals.

His speech elicited loud applause from the Right. M. Dufaure, on behalf of Government, suggested that the military authorities alone were responsible for the selection of persons to be prosecuted. M. Duval indignantly rejected the evasion, and proposed the following resolution : “ Counting on the equal application of the law, the House passes to the order of the day.” But the defenders of Government objected; and a discussion ensued, in which damaging admissions on their part were elicited. Their position seemed dangerous, until an ultra-Imperialist, M. Prax Paris, came to their rescue, and succeeded in carrying a prefatory clause to M. Duval's motion, viz., “ Having heard the explanation of the Ministers of War and of Justice, and counting on the equal application of the law,” &c. A few days afterwards M. Ranc was put in nomination by one of the radical cliques of the city for the office of deputy to the Assembly, vacant since the death, or disappearance—for the Communists maintained that the identity had been mistaken--of M. Millière in the month of May. However, his name was presently afterwards withdrawn, and that of Victor Hugo substituted for it.

Towards the close of the month, M. Pouyer-Quertier laid his financial statement before the House. On this subject we give a few extracts from the Journal des Débats :

The credits asked for the year 1872 amount in round figures to 2415 millions of francs. That amount does not include the cost of departmental services and certain temporary expenses immediately resulting from the war, which are carried to a special account. The credits granted under the Empire for 1871 only amounted to 1852

millions, thus showing an excess of 563 millions in 1872. The figures relating to the public debt and dotations are doubled, having risen from 555 millions to 1109 millions; it is true that in this latter amount is included 200 millions for the sinking fund. The estimated receipts for 1872 are put at 2429 millions, which would leave a surplus of receipts over expenditure of 14 millions. The estimate of receipts for 1871 under the Empire was 1880 millions, which leaves an increase of 548 millions for 1872. It is those 548 millions added to an amount equal to the loss sustained by the transfer of Alsace-Lorraine which must be met by new taxation. Starting from those facts, M. Pouyer-Quertier estimates the additional charge to be met in our future Budgets at 650 millions, but it is important to observe that in that sum of 650 millions are included two sinking funds,—first, the 200 millions which the State is bound to repay each year to the Bank of France; and, secondly, the repayments to the Departments and the Communes, to the extent of thirtyeight millions per annum on account of the expenses incurred for the mobilized National Guards. Of these 650 millions required by the Government, the taxes which have been voted this summer and autumn would of themselves produce more than 366 millions. Some forty millions might be saved under different heads and by an increase of the revenue obtained from forests and domains belonging to the State. There would then remain 247 millions to be provided for by new taxation.

It was truly a formidable problem how to raise an additional sum of ten millions sterling annually to the public revenue. Various taxes were proposed; and again M. Pouyer-Quertier brought forward his favourite scheme of a heavy impost on raw materials. To an income tax, advocated by a large party in the Assembly, both he and the President of the Republic declared themselves inexorably opposed. It was the subject of a very remarkable speech, by M. Thiers himself, on the 26th. He declared that the scheme of French taxation must be looked upon as a whole, and that it was eminently favourable to the poor. The easy classes paid three-fourths of the whole taxation, and it would be grossly unfair to alter the distribution of the public imposts further to their prejudice, even if the great annoyance occasioned by the inquisitorial nature of the income tax were not taken into consideration. Dismissing the income tax, he maintained that the taxes on raw materials were the best way of getting at the required money. He owned that this was contrary to English notions, as introducing the system of protection in one of its worst forms. He even admitted that Free Trade was the best system for the English: were he an Englishman, he should be a Free-trader himself. But he was prepared to prove that with regard to France it was otherwise.

On the 29th Thiers obtained from the Assembly a vote of aug. mentation by 400,000,000 francs to the circulation of the Bank of France.

CHAPTER IV.

GERMANY — Royal Proclamation, accepting the Imperial Crown - Public rejoicings

Return of the Conquerors-Elections to First Parliament of the German EmpirePolitical Parties-International and Ultramontane Extremes-Debate on the Address—Conduct of the Clerical Party-Bill for Incorporating Alsace-Lor. raine-Bismarck and the Peace of Frankfort-Military Triumph at Berlin-Dr. Döllinger and the "Old Catholic "Movement-Bismarck's Policy against the Ultramontanes - Interview of the Emperors of Germany and Austria at Salzburg Religious Congresses at Mayence and at Munich-Count Benedetti's “Case". Reassembling of Parliament in October-Emperor's Speech-Bismarck's Speech on the Convention with France—The Bishops' Address—Bill to prohibit Pulpit Politics—Bills of Centralization, &c.—Budget-Meeting of Diets-Attitude of

Extreme Republicanism-Public Prosperity-Cholera-Emperor William. AUSTRO-HUNGARY-Count Beust and the two parties of Centralization and Federalism

-Hohenwart Ministry-Meeting of the Reichsrath-Finance-Position of Parties Count Hohenwart's Scheme of Reform-Dissolution of the Reichsrath-New Elections—“Home Rule" for Bohemia-Opposition to it by Counts Beust and Andrassy-Imperial Rescript-Fall of Hohenwart—Kellersperg Ministry - Resignation of Count Beust-Count-Andrassy Minister for Foreign Affairs - Kellersperg retires-Adolf Auersperg succeeds him-Auersperg Programme-Winter Session of the Reichsrath-The Emperor's Speech.

GERMANY. One can hardly experience a greater sense of contrast than in turning one's thoughts from the condition of France in the year 1871-marked by ruin, discord, disintegration-to that of Germany -triumphant, powerful, and occupied in consolidating, by a mighty principle of attraction, the hitherto loosely-compacted elements of the national polity. Our present chapter will fitly begin with the Royal Proclamation which was read out to the Upper and Lower Houses of the Prussian Diet on the 18th of January, announcing the revival of the ancient title of Emperor of Germany in the person of the Prussian monarch, now absent at the siege of Paris :

“We, William, by God's grace, King of Prussia, hereby announce that the German Princes and Free Towns having addressed to us a unanimous call to renew and undertake with the re-establishment of the German Empire the dignity of Emperor, which now for sixty years has been in abeyance, and the requisite provisions having been inserted in the constitution of the German Confederation, we regard it as a duty we owe to the entire Fatherland to comply with this call of the United German Princes and Free Towns, and to accept the dignity of Emperor.

“Accordingly, we and, our successors to the Crown of Prussia henceforth shall use the Imperial title in all our relations and affairs of the German Empire, and we hope to God that it may be vouchsafed to the German nation to lead the Fatherland on to a blessed future under the auspices of its ancient splendour. We undertake

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