CHAPTER II. GERMANY, AUSTRO-HUNGARY, SPAIN, AND GERMANY.-The new Bank Law-Opening of the Prussian Diet-The Financial Estimates speech of Herr Camphausen-The Penal Code Amendment Act: speech of Prince Bismarck-Release of Cardinal Ledochowski-Prince Bismarck's plan of Railway transfer: debates in the Diet, and ultimate passing of the Bill— Count Arnim and Pro Nihilo-Visit of the Emperor of Russia to Berlin-The Berlin Note--Professor Reuleaux on German manufactures-The Old Catholic Synod at Bonn-Wagner at Bayreuth-Opening of the German ParliamentDebates on the Press Law-Prince Bismarck's speech on the Eastern Question. AUSTRIA.-Position among the European Powers-Death of Franz Deak-Difficulties between the two Governments-Meeting of the Delegations-Meeting of the Emperors at Reichstadt-Austria and the Eastern Question--Financial questions -The Maros outrage: satisfaction given by the Servian Government. SPAIN. The end of the Carlist War-Martinez Campos-Victory of Primo de Rivera at Estella-Prince Carlos in France-The meeting of the Cortes: the new Constitution-Debates on the subject of Religious Liberty-The suppression of the Fueros-Señor Salaverria's Budget-Return of the ex-Queen Isabella-Affairs in Cuba. PORTUGAL.-Emancipation of slaves-Death of the Princess Isabella-Financial crisis at Lisbon: closing of banks--Death of the Duke de Saldanha. GERMANY. ON January 1, 1876, the Bank Law, passed on March 14, 1875, came into force. By this law the thirty-two German Joint-Stock Banks which enjoy the privilege of issuing notes were compelled to confine their business to the State in which they are located, unless complying with certain conditions laid down in the same statute. These conditions are that the reserved fund is to be increased to one-fourth of the capital; that cash is to be kept in hand for one-third of the notes circulated; that no bills are to be discounted for longer dates than three months, and no bill whatsoever unless bearing two respectable signatures; that their notes are to be exchanged for cash in Berlin or Frankfort-on-the-Main; that the notes of other banks circulating in the Empire be taken at the seat of the bank and in branch offices in towns of over 80,000 inhabitants, and that the banks in question resign the right of forcing their notes upon the public Exchequer, and of issuing any notes after January 1, 1891. Banks complying with these terms acquire the right to circulate their notes through the whole German Empire, the amount allotted to each being fixed by law. Should any notes above this amount be issued, a tax of 5 per cent. will be levied upon them. Thirteen banks declared their inability to comply with the law and resigned the right of issuing notes, sixteen others adopting the opposite course and remodelling the issue department in accordance with the requirements of the REESE LIBRARY 177 statute. Of the two other banks one-the Brunswick Bankrestricts the circulation of its notes to the Duchy of Brunswick, while the last remains to be accounted for. The thirteen banks which have resigned their privilege, formerly having been entitled to issue a total of 22,561,330 marks, this sum is added to the notes of the German National Bank, which are consequently raised to 272,561,000 marks. No bank-notes need be accepted in payment, except by the banks themselves and by the Imperial and State Exchequers; and no notes of private banks may be issued by other banks which have taken them in payment, except at the place of issue. Simultaneously with the Bank Law the new coinage arrangements came into operation. Under this law the only coins constituting a legal tender are the following:-5, 10, and 20 mark pieces in gold; 20 and 50 pfennig pieces in silver; 1, 2, and 5 mark pieces in silver; and divers small coin in nickel. Temporarily, the 1 and 2 thaler pieces, as also the 1, 2, 5, and 10 groschen pieces, as well as some of the copper coin of the old currency, pass current; but they will be withdrawn from circulation in course of time. By the same law establishing the gold standard, nobody is obliged to accept a sum exceeding 20 marks in silver or a sum exceeding 1 mark in copper or nickel; but the Government recognize the duty of giving gold for any sums not exceeding 200 marks in silver and 50 marks in copper. The next event of interest in the history of Germany during 1876 was the opening of the Prussian Diet. This took place in the White Hall of the Royal Palace, at Berlin, on January 16. Herr Camphausen, Minister of Finance and Vice-President of the Prussian Ministry, read the Speech from the Throne. It commenced by regretting the pressure weighing upon trade and industry, but expressed confidence that the Prussian people would succeed through their energy in overcoming the difficulties of the situation. The revenue was not so large as set down in the estimates for 1876, but it sufficed to carry on the Administration in the same manner as formerly, to allow larger grants in various departments, and to give further development to the great public works of construction which have been undertaken. The speech announced that the Budget would be immediately submitted to the Diet, as also Bills for settling the jurisdiction of the newlycreated public authorities, altering the regulations for the administration of towns, forming a communal union for the city of Berlin, regulating the question of settlement and legal position of agricultural and forest labourers, completing the laws for the protection of forests, granting a legal sanction to the rules of the General Synod, and regulating the State's right of supervision over the Evangelical Churches. The speech confidently anticipated that the Houses of the Diet would willingly co-operate in assuring to the Evangelical Church an independent organization. It remarked that the preliminary labours connected with the N draughting of a law upon the State right of supervision and administration of the property of Catholic dioceses were approaching their conclusion. The closing paragraph was as follows:-" May the last session of the legislative period bring to maturity further results of the united efforts made by the Diet and the Government to promote the welfare of the country." In the Lower House of the Prussian Diet, on Jan. 18, Herr Camphausen submitted the estimates of public income and expenditure for the current year. Referring to the past year, the Minister observed that owing to the state of affairs in 1875 it was expected that the revenues derived from the State railways would show a deficiency as compared with the estimates of six million marks, and the stamp duties a falling off of 24 millions. On the other hand, the administration of woods and forests showed a surplus of six millions, and that of the State mines a surplus of one million. Direct and indirect taxation yield the amounts calculated upon in the estimates. With regard to the present year, Herr Camphausen explained that, notwithstanding the reduced scale of taxation for 1876, the amount anticipated from the class-tax would only be 1,949 marks less than in 1874, the Minister pointing out that the number of persons now liable to pay income-tax exceeds the number liable in 1875 by 21,170. The complete accounts for 1875 would only show a trifling surplus. The gross receipts for 1876 were estimated at 43,010,110 marks less than last year, and the estimated expenditure was reduced by a similar amount. An equilibrium between expenditure and revenue was thereby maintained, both being estimated at 651,488,800 marks. The ordinary expenditure was 619,162,518, and the extraordinary 32,326,282 marks. The next point of interest was the modification of the Penal Code aiming at repressing abuses of the freedom of the press and as reaching certain offences committed by public functionaries. The clauses effecting the latter result were pressed strongly towards the end of 1875 on the Reichsrath by Prince Bismarck, who was bent on repressing such abuses as those for which Count Arnim was condemned, and the Parliament voted the clauses that he recommended. The third reading of the Penal Code Amendment Bill was discussed in the German Parliament on February 9. It having been moved that clauses 130 and 131, which were struck out at the second reading, should be restored, Prince Bismarck rose and delivered a long speech, in which he animadverted upon the misrepresentation of facts and calumnious statements of the press, which last spring were carried to the point of inventing an alleged war-peril in newspapers to which a semi-official character was even attributed. The Imperial Chancellor emphatically denied the existence of semi-official papers. He declared, once and again, that the Foreign Office had no longer any relations with any paper except the Official Gazette and the Provincial Correspondence. After this distinct declaration on his part, anyone speaking of semi-official correspondence inspired by the Foreign Office must know that he was telling a lie. If there were any diplomatic intelligence that regularly found its way into the German press, it proceeded from foreign legations accredited to this country. Unfortunately, diplomatists were in the habit of telling correspondents only what they wished to be known, or what they were desirous to make others believe. Hence this flood of misrepresentations and mistakes, hence the constant recurrence of alarming rumours, which had such a deplorable effect, preventing the renewal of confidence and the revival of business. It was true the greed of the public for sensational intelligence was even more to be censured than the spirit that truckled to it. It was this morbid hankering after startling events which last spring invested the warlike prognostications of a Berlin paper with undue weight. It was true no war would be kindled by newspaper articles. All war was brought on by minorities, or in absolute States by sovereigns and cabinets, the majority always being opposed to hostilities; but much money was lost if the public allowed themselves to be frightened into apprehensions of war. He had nothing to do with the alarming article published last spring in the Berlin Post. He had never had any article written for that paper, as far as he could remember. Besides, he had to ask them to consider that, even if there were a Minister intent upon war, no war could be declared in this country without the consent of his Majesty-a sovereign too pacific, too old, and too successful in previous campaigns to wish for war. If he (Bismarck) had really intended to go to war with France last spring, on the mere excuse that France was reorganizing her army, the German Parliament would probably have recommended him to a lunatic asylum, and not allowed him any money for the execution of so mad a scheme. Germany had nothing to gain by war with France; and feeling safe and comfortable within her frontiers, was free from any wish to acquire more. What aggravated matters last spring was the fact that some diplomatists were deceived by persons in high positions, though not officially entitled to represent the German Government. Upon the whole, he must say that political telegrams were generally concocted at places the least likely to know what was going on. They were sent to the Reuter and Havas agencies, those nurseries of sensational canards, whence they made the round of the press. Political speculators vied with financial speculators in leading the public astray, and it was therefore a serious and important question to consider whether the propagators of such rumours should not be held responsible by law. From diplomatic spheres Prince Bismarck then passed on to a very different region of the social universe-Communism. Socialistic journals, he said, had recently done immense harm, and had done so without let or hindrance. The poor people who subscribed for socialistic papers read but one journal, and were perverted by that one. They had an indistinct idea that they were badly off, which was no doubt true, and they, therefore, were ever ready to believe the insane promises held out by the socialistic journals. The result was that the German operative no longer worked as much and as well as did the English and French, and that German manufactories could no more compete in the great markets of the world. A nation that had been industrious and steady to a proverb had, by the incessant agitation of the socialistic. press, been brought to this sad pass. If Parliament were really determined to throw out the Bills submitted to them; if they really thought that these things should be tolerated in future, some other Bill, he hoped, would be introduced next session and a compromise effected on this urgent question. Socialism disposed of, the Chancellor proceeded to the concluding topic of his speech. The German press, he contended, had lately displayed such a want of urbanity and such marked predilection for calumny and personal innuendo, that something should be done to stop these dishonourable doings. Ministers had been infamously accused of following the dictates of personal interest when acting on behalf and for the good of the State. A Berlin journal had artfully circulated these calumnies in a form which, while it was perfectly intelligible, precluded prosecution. He could not help saying that anyone subscribing for such a paper was indirectly assisting in the propagation of disgraceful lies. If the public would only form a league and render these excesses impossible, by condemning them, as they deserved, much might be effected without applying to the law courts. This ended his long and discursive speech. Two gentlemen rose to reply, an Ultramontane and a Socialist. The latter used very violent language while defending his party against the charges made by the Prince. No member of the Ministerial party, though they rejected the Bill almost unanimously, stood up to say a word on the subject. February 3 is an important date in the history of the conflict. between Prussia and Rome. On that date Cardinal Ledochowski was released from prison, his sentence having expired. It will be recollected that in 1866 he was elected by the chapters of Posen and Gnesen as the successor of Archbishop Przyluski; in 1871 he was entrusted by the Pope with the negotiations for the restoration of the temporal power, as a return for the recognition of the German Empire. The mission of Ledochowski remaining fruitless, the Curia recognized that a conflict between Protestant Germany and Papal Rome was inevitable, and therefore took all necessary precautions. The Ultramontane Centre party was formed obviously for the purpose of supporting the interests of the Church, indirectly causing the "pulpit" clause and the subsequent May laws. The next inducement for differences with the Archbishop of Posen was an ordinance of Government decreeing that religious |