said,
"that we shall have two great parties--one which supports and maintains
the State, and another which attacks it. The former will be the great
majority and it will be formed in the school of conflict." These words
are the strongest condemnation of his policy. It could not be wise for
any statesman to arrange that party conflict should take the form of
loyalty and disloyalty to the Empire.

There can be little doubt that his sense of failure helped to bring
about a feeling of enmity towards the National Liberals. Suddenly in the
spring of 1877 he sent in his resignation. There were, however, other
reasons for doing this. He had become aware that the financial policy of
the Empire had not been successful; on every side it seemed that new
blood and new methods were required. In financial matters he had little
experience or authority; he had to depend on his colleagues and he
complained of their unfruitfulness. Influenced perhaps by his perception
of this, under the pretext--a genuine pretext--of ill-health, he asked
the Emperor to relieve him of his offices. The Emperor refused. "Never,"
he wrote on the side of the minute. Instead he granted to Bismarck
unlimited leave of absence. In the month of April the Chancellor retired
to Varzin; for ten months he was absent from Berlin, and when he
returned, recruited in health, in February, 1878, it was soon apparent
that a new period in his career and in the history of the Empire was to
begin.

CHAPTER XVI.

THE TRIPLE ALLIANCE AND ECONOMIC REFORM.

1878-1887.

The year 1878 forms a turning-point both in internal and in external
politics. Up to this year Prussia has been allied with the two Eastern
monarchies; the Empire has been governed by the help of the National
Liberal party; the chief enemy has been the Clericals. The traditions of
the time before the war are still maintained. After this year the
understanding with Russia breaks down; instead of it the peace of Europe
is preserved by the Triple Alliance with Austria and Italy. In internal
affairs the change is even more marked; the rising power of the
Socialists is the enemy to be fought against; for this conflict, peace
has to be made with the Catholics--the May laws are modified or
repealed. The alliance with Liberalism breaks down, and the efforts of
the Government are devoted to a far-reaching scheme of financial reform
and social legislation.

When, in April, 1877, the Emperor refused to accept Bis