ation of the imperial system of finance with a view to
meeting the growing expenses of the Empire, and in especial those of
the army and navy, was necessary if imperial bankruptcy was to be
avoided. The practice of taking what were known as matricular
contributions from the separate States to make up for deficits in the
imperial budgets, and of burdening posterity by State loans, had one
day to cease. At the beginning of the reign the National Debt was 884
million marks (L44,200,000), and in 1908 over 4,000 million marks
(L200,000,000). A year before this Prince Buelow had made his first
proposals for reform, including new taxes on beer, wine, tobacco, and
succession duties on property.

All parties in Parliament, except of course the Social Democrats,
admitted that fresh imposts were inevitable, but, very naturally, no
party was willing to bear them. The Conservatives would not hear of an
inheritance tax and the Liberals would not hear of duties on popular
consumption. The result was to make the Centrum masters of the
political field and place the Conservative-Liberal "bloc" at its
mercy. After long discussion, the Government proposals were put to the
vote on June 24th, and as the Centrum threw in its lot with the
Conservatives, the proposals were rejected by 195 votes to 187. Prince
Buelow thereupon went to Kiel and tendered his resignation to the
Emperor, but at the latter's urgent request consented to remain in
office until financial reform in one shape or another had been
effected. This result was attained a month later, after much
compromising and discussion. The Chancellor renewed his request for
retirement, and the Emperor agreed. On the same day, July 14th, that
the resignation took effect, it was officially announced that Herr von
Bethmann-Hollweg, who had hitherto been Minister of the Interior, was
appointed to succeed Prince von Buelow as Imperial Chancellor.

An impression prevails widely in Germany that Prince Buelow's
retirement was due to the loss of the Emperor's favour owing to the
Prince's attitude towards the monarch during the "November storm."
Prince Buelow, very properly, has always refused to say anything about
his relations with his royal master, but a lengthy statement he made
to a newspaper correspondent referring his resignation to the conduct
of the Conservatives, and a letter from the Emperor gratefully
thanking the Prince in the warmest terms for his "long and intimate
co-operation," and