arbitration treaties, and the participation of Germany in the colonial mandates of the League of Nations. In regard to the first two points the German negotiations were quite successful ; for the practical results" they obtained only promises, the value of which could not be gauged in the period between the conclusion of the treaty (October 16) and the date of ratification (December 1).

This circumstance damped in no small degree the joy which was felt in Germany at the visible heightening of German prestige due to the Treaty, and at the guarantee which it provided against invasion. Before the Before the "practical results" were assured, it was difficult for the parties and for public opinion to judge whether Germany had not undertaken heavier obligations than the other partners. Their doubts were strengthened by the interpretation which the Treaty of Locarno received in a portion of the French Press. Acceptance of the Treaty was to a large degree not merely an act of judgment, but also, so to speak, an act of faith. Even apart from the question of the practical results, the signing of the Treaty might in many respects be regarded as a leap in the dark. Unmistakable as was the will to peace expressed in it, there was yet complete uncertainty as to the concrete political situations to which it might give rise. Fears were expressed that Germany perhaps had tied herself for the future to the political and economic chariot of the Western Powers; the conversations which Stresemann had had before Locarno with the Russian Foreign Minister seemed to provide no sufficient guarantee against this. Such apprehensions were most pronounced in influential circles in Bavaria, where they led to the wish being expressed that the entry of Germany into the League of Nations, which was to complete the rapprochement with the Entente Powers, should be deferred as long as possible.

The rank and file of the German Nationals were influenced by considerations of a less subtle kind. Their feelings revolted at the thought of accepting a Treaty which threatened to establish a permanent understanding with the victors in the world war. Without waiting for the "practical results" to begin, or for directions from the leaders and Ministers of the party, local associations of the German National People's Party passed resolutions urging the rejection of the Treaty. The leaders and Ministers, who hitherto had been powerless against Luther and Stresemann, now followed the lead given by their supporters. On October 25 the party rejected the Treaty of Locarno, and the Ministers Schiele, von Schlieben, and Neuhaus resigned. This was followed by a lively discussion in the Press, in which the Foreign Minister had to defend himself against the charge of having betrayed his German National colleagues. Thus the Coalition which Stresemann had formed for the support of his foreign policy was rent asunder. As a stable basis for this policy and an instrument for

uniting the whole German bourgeoisie on questions affecting the future of Europe it had broken down.

For the moment it was not required. A majority for ratification was assured, especially when practical results began to be visible in the shape of preparations for the evacuation of Cologne. But warning voices which were raised against joining the League of Nations were not without influence on the deliberations of the Reichsrat and Reichstag, which met at the end of November. The Treaty was accepted, but before Germany's entry into the League further "practical results" were to be awaited.

After the ratification on December 1 the Government had to face the altered alignment of parties to which the treaties had given rise. The Cabinet, from which the Minister of Justice Frenken had also just resigned, could not be reconstructed by simply filling up the vacant places. The Democratic parties, on which the Government now had to rely for support in its foreign policy, demanded a Ministry which should not again be forced to make concessions to the German Nationals. Accordingly Luther, with his Ministry, resigned on December 5.

The Cabinet crisis with which the year closed was even more serious than that with which it had commenced. It seemed natural that the new Ministry should be formed from the parties which had undertaken the responsibility for the ratification, that is, the Social Democrats, the Democrats, the Centre, and the German People's Party. This would have meant the restoration of the "Big Coalition," with which Stresemann had governed in his August Ministry. As then, so now, such a consummation was highly desirable for the bourgeois parties on economic grounds as well as those of foreign policy, in spite of the unwillingness of the People's Party to recognise the fact. The economic plight of Germany had become much worse as the year went on. The financial exhaustion to which the country had fallen a prey through the inflation and the reactions of economic crises abroad were now first felt in their full strength, and in combination. The first of these factors had ruined the purchasing power of the home market and had dissipated the capital required for production or diverted it to wrong channels. On the other side, the export trade, owing to the fact that the purchasing capacity of foreign countries had also been diminished, and that German products had been too long strangers to them, could only recover gradually, although a steady increase was unmistakable. The general overstocking of the market caused an uninterrupted series of failures. The crisis led among other things to the dissolution of the Stinnes concern, which in the inflation period had grown to gigantic dimensions. It was the unsound concerns from this period which were particularly exposed to danger; but old undertakings which were regarded as well established were also drawn into the vortex. An enormous increase took place in the number of

unemployed; in December the number of those receiving support rose to nearly 1 millions. The necessity of grappling with the unemployment problem was one of the causes which made the middle-class parties anxious for the co-operation of the Socialists. The prospects of winning over this party for a Coalition in which it should not be the leading factor were slight. There was no question that the economic situation drew the workers in numbers away from the Socialists to the Communists, who in the Prussian provincial and communal elections, on November 29, showed a marked increase for the first time since the spring of 1924. The Social Democrats could only make sure of retaining the workers under their banner if as governing party they should be able to carry through an extensive programme of social legislation. The programme which they drew up with this end in view was not regarded as feasible by the bourgeois parties, and especially by the German People's Party. A further problem, which now engaged public attention and which the Left and Right sides of the projected Coalition handled in quite different ways, was the question of compensation for the Hohenzollerns. The claims to certain properties put forward by the dynasty deposed in November, 1918, were decided by the courts in many places, particularly in Prussia and Thuringia, in a manner So highly favourable to the princes that in all non-monarchist circles an insistent demand was made to reduce the awards. The various parties drafted Bills for this purpose; but the Social Democrats in their Bill adopted a radical standpoint which could scarcely be reconciled with the attitude of the German People's Party.

Under these conditions the attempt to reconstitute the Big Coalition failed. Fehrenbach, whom Hindenburg first entrusted with the formation of a Ministry, soon gave up the task. The Democrat Koch, who then made a determined attempt and drew up a programme for the Coalition, received a refusal from the Social Democrats on December 17, and further negotiations were then postponed to the New Year.

AUSTRIA.

By the end of 1924 the Austrian Government had made but little progress in carrying out the undertakings which it had given to the League of Nations in September (vide ANNUAL REGISTER, 1924, p. 186), and in his report in January the League of Nations Commissioner in Vienna, Dr. Zimmermann, complained of the slowness with which the work of reconstruction was proceeding. On February 7 Austrian delegates appeared before the League of Nations Financial Committee in Geneva to beg for consideration on the ground of Austria's difficulties, in particular the lack of long-term credits for her business undertakings and the difficulty of finding markets. The Finance Committee of the

League adopted a resolution noting that certain laws required under the agreement of September had not been passed, and insisting that the Austrian Finance Committee should exercise real control over the other departments. The delegates replied that they realised the importance of the Committee's representations, and would endeavour to carry them out.

In accordance with this promise, the Government immediately took energetic steps to bring the Provincial Governments more under the control of the Central Government, especially in fiscal matters-a reform to which the League Committee attached great importance. Most of the Provincial Governments showed themselves willing to submit their Budgets and taxation measures to the Central Government, provided the Vienna municipality, which ranked as a Province, did the same. This body, however, which was controlled by the Social Democrats, was jealous of its financial autonomy, and long stood out against the proposals of the Government. At length, after wearisome negotiations, the Government succeeded in coming to an arrangement with the party leaders and the representatives of the Provinces, as a result of which, towards the end of May, it laid before the National Council a number of proposals designed to regulate the relations between the Central and Provincial Governments on the lines demanded by the League of Nations Committee. By these proposals the respective spheres of action of the two parties were clearly defined; the financial measures of the Provincial Governments were made subject to the supervision of the Chief Court of Audit and to the veto of the Central Government; and a new apportionment of financial burdens between Central and Provincial Governments was instituted. The proposals were keenly debated, but Dr. Ramek, the Chancellor, by the exercise of great skill and tact, piloted them safely through the National Assembly before that body rose on July 30, although, as they involved changes in the Constitution, a two-thirds majority was necessary for their adoption.

While endeavouring to improve the internal administration, the Government did not slacken its efforts to induce Austria's neighbours to give greater facilities to Austrian imports. When the Austrian delegation went to Geneva in May to meet the Council of the League of Nations, Dr. Mataja, the Foreign Minister, had a conversation with Dr. Benes, the Czechoslovakian Foreign Minister, and pointed out to him that Austria's financial difficulties were largely due to the tariff policy of her neighbours. Dr. Benes replied sympathetically, but could promise nothing till the new Commission of investigation, which had recently been appointed by the League of Nations, had made its report. However, negotiations for trade agreements were continued with Czechoslovakia, and were opened soon afterwards with Yugoslavia and Hungary. Agreement was first reached with

Yugoslavia, on September 3, Austria receiving a tariff reduction of between 20 and 30 per cent. on certain goods. Negotiations with Czechoslovakia made progress, but were not completed so quickly, while with Hungary a deadlock was reached, owing to the inadequacy of the terms offered by that country.

In

Concurrently with the Government's endeavours to secure tariff concessions, an unofficial but influential agitation was carried on in favour of the "Anschluss" with Germany, as an alternative method of improving the economic situation. January two prominent members of the Pan-German Party, Dr. Dinghofer and Dr. Franck, visited Germany in order to encourage the idea of a rapprochement, and found a sympathetic reception. In May there was founded in Vienna a GermanAustrian" Arbeitsgemeinschaft," or Co-operative Committee, with an influential membership from all parties, especially the Socialists, for the purpose of working out a plan for the ultimate union of the two countries. These activities were viewed with disfavour in Czechoslovakia and also in Italy, where Signor Mussolini denounced them with characteristic vigour; and the Government was careful to dissociate itself from them. When the German-Austrian negotiations for the abolition of passport visas between the two countries broke down in May, the Austrian negotiators were strongly criticised in the National Assembly for losing such an opportunity of drawing closer to Germany. After a brief lull, due to a renewal of hopes in the League of Nations, the agitation revived, and at the end of August the Austrian-German People's League held a great demonstration in Vienna, which was attended by an influential German delegation headed by Dr. Löbe, the President of the Reichstag, and which showed great enthusiasm for the idea of Austria's union with Germany. In a debate in the National Assembly on October 13, the leader of the Opposition, Herr Leuthner, strongly attacked the Government for what he called their "sabotage" of the union of Austria to Germany. A vigorous reply by Dr. Mataja, the Foreign Minister, gave rise to a stormy scene, and the President was forced to adjourn the sitting.

During the first two months of the year the Ministry of Finance had succeeded in keeping the Budget deficit well within the limits allowed by the League of Nations, but subsequently expenditure rose more rapidly than revenue, so that the Budget figures for June, issued at the end of May, showed a deficiency of 9.49 millions of schillings (the new currency denomination, now officially used for the first time) on an estimated expenditure of 70.99 millions of schillings, which was more than the one-twelfth allowed under the Geneva scheme as revised in the previous September. Nevertheless, the League of Nations Council, at its meeting in May, consented to release 18 million dollars from the unspent balance of the loan for the electrification of the Austrian railways, which,