required from the states to exceed the grants to them from the imperial exchequer. In 1903 Baron von Stengel, who succeeded Baron von Thielmann as finance minister in this year, proposed that the matricular contributions of the several states, instead of varying as heretofore with the exigencies of the annual budget, should be fixed by law. This plan, originally suggested by Dr von Miquel, was adopted by the Reichstag in May 1904. The deficits in the imperial budget, however, continued. In 1909 the whole system of German imperial finance was once more in the melting-pot, and, in spite of the undoubted wealth of the country, the conflict of state and party interests seemed to make it practically impossible to remould it on a satisfactory basis. Party changes. Secessionists. Freisinnige. The acceptance by Bismarck of the principle of Protection and his alliance with the Catholic Centre were followed by the disruption of the National Liberal party and a complete change in the parliamentary situation. Already the Liberal ministers, Falk and Hobrecht, had resigned, as well as Max von Forckenbeck the president, and Stauffenberg the vice-president of the Reichstag; in their place there were chosen a Conservative, and the Catholic Baron von Franckenstein. The whole party had voted against the Franckenstein Clause, but a few days later fifteen of the right wing left the party and transferred their support to the government. For another year the remainder kept together, but there was no longer any real harmony or co-operation; in 1880 nineteen, including most of the ablest leaders, Lasker, Forckenbeck, Bamberger and Bunsen, left the party altogether. The avowed cause of difference was commercial policy; they were the Free Traders, but they also justly foresaw that the reaction would extend to other matters. They took the name of the _Liberale Vereinigung_, but were generally known as the _Sezessionisten_; they hoped to become the nucleus of a united Liberal party in which all sections should join together on the principles of Free Trade and constitutional development. At the elections of 1881 they secured forty-seven seats, but they were not strong enough to maintain themselves, and with great reluctance in 1884 formed a coalition with the Progressives (_Freisinnigen_), who had gained greatly in strength owing to the breach among the government parties. They did so reluctantly, because they would thereby condemn themselves to assume that attitude of purely negative criticism which, during the great days of their prosperity, they had looked down upon with contempt, and were putting themselves under the leadership of Eugen Richter, whom they had long opposed. The new party, the _Deutschfreisinnige_, had no success; at the election of 1884 they secured only sixty-seven seats, a loss of thirty-nine; they were subjected to all inconveniences which belonged to opposition; socially, they were boycotted by all who were connected with