A large number of the taxpayers were called upon to contribute to this “Defence Levy,” within two years, a third or more of their income. For manufacturers, bankers, commercial companies, and others who had capital in reserve, this sacrifice was not very hard to make. A landed proprietor, however, who lived on the income derived from his estate, would be compelled either to cut down expenses or to raise money on a mortgage. In the same way, a person who depended on the modest proceeds of his investments would have to sell or mortgage a portion of his holdings. For permanent expenditure, the Committee rejected the increase in matricular assessments proposed by the Government, on the pretext that the Empire ought not to beg for alms from the federated States. On the other hand, it accepted, with some modifications of detail, the principle of taxing increments of wealth and capital. It exempted princely families, but not limited companies. At the second and third readings, the Reichstag adopted the resolutions of its committee. On 30th June, the date recommended by the Government, the bill for financial cover was passed, as I have said above, by a notable majority, composed of the Liberal and Socialist groups, with which the Centre had combined, the Conservatives forming the bulk of the opposition. It was a great victory for the more advanced elements, Progressive and Socialist. The Centre and the National Liberals rallied to their standard, being convinced that it was impossible to revive the Bassermann-Erzberger proposal. In point of fact, the bill passed by the Reichstag proceeded, to a great extent, upon the same lines as the measure proposed by these two deputies. A series of direct taxes, on an enormous scale, now swelled the resources of the Empire, while their yield, in accordance with the Bismarckian policy, was almost entirely reserved for the individual States. The Socialists would have liked to go further and throw the whole weight of this burden upon the shoulders of the privileged classes. After all, the Reichstag vote was, in a way, a breach of the federal compact, and an invasion by the Imperial Parliament of the rights of individual States. It marked a stage in the journey towards complete unification of the Empire by means of fiscal processes. This encroachment by the central power was not accepted without a murmur by Saxony and the southern States. Their deputies in the Reichstag were forced to bow to the higher necessities pleaded by the Government, and to ratify a measure which claimed to be in the interests of the nation as a whole. It may be said that from this time onward the fiscal independence of the federated States ceased to exist.