"Your attention will be claimed in a special degree to the improvement of the administration of justice, and to a project for a complete identical code for the whole monarchy.

"Bills will also be presented to you relative to superior law appointments and law examinations, relative to expropriation, and also a Bill for introducing modifications, urgently desired by the commercial world, in the bankruptcy laws.

"Moreover, proposals will come before you for reforming the mortgage laws; and a general game law, to obtain throughout the whole monarchy, has been drawn up.

"By the conclusion of a revised Rhine Navigation Act, a new international agreement has been obtained for the traffic upon one of the most important of rivers. My Government will lay this convention before you for approval, in accordance with the Constitution.

"It affords me satisfaction that a return of the distress which afflicted a portion of the province of Prussia last year need not be apprehended this winter-a result due to the measures which were taken with your approval, to the devoted activity of the authorities and corporations, and to this year's favourable harvest in every province of the monarchy.

"The relations of my Government with foreign Powers in every direction are satisfactory and friendly. The events in the Western Peninsula of Europe can give rise to no other feeling within us than the wish and confidence that the Spanish nation will succeed in finding in the independent formation of her national position a guarantee of her future prosperity and power.

"A proof of united progress in civilization and humanity has been afforded by the International Congress, which has just accomplished at Geneva the task of completing and extending to the navies the principles already settled previously for treating and caring for the wounded in war. We may hope that the moment is far distant which will call for the application of these principles. The sentiments of the Sovereigns of Europe, and the nations' desire for peace, give ground for trusting that the advancing development of the general welfare will not only suffer no material disturbance, but will also be freed from those obstructing and paralyzing effects which have only too often been created by groundless fears taken advantage of by the enemies of peace and public order.

"Let the Diet proceed to its work of peace penetrated with this confidence."

In a speech delivered by Count Bismarck in December, he made the following remarks in answer to a bitter attack made by one of the deputies upon Baron Beust, the Austrian Minister:-"It is absolutely impossible for me to defend a foreign Minister without dilating on the policy of the State he serves, a task I do not feel called upon to perform at this moment, with regard to the Chancellor of the Austro-Hungarian Monarchy. Still, I may observe that I am ignorant of the existence of personal hostility to myself or this Government in-if I may call him so-my Austrian col

league. In former years I was on a friendly footing with him, and have no reason to suppose that a change has occurred. I should therefore deem myself bound to vindicate his conduct against what has fallen from a preceding speaker, had I not reasons for wishing to steer clear of the quicksands of international policy in to-day's debate. As to Austria's Liberalism, it consists in an army of 800,000, demanded and voted for a period of ten years, and some municipal arrangements introduced in Prussia fifty years ago. Even these Count Beust has taken care to render innocuous by a vigorous supervision on the part of the administrative authorities. Au reste, there is this similarity between Liberal Governments and the reigning beauties of the season, that the last out generally carries the day."

AUSTRIA.

A document called the Red Book was issued by the Austrian Government in February which gave a view of the political relations of the Empire with other States. With respect to the policy of Austria herself they said, "Austria, having by great sacrifices extricated herself from the events of 1866, is firmly resolved to follow both at home and abroad the policy of peace and conciliation as the only salutary one for the present as well as the future. His Majesty the Emperor-King, as well as the people of the Empire, are conscious that the war which Austria was forced to fight against two powerful enemies was neither unjust nor inglorious. But this thought is free from all idea of retaliation, and since the Peace of Prague, Austria, with respect both to Prussia and Italy, has the same pacific and friendly sentiments which she manifests with respect to the other Powers."

With respect to Germany and Italy,-" Austria entertains, since the treaty of Prague, the same peaceful and friendly sentiments towards Prussia and Italy as towards the other Powers. Though Austria's loss of her position in Germany did not imply the extinction of her sympathies towards her former Federal allies, she nevertheless would not side with Prussia in the Luxemburg difficulty. On the other hand she would not attempt to profit by a war between France and Prussia, and the Imperial Government, therefore, took care to prevent the Emperor Napoleon and the French statesmen from expecting the co-operation of Austria in a conflict with Prussia. Impartial and neutral, Austria's attitude must have greatly contributed towards the preservation of peace. In any further proffer of its good offices the Imperial Government was compelled to act with the greatest prudence, as it desired neither to exercise any pressure upon Prussia to induce her to sacrifice German national interests, nor did it wish to lay itself open to the suspicion of confirming Prussia in her resistance with the view of bringing about a conflict. . . . . Without departing from the standpoint of the treaty of Prague, the Imperial Government

did not allow itself to be delayed in the pursuit of its peaceful occupations by the new state of things which had been brought about through the treaties of alliance between Prussia and South Germany, nor did the Government of the Emperor think it necessary to enter a decided protest against this state of things on the ground of its formal rights. On the contrary, it looked upon the treaties relative to the reorganization of the South German armies and the Parliamentary representation of the States of the Zollverein with no other feelings than good wishes and reserve, although those treaties limited in important respects the rights of the South German States to act independently, and subordinated their decisions to those of the Prussian Government. The Emperor's Government has regarded from an equally conciliatory point of view the question of North Schleswig, in regard to which the Treaty of Prague, in the 5th Article, bears traces of the mediation of France. The provision of the treaty referred to has not yet been carried out. Lastly, there is one fact which cannot be overlooked-namely, that while under the impression of the danger of an European war many an anxious glance was directed both from Berlin and Munich towards Austria, the intimations which were received respecting a new alliance were too vague and too exclusively favouring the interests of one side, for Austria to sacrifice for it the freedom of action she obtained in exchange for the rights and duties cancelled at the termination of the era which closed with a dissolution of the German Confederation."

With regard to the relations of Austria towards Italy and the Roman question, the Red Book stated, "As Austria has attached great value to the maintenance of friendly relations with Italy, so also has Italy shown herself equally well disposed towards Austria. The withdrawal of the French army of occupation from Rome aroused dormant passions, and manifested the full danger of the conflict between the Italian claims to unity and the interests of Catholicity. The most open declarations were made to the Pope of the impossibility of Austria's affording the Holy See any material support. The despatch of Austrian corvettes to Civita Vecchia in November, 1866, for the protection of Austrian subjects was at first regarded by France as a sign of mistrust. Mutual declarations which followed between Austria and France removed all doubts of the latter's firm determination to insist upon the execution of the September Convention. The apprehensions of Roman diplomatists induced Austria in March, 1867, to request information from the French Government respecting the then threatening eventualities in connexion with the Roman question. At that time the extent of the danger was doubted in Paris. . . The Imperial Government, appreciating the just desire of France to lessen her responsibility, by submitting the Roman question to the united consideration of all the European powers, accepted not only the invitation to a Conference without any distinct programme, but also a proposal proceeding from another quarter for a preliminary

Q

[1868. Conference of the five great Powers. The Austrian Government awaits the realization of this proposal."

On the 25th of May new laws which had been passed on the subject of marriage and education, withdrawing these both from ecclesiastical jurisdiction, received the sanction of the Emperor. By these laws the Concordat was virtually abolished, and religious freedom was established in Austria. Marriage was made matter of civil contract, and schools were thrown open to all without distinction of creed. It was a great step in advance, and the death-blow of priestly domination.

At the end of October, Baron Beust having in his speech on the Army Budget represented the political situation of Europe as rather critical, he was reminded that Lord Stanley, the English Foreign Minister, had a short time before spoken of it in more favourable terms, upon which he said, "My position differs materially from that of the English Secretary of State. Lord Stanley is the Minister of a country surrounded and protected by the sea: I have the honour of directing the affairs of a State which has every reason to beware of its neighbours. We should, of course, be glad to be on friendly terms with Prussia, and are even endeavouring to improve our relations with the St. Petersburg Cabinet; but, as I said, we must be on our guard, though there is nothing to excite our immediate fears."

Afterwards there appeared in the Vienna Presse, a semi-official journal of the Austrian Government, the following remarks:"That Austria's military preparations are merely defensive must be plain to any one that is not wilfully blind. To assume the contrary is simply to offend against common sense, or to enact over again the old story of the lamb and the wolf. But of course we owe it to our own interests not to allow ourselves to be netted and bagged. Our rival is showing an unmistakable intention of reviving the Oriental question to enable him to cross the Maine. It is this policy which encourages Russia to assume a haughty and menacing attitude towards Western Europe, and which is evidently intent on encompassing Austria with flames of revolutionary fire, from the Red Tower Pass to the Alps-from the River Save to the Bocca di Cattaro."

In October Baron Beust made a speech, justifying the necessity of maintaining the Austrian army on the war footing of 800,000 men. He is reported to have said, "Austria maintains the best relations with France and England, and is also upon the most friendly footing with Italy. The latter Power, however, has not always complete freedom of action. Austria remains unchanged in her resolve to abandon all policy of revenge against Prussia. With Russia Austria also seeks to maintain friendly relations. In view, however of the possibility of a conflict between France and Prussia, Austria is obliged to remain armed, as much to cause her own neutrality to be respected as to keep back other Powers who might be inclined to attack."

In November the Emperor addressed a letter to Baron Beust, in which he ordered that henceforth the title of the Emperor in treaties with foreign Powers should be Emperor of Austria, King of Bohemia, &c., and Apostolic King of Hungary; in the text of these treaties the abbreviated form, Emperor of Austria and Apostolic King of Hungary was to be used, and his Majesty would then be spoken of as his Majesty the Emperor and King, or his Imperial and Royal Apostolic Majesty.

It was further ordered that the whole of the royal and other provinces should be designated as the Austro-Hungarian Monarchy or the Austro-Hungarian State.

In an address to the army on the 8th of December the Emperor Francis Joseph said, "The Monarchy wants peace; we must know how to maintain it. For this purpose I have had presented to both Legislatures a Bill by which, in case of necessity, the whole population may rise in arms to defend the dearest interests of the country. Both Legislatures have passed it, and I have sanctioned it.

"The reorganization of the Empire has been effected on those historical bases on which it reposed in the times when it fought out the most difficult wars successfully.

"Both sides of my Empire will have henceforth the same interests in defending its security and power.

"My army thereby gains an auxiliary which will support it in good and ill fortune.

"My people, without distinction of class, will now, according to the law, rank under my colours proudly. Let the army be the school of that courage without which empires cannot maintain themselves.

"Side by side with the army will be a new element, the Honveds, to help in the common defence. Its aim is the same, and it is composed of the same elements, nay, partly issues from the army itself.

"I turn with confidence to the army.

"It is my will that those who serve the country in arms should do so with pleasure. It is my will that the loyalty and comradeship that dear inheritance of the army-should animate all its parts, and that army, navy, and Honveds should hold together, like good comrades, animated by the same duties, and called to the same glory.

"I therefore confidently trust that all officers of the army and of the Honveds will receive this new institution in this spirit; particularly I expect that the Generals, as leaders, will draw closely the links which unite the two; that they will keep up the spirit of order and discipline, and stop from the beginning any false directions which may be taken.

My army has gone through hard trials, but its courage is not broken, and my faith in it is not shaken.

"The path of honour and loyalty on which the brave sons of my