The reform of the educational codes, including religious instruction in primary and secondary schools, was passed on September 2 by the Cabinet, and came into operation with the reopening of the scholastic year. The measure had been discussed with some heat throughout the summer, and the controversy culminated with a students' agitation which led, in December, to the closing of several Universities and in which Signor Mussolini discerned a grave infringement of the national discipline, which he places in the forefront of his policy. On December 13 he issued a severe warning to all concerned, and the disturbances eventually subsided.

In January a Royal Decree was issued, abolishing all wartime rent restrictions as from the following July, with provisions, however, to safeguard tenants against exactions and landlords against undesirable occupants of their premises. Arbitration Commissions were set up in all provincial centres to deal with cases upon their merits, according time-extensions of varying length but not to reach beyond July, 1924.

On June 19 alarming reports were received of the eruption of Etna. The King and afterwards Signor Mussolini proceeded to the spot. Happily the lava traversed uninhabited districts, and whilst cultivated and wooded areas on the N.W. mountain slope were devastated, observations taken from the air,-for the first time,-enabled the lava flow to be timed, and the exodus of the inhabitants from villages within the danger zone to be regulated, and so to preclude loss of life.

The proceedings of the Legislature during the year were not without importance. In the first session, which opened on February 6 for the Deputies and on February 8 for the Senate, Parliament ratified the Washington Naval Disarmament Convention, and the commercial agreements entered into with Czechoslovakia, Poland, France, and Spain; while among domestic questions the Legislature sanctioned (March 16) the transfer to private enterprise of a number of Government undertakings, including the railways, telephones and parcels deliveries. On June 8 Signor Mussolini in the Senate reviewed the position at home and abroad, and on June 9 the Chamber delegated powers to the Cabinet to proceed with the reform of the civil, commercial and maritime law codes.

At the opening of the brief Parliamentary session in December, Signor Mussolini, speaking in the Senate, reviewed the foreign policy of Italy and observed that whilst the acceptance of Mr. Bonar Law's proposals for the Reparations settlement would not have harmonised with Italian interests, he had expressed his concurrence with the British policy in its broad lines. Dealing with Russia, he submitted that the time was ripe for the de jure recognition of the Soviet Government, adding that a do ut des policy best furthered Italian interests, and should stimulate the opening of new markets for Italian export trade, whilst access to a practically untapped source of raw material such

as Russia is, could not but prove of advantage to Italian industries.

This session transacted only more or less formal business. Signor Mussolini did not ask for the renewal of the full powers accorded to him by Parliament, and which lapse on December 31. This is certainly a long step in the direction of normal parliamentary government. That Signor Mussolini himself desires to see Fascismo rule on strictly constitutional lines is shown by the following pronouncement made by him since the rising of Parliament in December: "I feel to-day that Italy is well forward upon the course of her renascence, and that the network of demagogic fallacies which encompassed her is broken, a network that choked and hemmed in the will and desire of my countrymen to work, and to win speedily the fruits of their endeavours. It behoves Italy to recover quickly from her century-old ills, in order that she may take her due place upon the same level with the other great nations in the world.'

CHAPTER IV.

GERMANY AND AUSTRIA.

GERMANY.

AT the end of 1922 the combined Allied Powers and Germany itself were faced with the task of making some practicable arrangements for the payments in money and kind to which Germany was pledged by agreements concluded during previous years. The depreciation of the German currency which had followed all decisions for securing reparations hitherto had convinced economic experts in most countries that this problem could be solved only if Germany were granted a moratorium of several years, which would give her an opportunity of rectifying her finances and her trade balance, so as eventually to become capable of making regular payments in a sound currency. It was further recognised that Germany's capacity to pay depended on her maintaining internal peace, for which purpose it was essential that agitators who aimed at overthrowing by violence the Constitution set up after the war should not be allowed to win new adherents, that the smouldering Bolshevist propaganda should not burst into flame again, and that the Separatist designs which were still fostered here and there in the West and South should not receive encouragement.

But the public opinion and the policy of France, which was supported in this matter by Belgium, were guided by quite other considerations. In those countries it was confidently asserted that Germany's capacity for making reparation payments was far greater than was admitted by German and foreign experts; and the conclusion was drawn that Germany's

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creditors should recover payment from the recalcitrant debtor by the forcible seizure of pledges. In the French mind the problem of reparations was further bound up with that of security." The Nationalist agitation in Germany, which other countries thought to allay by means of a reasonable treatment in the economic sphere, was regarded by French politicians as revealing the real inner mind of Germany, and the opinion gained ground in France that the territorial and military guarantees of the Treaty of Versailles were not sufficient for her purposes. On this ground also an intensification of the pressure on Germany was demanded.

The step by which practical expression was to be given to these feelings was the occupation of the Ruhr district by France and such Powers as were willing to help her. It was a step which could be carried through quickly, as the Ruhr adjoins the districts on the Rhine already occupied.

It was not primarily the desire for reparations but considerations of security and schemes of domination which at the opening of the year led to the inception of the Ruhr enterprise, followed as it was bound to be almost immediately by the disorganisation of Germany. On all sides efforts were made to dissuade the French Government. The German Government in December, 1922, drafted a special Franco-German pact which separated the problem of security from that of reparations, and so rendered possible a harmonious solution of the latter. When this project failed to find a hearing in Paris, Chancellor Cuno on the last day of the year in a speech at Hamburg proclaimed once more the willingness of Germany to carry out her reparation obligations. A new scheme of payment was elaborated which Herr von Bergmann was to lay before the approaching Conference of the Allied Premiers in Paris.

The Conference which opened on January 2 was nominally necessitated by the cessation of Germany's payments and her request for a postponement. The French were for immediate action and proposed the invasion of the Ruhr. But as is well known, England refused to take any part in France's policy of pledges and sanctions. So far was this from causing difficulty to France that it actually increased her freedom of action. For the body which was principally charged with the task of carrying out the provisions of the treaty was not the Federation of the Allies but the Reparation Commission; and in this body France held the presidency, and so exercised dominating influence so long as England was passive.

Immediately after the conclusion of the Conference M. Barthou summoned a meeting of the Commission. He laid before it a complaint of France that Germany during 1922 had deliberately fallen short in her deliveries of wood and coal. German delegates were called before the Conference in order to explain these shortcomings. They were at pains to point out that the deficiencies were less than the French alleged,

and that they should not be ascribed to malice prepense. Nevertheless on January 9 the Commission pronounced Germany guilty of deliberate default, the British representative dissenting.

Mr. Boyden, who had been invited to the proceedings as the representative of the U.S.A., had declared that he did not question the guilt of Germany in the matter of deliveries, but that it was impossible to pick a single incident out of the whole reparation problem in order to make a small deficiency the excuse for applying most serious sanctions. The majority on the Reparation Commission, following the lead of France, proceeded on the strength of the Commission's verdict to carry into effect the two main ideas of the French programme of January 2, the seizure of the Ruhr coal as a "pledge," and the occupation of the Ruhr district as a "sanction," without the co-operation of England. Even while the Commission was debating, troops had been collected in Düsseldorf for the invasion. A mission of mining and smelting engineers had been formed to organise the exploitation of the Ruhr district, and French and Belgian troops had been put under orders to accompany this mission. Italy on the other hand contented herself with sending engineers, and took no part in the subsequent occupation measures.

On January 10 the French Ambassador and the Belgian Chargé d'Affaires in Berlin handed in identic Notes, representing the impending step as justified by the deficiencies established by the Commission and as being in accord with Paragraphs 17 and 18 of Annexe II. to Section VIII. of the Versailles Treaty. The Mission, it said, desired to supervise the activity of the Coal Syndicate, and for this purpose claimed the right of requiring information and documents of every kind from the local authorities, commercial corporations, and private concerns; further, it would be authorised to alter the distribution of coal and coke planned or being carried out by the Coal Syndicate. Military compulsion or political interference, went on the Note, was not for the present contemplated, but would be resorted to if the proceedings of the Mission and the quartering of the accompanying troops met with impediments. At midday on January 11 the Mission with its escort entered Essen.

The action of France and Belgium placed the German Government for the first time since the war in the position of being able to assert a will of its own in the face of the victorious Powers, and at the same time made this assertion a matter of necessity. The Imperial Chancellor in his speech in Parliament on January 10 described the invasion as an open breach of law, all the more flagrant in view of the steps which he had just undertaken to satisfy French requirements in the matter of security and to proclaim Germany's willingness to pay. The occupation, he concluded, robbed Germany of just that district the products of which had enabled her to

make payments so far. Germany's answer to the appeal to force would be an appeal to law.

In pursuance of this, two steps were immediately undertaken. One was a formal protest against the illegality of the invasion, and the other was the recall of the German Ambassador in Paris and the German envoy in Brussels, along with the announcement that reparation payments to the countries which had broken the Treaty would be suspended. A similar step was taken by the Coal Syndicate which had been designated by France as the immediate object of the invasion: it left Essen, and removed its headquarters to Hamburg. This was the beginning of the "passive resistance" which was the keynote of German policy during the next few months.

The German Government felt itself emboldened to adopt this attitude by the external no less than by the internal situation. No sooner had Great Britain declined to participate in the French policy than the United States proclaimed its resolution of keeping clear of all entanglements to which it might give rise, and recalled its troops from the occupied Rhine district. Above all, however, the policy of passive resistance was able to count on the approval of the working-class population of the Ruhr. These workers had often shown a stubborn spirit of resistance against the German capitalists; they were still less likely to submit to the control of foreigners. The Christian Trade Unions were under the leadership of the Centre Party, which belonged to the Government Coalition. The Social Democrats, it is true, were not represented in the Cuno Government, which they mistrusted on account of its connexion with the great industrialists. But they welcomed resistance to the occupation not only because they hated oppression, but because they were as a party devoted heart and soul to the unity of the nation and the Reich, and recognised that it now devolved on the workers of the Ruhr to defend this unity. Their leader, Hermann Müller, proclaimed on January 13 in the Reichstag that the workers in the Ruhr would be loyal to their country, and the Government obtained an almost unanimous vote of confidence.

The problem now arose how this population, which could no longer work for reparations, might find opportunities of employment under the occupation regime. The representatives of the invading Powers inquired of the colliery owners whether it was not possible for coal to be delivered to the Allies and paid for by them until the German Government had finally decided on its attitude. The coal-owners showed themselves not averse to this proposal, which offered a prospect of maintaining normal conditions; but they did not want to do anything which might impede the German Government in its policy of resistance. The Government saved them the necessity of deciding. While they were still discussing with the French, a rescript came from the Imperial Coal Commissioner forbidding all deliveries to the