This reorganization was a sign of the great increase of work which had already begun to fall on the imperial authorities, and was a necessary step towards the further duties which Bismarck intended to impose upon them.
Meanwhile the relations with the National Liberals reached a crisis. Bismarck remained in retirement at Varzin for nearly a year; before he returned to Berlin, at the end of 1877, he was visited by Bennigsen, and the Liberal leader was offered the post of vice-president of the Prussian ministry and vice-president of the Bundesrat. The negotiations broke down, apparently because Bennigsen refused to accept office unless he received a guarantee that the constitutional rights of the Reichstag should be respected, and unless two other members of the party, Forckenbeck and Stauffenberg, were given office. Bismarck would not assent to these conditions, and, even if he had been willing to do so, could hardly have overcome the prejudices of the emperor. On the other hand, Bennigsen refused to accept Bismarck's proposal for a state monopoly of tobacco. From the beginning the negotiations were indeed doomed to failure, for what Bismarck appears to have aimed at was to detach Bennigsen from the rest of his party and win his support for an anti-Liberal policy.
The session of 1878, therefore, opened with a feeling of great uncertainty. The Liberals were very suspicious of Bismarck's intentions. Proposals for new taxes, especially one on tobacco, were not carried. Bismarck took the opportunity of avowing that his ideal was a monopoly of tobacco, and this statement was followed by the resignation of Camphausen, minister of finance. It was apparent that there was no prospect of his being able to carry through the great financial reform which he contemplated. He was looking about for an opportunity of appealing to the country on some question which would enable him to free himself from the control of the Liberal majority. The popular expectations were expressed in the saying attributed to him, that he would "crush the Liberals against the wall." The opportunity was given by the Social Democrats.
The constant increase of the Social Democrats had for some years caused much uneasiness not only to the government, but also among the middle classes. The attacks on national feeling, the protest against the war of 1870, the sympathy expressed for the _Communards_, had offended the strongest feelings of the nation, especially as the language used was often very violent; the soldiers were spoken of as murderers, the generals as cut-throats. Attacks on religion, though not an essential part of the party programme, were common, and practically all avowed Social Democrats were hostile to Christianity. These qualities, combined with the open criticism of the institutions of marriage, of monarchy, and of all forms of private property, joined to the deliberate attempt to stir up class hatred, which was indeed an essential part of their policy, caused a widespread feeling that the Social Democrats were a serious menace to civilization. They were looked upon even by many Liberals as an enemy to be crushed; much more was this the case with the government. Attempts had already been made to check the growth of the party. Charges of high treason were brought against some. In 1872 Bebel and Liebknecht were condemned to two years' imprisonment. In 1876 Bismarck proposed to introduce into the Criminal Code a clause making it an offence punishable with two years' imprisonment "to attack in print the family, property, universal military service, or other foundation of public order, in a manner which undermined morality, feeling for law, or the love of the Fatherland." The opposition of the Liberals prevented this from being carried. Lasker objected to these "elastic paragraphs," an expression for which in recent years there has been abundant use. The ordinary law was, however, sufficient greatly to harass the Socialists. In nearly every state there still existed, as survivals of the old days, laws forbidding the union of different political associations with one another, and all unions or associations of working men which followed political, socialistic or communistic ends. It was possible under these to procure decisions in courts of justice dissolving the General Union of Workers and the coalitions and unions of working men. The only result was, that the number of Socialists steadily increased. In 1874 they secured nine seats in the Reichstag, in 1877 twelve, and nearly 500,000 votes were given to Socialist candidates.