Next year, 1909, was the year of the famous finance reform measure which, though finally carried through, led to the resignation of Chancellor von Buelow.  It had been obvious for some years that a reorganization of the imperial system of finance with a view to meeting the growing expenses of the Empire, and in especial those of the army and navy, was necessary if imperial bankruptcy was to be avoided.  The practice of taking what were known as matricular contributions from the separate States to make up for deficits in the imperial budgets, and of burdening posterity by State loans, had one day to cease.  At the beginning of the reign the National Debt was 884 million marks (L44,200,000), and in 1908 over 4,000 million marks (L200,000,000).  A year before this Prince Buelow had made his first proposals for reform, including new taxes on beer, wine, tobacco, and succession duties on property.

All parties in Parliament, except of course the Social Democrats, admitted that fresh imposts were inevitable, but, very naturally, no party was willing to bear them.  The Conservatives would not hear of an inheritance tax and the Liberals would not hear of duties on popular consumption.  The result was to make the Centrum masters of the political field and place the Conservative-Liberal “bloc” at its mercy.  After long discussion, the Government proposals were put to the vote on June 24th, and as the Centrum threw in its lot with the Conservatives, the proposals were rejected by 195 votes to 187.  Prince Buelow thereupon went to Kiel and tendered his resignation to the Emperor, but at the latter’s urgent request consented to remain in office until financial reform in one shape or another had been effected.  This result was attained a month later, after much compromising and discussion.  The Chancellor renewed his request for retirement, and the Emperor agreed.  On the same day, July 14th, that the resignation took effect, it was officially announced that Herr von Bethmann-Hollweg, who had hitherto been Minister of the Interior, was appointed to succeed Prince von Buelow as Imperial Chancellor.

An impression prevails widely in Germany that Prince Buelow’s retirement was due to the loss of the Emperor’s favour owing to the Prince’s attitude towards the monarch during the “November storm.”  Prince Buelow, very properly, has always refused to say anything about his relations with his royal master, but a lengthy statement he made to a newspaper correspondent referring his resignation to the conduct of the Conservatives, and a letter from the Emperor gratefully thanking the Prince in the warmest terms for his “long and intimate co-operation,” and conferring upon him at the same time the highest Order in the Empire, that of the Black Eagle, should be sufficient evidence to disprove the supposition.  It is more probable that the Prince was weary of the cares of office and of the strife of party.  Moreover, he had, in the state of his health, a strong private reason for retirement.  Four years before, on April 5, 1906, he had fallen unconscious from his seat on the ministerial bench during the proceedings in the Reichstag, and although he was back again in Parliament, perfectly recovered, in the following November, the attack was an experience which warned him against too great a prolongation of such heavy work and responsibility as the Chancellorship entails.