DIPLOMATIC CORRESPONDENCE. 
 
199 
 
Holstein and Lauenburg are already in possession of the troops acting under

the orders of the federal Diet, and the Danish officials have either been
sup- 
planted, left the provinces, or acknowledged the authority of the civil com-

missioners that accompany the expedition, and, under the eyes and within
the 
hearing of these commissioners, a new dynasty is being proclaimed. The Saxon

and Hanoverian troops are now in occupation, and they, as well as their nations,

sympathize with Prince Frederick. -Prussianand Austrian troops are moving

towards, and are in, the duchies, and the ruling powers of these countries
desire 
that the Diet shall pronounce upon the Prince. of Augustenburg's title before

they define their position upon the question. Austria is against setting
up the 
prince as duke, in any event; Prussia may or may not be, according as it
sees 
.safety in resisting the popular demand. 
The immediate question now is, will Schleswig be occupied?  It is believed

that the attempt to do it will lead to a collision and war, and the rulers
of Eu- 
rope fear war at the present time. The German people are for it, as they
say, 
in defence of, and for the protection of, their oppressed brethren in the
duchies; 
and with many there is another underlying motive, and that is the belief
that 
a general war will bring in its train a relief from some of the dynastic
influ- 
ences that press down the liberal element. 
His Majesty the King of Prussia is still in disagreement with his people
and 
their representatives in the legislature. He asked for twelve millions, to
meet 
the exigencies of the SchlesvAig-Holstein difficulty, and, notwithstanding
the 
strong desire on the part ofthe people that Prussia should actively interfere
in 
these matters, their representatives refuse the money, demanding a change
of 
the ministry, and giving as their reason that they have no faith in the proper

application of the funds if intrusted to the present ministry. 
I am, sir, your obedient servant, 
N. B. JUDD. 
Hon. WILLIAM H. SEWARD, 
Secretary of State, Washington, D. C. 
Mr. Judd to Mr. Seward. 
[Extract.] 
No. 55.]                               UNITED STATES LEGATION, 
Berlin, February 2, 1864. 
SIR: Your despatch to Mr. Kreismann, as charge d'affaires, No. 9, and dated

January 7, 1864, is received. 
The interior politics of Prusia, and the contest between the ministers and

the Chamber of Deputies, have again culminated in a prorogation of the two

houses. The budget for the current year, presented by the ministry to the

Chambers, contained the oft rejected items for the reorganization of the
army, 
and the same overwhelming majority again rejected these items. 
The ministry also asked authority to make a loan of twelve millions, to meet

the expenses to be incurred by-the Prussian government in performing its
obliga- 
tions as a member of the German Bund in the federal execution in Holstein,
and 
his Majesty, in a message in responseto the address voted by the second Chamber,

pledged his royal word that the funds'should be applied to the object specified.

he house refused to authorize the loan, and, in addition, resolved that a
loan 
effected without its sanction would be a violation of the constitution, and
its 
repayment would not be obligatory upon Prussia. In the conduct of Prussian

finances it has been for years the practice not to anticipate revenue, but
to use