Meanwhile, Bute was sedulously at work to clear the way for his own assumption, not merely of office, but of the whole power of the Government. He acted as already the only medium of communication with the king, and the depositary of his secrets. He opened his views cautiously to Bubb Dodington, who was a confidant of the Lichfield House party, and still hungering after a title. Dodington advised him to induce Lord Holderness to resign and take his place, which, at first, Bute affected to disapprove of, but eventually acted upon. The first object was to get rid of Pitt, who, by his talents and haughty independence of manner, was not more acceptable to the king and his counsellor, Bute, than by his policy, which they desired to abandon. Pamphlets were therefore assiduously circulated, endeavouring to represent Pitt as insatiable for war, and war as having been already too burdensome for the nation.

On the 21st of March Parliament was dissolved by proclamation, and the same day the Gazette announced several of the changes determined on in the Ministry. The Duke of Bedford retired from the Lord-Lieutenancy of Ireland, and his place was taken by the Earl of Halifax. Legge, who was considered too much in the interest of Pitt, was dismissed, and Lord Barrington now took his place of Chancellor of the Exchequer. Charles Townshend took Barrington's former office, and Sir Francis Dashwood became Treasurer of the Chambers in room of Townshend. Both Townshend and Dashwood had gone over to the party of Bute. Lord Holderness was now made to do what Dodington had before suggested; he resigned his office of Secretary of State, and in due course Bute was gazetted as appointed to that post. No notice of this change had been communicated to Pitt, the other and Chief Secretary, till it took place.

On the 8th of July an extraordinary Privy Council was summoned. All the members, of whatever party, were desired to attend, and many were the speculations as to the object of their meeting. The general notion was that it involved the continuing or the ending of the war. It turned out to be for the announcement of the king's intended marriage. The lady selected was Charlotte, the second sister of the Duke of Mecklenburg-Strelitz. Apart from the narrowness of her education, the young princess had a considerable amount of amiability, good sense, and domestic taste. These she shared with her intended husband, and whilst they made the royal couple always retiring, at the same time they caused them to give, during their lives, a moral air to their court. On the 8th of September Charlotte arrived at St. James's, and that afternoon the marriage took place, the ceremony being performed by the Archbishop of Canterbury. On the 22nd the coronation took place with the greatest splendour.

We must now step back a little to observe the war on the Continent from the opening of the present campaign. Frederick of Prussia lay encamped during the winter in Silesia, surrounded by difficulties and enemies. His resources both in money and men appeared well nigh exhausted. The end of autumn, 1760, brought him the news of the death of George II., and, from what he could learn of the disposition of his successor and his chief advisers, it was certain that peace would be attempted by England. This depressing intelligence was confirmed in December by the British Parliament indeed voting again his usual subsidy, but reluctantly, and he found it paid with still more reluctance and delay. Whilst thus menaced with the total loss of the funds by which he carried on the war, he saw, as the spring approached, the Russians and Austrians advancing against him with more than double his own forces. Disasters soon overtook him. The capture of Schweidnitz enabled the Austrians to winter in Silesia, which they had never yet done during the war; and the Russians also found, to their great satisfaction, on arriving in Pomerania, that they could winter in Colberg. The Russian division under Romanzow had besieged Colberg both by land and sea, and, despite the attempts of the Prussians sent by Frederick to relieve it, it had been compelled to surrender. In these discouraging circumstances Frederick took up his winter quarters at Breslau. His affairs never wore a darker aspect. He was out-generaled and more discomfited this campaign than by a great battle. His enemies lay near in augmented strength of position, and his resources had ominously decreased.

The campaign against the French was opened in February by Prince Ferdinand of Brunswick attacking the Duke de Broglie, and driving him out of Cassel. Prince Ferdinand followed up this advantage by attacking them in Marburg and Göttingen, and applied himself particularly to the siege of Cassel. But Broglie, now recovered from his surprise, first defeated the hereditary Prince of Brunswick, Ferdinand's nephew, at Stangerode, and then repulsed Ferdinand himself from Cassel.

The destruction of the French magazines delayed their operations till midsummer, when Broglie advanced from Cassel, and the Prince Soubise from the Rhine, to give Ferdinand battle. On the march they fell in with Sporken, and this time defeated one of his posts, and took nineteen pieces of cannon and eight hundred prisoners. The Allies awaited them in front of the river Lippe, and between that river and the Aest, near the village of Kirch-Denkern. The French were routed at all points, having lost, according to the Allies, five thousand men, whilst they themselves had only lost one thousand five hundred. The effect of the victory, however, was small.

If the French had been by no means successful in Germany, they had been much less so in other quarters of the globe. In the East Indies we had taken Pondicherry, their chief settlement, from them, and thus remained masters of the whole coast of Coromandel, and of the entire trade with India. In the West Indies, the French had been fortifying Dominica, contrary to treaty, and Lord Rollo and Sir James Douglas were sent thither, and speedily reduced it. France, indeed, was now fast sinking in exhaustion. Louis XV. was a man of no mark or ability, inclined to peace, and leaving all affairs to his Ministers, and still more to his mistress, Madame de Pompadour. Choiseul was a man of talent, but of immense vanity, and little persistent firmness. He was now anxious for peace, but, too proud to make the proposal directly, he induced the Courts of Russia and Austria to do it. It was suggested that a congress should be held at Augsburg for settling the peace of Europe. England and Prussia readily consented. But the Duke of Choiseul, anxious to have a clear understanding of the terms on which England and France were likely to treat, proposed a previous exchange of views, and dispatched M. Bussy to London, whilst Mr. Pitt sent to Paris Mr. Hans Stanley.

Choiseul made, undoubtedly, a large offer for peace. It was that each power should retain all such of its conquests as should be in its hands, subject to exchanges and equivalents, in Europe, on the 1st of May next; in America, the West Indies, and Africa, on the 1st of July; and in the East Indies on the 1st of September. But Pitt had declared that he would never make another peace of Utrecht. He considered that we had France down, and he determined to retain everything of value. He therefore replied that the proper period for the principle of the treaty to take place was that on which the treaty was really signed, that it might so happen that it would not be signed at the dates named, and he did this in order to complete a scheme, which he had already nearly accomplished, that of seizing on Belleisle, an island on the coast of France. It surrendered in July, and the news of this loss was speedily followed in Paris by that of the loss of Dominica in the West, and of Pondicherry in the East Indies.

These reverses were calculated to make France more compliant; yet Pitt was astonished to find, instead of compliance, a great spirit of resistance. Choiseul would by no means admit that Belleisle was an equivalent for Minorca. He demanded Guadeloupe and Belleisle too, simply in lieu of the French conquests in Germany. He now demurred to the surrender of Cape Breton, or in any case to forego the right of fishing along its coasts. He was not content with Amaboo or Acra; he demanded Senegal or Goree. He declined also to destroy the fortifications of Dunkirk, raised in contempt of the treaty of Utrecht. All captures made at sea previous to the declaration of war must be restored; and in Germany, though he was willing to withdraw the French troops, it was only on condition that the troops commanded by Prince Ferdinand should not reinforce the Prussian army.

The secret of this wonderfully augmented boldness of tone on the part of France soon transpired. Choiseul had been endeavouring to secure the alliance of Spain, and saw himself about to succeed. Spain was smarting under many losses and humiliations from the English during the late war. Whilst General Wall, the Spanish minister at Madrid, urged these complaints on the Earl of Bristol, our ambassador there, Choiseul was dexterously inflaming the minds of the Spanish Court against Britain on these grounds. He represented it as the universal tyrant of the seas, and the sworn enemy of every other maritime state. He offered to assist in the recovery of Gibraltar, and to make over Minorca to Spain. By these means he induced Spain to go into what became the celebrated Family Compact—that is, a compact by which France and Spain bound themselves to mutually succour and support each other; and to admit the King of Naples, the son of the Spanish king, to this compact, but no prince or potentate whatever, except he were of the House of Bourbon.