Sooner, probably, than was expected came the result of the King's message to the peasants. M. Staaff, the day after the Royal speech, forwarded to the King a lengthy communication, to the effect that the measures of defence which the Government was about to lay before the Riksdag, though very comprehensive, yet might not fulfil all the expectations or demands of the military authorities. The King, however, in his message to the peasants, had said that he "would not abandon the demands as to the efficiency and readiness of the field army," "which by the experts within my army are stated to be indispensable." M. Staaff wanted to know whether the King would refuse to sanction any proposal which did not fully comply with these demands, and whether His Majesty in any respect had made up his mind beforehand as regarded the impending proposals, before his constitutional advisers had had an opportunity of humbly submitting their proposals and the views which had prompted them. The King replied that, as he had not seen the Government proposals or the experts' opinion upon them, he could not yet answer that question. (Hence the King could not have made up his mind beforehand.) To the second question the King's reply was to the effect that it was evident that he had not beforehand made up and could not make up his mind in any question, without first hearing the statements of his constitutional advisers or their proposals in Council.
This answer was not considered satisfactory by M. Staaff, who again addressed a communication to the King containing a drafted reply to be signed by His Majesty, stating amongst other things that his speech to the peasant procession was in no way intended to have the character of an act of State. The King's reply was in the main a short repetition of his answer to the former communication. A third letter from M. Staaff asked the King, when he intended to make any public statement of a political nature, to communicate it beforehand to the Government. The King replied, that he could not consent to this, as he would not deprive himself of the right to speak untrammelled to the people of Sweden.
The Staaff Ministry then resigned (February 10). On the day following some 5,000 Swedish students, in a great and enthusiastic procession, waited upon the King, and were greeted on their way to the palace with the utmost enthusiasm. In answer to their loyal and patriotic homage the King made a lengthy reply, maintaining at the outset his constitutional right and duty to state openly and without restraint his opinion of what he thought was for the good of his people; and, having urged the youth of the nation to assist him in his labours, the King wound up by saying: "Forward to our goal; a free and strong Sweden!" The proceedings were altogether marked by the most spontaneous enthusiasm.
The same day M. Staaff made a lengthy statement in the Second Chamber; the Liberals placed the responsibility upon the new Cabinet, and M. Branting, on behalf of the Social Democrats, thanked the retiring Government.
The formation of a new Ministry, as might have been expected, did not prove easy. Baron de Geer tried, but failed, and on February 13 the King entrusted M. Hammarskjöld with the task. Whilst Baron de Geer had tried to form a purely Liberal Ministry, M. Hammarskjöld, who had been a member of two previous Governments and Swedish Minister in Copenhagen, favoured the formation of a Conservative Ministry; the King, however, asked him to attempt the formation of a Liberal Government. On the 16th M. Hammarskjöld had his list ready as follows: M. Hammarskjöld, Premier and War Minister; M. K. Wallenberg, a well-known banker, Foreign Affairs; M. B. Hasselrot, President of one of the Courts, Minister of Justice; M. D. Broström, a large steamship owner, Minister of Marine; M. O. P. von Sydow, Interior; Baron J. G. Beck-Friis, Agriculture; M. A. F. Vennersten, Finance; Professor G. Westman, Ecclesiastical Minister; and Colonel B. Murcke, M. S. I. Stenberg, and M. S. N. Linner, Consulting Ministers. It may be noted that M. Wallenberg is the first Swedish Foreign Minister not of noble birth. The Hammarskjöld Ministry, admittedly, counted amongst its members some very able and distinguished men. It was formed solely to solve the defence problem.
The Riksdag was promptly dissolved (March 5), the Government at the same time publishing its manifesto or defence programme. The latter contained the various items embodied in the proposals of the defence committees, with the so-called "winter-line,"[28] coupled with the adoption of the Sverige type of warship. On the 11th the Liberal Union issued their manifesto, also containing the Defence Committee's proposals, but with the "summer-line" and leaving the naval plan in abeyance, as the committee had not completed its report on the Fleet; this programme consequently kept all which had been promised in the Karlskrona speech.
Ultimately the Ministerial programme was substantially as follows. The period of training for the Army was extended to 250 days (Nov. to July) with courses of thirty days each in four subsequent years. To the Navy were to be added two new divisions of four warships each for coast defence, the Sverige being included in the first; sixteen destroyers, two divisions of sea-going submarines, and two divisions of torpedo-boats.
An electioneering campaign followed, more violent and passionate than Sweden had ever witnessed, and perhaps rather disproportionate to the actual differences between the combatants. But there were, no doubt, deeper political instincts and influences at work. The result was a most serious set-back for the Liberals; most of the seats they lost went to the Conservatives, the rest to the Social Democrats. The respective strength of parties in the former or "A" Riksdag had been: Right 65, Liberals 101, Social Democrats 64; in the new or "B" Riksdag, the Right took the first place with 86 seats, the Social Democrats had 73, whilst the Liberals had become the smallest party, with but 71. The Left or Liberal joint majority in both Chambers, however, had not disappeared, though reduced from 76 to 34.
The new Riksdag assembled on May 18, and was occupied solely with the question of national defence. M. Staaff presided over the deliberations of the Defence Committee in a manner for which even his staunchest opponents felt it right to compliment him. Meantime no progress could be made, no solution reached, and even distinctly Liberal organs urged a speedy settlement, even if the demand for strictly Parliamentary Government must be postponed. The defensive programme set forth by the Social Democrats found no support whatever outside their own party.
On June 13 the Government introduced the Bill imposing a special tax for national defence. This tax is charged on income and capital jointly, according to a comprehensive sliding scale, the taxed sum comprising 10 per cent of capital; an income of at least 5,000 kr. is taxed on its full amount; on smaller incomes the tax is degressive, on larger it is progressive, the limit being reached at incomes exceeding 250,000 kr. (13,888l.), a sum which is increased, for purposes of taxation, by 1,250 per cent. The tax is 1 per cent. of the taxed amount; in other words, instead of increasing the percentage, the amount is increased. The measure in question devoted about 37,000,000 kr. (2,055,555l.) to land defence and 24,000,000 kr. (1,333,333l.) to naval defence, the expenditure being non-recurrent. The entire revenue from the defence tax was estimated to amount to 75,000,000 kr. (4,166,666l.).