Letter-writers say that the Elysée is marked by scenes of luxury and profligacy scarcely paralleled in the days of the Regent Orleans and of Louis XV. The President is known to be deeply involved in debt, and the Assembly has been called upon for a further dotation, which will of course be granted, in spite of the resistance of the Opposition. Fines and imprisonments of the conductors of the newspapers are growing more and more frequent.

GERMANY.

The scales have turned on the side of peace. The Gordian knot is to be untied, if possible, not cut. The affairs of Germany are to be decided by articles, not by artillery. The crisis seems to have been brought about by a peremptory demand from Austria, that Prussia should evacuate the Electorate of Hesse-Cassel within forty-eight hours, under the alternative of a declaration of war. At the same time a dispatch arrived from Lord Palmerston, hinting that in the event of war, the other powers could not preserve their neutrality. Thus brought face to face with war, both Austria and Prussia were frightened. A conference was proposed between Prince Schwartzenberg and Baron Manteuffel, the Austrian and Prussian Ministers. This took place at Olmutz, where articles of agreement were speedily entered into. The essential point of the agreement is, that all measures for the pacification of Germany shall be taken jointly by Austria and Prussia. If the Elector of Hesse-Cassel can not come to terms with his subjects, a Prussian and Austrian battalion are to occupy the Electorate. Commissioners from the two powers are to demand the cessation of hostilities in the Duchies, and to propose terms to Denmark. The formation of a new German Constitution is to be undertaken by a Conference, meeting at Dresden, Dec. 23, to which invitations have been sent jointly by the two powers, who are to stand in all respects on an equality. In the mean time both are to reduce their armies, as speedily as possible, to the peace footing. This agreement of the Ministers was ratified by the two sovereigns. In Prussia the opposition in the Chambers was so vehement that the Ministry dared not meet it, and adjourned that body for a month, till Jan. 3, the longest period practicable, in the hope that by that time the issue of the Dresden Conference might be such as to produce a favorable change. In the mean time, opposition to the proposed measure has sprung up from an unexpected quarter. Austria had hitherto acted in the name of the Diet; she now coolly ignores the existence of that body, and proceeds to parcel out all the power and responsibility between herself and Prussia. The minor German States find themselves left entirely out of the account. They remember the old habit of powerful states, to indemnify themselves at the expense of the weaker ones, for any concessions they have been forced to make to each other; and suspecting some secret articles; or, at least, some understanding not publicly avowed, between the two powers, they tremble for their own independence. The sense of a common danger impels them to a close union, but they are destitute of a rallying point. A portion of them, with Austria at their head, had declared themselves the Diet; but if Austria, the constitutional president, withdraws, the Diet can not have a legal existence. The Dresden Conference, therefore, meets, with three parties, having separate interests and fears: Austria, Prussia, and the minor States—the governments, that is, of all these—while behind and hostile to the whole, is the Democratic element, predominant probably among the Prussians, strong in the lesser States, and not powerless even in Austria, hostile to all existing governments, or to any confederation they may form, whether consisting of a duality of Austria and Prussia, or a triad, composed of these and a coalition of the minor States; but longing, instead, for a German unity. The cannon is still loaded; the priming has only been taken out.

The last advices from Dresden, of Dec. 28, bring us an account of the opening of the Conference by speeches from the Austrian and Prussian Ministers. That of the former was highly conservative in its tone, dwelling mainly upon the advantages secured by the old Confederation. The speech of the Prussian Minister, on the contrary, hinted strongly at the inefficiency which had marked that league. The proceedings, thus far, have been merely preliminary. The return of the Elector of Hesse-Cassel to his dominions, under the escort of Austrian and Prussian troops, was marked by sullen gloom on the part of the people. Preparations for the forcible disarmament of Schleswig-Holstein by Austrian and Prussian forces are actively going on; it is feared that the Duchies will make a bloody and desperate resistance.

The internal condition of Austria is far from settled. So arbitrary have been the proceedings of Government, that even the Times is forced to disapprove of them, and to wish that instead of Russia, the Empire had a constitutional ally. The discontents among the Croats and Servians are as predominant as were those among the Hungarians, and a coalition between the Slavic and Magyar races, whom Government has hitherto played off against each other, is by no means improbable. Government dares not assemble the Provincial Diets, being fully aware that they would set themselves in opposition to its measures. In Hungary, the few natives who have accepted office under Austria, are treated by their countrymen as the veriest Pariahs, and the officials of Government are thwarted and harassed in every way possible.

ITALY.

The political affairs of the different Italian States are in no wise improving. The Roman Government finds its Austrian allies somewhat burdensome guests. They demand that the Austrian corps of 20,000 men, which entails an expense upon the impoverished Ecclesiastical States of 6,000,000 francs per annum, should be reduced to 12,000. Austria declines, at present, to make the reduction. The American Protestants have been allowed to have a chapel within the city, while the English have been compelled to be satisfied with one without the walls; this privilege has been withdrawn.——The Austrian Governor of Venice has issued a proclamation directing that the subscriptions for the relief of Brescia, which was destroyed by Austrian bombardment, shall be closed; on the ground that the pretense of philanthropy was merely a cloak for political demonstrations.——At Leghorn domiciliary visits of the police have been made, the reasons for which have not transpired.——The state of affairs in Sardinia has been set forth in the following terms in a speech in its Parliament: "There is in Sardinia no safety for property; there is neither law nor justice. Not to speak of thefts, assaults, injuries to property innumerable—look at the assassinations: two hundred within a short time. Assaults and highway robberies have increased and are daily increasing. There is one assassination to every thousand inhabitants. Murders are committed by day and by night, in towns and villages, in castles and dwellings. Children of thirteen years are murderers. The judges are terrified, and dare not execute justice. In England you must pay, but you have safety for your life. But here Ministers take one half our income for the State, and then suffer scoundrels to rob us of the other half. Let Government look to it. If it says it can do nothing, it does not deserve the name of Government: it is the very opposite of what should be called Government." The correspondent of the Augsburg Allgemeine Zeitung declares this to be a true account of the state of things in Sardinia.

SPAIN.

There has been a disruption in the Cabinet. The Minister of Finance, finding that there would be a deficit of some 240,000,000 of reals, nearly one-fourth of the entire revenue, proposed a reduction of expenditures in various departments. This the other Ministers would not consent to; and the Minister of Finance, finding that he would be called to solve the difficult problem of making payments without funds, or resign his post, chose the latter as the more feasible if not the more agreeable alternative. A surplus of revenue is, of course, anticipated the coming year. But the calculations of Spanish financiers never prove to be correct.

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