His son, Frederick William III. (1797-184o) was a man of the best intentions, but pedantic, vacillating and narrow. The Government fell more and more into the hands of the cabinet councillors who, under the system introduced by Frederick the Great, formed the sole channel of communication between the king and the ministers. But while under Frederick the councillors had been only executive organs of the king's will, under his weak successors they became the all-important personal advisers of the monarch. The Prussian State still kept the outward form given it by Frederick William I. and Frederick the Great; but the living spirit was gone from it, and its swift and complete collapse after the first great military reverse (Jena, 18o6), is easily comprehensible. Under the Peace of Tilsit (1807) Fred erick William was obliged to cede his entire territory west of the Elbe and the greater part of his acquisitions in Poland; he re tained only Brandenburg, Pomerania, Prussia and Silesia. This fearful collapse, however, also released the forces of reconstruc tion which still lived on within the State, and during the so-called "period of reform" a complete reconstruction of the State was begun. The king himself always remained disassociated from, and at heart hostile to these efforts, which appeared to him as a concession to Jacobinism; but as he knew no plan of his own for reconstructing the shattered State, he was forced to let the apostles of the new ideas have their way.
Freiherr von Stein became the leading figure in the administra tion. He had long been urging reforms, but before i8o6 without success. His fundamental idea was that in a modern State the people itself must be required to help in the conduct of public affairs, because the State cannot exist unless it can count upon the willing co-operation and devotion of its citizens. The most
important measures which he carried through were the liberation of the peasants from serfdom, the reintroduction of municipal self-government under the Municipal Act of 1808, and the abolition of cabinet government. He also planned to introduce self-government in the rural districts and participation of repre sentatives of the people in the provincial administration and the central Government. He was unable, however, to carry these measures into practice, being dismissed in the autumn of 18o8, at Napoleon's order. The reforms were taken up again by Frei herr von Hardenberg, in 181o, on his appointment as head of the ministry, although on lines rather different from those intended by Stein. Hardenberg really inclined more to enlightened despot ism than to Stein's ideas of self-government. His principal achievements were the reorganization of the finance and of the administrative system, the abolition of restrictions in industrial life, and the edict of 1811 which made the peasants free pro prietors of their holdings, in return for the cession of a part of them to the former landlords. The peasants were thus re quired to buy their ownership at the price of giving up part of their holdings. Moreover, as the smaller holdings were excluded from the measure, the landlords could now take full possession of them, and their former cultivators sank to the position of propertyless agricultural labourers.
These years also saw a great reorganization of the army, carried through by Generals von Scharnhorst and von Boyen. The underlying principle was the transformation of the mercenary army into a national army. Universal service was introduced, degrading punishments abolished, admission to the Corps of Officers revised and the internal organization of the army re arranged in more practical form. But for these reforms in all directions, the little State would have been incapable of the great achievements which it performed during the Wars of Liberation.