Hans Luther, an independent, began talks on 10 January, but his initial attempt to form a coalition failed when the Centre Party asked for reassurance that the DNVP would accept a formal declaration of allegiance to the democratic constitution.

On 15 January it became obvious that a formal vote of confidence, as preferred by the DNVP, was viewed unfavourably in the Centre Party parliamentary group.

[3] In December 1924, at a meeting with French Prime Minister Édouard Herriot, British Foreign Secretary Austen Chamberlain expressed support for a separate treaty between France and Britain, outside of the wider European collective security arrangement that was sought by the League of Nations.

They refused to do so and on 5 January justified their decision in a note with vague references to German "breaches of the disarmament clauses of the Treaty of Versailles".

It presented a secret memorandum on 20 January to Britain and on 9 February to France, suggesting a non-aggression pact between all countries "interested in the Rhine".

It also offered a guarantee of the "current status on the Rhine" (i.e. the German-French and German-Belgian borders) and the signing of arbitration agreements with all interested parties.

This was steadfastly opposed in Berlin, where the cabinet insisted on leeway to change the border by peaceful means and saw the arbitration agreement proposed in the memorandum as sufficient.

[3] By March, concerns started to surface in the DNVP about the government making too many concessions, and its parliamentary membership wrote to Stresemann indicating that they would not agree to any treaties unless the "spirit of the negotiations" changed.

Stresemann said that the government would not change its stance on the Polish border and that he saw the current process leading towards a speedy withdrawal of foreign troops from Cologne and the Ruhr as well as their departure from the rest of the occupied Rhineland ahead of schedule.

After the German government had sharply protested the Allied decision not to vacate the northern Rhineland and asked for an explanation, no further progress had been made.

Through unofficial channels, the Reichswehr Ministry managed to gain access to some details of the report by the Military Inter-Allied Commission of Control (CMIC), but it remained unclear which of its findings served as the rationale for the refusal to withdraw.

Meanwhile, with no official information available, the foreign press was starting to speculate about significant German breaches of the disarmament clauses, and indeed about secret preparations for war.

It also made a number of major demands on armament, organization of the armed forces, and police or troop training that could not be reasonably derived from the Treaty of Versailles' articles.

The cabinet faced a difficult choice: agree to the whole list in the interest of regaining control of the Rhineland, or offer to deal only with those points which were clearly based on Germany's obligations under the Treaty.

Schiele held firm on his second demand that the government's reply to the invitation should officially protest the Allied position assigning sole responsibility for World War I to Germany.

[3] On 2 October, the cabinet agreed on the delegation's guidelines: change of the French-British draft discussed at the London expert meeting to make clear that the guarantee of the western border would mean only a renunciation of offensive war and not a waiver of claims to German territory (i.e. Alsace–Lorraine and Eupen-Malmedy); refusal of a French guarantee of the eastern arbitration treaties; interpretation of Article 16 in a way that took account of German reservations; changes to military rule in the Rhineland and a reduction in the duration of the occupation of the second and third zone of the Rhineland.

[3] At the Locarno conference (5–16 October), Stresemann and Luther were able to achieve their goals to a sufficient degree with regard to Article 16, the form of the western security arrangement (also known as the Rhine Pact and the arbitration conventions).

No clear reply came from Chamberlain and Aristide Briand on German concerns about the creation of permanent observer institutions in the demilitarized zone: the relevant article's wording was not final and it might never be implemented.

The conference of Allied ambassadors would then fix a date for withdrawal from the Cologne area and express a firm expectation that Germany would comply with all the demands of the note of 5 January not already fulfilled in the short term.

[3] When they returned to Berlin, they managed to convince the rest of the cabinet, which met with President Paul von Hindenburg (see below) of the necessity of their actions.

Yet within hours, the DNVP parliamentary membership criticized the results of Locarno and declared that it would not be able to support any treaty that "sacrificed German territory or people".

Luther and Schiele tried to calm the waves by way of a government declaration stating that Article 1 of the treaty implied only a renunciation of war, not of the right of self-determination or peaceful changes to the borders.

However, since the note was treated confidentially and not transmitted to the Allies as demanded by the DNVP, its Reichstag group voted to leave the coalition on 25 October.

[4] After protests by the SPD and DDP against Luther's double role as chancellor and acting president, he agreed to have the Reichstag decide the issue.

A law of 10 March appointed Walter Simons, president of the Reichsgericht, Germany's highest court, as acting head of state.

[4] During the election campaign, Luther was at pains to emphasize the neutrality of the government but noted that he personally would not refrain from influencing the choice of candidates and working to prevent damage to the interests of the German state.

He indicated that he had no plans to make use of his powers to dismiss the chancellor and agreed to the current cabinet staying in office with no personnel changes.