On 29 January 1927 it replaced the third Marx cabinet, which had resigned after information concerning clandestine operations by Germany's armed forces, the Reichswehr, had come to light.

It cooperated with the Reichswehr in keeping silent about its prohibited activities and passed important labour laws that required overtime pay for more than eight hours of work in a day.

In its efforts to finalise a school law left open by the Weimar Constitution, the cabinet was unable to find consensus, and the coalition broke apart.

President Paul von Hindenburg wanted to see a more conservative cabinet, and the right-wing nationalist German National People's Party (DNVP) was eager to return to a place in the government.

They included the stipulations that all parties guarantee their support of the constitutional republican form of government and agree to a continuation of Germany's previous foreign policy.

Called the Lohmann Affair, it led to the dismissal of two high-ranking naval officials, including Hans Zenker, head of the German Navy, who had been at the 26 February meeting with the cabinet, and to the resignation of Reichswehr Minister Otto Gessler.

In March 1927, French troops in the Saarland were replaced by a railway protection force, but the DNVP remained unhappy with Foreign Minister Gustav Stresemann's policy of waiting and compromising.

The Reichstag succeeded in passing an overtime law that allowed more than eight hours of work per day only if sanctioned by a collective agreement or "official authorization".

[6] When talks collapsed on 15 February 1928, the Centre Party declared the coalition dissolved but agreed to continue work until 1 April on crucial issues such as the budget.