A series of negotiations was begun for the marriage of his son with a Princess of Spain. Each of his successive favourites supported the Spanish alliance; and after years of secret intrigue the King's intentions were proclaimed to the world, at the moment when the policy of the House of Austria threatened the Protestants of Southern Germany with utter ruin or civil war. From whatever quarter the first aggression should come, it was plain that a second great struggle in arms between Protestantism and Catholicism was to be fought out on German soil It was their prescience of the coming conflict which, on the very eve of the crisis, spurred a party among his ministers who still clung to the traditions of Salisbury to support an enterprise which promised to detach the King from his new policy by entangling him in a war with Spain. Sir Walter Ralegh, the one great warrior of the Elizabethan time who still lingered on, had been imprisoned ever since the beginning of the new reign in the Tower on a charge of treason. He now disclosed to James his knowledge of a gold-mine on the Orinoco, and prayed that he might sail thither and work its treasures for the King. The King was tempted by the bait of gold; but he forbade any attack on Spanish territory, or the shedding of Spanish blood.

Ralegh however had risked his head again and again, he believed in the tale he told, and he knew that if war could be brought about between England and Spain a new career was open to him. He found the coast occupied by Spanish troops; evading direct orders to attack he sent his men up the country, where they plundered a Spanish town,found no gold-mine, and came broken and defeated back. The daring of the man saw a fresh resource; he proposed to seize the Spanish treasure ships as he returned, and, like Drake, to turn the heads of nation and King by the immense spoil. But his men would not follow him, and he was brought home to face his doom. James at once put his old sentence in force; and the death of the broken-hearted adventurer on the scaffold atoned for the affront to Spain. The failure of Ralegh came at a critical moment in German history. The religious truce which had so long preserved the peace of Germany was broken in 1618 by the revolt of Bohemia against the rule of the Catholic House of Austria; and when the death of the Emperor Matthias raised his cousin Ferdinand in 1619to the Empire and to the throne of Bohemia, its nobles declared the realm vacant and chose Frederick, the young Elector Palatine, as their King. The German Protestants were divided by the fatal jealousy between their Lutheran and Calvinist princes; but it was believed that Frederick's election could unite them, and the Bohemians counted on England's support when they chose James's son-in-law for their king.

A firm policy would at any rate have held Spain inactive, and limited the contest to Germany itself. But the "statecraft" on which James prided himself led him to count, not on Spanish fear, but on Spanish friendship. He refused aid to the Protestant Union of the German Princes when they espoused the cause of Bohemia, and threatened war against Holland, the one power which was earnest in the Palatine's cause. It was in vain that both court and people were unanimous in their cry for war. James still pressed his son-in-law to withdraw from Bohemia, and relied in such a case on the joint efforts of England and Spain to restore peace. But Frederick refused consent, and Spain quickly threw aside the mask. Her famous battalions were soon moving up the Rhine to the aid of the Emperor; and their march turned the local struggle in Bohemia into a European war. While the Spaniards occupied the Palatinate, the army of the Catholic League under Maximilian of Bavaria marched down the Danube, reduced Austria to submission, and forced Frederick to battle before the walls of Prague. Before the day was over he was galloping off, a fugitive, to North Germany, to find the Spaniards encamped as its masters in the heart of the Palatinate.

James had been duped, and for the moment he bent before the burst of popular fury which the danger to German Protestantism called up.

He had already been brought to suffer Sir Horace Vere to take some English volunteers to the Palatinate. But the succour had come too late. The cry for a Parliament, the necessary prelude to a war, overpowered the King's secret resistance; and the Houses were again called together. But the Commons were bitterly chagrined as they found only demands for supplies, and a persistence in the old efforts to patch up a peace. James even sought the good will of the Spaniards by granting license for the export of arms to Spain. The resentment of the Commons found expression in their dealings with home affairs. The most crying constitutional grievance arose from the revival of monopolies, in spite of the pledge of Elizabeth to suppress them. A parliamentary right which had slept ever since the reign of Henry VI., the right of the Lower House to impeach great offenders at the bar of the Lords, was revived against the monopolists; and James was driven by the general indignation to leave them to their fate. But the practice of monopolies was only one sign of the corruption of the court.

Sales of peerages and offices of state had raised a general disgust; and this disgust showed itself in the impeachment of the highest among the officers of State, the Chancellor, Francis Bacon, the most distinguished man of his time for learning and ability. At the accession of James the rays of royal favour had broken slowly upon Bacon. He became successively Solicitor and Attorney-General; the year of Shakspere's death saw him called to the Privy Council; he verified Elizabeth's prediction by becoming Lord Keeper. At last the goal of his ambition was reached. He had attached himself to the rising fortunes of Buckingham, and the favour of Buckingham made him Lord Chancellor. He was raised to the peerage as Baron Verulam, and created, at a later time, Viscount St. Albans. But the nobler dreams for which these meaner honours had been sought escaped his grasp. His projects still remained projects, while to retain his hold on office he was stooping to a miserable compliance with the worst excesses of Buckingham and his royal master. The years during which he held the Chancellorship were the most disgraceful years of a disgraceful reign.