Napoleon III declared war in 1870, and the Franco-Prussian War began. The French were unprepared, and their armies were surrounded at Metz and Sedan. Napoleon III was taken prisoner in Sedan. The empire in France fell, and the French military tried to oppose the Germans. In 1871, after a lengthy siege, Paris surrendered and a peace treaty was signed. A huge war indemnity was demanded, and Alsace and east Lorraine ceded to the newly unified Germany. A Revolutionary Paris Commune was declared by the conservative government of Adolphe Thiers. He based the government in Versailles. For the next two years Thiers ruled France. He succeeded in establishing order and restoring finances. Quarreling ensued over the constitution that France should adopt, and Thiers was pushed from a conservative position to a republican one. Thieres was subsequently driven from power in 1873. He was succeeded by the army commander Marshal MacMahon. MacMahon was considered too conservative in sympathy and too autocratic in method, and in 1879 he was succeeded as president by Jules Grevy. After this victory the republicans split into divergent groups, notably the Opportunists led by Léon Gambetta, and the Radicals, whose chief representative was Georges Clemenceau. In opposition to the Opportunists and the Radicals, the Monarchists, Bonapartists, and Clericals formed a right-wing coalition, and exploited the ambition of Gen. Georges Boulanger to overthrow the Republic. Grevy resigned in 1887, and was replaced by Sadi Carnot. Government prestige was weakened by the scandal connected with the bankruptcy of the Panama Canal Company in 1892. Meanwhile Socialism was becoming an organized force in France. One of its principal leaders was Jean Jaures. In 1894 Carnot was assassinated. The moderate Anticlerical Republican Emile Combes, was brought to power. His government brought about the complete separation of church and state in 1905.