He tried to reconcile political parties by granting from his own initiative a liberal constitution (April 6, 1901), introducing for the first time in the constitutional history of Servia the system of two chambers (skupshtina and senate).
Even later, between 1868 and 1880, the national assembly (Narodna Skupshtina) usually met there.
The introduction of new taxes and the reorganization of the financial administration of the country could not keep pace with the increase of public expenditure, chiefly because the skupshtina was for some time reluctant to replace the old system of direct taxation by a more modern system.
The king and the national assembly, or Narodna Skupshtina, of 1301 members, together form the legislature.
The Velika Skupshtina or Grand Skupshtina is only convoked to discuss the most serious national questions, such as changes in the succession, the constitution or the territories of the kingdom.
The choice was unanimously approved by the Velika Skupshtina, which had been immediately convoked.
To strengthen his position in the country he promulgated a new constitution in April 1901, establishing for the first time in the history of Servia a parliament with two houses (skupshtina and senate).
The skupshtina and senate assembled, restored the constitution of 1889 instead of the reactionary constitution promulgated by King Alexander on the 19th of April 1901, and ratified the election of Prince Peter, who entered Belgrade as king on the 24th of June 1903.
His authority was at first merely nominal; the highest administrative offices were occupied by the regicides, who received the unanimous thanks of the skupshtina for the assassination of King Alexander and Queen Draga.
As, however, the armaments and finances of Servia were unequal to a conflict with Austria-Hungary, while Great Britain, Russia, France and Italy counselled peace, the skupshtina, meeting in secret session on the 11th of October 1908, determined to avoid open hostilities, and sent M Milanovich, the minister for foreign affairs, to press the claims of Servia upon the powers.