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One of the highlights of the second parliament was the plan to hire a finance director to improve Iran's treasury and finances, which led to a Russian ultimatum and British opposition.

In a speech, Modares suggested that instead of hiring someone from the Great Britain, Iran should hire a person from the United States of America to initiate relations with the United States and prevent the Great Britain and Russia from gaining more power. Parliament passed the bill, and the American William Morgan Schuster was hired.

Both the British and Russian governments opposed the Majles’s decision to halt Iran's financial growth and Russia issued an ultimatum. With the approval of the parliamentarians, the parliament was extended for several months to address this issue although the second term’s final date was approaching. Russia announced another ultimatum against Iran to oust Schuster within twenty-four hours. The Russian government even stationed its troops in northern Iran and threatened to attack the Capital.

A meeting for rejecting or accepting the second ultimatum was held in the Parliament. In his speech, Modares emphasized that Iran should not accept the ultimatum and he strongly opposed Nasser al-Molk, Ahmad Shah Qajar’s viceroy, and other Russian puppets. Modares stated that why should we sign a document that is nothing but our humiliation and captivity and is designed to destroy us. The parliament rejected the Russian’s second ultimatum.

Nasser al-Molk, who had sided with Russia to protect his personal interests, along with some other Russian and British agents had a heated argument with Modares to disallow his opposition and to accept Russia's ultimatum. Being unsuccessful to earn the Majles’s agreement, Nasser al-Molk declared that the parliament’s rejection was illegal and announced the dissolution of the second period of the parliament.

The period between the dissolution of the 2nd period of Majles until the beginning of the 3rd period is known as Fetrat(lifeless) period. Modares described this tragedy as “the passing of the young Majles.”