True. When Gunray was talking about peace, I imagine he thought that they would become seperate from the Republic.
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Exactly. As I said to someone I work with who is as much of a Star Wars fan as I am if not more so, the manipulative powers of Palpatine can never be overstated. It awes me in some ways to have that many balls in the air and have them come down pretty much exactly as he wanted them too. He played up the fears of the Senate, The Jedi, The Trade Federation, and they reacted almost exactly how he wanted them to.
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Yeah...the only wild card that messed everything up for him at the end was Luke helping Anakin good again.