The Development of the European Nations, 1870-1914 Part 10

[Footnote 80: Busch, _Our Chancellor_, vol. i. p. 122, quotes speeches of his hero to prove that Bismarck himself disliked this Civil Marriage Law. "From the political point of view I have convinced myself that the State . . . is constrained by the dictates of self-defence to enact this law in order to avert from a portion of His Majesty's subjects the evils with which they are menaced by the Bishops' rebellion against the laws and the State" (Speech of Jan. 17, 1873). In 1849 he had opposed civil marriage.]

Bismarck's resolve to give up the system of Free Trade, or rather of light customs dues, adopted by Prussia and the German Zollverein in 1865, is so momentous a fact in the economic history of the modern world, that we must here give a few facts which will enable the reader to understand the conditions attending German commerce up to the years 1878-79, when the great change came. The old order of things in Prussia, as in all German States, was strongly protective--in fact, to such an extent as often to prevent the pa.s.sing of the necessaries of life from one little State to its Lilliputian neighbours. The rise of the national idea in Germany during the wars against the great Napoleon led to a more enlightened system, especially for Prussia. The Prussian law of 1818 a.s.serted the principle of imposing customs dues for revenue purposes, but taxed foreign products to a moderate extent. On this basis she induced neighbouring small German States to join her in a Customs Union (Zollverein), which gradually extended, until by 1836 it included all the States of the present Empire except the two Mecklenburgs, the Elbe Duchies, and the three Free Cities of Hamburg, Bremen, and Lubeck. That is to say, the attractive force of the highly developed Prussian State practically unified Germany for purposes of trade and commerce, and that, too, thirty-eight years before political union was achieved.

This, be it observed, was on condition of internal Free Trade, but of moderate duties being levied on foreign products. Up to 1840 these import duties were on the whole reduced; after that date a protectionist reaction set in; it was checked, however, by the strong wave of Free Trade feeling which swept over Europe after the victory of that principle in England in 1846-49. Of the new champions of Free Trade on the Continent, the foremost in point of time was Cavour, for that kingdom of Sardinia on which he built the foundations of a regenerated and united Italy. Far more important, however, was the victory which Cobden won in 1859-60 by inducing Napoleon III. to depart from the almost prohibitive system then in vogue in France. The Anglo-French Commercial Treaty of January 1860 seemed to betoken the speedy conversion of the world to the enlightened policy of unfettered exchange of all its products. In 1862 and 1865 the German Zollverein followed suit, relaxing duties on imported articles and manufactured goods--a process which was continued in its commercial treaties and tariff changes of the years 1868 and 1869.

At this time Bismarck's opinions on fiscal matters were somewhat vague.

He afterwards declared that he held Free Trade to be altogether false.

But in this as in other matters he certainly let his convictions be shaped by expediency. Just before the conclusion of peace with France he so far approximated to Free Trade as to insist that the Franco-German Commercial Treaty of 1862, which the war had of course abrogated--- war puts an end to all treaties between the States directly engaged--should now be again regarded as in force and as holding good up to the year 1887[81]. He even stated that he "would rather begin again the war of cannon-b.a.l.l.s than expose himself to a war of tariffs." France and Germany, therefore, agreed to place one another permanently on "the most favoured nation" footing. Yet this same man, who so much desired to keep down the Franco-German tariff, was destined eight years later to initiate a protectionist policy which set back the cause of Free Trade for at least a generation.

[Footnote 81: For that treaty, and Austria's desire in 1862 to enter the German Zollverein, see _The Diplomatic Reminiscences of Lord A. Loftus, _vol. ii. pp. 250-251.]

What brought about this momentous change? To answer this fully would take up a long chapter. We can only glance at the chief forces then at work. Firstly, Germany, after the year 1873, pa.s.sed through a severe and prolonged economic crisis. It was largely due to the fever of speculation induced by the incoming of the French milliards into a land where gold had been none too plentiful. Despite the efforts of the German Government to hold back a large part of the war indemnity for purposes of military defence and substantial enterprises, the people imagined themselves to be suddenly rich. Prices rapidly rose, extravagant habits spread in all directions, and in the years 1872-73 company-promoting attained to the rank of a fine art, with the result that sober, hard-working Germany seemed to be almost another England at the time of the South Sea Bubble. Alluding to this time, Busch said to Bismarck early in 1887: "In the long-run the [French] milliards were no blessing, at least not for our manufacturers, as they led to over-production. It was merely the bankers who benefited, and of these only the big ones[82]."

[Footnote 82: _Bismarck: Some Secret Pages of his History, _by M. Busch, vol. iii. p. 161 (English edition).]

The result happened that always happens when a nation mistakes money, the means of commercial exchange, for the ultimate source of wealth.

After a time of inflation came the inevitable collapse. The unsound companies went by the board; even sound ventures were in some cases overturned. How grievously public credit suffered may be seen by the later official admission, that liquidations and bankruptcies of public companies in the following ten years inflicted on shareholders a total loss of more than 345,000,000 marks (17,250,000)[83].

[Footnote 83: German State Paper of June 28, 1884, quoted by Dawson, _Bismarck and State Socialism_, App. B.]

Now, it was in the years 1876-77, while the nation lay deep in the trough of economic depression, that the demand for "protection for home industries" grew loud and persistent. Whether it would not have been raised even if German finance and industry had held on its way in a straight course and on an even keel, cannot of course be determined, for the protectionist movement had been growing since the year 1872, owing to the propaganda of the "Verein fur Sozialpolitik" (Union for Social Politics) founded in that year. But it is safe to say that the collapse of speculation due to inflowing of the French milliards greatly strengthened the forces of economic reaction.

Bismarck himself put it in this way: that the introduction of Free Trade in 1865 soon produced a state of atrophy in Germany; this was checked for a time by the French war indemnity; but Germany needed a permanent cure, namely, Protection. It is true that his ideal of national life had always been strict and narrow--in fact, that of the average German official; but we may doubt whether he had in view solely the shelter of the presumedly tender flora of German industry from the supposed deadly blasts of British, Austrian, and Russian compet.i.tion. He certainly hoped to strengthen the fabric of his Empire by extending the customs system and making its revenue depend more largely on that source and less on the contributions of the federated States. But there was probably a still wider consideration. He doubtless wished to bring prominently before the public gaze another great subject that would distract it from the religious feuds described above and bring about a rearrangement of political parties. The British people has good reason to know that the discussion of fiscal questions that vitally touch every trade and every consumer, does act like the turning of a kaleidoscope upon party groupings; and we may fairly well a.s.sume that so far-seeing a statesman as Bismarck must have forecast the course of events.

Reasons of statecraft also warned him to build up the Empire four-square while yet there was time. The rapid recovery of France, whose milliards had proved somewhat of a "Greek gift" to Germany, had led to threats on the part of the war party at Berlin, which brought from Queen Victoria, as also from the Czar Alexander, private but pressing intimations to Kaiser Wilhelm that no war of extermination must take place. This affair and its results in Germany's foreign policy will occupy us in Chapter XII. Here we may note that Bismarck saw in it a reason for suspecting Russia, hating England, and jealously watching every movement in France.

Germany's future, it seemed, would have to be safeguarded by all the peaceable means available. How natural, then, to tone down her internal religious strifes by bringing forward another topic of still more absorbing interest, and to aim at building up a self-contained commercial life in the midst of uncertain, or possibly hostile, neighbours. In truth, if we view the question in its broad issues in the life of nations, we must grant that Free Trade could scarcely be expected to thrive amidst the jealousies and fears entailed by the war of 1870. That principle presupposes trust and good-will between nations; whereas the wars of 1859, 1864, and 1870 left behind bitter memories and rankling ills. Viewed in this light, Germany's abandonment of Free Trade in 1878 was but the natural result of that forceful policy by which she had cut the Gordian knot of her national problem.

The economic change was decided on in the year 1879, when the federated States returned to "the time-honoured ways of 1823-65." Bismarck appealed to the Reichstag to preserve at least the German market to German industry. The chances of having a large export trade were on every ground precarious; but Germany could, at the worst, support herself. All interests were mollified by having moderate duties imposed to check imports. Small customs dues were placed on corn and other food supplies so as to please the agrarian party; imports of manufactured goods were taxed for the benefit of German industries, and even raw materials underwent small imposts. The Reichstag approved the change and on July 7 pa.s.sed the Government's proposals by 217 to 117: the majority comprised the Conservatives, Clericals, the Alsace-Lorrainers, and a few National Liberals; while the bulk of the last-named, hitherto Bismarck's supporters on most topics, along with Radicals and Social Democrats, opposed it. The new tariff came into force on January 1, 1880.

On the whole, much may be said in favour of the immediate results of the new policy. By the year 1885 the number of men employed in iron and steel works had increased by 35 per cent over the numbers of 1879; wages also had increased, and the returns of shipping and of the export trade showed a considerable rise. Of course, it is impossible to say whether this would not have happened in any case owing to the natural tendency to recovery from the deep depression of the years 1875-79. The duties on corn did not raise its price, which appears strange until we know that the foreign imports of corn were less than 8 per cent of the whole amount consumed. In 1885, therefore, Bismarck gave way to the demands of the agrarians that the corn duties should be raised still further, in order to make agriculture lucrative and to prevent the streaming of rural population to the towns. Again the docile Reichstag followed his lead. But, two years later, it seemed that the new corn duties had failed to check the fall of prices and keep landlords and farmers from ruin; once more, then, the duties were raised, being even doubled on certain food products. This time they undoubtedly had one important result, that of making the urban population, especially that of the great industrial centres, more and more hostile to the agrarians and to the Government which seemed to be legislating in their interests. From this time forward the Social Democrats began to be a power in the land.

And yet, if we except the very important item of rent, which in Berlin presses with cruel weight on the labouring cla.s.ses, the general trend of the prices of the necessaries of life in Germany has been downwards, in spite of all the protectionist duties. The evidence compiled in the British official Blue-book on "British and Foreign Trade and Industry"

(1903. Cd. 1761, p. 226) yields the following results. By comparing the necessary expenditure on food of a workman's family of the same size and living under the same conditions, it appears that if we take that expenditure for the period 1897-1901 to represent the number 100 we have these results:--

+-----------+-----------+-----------------+ | Period. | Germany. | United Kingdom. | +-----------+-----------+-----------------+ | 1877-1881 | 112 | 140 | | 1882-1886 | 101 | 125 | | 1887-1891 | 103 | 106 | | 1892-1896 | 99 | 98 | | 1897-1901 | 100 | 100 | +-----------+-----------+-----------------+

Thus the fall in the cost of living of a British working man's family has been 40 points, while that of the German working man shows a decline of only 12 points. It is, on the whole, surprising that there has not been more difference between the two countries[84].

[Footnote 84: In a recent work, _England and the English_ (London, 1904), Dr. Carl Peters says: "Considering that wages in England average 20 per cent higher in England than in Germany, that the week has only 54 working hours, and that all articles of food are cheaper, the fundamental conditions of prosperous home-life are all round more favourable in England than in Germany. And yet he [the British working-man] does not derive greater comfort from them, for the simple reason that a German labourer's wife is more economical and more industrious than the English wife."] Before dealing with the new social problems that resulted, at least in part, from the new duties on food, we may point out that Bismarck and his successors at the German Chancellory have used the new tariff as a means of extorting better terms from the surrounding countries. The Iron Chancellor has always acted on the diplomatic principle _do ut des_--"I give that you may give"--with its still more cynical corollary--"Those who have nothing to give will get nothing." The new German tariff on agricultural products was stiffly applied against Austria for many years, to compel her to grant more favourable terms to German manufactured goods. For eleven years Austria-Hungary maintained their protective barriers; but in 1891 German persistence was rewarded in the form of a treaty by which the Dual Monarchy let in German goods on easier terms provided that the corn duties of the northern Power were relaxed. The fiscal strife with Russia was keener and longer, but had the same result (1894). Of a friendlier kind were the negotiations with Italy, Belgium, and Switzerland, which led to treaties with those States in 1891. It is needless to say that in each of these cases the lowering of the corn duties was sharply resisted by the German agrarians. We may here add that the Anglo-German commercial treaty which expired in 1903 has been extended for two years; and that Germany's other commercial treaties were at the same time continued.

It is hazardous at present to venture on any definite judgment as to the measure of success attained by the German protectionist policy.

Protectionists always point to the prosperity of Germany as the crowning proof of its efficacy. In one respect they are, perhaps, fully justified in so doing. The persistent pressure which Germany brought to bear on the even more protectionist systems of Russia and Austria undoubtedly induced those Powers to grant easier terms to German goods than they would have done had Germany lost her bargaining power by persisting in her former Free Trade tendencies. Her success in this matter is the best instance in recent economic history of the desirability of holding back something in reserve so as to be able to bargain effectively with a Power that keeps up hostile tariffs. In this jealously compet.i.tive age the State that has nothing more to offer is as badly off in economic negotiations as one that, in affairs of general policy, has no armaments wherewith to face a well-equipped foe. This consideration is of course scouted as heretical by orthodox economists; but it counts for much in the workaday world, where tariff wars and commercial treaty bargainings unfortunately still distract the energies of mankind.

On the other hand, it would be risky to point to the internal prosperity of Germany and the vast growth of her exports as proofs of the soundness of protectionist theories. The marvellous growth of that prosperity is very largely due to the natural richness of a great part of the country, to the intelligence, energy, and foresight of her people and their rulers, and to the comparatively backward state of German industry and commerce up to the year 1870. Far on into the Nineteenth Century, Germany was suffering from the havoc wrought by the Napoleonic wars and still earlier struggles. Even after the year 1850, the political uncertainties of the time prevented her enjoying the prosperity that then visited England and France. Therefore, only since 1870 (or rather since 1877-78, when the results of the mad speculation of 1873 began to wear away) has she entered on the normal development of a modern industrial State; and he would be an eager partisan who would put down her prosperity mainly to the credit of the protectionist regime. In truth, no one can correctly gauge the value of the complex causes--economic, political, educational, scientific and engineering--that make for the prosperity of a vast industrial community. So closely are they intertwined in the nature of things, that dogmatic arguments laying stress on one of them alone must speedily be seen to be the merest juggling with facts and figures.

As regards the wider influences exerted by Germany's new protective policy, we can here allude only to one; and that will be treated more fully in the chapter dealing with the Part.i.tion of Africa. That policy gave a great stimulus to the colonial movement in Germany, and, through her, in all European States. As happened in the time of the old Mercantile System, Powers which limited their trade with their neighbours, felt an imperious need for absorbing new lands in the tropics to serve as close preserves for the mother-country. Other circ.u.mstances helped to impel Germany on the path of colonial expansion; but probably the most important, though the least obvious, was the recrudescence of that "Mercantilism" which Adam Smith had exploded.

Thus, the triumph of the national principle in and after 1870 was consolidated by means which tended to segregate the human race in ma.s.ses, regarding each other more or less as enemies or rivals, alike in the spheres of politics, commerce, and colonial expansion.

We may conclude our brief survey of German constructive policy by glancing at the chief of the experiments which may be cla.s.sed as akin to State Socialism.

In 1882 the German Government introduced the Sickness Insurance Bill and the Accident Insurance Bill, but they were not pa.s.sed till 1884, and did not take effect till 1885. For the relief of sickness the Government relied on existing inst.i.tutions organised for that object. This was very wise, seeing that the great difficulty is how to find out whether a man really is ill or is merely shamming illness. Obviously a local club can find that out far better than a great imperial agency can. The local club has every reason for looking sharply after doubtful cases as a State Insurance Fund cannot do. As regards sickness, then, the Imperial Government merely compelled all the labouring cla.s.ses, with few exceptions, to belong to some sick fund. They were obliged to pay in a sum of not less than about fourpence in the pound of their weekly wages; and this payment of the workman has to be supplemented by half as much, paid by his employer--or rather, the employer pays the whole of the premium and deducts the share payable by the workman from his wages.

Closely linked with this is the Accident Insurance Law. Here the brunt of the payment falls wholly on the employer. He alone pays the premiums for all his work-people; the amount varies according to (1) the man's wage, (2) the risk incidental to the employment. The latter is determined by the actuaries of the Government. If a man is injured (even if it be by his own carelessness) he receives payments during the first thirteen weeks from the ordinary Sick Fund. If his accident keeps him a prisoner any longer, he is paid from the Accident Fund of the employers of that particular trade, or from the Imperial Accident Fund. Here of course the chance of shamming increases, particularly if the man knows that he is being supported out of a general fund made up entirely by the employers' payments. The burden on the employers is certainly very heavy, seeing that for all kinds of accidents relief may be claimed; the only exception is in cases where the injury can be shown to be wilfully committed[85]. A British Blue-book issued on March 31, 1905, shows that the enormous sum of 5,372,150 was paid in Germany in the year 1902 as compensation to workmen for injuries sustained while at work.

[Footnote 85: For the account given above, as also that of the Old Age Insurance Law, I am indebted to Mr. Dawson's excellent little work, _Bismarck and State Socialism_ (Swan Sonnenschein & Co., 1890). See also the Appendix to _The German Empire of To-day_, by "Veritas" (1902).]

The burden of the employers does not end here. They have to bear their share of Old Age Insurance. This law was pa.s.sed in 1889, at the close of the first year of the present Kaiser's reign. His father, the Emperor Frederick, during his brief reign had not favoured the principles of State Socialism; but the young Emperor William in November 1888 announced that he would further the work begun by _his grandfather_, and though the difficulties of insurance for old age were very great, yet, with G.o.d's help, they would prove not to be insuperable.

Certainly the effort was by far the greatest that had yet been made by any State. The young Emperor and his Chancellor sought to build up a fund whereby 12,000,000 of work-people might be guarded against the ills of a penniless old age. Their law provided for all workmen (even men in domestic service) whose yearly income did not exceed 2000 marks (100).

Like the preceding laws, it was compulsory. Every youth who is physically and mentally sound, and who earns more than a minimum wage, must begin to put by a fixed proportion of that wage as soon as he completes his sixteenth year. His employer is also compelled to contribute the same amount for him. Mr. Dawson, in the work already referred to, gives some figures showing what the joint payment of employer and employed amount to on this score. If the workman earns 15 a year (_i.e._ about 6s. a week), the sum of 3s. 3-1/2d. is put by for him yearly into the State Fund. If he earns 36 a year, the joint annual payment will be 5s. 7-1/2d.; if he earns 78, it will be 7s. a year, and so on. These payments are reckoned up in various cla.s.ses, according to the amounts; and according to the total amount is the final annuity payable to the worker in the evening of his days. That evening is very slow in coming for the German worker. For old age merely, he cannot begin to draw his full pension until he has attained the ripe age of seventy-one years. Then he will draw the full amount. He may antic.i.p.ate that if he be incapacitated; but in that case the pension will be on a lower scale, proportioned to the amounts paid in and the length of time of the payments.

The details of the measure are so complex as to cause a good deal of friction and discontent. The calculation of the various payments alone employs an army of clerks: the need of safeguarding against personation and other kinds of fraud makes a great number of precautions necessary; and thus the whole system becomes tied up with red tape in a way that even the more patient workman of the Continent cannot endure.

In a large measure, then, the German Government has failed in its efforts to cure the industrial cla.s.ses of their socialistic ideas. But its determination to attach them to the new German Empire, and to make that Empire the leading industrial State of the Continent, has had a complete triumph. So far as education, technical training, research, and enlightened laws can make a nation great, Germany is surely on the high road to national and industrial supremacy.

It is a strange contrast that meets our eyes if we look back to the years before the advent of King William and Bismarck to power. In the dark days of the previous reign Germany was weak, divided, and helpless.

In regard to political life and industry she was still almost in swaddling-clothes; and her struggles to escape from the irksome restraints of the old Confederation seemed likely to be as futile as they had been since the year 1815. But the advent of the King and his st.u.r.dy helper to power speedily changed the situation. The political problems were grappled with one by one, and were trenchantly solved.

Union was won by Bismarck's diplomacy and Prussia's sword; and when the longed-for goal was reached in seven momentous years, the same qualities were brought to bear on the difficult task of consolidating that union.

Those qualities were the courage and honesty of purpose that the House of Hohenzollern has always displayed since the days of the Great Elector; added to these were rarer gifts, namely, the width of view, the eagle foresight, the strength of will, the skill in the choice of means, that made up the imposing personality of Bismarck. It was with an eye to him, and to the astonishing triumphs wrought by his diplomacy over France, that a diplomatist thus summed up the results of the year 1870: "Europe has lost a mistress, but she has got a master."

After the lapse of a generation that has been weighted with the cuira.s.s of Militarism, we are able to appreciate the force of that remark.

Equally true is it that the formation of the German Empire has not added to the culture and the inner happiness of the German people. The days of quiet culture and happiness are gone; and in their place has come a straining after ambitious aims which is a heavy drag even on the vitality of the Teutonic race. Still, whether for good or for evil, the unification of Germany must stand out as the greatest event in the history of the Nineteenth Century.

NOTE TO THE SECOND EDITION

The statement on page 135 that service in the German army is compulsory for seven years, three in the field army and four in the reserve, applies to the cavalry and artillery only. In the infantry the time of service is two years with the colours and five years in the reserve.

CHAPTER VII

THE EASTERN QUESTION

"Perhaps one fact which lies at the root of all the actions of the Turks, small and great, is that they are by nature nomads. . . . Hence it is that when the Turk retires from a country he leaves no more sign of himself than does a Tartar camp on the upland pastures where it has pa.s.sed the summer."--_Turkey in Europe_, by "Odysseus."

The remark was once made that the Eastern Question was destined to perplex mankind up to the Day of Judgment. Certainly that problem is extraordinarily complex in its details. For a century and a half it has distracted the statesmen and philanthropists of Europe; for it concerns not only the ownership of lands of great intrinsic and strategic importance, but also the welfare of many peoples. It is a question, therefore, which no intelligent man ought to overlook.

For the benefit of the tiresome person who insists on having a definition of every term, the Eastern Question may be briefly described as the problem of finding a _modus vivendi_ between the Turks and their Christian subjects and the neighbouring States. This may serve as a general working statement. No one who is acquainted with the rules of Logic will accept it as a definition. Definitions can properly apply only to terms and facts that have a clear outline; and they can therefore very rarely apply to the facts of history, which are of necessity as many-sided as human life itself. The statement given above is incomplete, inasmuch as it neither hints at the great difficulty of reconciling the civic ideas of Christian and Turkish peoples, nor describes the political problems arising out of the decay of the Ottoman Power and the ambitions of its neighbours.

It will be well briefly to see what are the difficulties that arise out of the presence of Christians under the rule of a great Moslem State.

They are chiefly these. First, the Koran, though far from enjoining persecution of Christians, yet distinctly a.s.serts the superiority of the true believer and the inferiority of "the people of the book"

(Christians). The latter therefore are excluded from partic.i.p.ation in public affairs, and in practice are refused a hearing in the law courts.

Consequently they tend to sink to the position of hewers of wood and drawers of water to the Moslems, these on their side inevitably developing the defects of an exclusive dominant caste. This is so especially with the Turks. They are one of the least gifted of the Mongolian family of nations; brave in war and patient under suffering and reverses, they nevertheless are hopelessly narrow-minded and bigoted; and the Christians in their midst have fared perhaps worse than anywhere else among the Mohammedan peoples.