CHAPTER XIV.(1871-1888)

SOCIAL ADJUSTMENTS

THE FOREMOST EPISODES IN the domestic history of Germany during the period of Bismarck’s Chancellorship having been related in detail, other notable events and tendencies incidental to the new epoch may be reviewed more summarily. The dominant mark of this epoch was expansion, in the form of greater political influence abroad and in the development of the nation’s material resources at home. The war of 1870—1871 had not been attended in Germany by any of the violent economic and social disturbances which had convulsed France. No German territory was invaded, no systematic blockade of the German coasts was attempted, and the temporary dislocation of labour, large though it was, caused no serious set-back to industry. The conclusion of a victorious peace was the signal for a great outburst of activity throughout the entire country, and the nation was carried forward on a wave of patriotic enthusiasm into new spheres of material enterprise and conquest. The foundations of German industrial and commercial prosperity had been laid long before; now the fabric itself sprang suddenly into sight, beneath the busy hands of her myriad builders.

Seldom has a nation so rapidly bridged the gulf between a position of relative poverty and one of positive well-being. For the first half of the century Germany still ranked as an impoverished country. Wages everywhere were low, being seldom much above and often below the subsistence level; local dearth was frequent; in many of the districts dependent upon home industries “hunger typhus” periodically decimated the population; the rising manufacturers of the factory towns had hardly begun to talk of fortunes; the successful business man was the man who had just enough, and he was usually well satisfied with that. Germans then lived frugally because they could not do otherwise. Until after the middle of the century about a quarter of all the wheat produced in the country was sold abroad, and the coarser rye was kept at home for food.

Yet even by this time the nation had given pledges of an assured economic future. Compulsory education had given to the artisan and labouring classes a high level of intelligence and aptitude, while compulsory military service had developed in them in a large degree the spirit of order, discipline, and cooperation. These advantages could not fail to prove of great effect in a material competition which was destined to be one of brains, science, and organization. There could be no hope of any marked advance, however, so long as the States closed their doors to each other, and the first definite commercial awakening may be dated from the time when the breaking down of internal customs barriers converted all Germany into one market. How important was this unification of the country for economic purposes will be understood when it is remembered that during the forty years following the middle of the century the population of the German customs territory increased from thirty-two to nearly fifty millions. The next necessary step was to introduce within the union of States greater uniformity in the media of commercial exchange and a common body of commercial law. Attempts to unify weights, measures, and coinage had been made since 1833, and they had partially succeeded; it was not until 1868, however, that this measure was carried out thoroughly for the States forming the North German Confederation; three years later it was applied to the Empire as it exists to-day. The metric system of weights and measures, first introduced optionally, became compulsory in 1872.

New forms of commercial enterprise, and especially the public company system, enlisted the resources of the community in the service of trade and industry upon a scale unknown and impossible hitherto. It is commonly supposed that Germany’s first era of company promotion dated from the ‘seventies, when the distribution of the French milliards gave an artificial impetus to enterprise and speculation. It really began twenty years before, in the flotation of large banks and other financial institutions, but it soon spread in other directions; in addition to railways, both State and private, many of the large mining, smelting, iron and steel, machinery, sugar manufacturing, steam shipping, and textile companies were established in the middle of the century. In those days were laid the foundations of many industrial undertakings which have since ranked with the most famous in the world, and of many princely fortunes which later enabled their owners to exchange the rank of commoner for that of the minor nobility. It was at this time also that the banks began to cultivate the relationship to industrial enterprise which became so intimate in later years. The idea of the co-operation of bank and industry had in 1852 given rise in France to the Crédit Mobilier, and German financiers were not slow to turn the idea to use. The German Bank for Trade and Industry was established in the following year at Darmstadt, and other banking institutions followed on the same lines. Only in the ‘seventies did company promotion become for a time a mania; yet while it then led to many unhealthy developments, a large balance of solid advantage remained. Enterprise became more daring; many large new industries were established, and not a few old towns were recreated on industrial lines.

Now also Germany began to take a prominent place in foreign markets. The value of her foreign trade increased from 2,100 million marks in 1850 to 3,200 millions in 18’60, 4,240 millions in 1870, and 5,980 millions in 1880. Later the progress was equally marked, and the increase in value during the following decade was to 7,470 millions. The export trade in particular received a powerful stimulus owing to the colonial movement which took practical shape in 1884 and 1885, with the concurrent introduction of mail steamship subsidies, by the aid of which regular communication by German vessels was established with East Asia, Australia, and parts of Africa. The years from 1880 onward were, as has been shown, a period of active emigration, and no fewer than 1,362,000 persons of German birth were lost to the Empire from this cause during the ten years 1880—1889 alone. But the loss of population brought gain in other ways; if the emigrants did not make new Germanics over the seas, they made markets and consumers for German goods, and thus more work for the hands left at home.

The economic transition which was diverting the nation’s energies in an increasing degree from agricultural into industrial and mercantile channels was illustrated by the growing aggregation of population in the towns. In the middle of the century one in four of the inhabitants of Prussia, one in five in Würtemberg, and one in seven in Bavaria lived in towns. Thirty years later two out of five and at the end of the century one-half of all the inhabitants of Germany belonged to the urban class.

Notwithstanding these changes, so momentous in their influence, the years immediately preceding and following the establishment of the Empire were years of comparative barrenness in legislation for the welfare of the people. The third quarter of the century had passed before either the Government or the nation became conscious of the existence of a social question. As late as 1871 the Tubingen political economist, Gustav Schonberg, wrote deploring “how little we in Germany know about the real position of our working classes.” It has been shown already that economic individualism had obtained a foothold in Germany. Copied from England, where it had from the first been embraced with passionate devotion by the hardheaded industrial pioneers of the North—dura mrum mater—this austere faith had all the harshness and crudeness of copies, and it was under its unfavourable influence that the first great development of industrialism and the factory system took place. With the introduction of the constitutional era a strong revulsion against restraints of all kinds set in, and in sheer relief the middle-class parties welcomed liberty in any form and degree, little concerned about its effects.

When at the inaugural meeting of the Association for Social Policy, formed at Eisenach in 1872 to counteract the State policy of laissez faire, Gustav Schmoller claimed that the just desires and demands of the working classes should be emphasized with “moral pathos,” the phrase was turned to a jest by the individualistic school of politicians, who replied that economic science had nothing to do with either morality or pathos. Nevertheless, from the Eisenach movement went forth beneficial influences which powerfully reacted upon the later development of the social question. From the first the leaders of the new movement—among whom were many well-known professors of political economy, including Schmoller and Adolf Wagner of Berlin, Conrad of Halle, Lujo Brentano of Munich, Schönberg of Tubingen, and Wilhelm Roscher of Leipzig—were called “Socialists of the Chair,” a label more infelicitous than labels given in reproach usually are, since not one of them was identified, directly or indirectly, with either the party or the programme of Social Democracy. The name clung, however, and it has been used ever since with complete inconsequence to denote those university teachers and writers who, in their criticism of Socialism, have persisted in discriminating between the false doctrines and the true. So strongly entrenched was individualism in the Diets at that time that it was 1874 before factory inspection was introduced in Prussia, at first for Berlin and Silesia,...