No More Learning

comprehensive legislative code
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BISMARCK
it had failed to secure by a frontal onslaught. Secondly,
the requisition that deficits must be made good by matri-
cular contribution from the federated States was very un-
popular with the contributories, and the opposition made
itself felt in the Federal Council, where the governments
could outvote Prussia and resist measures of policy that
involved further expenditure with a corresponding in-
crease in the fro rata matricular contributions to imperial
revenue from the States. Hence the control of policy was
threatened. Thirdly, an increase in direct imperial
taxation was not practical politics. The several budgets
of the federated States were dependent on direct taxation,
and it was impossible for the imperial revenue either to add
an imperial to the State tax or to remove from the State
governments their main source of income. Fourthly,
without much larger sums of money, unification and cen-
tralisation through the imperial executive would come to
a standstill. Even more pressing was the cost of defence.
Foreign policy and the general principles of the State
polity necessitated the arming of Germany to the teeth.
An expanding population automatically provided the men,
and the Empire had to pay for their equipment. The
more scientifically that an army is organised, the larger
the amount of science that it brought into armaments,
the more costly will that army be. Efficiency can only
be purchased by increasing expenditure. If the German
army was no more efficient, better equipped, and in ad-
vance of all rivals in the quality and amount of its materiel,
the basis of Bismarckian foreign policy was shattered.
'It must never be forgotten,' wrote Frederick the Great,
'that distrust is the mother of security. ' Bismarck's
system started from profound distrust and fear of foreign
States, and the assumption that distrust and fear made the
foreign policy of all other States. He studied the omens
of the international situation with the superstitious creed
of the augur, profoundly convinced that the gods were
jealous, malevolent, and implacable, and the human beings
they influenced a debased copy of the gods. If the
Socialist Democrat, according to Bismarck, interpreted
life in the terms of a carnal and fleeting hedonism (which
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? THE IMPERIAL CHANCELLOR 365
he did not, for he lived and throve on ideas and ideals),
Bismarck for all his belief in God, Heaven, and a Hereafter,
seems to have been convinced that the sole justification
of Heaven and an after life lay in importing as much of the
Devil and of Hell into international relations as were neces-
sary to provide a deterrent to coalitions against Germany.
The prestige of Germany depended on the universal con-
viction that Bismarck relied on force, and that the German
army could be at the gates of its foe within ten days of
a rupture. The army therefore must be provided with
strategic railways and vast stores; and on the horizon
there already grew out of the sea the little cloud that fore-
told an imperial navy no less efficient and ready. The
navy was an imperial affair. As yet it was in its cradle,
but even cradles are expensive, and those who rock them
must be paid. The most fatal disaster to be apprehended
was a limitation of German armaments imposed by a
Reichstag that refused to tax the Empire any further.
The advantages of a new, were as conspicuous as the
defects of the old, system. Bismarck saw the German
nation, in consequence of its unification, its long intel-
lectual preparation, its intoxication from victory, and its
belief in its own disciplined, intellectual, and moral
strength, growing in wealth, numbers, and solidarity.
A tariff and indirect taxation would tap the expanding
national reservoir and disguise the withdrawal of the wealth.
In his eyes the supreme advantage of indirect taxation
lay in the concealment of the tax. It would fall on the
ignorant consumer, not on the taxpayer directly mulcted
by the action of a government. A tariff was an arrange-
ment that could not be annually revised, for it would rest
on an economic code enacted for a period of years, or be
largely regulated by treaty beyond the revising power of
the legislature. Hence the revenues derived from indirect
taxation would fall into the same category as the military
Septennates, and pass from parliamentary control into
the hands of government. More than ever policy would re-
main the monopoly of the Federal Council and Prussia, and
the Reichstag be reduced to a debating society, incapable
of interfering at any point with the central springs of power.
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BISMARCK
Already in 1879 Bismarck foresaw one further marked
advantage. The existing structure of society was the core
of the Prussian system. The real danger of Social Demo-
cracy did not lie in its opinions, for the executive could
always ignore or crush opinions and ideas, but in the
reconstruction of society that the Socialist programme
avowedly contemplated. The Bismarckian system and
the State which stood for Power could not exist on
a different stratification of society to that established in
Prussia. Social Democracy aimed at a social revolution,
the political effects of which would be simply consequential
to the economic and social redistribution. Apart, how-
ever, from Social Democracy, the existing structure was in
1878 threatened more insidiously and continuously by the
operation of social and economic changes, not confined to
Germany, though accentuated by the rapid industrial
revolution that set in after 1871. Agricultural depression,
if unchecked, meant that Germany would shortly be
dependent, like Great Britain, on imported food; but
far more serious politically was the pauperisation of
agricultural Junkertum. The squirearchy would be trans-
formed from an independent landowning and governing
class into a class no longer able to staff the army and the
civil service, but divorced from the land and driven like
the bourgeois to earn a middle-class living. Industrial-
ism, too, was throwing up a new aristocracy of brains and
money whose power rested on their capacity, their wealth,
and their potent material interests. Sooner or later they
would usurp the position occupied by the old Junkertum,
because they were quite as able, worked as hard, and com-
manded a. far greater share of the elements of material
power. It is as hard to argue with the masters of industrial,
as with the master of military, legions.
Bismarck's economic and fiscal policy from 1879to
has absorbed the analytical attention of the economist and
the political philosopher, but the major premises from
which he argued and the conclusion to which he marched
with relentless energy, derive their deepest significance
from their relation to the principles of his statecraft. For
by his policy at the critical moment of development he
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? THE IMPERIAL CHANCELLOR 367
gradually attracted the allegiance of the new elements
of power to the Prussianised Empire. By so doing he
saved the Bismarckian State, and he prevented all those
formidable elements from being thrown into revolt against
the existing regime. He did not love industrialism or its
works; all his sympathies were with agriculture, the
landowner and the farmer and the peasant; he did not
argue from economic science, or from any devotion to an
economic theory of freedom or otherwise. From first to
last his inspiration and his objective were purely political,
and intensely conservative. Contemporary and later critics
alike have questioned the sincerity and disputed the mean-
ing of Bismarck's' conversion' to Socialism. In reality there
was no conversion at all. Socialism as a theory of society,
or of the economic life and functions of an organised com-
munity, he never accepted nor professed to accept. His
view of the true type and character of social and economic
stratification remained constant, and it may be questioned
whether in 1879 or 1890 he had altered one hair's-breadth
of the opinions he professed in 1849. But he was a realist
and an opportunist, and he recognised that change must
continually be taking place. The function of conser-
vative statesmanship, if sincere in its allegiance to a defined
table of social values and a defined social order, must con-
tinuously incorporate the ' ponderable ' elements, created
by change, and employ them in shoring up the social
framework and preserving the type. The problem was
essentially one of political judgment, knowledge, delicacy
of method, and an elastic adaptability--a perpetual com-
promise which conceded details but never allowed funda-
mentals to be questioned or weakened. Hence his deep
contempt for the Metternich school or for the unbending
Conservatism of the Kreuzzeitung type, which would let
a conservative social order go to ruin because some
conscientious shibboleth was erected into an inflexible
principle. A Conservatism that lacked the political in-
stinct and the true political judgment was as useless and
dangerous as the Socialism of Bebel and Liebknecht. Had
Bismarck been a" conservative leader in Great Britain
between 1820 and 1850 he would have put Eldon, George
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BISMARCK
Bentinck, and Wellington in the same category as he put
Gerlach and the tribe of Senfft-Pilsachs and Blanckenburgs.
He would not have waited, like Peel, for the destruction
of the landed aristocracy and a potato famine to be con-
verted into a great betrayal and the ruin of his party.
He would have united the millowners and manufacturers
who were the backbone of Cobden's League in an
alliance with the old aristocracy, and compelled the
Whigs and the middle-class Liberals to share the fate
that he meted out to Bennigsen, Lasker, Forckenbeck,
and Stauffenberg.
Failing a coup cTEtat, which Bismarck regarded as a con-
fession of failure and stupidity, parties in the Reichstag
had to be manipulated. The autocracy was yoked to a
representative legislature and lived under a constitution.
The new policy, as Bismarck foresaw, offered unrivalled
opportunities, first, for splitting the existing party distri-
bution, and, secondly, for bargaining. The substitution of
interests for principles as the basis of parties was not the
least important result that accompanied and flowed from
the new system. 1 Bargaining over principles is always a
failure. Hence coalitions in a country where party sys-
tems rest on principles are usually failures, and always
hated by the country as a whole. But bargaining over
interests is simply an affair of political and economic
arithmetic. Conducted by a strong government with a
resolute chief it resolves itself into a simple problem of the
quantity of the article required conditioned by the price.
Bismarck, though he probably had never read an economic
text-book and could not have explained the meaning of
'final utility' or ' marginal value,' applied the principle
in the world of parliamentary politics in the same effective
way as M. Jourdain spoke prose. The final political
utility of Clericals, National Liberals, or any other group
was, in his eyes, simply the last quantity of votes that the
buyer was prepared to secure, and the seller willing to
1 Cf. Strachey's remark (Report already cited, p. 45) as an example in
1885: 'No reason can be given why spun silk should be excluded from the
blessings of protection, except the conclusive one, that they do not form a
powerful interest, and that in spun silk, as in other things, " to be weak is to be
miserable. "'
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? THE IMPERIAL CHANCELLOR 369
part with, at a given price. And the famous cartel which
secured him a working majority was a political coalition,
arranged precisely on the principles on which a big manu-
facturer coalesces with a group of rival but smaller firms.
Bismarck, moreover, started from two fixed points, as in-
telligible to every one as to himself--he could move the
government levers, and once he had broken with Liberal-
ism he could always rely on the Conservative vote. King
and Junkers, the social structure round the throne, and
the Federal Council and the governments would fall to
heel. They barked and bit (sometimes) and growled
perpetually, but they knew when their master meant
business.
In a word, the new policy of 1879 was a fresh mani-
festation, moulded by circumstances, of the State as the
incarnation of Power. The Alpha and Omega of Bis-
marck's ' Socialism ' were summed up in the determination
to make the Empire self-sufficing, stronger than ever, and
still more dependent on the government, still more im-
potent to place the control of policy under responsible
parliamentary institutions. Such measures were not really
Socialism, properly defined, at all--the Social Democrats
saw that from the first--except in the sense that every act
of a State is 'socialistic' It was the renaissance of the
mercantilism of the seventeenth century adapted to the
benevolent and illuminated despotism of the eighteenth
century and the conditions of a militarist State, remoulded
by the phenomena of modern industrialism. Hence its
ultimate and unequivocal challenge to the principle of
Free Trade, and the modern State built up on the prin-
ciples of which Free Trade was but one plinth in the
whole structure. Its raison d'etre and end were power,
directed by a fusion of the landowning and capitalistic
classes that dominated a social organisation of a definable
type. The so-called Socialism of Bismarck was a denial
of the postulates and economic analysis alike of Lassalle,
Marx, or Bebel. The academic Socialists of the Chair--
the Katheier Socialisten, led by Wagner, Schmoller, and
their school--wrote elaborate volumes on Bismarckian
Socialism, and read into it a mass of theory which Bismarck
B. 2 A
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BISMARCK
would have failed to understand, or dismissed as irrelevant
verbiage: so far as it had an ascertainable paternity, the
genealogy of Bismarck's Socialism can be found, not in the
writings and teaching of Karl Marx, but in the doctrines
of F. List. But the new programme was a wonderful
illustration of Bismarck's intuitive sensitiveness to change
and ideas, that he exploited for his own political purposes.
So long as Germany was rent by the Kulturkampf this
comprehensive programme could not be fairly discussed
or embodied in law. The Kulturkampf was essentially a
controversy over principles, which brought the theory and
functions of the civil power into the arena of conflict. The
Clerical Centre, as developed by Windthorst with the aid
of the Roman Curia, was first and foremost a confessional
organisation which united in a single party every class from
the princes and hierarchs of the Church to the industrial
proletariat in the great Catholic centres of industry, and
which subordinated all the separable class interests of its
members to a broad aim, the practical independence of
the Roman Church. The new economic programme in-
volved a complete breach with Liberalism and Radicalism.
It could not therefore have any chance of success unless
the Centre were rallied to the side of the government.
The Kulturkampf must therefore be ended, as a prelimi-
nary condition to the new era. Bismarck's conversations
with Masella at Kissingen cleared up the situation. The
Vatican required the repeal of the May Laws and a return
broadly to the position in 18711 Bismarck required the
Centre vote on all governmental proposals. Both sides
had a valuable article to sell; both sides were weary of
the struggle, and neither side dared openly to don the
white sheet and publicly reverse their explicit statement
of principles. Each side thoroughly distrusted the other,
and with good reason. Windthorst feared that once
Bismarck had utilised the Centre he would throw them
over and reunite with the Liberals. Bismarck, uncertain
of how far Germany would accept the new programme,
and aware that the Liberal and Protestant forces would
resent an advance to Canossa, and that repeal of the May
Laws was a damaging blow to his prestige, dared not make
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? THE IMPERIAL CHANCELLOR 371
the Centre master of the situation. The exchange of a
Clerical control for the National Liberals was no gain but
loss. For he wanted to be independent alike of Clericals
and Liberals, and of the two the Clericals were more
difficult to satisfy. Foreign policy entered into his cal-
culations. Ultramontanism in France and Austria was a
continuous and disturbing element in the European
situation. Bismarck had to reckon with a possible Ultra-
montane supremacy in France upsetting the results
achieved by the Dual Alliance of 1879. And there was
always Poland--the eternal Poland, Catholic and Slav
in one.
It was essentially, therefore, a case for a slow and
gradual reconciliation, every concession being decided by
the situation of the moment and paid for in advance
by positive results. Bismarck began by heartening the Con-
servatives. In 1878 Camphausen, the Liberal financial
minister, was replaced by Maybach, a Conservative; Eulen-
berg, the new Minister of the Interior, was a strenuous
Conservative; Stolberg, the new Vice-Chancellor under
the Kanzlervertreter law was not a National Liberal, but
an unbending Conservative. On July 14, 1879, Falk's
resignation was accepted. He left office with all the in-
dications of dismissal. His health had failed; and to
assist him in his recovery he was given a riband, a eulo-
gistic letter, portraits and photographs, while his place
was taken by Puttkamer, a fierce Conservative. On
May 3 the members of the Reichstag who attended the
Chancellor's parliamentary soirees, where Bismarck^ cigar
in one hand and glass in the other, arranged his parlia-
mentary plans of campaign, saw with astonishment 'the
pearl of Meppen,' 'the little Chancellor,' Windthorst,
making his bow with the air of a habitut, and witnessed the
genial cordiality with which the 'big Chancellor' wel-
comed the apparition expected by himself and no one else.
Delbriick, Camphausen, Falk had gone, and in their place
was Windthorst, polished, smiling, and epigrammatic.
'Every courtesy as far as the gallows,' Bismarck had said
thirty years before to G. von Vincke. 'Every courtesy
as far as Canossa,' was now Windthorst's silent comment.
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BISMARCK
It cannot have been a happy evening for Bismarck, though
he made his new guest taste from the huge cask of the
finest Franciscan liqueur sent him by the reconciled monks.
The fruits of the negotiations behind the scenes were
laid on the table of the Prussian Landtag in 1880 in a
governmental bill. The measure was roughly handled and
drastically amended, and in its final form only passed by
four votes (206-202), a convincing proof of the strength of
Liberal feeling and voting power. As amended, the bill
did not repeal any of the fundamentals in the May Laws,
but gave to the government a qualified discretion in the
enforcement of the penal legislation. It had been pre-
ceded by a Papal announcement (February 24) authorising
the Roman bishops in Prussia to notify ecclesiastical
appointments in their diocese to the Prussian government
for approval (Anzeigepflicht). The bill was the first step
towards a complete peace. The remaining stages were
covered in the next four years. In 1882 (May 31) Roman
priests were largely dispensed from the necessity and con-
ditions of the State examination, prescribed in the May
Laws; in 1883 (July 11) Roman bishops were released
from the obligation to notify ecclesiastical appointments to
the civil authority, which simply retained a power of veto;
in the same year the Crown Prince visited Rome and had
an audience with the Pope; in 1884 the Roman bishops
were introduced into the Prussian Council of State; in
1886 Leo xii1. was invited by Bismarck to arbitrate'on the
dispute between Germany and Spain over the Caroline
Islands, and in the same year a new law empowered the
government practically to dispense at its discretion with
the penal code set up between 1873 and 1875. On
May 23, 1887, Leo xm. was able to assure the Consistory
that the Kulturkampf was at an end, and that the Roman
Church had secured the essentials for which it had fought.
Bismarck received the Order of Christ, the first Protestant
to be given this Papal decoration, a portrait of Leo xm. ,
and a copy of the Pope's Latin poems.
He did not forward
in return a bound volume of his speeches in which he had
laid it down that he would not go to Canossa either in
body or in spirit.
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? THE IMPERIAL CHANCELLOR 373
'That journey,' as a distinguished German historian
said, 'nevertheless took place. ' The argument that
Bismarck was not beaten, and that he did not surrender,
cannot stand the test of indisputable fact. Still less
tenable is the view that Bismarck made the surrender
willingly. He was not the man, after all his stout words
and the violence of the conflict in which Protestant and
Liberal Germany had hailed him as a second Luther,
nailing 'the May Laws,' like the immortal ninety-five
theses at Wittenberg, to the Throne and Parliament of
Prussia. The attempt to enforce the omnipotence of the
Civil State had broken down; the attempt to assert civil
control over the faith, discipline, and education of the
Roman priesthood had collapsed. In 1873 Bismarck had
plainly miscalculated the resources of the foe he had chal-
lenged, and exaggerated the strength of the weapons at his
disposal. He had beaten a retreat because he could not
hold the position that he had occupied in the battle:
but he had not retreated without securing compensation
adequate to the humiliation. The Clerical vote enabled
him to carry out a policy more important in his eyes than
the principles enshrined in the May Laws, and in the criti-
cal controversy in 1887-8 over the Septennate the Centre
came to his" aid and secured the victory (see p. 451).
The Chancellor's surrender was a bitter blow to
Liberalism and Radicalism. To both parties the Clerical
Centre was, in Gambetta's phrase, the enemy, for Ultra-
montanism challenged every principle of importance in
the Liberal and Radical creed, and to them the victory of
Windthorst and the Vatican was a victory of obscurantism,
not merely in the narrow plot of theology and dogma,
but in the unlimited fields of intellectual and social life.
The far-reaching influence of the 'progress to Canossa'
between 1879 and 1887 on the German mind cannot yet
be fairly estimated, nor do they fall within the scope of
our subject, but its direct and immediate results were
obvious. It opened up an epoch of growing reaction in
home politics and administration, and the barometer of
Liberalism steadily fell. The Centre remained at a fairly
constant figure of approximately one hundred votes in
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BISMARCK
the Reichstag, and Bismarck's action made it the arbiter
of the parliamentary situation. The full effect of that
predominance was felt outside the period of Bismarck's
Chancellorship, and he left it as a dangerous inheritance to
his successors. They had to liquidate the bill incurred
between 1879 and 1887.
The smashing of Liberalism was the other conspicuous
result. Here again Bismarck reaped the direct advantage
for himself, and left the aftermath to his successors. But
when Bismarck broke the National Liberal party he left
the Empire with no buffer between the government and
Social Democracy except an uneasy marriage of con-
venience between Conservatism, which completely failed
to grow any stronger in voting power, and the Clerical
Centre--a coalition of interests, not a fusion of principles.
The inheritor of the broken Liberalism was the Socialist
Democratic party, and the growth of that party was a
fresh proof that Bismarck had miscalculated its strength,
the sources from which it drew its recruits, and the
methods by which it could be successfully combated.
The gradual degradation of the Reichstag, and with it
the deterioration of political life in Germany, began in
1879 when Bismarck for purely tactical reasons bought
the support of the Centre. That degradation was per-
haps inevitable, because the Reichstag under the Imperial
Constitution was simply a part, and not the most important
part, of the legislative machine; and no representative
body can retain its vitality, its dignity, and its self-respect
--the three qualities essential to a healthy and self-renew-
ing political life--when it is deliberately made a House of
Phrases and nothing else. But unquestionably the de-
terioration was materially hastened by Bismarck's policy.
Power and responsibility are correlatives in the life of
organised communities, and the Reichstag was steadily
deprived of the shreds of both that it once possessed.
When the generation that had produced Bennigsen,
Lasker, Forckenbeck, Miquel, and Richter had passed away,
as they practically did in Bismarck's lifetime, the ideals
and the effort to realise them which had been the life-blood
of the heroic Germany from 1848 to 1870 were no longer
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? THE IMPERIAL CHANCELLOR
there to inspire the new generation. An acute observer
remarked at the time when Prince Hohenlohe's Memoirs
were published, the painful disillusionment in Germany
at the revelation of the atmosphere of intrigue poisoning
the political world in which Hohenlohe had played his
part, with increasing aversion to the setting in which
he found himself. The disillusionment of the politicians
began long before 1902. The lifting of the curtain on
parliamentary history after 1879 reveals the Reichstag not
as the centre of national life where the principles of a
nation's policy are fought out in argument and open day-
light, but as the market-place where an irresponsible
government secured a more or less transient majority by
the sleepless manipulation of the leaders and the purchase
of votes by concessions to the rank and file. The real bar-
gaining took place in the Federal Council, and as to its
nature and terms our information is either non-existent
or so scanty as not even to justify the speculative hypotheses
of a Privatdozent. The function of the government was
reduced to securing a majority in the Reichstag in order
to place the legal stamp on decisions arrived at else-
where. And this function Bismarck performed with
remarkable skill, because he had an unrivalled personal
prestige, and to the end he exercised a personal hypnotism
over the men with whom he negotiated and the Germany
that they represented.
Here again the results affected his successors more dis-
astrously than himself. Surrounded by a network and an
atmosphere of intrigue he was strong enough to defeat it,
simply because he was Bismarck. But Caprivi, Hohenlohe,
and Bulow--to take the story no further--had to wrestle
with the system that Bismarck had created, and they were
the victims of that system. In home as in foreign politics
Bismarck did not wish to look beyond the immediate needs
of the hour. He saw the storms successively rolling up,
and he added one temporary lightning conductor after
another to divert the destructive force from the main
building. He had definite ends in view, but for their
realisation he implicitly relied on the tactical situation,
and even more on his own unrivalled power of extricating
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BISMARCK
himself from any and every difficulty by an unerring use
of opportunities.
He illustrated these qualities triumphantly in the great
struggle from 1879 to 1888, which was the climax to his
political career. The first step was the abandonment of
Free Trade and the return to Protection, embodied in the
measures submitted in May 1879. '^ne corn duties were
voted in May, and the new general tariff passed on July 12
by a majority of one hundred, the Centre voting with the
government. Bismarck's interest and share in the policy
was shown by his continuous intervention in debate. He
spoke no less than eight times, and his speeches were a
personal confession and the exposition of a comprehensive
programme. He desired to return to the ' time-honoured
ways of 1823 ' (when Prussia began to abandon its Pro-
tectionist system with the organisation of the Zollverein),
and he asked the Reichstag to believe that in 1862 he had,
to his shame, no ' economic tendencies ' at all; for fifteen
years he had been so completely absorbed in foreign policy
that he had had no leisure to form independent opinions or
an exhaustive investigation, and he had relied on Delbriick
and others, whose opinions he had accepted. Delbriick's
retirement in 1876 had compelled him to take up the
matter for himself, and he had discovered that Germany
and himself had been ' the dupes of an honest conviction'
(FreeTrade) 'worthy of the honourable capacity for dream-
ing in the German race. ' In a characteristic passage he
argued that surgery based on experience had made brilliant
progress, whereas medical science, unable to examine the
internal mechanism of the body, had practically stood
still: so with economics,' the abstract doctrines of science
leave me perfectly cold, my only standard of judgment
being experience,' and experience showed him that Pro-
tectionist countries prospered and Free Trade countries
were stagnant or retrograde. The unanimity of the pro-
fessors for, was in itself an argument against, Free Trade.
He concluded with his customary peroration that party
considerations never influenced his patriotic zeal, and that
in advocating the change he had but one motive, the
prosperity and well-being of the Empire.
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? THE IMPERIAL CHANCELLOR
As an account of Bismarck's conversion the speech was
as remarkable for its omissions as for its assertions, ignor-
ing as it did the powerful pressure exerted by the agri-
cultural and manufacturing interests. The passage on
science must have highly diverted Virchow, and had
Pasteur read it, would have caused him to raise his eye-
brows in amused contempt. Still more naive was the
assertion that Free Trade was a cause of decadence, when
it was precisely a Free Trade Great Britain whose com-
petition was so distressing to German manufacturers.
Windthorst, too, must have enjoyed the passionate protest
that party considerations never entered into the Chan-
cellor's calculations, for the night before he had been
haggling with Bismarck over the price for the Clerical vote.
The Chancellor struck the note of irresistible appeal when
he invited the Reichstag to save agriculture and preserve
the German market for German industry at all costs, and
by a large addition to the revenue release the Federated
States from the burden of the increasing matricular con-
stitutions. He bid for the material interests, and they
responded manfully to the invitation. 1
The division was a personal triumph, and the aged
Field-Marshal Moltke could be seen stumbling over his
sword, caught in the rails, as he mounted the steps to the
Chancellor's seat to congratulate him. Yet the triumph
was not unalloyed. Bismarck had been compelled to
accept the Franckenstein amendment by which all revenue,
above one hundred and thirty million marks, derived from
the new tariff was to be appropriated to the relief of the
Federated States. His desire to obtain the sole use of the
new revenue for imperial purposes was thereby frustrated,
and this damaging amendment was the beginning of a
series of disappointments and rebuffs.
For eighteen months the economic battle between Free
Trade and Protection had been squarely fought out in
Germany in the press, on public platforms, and in academic
controversy. The vote of July 1879 decided the issue,
1 'The political constitution of the Empire, the highest personal influences,
the most powerful industrial and commercial forces, some of the principal
press energies, all are on the side of the (Protectionist) system. '--Report already
cited, p. 75.
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? 378
BISMARCK
and the Centre gave the victory to Bismarck. The
National Liberals broke over the controversy; sixteen
voted with, but the majority against, the government.
Free Trade and a Free Parliament in a united and cen-
tralised Empire had been their programme since their
formation in 1867, and in the attack on Free Trade the
majority recognised a general assault on the whole Liberal
creed. The suspicion was confirmed by the revision of
the May Laws next year, and the party broke up. The
Secession, which included the ablest and most vigorous
members--Lasker, Forckenbeck, Bamberger, and Bunsen
--endeavoured to establish, like the Peelites in England,
an independent existence between the Conservatives, with
whom the right of the party now acted, and the Pro-
gressives under Richter. But the general election of 1881
was a further blow. True, it went badly for Bismarck
and the government, for the Conservatives lost a great
many seats, but it made clear that there was no room for
a divided National Liberalism, and it gave the gains to the
Centre, the Socialists, and the Radicals. Bennigsen, worn
out and disillusioned, retired from public life in 1883, and
the Secession was driven to unite with the Progressives, and
found under Richter's leadership a new party, the Deutsch
Freisinnige--the German Free Thinkers. The remnant
of the old party continued to exist under the old name,
and to support the government, because it was national
rather than Liberal. But between 1881 and 1883 the old
National Liberalism really ceased to exist. It became
under a misleading label a party moderately Conservative
at home, and fiercely Nationalist in foreign politics.
The old National Liberalism had been the most powerful
intellectual, educative, and political force in forming a
united Germany; but when in 1867 it subordinated free
institutions to unity, when in 1870 it accepted without a
struggle the system of 1867 as the basis of the Empire,
when it persistently helped the government by the Sep-
tennates to ruin the Budget control of Parliament, and
when in 1878 it consented to pass the law apainst the
Social Democrats, it destroyed itself.
Bismarck treated the party as he treated Napoleon 111. ;
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? THE IMPERIAL CHANCELLOR
and he used the support it gave him to be the engine of its
downfall. The middle class from which it drew its
strength turned either to Protection, from which it could
gain wealth, or to the Progressives who fought a hopeless
battle with the entrenched governing class. Richter's
party had at least an intelligible creed and an avowed aim
--that of destroying the Bismarckian system and of substi-
tuting for it responsible parliamentary government at
home, an economic regime not founded on prosperity for
the landowner and manufacturer and State doles to the
proletariat, and a foreign policy that did not rest on a
continuous expenditure on armaments and the Prussian
sword as the ultima ratio in international relations. After
1878 National Liberalism, as such, had no constructive
policy to offer Germany. It resisted the conversion of
Bismarck, but it had no practical alternative to meet the
needs of the Empire it had largely created. It criticised
with acerbity, and voted with docility in the government
lobby, and its dissolution was a confession of bankruptcy.
Bismarck and the Radicals acted as joint-receivers, liqui-
dated the account, and distributed the business of a once-
flourishing and powerful House into various and hostile
hands. It was, indeed, the end of an old song.
The year 1880 was mainly occupied in opening the road
to Canossa, but from 1881 to 1889 Bismarck laid down the
main framework of the economic legislation that earned
him the title of the Great State Socialist of the nineteenth
century--the measure which provided for Employers'
Liability in accidents, for insurance against sickness, and
for the provision of Old Age Pensions. The feverish
energy--alles ging in galopp, as he said--with which these
measures were pressed is very remarkable, and still more
remarkable is the Chancellor's personal share in their con-
struction and in the task of carrying them in the teeth of
bitter opposition in the Reichstag. In the autumn of 1880
he took over the Ministry of Commerce, adding it to the
duties of Minister-President and Chancellor; he was then
in his sixty-fifth year, and during all this period he carried
alone the burden of foreign policy, in itself a tremendous
task, and was also engaged in the complicated negotiations
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? 38o
BISMARCK
with the Vatican and the Centre which ended the Kultur-
kampf. The expression that Bismarck was the govern-
ment and the government was Bismarck conveys a very
faint conception of the responsibility and labours that he
shouldered. The Prime Minister of a modern Parlia-
mentary State, such as Great Britain, carries no doubt an
onerous burden, but he shares his responsibility with
colleagues, while the party system relieves him of the duty
of creating a majority that will loyally vote as required;
because if the country refuses him the majority the burden
of office is transferred across the table to a rival party
leader. But Bismarck had to steer through the rocks,
shallows, and eddies of the parliamentary seas, finding
'allies where he could get them,' and uncertain whether in a
critical turn if the ministerial ship ' hung in stays' the crew
might not take to the boats. He had, moreover, as Chair-
man of the Federal Council to keep that essential organ
united and compliant, and the Federal Council was not a
Cabinet cemented by the ethos of collective responsibility
and composed of members in broad agreement on the
current questions of public policy. Mr. Gladstone or Lord
Salisbury would not have relished working the Parlia-
mentary System through a Cabinet of fifty-six members,
only seventeen of which could be implicitly trusted to vote
straight. It is not surprising therefore that Bismarck's
performance from 1879 to 1888, in the autumn of a life,
which had never spared itself from youth to old age, made
an indelible impression on Germany. Compared with the
'Iron Chancellor ' the other public figures seemed indeed
bloodless and fleeting shades. Every quality in the
Chancellor's person was titanic--the physical frame, the
head carved and moulded by a Berserker's hammer and
chisel, the will, the temper, the appetites, the ambitions.
The Empire that was Power was incarnated in that
hypnotic personality.
In 1881, 1884, and 1886, the Trade Law (Gewerbe-
ordnung) was substantially amended and extended; the
structure and scope of Trade Guilds were reorganised with
a view to strengthening artisans against the capitalist and
the factory (and incidentally to minimise the power of
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? THE IMPERIAL CHANCELLOR 381
Trade Unions), and ' in diametrical opposition to the prin-
ciple of laissez-faire, the abandonment of the weak to their
own resources and to private help. ' The measure pro-
viding for compulsory insurance against sickness was
destroyed by criticism in 1881, was reintroduced in 1882,
and carried against the Radicals and Socialists in 1883;
it was subsequently extended in 1885 and in 1886. A
bill for insurance against accidents was introduced in
1882 and became law in 1884 (July 6); it, too, was
amended and extended in 1885, 1886, and 1887. The
system was completed by the Old Age Insurance Law
of June 1889.
Concurrently with these measures of vast scope Bis-
marck was engaged in an effort to recast the whole
system of taxation, and to create an imperial revenue
that would provide the funds for 'the socialism of the
State. ' But he met in this sphere with more defeats
than successes.
The Stamp Tax of 1881 imposed a duty on Stock Ex-
change transactions, and the Usury Law of 1880 intro-
duced legal rates of interest. But the proposal to tax all
exemptions from military service was rejected in 1881,
Moltke ostentatiously leaving the Reichstag before the
division. The attempt to establish in 1882 a tobacco
monopoly which was to provide the funds for Old Age
Pensions broke down completely; and though an income
tax was introduced for Prussia, the idea of imposing a
separate Imperial Income Tax was dropped. The sug-
- gested monopoly in brandy was introduced in 1886 and
decisively defeated, and the failure destroyed the idea of
establishing a monopoly in sugar. The principles and
aims of this programme were fully set out in the Royal
Speech of November 17, 1881:--
'We express our conviction that the cure of social ills must be
sought, not exclusively in the repression of Social-Democratic ex-
cesses, but simultaneously in the positive advancement of the wel-
fare of the working classes. . . . The finding of the proper ways
and means is a difficult task, yet it is one of the highest of every
Commonwealth which is based on the ethical foundations of a
Christian national life. '
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? 382
BISMARCK
Bismarck's own views can be summarised by a few
quotations from his speeches :--
'In my opinion we are behind all great European States in regard
'to the development of our system of Taxation, especially with re-
spect to its reaction upon our economic conditions, and we have
much ground to recover in this domain' (February 22, 1878).
'In regard to exemption from taxation, I hold in general the
principle that the man who has nothing but his two hands, that is
untrained hands that have learned no industry, should be quite
exempted from both state taxes and imperial contributions, and
that the taxation should begin when a further capital exists'
(February 4, 1881).
'You know that I am an opponent of direct and a friend of in-
direct taxes . . . my ideal is not an Empire which must collect its
matricular contributions at the door of the individual states, but
an Empire which, having in its hands the principal source of good
finance--indirect taxes--would be in a position to pay contributions
to all the individual states' (February 26, 1878).
'I regard it as one of the greatest superiorities of our life in
Germany that a large part of our well-to-do classes live all the year
round in the country, carrying on agriculture themselves . . . if
you succeeded in destroying this race you would see the result in
the palsying of our entire economic and political life' (February 14,
i885)-.