Chapter 28

In 1851 the Krupps exhibited at the exposition in London the first cannon made of cast steel; now they turn out more shells and shrapnel in a week than were used at the whole battle of Koeniggraetz (Sadowa), which lasted from eight o'clock in the morning till four o'clock in the afternoon on July 3, 1866. The queen of this, the greatest factory of destructive agencies in the world, is a gentle Madonna-faced lady who might well pose for a statue of peace, and whose loveliness is a mirror of the countless and untiring benefactions with which the people who work here are surrounded. Both the powers and the people of Germany may well be proud of the Krupps, for if sane beneficence were to be raised to the rank of statehood this great colony would well deserve the honor. The gross profits for the last year were $9,000,000, half of which was written off and the rest devoted to the reserve, to dividends, and to contributions to the invalid and pension funds of the employees, which now amount to $9,500,000. The employees also have on deposit with the management $8,700,000. The contribution of the Krupps to the workmen's state-insurance fund amounted, in 1910, to $1,320,000. The Krupp family is rich, but what would their wealth have been had they practised the gobbling and juggling financial methods of ----; but I will not pillory my own countrymen by name, for, after all, our political methods have made them, and not they themselves.

The German manufacturer has been at a disadvantage, too, for several reasons, and this may well be noted as one of Germany's problems. She has not the deposits of coal that have made England rich, nor the wonderful soil of America, from which alone we take $9,000,000,000 every year, nor France's population, now at a standstill, and which can feed itself off its own soil. She has been a large borrower of capital to finance her enormous expansion of industry and commerce, and, above all, the gold supply of the world, which in the last resort is the foundation of credit, is not in her hands, nor can it be so long as British and American fleets keep the ocean highways over which that gold travels.

The world's gold output in 1911 was $493,100,000; of this $177,600,000 came from the Transvaal; $100,350,000 from the United States; $63,600,000 from Australia; $42,300,000 from Russia; $23,300,000 from Mexico; $35,600,000 from Rhodesia, India, and Canada; and $15,650,000 from Central and South America, or $458,000,000, of the total output of $493,100,000, from countries which in time of war would be unlikely to ship gold to Germany. More than one half the output comes from the British Empire alone. To those who are satisfied with the easy answer to the reason for the increased cost of living, that the output of gold has increased, it must be puzzling to learn that of the total output, in round numbers, of $500,000,000, $150,000,000 is used in the arts and manufactures and $150,000,000 goes to India, where it is buried and hoarded, and $100,000,000 is retained in the United States for currency and other purposes. In spite of the fact that the gold output of the world doubled between 1890 and 1897, and nearly doubled again between 1897 and 1911, money is dear, and is likely to be so long as present conditions last.

The reason for the higher cost of living is to be found in the movement of the population, from the dulness of the plough to the sprightliness of the cinematograph. This choice every freeman has a right to make for himself, but the trouble arises when the politician comes forward and pays his admission to the cinematograph entertainment, out of the public funds, in order to get his vote. The man who does not leave the plough under those conditions is either a fool or a saint, and the percentage of the growth of cities is a fair measure of their relative numbers. The increased cost of living is the result, not of too much gold, but of too little labor on the land, and this is due, in turn, to the voluptuous rhetoric of the political street-walkers, whose promises of pleasure are as illegitimate as they are impossible of fulfilment. A debtor nation like Germany is highly sensitive to these conditions, and just as she is overcoming, by her splendid success as a manufacturing nation this problem, she is met by increased and ever-increasing rivalry. America, in 1901, exported $466,000,000 of manufactures; in 1891 only $188,000,000; but in 1911, $910,000,000; and in 1912, $1,021,753,918. We now have in America 225,000 manufacturing plants employing 6,000,000 people, with an annual pay-roll of $3,500,000,000 and producing every twelve months $15,000,000,000 worth of goods. The total value of exports and imports of Japan thirty years ago was $30,000,000, or 87 cents per capita; in 1911 the figures were $480,000,000, or $10 per capita. England during the years 1911 and 1912 surpassed all previous figures both for exports and imports. Germany's rivals, it is thus seen, have not been idle.

The agricultural population of Germany in 1850 was 65 in the 100; it is now less than one third. In 1911, after a bad year for the farmers, Germany was obliged to pay out some $200,000,000 more than usual for food. The total loans of the German banks on industrial securities rose from $107,000,000 in 1890 to $632,000,000 in 1910, and bankers themselves admit that Germany has fallen into the error of seeking and accepting credit far beyond the value of the capital that they have to work with. Still more dangerous is the fact that 55 per cent. of the savings-bank moneys of Germany is locked up in mortgages. In 1907, 217 new companies were formed in Germany, issuing $62,050,900 in securities; in 1909, 179 new companies issued $54,929,450 of securities; in 1910, 186 new companies issued $57,437,700 of securities. In 1910, 340 companies increased their capital by $142,657,200. In 1910 there were 5,295 companies in Germany with a nominal capital of $3,680,979,400. It is estimated that since 1895 there has been invested in industrial companies in Germany $1,200,000,000. It is to be said also that since 1897 German agricultural production has doubled, German industrial production increased sevenfold, and Germany is said to have $4,750,000,000 in her savings-banks. The value of imports for home consumption, exclusive of the precious metals, in 1911 was $2,386,200,000; the value of the exports of home produce, exclusive of the precious metals, was $2,025,450,000. It is a quaint result of her temperament and her good forestry, that Germany sells $25,000,000 worth of toys a year; she is veritably the workshop of Santa Claus, and many more than 25,000,000 children would bless her did they know.

German financiers affirm that she can stand alone financially, while others assert that one sixth of her capital, I have heard it placed at one third, is borrowed from France and England. It is certain at least that the American panic of 1907, and the recent war in the Near East, have seriously embarrassed Germany financially.

As Germany can only feed, even in good harvest years, forty-eight or forty-nine millions of her people, a large proportion of her profits from industry must necessarily go to the purchase of food for the other sixteen or seventeen millions. The consumption of meat has increased among all classes in Germany, and both the demands of the individual and of the state have increased with the increased wealth of the country. In Prussia alone the number of those subject to income tax has increased from 2,400,000 in 1892 to 6,200,000 in 1912; but the taxes have increased as well, or from $800,000,000 to $1,675,000,000.

In the endeavor to increase the manufacturing output and to find new markets German credit has been stretched to a dangerous tenuity. While the war feeling was at its height the Koelnische Zeitung, a conservative and able journal, wrote: "In case of war both France and Germany will be obliged to borrow; but it is certain that the credit of Germany cannot as yet be compared with the credit of France: this is a strong guarantee of peace."

Wermuth, said by impartial judges to be the ablest secretary of the treasury the German Empire has had in a quarter of a century, resigned in 1912, on the general ground that he would not be responsible for the finances of the empire, if it was proposed to continue the constant increase of national expenditure, by a constant increase of borrowing, and an ever-increasing amount of interest-bearing liabilities. He must have smiled to himself when an Imperial issue at four per cent. put out in February, 1913, was not only not over-subscribed but not even all taken.

Unlike the French, who invest their savings small and large in national loans, the Germans neglect even their own national loans, preferring the higher returns for their investments from the innumerable industries launched in modern Germany; so pronounced is this form of investment, that a director of the Deutsche Bank has warned his countrymen, that every month's profits are no sooner gained than they are put out again in new enterprises, either by the individuals themselves, or by the banks in which they are deposited. As a result, the liquid capital at the disposal of Germany is dangerously out of proportion to her borrowings and her working capital. It shows a fine confidence in the future, and it proves what needs no proof: the immense industrial and commercial progress, and the immense sea-carrying trade of Germany. Germany is like a man with $1,000 in the bank to check upon, but doing business with $100,000 of borrowed capital, upon which he must pay interest, and out of which he must take his running expenses. Such a one has no provision for a bad year, and must depend upon more credit in case of trouble; and in the case of Germany, it may be added, his personal and family expenses have largely increased. The German imperial debt had increased during the first twenty-two years of the present Emperor's reign, or from 1888 to 1910, by $1,040,000,000, and of that sum some $650,000,000 were added in the ten years from 1900 to 1910, when Germany was building her fleet.

Between the years 1905 and 1910 the total export trade of Germany increased by $408,225,000, but the whole of the increase was due to the heavier forms of manufactures: machinery, iron ware, coal-tar dyes, iron wire, steel rails, and raw iron. The increasing competition is shown by the fact that during those same years her exports of the finer manufactures, such as cotton and woollen goods, clothing, gold and silver ware, porcelain, maps, prints, and the like, actually decreased by $66,975,000!

I am not maintaining for a moment that these problems are peculiar to Germany, but merely that, owing to the rapid progress, they are aggravated, and that to point out Germany as a model of successful achievement, along these and other lines, in order to bolster up political cure-alls at home, is a betrayal of crass ignorance of the general internal situation of the country, and once such prejudiced pleaders are found out, the rebound will go too far the other way. That were a pity, too, for we have much to learn from Germany.

The $30,000,000 in gold in the Julius Tower at Spandau, called the war-chest, and the income from railroads, forests, and mines, are to be put down on the other side of the ledger, but as a year's war, it is calculated, would cost France, England, or Germany some $2,300,000,000 each, these sums are of negligible importance.

The Prussian railways cost $2,250,000,000, and are now valued at twice that sum, and pay an average of seven per cent. on the invested capital. Maintenance costs are included in the total annual expenses, and there is no, so it is claimed, actual depreciation. Of the net revenue of $157,330,417 in 1909, about $55,000,000 are transferred to the state revenue, out of which all charges of the state, including interest on bonds, are paid. The rest is used for new construction, sinking funds, reserve funds, and so on.

The report of the Interstate Commerce Commission of 1909-1910 states that there are nearly $19,000,000,000 of railway capital outstanding in America. There are 240,438 miles of single track in the United States; 59,000 locomotives, 35,000 for freight, and a total of 2,290,000 cars of all kinds; and the railways carried in one year 971,683,000 passengers and 1,850,000,000 tons of freight. In 1910, 386 persons were killed, but, what is often forgotten, more than one half the total accidents were due to stealing rides and trespassing on the tracks. The railways in the United States are our largest purchasers by far, and for every dollar they earn 42 cents is spent in wages, 26 cents for material, raw or manufactured, before anything is given out for interest on loans or dividends.

A first-class ticket in Germany is taxed 16 per cent. on the price of the ticket; a second-class ticket, 8 per cent.; a third-class ticket, 4 per cent.; the fourth-class ticket, nothing. Crowded and uncomfortable travelling in Germany is cheap; comfortable travelling in Germany is very dear indeed. The herding of people in the fourth- class carriages in Germany resembles our cattle-cars rather than transportation for human beings. Such conditions would not be tolerated in America, but against these state-owned railways there is no redress. No luggage, except hand luggage, is carried free. Not once, but many times in Germany, my first-class ticket found me no accommodation, and often in changing from the main line to a branch line not even a first-class compartment. Shippers in the coal and iron districts, when I was there, complained bitterly that there were not enough freight-cars, that their complaints were smothered in bureaucratic portfolios, and that private enterprise in the shape of proposals to build new lines was disregarded. The tyranny of Prussia extends even into the railway field. The Oderberg-Wien line was built to avoid using the Saxon state railway lines, was a spite railway in fact. Here again there was no redress, no one to appeal to against the autocrat.

In a debate in the Reichstag, in January, 1913, there was much complaint that the Prussian government was conducting the railways with the least possible outlay, thus saving money for the state, but hampering the industrial interests of the country. It was stated that there were not enough engines or freight-cars, there was an inadequate staff, and that as a consequence, the loss to the coal industry had been $11,500,000 and to the coal-miners $3,375,000.

On the state-owned railways of the west of France the break-down is ludicrously complete, and the people are staggered by the official estimates that it will require at least $100,000,000 to put them in decent running order.

In twenty years the American railways have practically been rebuilt, with heavier rails, better bridges, more permanent stations, and so on; while twenty years ago it cost a passenger 2.165 cents to travel a mile, to-day it costs him 1.916 cents. We need a lot of bustling about abroad before we realize how much we have to be grateful for at home!

Probably the most costly and the most troublesome of Germany's problems is her conquered provinces: Hanover, Schleswig-Holstein, Alsace-Lorraine, and Poland. Hanover, which was taken by Prussia and her king deposed, is nowadays a minor matter of the relations between courts, individuals, and families, which may be said to be settled by the arranged marriage between the Kaiser's charming daughter and the heir to the Duke of Cumberland, whose ancestors were kings of Hanover.

The Danes, on the other hand, in the northern part of these provinces, still resist Prussianization. They keep to themselves and their language, send their children to school in Denmark, and resist all attempts at social and racial incorporation. They are troublesome, as an independent and surly daughter-in-law might be troublesome. Alsace-Lorraine and Posen, on the contrary, are outspoken and potentially dangerous foes in Germany's own household.

In 1872 Bismarck said: "Alsace-Lorraine will be placed on an equality with the other German states, ... so that the people may be induced to forget, in a comparatively short time, the trouble and distress of the war and of annexation." In 1912, a loyal Alsatian German writes: "Das Elsass, dies jungstgeborene Kind der deutschen Voelkerfamilie, braucht etwas mehr Liebe." Forty years of Prussian rule have not fulfilled the promise of Bismarck. This same Alsatian writer continues: "In short, we are approaching ever nearer to the condition of the citizens of all the other German States, as Baden, Saxony, Bavaria, where they are also not always of one mind with the higher ruling powers."

It is difficult for the American, who, no matter what particular State he lives in, is first of all a citizen of the United States, to understand this jealousy and, in some quarters, bitter dislike of Prussia. If the State of New York had sixty million of our ninety million population, and if the governor of New York were also perpetual President of the United States, commanded the army and navy, controlled the foreign policy, and appointed the cabinet ministers, who were responsible to him alone, we could get an approximate idea of how the people of Virginia, Massachusetts, Illinois, and California would feel toward New York. This is a rough-drawn comparison with the situation in Germany. If, in addition, we had the Philippine Islands where Maine is, and Cuba where Texas is, it is easy to recognize the consequent complications.

We should remember this picture in dealing with this German problem, which, at any rate, from the point of view of kindly feeling and successful adoption of these foreign peoples into the German family, has been a dire failure. The miserable failure of the Germans in Southwest Africa, their inconclusive war with the Herreros, and the absolute break-down of Prussian methods with the natives, is scarcely more typical than the failure in Alsace-Lorraine and Poland. The Prussian belief in sand-paper as an emollient must be by now rudely shaken.

At last a constitution has been given the two conquered provinces. The governor is to be advised by a parliament, but the government is not responsible to the parliament, which is composed of two houses. The upper house has thirty-six members, eighteen of whom are nominees of the Emperor and eighteen from the churches, universities, and principal cities. The lower house is to be elected by popular franchise. Three years' residence in the same place entitles a man to a vote, but every voter over thirty-five years of age has two votes, and every voter over forty-five has three votes.

This, as an American can appreciate, has not been received with enthusiasm, and their conduct has been so provoking that the Emperor, during a recent visit, scolded the people, in an interview with the mayor of a certain town, and, what caused great amusement among the enemies of Prussia, threatened to incorporate them into Prussia, as had been done with Hanover, if they were not better behaved. This, of course, was seized upon as an admission that to be taken into the Prussian family was of all the hardships the most dreadful. The socialist journal Vorwaerts spoke of Prussia as "that brutal country which thus openly confesses its dishonor to all the world." Herr Scheidemann asked in the Reichstag, if Prussia then acknowledged herself to be a sort of house of correction, and "has Prussia, then, become the German Siberia?" In 1911 the Reichstag gave the provinces three votes in the Federal Council.

Metz, it is said, is more French than ever, and thousands troop across the boundaries on the anniversary of the French national holiday, to celebrate it on French soil. The conquered provinces are kept in order, but the French language, French customs, French culture, are still to the fore, and so far as loyalty, affection, or a change of mind and heart is concerned the conversion is still incomplete. The inhabitants have been baptized Germans, but very few of them have taken voluntarily, their first communion of nationalization.

"On changerait plutot le coeur de place, Que de changer la vieille Alsace."

The German, Karl Lamprecht, in his valuable history of contemporary Germany, is more hopeful of the situation than are other writers and observers. Professor Werner Wittich maintains that the best of the intellectual side of life in Alsace is impregnated with French culture and traditions; and even German officers long stationed in the two conquered provinces admit the stubborn allegiance of the people to French customs, habits, beliefs, and traditions. But however that may be, and it is admittedly a question that different prejudices and hopes will answer differently, there is no denial on the part of any one, high or low, that the Prussian bureaucratic mandarins have made no progress in winning the affection or the voluntary loyalty of the people. The Prussian has had recourse to the advice given by Prince Billow, "if you cannot be loved, then you must be feared." A friend who is only a friend, an ally who is only an ally, a servant who only serves you because he is afraid of you, is not only an uncomfortable but a dangerous factor in any establishment, whether domestic or national. Corporalism, begun by Frederick the Great and fastened upon Germany by Bismarck, has had its successes. I recognized them, indeed, on returning to Germany after twenty-five years, as astounding successes, but they have their weak side too. A barracks can never be the ideal of a home, nor a corporal the ideal of a guide, philosopher, and friend. Their own philosopher Nietzsche writes: "the state is the coldest of all cold monsters."

Joseph de Maistre, writing of the Slav temperament, says: "Si on enterrait un desir Slave sous une forteresse, il la ferait sauter." Germany has some reason to believe that this is true.

In the northeast of Germany live some 3,000,000 Poles under Prussian supervision and laws, and ruled by a Prussian governor. There are some 7,000,000 or 8,000,000 Poles divided between Russia, Austria-Hungary, and Prussia, and behind these are 165,000,000 Russians. The boundary between this mass and Germany is one of sand; and the railway journey from Posen to Berlin, is a matter of only four hours. If we were in Germany's shoes, we should probably take some pains to be well guarded in that quarter. We should, however, do it in quite another fashion. We should, if possible, turn over the inhabitants to their own governing, as England has done in South Africa, as we have tried to do in Cuba, and as we would do gladly in the Philippines, if every intelligent man who knows the situation there, were not assured that robbery, murder, and license would follow on the heels of our departure; and that instead of doing a magnanimous thing we should be shirking our responsibilities in the most cowardly fashion. It is bad enough to know, that we have such cynical political sophists in Congress, that they would even suffer that catastrophe to innocent people in the Philippines, if they thought it would make them votes at home.

Prussia does not recognize such methods of ruling. Corporalism is their only way, and, where the people are fit to govern themselves, a very bad and humiliating way, for the Eden of the bureaucrat is the hell of the governed. If the Germans approve it for themselves, it is not our business to comment; but where these methods are applied to foreign peoples, we both anticipate and applaud their failure.