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was only concluded after negotiations which lasted
three full years and were interrupted by a tariff war.
Agriculture had to pay for the commercial treaties,
since it had for the space of twelve years to work
under considerably less favourable conditions, owing



274 Imperial Germany

to the reduction in the corn tax from five to 3^/2 marks.
That was, as Bismarck expressed it at the time, a leap
in the dark. The commercial treaties themselves, of
course, had a very stimulating effect on trade. But
this was at the expense of a great industrial class, in-
dissolubly bound up with the economic welfare of the
whole nation and with our great national traditions;
this class, feeling slighted, fell into a condition of vio-
lent unrest and excitement.

It cannot be denied that, owing to an economic
policy that, by injuring one class of industry, fav-
oured the others, the economic differences in the na-
tion were intensified. Up to the beginning of the
'nineties agriculture had on the whole advanced hand
in hand with the other industries. Now it assumed
a defensive position, formed the Association of
Farmers in 1893, a very strong organisation which,
in common with all societies representing economic in-
terests, gradually grew more and more intemperate
in its attitude and demands. The belief that com-
merce and export industries gain, if agi'iculture loses,
has its origin in the early 'nineties. This mistake in-
troduced a factor of dissension and unrest into our
home politics, which has often acted in a disturbing
manner, calculated to hinder development.



The Tariff Policy of 1902 275

THE TAEIFF POLICY OF 1902 AND ITS OPPONENTS.

It was the task of the new century to find a just
compromise in economic policy, in the interests of
agriculture. This was necessary, not only for reasons
of State justice, but, above all, because it became
clear that the belief that agriculture could prosper
in spite of the tariff reductions had not been justi-
fied. Therefore, in the year 1901, I introduced the
new Tariff Bill, on the basis of which new commercial
treaties were to be concluded which should consider
the legitimate interests of agriculture. By placing
our commercial policy on an agrarian foundation, we
gave added strength to the economic life of the na-
tion. But the change to agrarian policy must not be
accomplished in such a way as to be a hindrance or,
what would be worse, a set-back to the development
of commerce; i.e. the new tariff must make it pos-
sible to conclude favourable commercial treaties of
long duration.

The "middle course" that I gave out as a watch-
word before the tariff fight, was thus clearly indicated.
If the whole matter was not to come to grief it was
necessary to be moderate on the agrarian side as well.
In the preamble to the Government's Bill it was said:



276 Imperial Germany

"Germany's future commercial policy will have to be
founded on the principle that measures in favour of
export industry must not lead to a reduction in the
protective duties which are indispensable to agricul-
ture. On the other hand, export industries will be
entitled to expect that consideration of agriculture, at
their expense, shall not go beyond what is absolutely
needful." This problem was set us by the tariff
laws, and in the course of long parliamentary battles,
fought with almost unexampled obduracy, it was
solved.

As soon as the new tariff rates were made known,
the Free Trade Press declared that it would be im-
possible to conclude commercial treaties on the basis
of this new tariff: the end of German commercial
policy was said to be at hand. The extreme Agrarian
papers were of the opinion, on their part, that the
tariff would not satisfy even the most unpretentious
farmers. The Socialist Press said: "Down with the
extortionate tariff." The Government was attacked
on both flanks and had to break in the middle in order
to carry its work which was in the interests of the
whole community and especially of agriculture, to a
successful finish.

If two extreme views or demands are opposed to



The Tariff Policy of 1902 277

each other, then, in politics as in life, common sense
and truth usually lie midway between them. Free
trade democracy demanded that agriculture should
be sacrificed to commercial policy. The Association
of Farmers demanded that the prospect of commer-
cial treaties should be sacrificed to agrarian policy.
One was as impossible as the other. Agrarian op-
position, as well as free trade opposition, had to be
overcome. The attack from both sides was very vio-
lent. Only if the Government remained inflexible
on the main points, if it did not allow itself to be
dragged over by the opposition on the Right or on the
Left, could it hope to see the parties, when they had
moderated their demands, agree to the middle course
which it had planned. The Social Democrats and
Ultra-Liberal Association resorted to obstruction in
order to make discussion of the clauses of the Bill im-
possible, and so force a General Election. With
praiseworthy impartiality the deputy, Eugen Richter,
although he and his party friends were not in favour
of the tariff proposals, protested in the name of the
Ultra-Liberal People's party against this violence
offered to the majority by the obstruction of the
minority.

For a time it seemed as if it would be impossible to



278 Imperial Germany

get a majority for the Tariff Bill, as part of the
Right, on the principle of * 'everything or nothing,'*
seemed inclined to refuse the whole tariff reform,
undertaken in the interests of agriculture. It was
greatly to the credit of the Chairman of the German
Agricultural Council, Count Schwerin-Lowitz, of
Count Kanitz, who unfortunately died in the prime
of life, and, above all, of the leader of the Conserva-
tive party at that time. Count Limburg-Stirum, that
they did not allow themselves to be overcome by the
hyper-agrarian opposition, nor allow the Conserva-
tive party to embark on a wrong course. The deputy,
Herr Bassermann, showed equally praiseworthy in-
sight and power of resistance with regard to the free
trade tendencies of a section of the Liberals. Thus
Conservatives, National Liberals and the Centre led
with statesmanlike ability by Count Ballestrem and
the deputy, Herr Spahn, met on the ground of the
motion proposed by thq free Conservative deputy,
Herr v. Kardorff .

The opposition of the Association of Farmers,
which in other respects had done so much for the
cause of agriculture, shows how the best cause is in-
jured by excess. For the sake of unattainable ad-
vantages the realisation of possible ones was jeop-



The Tariff Policy of 1902 279

ardised. The whole Tariff Bill, which was intended
to help agriculture out of the plight in which it had
so long been, was to be rejected because it did not
grant everything that was demanded. It has been
said that the opposition of the Association of Farmers
strengthened the position of the Government, both
with regard to Foreign Powers and with regard to
the parties, and thus contributed to ultimate success.
That is not correct. The Federal Governments had
left no doubt from the very first as to what they would
concede and what they would refuse. They had
stated clearly that they would make no fundamental
concessions, either on the one side or on the other. I
was sufficiently convinced of the necessity of greater
tariff protection for agriculture to withstand the at-
tack from the Left. On the other hand it was ob-
viously our duty not to block the prospect of soon
concluding new commercial treaties of sufficient dura-
tion, by tariff barriers which would have been insur-
mountable for foreign countries. The hyperagrarian
opposition did not strengthen the Government, but
it sharpened the weapons of the opposition. Eco-
nomic differences were intensified, and in commer-
cial circles and those of export industry the erroneous
idea gained ground, that between their interests and



28o Imperial Germany

those of agriculture there was a chasm that could not
be bridged.

The belief of the extreme Agrarians, however, that
immediately after the rejection of the Government's
proposals another tariff would be introduced that
would embody the tariff rates advocated by the As-
sociation of Farmers, was utterly and completely
without foundation. The Federal Governments con-
sidered it absolutely necessary to continue the com-
mercial policy, and looked upon this as an indispens-
able condition for any tariff. In the Federal Coun-
cil no majority could have been found for a va-banque
game in tariff policy, in which our whole economic
policy would be staked on the one card of an ex-
treme tariff. The rates of the Government's tariff
represented the extreme limit to which the Federal
Governments were willing to go.

If this tariff had been wrecked by Agrarian op-
position, one of a more agrarian trend could not ^^os-
sibly have been introduced. The old Caprivi rates
would have remained in force, and there the matter
would have ended. Perhaps for a long time all would
have remained unchanged. The Kreuzzeitung went
too far when it said in those times of struggle that
the Association of Farmers was shamefully leaving



Results of the Tariff Law of 1902 281

its country in the lurch in the hour of need. But
it is a fact that the representatives of great economic
interests would have done much damage to those in-
terests which they otherwise cared for so wisely and
energetically, had it not been for the firm attitude
of the Government and the wisdom of the Conserva-
tive leaders. This is a case which, unfortunately, is
not without parallel in the history of the home policy
of our country.

THE RESULTS OF THE TARIFF LAW OF 1902.

Thanks to the Tariff Law of 1902, our economic
policy regained that agrarian bias so indispensable to
the interests of the whole community. Side by side
with the foreign trade, advancing with such mighty
strides, the maintenance of a strong home industry
was secured. German agriculture, under the influ-
ence of the new tariff and of the commercial treaties
based on it, has experienced a decade of vigorous de-
velopment. Our robust and hardworking farmers re-
covered the feeling that the Empire had an interest
in the success of their work; that it no longer looked
upon agriculture as an industrial stepchild, but as
one having equal rights and, indeed, as the first-born
of its mother Germania. The number of agricul-



282 Imperial Germany

tural undertakings increased by nearly 180,000 be-
tween 1895 and 1907. The amount of live stock in-
creased enormously, cattle by about 3,000,000 head,
pigs by about 5,300,000, in the same space of time.
The harvest of rye in 1909 was 11,300,000 tons* as
against 6,600,000 in 1895; wheat, 3,750,000 tons, as
against 2,800,000; barley, 3,500,000 tons, as against
2,400,000; oats, 9,100,000 tons, as against 5,200,000;
potatoes, 46,700,000 tons, as against 31,700,000.

In comparison with the agriculture of other coun-
tries, ours has developed quite extraordinarily in the
last decade. In the summer of 1902, not long be-
fore the second debate on the tariff, the historian of
GeiTQan agriculture. Dr. Freiherr v. d. Goltz, had to
conclude the opening remarks of his work with the
statement that, "owing to events in the sphere of na-
tional and international economics, German agricul-
ture was passing through a critical period." To-day,
qualified judges of agricultural conditions point
proudly to the flourishing development, the growing
value of the yield and the increased power of pro-
duction (which is capable of still further increase)
of German agriculture.

* The German ton is not quite so much as the English, being equal to
2.205 lbs. avoirdupois.



Results of the Tariff Law of 1902 283

But the agricultural development has not taken
place at the cost of the expansion of our industrial
export trade or of our commerce. The free trade
prophets, who in the debates of 1901 and 1902 proph-
esied that the agrarian trend of our economic poKcy
would "restrict commerce," have proved wrong.
Those who believed that it would not be possible to
conclude favourable commercial treaties of long dura-
tion, on account of the increased agrarian duties, had
underestimated Germany's economic importance in
the world. Germany, with the weapon of her new
tariff in her hand, had by no means too little
to offer other countries; in 1891 she had offered
too much. When introducing the Caprivi-Marschall
Tariff and Commercial Policy, the assumption had
been made, amongst others, that the excess of our
imports over our exports must force us to special
concessions in order to open the foreign markets still
further to us. As a matter of fact, the large amount
of our imports, our ability to buy, was the strongest
point in our position when concluding our commer-.
cial treaties. We could expect concessions because
we are such excellent customers of foreign countries.
We were able successfully to make use of the rela-
tion between our imports and our exports in the op-



284 Imperial Germany

posite sense to that employed at the beginning of the
'nineties.

The commercial treaty with Russia, round which a
contest raged between 1891 and 1894, was concluded
between Count Witte and myself with comparatively
little difficulty in Norderney in July, 1904. The
other commercial treaties followed, and in no case
did the new tariff prove an insurmountable obstacle.
Under the commercial treaties based on the tariff of
1902 commerce and industry have steadily continued
their brilliant development.

The number of persons employed in commerce and
industry is continually on the increase, as is the num-
ber of large undertakings. The rapid growth of
general prosperity, chiefly due to industry and com-
merce, is quite obvious. To take one example from
among many, the official statistics in the year 1909
report 4,579 commercial companies with a capital of
15,860 million marks, which pay yearly dividends to
the amount of about 1,000 million. The large private
banks have become a power, not only in the industrial
world, but in the sphere of economic policy. German
imports in general rose between 1903 and 1911 from
6,300 million marks to 10,300 million; exports, from
5,300 million to 8,700 million. And following the



Results of the Tariff Law of 1902 285

development of foreign trade, the German mercantile
marine increased (in 1,000 gross registered tonnage)
from 2,650 in 1900 to 4,267 m 1909, and 4,467 in 1911.
In the German shipyards the construction of ships,
including river craft and warships, rose from 385 in
1900 to 814 in 1909 and 859 in 1911. Since, at the
same time, during the last decade, social provision
has not only been further developed for the working
classes, but has been extended to the middle classes,
we may say that all classes engaged in trades and pro-
fessions have maintained and developed their flour-
ishing condition since our economic pohcy took an
agrarian turn, while agriculture has been rescued
from a critical condition, and has taken its place in
the ranks of the general, thriving development of
German industrial life.

From the economic point of view in particular the
German nation has reason to be content with the re-
sult of their development during the last decade, and
to hope that the courses on which they have embarked,
and which have proved so profitable, will not be aban-
doned. The advantages gained by commerce and
export through the inauguration of commercial policy
at the beginning of the 'nineties have been maintained.
The whole of German industry has been able uninter-



286 Imperial Germany

ruptedly to enjoy the protection of the tariff granted
in the year 1878. Individual defects of the Caprivi
tariff were remedied in favour of industry by the
tariff of 1902. Finally, German agriculture has ac-
quired the necessary protective duties.

More has been done for the workmen in Germany
than in any other country. When, a few years ago,
a deputation of English trades unions made a circular
tour through Germany, to study the conditions of our
working classes, one of the Englislimen, after being
made acquainted with our arrangements for the wel-
fare of the working man, asked one of his German
guides (a Social Democrat, by the way) in astonish-
ment, "But what do you go on agitating for?"

ECONOMIC POLICY AND PARTY POLITICS.

If, in spite of everything, we have not achieved
industrial peace, if the antagonism between different
industrial classes continues to be violent, if on the
contrary passion runs higher in the field of industry,
and the quarrels and hatred between the various in-
dustrial classes are bitterer than ever, the cause does
not lie in any defect or any lack of adjustment in our
economic policy, but in the imperfection of our home
politics.



Economic Policy and Party Politics 287

Just as in purely political questions the German
parties as a rule determine their attitude not by con-
siderations of expediency, but by their hostility for
the time being to one party or another, so they do to a
far greater extent on questions of economic policy.
Germany is probably the only country in which prac-
tical economic questions are weighed with scrupulous
care in the party balance. With the single exception
of the Centre, which is practical even in these mat-
ters, every party, great or small, has its own eco-
nomic policy or, at least, its own specialty in eco-
nomic policy to which economic questions are subor-
dinated. That is part and parcel of party dogma-
tism. We have almost as many different conceptions
of financial policy, agrarian policy, commercial policy,
trade policy, social policy, tariff policy, rating policy
and other kinds of economic policy, as we have par-
ties. The German party man gets so wrapped up in
the views of his party on economic questions that soon,
by auto-suggestion, he comes to consider these views
as indissolubly bound up with his own trade interests
and his own livelihood, and, so far as economic mat-
ters are concerned, carries on party warfare with a
violence that can only be inspired by selfishness. We
have no party that can say that it represents cne



288 Imperial Germany

single form of industry, not even the Social Demo-
crats can assert that of themselves. Nevertheless,
with the exception of the Centre, every party has
often carried on the struggle in economic politics more
or less as if for each one it were a question of repre-
senting one particular interest. True, the Conserva-
tives base their attitude chiefly on landed property,
the National Liberals on industry, and the Ultra-
Liberals on commerce. That is due to the political
traditions of the various classes. But if the parties
develop more and more into representatives of the
interests of special professions and trades, that will
involve great dangers with regard to economic, po-
litical and national questions.

If the diiferent industrial classes confront each
other as so many political parties, it will no longer be
possible to dispose of questions of economic policy in
such a manner as to profit all branches of industry.
The diiferent interests will become totally irrecon-
cilable. Each class will see its own gain in the other's
loss. And the industrial diif erences will, if the Gov-
ernment is not in strong hands, be decided, like party
struggles for power, by beating the minority party
by a majority vote, with a total disregard of the in-
terests of whole industrial classes.



Economic Policy and Party Politics 289

On the other hand, professional and industrial
classes are rarely capable of deciding great national
questions independently, with a view to the position
of the Empire in the world, instead of to their own
professional interest. And they are the less capable
of this the more a national task involves material
sacrifices. An amalgamation of the ideas of party
politics with those of an industrial class would con-
stitute an equally great danger for national and for
industrial life. Neither agriculture, nor commerce,
nor industry, but the Social Democrats ultimately,
would profit by this.



IV

THE EASTERN MARCHES

A DiSTiisrcTiON must be made between the domain of
State rule and a nation's ownership. The two rarely
coincide. The attempt to make them fit, whether it
be by obtaining State control over regions where the
nation has settled, or whether it be by spreading na-
tional civilisation in the domain where the State has
power, is responsible for a great number of complica-
tions in recent history. It has found its most modem
expression in that form of colonial policy which is
called, sometimes not quite rightly and sometimes
quite wrongly. Imperialism.

STATE AND NATIONAL OWNERSHIP.

Nations of military ability and economic skill and

of superior culture, will mostly reach further with

the arm of their State power than with the sway

of their national culture, and will expend their energy

on making the national conquest follow in the wake

of the political.

Weak and incapable nations must look on while

290



State and National Ownership 291

foreign nationalities gain in number and importance
within the borders of their State.

There is no third course. In the struggle between
nationalities one nation is the hammer and the other
the anvil; one is the victor and the other the van-
quished. If it were possible in this world to separate
nationalities definitely and clearly by means of fron-
tier posts and boundary stones, as is done for States,
then the world's history and politics — ^by which his-
tory is made — would be relieved of their most diffi-
cult task. But State boundaries do not separate na-
tionalities. If it were possible henceforward for mem-
bers of different nationalities, with different language
and customs, and an intellectual life of a different
kind, to live side by side in one and the same State,
without succumbing to the temptation of each trying
to force his own nationality on the other, things on
earth would look a good deal more peaceful. But
it is a law of life and development in history, that
where two national civilisations meet they fight for
ascendancy.

In that part of old Poland where, after the parti-
tion, most was done to meet Polish wishes, it is per-
haps shown more clearly than anywhere else that
where two nationalities are bound to the same spot,



292 Imperial Germany

it is very difficult to make both contented ; that given
such conditions, friction easily arises; and that it can
happen that measures, adopted on the one side in good
faith, may rouse excitement and opposition on the
other. Did the Poles succeed in contenting the Ru-
thenians in Galicia? Do not the Ruthenians in the
Carpathians and on the Pruth make the same com-
plaints as the Poles on the Warthe and the Vistula,
or even more violent ones?

Other countries, too, resound with the battles of
nationalities, and the accusations of one nationality
against another. Every nation is convinced of the
higher value and consequently of the better right of
its own civilisation, and is inspired by a strong de-
sire, which is like an unconscious natural force, to at-
tain more and more authority for its own civilisation.
Not every nation is conscious of this force. The
great Roman generals and statesmen were well aware
of it, when they advanced, conquering as they went,
into Greece, Asia Minor, North Africa, above all into
Gaul and Germany where they followed up the con-
quest by arms, with the conquest by superior Roman
civilisation.

Such a steady consciousness of national civilisation
exists to-day among the English people. The Eng-



State and National Ownership 293

lishman is deeply imbued with the idea of the supe-
riority of Anglo-Saxon culture. He certainly disap-
proves at times if other nations make more or less en-
ergetic propaganda for their own culture, but he sel-
dom raises the question whether England might not
be justified in taking such proceedings herself. He
is convinced that English rule and the consequent
Anglicising is a blessing, and he bases his right to ex-
pansion and conquest on his sense of the superiority
of Anglo-Saxon civilisation and Anglo-Saxon insti-
tutions. The grand fabric of the British Empire,
the greatest the world has seen since the Roman Em-
pire, for which no sacrifice of Hfe or property was
ever refused, was and is supported by the steadfast
consciousness and firm intention on the part of Eng-
glish people of being bearers of a higher civilisation


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