480. Effect on economic development of the establishment of the Empire.—Leaving now the topic of commercial policy until we return to it in a concluding paragraph, we must attend to the material development of Germany. Down to the foundation of the Empire in 1871, progress, if steady, still was slow. The best energies of the people were absorbed in the great political conflicts out of which united Germany was to emerge; delicate questions of the relations between the German states had to be settled, and much needed still to be accomplished in the reform of industrial legislation inside the states. As late as 1862 it was estimated that five-eights of the people were still engaged in agriculture or in other extractive industries. In comparison with this period of preparation the progress which Germany has made since 1871 is startling. The direct gains which Germany made in the war with France, the acquisition of the rich provinces of Alsace and Lorraine, and the receipt of about $1,000,000,000, as a war indemnity, were large, but still they were less than the indirect results: the establishment of national unity on a lasting basis, freeing the people from political anxieties, and encouraging them to face their economic problems with a new energy and pride in their strength, and with a new hope in the future. This political factor, vague and intangible as it may be, is still most important; without it the recent economic development of Germany could be regarded only as a miracle.
481. Development of commerce, 1870-1913.—In the period between the founding of the Empire and the outbreak of the World War the population of Germany increased from 41 to 67 million, about 63%, while the foreign trade increased almost exactly 250%, four-fold as fast. Comparing the figures in the accompanying table with those given for the United Kingdom in a preceding chapter we see that in 1872 the Germans were much behind the English, separated roughly by an interval of ten years of development, but that they were closing the gap as time passed, and at the end of the period had passed the English in the value of their export trade.
| Special Commerce of Germany, Selected Years in Milliardsof Marks and of Dollars. | ||||
|---|---|---|---|---|
| Imports | Exports | |||
| Marks | Dollars | Marks | Dollars | |
| 1872 | 3.5 | .9 | 2.5 | .6 |
| 1875 | 3.6 | .9 | 2.6 | .6 |
| 1880 | 2.8 | .7 | 3.0 | .7 |
| 1885 | 3.0 | .7 | 2.9 | .7 |
| 1890 | 4.3 | 1.1 | 3.4 | .8 |
| 1895 | 4.2 | 1.1 | 3.4 | .9 |
| 1900 | 6.0 | 1.5 | 4.8 | 1.2 |
| 1905 | 7.4 | 1.9 | 5.8 | 1.5 |
| 1910 | 8.9 | 2.2 | 7.5 | 1.9 |
| 1913 | 10.8 | 2.7 | 10.1 | 2.5 |
While in 1871 60 men out of 100 were engaged in agriculture, the proportion had fallen in 1907 to 27. The change was brought about not by an absolute decline of the number in agriculture, though sometimes that was observable, but by the young men leaving the country for the mines, factories, and commercial centers. Germany had in 1840 only 12 cities of over 100,000 inhabitants, while at the end of the century it had 28, of which the chief, Berlin, was growing more rapidly than Chicago; and in 1910 it had 48. The industrial development during the generation ending in 1900 may be inferred from the following: coal production increased over 250 per cent, pig iron production nearly 400 per cent, and shipping 500 per cent.
482. Character of recent German commerce.—England was characterized in a preceding paragraph as “offering one of the most remarkable examples of advanced commerce in the world.” In an earlier period England stood alone; it offered the most remarkable example. In 1913 Germany stood alongside England, not merely as regards the quantity but also as regards the quality of her trade. In Germany as in England manufactures formed the major part of the exports; their proportion of the total value approached if it did not reach the English. Exports of raw materials and crude food stuffs had declined to less than one-quarter of the total, and among exports of this character coal, as in England, took the dominant place. On the other hand the imports of raw material and food stuffs had grown until they amounted to about three-quarters of the total imports. Of the total value of imports finished manufactures formed only 13 per cent, a proportion actually less than that of the English, whose policy of free trade permitted wares to be brought in which were excluded from Germany by the customs tariff. If we arrange the wares imported in 1913 in the order of their value we do not find a single finished manufacture among the first 26 items, which include all those exceeding 100 million marks in value; crude copper was fifth on the list, but we find no product of factory industry until we reach the twenty-second item, woolen yarn, which itself was destined to feed the German factories and in large part to be exported in a finished form. To understand recent German commerce we need first of all, evidently, to study the development of Germany’s manufactures.
483. Rapid development of factory industry.—Before the founding of the Empire most of the people engaged in manufactures in Germany still worked at home, with simple machinery and no steam power. In Saxony, for instance, now one of the industrial centers of the country, the manufactures of cloth, stockings, lace, etc., were still carried on outside of factories in 1868. The proportion of people working in this simple way is still large in Germany, but the number has declined in many lines of work (weaving, milling, shoemaking, etc.), and the great growth of the recent period has been in the modern factory industry. Since 1882 the rate of growth of the factory population has been about fourfold that of the general population. The results of this development have been indicated in the previous paragraph, and they furnish a striking contrast to conditions as they were at the time of the Centennial Exposition of 1876, when the German representative reported that in the industrial field Germany had received a defeat equal to two Sedans, that German industry produced only articles of poor quality and of slight value (“schlecht und billig”), and that Krupp guns were the only product of which the Germans could be proud.
484. Resources of coal and iron.—Germany was favored by some important physical resources in building up its modern industry. The country had a rich supply of coal, the great source of modern power, and took in Europe a place barely second to England in coal production, far ahead of any other country. Germany was well supplied also with the raw materials for the staple products, iron and steel. The ore supplies in the province of Lorraine, taken from France in 1871, are the most extensive in Europe. At the time when they were acquired they were thought to be of poor quality, because of the phosphorus contained in them, but under the basic process they were made to yield metal of excellent grade, and in addition a valuable fertilizer, obtained from the phosphate slag. Germany has developed its iron resources with a rapidity exceeded only in the United States. It contributed only one-twenty-seventh of the world’s iron supply in 1866, but had raised its share to one-sixth at the end of the century, and to about one-fourth before 1914. It passed England in steel production shortly after 1890, and in iron production about ten years later; it raised constantly the figure of its output while that of England remained relatively stationary, and in the decade before the war it was advancing at a rate seven-fold that of England.
485. Quality of the people.—The richest resource of Germany, however, was its people. The past poverty of the country and the trials through which it had gone nurtured a steadiness and thriftiness among the working classes which made them admirable members of the modern productive organization. An effective system of elementary education was established in parts of Germany long before a similar step had been taken in most other countries; and practically all the people had not only the rudiments of education, but also, what is perhaps more important, a respect for knowledge, a desire to learn and to make the best use of their learning, which were in striking contrast with the careless spirit of other peoples. It has been said that it was the primary school-teacher who won for the Germans the victories of 1866 and 1870; and the Germans could hope now to beat their industrial rivals as they beat their military opponents, by method and steady application rather than by brilliancy and dash.
486. Superiority in technical training.—The effects of careful training were as evident in the class of the responsible managers of Germany’s industries as in the laboring class. Nowhere in Europe had technical education reached so high a development. Not only were the appliances, methods, and system of organization superior to those of other states; the technical schools reached a larger part of the population, training them not only in the fundamental subjects of science, but also in the special branches of production (mining, weaving, dyeing, etc.).
The results were everywhere apparent in German industry; to instance chemicals, sugar, glass, and electrical appliances is to pick only a few examples from a list which could be greatly extended. Especially noteworthy was the readiness of the Germans to adopt a new process or machine which was first brought out in some other country. Englishmen invented processes to make a fast black aniline dye, to manufacture potassium cyanide for the reduction of gold, to make steel by the basic process; all these inventions were developed first into commercial successes in Germany. The Germans imported, if necessary, foreign machinery and foreign foremen to superintend its action, until they had mastered the principles of operation and had firmly established the industry in its new home.