If the State can thus contribute directly to the increase of national productions, it can equally raise its own credit by looking after the reduction of the national debt, and thus improving its financial position. But payment of debts is, in times of high political tension, a two-edged sword, if it is carried out at the cost of necessary outlays. The gain in respect of credit on the one side of the account may very easily be lost again on the other. Even from the financial aspect it is a bad fault to economize in outlay on the army and navy in order to improve the financial position. The experiences of history leave no doubt on that point. Military power is the strongest pillar of a nation's credit. If it is weakened, financial security at once is shaken. A disastrous war involves such pecuniary loss that the State creditors may easily become losers by it. But a State whose army holds out prospects of carrying the war to a victorious conclusion offers its creditors far better security than a weaker military power. If our credit at the present day cannot be termed very good, our threatened political position is chiefly to blame. If we chose to neglect our army and navy our credit would sink still lower, in spite of all possible liquidation of our debt. We have a twofold duty before us: first to improve our armament; secondly, to promote the national industry, and to keep in mind the liquidation of our debts so far as our means go.
The question arises whether it is possible to perform this twofold task.
It is inconceivable that the German people has reached the limits of possible taxation. The taxes of Prussia have indeed, between 1893-94 and 1910-11, increased by 56 per cent, per head of the population—from 20.62 marks to 32.25 marks (taxes and customs together)—and the same proportion may hold in the rest of Germany. On the other hand, there is a huge increase in the national wealth. This amounts, in the German Empire now, to 330 to 360 milliard marks, or 5,000 to 6,000 marks per head of the population. In France the wealth, calculated on the same basis, is no higher, and yet in France annually 20 marks, in Germany only 16 marks, per head of the population are expended on the army and navy. In England, on the contrary, where the average wealth of the individual is some 1,000 marks higher than in Germany and France, the outlay for the army and navy comes to 29 marks per head. Thus our most probable opponents make appreciably greater sacrifices for their armaments than we do, although they are far from being in equal danger politically.
Attention must at the same time be called to the fact that the increase of wealth in Germany continues to be on an ascending scale. Trades and industries have prospered vastly, and although the year 1908 saw a setback, yet the upward tendency has beyond doubt set in again.
The advance in trade and industry, which began with the founding of the Empire, is extraordinary. "The total of imports and exports has increased in quantity from 32 million tons to 106 million tons in the year 1908, or by 232 per cent., and in value from 6 milliards to 14 1/2-16 milliards marks in the last years. Of these, the value of the imports has grown from 3 to 8-9 milliards marks, and the value of the exports from 3 1/2 to 6 1/2-7 milliards…. The value of the import of raw materials for industrial purposes has grown from 1 1/2 milliards in 1879 to 4 1/2 milliards marks lately, and the value of the export of such raw materials from 850 million to 1 1/2 milliard marks. The import of made goods had in 1879 a value of 600 million marks, and in 1908 a value of 1 1/4 milliard marks, while the value of the export of manufactured goods mounted from 1 to 4 milliards. The value of the import of food-stuffs and delicacies has grown from 1 to 2 1/2-2 1/3 milliard marks, while the value of the export of articles of food remained at about the same figure.
The mineral output can also point to an undreamed-of extension in Germany during the last thirty years. The amount of coal raised amounted in 1879 to only 42 million tons; up to 1908 it has increased to 148 1/2 million tons, and in value from 100 million to 1 1/2 milliard marks. The quantity of brown coal raised was only 11 1/2 million tons in 1879; in 1908 it was 66 3/4 million tons, and in value it has risen from 35 million to 170 million marks. The output of iron-ore has increased from 6 million tons to 27 million tons, and in value from 27 million to 119 million marks…. From 1888 to 1908 the amount of coal raised in Germany has increased by 127 per cent.; in England only by about 59 per cent. The raw iron obtained has increased in Germany from 1888 to 1908 by 172 per cent.; in England there is a rise of 27 per cent. only.[F]
[Footnote F: Professor Dr. Wade, Berlin.]
Similar figures can be shown in many other spheres. The financial position of the Empire has considerably improved since the Imperial Finance reform of 1909, so that the hope exists that the Budget may very soon balance without a loan should no new sacrifices be urgent.
It was obvious that with so prodigious a development a continued growth of revenue must take place, and hand-in-hand with it a progressive capitalization. Such a fact has been the case, and to a very marked extent. From the year 1892-1905 in Prussia alone an increase of national wealth of about 2 milliard marks annually has taken place. The number of taxpayers and of property in the Property Tax class of 6,000 to 100,000 marks has in Prussia increased in these fourteen years by 29 per cent., from 1905-1908 by 11 per cent.; in the first period, therefore, by 2 per cent., in the last years by 3 per cent. annually. In these classes, therefore, prosperity is increasing, but this is so in much greater proportion in the large fortunes. In the Property Tax class of 100,000 to 500,000 marks, the increase has been about 48 per cent.—i.e., on an average for the fourteen years about 3 per cent. annually, while in the last three years it has been 4.6 per cent. In the class of 500,000 marks and upwards, the increase for the fourteen years amounts to 54 per cent. in the taxpayers and 67 per cent. in the property; and, while in the fourteen years the increase is on an average 4.5 per cent. annually, it has risen in the three years 1905-1908 to 8.6 per cent. This means per head of the population in the schedule of 6,000 to 100,000 marks an increase of 650 marks, in the schedule of 100,000 to 500,000 marks an increase per head of 6,400 marks, and in the schedule of 500,000 marks and upwards an increase of 70,480 marks per head and per year.
We see then, especially in the large estates, a considerable and annually increasing growth, which the Prussian Finance Minister has estimated for Prussia alone at 3 milliards yearly in the next three years, so that it may be assumed to be for the whole Empire 5 milliards yearly in the same period. Wages have risen everywhere. To give some instances, I will mention that among the workmen at Krupp's factory at Essen the daily earnings have increased from 1879-1906 by 77 per cent., the pay per hour for masons from 1885-1905 by 64 per cent., and the annual earnings in the Dortmund district of the chief mining office from 1886 to 1907 by 121 per cent. This increase in earnings is also shown by the fact that the increase of savings bank deposits since 1906 has reached the sum of 4 milliard marks, a proof that in the lower and poorer strata of the population, too, a not inconsiderable improvement in prosperity is perceptible. It can also be regarded as a sign of a healthy, improving condition of things that emigration and unemployment are considerably diminished in Germany. In 1908 only 20,000 emigrants left our country; further, according to the statistics of the workmen's unions, only 4.4 per cent, of their members were unemployed, whereas in the same year 336,000 persons emigrated from Great Britain and 10 per cent. (in France it was as much as 11.4 per cent.) of members of workmen's unions were unemployed.