This anti-clerical policy is known as the "Kultur-Kampf", a term that denotes a struggle for civilisation against the forces of reaction. For some years the strife was of the sharpest kind. The Roman Catholic bishops continued to ban the "Old Catholics", while the State refused to recognise any act of marriage or christening performed by clerics who disobeyed the new laws. The logical sequel to this was obvious, namely, that the State should insist on the religious ceremony of marriage being supplemented by a civil contract[79]. Acts to render this compulsory were first passed by the Prussian Landtag late in 1873 and by the German Reichstag in 1875.
It would be alike needless and tedious to detail the further stages of this bitter controversy, especially as several of the later "May Laws" have been repealed. We may, however, note its significance in the development of parties. Many of the Prussian nobles and squires (Junkers the latter were called) joined issue with Bismarck on the Civil Marriage Act, and this schism weakened Bismarck's long alliance with the Conservative party. He enjoyed, however, the enthusiastic support of the powerful National Liberal party, as well as the Imperialist and Progressive groups. Differing on many points of detail, these parties aimed at strengthening the fabric of the central power, and it was with their aid in the Reichstag that the new institutions of Germany were planted and took root. The General Election of 1874 sent up as many as 155 National Liberals, and they, with the other groups just named, gave the Government a force of 240 votes--a good working majority as long as Bismarck's aims were of a moderately Liberal character. This, however, was not always the case even in 1874-79, when he needed their alliance. His demand for a permanently large military establishment alienated his allies in 1874, and they found it hard to satisfy the requirements of his exacting and rigorous nature.
The harshness of the "May Laws" also caused endless friction. Out of some 10,000 Roman Catholic priests in Prussia (to which kingdom alone the severest of these laws applied) only about thirty bowed the knee to the State. In 800 parishes the strife went so far that all religious services came to an end. In the year 1875, fines amounting to 28,000 marks (£2800) were imposed, and 103 clerics or their supporters were expelled from the Empire[80]. Clearly this state of things could not continue without grave danger to the Empire; for the Church held on her way with her usual doggedness, strengthened by the "protesting" deputies from the Reichsland on the south-west, from Hanover (where the Guelph feeling was still uppermost), as well as those from Polish Posen and Danish Schleswig. Bismarck and the anti-clerical majority of the Reichstag scorned any thoughts of surrender. Yet, slowly but surely, events at the Vatican and in Germany alike made for compromise. In February 1878, Pope Pius IX. passed away. That unfortunate pontiff had never ceased to work against the interests of Prussia and Germany, while his encyclicals since 1873 mingled threats of defiance of the May Laws with insults against Prince Bismarck. His successor, Leo XIII. (1878-1903), showed rather more disposition to come to a compromise, and that, too, at a time when Bismarck's new commercial policy made the support of the Clerical Centre in the Reichstag peculiarly acceptable.
Bismarck's resolve to give up the system of Free Trade, or rather of light customs dues, adopted by Prussia and the German Zollverein in 1865, is so momentous a fact in the economic history of the modern world, that we must here give a few facts which will enable the reader to understand the conditions attending German commerce up to the years 1878-79, when the great change came. The old order of things in Prussia, as in all German States, was strongly protective--in fact, to such an extent as often to prevent the passing of the necessaries of life from one little State to its Lilliputian neighbours. The rise of the national idea in Germany during the wars against the great Napoleon led to a more enlightened system, especially for Prussia. The Prussian law of 1818 asserted the principle of imposing customs dues for revenue purposes, but taxed foreign products to a moderate extent. On this basis she induced neighbouring small German States to join her in a Customs Union (Zollverein), which gradually extended, until by 1836 it included all the States of the present Empire except the two Mecklenburgs, the Elbe Duchies, and the three Free Cities of Hamburg, Bremen, and Lübeck. That is to say, the attractive force of the highly developed Prussian State practically unified Germany for purposes of trade and commerce, and that, too, thirty-eight years before political union was achieved.
This, be it observed, was on condition of internal Free Trade, but of moderate duties being levied on foreign products. Up to 1840 these import duties were on the whole reduced; after that date a protectionist reaction set in; it was checked, however, by the strong wave of Free Trade feeling which swept over Europe after the victory of that principle in England in 1846-49. Of the new champions of Free Trade on the Continent, the foremost in point of time was Cavour, for that kingdom of Sardinia on which he built the foundations of a regenerated and united Italy. Far more important, however, was the victory which Cobden won in 1859-60 by inducing Napoleon III. to depart from the almost prohibitive system then in vogue in France. The Anglo-French Commercial Treaty of January 1860 seemed to betoken the speedy conversion of the world to the enlightened policy of unfettered exchange of all its products. In 1862 and 1865 the German Zollverein followed suit, relaxing duties on imported articles and manufactured goods--a process which was continued in its commercial treaties and tariff changes of the years 1868 and 1869.
At this time Bismarck's opinions on fiscal matters were somewhat vague. He afterwards declared that he held Free Trade to be altogether false. But in this as in other matters he certainly let his convictions be shaped by expediency. Just before the conclusion of peace with France he so far approximated to Free Trade as to insist that the Franco-German Commercial Treaty of 1862, which the war had of course abrogated--- war puts an end to all treaties between the States directly engaged--should now be again regarded as in force and as holding good up to the year 1887[81]. He even stated that he "would rather begin again the war of cannon-balls than expose himself to a war of tariffs." France and Germany, therefore, agreed to place one another permanently on "the most favoured nation" footing. Yet this same man, who so much desired to keep down the Franco-German tariff, was destined eight years later to initiate a protectionist policy which set back the cause of Free Trade for at least a generation.
What brought about this momentous change? To answer this fully would take up a long chapter. We can only glance at the chief forces then at work. Firstly, Germany, after the year 1873, passed through a severe and prolonged economic crisis. It was largely due to the fever of speculation induced by the incoming of the French milliards into a land where gold had been none too plentiful. Despite the efforts of the German Government to hold back a large part of the war indemnity for purposes of military defence and substantial enterprises, the people imagined themselves to be suddenly rich. Prices rapidly rose, extravagant habits spread in all directions, and in the years 1872-73 company-promoting attained to the rank of a fine art, with the result that sober, hard-working Germany seemed to be almost another England at the time of the South Sea Bubble. Alluding to this time, Busch said to Bismarck early in 1887: "In the long-run the [French] milliards were no blessing, at least not for our manufacturers, as they led to over-production. It was merely the bankers who benefited, and of these only the big ones[82]."
The result happened that always happens when a nation mistakes money, the means of commercial exchange, for the ultimate source of wealth. After a time of inflation came the inevitable collapse. The unsound companies went by the board; even sound ventures were in some cases overturned. How grievously public credit suffered may be seen by the later official admission, that liquidations and bankruptcies of public companies in the following ten years inflicted on shareholders a total loss of more than 345,000,000 marks (£17,250,000)[83].
Now, it was in the years 1876-77, while the nation lay deep in the trough of economic depression, that the demand for "protection for home industries" grew loud and persistent. Whether it would not have been raised even if German finance and industry had held on its way in a straight course and on an even keel, cannot of course be determined, for the protectionist movement had been growing since the year 1872, owing to the propaganda of the "Verein für Sozialpolitik" (Union for Social Politics) founded in that year. But it is safe to say that the collapse of speculation due to inflowing of the French milliards greatly strengthened the forces of economic reaction.
Bismarck himself put it in this way: that the introduction of Free Trade in 1865 soon produced a state of atrophy in Germany; this was checked for a time by the French war indemnity; but Germany needed a permanent cure, namely, Protection. It is true that his ideal of national life had always been strict and narrow--in fact, that of the average German official; but we may doubt whether he had in view solely the shelter of the presumedly tender flora of German industry from the supposed deadly blasts of British, Austrian, and Russian competition. He certainly hoped to strengthen the fabric of his Empire by extending the customs system and making its revenue depend more largely on that source and less on the contributions of the federated States. But there was probably a still wider consideration. He doubtless wished to bring prominently before the public gaze another great subject that would distract it from the religious feuds described above and bring about a rearrangement of political parties. The British people has good reason to know that the discussion of fiscal questions that vitally touch every trade and every consumer, does act like the turning of a kaleidoscope upon party groupings; and we may fairly well assume that so far-seeing a statesman as Bismarck must have forecast the course of events.