Bismarck and the Foundation of the German Empire

by James Wycliffe Headlam

During this crisis in foreign affairs Bismarck was occupied by another, which threatened to be equally serious, in home politics. In the spring of 1878 an attempt was made on the life of the Emperor; a young man, named Hobel, a shoemaker's apprentice, shot at him in the streets of Berlin, fortunately without result. The attempt naturally created intense indignation throughout the country. This was increased when it became known that he had been to some extent connected with the Socialist party, and it seemed as though the motives of the crime were supplied by the violent speeches made at Socialist gatherings. Bismarck had long regarded the growth of Socialism with concern. He determined to use this opportunity to crush it. He at once brought into the Bundesrath a very severe law, forbidding all Socialist agitation and propaganda. He succeeded in passing it through the Council, but it was thrown out in the Reichstag by a very large majority. No one voted for it except the Conservatives. The law indeed was so drawn up that one does not see how anyone could have voted for it; the first clause began, "Printed writings and unions which follow the aims of Social Democracy may be forbidden by the Federal Council," but, as was pointed out, among the aims of Social Democracy were many which were good in themselves, and many others which, though they might be considered harmful by other parties, were at least legitimate. Directly afterwards the Reichstag was prorogued. Ten days later, another attempt was made on the Emperor's life; this time a man of the name of Nobeling (an educated man who had studied at the University) shot at him while driving in the Unter den Linden, and wounded him severely in the head and arms with large shot. The Emperor was driven home to his palace almost unconscious, and for some time his life was in danger. This second attempt in so short a time on the life of a man almost eighty years of age, so universally loved and respected, who had conferred such benefits on his country, naturally aroused a storm of indignation. When Bismarck received the news his first words were, "Now the Reichstag must be dissolved." This was done; the general elections took place while the excitement was still hot, and of course resulted in a great loss to those parties—especially the National Liberals—who had voted against the Socialist law; the Centre alone retained its numbers. Before this new Parliament a fresh law was laid, drafted with much more skill. It absolutely forbade all speeches or writing in favour of plans for overthrowing the order of society, or directed against marriage and property. It enabled the Government to proclaim in all large towns a state of siege, and to expel from them by the mere decree of the police anyone suspected of Socialist agitation. The law, which was easily carried, was enforced with great severity; a state of siege was proclaimed in Berlin and many other places. Socialist papers, and even books, for instance the writings of Lassalle, were forbidden; they might not even be read in public libraries; and for the next twelve years the Socialist party had to carry on their propaganda by secret means.

This Socialist law is very disappointing; we find the Government again having recourse to the same means for checking and guiding opinion which Metternich had used fifty years before. Not indeed that the Socialists themselves had any ground for complaint; their avowed end was the overthrow of government and society; they professed to be at war with all established institutions; if they confined their efforts to legal measures and did not use violence, it was only because the time had not yet come. The men who avowed admiration for the Paris Commune, who were openly preparing for a revolution more complete than any which Europe had hitherto seen, could not complain if the Government, while there was yet time, used every means for crushing them. The mistake was in supposing that this measure would be successful. Bismarck would, indeed, had he been able, have made it far more severe; his own idea was that anyone who had been legally convicted of holding Socialist opinions should be deprived of the franchise and excluded from the Parliament. What a misunderstanding does this shew of the whole object and nature of representative institutions! It had been decided that in Germany Parliament was not to govern; what then was its function except to display the opinions of the people? If, as was the case, so large a proportion of the German nation belonged to a party of discontent, then it was above all desirable that their wishes and desires should have open expression, and be discussed where they could be overthrown. The Government had enormous means of influencing opinion. In the old days the men of letters had been on principle in opposition; now Germany was flooded by papers, books, and pamphlets; all devoted to the most extravagant praise of the new institutions. The excuse which was made for these laws was not a sufficient one. It is seldom necessary to meet political assassination by repressive measures, for they must always create a danger which they intend to avert. There was not the slightest ground for supposing that either Hobel or Nobeling had any confederates; there was no plot; it was but the wild and wicked action of an individual. It was as absurd to put a large party under police control for this reason as it was to punish Liberals for the action of Sand. And it was ineffective, as the events of the next years shewed; for the Socialist law did not spare Germany from the infection of outrage which in these years overran Europe.

The Socialist laws were soon followed by other proposals of a more useful kind, and now we come to one of the most remarkable episodes in Bismarck's career. He was over sixty years of age; his health was uncertain; he had long complained of the extreme toil and the constant annoyance which his public duties brought upon him. It might appear that he had finished his work, and, if he could not retire altogether, would give over the management of all internal affairs to others. That he would now take upon himself a whole new department of public duties, that he would after his prolonged absence appear again as leader and innovator in Parliamentary strife—this no one anticipated.

Up to the year 1876 he had taken little active part in finance; his energies had been entirely absorbed by foreign affairs and he had been content to adopt and support the measures recommended by his technical advisers. When he had interfered at all it had only been on those occasions when, as with regard to commercial treaties, the policy of his colleagues had impeded his own political objects. In 1864 he had been much annoyed because difference on commercial matters had interfered with the good understanding with Austria, which at that time he was trying to maintain. Since the foundation of the Empire almost the complete control over the commercial policy of the Empire had been entrusted to Delbrück, who held the very important post of President of the Imperial Chancery, and was treated by Bismarck with a deference and consideration which no other of his fellow-workers received, except Moltke and Roon. Delbrück was a confirmed Free-Trader, and the result was that, partly by commercial treaties, and partly by the abolition of customs dues, the tariff had been reduced and simplified. The years following the war had, however, not been altogether prosperous; a great outbreak of speculation was followed in 1873 by a serious commercial crisis. And since that year there had been a permanent decrease in the Imperial receipts. This was, for political reasons, a serious inconvenience. By the arrangement made in 1866 the proceeds of the customs and of the indirect taxation (with some exceptions) were paid into the Exchequer of the Federation, and afterwards of the Empire. If the receipts from these sources were not sufficient to meet the Imperial requirements, the deficit had to be made up by contributions paid (in proportion to their population) by the separate States. During later years these contributions had annually increased, and it is needless to point out that this was sufficient to make the relations of the State Governments to the central authorities disagreeable, and to cause some discontent with the new Constitution. This meant also an increase of the amount which had to be raised by direct taxation. Now Bismarck had always much disliked direct taxes; he had again and again pointed out that they were paid with great reluctance, and often fell with peculiar hardship on that very large class which could only just, by constant and assiduous labour, make an income sufficient for their needs. Worst of all was it when they were unable to pay even the few shillings required; they then had to undergo the hardship and disgrace of distraint, and see their furniture seized and sold by the tax-collectors. He had therefore always wished that the income derived from customs and indirect taxation should be increased so as by degrees to do away with the necessity for direct taxation, and if this could be done, then, instead of the States paying an annual contribution to the Empire, they would receive from the central Government pecuniary assistance.

The dislike of direct taxation is an essential part of Bismarck's reform; he especially disapproved of the Prussian system, the barbarous system, as he called it, according to which every man had to pay a small portion, it might be even a few groschen, in direct taxes.

"I ascribe," he said, "the large part of our emigration to the fact that the emigrant wishes to escape the direct pressure of the taxes and execution, and to go to a land where the klassensteuer does not exist, and where he will also have the pleasure of knowing that the produce of his labours will be protected against foreign interference."

His opinion cannot be called exaggerated if it is true that, as he stated, there were every year over a million executions involving the seizure and sale of household goods on account of arrears of taxation. It was not only the State taxes to which he objected; the local rates for municipal expenses, and especially for education, fell very heavily on the inhabitants of large cities such as Berlin. He intended to devote part of the money which was raised by indirect taxation to relieving the rates.

His first proposals for raising the money were of a very sweeping nature. He wished to introduce a State monopoly for the sale of tobacco, brandy, and beer. He entered into calculations by which he proved that were his policy adopted all direct taxation might be repealed, and he would have a large surplus for an object which he had very much at heart—the provision of old-age pensions. It was a method of legislation copied from that which prevails in France and Italy. He pointed out with perfect justice that the revenue raised in Germany from the consumption of tobacco was much smaller than it ought to be. The total sum gained by the State was not a tenth of that which was produced in England by the taxing of tobacco, but no one could maintain that smoking was more common in England than in Germany. In fact tobacco was less heavily taxed in Germany than in any other country in Europe.

In introducing a monopoly Bismarck intended and hoped not only to relieve the pressure of direct taxation,—though this would have been a change sufficient in its magnitude and importance for most men,—but proposed to use the very large sum which the Government would have at its disposal for the direct relief of the working classes. The Socialist law was not to go alone; he intended absolutely to stamp out this obnoxious agitation, but it was not from any indifference as to the condition of the working classes. From his earliest days he had been opposed to the Liberal doctrine of laissez-faire; it will be remembered how much he had disliked the bourgeois domination of the July Monarchy; as a young man he had tried to prevent the abolition of guilds. He considered that much of the distress and discontent arose from the unrestricted influence of capital. He was only acting in accordance with the oldest and best traditions of the Prussian Monarchy when he called in the power of the State to protect the poor. His plan was a very bold one; he wished to institute a fund from which there should be paid to every working man who was incapacitated by sickness, accident, or old age, a pension from the State. In his original plan he intended the working men should not be required to make any contribution themselves towards this fund. It was not to be made to appear to them as a new burden imposed on them by the State. The tobacco monopoly, he said, he looked on as "the patrimony of the disinherited."

He did not fear the charge of Socialism which might be brought against him; he defended himself by the provisions of the Prussian law. The Code of Frederick the Great contained the words: