Personnel.—The German navy is manned by the obligatory service of the essentially maritime population—such as sailors, fishermen and others, as well as by volunteers, who elect for naval service in preference to that in the army. It is estimated that the total seafaring population of Germany amounts to 80,000. The active naval personnel was, in 1906, 2631 officers (including engineers, marines, medical, &c.) and 51,138 under-officers and men, total 53,769. In addition, there is a reserve of more than 100,000 officers and men.
(P. A. A.)
Finance.—The imperial budget is voted every year by the Reichstag. The “extraordinary funds,” from which considerable sums appear annually in the budget, were created after the Franco-German War. Part of the indemnity was invested for definite purposes. The largest of these investments served for paying the pensions of the invalided, and amounted originally to £28,000,000. Every year, not only the interest, but part of the capital is expended in paying these pensions, and the capital sum was thus reduced in 1903 to £15,100,000, and in 1904 to £13,200,000. Another fund, of about £5,200,000, serves for the construction and armament of fortresses; while £6,000,000, known as the Reichskriegsschatz—or “war treasure fund”—is not laid out at interest, but is stored in coined gold and bullion in the Juliusturm at Spandau. In addition to these, the railways in Alsace-Lorraine, which France bought of the Eastern Railway Company for £13,000,000, in order to transfer them to the control of Germany, are also the property of the empire.
During the years 1908 and 1909 considerable public discussion and political activity were devoted to the reorganization of German imperial finance, and it is only possible here to deal historically with the position up to that time, since further developments of an important nature were already foreshadowed.
In 1871 the system accepted was that the imperial budget should be financed substantially by its reliance on the revenue from what were the obvious imperial resources—customs and excise duties, stamp duties, post and telegraph receipts, and among minor sources the receipts from the Alsace-Lorraine railways. But it was also provided that, for the purpose of deficits, the states should, in addition, if required by the imperial minister of finance, contribute their quotas according to population—Matrikular Beiträge. It was not expected that these would become chronic, but in a few years, and emphatically by the early ’eighties, they were found to be an essential part of the financial system, owing to regular deficits. It had been intended that, in return for the Matrikular Beiträge, regular assignments (Überweisungen) should be returned to the states, in relief of their own taxation, which would practically wipe out the contribution; but instead of these the Überweisungen were considerably less. Certain reorganizations were made in 1887 and 1902, but the excess of the Matrikular Beiträge over the Überweisungen continued; the figures in 1905 and 1908 being as follows (in millions of marks):—
| Matrikular- Beiträge. | Überweisungen. | Excess. | |
| 1905 | 213 | 189 | 24 |
| 1908 | 346 | 195 | 150 |
These figures show how natural it was to desire to relieve the states by increasing the direct imperial revenue.
Meanwhile, in spite of the “matricular contributions,” the calls on imperial finance had steadily increased, and up to 1908 were continually met to a large extent by loans, involving a continual growth of the imperial debt, which in 1907 amounted to 3643 millions of marks. The imperial budget, like that of most European nations, is divided into two portions, the ordinary and the extraordinary; and the increase under both heads (especially for army and navy) became a recurrent factor. A typical situation is represented by the main figures for 1905 and 1906 (in millions of marks):
| Expenditure. | Revenue. | Raised by Loan. | ||
| Ordinary. | Extra- ordinary. | |||
| 1905 | 2002 | 193 | 2053 | 341 |
| 1906 | 2157 | 235 | 2118 | 258 |