II. (3)

I. Complaints of the agrarians—II. Bismarck fights against Socialism and helps it to expand—Milk-and-water Socialism v. Democratic Socialism—The Caprivi Treaties—Division of the population according to occupations—Back to the land. Taxes on food—III. North, East, and South Germany against Westphalia and the Rhenish provinces—Changed outlook—Posadowsky—Wheat and rye—Incidence of duties—IV. Small and large holdings—Calculation of incidence—Mr. Arnold White on reality and political institutions.

In 1894, when France raised the duty on corn to 2s. 10d., Germany lowered it to 1s. 11d. per cwt. The agrarians complained that they were being sacrificed to the manufacturers: they, the solid foundation of Europe in general and Prussia in particular. The aim of the Chancellor, Caprivi, was to open markets to German manufactures; the aim of the Emperor in introducing the 1902 tariff was to close Germany to agricultural competition. The 1902 tariff is an attempt to check the flow of the population to the industrial centres and keep it on the land.

When Bismarck tried to stamp out Socialism in 1879, he attempted to do it by imposing Customs duties which acted as a hothouse for industry, and spread Socialism far and wide; the logical completion of this delightfully illogical policy was the establishment of the Imperial Insurance Bureau as a soothing poultice in the form of bureaucratic Socialism, under whose application he imagined that the Social Democrats would melt away.

The result was that they polled three million votes at the 1904 election.

Caprivi, rightly judging that a protective policy which encourages production without providing for commercial expansion naturally leads to crises, pursued the Bismarckian policy in the commercial treaties of 1891, and with success, as the German census returns testify. In 1871 the rural population living in groups of less than 2,000 inhabitants was 64 per cent. and the urban population 36 per cent. of the whole; in 1898 they were equal. Now, whereas the urban population is more than 54 per cent., the rural has fallen to 46 per cent. The division into occupations was as follows, according to the 1896 census:—

The Emperor, whose speeches at Essen and Breslau in 1902 showed his hatred of the Socialists, saw that it was suicidal for a Government, such as he intended to maintain, to encourage the growth of an industrial population in Germany: reversing the political traditions of the last quarter of a century he aimed at an agrarian policy. But it is certain that taxes on food have never operated to send workmen from factories and mines back to the land; nor does any better success attend the policy of artificially retaining on the soil the labourers who are anxious to leave it, by means of taxes which make the town workers dependent on the agricultural interest. The 1902 tariff contained a minimum tariff for cereals which narrowed the field of possible treaties of commerce. The duty on rye and oats was raised to 2s. 6d. per cwt. (a rise of 43 per cent. on the first and 78 per cent. on the second); that on wheat to 2s. 10d. (a rise of 57 per cent.); that on brewing barley to 2s. (a rise of 100 per cent.); while the duty on other barley was 7d. The duty on beef was raised to 6s. per cwt., the average weight of an ox being reckoned in Germany as 12 cwt., of which 58 per cent. can be used as food. When Von Bülow laid the commercial treaties before the Reichstag on February 1, 1905, he took care, in order to curry favour with the agrarians, to announce a rise in the duty on bacon from 2s. 6d. to between 6s. and 7s. The trebling of the duty was greeted by violent protests from the Extreme Left. “You protest against the increase in Customs on foodstuffs? Follow the example of the Radical majority in the French Republic. They passed a duty of 2s. 10d. on wheat—higher than ours, that is. In 1903 they raised the duties on live stock to 8s. per cwt., making the tax on meat 14s., and raised the duties on pork to 6s. and 10s. What have you to complain of when they pay more than you will have to do?” Von Bülow was right. French fiscal policy was as incoherent as the German; but there is no logic in imitating some one else’s want of logic.

Naturally, the proposers of such an imposition make it quite small, which in itself condemns it. The preamble declared that the average duty on the German tariff was 9·4 per cent., that on the French 9·6 per cent., and the Italian 13·7 per cent. The new tariff represented an increase of 2·26 per cent., but M. Posadowski added that the commercial treaties would involve a farther rise of from 1 to 11/3 per cent., affecting 241 out of 946 items—a quarter of the whole. The tariff was strongly opposed by the Socialists, Liberals, the Liberal League, and the Southern Democrats, and of course the agrarians found it inadequate, since, if they wanted to prevent other people from eating, they are always greedy enough on their own account. Von Bülow, addressing the Reichstag, declared that he considered that it was of first-rate importance to preserve the agricultural population in the north, east, and south of Germany as the granary of Germany and the recruiting ground for the army. The Emperor allowed himself to dream that a few shillings on corn, rye, beef and bacon could alter the movements of the population.