politicians. We are all, thank God, discontented, and a poor lot we
should be if we were not. The workingman's discontent has been
over-emphasized, for the reason that what he demands is material,
ponderable, for sale, easy to see, and not far out of the reach of
one's hand. He wants more rooms, more meat, more tobacco, more beer,
more leisure. I am glad he does want them, and let me say just once,
in answer to my detractors along these lines, that the workingman has
no heartier champion than am I. I applaud his discontent just as I
cherish my own, for "it is precisely this that keeps us all alive!" It
is just because I wish him well that every ounce of my influence and
experience are his, to open his eyes to the demagogues who fatten upon
him, fool him, rope him, throw him and brand him, as they have done in
Germany, as they are attempting to do in England, and as they will
shortly begin to do in America. State socialism means slavery for him,
with an army of officials living on him. He will be given so much
bread, and beer, and meat, and tobacco; so much music, theatre, and
literature; and there will grow up an army whose business it will be
to keep him in order, and to cut him down if he revolts, as was done
by the police in one of the suburbs of Berlin not long ago. The German
workman is already so entangled in the ropes of insurance, so harried
by petty officials, so branded by the police, and he has permitted to
increase such a host of guardians, that revolt or revolution is
practically impossible. Counting the army, navy, and officials, there
are said to be three million officials, great and small in Germany;
and there are fourteen million electors, or, roughly, one policeman to
every five adults. And those three million policemen, armed with
lethal and legal weapons, are inflexibly and unalterably for no
change. Does the workingman ever stop to think that those officials
draw salaries amounting to something like $1,200,000,000 a year, and
is he still fool enough to think that he does not pay those salaries
to these slave-drivers! I have said that the population is well fed,
well clothed, and well looked after. Of course they are. No slave-owner
so maltreats his slaves that they cannot work for him! But is
man fed by bread alone, even in the sugared form of music and
theatricals?
If the socialist Pygmalion ever succeeds in bringing his statue to
life, how she will scorn him, hate his suffocating environment, wish
for the wealth and softness he cannot give, desert him, begging to
return to her marble tomb again.
Long life to discontent, say I; but
is the workingman such a fool that his eyes are not opened when a man
of Bismarck's way of thinking, when an autocrat like the Emperor have
favored state socialism! Does he not see that socialism is the neatest
hangman of them all to strangle his discontent! Does he not see the
demagogue gradually assuming the features and the powers of the
tyrant! Tyranny is not alone the prerogative of an aristocracy. "It is
the place of a court to make its servants insignificant. If the people
should fall into the same humor, and should choose their servants on
the same principles of mere obsequiousness and flexibility, and total
vacancy and indifference of opinion in all public matters, then no
party of the state will be sound, and it will be vain to think of
saving it." Thus writes Burke, the champion of our American revolt
against his own country. The electors, now so flattered by the smooth
phrases of their tyrants disguised as liberators, will one day be
aghast to find themselves in a veritable house of correction paid for
from their own savings. They will have learnt then, at last, that you
cannot get rid of the fools who are rich by deceiving the fools who
are poor; and corporalism will be found to be a harsher, fussier, a
more meddlesome and a more indifferent tyrant than even feudalism.
Even at the Krupp works at Essen, and the various branches elsewhere,
where there is the most elaborate combination of Lady Bountiful and
successful business anywhere in the world, men are not satisfied. If
they are not contented there, then nowhere in this world will the
workingman be contented. The Krupp business employs some 70,000
persons. In the particular Essen works, for a hundred years, there has
never been a strike, though others of their employees elsewhere have
used the strike. Though the Cadburys and Levers and Taylors, in
England, the Armours, the United States Steel Corporation, the
National Cash Register Company, the Procter and Gamble Company, the
General Electric Company, and others in America, and the famous and
successful adoption of co-operation in Monsieur Godin's iron foundry
at Guise, in France, have worked along the lines of recognition of
their workmen's right to participate in the profits, there is nothing
on such an elaborate scale as at Essen, under the regime of the
Krupps.
From 1904 to 1910 the Krupps spent, for beneficial institutions of all
kinds, $14,250,000, or 56 per cent. of the dividends during that time.
I have passed many hours at Essen, and seen thoroughly, from cellar to
attic, this truly noble institution for the comfortable and safe
guardianship of men, women, and children who are at the same time
factors in a huge and successful industrial enterprise. There are
schools, technical schools, hospitals, convalescent homes, a library
with 71,000 volumes, theatre, orchestra, band, lectures, concerts,
pension and insurance funds, lodgings for bachelors, tenements and
dwellings for married people, separate cottages for widows and
widowers too old for work, and every opportunity, with a high rate of
interest, for saving. There is in existence a co-operative store, as
well managed as the co-operative stores at Tuxedo Park, and with much
the same system of rebates. There are bathing facilities, gymnasium, a
boat club, a system of providing hot meals from a central kitchen,
reading-rooms and smoking-rooms. There is invested, not including the
value of the land, which has risen enormously in value, over
$12,500,000 in houses for the working-people, the return on the money
being about 2 3/4 per cent. It would require volumes -- indeed, two
bulky volumes were issued last year by the company to celebrate the
hundredth anniversary of the foundation of the Krupp works -- to
describe merely the machinery for making the people comfortable.
In 1851 the Krupps exhibited at the exposition in London the first
cannon made of cast steel; now they turn out more shells and shrapnel
in a week than were used at the whole battle of Koeniggraetz (Sadowa),
which lasted from eight o'clock in the morning till four o'clock in
the afternoon on July 3, 1866. The queen of this, the greatest factory
of destructive agencies in the world, is a gentle Madonna-faced lady
who might well pose for a statue of peace, and whose loveliness is a
mirror of the countless and untiring benefactions with which the
people who work here are surrounded. Both the powers and the people of
Germany may well be proud of the Krupps, for if sane beneficence were
to be raised to the rank of statehood this great colony would well
deserve the honor. The gross profits for the last year were
$9,000,000, half of which was written off and the rest devoted to the
reserve, to dividends, and to contributions to the invalid and pension
funds of the employees, which now amount to $9,500,000. The employees
also have on deposit with the management $8,700,000. The contribution
of the Krupps to the workmen's state-insurance fund amounted, in 1910,
to $1,320,000. The Krupp family is rich, but what would their wealth
have been had they practised the gobbling and juggling financial
methods of ----; but I will not pillory my own countrymen by name, for,
after all, our political methods have made them, and not they
themselves.
The German manufacturer has been at a disadvantage, too,
for several reasons, and this may well be noted as one of Germany's
problems. She has not the deposits of coal that have made England
rich, nor the wonderful soil of America, from which alone we take
$9,000,000,000 every year, nor France's population, now at a
standstill, and which can feed itself off its own soil. She has been a
large borrower of capital to finance her enormous expansion of
industry and commerce, and, above all, the gold supply of the world,
which in the last resort is the foundation of credit, is not in her
hands, nor can it be so long as British and American fleets keep the
ocean highways over which that gold travels.
The world's gold output in 1911 was $493,100,000; of this $177,600,000
came from the Transvaal; $100,350,000 from the United States;
$63,600,000 from Australia; $42,300,000 from Russia; $23,300,000 from
Mexico; $35,600,000 from Rhodesia, India, and Canada; and $15,650,000
from Central and South America, or $458,000,000, of the total output
of $493,100,000, from countries which in time of war would be unlikely
to ship gold to Germany. More than one half the output comes from the
British Empire alone. To those who are satisfied with the easy answer
to the reason for the increased cost of living, that the output of
gold has increased, it must be puzzling to learn that of the total
output, in round numbers, of $500,000,000, $150,000,000 is used in the
arts and manufactures and $150,000,000 goes to India, where it is
buried and hoarded, and $100,000,000 is retained in the United States
for currency and other purposes. In spite of the fact that the gold
output of the world doubled between 1890 and 1897, and nearly doubled
again between 1897 and 1911, money is dear, and is likely to be so
long as present conditions last.
The reason for the higher cost of living is to be found in the
movement of the population, from the dulness of the plough to the
sprightliness of the cinematograph. This choice every freeman has a
right to make for himself, but the trouble arises when the politician
comes forward and pays his admission to the cinematograph
entertainment, out of the public funds, in order to get his vote. The
man who does not leave the plough under those conditions is either a
fool or a saint, and the percentage of the growth of cities is a fair
measure of their relative numbers. The increased cost of living is the
result, not of too much gold, but of too little labor on the land, and
this is due, in turn, to the voluptuous rhetoric of the political
street-walkers, whose promises of pleasure are as illegitimate as they
are impossible of fulfilment. A debtor nation like Germany is highly
sensitive to these conditions, and just as she is overcoming, by her
splendid success as a manufacturing nation this problem, she is met by
increased and ever-increasing rivalry. America, in 1901, exported
$466,000,000 of manufactures; in 1891 only $188,000,000; but in 1911,
$910,000,000; and in 1912, $1,021,753,918. We now have in America
225,000 manufacturing plants employing 6,000,000 people, with an
annual pay-roll of $3,500,000,000 and producing every twelve months
$15,000,000,000 worth of goods. The total value of exports and imports
of Japan thirty years ago was $30,000,000, or 87 cents per capita; in
1911 the figures were $480,000,000, or $10 per capita. England during
the years 1911 and 1912 surpassed all previous figures both for
exports and imports. Germany's rivals, it is thus seen, have not been
idle.
The agricultural population of Germany in 1850 was 65 in the 100; it
is now less than one third. In 1911, after a bad year for the farmers,
Germany was obliged to pay out some $200,000,000 more than usual for
food. The total loans of the German banks on industrial securities
rose from $107,000,000 in 1890 to $632,000,000 in 1910, and bankers
themselves admit that Germany has fallen into the error of seeking and
accepting credit far beyond the value of the capital that they have to
work with. Still more dangerous is the fact that 55 per cent. of the
savings-bank moneys of Germany is locked up in mortgages. In 1907, 217
new companies were formed in Germany, issuing $62,050,900 in
securities; in 1909, 179 new companies issued $54,929,450 of
securities; in 1910, 186 new companies issued $57,437,700 of
securities. In 1910, 340 companies increased their capital by
$142,657,200. In 1910 there were 5,295 companies in Germany with a
nominal capital of $3,680,979,400. It is estimated that since 1895
there has been invested in industrial companies in Germany
$1,200,000,000. It is to be said also that since 1897 German
agricultural production has doubled, German industrial production
increased sevenfold, and Germany is said to have $4,750,000,000 in her
savings-banks. The value of imports for home consumption, exclusive of
the precious metals, in 1911 was $2,386,200,000; the value of the
exports of home produce, exclusive of the precious metals, was
$2,025,450,000. It is a quaint result of her temperament and her good
forestry, that Germany sells $25,000,000 worth of toys a year; she is
veritably the workshop of Santa Claus, and many more than 25,000,000
children would bless her did they know.
German financiers affirm that she can stand alone financially, while
others assert that one sixth of her capital, I have heard it placed at
one third, is borrowed from France and England. It is certain at least
that the American panic of 1907, and the recent war in the Near East,
have seriously embarrassed Germany financially.
As Germany can only feed, even in good harvest years, forty-eight or
forty-nine millions of her people, a large proportion of her profits
from industry must necessarily go to the purchase of food for the
other sixteen or seventeen millions. The consumption of meat has
increased among all classes in Germany, and both the demands of the
individual and of the state have increased with the increased wealth
of the country. In Prussia alone the number of those subject to income
tax has increased from 2,400,000 in 1892 to 6,200,000 in 1912; but the
taxes have increased as well, or from $800,000,000 to $1,675,000,000.
In the endeavor to increase the manufacturing output and to find new
markets German credit has been stretched to a dangerous tenuity. While
the war feeling was at its height the Koelnische Zeitung, a
conservative and able journal, wrote: "In case of war both France and
Germany will be obliged to borrow; but it is certain that the credit
of Germany cannot as yet be compared with the credit of France: this
is a strong guarantee of peace."
Wermuth, said by impartial judges to be the ablest secretary of the
treasury the German Empire has had in a quarter of a century, resigned
in 1912, on the general ground that he would not be responsible for
the finances of the empire, if it was proposed to continue the
constant increase of national expenditure, by a constant increase of
borrowing, and an ever-increasing amount of interest-bearing
liabilities. He must have smiled to himself when an Imperial issue at
four per cent. put out in February, 1913, was not only not over-subscribed
but not even all taken.
Unlike the French, who invest their
savings small and large in national loans, the Germans neglect even
their own national loans, preferring the higher returns for their
investments from the innumerable industries launched in modern
Germany; so pronounced is this form of investment, that a director of
the Deutsche Bank has warned his countrymen, that every month's
profits are no sooner gained than they are put out again in new
enterprises, either by the individuals themselves, or by the banks in
which they are deposited. As a result, the liquid capital at the
disposal of Germany is dangerously out of proportion to her borrowings
and her working capital. It shows a fine confidence in the future, and
it proves what needs no proof: the immense industrial and commercial
progress, and the immense sea-carrying trade of Germany. Germany is
like a man with $1,000 in the bank to check upon, but doing business
with $100,000 of borrowed capital, upon which he must pay interest,
and out of which he must take his running expenses. Such a one has no
provision for a bad year, and must depend upon more credit in case of
trouble; and in the case of Germany, it may be added, his personal and
family expenses have largely increased. The German imperial debt had
increased during the first twenty-two years of the present Emperor's
reign, or from 1888 to 1910, by $1,040,000,000, and of that sum some
$650,000,000 were added in the ten years from 1900 to 1910, when
Germany was building her fleet.
Between the years 1905 and 1910 the total export trade of Germany
increased by $408,225,000, but the whole of the increase was due to
the heavier forms of manufactures: machinery, iron ware, coal-tar
dyes, iron wire, steel rails, and raw iron. The increasing competition
is shown by the fact that during those same years her exports of the
finer manufactures, such as cotton and woollen goods, clothing, gold
and silver ware, porcelain, maps, prints, and the like, actually
decreased by $66,975,000!
I am not maintaining for a moment that these problems are peculiar to
Germany, but merely that, owing to the rapid progress, they are
aggravated, and that to point out Germany as a model of successful
achievement, along these and other lines, in order to bolster up
political cure-alls at home, is a betrayal of crass ignorance of the
general internal situation of the country, and once such prejudiced
pleaders are found out, the rebound will go too far the other way.
That were a pity, too, for we have much to learn from Germany.
The $30,000,000 in gold in the Julius Tower at Spandau, called the
war-chest, and the income from railroads, forests, and mines, are to be
put down on the other side of the ledger, but as a year's war, it is
calculated, would cost France, England, or Germany some $2,300,000,000
each, these sums are of negligible importance.
The Prussian railways
cost $2,250,000,000, and are now valued at twice that sum, and pay an
average of seven per cent. on the invested capital. Maintenance costs
are included in the total annual expenses, and there is no, so it is
claimed, actual depreciation. Of the net revenue of $157,330,417 in
1909, about $55,000,000 are transferred to the state revenue, out of
which all charges of the state, including interest on bonds, are paid.
The rest is used for new construction, sinking funds, reserve funds,
and so on.
The report of the Interstate Commerce Commission of 1909-1910
states that there are nearly $19,000,000,000 of railway capital
outstanding in America. There are 240,438 miles of single track in the
United States; 59,000 locomotives, 35,000 for freight, and a total of
2,290,000 cars of all kinds; and the railways carried in one year
971,683,000 passengers and 1,850,000,000 tons of freight. In 1910, 386
persons were killed, but, what is often forgotten, more than one half
the total accidents were due to stealing rides and trespassing on the
tracks. The railways in the United States are our largest purchasers
by far, and for every dollar they earn 42 cents is spent in wages, 26
cents for material, raw or manufactured, before anything is given out
for interest on loans or dividends.
A first-class ticket in Germany is taxed 16 per cent. on the price of
the ticket; a second-class ticket, 8 per cent.; a third-class ticket,
4 per cent.; the fourth-class ticket, nothing. Crowded and
uncomfortable travelling in Germany is cheap; comfortable travelling
in Germany is very dear indeed. The herding of people in the fourth-
class carriages in Germany resembles our cattle-cars rather than
transportation for human beings. Such conditions would not be
tolerated in America, but against these state-owned railways there is
no redress. No luggage, except hand luggage, is carried free. Not
once, but many times in Germany, my first-class ticket found me no
accommodation, and often in changing from the main line to a branch
line not even a first-class compartment. Shippers in the coal and iron
districts, when I was there, complained bitterly that there were not
enough freight-cars, that their complaints were smothered in
bureaucratic portfolios, and that private enterprise in the shape of
proposals to build new lines was disregarded. The tyranny of Prussia
extends even into the railway field. The Oderberg-Wien line was built
to avoid using the Saxon state railway lines, was a spite railway in
fact. Here again there was no redress, no one to appeal to against the
autocrat.
In a debate in the Reichstag, in January, 1913, there was much
complaint that the Prussian government was conducting the railways
with the least possible outlay, thus saving money for the state, but
hampering the industrial interests of the country. It was stated that
there were not enough engines or freight-cars, there was an inadequate
staff, and that as a consequence, the loss to the coal industry had
been $11,500,000 and to the coal-miners $3,375,000.
On the state-owned
railways of the west of France the break-down is ludicrously complete,
and the people are staggered by the official estimates that it will
require at least $100,000,000 to put them in decent running order.
In twenty years the American railways have practically been rebuilt,
with heavier rails, better bridges, more permanent stations, and so
on; while twenty years ago it cost a passenger 2.165 cents to travel a
mile, to-day it costs him 1.916 cents. We need a lot of bustling about
abroad before we realize how much we have to be grateful for at home!
Probably the most costly and the most troublesome of Germany's
problems is her conquered provinces: Hanover, Schleswig-Holstein,
Alsace-Lorraine, and Poland. Hanover, which was taken by Prussia and
her king deposed, is nowadays a minor matter of the relations between
courts, individuals, and families, which may be said to be settled by
the arranged marriage between the Kaiser's charming daughter and the
heir to the Duke of Cumberland, whose ancestors were kings of Hanover.
The Danes, on the other hand, in the northern part of these provinces,
still resist Prussianization. They keep to themselves and their
language, send their children to school in Denmark, and resist all
attempts at social and racial incorporation. They are troublesome, as
an independent and surly daughter-in-law might be troublesome.
Alsace-Lorraine and Posen, on the contrary, are outspoken and
potentially dangerous foes in Germany's own household.
In 1872 Bismarck said: "Alsace-Lorraine will be placed on an equality
with the other German states, ... so that the people may be induced to
forget, in a comparatively short time, the trouble and distress of the
war and of annexation." In 1912, a loyal Alsatian German writes: "Das
Elsass, dies jungstgeborene Kind der deutschen Voelkerfamilie, braucht
etwas mehr Liebe." Forty years of Prussian rule have not fulfilled the
promise of Bismarck. This same Alsatian writer continues: "In short,
we are approaching ever nearer to the condition of the citizens of all
the other German States, as Baden, Saxony, Bavaria, where they are
also not always of one mind with the higher ruling powers."
It is difficult for the American, who, no matter what particular State
he lives in, is first of all a citizen of the United States, to
understand this jealousy and, in some quarters, bitter dislike of
Prussia. If the State of New York had sixty million of our ninety
million population, and if the governor of New York were also
perpetual President of the United States, commanded the army and navy,
controlled the foreign policy, and appointed the cabinet ministers,
who were responsible to him alone, we could get an approximate idea of
how the people of Virginia, Massachusetts, Illinois, and California
would feel toward New York. This is a rough-drawn comparison with the
situation in Germany. If, in addition, we had the Philippine Islands
where Maine is, and Cuba where Texas is, it is easy to recognize the
consequent complications.
We should remember this picture in dealing with this German problem,
which, at any rate, from the point of view of kindly feeling and
successful adoption of these foreign peoples into the German family,
has been a dire failure. The miserable failure of the Germans in
Southwest Africa, their inconclusive war with the Herreros, and the
absolute break-down of Prussian methods with the natives, is scarcely
more typical than the failure in Alsace-Lorraine and Poland. The
Prussian belief in sand-paper as an emollient must be by now rudely
shaken.