RUIN AND RECONSTRUCTION
The mistake we are all making about Germany over here, and a very
natural one, is that we can't realise what Germany to-day is like.
While we are rapidly getting back to the material and mental
conditions of pre-war days, Germany is daily getting farther and
farther away from us. It is difficult to express the difference. We
all know the curious psychological change that comes over our lives
when the doctor tells us we must "give up"; how then in a moment, as
we sink into bed, we are changed from responsible personalities,
ruling our own and others' lives, to helpless encumbrances ruled by
doctors and nurses; and how we only recover our rights through a long
convalescence. Germany has given up. It carried on until it collapsed,
and now lies semi-comatose; and we, still absorbed in our quarrel,
keep pestering it with solicitors and foreclosures instead of patching
it up with doctors and food. Descriptions of economic conditions in
Germany must therefore be read with the realisation that they are
morbid symptoms. Germany may be, no doubt is, working its way through
revolution to a saner, sounder condition, but at present is as
abnormal and helpless as a snake changing its skin. Meantime, we,
using the complete control over Europe that the war has put into our
hands, have so interfered with this process as to risk making out of
Germany as great a danger to the existing order in Europe as we made
out of Russia.
Nor is the danger one of to-day only. In ten years' time when the
Blockade will be no more than a memory, but when the surviving
childhood of Germany, bodily wasted and mentally warped, comes to
maturity, Europe will suffer for it. The fathers will have eaten their
sour grapes by then, but the children's teeth will still be set on
edge.
"I do not complain of your blockade, it ended the war," said to me a
former Minister and a leader of political thought. "Yes, I've lost
four stone since I left the trenches"--he was indeed only the
framework of a once big and burly man with the low voice and languid
bearing of the underfed. "I'm all right on what I get, it's the
children--I could give you statistics, but you wouldn't believe them;
I never do. Go and see them yourself."
So I went. First a tour of the cellars of the great tenement houses of
Berlin--cellars closed before as unfit for habitation, but now, under
stress of house shortage, lived in by the large families of the German
working class. In one I find a war widow keeping five children on the
bare ration: 5 lb. of potatoes, 5 lb. of bread per head a week, 1/2 lb.
of meal and 1 lb. of jam when they can afford it and find it. The
bigger children get a quart of skim-milk a week, too sour for anything
but soup--the younger about two quarts of full-milk. They are having
their supper--cabbage and potatoes. The younger children nibble
suspiciously at gifts of chocolate. They do not know what it is and
suspect a new "substitute." The younger children look better than the
elder. The eldest boy has lost his job because he "can't keep his
feet." The mother is emaciated. Next door is another family--the
father, a painter, is in work, but is continually losing days from
"stomach-trouble." They have lost one child from decline.
And so on, always the same stories of struggle against decline from
want of fats or sugar, for the sugar supply failed when the Poles
occupied Posen--against dirt from want of soap--against dark and
cold, for the gas and coal are getting daily shorter.
Then I went to a public soup kitchen where a long queue of every class
was waiting for its plate of potato-soup, just potatoes, absolutely
nothing else, and they too deducted from the week's ration. "Splendid,
splendid soup," says an enthusiastic little man, a small shopkeeper,
perhaps, "not a rotten potato in the whole plateful."
Thence to the creches and children's hospitals of the organisation
started by the Empress Frederick and run for many years by English
ladies. In these big, bright rooms there was the same ominous quiet as
in the dark cellars. "We can keep them alive when we get them in time,
but we can't do more. We can fill them, but we can't feed them with
this," said the sister, ladling out potatoes and cabbage to the older
children and oatmeal gruel to the younger. Everywhere swollen bellies
and shrunken limbs--children of three that had nothing actually wrong
with them but couldn't yet stand--children with "English sickness" as
rickets is called--children of school age that couldn't be sent to
school because they were so mentally and physically backward. Here and
there a sturdy infant that owed a better start to some stronger
mother, but the most of them lying silent or wailing feebly. "We
could save even that one," says the sister, unwrapping a baby so
shrivelled it looked scarcely human, "but we can get nothing, though
they give us here whatever there is. They know it's the children that
matter most now."
Children have always meant much to the Germans, and in those days of
growing disgust with the past and of growing despair as to the future
they meant so much that nothing else seemed ever to matter to the
women at any rate. I heard a woman prominent in politics say she was
glad to hear that the Allies were going to occupy Essen, Duesseldorf
and the industrial district, because then they must see what was
happening to the children there, owing to the blockade and to the
barring off of the milk supply from across the Rhine.
I soon saw enough to be satisfied that though food could still be got
at a price in the eating houses of Berlin, private households of the
whole working class and lower middle class were so straitened for food
that some members of each family were being starved; either because
they were too sickly to digest such food as could be got or because
they were giving it to the children. The same conclusion was come to
by the numerous Commissions sent out to report, even though these
were generally composed of young officers; instead, as they should
have been, of experienced medical men and food experts. These
Commissions were given every facility for estimating how far
under-nourishment had deteriorated the working power of the poor and
was deterring them from work. Also how far the low development and
high death-rate of the children was due to this. And their reports
show what a terrible responsibility we assumed when we maintained the
blockade after the armistice, as a means of political pressure and a
method of penal procedure. These reports are easily accessible to
English readers, so I will only give here, for what they are worth,
the conclusions come to by one representative neutral and one native
authority. A Copenhagen association for studying the economic results
of the war, estimated that the German population, which at the
beginning of the war was about 67.8 millions, would, but for the war,
have risen by now to about 70 millions and had sunk to about 65
millions. Of this decrease 3.5 millions was due to diminished
birth-rate and 2.1 millions to increased mortality. In the last years
of war the birth-rate fell to one-half. Of the increased deaths,
700,000 were ascribable to insufficient nourishment, mainly in the
last two years of war. In 1918 the death-rate for both sexes over 60
increased by half and doubled for children between 4 and 14. My
observations also suggest that it was children of this age that
suffered most from the blockade. The loss of about two millions of men
in the prime of life, the decreased vitality of the women and children
who suffered especially from the blockade, and the general economic
conditions of the country, make any early re-establishment of previous
productivity impossible.
Again, in the _Deutsche Medizinische Wochenschrift_ one, Geheimrat
Ruebner, compares losses by war and blockade as follows:--
Military losses by Civil losses
Wounds. Disease. by blockade.
1st year of war 481,506 24,394 88,235
2nd " " 330,332 30,329 121,174
3rd " " 294,743 30,190 259,627
4th " " 317,954 38,167 293,700[B]
5th " " 62,417 10,902 ---
--------- ------- --------
1,486,952 133,982 762,736
--------- ------- --------
According to this estimate the blockade by the third year was causing
almost as heavy losses as the war itself; and a calculation on this
basis suggests that the continuance of the blockade after the
armistice for six months, must have cost Germany at least 100,000
lives.
Presumably we intended the pressure of our blockade to ensure prompt
acceptance of our peace conditions. If this was our policy, it was a
dangerous mistake. A people, as docile and disciplined as the Germans,
would have accepted any terms dictated them while still under the
impression of their military defeat and of the moral derailment caused
by the revolution. They would have welcomed our armies as allies in
spite of the efforts to rally them made by Chauvinist or Bolshevist
extremists. And nothing that a foreign State could have done was
better calculated to make such efforts successful than the blockade
and the boycott. Neither in Germany nor in Russia have we learnt that
it is better to feed an idealist than to fight him. It is only those
who fast who see visions.
The food scarcity from which Germany was suffering during the six
months I spent there, was something between the food shortage from
which we were then emerging and the famine we were imposing on Russia.
Germans were not dropping dead in the streets as they were in Russia;
but, on the other hand, Germans were not merely being restricted to a
sufficient ration of simple food as were we in England. The German
rations were insufficient both in quantity and quality. This was
especially the case in the essential elements of nourishment; in
bread-stuffs, fats, and sugar. Bread was particularly bad; and I
realised as I never had before that if one cannot live by bread alone,
bread alone is what one cannot live without. So rotten bad was the
blockade bread that the staff of life became little better than a stab
in the vitals. This punishment of the Prussian Prometheus should not
be overlooked when we cast up the reckoning. But how can we realise
it? I remember, the day after I got back from Germany, seeing a girl
in a Berkshire village come out from a baker's shop with a large piece
of white bread and give it to her donkey. Three days before I would
have pulled her and her cart all round the town for that bread.
During my first weeks in Berlin I found that I was being continually
reminded of the lines of the American poet:--
The window has a little pane,
And so have I.
The window's pane is in its sash,
I wonder why.
And after wondering why for some time I asked a doctor friend. "Oh,"
said he, "that's only the war bread. It will last some two months or
so, and then you'll be all right again. If it goes on longer I'll give
you a medical certificate for invalids' bread." But I could not face
those two months. I used to bring bread back from Weimar, where it was
better in quality, and after it went mouldy, boil it up into puddings.
Travelling, I lived mainly off imported tins of oatmeal cooked in a
stove of my own invention, for portable fuel such as petrol, spirits
of wine, etc., was unprocurable. Here is the patent, which tourists on
the Continent may find useful pending the permanent peace promised us
by Paris. You take a small oblong biscuit tin and cut out one end. You
stand your pot or a pan on the tin, roll up a newspaper, light it and
shove the lighted end into the tin, stopping it from burning too fast
with the tin lid. You can boil a kettle with a number of the
_Tag-Blatt_, and the morning paper heats your porridge instead of, as
usual, cooling it. I say nothing of the mental and moral advantages.
And if the bread was deleterious, the showy-looking biscuits and cakes
that flaunted shamelessly in the shop windows were positively deadly.
What they were made of German "substitute" experts alone know, but
mainly, I should think, saccharine and sawdust.
While this state of affairs was mostly due to the blockade,
statistics of German home cereal production before the war suggest
that, with anything like the increase of home production that we
brought about in England, there should have been enough to provide the
population with wholesome bread. And Germany, both from its superior
administrative organisation and from its far larger proportion of
home-grown food, seemed likely to have done better than we did. But,
both in total production and in production per acre there was a heavy
fall, amounting to as much as about 50 per cent. in such important
crops as rye and potatoes; while the slight recovery recorded in 1918
was due to a very favourable season.
And the reason for this collapse was loss of labour power in men and
animals and of fertilisers, natural and artificial. Women in Germany
do not play the large part in field work that many of us supposed. The
greater proportion of the heavy work of cereal production was done by
immigrant labour, and for that the prisoner labour seems to have been
a very inadequate substitute. When this disappeared the effort to
induce unemployed to go on the land was as complete a failure as might
have been expected from our experience. To this loss of labour must be
added the loss of agricultural land in the province of Posen, now
occupied by the Poles, from which Berlin and the Saxon industrial
districts drew their grain and potatoes. Thereafter the potato ration
in Leipzig was for some time reduced from 5 lb. to 2 lb. weekly.
The importation of flour from America made at first little difference.
It cost far too much and came to far too little. Meat was nearly
always procurable at a price, and, if one knew where to go, was good
enough. And for a hundred marks or so, equivalent to five pounds at
the pre-war rate of money, quite a decent dinner could be got in
select restaurants.[C]
The organisation of food supply was distinctly good. The conditions in
Germany were indeed far more difficult than in England. Instead of
having merely to control the importation at the main ports in Germany
the supply had to be controlled before it left the hands of the
individual farmer. This could, of course, only be done on broad
lines. The system followed was to divide the country up into
administrative areas corresponding to the local governments and
roughly to apportion the supply of food products to the population.
This resulted in certain areas becoming surplus and others deficit
regions; and the surplus regions were then compelled to supply a
certain proportion of their abundance to their less fortunate
neighbours. But, of course, no control, however meticulous, could
prevent rural districts from feeding full before anything went to the
industrial districts, or could stop illicit trading between the
well-to-do and the farmers. This "schleich-handel" or sneak trade kept
the profiteer well supplied throughout the war with farm produce.
After the revolution this profiteers' sneak trade was supplemented by
a proletariat sneak trade, in which plundered stores were hawked
through the poor quarters by broken soldiers and miscellaneous
brigands. In Berlin, round the Alexanderplatz, there was perpetual
skirmishing between these "wild traders" and the patrols of the
Frei-Corps. The efforts to suppress the sneak trade of the well-to-do
classes supporting the Government were not so drastic. Butter could
generally be bought through the hotel waiters at forty marks a pound.
There was noticeable in all this a marked deficiency of public spirit in
respect to private life. The German has for so long been drilled and
dragooned in his public life that his civic conscience is little
developed. Whereas in England one had the impression that the government
and authorities, and especially the army, were the worst offenders
against national economy and the mass of the middle class the most
conscientious, in Germany it seemed quite the other way. Undoubtedly one
of the irritants that excited the revolution was the failure of the
rationing system to secure an equitable distribution--or anything more
than a minimum of certain staple foods.
This food shortage is, of course, a cause as well as a consequence of
the economic collapse of Germany. German economic life, swept away for
years on the tide of war effort, now revolves round and round in a
vicious circle like a dead carcase in an eddy after a flood. Famine
and fighting have made the people too weak and too weary to work; but
until they work they cannot get food from abroad or grow it at home.
That is the economic vicious circle. The boycott and blockade have
made the people too restless and revolutionary to reconstruct and
remodel their constitutional institutions; and until they do so they
are to be boycotted and embargoed. That is the political vicious
circle in foreign affairs. In all regions of economic life one finds
this endless chain of cause and effect revolving round Paris and
fettering such energies as are left to Germany.
This is not the place for an estimate of the material sacrifices we
have made and are making, so as to coerce Germany into accepting the
peace conditions of Paris and into suppressing its own revolutionary
movements. I would only point out that a brisk trade between France
and Germany was proceeding all through these months of blockade. For
example, an acquaintance in Switzerland who wanted in February a
certain well-known make of French tyre was told by his garage that
they could get them cheaper than in France if he did not mind where
they came from. They came via Germany. And no sooner was the Treaty
signed than a swarm of American agents descended on Berlin, buying up
businesses right and left, as also such stocks as were left. Small
wonder, with the mark at one-quarter its pre-war value. As to _objets
d'art_ and paintings, the ruin of the plutocracy and the low rate of
exchange threaten to strip Germany far more effectively than any
German raiders could strip the villas of France and Belgium. But in
this legitimate indemnity we English have not benefited. We are too
much afraid of "dumping," no doubt.
There are still probably many in England who fear that German
competition will begin immediately with the raising of the blockade.
Apart from the political and social conditions that make impossible an
early convalescence of German industry from its complete collapse, the
following official data taken from the preface to new regulations for
the textile industry, show the conditions to which this industry was
reduced before the revolution. This document it may be noted, is not
one prepared for foreign consumption.
At the outbreak of war German industry had a stock of 300,000 bales of
cotton on hand, and as much more was held by the Bremen merchants. And
as much more again was imported up to the breach with Italy in May,
1915. The stock then was 600,000 bales. During the war 200,000 bales
were seized in Belgium and Poland. This supply allowed the German
mills an output of 4 per cent. to 5 per cent. of their annual peace
output of about a million tons. The annual local wool production
during the war was 7,000 tons, flax 20,000 tons, hemp 11,000 tons,
artificial wool 25,000 tons, and artificial cotton from rags, etc.,
33,000 tons.
Attempts to grow cotton substitutes were a failure. Nettle fibre in
1916 amounted to 200 tons, turf fibre 2,000 tons, reed fibre 1,000
tons. Artificial fabrics (stapel-fasser), on the other hand, rose to
an annual amount of 10,000 tons, and seem to have a future. Paper
thread rose to 150,000 tons annually, but is only a war expedient. The
home production of fibre was about 2 per cent. of the previous
importation.
These official figures show that the arrears now required are such
that if they could be supplied they could not be paid for. A value of
about five milliards is required as compared with a value of 1-1/2
milliards imported before the war, and 5 milliards is about the total
value of all raw material imported annually before the war. The only
prospect of supply otherwise is from home-made artificial fibres, and
that only if they are protected against foreign cotton, which is
absurd.
All the proposals now under discussion for improving methods of
production by co-ordinating and controlling the factories even if
feasible and effective will not, in the opinion of competent persons
here, make up for any material proportion of the loss of productive
power due to present conditions both of capital and labour. They wish
to get this and other industries restarted, not with any prospect of
profit, but to provide clothing and work for the industrial
population.
Of course, if the economic policy of the Treaty is ever realised and
we artificially stimulate the production of Germany and strangle its
consumption, we shall, if the country recovers, and is resigned to
work under such conditions, run a real danger of a dumping of a most
dangerous character. The semi-servile employment of the Germans could
under such conditions be used to fight the efforts of our workmen for
economic freedom; just as the semi-servile enlistment of Hessians and
Hanoverians was used to fight the efforts of our American colonies for
political freedom. But this policy, if policy it is, depends on
whether and when Germany is sufficiently recovered to work again.
When we measure the exhaustion of Germany on the one side against the
enormity of its burdens on the other, it is difficult to believe that
it can ever recover in the near future. German economic life has had
to endure three crushing blows--the war, the revolution, and the
peace. It was financially ruined by the war, industrially ruined by
the revolution, and economically ruined by the peace terms. Little
need be said as to the financial ruin caused by the war. In its
general lines it is the same as that suffered by all belligerent
peoples; in its details it would require a book to itself. War losses
reduced the industrial, agricultural, and mental producing power of
the male population by about a fifth, which may well be doubled to
cover the reduced productivity of the remainder due to physical anaemia
and political agitation. The productivity of the soil was reduced by
over a quarter, owing to want of labour and fertilisers. Livestock was
reduced by two-thirds. Deadstock, including industrial plant, railway
rolling stock, shipping, buildings, etc., was all much more reduced in
value than with us, owing to the greater material concentration of
Germany on its war effort. The State was bankrupt even in the opinion
of the most optimistic. But all this was remediable, even rapidly
remediable, as soon as the people recovered their vitality. And then
came the armistice which for nine months blockaded and bled the
patient. If one were to enquire which of the particular bleedings most
contributed to his relapse into his present condition of coma one
would choose the taking away of the 5,000 locomotives. The tie up of
internal transportation that followed did more than anything else to
injure the economic vitality of the country.
German unity was economic rather than political in its origin and
dates from the Zollverein and the railway system. Germany was made a
nation economically by railway construction in the '`forties'; though,
unfortunately, the attempt to realise this unity politically on a
liberal basis, in 1848, failed. Even in the present Constitution, we
can recognise the degree to which the railways are relied on for
binding the country together across the mediaeval barriers of
provincial frontiers. It was to some extent realisation of its
political importance that made the German railway system the pride of
the country; and it was the manner in which this system met the
extraordinary demands of modern warfare that enabled Germany to
exploit strategically to the full its internal position and fight a
war on four fronts. And now the condition of the railways is a
striking illustration of the economic and political conditions of the
country.
Here is an account of a journey from Berlin to Munich undertaken last
Easter.
In peace time, if you wanted to go to Munich from Berlin there were
half a dozen trains daily which did the journey in seven or eight
hours, and provided reading cars, eating cars, and sleeping cars at a
rate no more than an English third-class fare. Even after the war one
train daily only took eighteen hours, and the second-class carriages,
though very crowded, were comfortable enough. So, when I was warned
that if I wanted to see the Russian Communist _regime_ in Munich at
work I must lose no time, it seemed worth spending Easter week
examining whether Russian Bolshevism can take root in Germany. As a
matter of fact, I got just twenty-four hours in Munich, the rest of
the week going in travelling.
The first difficulty was a strike of bank clerks, so that I had to
leave short of money. The next was that owing to the coal strike all
passenger trains in Saxony had stopped running, and the only route
open was round by Frankfort. The Spa night express was, of course,
running; a long train of sleepers for the Allied officers and official
or officious personages, and a few ordinary carriages. Thanks to some
British Tommies, for whom a first-class carriage was reserved, failing
to turn up, I got a seat, and so comfortably enough to Cassel about
dawn. There I found that the suspension of passenger traffic had been
extended, and that a hundred miles of dead country lay between me and
Wuertemberg, where trains still ran. Fortunately, a party of prisoners
from England were being sent south on a goods train, and I got leave
from the Red Guard to join them. The station officials objected
strongly, but the prisoners, some of whom had been reading _The Daily
News_, overruled them.
And so, bumping slowly along on a wooden bench all day, discussing,
cooking and card-playing with the prisoners, past stations with names
reminiscent of pre-war high living. Leaving the goods yard at
Frankfort about ten that night, I was lucky enough to run across a
motor-bus just starting for Darmstadt, in Wuertemberg, and got there
about one in the morning with a jolly party of South Germans. Three
hours on a waiting-room bench, and then at dawn on Easter Monday a
train south into Baden, and then from Heidelberg east through
Wuertemberg.
All this country seemed to have suffered little from the war and to be
wonderfully happy and prosperous. The change came again in the
afternoon after crossing the Bavarian frontier and climbing slowly up
on to the Swabian plateau. Down in Baden it was full spring, with
fruit trees in bloom and warm sunshine. Here was winter, a bitter east
wind and snow flurries, bare uplands and dark pine woods.
After passing Ulm were the first signs of the winter of discontent,
some telegraph poles sawn through. And finally, just when a bed at
Augsburg after two nights up seemed assured, we were all turned out
about eleven at night at a miserable Swabian village called
Dinckelscherben. There was fighting in Augsburg and all access to the
town was barred by the Wuertemberg troops there.
It was freezing hard, with a bitter wind, and I joined a forlorn party
of some score travellers who wandered about knocking vainly at the
doors of the big farms that made up the village--no Swabian farmer
opens to a stranger at midnight these days. The only beerhouse was
packed two deep with travellers from an earlier train, but took in the
women on our threatening to storm it. The rest started off to tramp
the rails to Augsburg, seventeen miles away; but as this meant
abandoning my provisions I broke into a hayloft and bested the rude
Swabian boor. The bauer by daylight was somewhat less of a Swab and
gave me milk for my porridge, the first I had had for three months. He
also produced at a price a queer little shay, with a half-broken
Ukrainian, swerving erratically about beside a long pole, in which I
drove over the plateau to Augsburg, getting there about noon.
Coming in to Oberhausen, the workmen's quarter, there were all the
usual signs of trouble--deserted streets, bullet-starred walls, and
broken windows. The street was blocked by a crowd that was being
addressed by a speaker, from a window. The shay was surrounded by men
armed with rifles and bombs; and half-starved Bavarian workmen,
without sleep for days and fighting against odds, made an ugly looking
crowd. They were not at first satisfied with my papers; said they, "If
you are an English _genosse_ make us a speech and if it's all right
we'll let you through, if not--" It was a severer _viva voce_ than I'd
had for the Diplomatic Service, but I passed, and some of the elder
men escorted the shay through the lines for fear of accidents. They
promised not to draw fire from the Government machine-guns until we
were across and the Wuertemberg outpost was safely reached.
That afternoon was spent in Augsburg, the base of the Wuertemberg
Expeditionary Force, and the next stage was the fifty miles of road to
Munich. No motor would go for fear of being confiscated by the
Communists, and in all Augsburg there was only one fly with a pair of
horses that could do it. It asked L20 for the round trip, about four
times what I had with me. However, having bought an option on the fly,
I had a monopoly of the transport to Munich, and had only to float a
company. A merchant, an officer in mufti, probably a spy, and a
charming lady in the dress of the Red Cross took the other three seats
at L5 each, and I had still the seats for the return journey. These
eventually brought a handsome profit that I divided between the
Anti-Bolshevist League and the Communist Party.
These negotiations, and finding out what was happening in Augsburg,
took the afternoon, and at dawn next morning we started over the
rolling uplands for Munich. Outside Bruck we came on a score or so of
Red Guards bivouacking in a barn, and nearer Munich passed through
several pickets which searched for weapons, but gave no trouble. And
so about two in the afternoon of Wednesday into Munich, having left
Berlin Saturday evening.
The return journey was better. I had intended to leave Munich by the
carriage for Augsburg on Friday, but on Thursday afternoon I heard the
two parties had agreed to let a special train run for Munich merchants
exhibiting at the Leipzig Fair. Having done nearly all that I came
for, this chance was not to be missed. So I paid Levien, the Communist
Commissioner, a farewell visit, and got a special permit from him to
go by the Leipzig train. Leaving Munich about four with a train load
of Munich merchants and their assistants, we went very slowly round by
Landshut to Nuremberg, with nothing more sensational than searches for
arms first by Red then by White Guards. The special arrived at
Nuremberg about dawn, and was to wait six hours there; so finding a
train was leaving for Bamberg, the seat of the Hoffmann Government, I
went on there, and spent the morning in the picturesque old town, then
the "Weimar" of Bavaria. Like Weimar, the station was barricaded, and
a pass was required to enter the town. Like Weimar, the town was worth
entering, for food was plentiful.
Having seen the Premier, I got back to pick up the Leipzig special.
But the railway officials had other views, and there was no Red Guard
to overrule them. My Communist permit was useless, and there was no
time to get one from the Bamberg Government. So I had to see the
special steam out. This might have meant a day's delay, as Bavarian
passenger traffic was by now also suspended, the Bohemian coal having
been cut off. I was lucky in getting on in a wooden box hitched on to
a regular dachshund of a goods train, it was so long and slow. It
crawled gasping up into the Thuringer Wald, and there after dark ten
miles from anywhere lay down with no sign of life but an occasional
sigh. After some hours a Prussian engine came down, and pulled it over
the ridge, and we got clear of Bavaria at Probstcella about midnight.
Here there was a great row between the Prussian and Bavarian
railwaymen. The Prussians complaining the Bavarians kept them up to
all hours by being always late and the Bavarians saying it was the bad
coal the Prussians sent them. Our small party, headed by some Bavarian
officers, profited, because we backed the Bavarians, who in return
insisted on our being taken on with the train. Behind the Prussian
engine we developed a surprising turn of speed, and rattled along
expecting at every station to be turned out or shunted until we got
into the main line at Halle. A judicious change at a way station into
a passenger train that overtook us, and three hours' standing up in a
carriage with fourteen people, a large dog, two goats, and a baby,
brought me to Berlin about two on Saturday afternoon.
Nor was this a unique experience. On my last journey home the
locomotive broke down and had to be changed three times before we got
to Hanover.
A German train with its immense but impotent engine, its ponderous but
dilapidated carriages, its officials once resplendent and arrogant,
now servile and seedy, its groaning crawl from one breakdown to
another, is a painful picture of the German State.
And the financial position of the State railways is illustrative of
the condition of State finances. Before the war the Prussian State
Railways contributed to the budget a surplus of 600 million marks--now
they show a deficit of 2,000 millions.
In the intervals between the crisis of its internal convulsions
Germany worries feebly about its finances, much as a merchant in
mortal illness may worry about his bankruptcy. But, of course, nothing
has been done or could be done because the business was still closed
and the chief creditor had not yet filed his claim. Now we know what
Paris expects Germany to pay, and we also know something of the
financial position from the statements of the Finance Ministers,
Schiffer, Dernburg, and Erzberger.
The German debt before the war was an annual charge of 230 million
marks, the peace expenditure excluding the army 200 millions. The war
debt in December, 1918, was 146 milliards, increased in January by 3.5
milliards, in February by 2.7 milliards, in March by 2 milliards and
estimated to increase further by 1-1/2 milliards per month on an average
for the coming financial year. To this must be added 1/2 milliard for
cost of expropriations, 4-1/2 milliards for reconstruction of ravaged
territories in Prussia, 1-1/2 milliards for compensation of German
shipowners, separation allowance subsidies to the German States,
etc., in all 185 milliards about, with an annual charge of 10
milliards. Reduction of this item by total or partial repudiation of
this debt, though advocated by the Opposition, is impossible without
causing economic ruin and political revolution. The new army is
estimated to require 2 milliards; about the same as before the war,
because of the enormously exaggerated expense of this small volunteer
force compared with the old conscript army. If, to the great political
advantage of Germany, a Swiss militia were substituted for the
Frei-Corps, this item could be halved easily. The estimate of 4-1/2
milliards for pensions is the same as that of France and will probably
be exceeded, though as yet less than half that is being paid. This
makes up a total annual estimated expenditure of 17,429 million marks,
the mark at pre-war exchange being equal to a shilling.
As Herr Erzberger's speech on the Budget showed, he is faced by a
financial position unparalleled in the history of national
bankruptcies. The interest which he has to find on the Imperial debt
amounts by itself to Mk. 10 milliard; and his total annual
requirements, exclusive of the Allies' demands under the Peace Treaty,
are estimated at Mk. 25 milliard. Before the war the revenue from
Imperial taxation was under Mk. 2 milliard. Additional taxation
imposed during the war yields about Mk. 4 milliard. To-day therefore
Germany is faced with an annual expenditure of Mk. 25 milliard and an
annual revenue of Mk. 6 milliard--_i.e._, an annual deficit of Mk. 19
milliard, nearly ten times greater than the whole revenue of 1913. The
new taxes actually proposed are estimated to bring in about Mk. 2
milliard. But the main sources upon which the Finance Minister is
going to rely are two: a levy on capital and a tax on sales. The levy
establishes a graded tax on all property, starting at 10 per cent. and
reaching a maximum of 63.9 per cent. Payment may be made by
instalments spread over 30 years, and it is estimated that the tax
will bring in about Mk. 4 milliard annually. The tax on sales is still
more drastic. It really consists of three different taxes: (1) a
general tax of 1 per cent. on all sales, (2) a tax of 5 per cent. on
retail trade, (3) a tax on the producer of luxuries of 10 per cent.,
and on retail trade in luxuries of 15 per cent. This tax is estimated
to bring in about Mk. 3 milliard. But even after this raid on the
owners of property and upon capital, the unfortunate Minister of
Finance is faced with a deficit of Mk. 10 milliard. He proposes to
get Mk. 2-1/2 milliard out of beer, petroleum, stamps, flour and meat,
and the remainder, Mk. 7-1/2 milliard out of a uniform income tax for
the whole country and an excess profits tax.
The magnitude of these sums can be estimated when it is remembered
that the total incomes of all Prussians earning more than a pound a
week only amounts to 19 milliards, and that Helfferich's estimate of
the pre-war income of all Germany was 315 milliards. But that was a
very different Germany from the present. Germany has lost a greater
part of its mineral wealth, the coal of the Saar, the potash of
Alsace, the ores of Luxembourg. She has lost her colonies with their
great potential wealth. She has also lost her fleet and a great part
of her railway material. Over a million and a-half, or 16 per cent. of
the male working population are dead. Industry has neither the capital
nor the energy to reconvert itself to peace productivity. Much of the
capital left is either concealed or has been carried abroad. German
holdings of foreign securities were estimated at twenty milliards
before the war and not more than one milliard now. Over a milliard of
the gold reserve at the Deutsche Bank has been paid for foreign
provisions, leaving only a milliard and a-half to cover a note issue
of thirty milliards.
Germany must by March, 1921, deliver up all payment in kind, _i.e._,
goods, ships, coal, etc., which might possibly exceed the total of
L800,000,000 provided by the Treaty. On the other hand, Germany must
pay the pensions due to disabled soldiers and the relatives of the
fallen, which in the case of France alone amounted to L8,000,000,000.
In all, Germany is liable for a sum of L15,400,000,000, which should
be paid off in a period of thirty-six years. For the two first years
after the war she will pay nothing, but subsequently she must pay
L554,000,000, with interest at 5 per cent. The total amount paid by
Germany will therefore amount to L18,520,000,000 at the end of
thirty-six years.
And most serious loss of all--she has lost for a time, anyway, all
will to work. Improvement in food and general conditions of life will
do something for this, socialisation of industry and introduction of
the Council system would do more, but it will take time. Even if
Germany obtained at once a return of energy, a reopening of markets, a
re-entry of raw material and a free recourse to foreign capital, and
she will have to wait long for all of these, even so it seems very
doubtful whether she could make a living under such a load of debt.
This will mean the emigration of from ten to twenty million Germans in
the course of the next few years, to the West if it is open to them,
but otherwise to the East. Germany will, in fact, be brought down to
the political and economic conditions of Portugal.
We pursued this policy of ruining Germany for a century because we
were still under the impression of animosities and anxieties that
belonged to war conditions. Our attitude was that the Allies should
get what they could out of Germany while they could; and if the
attempt ruined Germany, Germany had deserved it.
This was the attitude that prevailed during the armistice period. But
the Peace of Versailles has inaugurated a more systematic and
far-reaching exploitation. This is no place to review its economic and
financial provisions; but no one could read them without realising
that our policy is apparently to make Germany work for us as its
bankers, brokers, shippers and creditors with unlimited claims. To
take a rake-off as merchants and middlemen from all German
manufactures and to set up a receivership over Germany that we call a
Reparation Commission, with the right to claim any remaining profit.
The powers of this receivership are such as to prevent the development
of any German competition with us in the conduct or control of German
production. Combined with the claims for damages these powers would,
indeed, make all government impossible. For example, under them
Germany is liable to pay the pension claims of the dependents of
Sikhs, Senegalese or South Carolina negroes to the exclusion of its
own wounded and widows. But the policy, in so far as a compilation of
the unchecked schedules and uncriticised schemes of war profiteers can
be said to have a policy, is that of making the German workmen produce
for British Big Business. The functions ascribed to the so-called
"Reparation Commission" represent an attempt to make the German
proletariat work under foreign exploitation. Experiments in foreign
financial control we have had in Eastern Europe, with semi-civilised
peoples; but this is an attempt to set up foreign economic control
over a people which in industry had won for itself the first place in
Europe. At first sight one is inclined to reject this policy as a
practical impossibility; but so extreme is the debility of Germany,
and so exceptional the docility of the people, that I am inclined to
think it might have had some temporary and partial success but for one
thing--the Council movement and the demands of the workmen for the
socialisation of industry.
Without some measure of socialisation of industry, without some
measure of political representation through Councils, the unemployed
will not return to work and the employed will only work in fitful
intervals between strikes.
Between the November revolution and the end of February the coalminers
alone forfeited 23 million marks of wages in more or less meaningless
strikes; and this was before the great strikes of the spring, which
had an obvious political purpose. This is three times the loss
incurred in the last pre-war strike of 1912. The decrease in
production rose from a quarter-million tons in December to a million
in February, and this was little compared with the loss that followed,
estimated at no less than ten million tons.
During the first six months of 1919 there were always at least a
million and a half workmen drawing an unemployment pay of about
two-thirds of their average wage.[D] Add to this outlay that of the
force raised to prevent the workmen from realising their
revolution--the seven hundred thousand Frei-Corps, engaged at such a
high pay that this Prussian volunteer force of to-day is budgeted for
at the same total as the vast German armies that dominated Europe
before the war. It is curious that Germany should now be paying the
same amount to terrorise a few working quarters that it paid five
years ago to terrorise the world. And the second attempt is as
hopeless as the first, for the revolution will not be denied. Even the
bureaucratic Social-Democrats of the present Government recognise this
and try to placate it with words.
"Socialisation has come," proclaim the Government posters all over
Berlin, and when I was in Berlin I thought I'd see if I could find it.
First, I went to the special department responsible, where in a
commandeered hotel I was introduced by a charming lady typist to an
equally charming temporary official. He was an enthusiastic alpinist,
and asked affectionately after my brother and other English climbers;
and, finally, with the help of the typist we unearthed some pamphlets
and propaganda leaflets. It was quite a shock on leaving to find
oneself in the Wilhelmstrasse, not in Whitehall. Then I tried
Westminster--I mean Weimar--where I found two Government Bills being
shoved through in a great hurry, because the Socialist supporters of
the Government had, like me, been investigating what was behind the
posters and pamphlets, and had found only brick walls and bureaucrats.
And to what does it all amount? Practically nothing, except as regards
the coal industry, and so far rather less than nothing there. But the
course of events is instructive and particularly interesting for us.
The German coal industry, even more than ours, has in the last
quarter-century become a monopoly under control of great capitalist
combines. Their power is not affected either by the State-owned
Prussian mines or by any possibility of new coalfields, as these are
either held in reserve by the combines or are too unremunerative to
compete. Already before the war this monopoly had been recognised by
all parties as not in the public interest; but "nationalisation" in
the sense of State exploitation was prejudiced by the poor results
given by the State-owned properties of the Saar fields.
This inferiority was due not to inferior industry on the part of the
workmen but to inferior initiative and independence in the management.
What effect over-papered, under-paid officialdom can have on the
productiveness of a coalfield is shown in the following annual
percentages of total production:
Westphalia. Silesia. Saar.
Year. Private. Private. State.
1860 26.6 24.7 19.5
1880 53.0 23.8 12.6
1890 55.2 26.2 9.4
1910 59.9 24.4 9.3
1913 60.2 22.8 8.9
But with the revolution came an alternative to
"nationalisation"--"socialisation"--in which all those connected with
the coal industry should have an interest in it. An autonomous guild
might preserve initiative and energy; while the interest of the
consumer and of the community might be safeguarded by representation
in the Guild and by State supervision.
A beginning was made towards such a solution in regulations, passed in
the first months of the revolution, recognising the functions of the
Workmen's Councils and attempting to reconcile their activities with
expert administration and official supervision. No progress was,
however, made by Weimar during the spring in this practical process of
working through a sort of Whitley Council system to a sort of Guild
Socialism; and the general strike of March found the Government with
nothing in particular to which it could refer its critics.
Accordingly two Acts were hurriedly run through the Assembly. One, the
"Socialisation Bill," recorded the right of the citizen to employment
or to support (amended to reserve "personal liberty")--the right of
the State to socialise all economic enterprises (restricted by
amendment to cases of urgent necessity and adequate compensation)--the
administration of socialised industries by autonomous guilds--(amended
to include the State or other Government authorities). And from this
it will be seen that an Act intended to establish general
"socialisation" in principle, on a basis of expropriation was amended
into one contemplating "nationalisation" in urgent cases, with
compensation.
A clause in this Act required immediate application of the principle
of socialisation to coal mines, and a Coal Bill has accordingly also
been passed. By this the State takes over the industry and entrusts it
to a Coal Board, reserving the right to regulate prices. Nothing is
said as to the composition of this Board, but nothing is changed in
the proprietary basis of the industry further than its organisation in
regional syndicates.
There is also to be an Expert Council, representing employers,
workmen, and officials equally. The retail coal trade remains
untouched.
As to "Socialisation" generally, the reports of the Socialisation
Commission have all been rejected and the Commission, that last relic
of the revolution, resigned as long ago as May. The recommendations of
Wissels, an active Minister, had as little success and he resigned in
June.
The Government had promised that socialisation was to be established
in the Constitution; but Art. 156 of the Constitution does no more
than give the State the power to "socialise" and syndicalise industry,
while Art. 155 says that private royalties are to be legislatively
transferred to the State.
Therefore, in spite of plaintive posters, it is not communistic
socialisation, but capitalistic syndicalisation, that has been
introduced in Germany. While loudly proclaiming a step forward, the
Government has taken a long stride back.[E]
"Socialisation" has not as yet affected the economic basis of the
Prussianism that we have been fighting. This basis was a coalition
between the old political interest of the landed proprietors and the
new political interest of the captains of industry, or, to express it
shortly, between the Junkers and the Jews. The free trade and
liberalism that kept Great Britain from "Prussianism" in spite of the
power retained by a few feudal families and the landed gentry was due
to the different relationship in England between the upper and middle
classes. In England our "Junkers" and "Jews" coalesced during our
great industrial development, perhaps because our upper class had
already more Jews than Junkers. In Germany they remained apart but
combined for their own interests. We have seen to what extent the
revolution has threatened the economic authority of the captain of
industry--the industrial profiteer. Is the feudal landed proprietor
also threatened?
The first effort of the revolution further east in Russia, Hungary and
the Baltic States has been to "socialise" land. Either, where the
agricultural industry is primitive, as in Russia, by simply dividing
up the land among the peasants, or where it is progressive, as in the
model-farm estates of Hungary, by putting the estate under control of
a council of workers as though it was a factory. But in Germany the
urban character of the revolution, which has accounted for the
comparative ease with which the Government have coerced it, is shown
by land tenure being as yet little affected. The only definite action
against the large landed estates, that I know of, is a measure of the
Prussian Assembly postponing action until 1921. This characteristic
procrastination is, of course, explained to the revolutionaries as
merely allowing a short period for voluntary breaking up of the big
estates, and to the reactionaries as a postponement of all action.
Meantime financial conditions in Germany are quite as favourable to
the dispersal of large estates as with us; for wherever the farming
system obtains the farmers have made even larger fortunes in Germany
than in England. But the system of landed tenure is much more varied
in Germany. There is a large proportion of freeholders and
copyholders, while big estates are farmed by bailiffs with hired
labourers.
In the region of these big estates--the land of the Junker
(Mecklenburg, Pomerania and Brandenburg)--the revolution is openly
defied. The agrarians of these regions not long ago had a regular
trial of strength with the present _regime_, and though worsted were
none the worse.
The strength of the German revolution is in labour, its weakness is in
the land.
FOOTNOTES:
[B] To end of 1918.
[C] The advertisement columns of the daily papers, those most
trustworthy of documents, told many a tale of distress. Here is one such
advertisement:--
"Valuable violin--Antonius Stradivarius Cremonentis, authentic, will
exchange for provisions: meat, sugar preferred."
But it's an ill wind that blows nobody good, and if it blows away the
family heirloom it blows off the mortgage on the family property:--
"Summer holidays in peace and plenty. Farmhouse in Harz mountains will
receive family and provide them with farm produce, milk, butter, eggs,
etc., in return for redemption of mortgage of 10,000 marks."
[D] The following percentages of unemployment during and after the war
may be of interest:--
Average
Month. 1908- 1914. 1915. 1916. 1917. 1918.
1913.
Jan. 3.1 4.7 6.5 2.6 1.7 0.9
Feb. 2.8 3.7 5.1 2.8 1.6 0.8
March 2.3 2.8 3.3 2.2 1.3 0.9
April 2.2 2.8 2.9 2.3 1.0 0.8
May 2.3 2.8 2.9 2.5 1.0 0.8
June 2.3 2.5 2.5 2.5 0.9 0.8
July 2.2 2.9 2.7 2.4 0.8 0.7
Aug. 2.2 22.4 2.6 2.2 0.8 0.7
Sept. 2.1 15.7 2.6 2.1 0.8 0.8
Oct. 2.1 10.9 2.5 2.0 0.7 0.7
Nov. 2.2 8.2 2.5 1.7 0.7 1.8
Dec. 3.2 7.2 2.6 1.6 0.9 5.4
[E] To do justice to the German revolution I annex a schedule of
measures passed by the Peoples Commissaries before the Weimar Parliament
met and reaction set in. How far these are being at present enforced I
do not know.
Unemployment provision--regulations of 13th November and 15th January.
The cost is borne one-half by the Reich, one-third by the State and
one-sixth by the locality. The rates must be reduced by April, 1919, to
a maximum of six marks per day. It can be withdrawn on refusal to work
for insufficient reasons.
Employment regulations of 4th and 25th January. Previous employes on
demobilisation must be re-employed and persons employed in their absence
only discharged under certain conditions.
Legislative regulations of labour. An order of 12th November, 1918,
restored to force all sanitary and social regulations and restrictions
suspended during the war.
Labour disputes. Settlement regulated by order of 23rd December, 1918,
which sets up workmen's committees responsible for questions of wages,
etc.
Prohibition of night baking, 23rd November, 1918.
Prevention of venereal diseases, 11th and 17th December. This measure
penalises with three years' imprisonment those exposing others to
infection even ignorantly and prescribes compulsory medical attendance.