SOCIALIZED GERMANY
SOCIALIZED GERMANY
BY
FREDERIC C. HOWE, LL.D.
AUTHOR OP "THE CITY: THE HOPE OF DEMOCRACY," "THE BRITISH CITY:
BEGINNINGS OF DEMOCRACY," "PRIVILEGE AND DEMOCRACY IN
AMERICA," "EUROPEAN CITIES AT WORK," ETC.
NEW- YORK
CHARLES SCRIBNER'S SONS
1915
COPTRIGHT, 1915, BY
CHARLES SCRIBNER'S SONS
Published September, 1915
PREFACE
MUCH of the material for this book was ready
for publication in the fall of 1914. It is the product
of rather intimate knowledge of German life during
the past quarter of a century. When the war broke
out the manuscript was laid aside to await its ter-
mination, but as the contest wore on and the ex-
traordinary resources of Germany were disclosed, it
seemed to me the book should be published, partly
as an explanation of the efficiency of Germany, but
primarily as a suggestion of a new kind of social
statesmanship which our own as well as other coun-
tries must take into consideration if they are to be
prepared to meet the Germany whiofe -in victory or
defeat, emerges from the war. For the "German
peril" is only in part a military peril. It is a peace
peril as well. The real peril to the other powers of
Western civilization lies in the fact that Germany is
more intelligently organized than is the rest of the
world. The individual German receives more from
society. He is better protected in his daily life.
The gains of civilization are more widely distributed
than they are with us. His dignity and his per-
vi PREFACE
sonal liberty are on a different, and from our point
of view on a lower, plane than in America and Great
Britain, but his daily and his hourly needs, and those
of his wife and family, are better cared for. And
the individual man is more efficient. He is better
prepared for his work. He enjoys a wholesome lei-
sure life. He is assured protection from la misere
in old age. The workhouse does not await him if
he falls by the wayside.
It is my belief that Germany had just reached the
beginning of her greatest achievements. Had not
the war intervened, the next generation would have
seen her competitors in industry, trade, and com-
merce outdistanced at an accelerated speed that
would have soon left them far and possibly perma-
nently in the rear.
If this is to be averted, new ideas of the obliga-
tions of the state must animate our legislators.
There must be an abandonment of the old concep-
tion that the only business of organized society is
to protect the individual from domestic and foreign
aggression. There must be a wide extension of pub-
lic ownership, a greater control of the aggressions of
privilege and property, a big programme of social
legislation, a change in our system of education, and
the exclusion of privileged and business interests
from the long ascendancy which they have enjoyed
PREFACE vii
in our political life. It required the war to make
this clear to Great Britain. It should shake us from
our complacency as well.
I desire to acknowledge the invaluable aid re-
ceived in the preparation of this volume from the
works of William Harbutt Dawson, whose books,
"The Evolution of Modern Germany," "Industrial
Germany," "Social Insurance in Germany," and
"Municipal Life and Government in Germany," offer
mines of information as well as a sympathetic in-
terpretation of the constructive political and social
statesmanship of that country.
I am also indebted to Miss Gertrude Borchard for
valuable assistance and research in the collection of
material and its preparation for publication.
FREDERIC C. HOWE.
NEW YORK, September, 1915.
CONTENTS
PAGE
PREFACE v
CHAPTER
I. INTRODUCTORY THE DUAL GERMANY 1
II. THE BACKGROUND OF MODERN GERMANY ... 8
III. THE CONSTITUTION OF THE EMPIRE 24
IV. THE ECONOMIC FOUNDATIONS OF CLASS RULE . . 36
V. RECENT ECONOMIC PROGRESS 52
VI. THE THEORY AND EXTENT OF STATE SOCIALISM . 80
VII. THE STATE-OWNED RAILWAYS 95
VIII. CANALS, WATERWAYS, AND FREE PORTS .... 121
IX. HARBORS AND RIVER SHIPPING 133
X. MINES, FORESTS, AND AGRICULTURAL LANDS . . 146
XI. THE ATTITUDE OF GERMANY TOWARD THE SOCIAL
PROBLEM 161
XII. CARING FOR THE UNEMPLOYED 172
XIII. LABOR AND INDUSTRIAL COURTS 182
XIV. SOCIAL INSURANCE AND SOCIAL DEMOCRACY . . 192
XV. HIGHER EDUCATION PROVIDING THE EXPERT . . 208
XVI. ELEMENTARY EDUCATION 220
XVII. VOCATIONAL EDUCATION PREPARING THE CHILD
FOR LIFE 231
XVIII. SANITATION AND HEALTH 248
XIX. THE WAB UPON DISEASE 258
ix
x CONTENTS
CHAPTER PAGE
XX. GOVERNING CITIES BY EXPERTS 265
XXI. MUNICIPAL SOCIALISM 280
XXII. THE BUILDING OF CITIES 298
XXIII. MUNICIPAL LANDOWNERSHIP AND HOUSING PROJ-
ECTS 313
XXIV. THE GERMAN CONCEPTION OF THE STATE . . . 321
INDEX . , 337
SOCIALIZED GERMANY
CHAPTER I
INTRODUCTORY THE DUAL GERMANY
THIS is not an apologia pro Germania. It is not a
defense of militarism nor a glorification of the Prus-
sian idea of the state. Nor is it a plea for socialism,
although the experience of Germany disproves many
of the arguments against the possibility of a social-
ist state. I am one of those who still believe that
with special privileges abolished and industrial
freedom assured, society would realize an approach
to economic justice that would exclude the necessity
of socialism. And I believe in democracy, and all
that democracy implies.
Germany has adopted a mixed programme, a
programme of state socialism which insures a large
degree of industrial freedom. It is not the socialism
to which the Social Democratic party aspires; it
does not involve control by the working classes. It
is the socialism of the ruling caste, the great estate
owners and the capitalists. And it is through state
socialism that efficiency as well as a large measure
of freedom has been secured.
With many other Americans I have an affection
for the German people, for the orderliness, finish,
and perfection of administration that makes for
2 SOCIALIZED GERMANY
personal comfort and convenience. I like the Ger-
man cities, and have affectionate memories of
Munich, Dresden, Diisseldorf, Frankfort, and Nu-
remberg, with their generous provision for art,
drama, music, and the cultural things of life. I have
a veneration for the traditions and glories of the
principalities and free cities that existed for cen-
turies as autonomous states prior to the organiza-
tion of the empire. I have unbounded respect for
the German educational system, for the universities,
for the wonderful elementary, vocational, and high
schools, as well as for the technical colleges for
training in industrial arts, in commerce and admin-
istration. I admire the far-seeing legislation for the
protection of the worker from the costs of industrial
and urban life, the social measures promoted by Bis-
marck, and the many municipal services like town-
planning, municipal ownership, and the other public
activities that explain in large measure the charm
of the German city.
The following chapters are an attempt to under-
stand the conflict between these achievements and
the things we do not like in Germany; they are an
endeavor to explain the militarism and the human-
ity, the paternalism and the large degree of freedom
which paternalism has secured to all classes. It is
an attempt to understand Germany at work as well
as at war; to portray the background which in large
measure explains the military efficiency of the em-
THE DUAL GERMANY 3
pire. And I have tried to write the book as though
there were no war.
And the underlying fact about Germany is that
the old Germany of a score of independent states
has been submerged by the new Germany of Prussia.
For Prussia is Germany, and Prussia in turn is feudal.
The confusion we feel about Germany is traceable
to the fact that much of the beauty and charm of
old Germany has been crushed under the heel of the
feudal autocratic caste which under constitutional
forms has projected its ideas into the very life of
the empire. It is a Germany that has lost much of
the individuality, much of the freedom, and much
of the liberalism of a century ago, for which has
been substituted a commercial and landed feudal-
ism having for its foundations the political and so-
cial concepts of an earlier age.
We may deplore the Prussianizing process but at
the same time admit that there is much that is won-
derful in the structure that has been erected during
the past generation ; a structure like that of ancient
Rome in the institutions that have been created,
and the big-visioned ideas of legislation, of educa-
tion, and of social activities that have been given to
the world. These ideas will only be ignored by
those who will not see. And it will be an unfortu-
nate thing for the nation that refuses to see. For
once the war is over, the pace for industrial suprem-
acy will be fierce and rapid. The race for recovery
4 SOCIALIZED GERMANY
will be to the strong and well-equipped. And there
is no doubt but that Germany will turn from war
to peace with much of the preparedness that she
turned from peace to war. Her state-owned rail-
ways and waterways, her mines and mineral re-
sources, her shipping and other commercial agencies,
with the highly trained men at her command, will
respond to an electric button when the treaties of
peace are agreed upon, and her mills, factories, and
workshops, her financial resources and credit agen-
cies, will respond to the imperial will just as did the
armies which were set in motion by the mobilization
orders in the summer of 1914. I have no doubt but
that to-day, in the midst of encircling wars, Ger-
many is making ready for peace, and the problems
then to be met, just as for a quarter of a century
she has been preparing for war. And just as France
and England found themselves unprepared on the
battle line, so they, and possibly America, will find
themselves equally unprepared for the new struggle
when the war is over.
And whatever we may think of German milita-
rism, of German autocracy, of German Kultur, the
fact remains that Germany has developed wonderful
efficiency, not only in the production of wealth, but
in the distribution of the advantages of civilization
as well. There is efficiency in transportation, scien-
tific thought to every process and every social and
industrial problem; there is the greatest concern for
THE DUAL GERMANY 5
human life, for health and well-being, for the educa-
tion and training of workers, artists, commercial men,
and scientists, and the co-ordination of the individual
into a machine of national rather than purely per-
sonal dimensions. All Germany, in fact, acts as a
unit. The individualism of England and America
does not there exist. There is an official realization
that the division of labor is no longer confined to a
single establishment; it is nation-wide in its scope.
Along with this is the conviction that many things
must be done by the state to insure a free field for
industry; to guarantee to every man a fair chance
to realize upon his abilities and his powers.
All of this is of especial significance to America at
the present time. Our public domain is gone. A
great part is held out of use. Opportunities in the
West are closed forever. Our unbounded resources
have been appropriated. Monopoly has closed many
industries to effective competition. The means of
transportation are in private hands. Financial credit
is still largely a matter of personal favor. And
credit is still monopolized, as are the raw materials
of production. Unemployment is chronic. It is
likely to increase rather than diminish, for the op-
portunities for labor are under the control of the
few. The city, the state, and the nation are still
largely police agencies rather than agencies of ser-
vice.
Public officials are still animated by the individual-
6 SOCIALIZED GERMANY
istic laissez-faire philosophy of an earlier generation,
and as a consequence the public service is negative
in its ideals, while the men who are attracted to it are
untrained to constructive effort. Of skilled admin-
istrators with social vision, there are comparatively
few, while the universities and the schools offer but
little training in this field. There is no big state-
craft, no commanding idea of statesmanship, and
only grudging social legislation. Instead we have
the struggle of economic groups, each seeking to
promote a programme of narrow class interest.
Many of these problems have been worked out by
Germany in a thoroughgoing way. Administrative
and industrial efficiency are a scientific study in
which hundreds of thousands of the best minds of
the state are engaged. The same is true of com-
merce and trade. The rest of the world is a quarter
of a century behind Germany in social conscious-
ness, in an understanding of the new statecraft, in
appreciation of the necessity for social legislation,
and for adjusting education in all of its branches to
life.
Germany has given a new conception of the state
to the world. It may not be a beautiful conception.
It certainly violates our ideas of personal and polit-
ical freedom. But at least the idea is a successful
one. It is in harmony with modern industry, and
finds its counterpart in the trusts, the syndicates,
and the ideas of scientific production with which we
THE DUAL GERMANY 7
are familiar. Germany is a recrudescence of the
Greek idea of the state adjusted to twentieth-cen-
tury conditions. It is a state that thinks primarily
in terms of the ruling class; but it thinks as well in
terms of the whole population. Politically Germany
is an oligarchy, but an oligarchy concerned about the
well-being of the people, about their health, educa-
tion, comfort, and efficiency. And viewed from this
standpoint, Germany is a democratically minded
country. It is a state organized on the ideals of
Frederick the Great, but guided by the scientific
ideas of the twentieth century. It is a feudal state
with the view-point of benevolent paternalism. And
the result of this policy has been efficiency, power,
and a high average of well-being, coupled with ad-
ministrative control of the lives, thoughts, and
liberties of the people.
CHAPTER II
THE BACKGROUND OF MODERN GERMANY
WITH all of the books that have been written on
the subject, Germany still mystifies us. She evades
Anglo-Saxon analysis. She differs from other coun-
tries in the most unexpected ways and challenges
most of our theories of politics. We find difficulty
in understanding the psychology of the people, their
attitude toward the war, the Kaiser, and the ruling
classes. There are many other anomalies that the
Anglo-Saxon, and especially the American mind,
cannot explain. Governed by an almost feudal
aristocracy with a detachment and disdain for all
other classes, Germany has worked out the most
elaborate programme of social legislation and state
socialism of any country in the world. Admit-
tedly a people with but little aptitude for politics
in the common acceptation of the term, the states
and cities have perfected their administration and
carried government ownership beyond the pro-
grammes of any except the extreme socialists of other
countries. Oppressed by the anti-socialist laws of
Bismarck, there has grown up the most highly or-
ganized revolutionary type of socialism in Europe,
with a total vote of over 4,000,000 electors. Up to
8
BACKGROUND OF MODERN GERMANY 9
1870 almost exclusively an agricultural nation, Ger-
many has developed her resources, diversified her
industries, expanded her trade and commerce, and
pushed herself to the front rank as an industrial
power in the face of the almost complete occupa-
tion of the markets of the world by other countries.
These are but suggestive of the many political
and social riddles which Germany presents. These
are some of the anomalies which challenge the
teachings of history and our currently accepted
theories of politics.
What is the explanation of the German people?
What lies back of the prowess of the nation not
only in war but in the arts of peace as well? By
what means has a peasant country been able to
project its life into industry, commerce, and finance,
and extend its conquests into every corner of the
earth? How has an autocratic state, the most
autocratic in western Europe, been induced to
think in terms of the peasant and the artisan, and
to provide social insurance and education, state
socialism and protection for the weaker members
of the state, far beyond any programme yet de-
veloped by any of the democratic nations of the
world? What is the social psychology of the Ger-
man people that apparently denies the materialistic
interpretation of politics enunciated by socialists
and largely confirmed by the contemporary experi-
ences of other countries?
10 SOCIALIZED GERMANY
A people cannot be analyzed in a few paragraphs,
and cannot be understood by an outsider even with
the most sympathetic of intentions. It is difficult
to understand one's own country the changes in
sentiment and conviction, the swift abandonment of
one position tenaciously held for another. Even
in America the political and social currents elude
us. And the social psychology of Germany is par-
ticularly baffling. It has confused even the students,
artists, and travellers who during the last generation
have gone to Germany for an education, for cultural
things, and the leisure life which Germany offers.
Possibly the most important influence in the mak-
ing of modern Germany and in moulding the mind of
the nation is the persistence even down to present
times of the feudal idea of the state with its eight-
eenth-century relation of classes. The German
people, especially the Prussians, still think in terms
of an earlier age; they accept the divine right of
kings and the only less divine right of the feudal
aristocracy to rule. And they accept this with but
little intellectual protest. Up to a generation ago
there were but two classes in Germany: the feudal
estate owners and the peasants working upon the
soil, whose relations had not materially changed in
centuries. The great feudal estates still persist in
Prussia, and a quasi-feudal system is the economic
mould of Germany. It is this that is responsible
for caste, for the division into classes; it is this
BACKGROUND OF MODERN GERMANY 11
that explains the social cleavage and the accep-
tance of authority. It is this, too, that explains the
paternalism of Prussia, just as it is the wide distri-
bution of the land under peasant proprietorship
that explains the gemutlichkeit of South Germany.
Feudal conditions have projected the traditions
of an earlier age down to the present day. They are
responsible for the autocratic power of the Bang of
Prussia, who remains a great landlord, the first
among other great landlords. His possessions have
been in the Hohenzollern family for centuries. The
Mark of Brandenburg, extended by force of arms
into the kingdom of Prussia and later under Bis-
marck into the empire, is an expansion of the feudal
state. The constitution of 1871 is a legal crystalli-
zation of eighteenth-century conditions, as is the
earlier constitution of Prussia. While suggesting
parliamentary forms, in reality they but legalize,
through the limitations upon the suffrage, the un-
just distribution of seats and the ascendancy of the
feudal class, the control of the old aristocracy in the
life of the nation.
And this old feudal class is the ruling class. It
fills all the higher offices of the state. From it come
the chancellors and ministers of the empire. It
officers the army and navy. It moulds public opin-
ion and controls legislation. The feudal class is
society. But this class is not Germany. It has
little interest in or appreciation of the Germany
12 SOCIALIZED GERMANY
which many Americans know and love. And we
cannot understand Germany without understanding
this duality. The confusion we feel, the mental
conflict of so many people, is traceable to the fact
that there are two Germanys: the Germany of poli-
tics, militarism, and aggression, and the Germany
of culture, sweetness, efficiency, and life. Official,
feudal Germany is separate and apart from the
real Germany. The voice of the class which rules
is not the voice of the people. It does not represent
the worker, the peasant, the merchant, or even the
great majority of the property-owning classes.
It is this persistence of an earlier organization of
society that explains the sense of dependence on the
part of the people, and the respect and veneration
for authority which affects all classes. No other
nation has so completely subordinated the individual
to the state; nowhere does such unchallenged author-
ity attach to so large an official class; and nowhere
does the official command such unquestioned obedi-
ence.
There are two explanations for this persistence of
the mediaeval idea of the state an anachronism in
the twentieth century. In the first place the French
Revolution did not penetrate into Prussia as it did
into Italy, Belgium, South Germany, and even
Scandinavia. Prussia was sparsely settled. There
were few cities, and the system of feudal landowner-
ship was too nearly universal for the revolutionary
BACKGROUND OF MODERN GERMANY 13
forces to gain a footing. Nor did the later revolu-
tionary movements of the nineteenth century pene-
trate into that part of Germany that lies to the east
of Berlin, into East Prussia, Posen, and Pomerania.
And when the constitution of Prussia was formed
the liberal forces were too weak to make their in-
fluence felt. The constitution then adopted was
merely a recasting in legal form of the old feudal
order. There was no provision for direct universal
suffrage or even an approach to it, for a responsible
ministry, or for real constitutional forms. Later,
when Prussia became the dominating state in Ger-
many, she impressed her feudal will and control by
the feudal classes upon the imperial constitution.
Manhood suffrage, it is true, was provided in elec-
tions to the Reichstag, but this is only a semblance
of popular power. The King became the Kaiser,
and along with the Bundesrat, or Senate, the final
repository of authority. There is no suggestion of
popular control over the government, and popular
opinion does not influence the ruling classes. Even
in the Prussian cities the great majority of the peo-
ple have but little voice. Politically Germany is
but little changed from what it was a century ago,
and the explanation is to be found in the fact that
the traditions of the people and the constitution of
the state repose the government in the hands of the
great landowners, who remain almost as powerful
as they were in an earlier age.
14 SOCIALIZED GERMANY
A second explanation of the persistence of the
feudal state and the eighteenth-century relation of
classes is found hi the fact that the industrial revolu-
tion did not reach Germany until very recently.
The factory system with a large industrial urban
population dates back to the Franco-Prussian War.
It was almost a century old in Great Britain before
it appeared in Germany. In the former country
it had built great cities and created a powerful
financial class, which insisted on political and social
recognition, and through its influence on legislation
and public opinion it put an end to much of the
personal and political subjection of earlier times.
The new commercial aristocracy broadened the
suffrage as early as 1832. It abolished the rotten-
borough system, which still prevails in Prussia. It
repealed all limitations on admission to the Com-
mons, and in 1910 it took away the veto from the
House of Lords. Freedom of conscience, of speech,
and of the press were guaranteed, and these are of
the very essence of popular government. The
ministry was made responsible, not to the King, but
to Parliament and the party in power. Far more
important, the commercial classes became rich and
powerful a generation before they appeared in Prus-
sia. The members entered Parliament. They married
into the old aristocracy. And, one by one, they took
away the privileges of the old feudal class.
Through the growth of industry England became
BACKGROUND OF MODERN GERMANY 15
predominantly an industrial and trading nation,
until to-day four-fifths of her people live in cities.
And through manhood suffrage industry became
articulate in legislation. It broke down the old
feudal concepts of the state and changed the psy-
chology of Great Britain. A new aristocracy was
elevated alongside of the old landed aristocracy,
and in securing political equality for itself it secured
equality for the rest of the people as well.
In Germany, on the other hand, the old regime
was crystallized into constitutional form long before
the commercial classes had risen to prominence in
the empire. The commercial aristocracy is of recent
appearance; it has never been admitted to the old
aristocracy, and under the constitutions of Prussia
and the empire it has but little voice in the affairs
of the nation.
The second influence in the moulding of modern
Germany is the complete ascendancy of two power-
ful individuals who have dominated the life of the
nation for over fifty years. These individuals are
Prince Bismarck and William II. And these two
men were consistent in their ambitions and alike in
their traditions. They had the same vision of the
paternal state. And both reflected the ideals of an
earlier age. Bismarck came from the ruling classes,
the aristocracy. He loved Prussia and his King.
And he loved only less the Junker class from which
he came. He was trained to statecraft, and just as
16 SOCIALIZED GERMANY
Stein and Hardenberg were entrusted with power
following the humiliation of Prussia by Napoleon,
so Bismarck was given almost sovereign authority
by William I in the years prior to the Franco-
Prussian War, as well as in the period of construc-
tion which followed it, when the results of military
conquest and the French milliards were made the
basis of a political, industrial, and social programme
that has been carried on since Bismarck's retire-
ment by Emperor William II.
These two men have guided the destinies of Ger-
many. They framed constructive legislation and
directed the state in the same general direction.
Both were possessed of boundless imagination as
to the ultimate destiny of the German people.
They were not seriously distracted by political con-
troversy. They ruled by party coalitions when that
was possible; and when it was not, they ruled without
parliamentary sanction. Their control over Prussia
was absolute, and through Prussia their control of
the empire was almost equally so. They chose their
own associates, and they chose them from the feudal
class. And they fashioned Germany to their liking,
not for military purposes alone but for industrial
and commercial aggression as well. The legislation
which they promoted, even the social legislation for
the protection of the working classes, was in har-
mony with the early traditions of Prussia. The laws
they insisted on involved no violent break with the
BACKGROUND OF MODERN GERMANY 17
past. Rather they were a continuation of the pa-
ternalism, of the feudalism, of the ascendancy of the
state over the individual, to which Germany had
long been accustomed.
A third influence in the making of Germany is
education an education which begins with the
cradle, that is compulsory, and is open even to the
poorest, who are able to make their way through
the secondary schools, the academies, technical col-
leges, and the university, if they have the ambition
and the ability to do so. Nowhere, not even in
America, is university training so universal as in
Germany; and nowhere are there fewer obstacles
to cultural opportunity. Moreover, education is a
matter of the most serious official concern by states-
men and experts. It is adjusted to every activity,
to every industry, and every scientific need. And
it is a public rather than a private function. The
appropriations for this purpose are generous. The
standards of elementary education are prescribed
by law, to which all communities must conform.
Elementary education is obligatory. Above the
minimum requirements prescribed by the state
local authorities may go as far as they choose, and
the greatest diversity exists in the development of
higher education not only between the universities,
which are found in almost every state of the empire,
but among the municipalities as well. Cities main-
tain a great variety of high schools and academies,
18 SOCIALIZED GERMANY
in which provision is made for all kinds of mechan-
ical, vocational, and artistic study. There are
gymnasia for classical training, for science, for the
fine arts. In addition, the larger cities maintain
colleges of commerce and technology, through which
thousands of students are trained for industry,
commerce, and state activities. There are 21 uni-
versities, with 66,000 students, giving higher post-
graduate degrees in philosophy, law, and medicine,
and a dozen technical colleges, with 17,000 students
pursuing similar advanced courses in engineering
and science. Provision is made for training in state-
craft and administration. Diisseldorf has a col-
lege of city administration and Berlin a college of
town-planning, while Frankfort has recently opened
a municipal university planned on an ambitious
scale. There are numerous technical colleges and
laboratories for mining, architecture, forestry, and
agriculture, and hundreds of industrial and vocational
high schools. And these educational institutions
are all closely identified with the state. Their pro-
fessors and scientists co-operate with the civil and
military authorities, while the civil servant is
everywhere trained to meet the needs of adminis-
tration and statecraft. Education, in fact, is a pre-
requisite of admission to the higher positions in the
civil service, while the universities and technical
schools are consciously allied with the administra-
tion of the empire.
BACKGROUND OF MODERN GERMANY 19
Education in Germany, from the primary school
to the higher endowments for scientific research, is
an adjunct of the state, not an isolated, detached
thing. And it is consciously organized to promote
efficiency. A large part of Germany's industrial
achievement is traceable to the system of educa-
tion, just as her international trade is traceable to
the commercial colleges, in which thousands of men
are trained for the conquest of the trade of the
world. Official and industrial Germany is a product
of the trained administrator. Education has had a
profound influence on the development of the past
generation. It has made Germany a land of experts.
All of these influences have reacted upon one
another. Obedience is a product of feudal tradition
as is the universal ambition for state service which
affects all classes. Education gave the Kaiser and
the civil service a body of highly trained men, de-
voted to the Fatherland and condemned by the
pressure of competition to a calling chosen early in
life. Education supplied industry with scientific
assistants and millions of trained hands and brains,
prepared from childhood for a definite calling. A
respect for authority, coupled with a constitution
that legalizes autocratic power, made it possible for
the Kaiser to carry through a colossal internal pro-
gramme, even against the temporary wishes of the
nation. There was no responsible ministry to check
his will and no popular party to be satisfied, while
20 SOCIALIZED GERMANY
the press and discussion were under the strictest
surveillance. Intelligent leadership, an overcrowded
scientific class, a wonderful system of trade educa-
tion, and a people trained by generations to respect
authority combined in the building of a nation that
in a generation's time has become one of the most
powerful in the modern world.
All of these influences combined to make the
mind of modern Germany what it is, to create a
psychology quite different from that of two genera-
tions ago, quite different from that of any other
nation in Europe. Still other influences contributed
in the same general direction. The traditions of a
patriarchal feudal state made it easy for Bismarck
to carry through his programme of state socialism.
The universities and public opinion accepted with-
out protest the taking over the railways, the develop-
ment of canals and waterways, and the acquisition
of mines and other industrial properties. State
socialism fell in with the traditions of the state, with
the will of the governing classes, as well as the opin-
ions of the academic world. For had not the state
owned great landed possessions and forest preserves
for centuries and operated them at a profit ? Legis-
lation in the interest of the working classes, the old
age, sickness, and accident insurance schemes were
all part of the traditions of an earlier age and found
a sanction in similar activities promoted by the
Great Elector and Frederick the Great. New Ger-
BACKGROUND OF MODERN GERMANY 21
many accepted state socialism just as it accepted
interference with the lives and property of the indi-
vidual by the state. It was in harmony with the tra-
ditions of the people.
And state socialism has reacted on the people.
It has not only increased their dependence on the
state; it has created affection for the state as well.
One explanation of the devotion of the German
people to the Fatherland is the devotion of the
Fatherland to the people. This is a most important
factor in the psychology of modern Germany, a
factor that has been generally overlooked. We in
America find this difficult to comprehend. For
with us the state performs but few services for the
citizen. Our political philosophy permits every one
to do pretty much as he pleases. Neither the
nation, the States, nor the cities engage in many
positive helpful activities. Germany has the other
point of view. The common good is a matter of
constant concern, and the state is the greatest of all
agencies of service. More than 3,000,000 persons
are in civil service. This is one person out of every
twenty. And state positions are highly prized.
They carry dignity, social position, permanent
tenure, and a pension on retirement. These em-
ployees and those dependent on them believe in the
Fatherland and all that it stands for. It is their
whole life to an extent that is difficult for us to
understand. In addition, and this is very impor-
22 SOCIALIZED GERMANY
tant, the state looks after the individual in count-
less ways. It serves him all the time. The service
is of a paternal sort, it is true, but it is satisfactory
to the German people. And this in turn creates a
reciprocal love on the part of the people for the
state. In addition they have a sense of common
ownership in the railroads, the telegraph, the mines,
forests, and the agricultural estates. There are
insurance funds which provide against accident,
sickness, and invalidity, as well as the old-age pen-
sions. If a citizen lives in a city, as 49 per cent, of
the people do, he is a joint owner of the street rail-
ways and gas, water, and electric-lighting plants, as
well as numerous other activities which touch his
life in many ways. He is educated in the public
schools; the teacher, the health officer, and even the
relief committees come to him as aids to his am-
bition and his well-being. Even the taxes are ad-
justed so as to fall most heavily upon those best
able to bear them. For the bulk of the revenues
of the cities and a large part of the revenues of the
state come through the income tax, a tax that is
paid directly and that is consciously felt by the
payer. The payment of direct taxes in turn creates
an interest in the state and its many activities.
And nowhere in the world do people pay taxes with
more willingness than in Germany.
The devotion of the German people in the pres-
ent struggle is far more than a feudal tradition. It
BACKGROUND OF MODERN GERMANY 23
is not inspired alone by fear or coercion or venera-
tion for authority. Rather it is largely a product of
the action and reaction of the state upon the daily
lives of the people. The psychology of Germany
has a strong economic as well as a historical back-
ground. The state may not be dedicated to a good
cause, and it may be mistaken in its conception of
the value of German Kultur to the world. But the
people have been so indissolubly merged into the
state, so identified with it by tradition, education,
and the common ownership of so many things that
there has been created a social psychology that is
unique in the history of the modern world; a social
psychology, too, that is so different from anything
with which we are familiar that it is difficult, if not
impossible, for us to comprehend the conflicting
meanings which Germany presents to the world.
CHAPTER III
THE CONSTITUTION OF THE EMPIRE
WILLIAM I became King of Prussia in 1861. He
appointed Bismarck as his chancellor and entrusted
him with large powers. Bismarck loved his King
and his Prussia. He had no sympathy with democ-
racy, with socialism, or with representative institu-
tions. And with the approval of his master he pro-
ceeded to weld North Germany into a federation
and later into an empire under the leadership of
Prussia. This was his overmastering idea, and from
the very beginning he seems to have had a vision
of the Germany of to-day under the dominion of
Prussia and the Hohenzollerns.
In the process of empire-building his method was
one of "blood and iron." In 1864 Prussia and Aus-
tria made war on Denmark and annexed the duchies
of Schleswig and Holstein. Prussia took Schleswig
and Austria Holstein. Two years later Prussia
occupied Holstein under a pretext which led to war
with Austria, a war for which Bismarck had been
preparing for years. A single battle sufficed for the
humbling of Austria, and Prussia annexed Holstein
and also Hanover, Hesse, Nassau, and the free city
24
CONSTITUTION OF THE EMPIRE 25
of Frankfort-on-the-Main, which had sided with
Austria in the struggle. This was done to round out
Prussia. It made her ascendant in the new North
German Federation, which was formed in 1867
under the hegemony of Prussia. The Prussian par-
liament protested that force was not an adequate
justification for the annexation of independent
states, to which Bismarck replied: "Our right is
the right of the German nation to exist, to breathe,
to unite; the right and duty of Prussia to give to
the German nation the foundation for her existence."
The war with Austria made Prussia supreme in
Germany. No humiliating terms were imposed upon
Austria, nor was any territory exacted in the treaty
of peace. Austria was needed as a potential ally in
case of war with France. Following the war a
constitution was adopted, under which Prussia
became the ascendant force in the North German
Federation. The King of Prussia was made per-
manent president. There was an upper house made
up of delegates from the individual states and a
lower house elected by universal suffrage. Into
this federation the larger states of the south, Ba-
varia, Baden, Wurtemberg, and Hesse-Darmstadt,
refused to enter.
The war with France followed shortly after. It
converted the North German Federation into the
German Empire, made up of twenty-five sovereign
and semi-independent states and Alsace-Lorraine,
26 SOCIALIZED GERMANY
which were voluntarily or forcibly united under a
written constitution. In the formation of this
union the people of the several states were not con-
sulted. Bavaria, Baden, Wiirtemberg, and Hesse-
Darmstadt, which had previously stood aloof, were
now incorporated into the empire.
Under the constitution adopted at Versailles the
King of Prussia is permanent Emperor. As King
of Prussia he has almost autocratic power over
three-fifths of the empire, but as German Emperor
his powers are defined by the constitution. Certain
limitations were placed upon his powers as a neces-
sary concession to the smaller kingdoms, which
were loath to lose their sovereign independence.
Still the powers of the Kaiser are very great. He is
commander-in-chief of the army and the navy and
minister of foreign affairs as well. With the consent
of the Bundesrat (or council of delegates from the
Kings and princes of the federated states) he can
declare war and serve execution against any of the
federal states when ordered to do so by the Bundes-
rat. He summons and dissolves the sittings of the
Reichstag, with the consent of the Bundesrat. He
appoints the chancellor and all other higher cabinet
officials, who are his personal representatives. There
is no semblance of parliamentary control over the
ministry or of responsible party government, such
as prevails in England, France, Italy, and other
constitutional monarchies. Neither the chancellor
CONSTITUTION OF THE EMPIRE 27
nor the ministry resigns in the face of a vote of lack
of confidence. They are not changed upon an ad-
verse election. Neither do they necessarily come
from the majority party. The chancellor is such
by grace of the Emperor rather than by virtue of
any popular selection. He presides over the de-
liberations of the upper chamber, is the fountain-
head of much legislation and has the right, which
he constantly exercises, of appearing and speaking
in the Reichstag. By these provisions the King of
Prussia enjoys almost as great powers in the empire
as he does in Prussia. He has back of him the sup-
port of his own state, the control of the army and
the navy, and the appointment and recall of all of
the ministers of the empire.
The power of the Kaiser as well as the influence
of Prussia has been greatly strengthened by the
personality of the present Emperor. The confedera-
tion has become a nation in every sense of the word.
The particularism of the individual states of a
generation ago has been succeeded by a sense of
solidarity which has closely knit the people into a
nation. The laws of Bismarck contributed greatly to
this end, as has the phenomenal industrial progress
of the past generation. Just as Alexander Hamil-
ton moulded the thirteen colonies into a nation by
his tariff and internal revenue policy, by the national
bank act, by the nationalization of the debt, and the
location of the capital at Washington, so Bismarck
28 SOCIALIZED GERMANY
and later William II cemented the twenty-five sepa-
rate states which form the empire into an indissoluble
union, in which Prussia is supreme. The federation
of a generation ago has become a nation.
The ascendancy of Prussia is further assured by
her place in the Bundesrat or Senate of the empire.
This is really a council of ambassadors from the
twenty-five kingdoms, principalities, and free cities
which comprise the empire. The members are not
elected by the people; they are appointed by the
rulers of the individual states. The vote of each
state is cast as a unit and under instructions from
the states which the delegates represent. In the
Bundesrat Prussia has 20 out of 58 votes, her quota
having been increased from 17 by contracts made
with smaller states subsequent to 1871, by which
they relinquished their representation. Only 14
votes in the Bundesrat are required to defeat any
proposed change in the constitution, so that Prussia
has more than enough votes to prevent any curtail-
ment of her power. By these provisions the sover-
eignty of the other states has been relinquished or
forcibly taken away by Prussia. Politically, at least,
Prussia is Germany, although some of the trappings
of sovereignty remain with the constituent states.
The Reichstag is the popular chamber of the
imperial parliament. It was a concession to the
liberal element of the nation, which had been agitat-
ing for a constitution since 1848. It is an escape
CONSTITUTION OF THE EMPIRE 29
valve for public opinion and little more. It offers
a forum for discussion and as such exerts real in-
fluence, but it has never been really democratic in
its personnel, and under the constitution it has little
real power and authority. It is the only body in
Germany, however, that is elected by manhood
suffrage. This explains the large Socialist represen-
tation which it contains. Here alone have the Social-
ists been able to secure an effective representation in
politics.
Members of the Reichstag are elected for five
years by direct universal suffrage and a secret
ballot, members being chosen by districts. But
even if the Socialists or radical parties controlled the
Reichstag, they would be impotent to carry out their
policies, for they could not impose their will on the
Bundesrat or the Emperor; they could do nothing
to alter the constitution, and they could not estab-
lish the cabinet or responsible-ministry system which
is of the essence of parliamentary government.
The chancellor, appointed by the Emperor, has
the right to appear in the Reichstag to urge govern-
ment measures. The Reichstag can do as it wills
with the chancellor's proposals, but, whatever its
action, it does not affect the position of the chan-
cellor, who is responsible to the Emperor alone. If
the Reichstag becomes too refractory, he may cause
it to be dissolved, and a new election ordered on
issues of the chancellor's choosing. This was done
30 SOCIALIZED GERMANY
by Bismarck after the attempts on the life of Em-
peror William I. It has been done on subsequent
occasions.
The power of Prussia through the King, the chan-
cellor, and the Bundesrat is further strengthened by
her preponderating representation in the Reichstag,
where she has 235 members out of 397. Even in
the popular branch of the government Prussia is
supreme. No coalition of all the other states could
overcome her control.
The distribution of seats in the Reichstag is almost
as unfair as in the Prussian parliament. Electoral
districts have not been changed since 1871, when
Germany was almost exclusively agricultural. Dur-
ing the intervening years great cities and industrial
centres, from which socialism recruits its strength,
have come into existence. But the country dis-
tricts still enjoy representation apportioned to them
nearly fifty years ago. And they are strongly Con-
servative. Greater Berlin, for instance, sends but
8 members to the Reichstag, whereas it should
send 20. All of the members from Berlin are
Socialists. The same number of electors in agri-
cultural districts return six times as many mem-
bers. The same disproportion exists in other in-
dustrial centres, all of which, with the possible
exception of Cologne, are now represented by
Socialist members. In the election of 1907, 20
seats were won by the Conservative party, with an
CONSTITUTION OF THE EMPIRE 31
average vote of but 10,500, while 6 Socialist seats
were won with an average vote of 77,500. The
average vote per seat won by the Socialists was
69,020, and the average per seat won by the Con-
servative party was 25,680. Were a system of
proportional representation introduced, as in Bel-
gium, or were the seats distributed according to any
just basis, the representation of the Socialists would
have been 115 in 1907 and 127 in 1903. Nor are
the members paid. This is a further check on
democracy. Bismarck insisted upon this provision,
and^ the Bundesrat has repeatedly rejected mea-
sures passed by the Reichstag providing salaries for
the members.
From the foregoing it is apparent that the con-
stitution does not essentially change the character
of the eighteenth-century feudal state or greatly
impair the power of the feudal classes. Rather it
strengthened and legalized them. It gave the ruling
classes the sanction of popular approval, even though
the nation was not consulted. The constitution
crystallized feudalism into legal form. Privilege,
which was previously subject to protest or revolu-
tion, as in 1830 and 1848, is now authoritative. It
has the backing of the nation rather than of the
King, and can be enforced by the courts and the
army with every show of legality.
The constitution of Germany made concessions
to the forms of representative government but safe-
32 SOCIALIZED GERMANY
guarded the ruling classes against any real exercise
of popular power. The actual power was kept in
the hands of an economic class. Privileges enjoyed
in an earlier age by force of arms are now en-
joyed by law. The German people were given a
charter, but the charter contained few rights.
Neither the states nor the empire reflect the popu-
lar will to any appreciable degree.
Prussia, and, through Prussia, Germany, reflects
the economic interests of the great estate owner or
Junker. He in effect is the government. He
maintains his power in Prussia through a reaction-
ary constitution, the three-class system of voting
and the open indirect ballot, which Bismarck him-
self termed "the worst of all electoral systems. "
Through these political limitations the Junker
controls Prussia and through Prussia the empire
as well. He forms a class by himself. And he uses
his power to promote his own interests, which are
mainly agrarian, to shift the taxes onto others, to
maintain the army and the navy, and to resist all
electoral reform.
Throughout all Europe government by~political
parties came in with the written constitution. The
system had its origin in Great Britain in which
country the line of division was originally between
the greater and lesser landlords. In the early half of
the nineteenth century, however, the commercial
classes obtained control of the Liberal party which
CONSTITUTION OF THE EMPIRE 33
had previously represented the lesser barons and
yeomen. They became ascendant under the regime
of Cobden, Bright, and Gladstone, when the Liberal
party came to represent the capitalist and trading
classes. The Conservative or Tory party, on the
other hand, has always been the party of the old
aristocracy, the feudal classes.
The German Junker has a party of his own, the
Conservative. It has ever been the agent of the
landed aristocracy. It reflects the will of this class
in financial, military, industrial, and social legis-
lation. The Junker is strongly imperialistic; he
stands for a powerful army and navy, for all legis-
lation that will preserve his privileges and power,
and he stands for little else.
The German manufacturers, the captains of
industry, and commercial classes formed another
party, the National Liberals. The Clerical or
Catholic group, whose strength comes almost ex-
clusively from Bavaria, Baden, and the Rhine
Provinces, has still another party, the Centre. Its
primary concern is religious and it has used its
power for the promotion and protection of the
interests of the Catholic Church and the peasant
class from which the party derives its support.
Over against these parties are several parties
which are much more liberal. The Freisinnige or
Radical group is a party of the lesser capitalists,
tradesmen, and shopkeepers. It is a free-trade
34 SOCIALIZED GERMANY
party. Its controlling philosophy is laissez-faire.
It is in opposition to the Conservative and Liberal
parties on agrarian legislation and a protective tariff.
It would liberalize the constitution, democratize
the suffrage, free the state from the shackles of
feudalism, and rely upon the laws of nature and
freedom in the development of the nation. The
Radical party is very like the present Liberal
party in Great Britain. From this liberal group
members of the Reichstag taper off into the Social-
ists, who form the strongest party in opposition and
have the largest vote of any at the polls. The
support of socialism comes almost exclusively from
the cities and mining districts. Practically every
city in the empire elects all or some of its represen-
tatives from the Socialist party. It is a party of the
proletariat and has been more class-conscious and
revolutionary in its doctrines than any socialist
group in Europe. Up to the outbreak of the
present war it stood aloof from all party alliances
and co-operated with none in legislation. It is
frankly against all governments save that of the
working classes. It is only less hostile to the Radical
group than to the Conservative and Liberal ones.
It fights its battles alone, is inspired by the class
war and the materialist conception of history and
politics. It is generally opposed to militarism, a
large navy, the "hunger tariff," and the present
constitution. It advocates more or less revolution-
CONSTITUTION OF THE EMPIRE 35
ary changes, although the younger men of the party
are far more moderate than the contemporaries of
Marx and Engels, who continue to control the
councils of the party. Socialism has spread all over
the empire. Wherever industry has changed sleepy
rural districts into communities with an alert
working-class population, there social democracy
has its adherents organized into branches of the
party, or of trade-unions influenced by the spirit
of the party.
Divided roughly, the present membership of the
Conservative groups in the Reichstag is 74; of the
Centre and Nationalist groups of Poles, Guelphs,
Danes, etc., 124; of the National Liberals and
Progressive and Radical parties 89, and of the Social
Democrats 110. Each party reflects an economic
class with the possible exception of the nationalist
groups.
CHAPTER IV
THE ECONOMIC FOUNDATIONS OF CLASS
RULE
THE wars against Austria and France created
the German Empire. They made Prussia ascen-
dant. This ascendancy was made permanent by
the constitution, adopted after the defeat of France.
In the affairs of the empire Prussia has a controlling
voice, first, by the hereditary position of the King,
as Emperor; second, by the vote of Prussia in the
Bundesrat and the Reichstag; and, finally, through
the control which Prussia enjoys over any changes
in the constitution. Prussia is further supreme by
reason of her size, for she contains three-fifths of
the population and most of the wealth and industry
and almost all of the large cities of the empire.
Prussia rules Germany. And Prussia in turn is
ruled by the old feudal aristocracy, by the Junkers,
or great estate owners. This, too, is written into
the constitution and laws of the land. Privileged
class rule, in fact, is the German idea of politics.
This is true of the empire, the individual states, and
the cities. The class is not the same in the different
states, but the rule is always by a limited class.
36
ECONOMIC FOUNDATIONS OF CLASS RULE 37
And over and above them all is the ruling class in
Prussia, the old feudal nobility, whose estates are
for the most part east of Berlin, in East Prussia,
Posen, and Pomerania. In this part of Germany the
land is divided into great estates, which have re-
mained much as they were in the seventeenth and
eighteenth centuries. There are but few cities and
but little organized industry. The industrial re-
gions are to the west, along the Rhine and the North
Sea. In 1895 and conditions have not changed
materially in the meantime 31 per cent, of all the
land in Prussia was in estates of more than 250
acres, while in the eastern provinces of Posen and
Pomerania the great estates rose to 55 per cent, and
52 per cent, respectively. The average size of the
8,365 greater estates in East Prussia was 1,132
acres, while the average size of 2,793 estates in
Pomerania was 1,380 acres. Many of these estates
are of far greater extent, and they are owned by the
descendants of the feudal barons of previous times.
In France, northern Italy, Switzerland, Denmark,
and Scandinavia as well as along the Rhine and in
South Germany feudal land ownership was converted
into peasant proprietorship by the French Revolution
or subsequent legislation. It was scarcely touched in
Great Britain, Russia, Prussia, and southern Italy.
And it is in these countries that reaction persists.
In Prussia especially the feudal aristocracy has re-
mained almost untouched by the liberalizing influ-
38 SOCIALIZED GERMANY
ence of the nineteenth century. It has not inter-
married with the commercial classes. Nor have the
members entered industry or the professions. Con-
tent with the old order, they have preserved many
of their privileges and almost all of their political
and social power.
In this part of Germany the conditions are greatly
changed from those described by the great liberator
Baron von Stein in the early part of the nineteenth
century. He said:
"The appearance of the country displeased me
as much as the cloudy, northern climate. Great
fields, of which a considerable part lies in pasture
and fallow, extremely few people, the whole laboring
class under the pressure of serfdom, the fields
attached to single farms, seldom well built; in one
word, a uniformity, a deadly stiffness, a want of
life and activity fused over the whole, which op-
pressed and soured me greatly. The abode of the
Mecklenburg nobleman who keeps down his peas-
ants instead of improving their condition strikes me
as the lair of a wild beast, who desolates everything
around him and surrounds himself with the silence
of the grave. "
Stein and Hardenberg attempted to put an end
to the old feudal abuses as was done in other coun-
tries, but their reforms did not penetrate beyond
the southern states. The landowners of Prussia de-
clined to permit the agrarian reforms to be adopted.
And during the intervening century they have con-
ECONOMIC FOUNDATIONS OF CLASS RULE 39
tinued so ascendant in the government that their
feudal privileges remain much as they were a hun-
dred years ago. Upon their estates they still
exercise independent manorial jurisdiction, in which
the estates are the administrative units. There is
little semblance of self-government, such as prevails
in the south, while the economic power of the land-
lords over the lives of the workers and the restric-
tions of the suffrage preclude the peasants from
exercising any real influence in politics.
Still other influences have divorced East Prussia
from the liberalizing influences of modern life.
There is but little industry and comparatively little
intercommunication in this part of Germany. The
great landowners live upon their estates (where they
enjoy something like sovereign powers) and have
only occasional contact with the city. Here they
rule with feudal authority, while in the legislative
halls they resist all legislation which threatens their
privileges or powers.
" So long as Junkerism exists in Germany and is a
leading factor in politics," said a German political
leader recently, "there is no possible hope of prog-
ress." For the German Junker is a reactionary.
He is ultimately responsible for the militarism and
jingoism which seem to characterize the whole
nation. Land monopoly is the economic framework
of Prussia, and through Prussia of the empire as
well.
40 SOCIALIZED GERMANY
The supremacy of the Junker is insured in Prussia,
first by property qualifications of the suffrage and
second by a distribution of seats in the Prussian
parliament, which lodges practically all power in the
large property owners and particularly the landed
aristocracy of the eastern provinces. In elections
to the Prussian parliament the voting strength of
the individual is determined by the amount of in-
come taxes paid by him. This applies to state and
city elections. The electoral power of the individual
is ascertained roughly as follows: The total amount
of income taxes paid by all persons is first divided by
three. Then those who paid one-third of the taxes
are permitted to choose electors, who in turn elect
one-third of the deputies to parliament. Then
those who paid another third of the taxes elect
another third of the deputies by the same indirect
process, while the great mass of the people, who have
paid the remaining third of the taxes, elect the re-
maining third of the members.
Under these provisions the poorer classes are
practically disfranchised. They have only a sem-
blance of a voice in the government. As the system
works in practice, from 3 to 5 per cent, of the
electors choose one-third of the members of parlia-
ment; from 10 to 12 per cent, elect another third,
while about 85 per cent, of the voters elect the re-
maining third, or would do so were the ballot a
secret one and the districts fairly distributed ac-
ECONOMIC FOUNDATIONS OF CLASS RULE 41
cording to population. It is said that in no less
than 2,200 electoral districts the first-class electors,
who choose one-third of the deputies, consist of
but a single voter. This is the electoral basis of the
Prussian oligarchy.
Every effort to change this system has been re-
sisted by the great estate owners. The continuance
of their power depends upon the preservation of a
system of voting which rests on property rather than
on men. It is against this inequality that the
Socialist and Radical parties are protesting. It was
this that aroused the demonstrations all over Prus-
sia in the spring of 1910.
The unrepresentative character of the Prussian
electoral system appears from the election returns
of 1908. Two million, two hundred and fifteen
thousand, nine hundred and sixty-one persons par-
ticipated in the election. The Social Democrats
polled 601,093 votes and elected 7 members, but
should have had 105, under a one-man one-vote
system, while the Conservatives, or agrarians, cast
356,110 votes and elected 152 members instead of
62 to which manhood suffrage would entitle them.
The Clericals cast a vote of 502,594 and secured 104
seats. They should have secured 88, while the
Liberal People's party elected 28 members but were
entitled to 40.
In addition the ballot is open rather than secret.
The choice of the voter is declared viva voce. In
42 SOCIALIZED GERMANY
consequence the peasant and agricultural laborers do
not dare to vote convictions that are contrary to
the wishes of the great landowner, while the workers
in the city are under the same fear. As a conse-
quence many remain away from the polls.
In addition to the three-class system of voting
and the open ballot election districts bear no relation
to the present population. They are distributed so
as to give the landed aristocracy an overwhelming
advantage. In spite of the growth of cities, more
rapid than our own, there has been no distribution
of parliamentary seats since before the Franco-
Prussian War. In the districts to the east, where
the aristocracy controls the elections, the number
of inhabitants to each representative is 63,000, while
in Socialist Berlin it is nearly three times as much,
or 170,000. Berlin has 9 members in the Prus-
sian parliament, but should have 24 under a uniform
distribution of seats. One election district in Prus-
sia has 34,000 inhabitants, while another has 323,000.
One-fourth of the population in the sparsely popu-
lated districts elects 161 deputies, while another
fourth in the cities elects only 41. The Prussian
peasant who blindly votes as his landlord orders has
many times the electoral power of the far more in-
telligent elector of the cities. As a consequence while
the Socialists polled 18.8 per cent, of the vote in 1903
they failed to elect a single member. In 1908 they
returned 7 representatives, at which time, had the
ECONOMIC FOUNDATIONS OF CLASS RULE 43
election districts been fairly apportioned, they would
have elected 81. On the other hand, the conserva-
tive land-owning classes elected 161 members, while
the business or commercial classes of the cities elected
but 17. The situation is not unlike that which pre-
vailed in Great Britain before the Reform Act of
1832, which swept away the rotten boroughs.
By these devices, the three-class system of voting,
the open ballot, and the unequal distribution of seats,
the land-owning aristocracy rules Prussia. This is
in spite of the commanding importance of industry,
of trade, and of commerce, which form the strength
and power of the state.
Through the ownership of the land and the con-
trol of politics the great estate owners control the
lives of the peasants. They not only control their
wages but their political and social life as well.
They elect their own class to parliament, while
through an almost complete control over the peas-
ants they dictate local administration as well. As a
class, the Junker is opposed to education for the
peasant; he is opposed to every evidence of liberty
or democracy, and clings tenaciously to the divine
right of the King and his own class to rule.
This is the class that rules Prussia, and through
Prussia the empire as well. And the rule is as ab-
solute as though it had been expressed by law. In
effect it differs only in form from that of feudal times.
The Junker has always been willing to sacrifice
44 SOCIALIZED GERMANY
the commercial classes to his own advantage. He
opposed the development of the system of water-
ways and frankly admitted that his opposition was
to prevent the reduction of inland transportation
costs, and the consequent competition of foreign
farm products. Measures for popular education
have been resisted, as well as expenditures for im-
proving the condition of the peasant classes. The
Junker would limit elementary education; he would
check ambition, either intellectual or otherwise, and
prevent the peasant from acquiring any knowledge
that will awaken dissatisfaction with his station in
life.
From the great estate owners come the chancellors
and higher officers of the empire. The Junker
officers the army and fills the higher civil service.
He moulds the imperial policy and accepts only
under protest such small concessions to democracy
as Germany enjoys. The merchant class, no matter
what its wealth, has never merged with the landed
aristocracy as in Great Britain. It has remained
separate and apart.
The power of the Junker is further strengthened
by a class sympathy and understanding with the
Bang, who is of the Junker class. He, too, is a great
landlord. His traditions are those of the landed
aristocracy. For the King comes from that class.
The relations of the crown and the aristocracy have
never been sundered by conflict as in England, in
ECONOMIC FOUNDATIONS OF CLASS RULE 45
which country the feudal aristocracy was in a con-
stant struggle with the King from the thirteenth to
the end of the seventeenth century. The contro-
versy began with Magna Charta. It was renewed
whenever the King endeavored to assert his feudal
rights as against the great barons. For the crown
was maintained and supported by dues and obli-
gations payable by the great estate owners. During
centuries of struggle the right of the King to feudal
dues and taxes was encroached upon by the aris-
tocracy, until the King became a mere figurehead
dependent on the consent of his greater vassals for
revenue, his army, and his power. Such is the posi-
tion of the King of England to-day. In addition,
his ancestors disposed of the crown landholdings to
favorites or squandered the great estates taken from
the monasteries and the guilds under Henry VIII.
This made the King dependent upon the landowners
in Parliament for revenue, for the King had no per-
sonal revenue of his own. In this long struggle over
dues and taxes the British constitution was evolved.
It ended in the subordination of the crown to Parlia-
ment, which up to 1909 was, in effect, subordination
to the landed aristocracy.
The King of Prussia, on the other hand, kept his
feudal landholdings. He remained the first of the
great barons. His kingly power was but an evolu-
tion of feudal primacy. His private estates were
the largest in the kingdom. He escaped the civil
46 SOCIALIZED GERMANY
wars of England and France largely because he was
economically independent of the landed aristocracy.
He did not need to go to them for taxes. The bulk
of the Prussian revenues came from domain lands,
just as the bulk of the revenues to-day come from
these and other productive undertakings.
Thus the King and Junker have been in harmony
from the beginning of the Prussian Kingdom. Their
interests have been identical. The King retained
his kingly power because he had no controversies
with his barons. The feudal nobility has also re-
tained its economic privileges, while the King has
increased his royal prerogatives. This has given
Junkerism a sympathetic ally in court and the King
a body of supporters unlike that of any other coun-
try in Europe except Austria and Russia, where sim-
ilar conditions prevail.
Here again is an unnoticed explanation of the
unity of Germany. It explains the rise of Prussia,
the power and the persistence of early feudal con-
ditions. While France and England were involved in
civil wars and parliamentary conflicts between the
King and the barons, Prussia, by reason of the
identity of interest and the absence of conflict,
remained unchanged by the currents of modern life.
And when it came to framing a constitution the old
regime was translated into constitutional forms,
with but little essential alteration in the relations of
classes. This is one of the most important in-
ECONOMIC FOUNDATIONS OF CLASS RULE 47
fluences in the making of modern Germany as well
as in the unity of her ambitions.
The Prussian city is also ruled by an economic
class, just as is the state. This rule is secured
through the same three-class system of voting, which
lodges power in the large taxpayers, who in munici-
pal elections are the business men and property
owners. Here, too, from 3 to 10 per cent, of the
electors choose two-thirds of the members of the
city council. Here, too, the Socialists and Labor
members are excluded from power. While under
manhood suffrage nearly all the cities send Socialist
representatives to the Reichstag, the Socialists have
practically no representation in the administration
of the cities, where they are in an overwhelming
majority, and they are never elected to the mayoralty
or to the magistrat.
The ruling class in the city is the business men.
They control the elections and select men of their
own class or view-point to the higher administrative
positions. And the business men who rule are not
the shopkeepers or the tradesmen, they are the men
of large means, the real-estate owners, and house
owners. And just as the Junker rules Prussia in
his own interest, so the business men mould the city
to their interest. But strangely enough they have
a far more generous outlook than the aristocracy
or the business classes of other countries. Only in
matters obviously prejudicial to real-estate interests
48 SOCIALIZED GERMANY
do they promote their own advantage. As de-
scribed elsewhere, 1 they assume a large share of the
local taxes, they have municipalized many of the
more profitable lines of business, they regulate
property in the interest of the community, and build
and plan in a far-visioned, patriotic way. No ruling
class in the world seems to negative the idea of class
control of politics as do the business men of the
German cities, for they rule for the city rather than
for themselves.
Prior to 1870 Germany was profoundly influenced
by the southern states, by Bavaria, Wiirtemberg,
Baden, and the Rhine Provinces. It was from this
part of the old confederation that the agitation for
representative government came. It was from the
Rhine Province and the South German states that
the revolutions of 1830 and 1848 drew their inspira-
tion. And these states, like Prussia, reflect the
economic foundations of the people. But these
states, though monarchical in form, are democratic
in spirit. And this democracy in turn is traceable
to the wide distribution of land ownership among the
peasants, who, through ownership, affect the quality
of the government.
This part of Germany was profoundly influenced by
the French Revolution. Here many of the reforms
of Napoleon were accepted. It was in these states,
too, that Stein and Hardenberg abolished many of
1 See chapters XXI, XXII, and XXIII.
ECONOMIC FOUNDATIONS OF CLASS RULE 49
the abuses of the feudal regime and brought about
the division of the land into small farms, for the most
part free from the feudal conditions of an earlier time.
As a result of these reforms these states are liberal
minded. Even the electoral provisions are more
generous to the non-propertied voter. Whereas
the three-class system of voting prevails in Prussia,
Bavaria has a system of proportional representation
under which each party elects representatives in
proportion to its voting strength. As a consequence,
the Socialists have returned many representatives to
the parliament and the city councils, who in turn
have elected members of their own party to the
magistrat, or executive department of the city.
And just as the politics of South Germany reflect
the economic foundations of these states, so the
psychology of the people is a mirror of the same
influence. The South German is easy-going and
genial. He is gemutlich. He takes life simply and
easily, and, while he recognizes the advantages of the
empire and admires the power and forcefulness of
Prussia, he chafes somewhat under her arrogance.
Even the court life is simpler, more democratic and
progressive than in Prussia, while the relations of
classes have little of the caste-like hardness which
characterizes North Germany. All this is traceable
to the long traditions of a home-owning peasantry,
whose psychology reflects the sense of freedom which
home ownership, wherever it be found, creates a
50 SOCIALIZED GERMANY
psychology not dissimilar to that of France, of Hol-
land, of Switzerland, or of Scandinavia.
Just as East Prussia differs from South Germany,
so western Germany differs from both of them.
West Germany is the centre of the great industrial
development which has taken place during the last
forty years. Here are the great iron, steel, cotton,
woollen, silk, and chemical industries which have
given Germany such eminence. Here are the cities
of Essen, Cologne, Dusseldorf, Duisburg, Barmen,
Elberfeld, and Crefeld, that form a series of great
communities closely related to one another and all
dependent upon the iron-ore and coal fields of the
Westphalian district. Beyond are the great mari-
time cities upon the North Sea and the Baltic, with
their splendid harbors and shipping facilities. This
is the centre from which the new aristocracy of
capital has come an aristocracy which, like the
Liberal party in England, struggles with the landed
classes for the control of the government. Here is
the source of Germany's power in the struggle for
world empire; here are many of the most wonder-
ful cities the world has known. Yet, despite the
preponderance of wealth and energy and the excess
of population, this part of Germany remains sub-
ordinate to the landed classes of the east, which
still dominate the empire. To some extent the cap-
italist classes have received social recognition; some
of them have reached high places in the ministry.
ECONOMIC FOUNDATIONS OF CLASS RULE 51
They are strongly represented in the Reichstag
and Prussian parliament. But for the most part
their political power is confined to the cities and
the lesser governmental positions into which they
have entered in recent years. The commercial classes
of Germany have not yet achieved the political and
social eminence which they enjoy in Great Britain
and the United States.
CHAPTER V
RECENT ECONOMIC PROGRESS 1
PRIOR to 1870 Germany was an agricultural coun-
try. There was little factory industry, little foreign
trade, only a rudimentary navy and the beginnings
of a merchant marine. The traditions of the coun-
try were those of the soil, of peasant proprietorship
in the south, and of agricultural laborers attached
to great landed estates in Prussia, Pomerania, and
Posen. The urban population was relatively small.
The towns were capital cities, Hauptstaedte, or sea-
ports. As late as the middle of the century only
4 per cent, of the population of Prussia lived in
cities of more than 100,000 people, while in 1871
68 per cent, were still engaged in agriculture.
Fifty years ago Germany did not suggest a great
empire challenging the world for supremacy, and
believing in its destiny as an irresistible power. Aside
from the memories of the Great Elector and Fred-
erick the Great there was little in her history to
justify such dreams of commanding place. The
1 Much of the material contained in this chapter is taken from
Germany's Economic Progress and National Wealth, 1883-1913, by
Doctor Karl Helfferich, director of the Deutsche Bank. Where
no other acknowledgment is given the statistics of trade and in-
dustry are taken from this work.
52
RECENT ECONOMIC PROGRESS 53
contributions of the country were of poetry, phi-
losophy, music, education, the inner things of life.
The great names of which the world was proud were
Goethe, Fichte, Schiller, Lessing, Kant, Mozart,
Beethoven, and Heine. Outside of the Prussian
aristocracy political leaders aspired to a constitu-
tional government like that of England rather than
to extended dominion. A score of states were kept
asunder by jealousy, differences of temperament,
and economic interest, while the rival ambitions of
Austria and Prussia seemed to forever preclude a
permanent union of the Germanic peoples. There
were few natural resources. The soil was far from
rich; in many sections it was barren waste. In-
dustry was undeveloped, and England, the United
States, and France had so occupied the field that
successful competition seemed out of the question.
There were no natural harbors like those of Great
Britain and the United States. Most of the ports
have been constructed at colossal cost.
It was on such unpromising foundations that the
German Empire has been reared. Yet, despite these
limitations, the progress of the last generation is
without parallel in the history of the world. There
is nothing in ancient or modern times to compare
with it. So rapid has been the development that
the estimated wealth of Great Britain in 1907 was
300,000,000,000 marks, while that of Germany was
350,000,000,000 marks. And this wealth creation has
54 SOCIALIZED GERMANY
come about in the short space of a generation, and
for the most part during the reign of the present
Emperor.
Following the formation of the empire a series of
laws were enacted that swept away the remnants of
the old state individualism and cleared the way for
a great forward movement in trade and industry.
In 1873 an Imperial Bureau of Railways was estab-
lished to control and unify railway transportation.
The same year a currency reorganization with gold
monometallism as the basis superseded the confusion
of coinage of a score of states. The Imperial Bank
was started in 1875, and two years later a series of
laws were passed covering bankruptcy, judicial
reorganization, a civil code, and the reform of
criminal and civil procedure. Local government
was reorganized. In 1878 the traditional low-tariff
policy was discarded and a protective tariff adopted,
designed to protect the agricultural classes of the
east and provide more adequate revenue. Much of
this legislation was inspired by Prince Bismarck. It
was almost as comprehensive as that of Napoleon I.
Increasing population is an indication of national
greatness only when the well-being of the people keeps
pace with growing numbers. And increasing popu-
lation in Germany has gone hand in hand with in-
creasing per-capita wealth, increasing health and
well-being, and the universalization of educational
opportunities. During the forty-two years from
RECENT ECONOMIC PROGRESS 55
1871 to 1913 the population of Germany increased
by 62 per cent. The growth from 1871 to 1888 was
7,000,000, or from 41,000,000 to 48,000,000, and
from 1888 to 1913 it was 18,000,000, or from 48,-
000,000 to 66,000,000. The most rapid growth has
been coincident with the reign of the present Kaiser,
Emperor William II,
Germany's excess birth-rate over the death-rate
is higher than in any other country where similar
statistics are kept, with the exception of Russia.
The annual increase in population due to this excess
has remained for a considerable number of years at
approximately 800,000, the increase in 1912 being
839,887. The excess of births over deaths in 1912
was 12.7 per thousand. In 1911 the rate in Eng-
land and Wales was 9.8, in Italy 10.1, in France .9,
in the United States, where proper vital statistics
are kept, 5.4 to 9.9, and in Russia 17. Not only is
Germany a prolific country, but wonderful sanitary
provisions and scientific health protection co-oper-
ate with a high birth-rate in stimulating population.
Most of the growth of the last generation has
been absorbed by the cities. In fact, almost the
whole increase, or about 24,000,000, has been added
to the urban population. Agriculture claims a
diminishing percentage of the people. In 1871 68
per cent, were employed on the land. In 1882 the
rural population had fallen to 42 per cent., and in
1907 to 28.5 per cent. During the period from
56 SOCIALIZED GERMANY
1882 to 1907 the proportion engaged in industry
rose from 35.1 per cent, to 42.5 per cent., and in
trade and commerce from 9.9 per cent, to 13.3 per
cent.
As a consequence of this shift in population Ger-
many has become an urban nation. Great cities
line the river Rhine from the Dutch frontier to
Switzerland. They have grown about every harbor
on the North Sea and the Baltic. Wherever natural
resources or transportation facilities offered an op-
portunity there a city has appeared. And these
cities are not straggling, unkempt collections of
factories and work-people, they are cities of com-
manding beauty, of fine architecture, of spacious
streets, and of splendid public structures. The
growth in urban population has been even more
rapid than in the United States. In 1871 there
were only 9 cities of more than 100,000 population,
while in 1885 there were 21. To-day there are 48.
In 1885 8,600,000 people, or 18.4 per cent, of the
total, lived in cities of more than 20,000 people.
In 1910 there were 22,400,000, or 34.5 per cent, of
the whole. In 1885 there were 21 cities of more than
100,000 people with a total population of 4,400,000,
or 9.4 per cent, of the total, while in 1910 there were
48 cities of more than 100,000 people with a total
population of 13,800,000, or 21.1 per cent, of the
whole. In a short generation Gemany has become
a nation of great cities, and with few exceptions,
RECENT ECONOMIC PROGRESS 57
such as the industrial centres of the Rhine region,
they are cities of beauty, charm, and great dignity.
This growth in urban population has been ac-
companied by many of the evils with which we are
familiar.
"That this shifting of the centre of gravity of the
population from country to town, from agriculture
to industry, trade and transportation, has its dark
side, is generally recognized, and is denied by no-
body. But none the less, the fact cannot be over-
looked that it was only the expansion of our indus-
tries, our trade, and transportation, that made it
possible on German soil to give labor and sustenance
to the vastly increased population, to protect us
from the misery of overpopulation, and to trans-
form the natural growth of the population into a
source of increasing wealth." 1
Agriculture in Germany partakes of a science.
It is not so well developed as in Denmark or Hol-
land. There is not that universal intensive culti-
vation that prevails in these countries, or in France,
Belgium, or Switzerland. For much of the land in
Prussia is owned in great estates, worked by agri-
cultural laborers. But scientific agriculture has
made great progress. It is a matter of state con-
cern. The landed estates belonging to Prussia and
the other states are used as experiment stations.
They are leased as model farms or operated by the
1 Germany's Economic Progress and National Wealth, 1888-1913,
p. 20.
58
SOCIALIZED GERMANY
state itself. And while the acreage under culti-
vation and the number of people engaged in agri-
culture remained stationary from 1883 to 1912, new
methods of cultivation brought about a great in-
crease in the yield. Fertilizers are extensively and
intelligently used, while mechanical power has
taken the place of hand labor. In certain sections
district central power stations furnish electric power
for the operation of all kinds of machines at very
low cost, while modern farm machinery has been
widely introduced.
How materially these new methods of production
have increased the productivity of German agricul-
ture is indicated by the following table:
AVERAGE FOR THE
YEARS 1883-7
AVERAGE FOR THE
YEARS 1908-12
AREA
PLANTED
HEC-
TARES
YIELD
TONS
YIELD
PER
HEC-
TARE
TONS
AREA
PLANTED
HEC-
TARES
YIELD
TONS
YIELD
PER
HEC-
TARE
TONS
Bye
Wheat
Summer barley
Potatoes
5,830,000
1,918,000
1,737,700
2,912,800
3,785,000
5,905,100
5,867,800
2,585,200
2,232,800
25,459,200
4,291,000
16,874,600
1.00
1.34
1.28
8.74
1.13
2.85
6,168,261
1,911,768
1,604,116
3,315,137
4,317,753
5,949,237
11,012,171
3,962,390
3,220,066
44,220,213
8,189,062
25,024,865
1.78
2.07
2.01
13.34
1.90
4.21
Oats
Meadow hay . .
In some crops the gain has been extraordinary.
In the case of rye, in which there was a gain of only
5.8 per cent, in acreage from one five-year period
to the other, the increase in the yield was 87.7 per
cent., and the increase in yield per hectare was 77.7
per cent.
RECENT ECONOMIC PROGRESS
59
Similar methods of cultivation give a yield of
22.6 metric cwt. (220 Ibs.) per hectare of wheat, as
compared with 6.9 for Russia, 13.8 for France, 10.7
in the United States, and 9.3 in Argentine.
Similar results are obtained in the other staples,
as shown in the following table :
HAR-
VEST
YEAR
COUNTRY
YIELD PER HECTARE IN METRIC
CWT. (220 LBS.)
WHEAT
BYE
BAR-
LEY
OATS
POTA-
TOES
1912
1912
1912
1911
1912
1912
Germany
22.6
6.9
( 15.0
I 12.7
13.8
13.7
10.7
18.5
9.0
14.6
11.6
14.3
12.0
10.6
21.9
8.7
16.0
13.9
14.3
16.7
16.0
19.4
8.5
13.0
10.4
12.6
15.0
13.4
150.3
81.7
100.2
84.4
74.2
115.8
76.2
Russia
Austria-Hungary ....
France
Canada
United States
From Germany's Economic Progress and National Wealth, 1888-1913,
Helfferich, p. 55.
All this is the more remarkable in view of the fact
that neither the soil nor the climate of Germany is
particularly favorable. Much of the land has been
worked for generations, much of it in the north and
east is far from fertile. Moreover, Germany has
had to compete with the virgin soil of newer coun-
tries, whose surplus produce has been thrown on the
European markets during the past few decades at
very low prices. But while the land in the United
States has been exhausted by careless cultivation
and millions of acres of good farming land have been
abandoned, in Germany lands far less fertile and
cultivated for generations remain in a high state of
60
SOCIALIZED GERMANY
fertility. There are no deserted farms in Germany.
In addition great stretches of waste-land, such as
marshes, heaths, etc., have been brought into till-
age. It is claimed that the area of wheat-land is
being doubled by these methods and a comfortable
living provided for hundreds of thousands of fam-
ilies.
To some extent Germany has been shielded from
foreign competition by a protective tariff, but the
tariff has not encouraged agricultural inefficiency,
as it has in other countries.
The sugar contents of the beet-root were discov-
ered by a German scientist, and the growth of this
industry in recent years has been phenomenal.
Improved methods of cultivation as well as manu-
facture have created a great industry, in which
Germany stands foremost. In the year 1912-13
the beet-sugar production amounted to 2,701,000
tons; 'in Russia, the next largest producer, it was
1,374,000 tons. 1 In twenty-five years the production
1 The rapidity of the growth of this industry as well as the con-
stantly advancing efficiency of manufacture is shown in the follow-
ing table:
AVERAGE
CHOP YEAR
BEETS
WORKED
UP 1,000
TONS
AREA IN
BEETS
HECTARES
YIELD OF
BEETS
PER
HECTARE
TONS
RAW
SUGAR
PRO-
DUCED
1,000
TONS
OP BEETS
REQUIRED
TO MAKE
1 KILO-
GRAM
OP SUGAR
KILOS
1888-89
7,896
149,411
28
991
7.97
1910-11
15,749
477,909
33
2,590
6.08
RECENT ECONOMIC PROGRESS 61
of beets has doubled, while the sugar-refining from
beets has increased two and one-half times.
Similar improvement has been made in the live-
stock industry, with the exception of sheep, which
require large pastures for grazing. The number of
swine, on the other hand, rose from 9,206,195 in
1883 to 21,805,073 in 1912. During the same period
the number of cattle rose from 15,786,764 to 20,-
158,738. Impressive as these statistics are, they
fail to tell the whole story because of the great im-
provement in the quality of cattle, brought about
through scientific breeding and the consequent in-
crease in the production of meat and milk.
Germany is far less generously endowed with
natural resources than is the United States. Coal
and iron are plentiful, while salts, zinc, lead, and
copper ores are found in considerable quantities.
In recent years these minerals have been mined and
utilized most economically and form the bases of
the remarkable progress in the manufacture of
finished products. From 1888 to 1913 the value of
mining products, such as coal, ores, and salts, in-
creased from 700,000,000 marks to considerably
more than 2,000,000,000 marks. The coal produc-
tion in 1887 amounted to 76,200,000 tons, with a
total value of 351,300,000 marks. By 1911 the pro-
duction had risen to 234,500,000 tons, and the value
to 1,756,100,000 marks. In 1912 the production
had risen to 254,400,000 tons. Germany is the
62 SOCIALIZED GERMANY
third largest producer of coal in the world, having
almost overtaken England, which a quarter of a
century ago produced more than twice as much
coal as Germany.
The same is true of iron ore, in which production
increased threefold from 1887 to 1911. But the in-
dustrial development of the country outran even the
production of raw materials, and as a consequence
an excess of 9,810,500 tons of iron ore was imported
in 1912.
Pig-iron production increased from 4,024,000 tons
in 1887 to 15,574,000 tons in 1911, an increase of
287 per cent., an increase larger than that of the
United States with its almost untouched ore de-
posits. The United States produced 6,520,000 tons
in 1887 and 24,028,000 tons in 1911, an increase of
268.5 per cent. Great Britain and Ireland, which in
1887 produced more than either of the other two
countries, produced less than either in 1911, her
percentage of increase being only 30.6 per cent.
The same phenomenal progress took place in the
finished product. The steel production of Germany
increased from 954,600 tons in 1886 to 13,698,600
in 1910, an increase of 1,335 per cent. In 1912 it
increased still further, to 15,019,300 tons, the only
other country approximating this increase being the
United States, in which the increase was 910.3 per
cent, from 1886 to 1910.
The enormous potash deposits of Germany,
RECENT ECONOMIC PROGRESS 63
greater than those of any other country in the
world, are another element in her natural resources.
And the production of potash has increased with
phenomenal rapidity. At the end of the year 1910
the production exceeded 8,000,000 tons, worth over
100,000,000 marks, as compared with 1,000,000 tons,
worth 25,000,000 marks twenty years earlier. Phos-
phate from iron ore is also used as a fertilizer, while
the recovery of cyanamide from the atmosphere,
supplying the soil with needed nitrogen, is another
advance in which Germany has made great progress.
Many by-products have been developed by Ger-
man science in the upbuilding of her industries.
These include the substances taken from mineral
coal. The recovery of illuminating-gas in making
coke out of mineral coal was one of the earliest dis-
coveries, as was the utilization of coal-tar, a by-
product in the making of coke. Compounds of
carbon produced from coal-tar are the bases of
many important industries, such as dye-works, phar-
maceutical preparations, etc., in which Germany is
the acknowledged leader.
The industrial progress of Germany is suggested
by the increase in steam-power, which in Prussia
alone expanded more than fourfold from 1882 to
1907, in spite of the competition of other kinds of
motive power. And if we estimate the efficiency of
one mechanical horse-power as equal to the labor
capacity of ten men, the effective horse-power in
64 SOCIALIZED GERMANY
1907 was equivalent to the physical labor of 52,000,-
000 men.
Water-power and electricity have also been
highly developed, along with the gas-engine, in
which development Germany is ahead of other
countries. Many wonderful improvements have
taken place along these lines, by means of which
gases are generated from peat, lignite, etc., which
are distributed through district stations to manu-
facturing plants and transportation systems. Am-
monia is a by-product secured in the conversion of
peat into gas. The utilization of peat for these pur-
poses has opened up a source of power of enormous
extent, especially in the extensive moors of Germany.
This new source of energy is the more important in
that the utilization of peat transforms great stretches
of land into arable territory which had before been
almost worthless.
Science is the handmaiden of industry in Ger-
many, as in no other country. Wonderful develop-
ments have taken place in iron and steel processes,
due to scientific improvements, and iron and steel
are fundamental to the manufacture of machinery,
railroads, bridges, and structures. They are the
bases of modern civilization. Science has co-oper-
ated with industry in countless ways in every line
of industry.
"The compounds of carbon that can be produced
from coal-tar have become the bases of important
RECENT ECONOMIC PROGRESS 65
new industries, in which Germany, owing to its
scientific progress has hitherto enjoyed the unchal-
lenged leadership. It is only necessary to mention
the most important coal-tar products, like aniline
and alizarin dyes, pharmaceutical preparations like
aspirin and phenacetin, saccharine and the various
coal oils." 1
Similar improvements to those made in the work-
ing up of iron and in coal products have been made
in other metals. The application of electricity re-
covered aluminum from the earth and made it into
a great industry. It is of great importance in the
development of the modern air-ship and aeroplane
industries.
"The splendid development in the utilization of
coal-tar has its counterpart in the synthesis of or-
ganic dye-stuffs (artificial indigo), in the chemical
manipulation of wood (cellulose), in the recovery
of cyanamide from the atmospheric air, ... in the
improvements based on progress in biochemistry,
and in the industries based on fermentation pro-
cesses (brewing, yeast manufacture, etc.). 2
In 1912 Germany's exports were 8,900,000,000
marks, of which 5,800,000,000 were in manufactured
goods.
"It would be a mistake, however, to assume that
the increase in our producing capacity in manufac-
tured goods is fully expressed in the gain of exports.
1 Germany's Economic Progress, p. 33. 2 Idem, p. 33.
66 SOCIALIZED GERMANY
General observation and scientific investigations of
a detailed character combine to show that the home
market for our industrial products has developed
even more rapidly than our foreign sales. It would
be rather a too low than a too high estimate if we
assume that the producing capacity of German manu-
facturing industries has been increased threefold in
the past twenty-five years." 1
The progress of German industry has been ac-
companied by concentration of production into
larger and larger units. A far larger proportion of
the workers are now employed in great concerns
than formerly. In 1907 there were 5,350,025 em-
ployees in establishments having over 50 employees,
as against 1,613,247 in 1882 and 3,044,267 in 1895,
an increase of more than threefold from 1882 to
1907.
Consolidation has developed along other lines just
as it has in the United States. Of such consolida-
tions the Krupp works is the greatest example an
establishment which includes coal-mines, coking
plants, iron-mines, smelting-works, steel workings,
ship-building, the manufacture of machines, cannon,
armor-plate, and munitions of war, as well as elec-
trical works, river vessels, and fleets for the high
seas.
The following table indicates the growth in the
more important industries, both as to the number
of persons employed and the steam-power applied.
1 Idem, p. 67.
RECENT ECONOMIC PROGRESS
67
INDUSTRIES
PEBSONB EMPLOYED
1882
1895
1907
PER-
CENT-
AGE
IN-
CREASE
1882-
1907
Mining, smelting, and salt-
works (also wire-drawing
for 1882)
430,134
349,196
459,713
356,089
71,777
42,705
910,089
100,156
121,532
469,695
743,881
1,259,791
533,511
85,394
536,289
558,286
639,755
582,672
115,231
57,909
993,257
152,909
160,343
598,496
1,021,490
1,390,604
1,045,516
147,746
879,600
747,057
905,868
1,171,783
167,670
95,957
1,094,955
225,046
206,313
736,424
1,260,580
1,562,382
1,576,804
243,262
104.5
111.1
97.1
229.1
133.6
124.7
20.3
124.7
69.8
56.8
69.5
24.0
195.6
184.9
Stone and earths
Metal-working
Machinery
Chemicals
Illuminating materials (fats,
oils soap etc )
Textiles
Paper
Leather
Wood and wood- working. . .
Foods, beverages etc..
Clothing trade and cleaning
Building trade
Printing, art reproduction,
etc
STEAM I
>OWER (IN H
. P.)
1895
1907
PER-
CENT-
AGE
IN-
CREASE
1895-
1907
ELECTRICAL
POWER
1907
IN 1,000
KILOWATTS
Mining, smelting, and salt-
works (also wire-drawing
for 1882)
995,069
2,332,968
134.5
422,782
Stone and earths
197,796
503,682
154.7
88,570
Metal-working
142,141
443,224
211.8
128,909
Machinery
184,821
1,215,512
557.7
225,026
Chemicals
83,587
192,905
118.9
42,288
Illuminating materials (fats,
oils, soap, etc.)
Textiles
29,942
515 583
77,265
886,373
158.1
71.7
13,368
75,126
Paper
201 422
412,908
104.9
54,966
Leather
32 377
85,304
163.5
19,302
Wood and wood- working. . .
Foods, beverages, etc
203,235
686,263
346,024
1,185,819
70.3
72.8
56,325
152,763
Clothing trade and cleaning
Building trade
19,235
46,274
54,852
189,117
185.2
308.7
18,999
21,497
Printing, art reproduction,
etc
18 793
35,974
91.4
40,950
68
SOCIALIZED GERMANY
Along with the internal development of the coun-
try has gone a remarkable development of overseas
trade. Germany has reached out for the markets
of the world. In this competition she has rapidly
distanced not only Great Britain but America as
well. The foreign trade has reached colossal pro-
portions in a few years' time. The growth in the
value of exports from 1887 to 1912 in three leading
industries is as follows:
YBAKS
COKE
ANILINE AND
OTHER COAL-
TAR DYES
ARTIFICIAL
INDIGO
1887
Marks
9,400,000
Marks
42,500,000
Marks
6,300,000
1913
126,400,000
133,800,000
45,200,000
In 1912 the foreign trade of Germany amounted
to 19,600,000,000 marks, of which 10,700,000,000
was of imports and 8,900,000,000 of exports. Of
the imports, however, only 1,600,000,000 marks was
in finished goods, the rest being in food products,
raw materials, and semimanufactured goods, upon
which labor was subsequently employed. At the
same time over two-thirds of the exports, or 5,800,-
000,000 marks was in manufactured goods.
Machinery holds the first place in value in the
export trade, and amounted in 1912 to 630,300,000
marks, as compared with 52,800,000 marks in 1887.
The export value of coarse and fine iron goods rose
from 16,000,000 marks in 1887 to 580,980,000 marks
RECENT ECONOMIC PROGRESS 69
in 1912. Motor-car exports amounted to 65,000,000
marks alone in 1912. The value of coal exported
grew from 79,900,000 marks in 1887 to 436,600,000
marks in 1912.
The export values of certain finished and semi-
finished textile goods increased in a scarcely less re-
markable degree, as is indicated by the following
table:
VALUE IK
r MAKKS
1887
1912
Cotton goods
67,300,000
421,600,000
W^oollen goods
177,600,000
253,400,000
Silk goods
16,100,000
190,900,000
34 000 000
84,200,000
17 700 000
64,100,000
The growth of Germany's overseas trade is fur-
ther indicated in the tonnage arriving in German
ports. In 1887 the aggregate tonnage of ships regis-
tering in German ports was 1,675,498, as compared
with 5,917,242 in other European ports. In 1911
the ships registering in German ports had increased
to 5,397,913 tons, as against 15,330,757 tons in
other European ports. In the vessels cleared the
registered tonnage amounted to 1,661,471 in Ger-
man ports in 1887 and 4,467,353 from other ports.
In 1911 the tonnage had risen to 5,495,791 from
German ports, as compared with 8,975,665 from
other European harbors. This tonnage refers only
to merchant vessels carrying cargoes. In 1913 there
were only two ports whose foreign traffic exceeded
70
SOCIALIZED GERMANY
that of Hamburg, and these ports were Antwerp,
whose import and export trade is largely for German
account, and the port of New York. Despite many
limitations, a restricted seacoast and difficult har-
bors, Germany has won a dominant position on the
sea, surpassed only by that of Great Britain.
In the matter of commercial fleets Germany's
proportion of the total seagoing commerce at the
GKOUP OP SAILING AND STEAM VESSELS AND TONNAGE
OF GERMANY, THE UNITED KINGDOM, AND THE
UNITED STATES.
SAILING AND
STEAM VESSELS
i
COUNTRY
YEAR
NUMBER
1,000 REGISTER TONS
Germany :
1885
4 102
1 275 5
1911 . . .
4 732
3 023 7
United Kingdom:
1885
1911
23,662
20 919
7,430
11 682
United States-
1885
23 963
4 265
1912
21,278
4,618 3*
* Gross tons.
STEAMSHIPS
COUNTRY
YEAR
NUMBER
1,000 REGISTER TONS
Germany:
United Kingdom:
United States:
1885
664
2,009
6,644
12,205
5,399
10,309
420.6
2,513.7
3,973.0
10,711.4
1,494.0
2,470.6
1911
1885
1911 . . .
1885
1912
outbreak of the war was far behind that of Great
Britain and considerably behind that of the United
States, although the steam tonnage of Germany
was somewhat ahead of the latter country. But it
is the rate of growth that is most significant, and
RECENT ECONOMIC PROGRESS 71
in this respect the progress of Germany has been
greater than either of the other two powers.
Germany's overseas trade has been accompanied
by a policy of colonial expansion, upon which the
country entered about 1885. England had already
appropriated the greater part of the available
colonial possessions and concessions during her
uninterrupted supremacy on the seas. A similar
policy had been pursued in a more limited field by
France, Italy, Holland, and Belgium. It was in
the face of great difficulties that Germany entered
on a colonial policy, which began in Africa and the
South Seas in a very modest way. By 1913 the
colonial empire of Germany amounted to 2,900,000
square kilometres, about five times the area of the
German Empire, in which there is a native popu-
lation of more than 11,000,000 people. In these
colonies, which are situated in South Africa and the
southern Pacific, the white population is still negli-
gible, being only about 27,000. As a matter of fact,
the colonial policy of Germany has been a failure
even from the point of view of the empire itself.
However, there has been a considerable extension
of railway building and commercial development.
The aggregate trade of the African colonies and
of the South Seas grew from 46,000,000 marks in
1898 to 263,000,000 marks in 1912, while the trade
of Kiao-Chau, the most successful of all German
colonies, rose from 34,500,000 marks in 1902 to
72 SOCIALIZED GERMANY
195,000,000 marks in 1911. But the colonial ex-
pansion of Germany is but incidental to other fi-
nancial and commercial overseas undertakings. Im-
mense sums have been invested in development
projects like the Bagdad railway and the Shantung
railway in China, which opened up extensive regions
and gave promise of developing great sources of
supply for German products. And in this colonial
development, foreign exploitation and merchant-
marine promotion the resources of the whole nation
have been interlocked as a great engine of promo-
tion, including vocational and technical education,
the development of trade-schools and colleges of
commerce, the sending of thousands of trained men
into every section of the globe to familiarize them
with commercial needs, to which is added govern-
mental encouragement of every possible kind.
With rapidly growing industry at home and an
increasing population came the need of creating
"permanent and well-anchored supports beyond
our frontiers." The solid basis of Germany's com-
merce is in her home industry, but to a large extent
she is dependent on foreign parts for the supply of
raw materials for manufacture and markets for the
disposal of her surplus. For the purpose of keeping
foreign markets open to her goods Germany de-
veloped a system of long-term commercial treaties.
That this policy has not altogether satisfied her
needs is shown in the following significant para-
RECENT ECONOMIC PROGRESS 73
graph of Doctor Karl Helfferich, director of the
Deutsche Bank, written in 1913:
"With the negotiation of treaties for securing
the interests of our commerce and shipping, how-
ever, we have not been, and dare not be, satisfied
to stop. Our dependence upon foreign countries,
the counterpart to the great advantages derived by
us from having taken our place in world-economy,
calls for stronger counterpoises. Such a counter-
poise can be created by German enterprise and
German capital establishing a field for their activ-
ity beyond the borders of our country, and thereby
gaining a direct influence over foreign territories
that may be important to us as sources of supply
and as markets. This can be done in an effectual
way by acquiring oversea colonial possessions; for
in such case economic influence is secured and
strengthened in the most effective manner possible
by political domination. In so far, however, as this
way is limited or barred up altogether for when
Germany, after the restoration of its political power,
first cast its eyes over the seas, it found unfortu-
nately that the colonial world was already for the
most part occupied our end must be reached by
means of a far-sighted financial and economic
activity."
Germany's industrial prosperity has been ac-
companied by a great increase in wealth and a gen-
eral improvement in the standard of living of all
classes. In 1870 the standards of the country were,
for the most part, those of agricultural workers, of
peasants, for there were but few large cities and
little industry. Wages were for the most part low,
74
SOCIALIZED GERMANY
the division of labor had not been carried to any
appreciable extent, and the number of workers re-
ceiving substantial incomes was relatively small.
The improvement in the last twenty-five years has
been striking. It is confirmed by such Socialists as
Bernstein. It is evidenced not only in the income-
tax returns but in the per-capita consumption of
standard articles, such as tea, coffee, and cocoa-
beans.
TABLE SHOWING THE CONSUMPTION OF COFFEE, COCOA-
BEANS, TEA, AND RICE
YEAR
COFFEE
COCOA-BEANS
TEA
RICE
TOTAL
TONS
PER
CAPUT
KILO
TOTAL
TONS
PER
CAPUT
KILO
TOTAL
TONS
PER
CAPUT
KILO
TOTAL
TONS
PER
CAPUT
KILO
1886-90.
1912
114,263
168,158
2.38
2.53
4,954
53,601
0.16
0.81
1,912
4,126
0.04
0.06
84,375
161,072
1.76
2.43
The consumption of cotton in the year 1912 was 501,660 tons, or 7.56
kilograms per caput. Germany's Economic Progress and Wealth, p. 124.
The per-capita consumption of cotton increased
from 4.19 kilograms, the average for the years
1886-90, to 7.56 kilograms in 1912, an increase of
80 per cent. Cotton is the most important of all
the raw materials in the clothing trades, and this
increase mirrors the greater variety of wants and
their increasing satisfaction by the people.
The same thing is indicated by the savings-banks
deposits, which in 1888 amounted to 4,550,000,000
marks, while twenty-five years later they had grown
to 18,000,000,000 marks, or an increase of nearly
RECENT ECONOMIC PROGRESS 75
400 per cent. The total deposits for the whole
country in banks, saving funds, and the co-opera-
tive societies increased from 6,500,000,000 marks in
1888 to more than 30,000,000,000 marks in 1913.
Inasmuch as the income-tax system did not be-
come fully operative until 1896, although it was pro-
vided for in 1892, the statistics of income-tax re-
turns are available for only sixteen years. They
show a growth of nearly 100 per cent, in this period.
The total incomes, including those exempt, in Prus-
sia alone, amounted in 1896 to 12,855,261,000 marks.
In 1901 they amounted to 15,347,548,000 marks,
in 1906 17,467,934,000 marks, in 1911 21,629,650,000
marks, and in 1912 22,311,749,000 marks. But even
under the thoroughgoing system of collection which
prevails in Prussia, a certain amount of taxable in-
comes inevitably escapes, which is estimated at 10
per cent, on the total taxable incomes for 1912, or
15,240,000,000 marks. There should be added
1,524,000,000 marks, which should be increased by
further additions, which would raise the aggregate
income for Prussia alone to about 24,000,000,000
marks.
The population of Prussia in that year was about
40,000,000, which would give an average income of
nearly 600 marks per capita, or between 2,500 and
3,000 marks per family. This is about the average
income in the other states of the empire, although
in the Hansa cities, Hamburg, Bremen, and Liibeck,
76 SOCIALIZED GERMANY
it amounts to nearly 1,000 marks per capita, while
in the Thuringian estates it is considerably lower.
The total private incomes for all Germany is esti-
mated at between 39 and 40 billion marks. The
increase in the aggregate income for the past six-
teen years amounts to about 80 per cent., and the
increase in the average per-capita income to about
45 per cent. 1
It is also claimed that the distribution of earn-
ings shows a similar favorable change. From 1896
to 1912 the number of persons in Prussia alone
exempt from taxation, including their dependants,
because their income was less than 900 marks, fell
from 21,066,000 to 16,105,000; while the number of
taxpayers, including their dependants, increased
from 10,283,000 to 24,232,000. In 1896 more than
two-thirds of the people were exempt from the in-
come tax, while in 1912 not quite two-fifths enjoyed
incomes below the exemption point.
Similar increases in taxable income are shown in
the various groups during these years. Thus the
number of taxpayers in the group enjoying incomes
from 900 to 3,000 marks increased from 2,321,000 to
6,123,000, and their total incomes from 3,197,000,000
marks to 8,584,000,000 marks, an increase of about
250 per cent. It was in this group that the greatest
increase is registered. The number of taxpayers
and the total incomes in the group of those receiving
1 Germany's Economic Progress and Wealth, p. 97.
RECENT ECONOMIC PROGRESS 77
from 6,000 marks to 9,500 marks per annum was
nearly doubled.
The wages of miners increased nearly 200 per
cent, from 1888 to 1912. The wages in the mine-
inspection district of Upper Silesia, for instance,
rose from an average wage of 516 marks in 1888 to
1,053 marks in 1912. In the mine-inspection dis-
trict of Dortmund it rose from 863 marks the first
year to 1,586 in the latter year. These figures are
for net wages, after deductions have been made of
the payments for various kinds of insurance, which
have increased greatly during the last few years.
In the Rhenish-Westphalian district the payments
for the various forms of insurance amounted to 204
marks per capita in 1912. Comparing wage in-
creases in Germany with those in England, Doctor
Helfferich says:
"The increase in wage incomes in Germany be-
comes more striking through a comparison with
England: The average yearly earnings of the Eng-
lish coal miner in 1900 amounted to 1,732 marks,
against 1,332 marks for the German miner in the
Ruhr (Essen) district. In the year 1912, on the
other hand, the English average was 1,622 marks,
and the German 1,586 marks. Besides this, the
German figures here given represent net earnings;
whereas the British miner has to pay out of his
earnings all the contributions to various forms of
insurance, except 20 marks a year per caput which
the employers must pay as their average con-
tribution for accident insurance. If we add these
78 SOCIALIZED GERMANY
20 marks to the earnings of the British miner, and
the 204 marks mentioned above as insurance con-
tributions to the earnings of the German miner,
we get an average wage of 1,642 marks for the Eng-
lish miner in 1912, but 1,790 marks for the German
miner in the Ruhr district. The difference in favor
of the German miner in 1912 was therefore about
148 marks, whereas it had been in 1900 also after
taking into account the insurance contributions of
that time 278 marks in favor of the British miner."
These are some of the achievements of peace
under a system of universal military conscription,
which takes every able-bodied man from wealth
production for from two to three years of his most
active life. It was achieved under heavy and in-
creasing tax burdens for naval and military prepara-
tion as well as for education and other purposes.
It was accompanied by colossal expenditure for the
building of the most wonderful cities of the modern
world, the construction of great railway systems,
of thousands of miles of canals and navigable water-
ways, of docks and harbors, as well as millions ex-
pended in unproductive enterprises and activities for
the health and well-being of the people.
How has this been achieved? By what states-
manship has an agricultural state, only emerging
from eighteenth-century feudalism a half century
ago, been raised to a position of commanding in-
dustrial, commercial, and agricultural importance?
How has the face of the nation been changed, its tra-
RECENT ECONOMIC PROGRESS 79
ditional policies and activities reversed, and an in-
dustrial empire erected in a few short years upon
such unpromising foundations? This it will be the
purpose of the succeeding chapters to answer.
CHAPTER VI
THE THEORY AND EXTENT OF STATE
SOCIALISM
AMERICA and Germany have widely divergent
ideas as to the nature and functions of the state.
We emphasize the right of the individual. His prop-
erty and his privileges are jealously protected by
the Constitution and the laws. The powers of the
state are limited. They are carefully enumerated
in the constitution. It is assumed that the state
should have as little as possible to do with business ;
it should leave productive industries to private in-
itiative and should give the individual the greatest
possible freedom on the assumption that this is the
best way to promote the common good. It is gen-
erally assumed, too, that the state is incompetent;
that its functions should be limited to those of
protection from domestic and foreign aggression.
This is the philosophy of individualism, of laissez-
faire; a philosophy born of pioneer conditions and
later written into our organic law. This philosophy
was the product of freedom in America. In Europe
it was a reaction against the feudal conditions
which prevailed prior to the French Revolution.
80
THEORY AND EXTENT OF STATE SOCIALISM 81
There was universal supervision of trade and in-
dustry. Internal and external tariff barriers every-
where prevailed, while privileges and restrictions on
commerce and trade interfered with the freedom of
the individual. France abolished many of these
restraints with the Revolution. The idea of indus-
trial liberty was carried into England and de-
veloped into a philosophy by Adam Smith and
Ricardo, the fathers of political economy in that
country. Later the teachings of these economists
became the working philosophy of the commercial
classes who desired free trade and relief from the
mediaeval restraints on the individual which the
feudal classes struggled to retain.
We in America have carried these ideas to even
greater extremes. As time went on they were crys-
tallized into law and made permanent by our con-
stitutions and judicial decisions. The public opinion
of the nation became identified with this philosophy.
As a nation we still think and act in terms of an
earlier age, just as do the Germans. We, however,
think in terms of pioneer conditions, they in terms
of feudal conditions. We have so weakened the
state that great aggregations of wealth have be-
come more powerful than the community, while
Germany has so strengthened the state as to de-
vitalize the individual.
There have never been any presumptions in
Germany against the state. From earliest times
82 SOCIALIZED GERMANY
great landed estates and forests have been owned
and operated as part of the fiscal system. The
lives and property of the individual have been
regulated with inquisitorial officialism. The state
has been supreme in the eyes of all classes. It has
been feudal, paternalistic, agrarian. There has
been no bill of rights for the courts to construe or
jealous insistence on personal liberty on the part
of the people.
The universities reflect this point of view. They
find a sanction of state socialism in the history and
experience of the country, just as our universities
find a sanction of laissez-faire in the teachings of
Adam Smith, Ricardo, and the statesmen of Great
Britain. Each country has evolved its own political
philosophy from its own experience and self-inter-
est as understood by the ruling classes. English po-
litical economy has never influenced the German
mind as it has the French. Adolph Wagner and
Gustav Schmoller, both leading professors in the
University of Berlin, approve of a wide extension
of state activities, and Wagner has carried his ad-
vocacy so far as to be classed by many with the
political socialists. And public opinion approves
of the subordination of the individual to the state
and the restriction of the play of self-interest when
it becomes harmful to its members. In the mind
of the Germans the functions of the state are not
susceptible of abstract, a priori deductions. Each
THEORY AND EXTENT OF STATE SOCIALISM 83
proposal must be decided by the time and the con-
ditions. If it seems advisable for the state to own
an industry it should proceed to own it; if it is wise
to curb any class or interest it should be curbed.
Expediency or opportunism is the rule of states-
manship, not abstraction as to the philosophic
nature of the state.
This point of view is known as monarchical
socialism, state socialism, or the socialism of the
chair. And all Germany accepts it as the most
natural thing in the world. It is not the opinion
of the ruling class alone. It is the opinion of all
classes. There is almost no dissent to the assump-
tion of state supremacy, of subordination of the
individual, of the necessity for personal and class
sacrifice to the Fatherland, even when the sacrifice
is imposed by a ruling class. The individual exists
for the state, not the state for the individual.
Modern Germany has the social psychology of the
cities of ancient Greece. It is the psychology of the
old feudalism adjusted to new conditions. Life
has changed, but the habit of mind has remained
much as it was in the eighteenth century.
This paternalism does not necessarily mean less
freedom to the individual than that which prevails
in America or England. It is rather a different kind
of freedom. Political freedom, freedom of speech
and the press, and the right of assemblage are not
recognized in Germany; they are not protected by
84 SOCIALIZED GERMANY
the constitution and the laws as an inalienable,
natural right. Rather there is endless supervision of
the individual. Verboten is the law of the land.
The daily life of the German is supervised by count-
less officials under the police power of the state; he
is subject to regulations without number upon his
daily personal acts. The German, however, does
not resent this interference. The rules and regula-
tions are accepted as the rules of the road. They
make it easier for the average man to live; and,
aside from the organized political protests against
electoral abuses, the privileged suffrage, and the
interference with freedom of speech and the press,
there is practically no resentment in Germany against
the paternalistic inquisition into the personal activi-
ties of the people.
In other respects, however, the German enjoys a
freedom far greater than that which prevails in
America and England. This freedom is of an eco-
nomic sort. Privileged interests are kept under
control. There is no favoritism upon the railways
or waterways. Terminals and harbors are owned
by the cities, and water and rail transportation are
accessible to all on equal terms. Through the
ownership of industrial sections, cities offer building
sites to all on easy and equal terms, so that capital is
encouraged to enter any field without fear or favor.
Credit is under control; while the state itself through
its ownership of mines and natural resources keeps
THEORY AND EXTENT OF STATE SOCIALISM 85
the raw materials of production open and accessible
to all on competitive terms. State socialism in-
sures that economic freedom which we in America
have sought to secure through the unrestrained play
of private initiative. Social legislation directed
against the exploitation of the worker and the con-
sumer insures freedom in many other ways. It
protects the defenseless classes from exploitation
and abuse. It safeguards the weak. Universal
education offers opportunities to even the poorest
to advance whether it be in the service of the state
or in the fields of individual effort. Germany pro-
tects industrial and social equality, while America
protects political and personal equality. Her free-
dom is in the economic, ours in the political field.
We find state socialism carried further in the
cities than by the state. And this is where it should
be least expected. For the cities are ruled by the
business men, who have received but scant courtesy
from the landed aristocracy or the ruling classes in
the empire. The dominant note in the cities is
commerce, trade, industry, as it is with us. Despite
this fact and the control which the business men
enjoy through the three-class system of voting, there
is far less exploitation by privileged interests than
in America, far less than in England. The business
men assume the burdens of direct taxation with sur-
prising willingness. They impose progressive in-
come taxes, often rising to 10 or 15 per cent, for all
86 SOCIALIZED GERMANY
purposes, upon their incomes. They impose taxes
on business, land, and the unearned increment of
land values. They burden their cities with in-
debtedness to make them beautiful and livable and
spend generously for education and other purposes.
They have municipalized the street railways, gas,
electric-light, and other public-service corporations
and have entered into municipal land speculation
and house-building activities in competition with
themselves. Cities own banks. They regulate pro-
perty for the good of all and the protection of
posterity. They build and plan for the future with
a big vision of the city as does no class in any cities
in the world.
This acceptance of control, of regulation, of state
socialism is indicative of the point of view of Ger-
many. It is not a patriotism for the Kaiser alone.
It is a patriotism for the Fatherland. With such a
background and with such a conception of the rela-
tive importance of public and private rights, it is
easy to understand why state and municipal socialism
have developed so rapidly in Germany during the
last quarter of a century.
The entrance of the state into industry has been
simplified, it is true, by the fact that the ruling class
is the landed aristocracy. The great estate owners,
or Junkers, did not own the railways or the public-
service corporations of the cities. They were not
interested in manufacturing or commerce. They
THEORY AND EXTENT OF STATE SOCIALISM 87
live on their estates and have but little interest in
industry. Nor have they married into the com-
mercial aristocracy as they have in England, where
the landed aristocracy has been merged with the rail-
way, financial, and capitalist classes. The Junker
has always kept aloof from commerce, for which he
has little real respect. As a consequence there was
no conflict of interest in the determination of policy.
The dominant political class has not been opposed
to state socialism, so long as state socialism did not
interfere with its own privileges and property.
Finally, Germany did not emerge into an in-
dustrial state until after the Franco-Prussian War.
The traditions of feudalism continued long after
they had passed away in France, England, and those
parts of Europe where the French Revolution exerted
an influence.
With such traditions as these it was perfectly
natural for the state to undertake new activities
and tighten its control over individuals or corpora-
tions whose actions were inimical to the state. If
the state could own great estates and manage them
at a profit, if it could care for its people in time of
distress, why should it not perform other functions,
which in modern times lie close to the life and well-
being of the state, especially when the things to be
owned and the interests to be regulated were the
property of a class which was but scantily represented
in the councils of the nation.
88 SOCIALIZED GERMANY
Added to these considerations is the fact that the
civil service in Germany is very efficient. It is also
permanent. Government service is the goal of all
classes. The official service is recruited from the
best talent of the nation. Admission to responsible
positions in the civil service is only open to those
who have pursued collegiate or engineering training
followed by the severest kind of examinations.
Titles are universal and are scrupulously observed,
even if they be of an insignificant sort, while a system
of universal pensions gives assurance to government
employment that adds much to its attractiveness.
There are a hundred trained men seeking admission
to every governmental opening. The majority of
the candidates have been preparing for the service
from the time they departed the secondary schools,
and in the majority of instances they have con-
sciously directed their education to a particular field
of activity. Men are not educated democratically
for any career as in America. They do not turn
their hand from one occupation or profession to
another. Rather they are trained, in a killing com-
petition, to the particular employment in which they
make a start. Rarely is there an opportunity to
turn back once the decision is made. And in the
government service the choice is only to go forward
or drop in the pace, and in many cases failure means
suicide. For suicide is common among the edu-
cated proletariat of Germany. With such a civil
THEORY AND EXTENT OF STATE SOCIALISM 89
service as this, Germany has been equipped to
undertake any activity and to carry on any under-
taking.
There is no clearly defined line of demarcation
between the industries that should be socialized
and those that should not. All forms of transpor-
tation are in the hands of the state, including the
railways, canals, waterways, docks, harbors, ter-
PROPERTIES OWNED
CAPITAL VALUES
NET PROFITS PROM
OPERATION
Farms
$198,122,725
$7,925,309
Forests
730,898,200
29,235,928
Mines
128,907,725
5,116,309
Railways
4,706,904,750
189,916,190
Telegraphs
Telephones .
694,816,650
27,792,666
Express
Mails
Other works
435,184,900
17,407,476
Total
$6,894,834,950
$277,393,878
minals, telegraphs, telephones, and express business.
Coal, iron, and potash mines are operated, while
great forests and agricultural lands have been owned
by the states and cities from very early times. In-
dividual states own porcelain manufactories, banks,
lotteries, baths and mineral springs, amber works,
and breweries. The state printing works produced
a revenue of $800,000 in 1913, while the shares owned
in the Imperial Bank yield a substantial sum.
Prussia is the largest single mine and mineral owner
90 SOCIALIZED GERMANY
in the kingdom, and in 1906 operated 36 mines, 12
smelting-works, 5 salt-works, 3 stone-quarries, and
1 amber works.
The total capital value of the principal activities
owned by the empire and the states is approxi-
mately $7,000,000,000, and the net annual profits
are nearly $300,000,000, distributed as shown in table
on page 89. 1
The field of socialization is being constantly
extended. In 1908 the Prussian Diet appropriated
$15,000,000 for the sinking of new coal shafts, while
in the building of the Weser Canal from the Rhine
to Hanover $5,000,000 was set aside for the purchase
of land on both sides of the canal way so that the
community could retain the unearned increment
from the increase in land values which the building
of the waterway created. In addition by the owner-
ship of the riparian property the whole development
could be so planned as to provide factory sites
and distribute industry and population over a large
area admirably suited for manufacturing and at the
same time so distribute population as to prevent
the appearance of bad housing conditions. The
government of Saxony has proposed the erection of
large cast-steel works for the making of rails and
other material needed, by the state-owned railway
lines.
The Post Office Department operates savings
1 Roberts, Monarchical Socialism in Germany, p. 7.
THEORY AND EXTENT OF STATE SOCIALISM 91
banks, and millions of persons have checking ac-
counts with the post office the same as with a private
bank. The German postman takes orders for dry
goods, groceries, and other commodities at the door
and later delivers them at a nominal charge. The
parcel post is universally used for the distribution
of products of all kinds. It is a great marketing
agency, and through it many hundreds of thousands
of people purchase their food supplies directly from
the farm. To such an extent has public banking
superseded private banking that 92 per cent, of all
deposits are in public institutions. Cities also
operate pawn-shops as an aid to those in distress
and have done so for generations.
Bavaria has insured her farmers against fire, hail,
and the loss of live stock for generations. At the
present time about $20,000,000 of property is in-
sured by the state against fire, while 142,000 farmers
are insured against loss by hailstones to the extent
of $57,500,000. Cities also carry on the fire-insur-
ance business. Recently the state and local author-
ities have begun the development of hydroelectric
plants. Some years ago a group of rural districts
determined to unite for the purpose of erecting a
central power station to serve a district in Cassel.
A representative of the government appeared and
announced that the state had decided to carry out a
similar project; so the local plans had to be dropped.
The government project involved the construction
92 SOCIALIZED GERMANY
of a large overland station to serve the northern
part of the Province of Hesse and the southern part
of the Province of Hanover, the water-power to be
obtained from three sources. The most important
electric-power project is that of the Bavarian govern-
ment for utilizing the water of the Bavarian high-
lands for the supply of electric light and power to all
parts of the country. The government does not
plan to carry out this scheme itself, but formulated
the general features of the proposal and left the exe-
cution of the various works to others with the object
of securing co-ordinated action and a proper regard
for the public interest. Not only is power to be
supplied for industrial, agricultural, and domestic
purposes, but several lines of state railways are to
be electrified as well.
The number of employees in the imperial and
state service is growing every year. In 1908 it was
about 3,000,000. There were then 563,684 in the
railway service, 309,026 in the posts and telegraphs,
390,005 in police and diplomatic, and 125,980 in
forestry and game-preserving. 1
Immense profits are realized from these activities.
In 1908 the profits of the empire and of the states
composing it amounted to $277,285,095. In 1911
the profits amounted to $282,749,224. These earn-
ings are used to reduce the burdens of taxation. The
combined federated states secure 38 per cent, of their
1 Berry, Germany of the Germans, p. 47.
THEORY AND EXTENT OF STATE SOCIALISM 93
total revenues from their enterprises, while, including
the imperial government, one-fourth of all the cur-
rent needs of the combined governments are derived
from business undertakings. Of the larger states,
Bavaria secures 39 per cent, of its revenue from in-
dustrial undertakings, Wiirtemberg 38.7 per cent.,
and Prussia 47.56 per cent.
Herein is one explanation of the relative ease with
which Germany supports the colossal expenditures
for war and armament as well as the appropriations
made in recent years for internal improvements.
With from 35 to 50 per cent, of the state revenues
obtained from industrial pursuits, the task of the
financier is greatly simplified in comparison with
that of surrounding countries. When to this is
added the ownership of a controlling interest in the
Imperial Bank and the actual control of over 90 per
cent, of the savings of the people deposited in mu-
nicipal banks and the postal system, the credit opera-
tions of the empire are still further facilitated. The
railways are part of the state, as are the express and
telegraph business, while the mines supply fuel at
the cost of production. Thus the state is almost
self-contained, so far as its more important functions
are concerned. It is not improbable that the am-
bitious undertakings of recent years would have been
impossible but for these contributing factors, which
greatly simplify the problem and relieve the financial
burden. Germany's military prowess would prob-
94 SOCIALIZED GERMANY
ably have been out of the question without the aid
of these socialistic services, while her industrial and
commercial advancement would have been difficult
if not impossible of achievement.
CHAPTER VII
THE STATE-OWNED RAILWAYS
No single agency has done more for the develop-
ment of Germany than the state-owned railways.
They have aided in welding the twenty-six states into
a nation and have contributed in countless ways to
the upbuilding of domestic industry and foreign
commerce. Their strategic value in time of war has
been demonstrated in the present European conflict.
The first German railways were built by private
capital under concessions from the individual states,
although Prussia had begun to experiment in this
field as early as 1850. But private operation was
never satisfactory and, following the war with France,
Bismarck urged the acquisition of the railways by
the empire. At this time the railways of Bavaria,
Saxony, Baden, and Wiirtemberg were for the most
part owned by these states, and they, jealous of the
ascendancy of Prussia and appreciative of the value
of their possessions, declined to acquiesce in Bis-
marck's proposal. But Bismarck persevered in his
policy. He saw in the railways a means for the con-
solidation of the nation as well as a military agency
of great strategic value. In addition, through cen-
95
96 SOCIALIZED GERMANY
tralized management, the chaos of state and local
rates and charges would be brought to an end.
The refusal of the states to transfer their systems
to the empire led Prussia to develop her own system.
Most of the more profitable lines were in private
hands, and by reason of the monopoly and large
earnings which the companies enjoyed they were
disinclined to extend their systems to meet the in-
dustrial revival which followed the Franco-Prussian
War. This and the obvious profitableness of the
railways led to the appointment of a committee by
the Prussian parliament to investigate the whole
matter, which committee subsequently reported
that it was desirable from every point of view that
all the railways should be nationalized.
Parliament took the first steps in this direction in
1873, first by the enlargement of the existing state
system, and second by the acquisition of the lines
of a considerable number of private companies.
From this time on nationalization was rapid, the
negotiations for the most part being carried on in a
friendly spirit, for many of the shareholders were
agreeable to the sale. The original concessions to
the companies contained reservations under which
it was possible for the state to acquire the lines upon
a valuation ascertained from a capitalization of the
dividends earned during the ten years prior to pur-
chase, or in case the roads had not been in operation
for so long a period then the dividends earned during
THE STATE-OWNED RAILWAYS
97
the preceding three years were taken as a basis of
purchase. If no dividends at all had been earned then
other evidences were to be used to ascertain the value.
This would seem to be a generous basis for ac-
quisition, but inasmuch as many of the roads were
acquired by the state in the early years of their
working, and as their rates and charges were subject
to regulation, the states, and especially Prussia,
were often able to buy advantageously and at a low
price. However, in most instances the stockholders
were treated fairly, and in many instances preferred
to exchange their securities for those of the state.
Proceedings similar to those of Prussia were taken
by other states, until at the present time over 90 per
cent, of the railway mileage of Germany is owned by
the several states, the remaining 10 per cent, being
in private hands. The latter holdings, however,
are for the most part confined to unimportant lines
and light railways. The growth in mileage of the
states in the empire from 1875 to 1910 is as follows: l
YEARS
LENGTH OF FULL-GAUGE
LINES
LENGTH OWNED BY
STATES
1875
17 483 miles
1880
21,028 "
13,888 miles
1890
26 136 "
18,738 "
1900
31,049 "
28,570 "
1910
36 894 "
34,596 "
As to the general efficiency of the German railways
there is no dispute. The service is excellent, the
1 Dawson, Industrial Germany, p. 50.
98 SOCIALIZED GERMANY
equipment is of a high order, while the comfort and
convenience of the public is considered in every
possible way. Accidents either to passengers or
employees are of infrequent occurrence. Trains
arrive punctually, while the stations are spacious
and are usually among the most imposing structures
in the city. Passenger fares are low and are ad-
justed to the purse of all classes, while the profits
from operation are so large as materially to reduce
the burdens of taxation.
, The Prussian railways are the best equipped and
best managed of any in the empire, if not in Europe.
The capital invested has increased from $370,000,000
in 1879 to $2,709,150,000 in 1910. A large part of
the capital investment has been earned by the rail-
ways and devoted to the extension and betterment
of the service. The net profits from operation, after
deducting interest on the indebtedness and making
ample provision for depreciation rose from $10,000,-
000 in 1882 to $140,000,000 in 1906.
When the railways were first acquired the fear
was expressed that the government had entered
upon a hazardous financial experiment, but W. H.
Dawson, a thorough student of modern Germany,
says the transaction has proved to be "a brilliant
stroke of business if not the most brilliant ever trans-
acted by a modern state." 1 Continuing he says:
" It is in the domain of railway ownership and ad-
ministration that the state has achieved its greatest
1 Dawson, Industrial Germany, p. 55.
THE STATE-OWNED RAILWAYS 99
success. It has been estimated that since they
passed into the national possession the German rail-
ways have provided $750,000,000 of revenue. The
profits are perhaps swelled by the low wages paid to
inferior grades of labor and because there are so many
females in the railway service. But the state tries
to make up for this by providing houses at low rents,
free garden-plots, pensions, bonuses, holidays, etc.
It must be admitted, however, that the wage ques-
tion is still a sore one and is agitated as much as
possible under the strict system prevailing, which
allows no strikes in this branch of the state service.
There is always a temptation to work the railways
for more revenue in these days, but on the whole the
governments keep well to the front the interests of
traffic and commerce." 1
The Prussian state railways are the most profitable
of any in the empire and earn approximately 8 per
cent, on an actual cash investment of $2,700,000,000.
The net profits from operation in 1911 amounted to
$178,000,000 or more than twice the income from
taxes, which was $85,000,000. 2 This sum went into
the state treasury and reduced taxation to that
extent or was used for other public purposes.
Summarizing his opinion of the operation of the
Prussian state railroads, Mr. Carl Vrooman says: 3
"Unquestionably the Prussian state railways have
made the best showing financially of any government
1 Dawson, idem.
2 Roberts, Monarchical Socialism in Germany, p. 4.
8 Vrooman, American Railway Problems in the Light of European
Experience } p. 160.
100 SOCIALIZED GERMANY
railways in the world, in spite of the fact that the
state management has given to the people of Prussia
the best and safest transportation service on the
continent of Europe and has charged for this service
as little if not less than has any continental railway
system. At the same time the Prussian state rail-
way system during the last quarter of a century has
brought into the state treasury every year enormous
sums of money as profits. Indeed there is criticism
on many sides that the results have been too brilliant;
that industry should not be taxed to relieve general
taxation. "
By 1905 the Prussian railways had paid into the
treasury, as profits, more than enough to pay off
every cent of railway indebtedness, including interest,
leaving the great system with all equipment as a net
asset in the hands of the state. This, too, was in
spite of the fact that many unprofitable extensions
have been constructed which private capital prob-
ably never would have attempted.
A paper read by Professor Herman Schumaker,
professor of political economy at the University of
Bonn, in January, 1912, before the Royal Economic
Society, describes the results that followed national
operation.
"The result of all these economies," he says, "is a
magnificent one. The aggregate revenue of the
Prussian State Railways has risen, during the twenty-
five years from 1883-1908, from 536,000,000 marks
to 1,910,000,000 marks, or from 34,503 to 52,795
marks per kilometre of railway track. Although
THE STATE-OWNED RAJLWA.YS 101
the expenses both of the staff and of the stock and
plant have increased very considerably (the cost
per kilometre per axle was 5.43 pfg. in 1895 and 7.4
pfg. in 1908), nevertheless the gross working profits
have increased from 222,000,000 marks in 1883 to
548,000,000 marks in 1908; so far, the maximum
obtained was, in 1906, namely 698,000,000 marks.
"These extraordinary working profits, which in
the aggregate amount since the nationalization of
the railways to a total of nearly 12,000,000,000
marks, have greatly benefited the Prussian State
Railways. They enabled them to meet nearly the
whole of the cost of construction of existing railways
out of current revenue. In fact, one may say that
all expenses necessary for the maintenance and
preservation of railway property have been met out
of current revenue. This continual capitalization
of the net profits has rendered unnecessary any
writing off to make due provision for the main-
tenance of the property. The present aggregate
value of the Prussian State Railways not only equals,
but exceeds the whole amount of capital taken up
on loan by the Prussian State for the purchase and
development of the railway system. When, never-
theless, a redemption of the loan has taken place,
and will be further increased in the future, that is
done not for the preservation, but for the augmen-
tation of capital. In contrast to the overcapitali-
zation of many foreign railways, the object aimed at
and achieved has been the undercapitalization of
the Prussian State Railways. This is the solid
foundation on which the Prussian railway finance
is based.
"But this does not exhaust the financial success
of the Prussian State Railways. Although, as has
been pointed out, it was by no means the original
102 SOCIALIZED GERMANY
intention, railways have nevertheless become, under
the combined influence of the above-mentioned fac-
tors, a considerable source of revenue to the State.
A total of nearly 3,000,000,000 marks has been
placed at the disposal of the Prussian Government
for other State purposes out of the surplus of the
railways. It is true that in consequence of the
varying conditions of trade the figures are liable
to great fluctuations, and therefore involve certain
risks to the State, which have not always been met
effectively by the Prussian financial administration,
but this does not detract from the momentous
advantage that, thanks to its railways, the Prussian
State was in a position to participate financially at
once in the great rise of prosperity in German
industrial life. Hence, the fact, that Prussian
finance presents, on the whole, such favorable con-
ditions, is largely due to the Prussian State Rail-
ways."
The railways of the other states are likewise
profitable, although, with the exception of Saxony
and Bavaria, these states contain comparatively
few cities and relatively little industry. In 1911
the Bavarian railroads earned 4.5 per cent, on the
outstanding loans; Saxony, 5.4 per cent.; Wurtem-
berg, 3.4 per cent.; and Baden, 3.8 per cent. 1
The proportion of the state income derived (1)
from the railroads, (2) from other state-owned prop-
erty, and (3) from taxes in the more important
states is indicated by the following table : 2
1 Dawson, Industrial Germany, p. 55.
2 Statistisches Jahrbuch, 1913, p. 345.
THE STATE-OWNED RAILWAYS
103
STATE
FBOM
RAILROADS
OTHER STATE-
OWNED PROP-
ERTIES AND
OTHER SOURCES
OF STATE IN-
COME
TOTAL TAX RE-
CEIPTS
Prussia
Marks
539,954,000
Marks
118,000,000
Marks
495,763,000
Saxony
44,608,000
15,020,000
90,890,000
Wiirtemberg . . .
Baden
21,281,000
29,869,000
21,319,000
5,479,000
54,633,000
57,009,000
From the above it appears that 57 per cent, of
the income of Prussia is derived from productive
industries owned by the state, and 46 per cent, from
the railways alone. In Saxony, 29 per cent, of the
revenue of the state comes from the railways, in
Wiirtemberg, 22 per cent., and in Baden, 32 per cent.
When it is considered that the income taxes are the
largest single source of state and local taxation,
it is easy to understand the universal approval of
public ownership even in a country as completely
governed by the landed and capitalist classes as is
Germany.
But the financial success of the railways, re-
markable as it is, is of secondary importance. "I
do not regard railways," said Bismarck, "as in the
main intent, to be the object of financial competition;
according to my view, railways are intended more
for the service of traffic than of finance, though it
would, of course, be foolish to say that they should
not bring financial advantages."
It is difficult to overstate the extent to which the
104 SOCIALIZED GERMANY
railways have contributed to the upbuilding of
Germany. The casual traveller sees but little of
this, the reports only scantily suggest it, and the
mere statement that the underlying motive of
operation is service, conveys but little idea of the
extent to which the industrial and social develop-
ment of the country has been promoted through the
railways. The very life of the nation is, in fact,
woven into the transportation agencies, which are
not operated as a separate, detached thing, but are
related to every need of the empire and are con-
sciously administered to serve its destiny.
" German railroads," says an English observer,
"have largely contributed to the prosperity of Ger-
man industry; the British railways have largely con-
tributed to the decay of British industries. In
Germany trade policy is made by trade; in Great
Britain it is made by the railroads, which, without
consulting the trade, prescribe its course, stimulating
it here and stifling it there." 1
Such struggles, as almost every American city
has experienced in order to secure even tolerable
terminal facilities, betterments, or service, are in-
conceivable in Germany. In place of hostility and
conflict, the state anticipates industrial and mu-
nicipal needs. The harbors and water-fronts are
operated in closest harmony with the railway ter-
minals, which are planned as a co-operating unit in
1 Eltzbacher, Contemporary Review, February, 1905.
THE STATE-OWNED RAILWAYS 105
the industrial programme. Great factory areas
are laid out with sidings and switches. The ap-
proaches to cities are not disfigured with unsightly
cuts and surroundings; rather they are sodded and
parked and made as unobtrusive as possible. The
stations of cities like Frankfort, Cologne, Dresden,
and Hamburg, are of splendid architecture, with
artistic overhead approaches which disfigure but
little the beauty of the city. Frankfort, a town of
400,000 people, has a station erected many years ago
at a cost of $10,000,000, when Frankfort was a small
town. There are no grade crossings. The tracks
are raised or depressed as necessity requires. Every-
thing is built for permanence and with provision for
safety. There are very few accidents. "German
railway trains arrive nineteen times out of twenty
to the minute because the government punishes
severely those responsible for the delay." 1
New lines are built when needed, even if they are
not profitable, for the convenience of the people or
the upbuilding of an industry or a territory. Nor
do localities or industries interfere unduly with the
administration in their efforts to secure favors or
special privileges. This is checked by the active
participation of representatives of chambers of
commerce and agricultural bodies in the actual
administration of the system.
Under private operation the companies showed
1 J. Ellis Barker, Modern Germany, p. 460.
106 SOCIALIZED GERMANY
a tendency to give low rates on foreign goods des-
tined to inland points because of the competition
of the waterways. This policy was reversed by the
state, and where discriminations are now made,
they are in favor of German rather than foreign
shippers. In order to attract trade to German sea-
ports, low rates are granted on goods from Hungary
or Russia, passing through Germany and destined
for England. The nearest and most natural ports
for the busy manufacturing districts of Westphalia
are those of Rotterdam and Antwerp, and if railway
rates were fixed solely by distance, Hamburg and
Bremen would find difficulty in competing with the
Dutch and Belgian ports, so far as the traffic of
Westphalia is concerned. The result would be a
loss of business both to the German railways and
German ports to the benefit of foreign railways and
foreign ports. In order to prevent this the "Prus-
sian railways concede exceptionally low rates from
various manufacturing centres in Germany, and
especially in the Rhine district, for goods conveyed
to Hamburg and Bremen." 1
These examples are indicative of the studied co-
operation of the railways with industry. Several
years ago, when there was a poor fruit harvest in
Holland, German fruit-growers sent large quantities
of fruit to Dutch preserve makers, being helped to
do so by the exceptionally low rates on the Prussian
1 Pratt, Railways and Nationalization p. 262.
THE STATE-OWNED RAILWAYS
107
railways to the Dutch frontier. The next year
fruit was plentiful in Holland, but scarce in Germany,
and the Dutch traders expected to profit by the low
rates of the year before. Instead, they found the
rates raised to a prohibitive point to protect the
German traders. 1 During the industrial depression
in 1908, the railways lowered freight tariffs 64 per
cent, in order to encourage export trade which was
suffering with that of other countries. 2
In the same way export trade is fostered by
lower rates on goods destined for abroad than for
home consumption. In general, the rate on goods for
export is as low proportionately for parcels as it is
for carload lots shipped from one part of the coun-
try to another. The following table illustrates this
difference, with regard to a few representative lines
of goods: 3
IN 10-ToN LOTS PER METRIC TON
EXPORT RATE
NORMAL RATE
Cotton goods, Cologne to Ham-
burs
$3.64
5.83
2.53
$6.38
9.33
4.86
Toys, Nuremberg to Hamburg. .
Machinery and machine parts,
Cologne to Hamburg . ...
In many cases, special rates are made to encourage
a new industry. For instance, a man finds sand
which he thinks suitable to the manufacture of glass.
1 Pratt, supra. 2 British Consular Reports, 1899.
3 E. Roberts, Scribner's Magazine, February, 1911.
108 SOCIALIZED GERMANY
He desires to start a manufacturing plant, provided
he can secure the necessary combination of chemi-
cals, coal, etc. He first places the matter before
the local Chamber of Commerce, which in Germany
is a semiofficial organization. If the proposal meets
with approval, a recommendation is made to the
railway authorities for special rates, who make a
fresh examination, and if they approve a special rate
is granted. In this manner the industry of the
Siegerland district is stimulated by a reduction in
the rate on ore to the Ruhr and Aix-la-Chapelle
districts and in the rates for the conveyance of fuel
needed by the Siegerland iron industry. In the
same way the disadvantage of the inland position
of Lorraine is minimized by special railway rates. 1
In fact, 66 per cent, of all the freight carried on
the German railways is taken under exceptional
rates, designed in almost all cases to meet some in-
dustrial need. 2 Mr. Elmer Roberts states:
"All the devices (rebates, special rates, etc.) so
passionately hated here (U. S.) are applied there,
but with this difference that while in Ajnerica
these devices are suggested, even necessitated by
the war of interests or the will of the individual
managers, they are applied in Germany according
to principles of equity which take into account in-
dustry, trade and agriculture as a national whole,
granting exceptions, taking one sort of traffic as
privileged, another as normal, upon calculations
1 Dawson, Industrial Germany, p. 58.
2 Roberts, Monarchical Socialism in Germany, p. 31.
THE STATE-OWNED RAILWAYS 109
wide enough to include the interests of the whole
people. " l
The Prussian minister of public works stated in
the lower house in April, 1912:
"I intend to be always in the first place a Min-
ister of Communications, though, at the same time
I must as a minister take account of the financial
well-being of the state. Like Bismarck, I regard
the railways as primarily a transport institution
and not as a milch cow, and I shall never administer
my department in a purely fiscal spirit." 2
Secret discriminations between individuals or
corporations seem to be unknown in Germany.
Neither is one city developed at the expense of an-
other, except in so far as it is to the advantage of the
whole community to grant special privileges for the
development of trade or commerce. The Prussian
Cabinet made the following statement in 1879 upon
this subject:
"The granting of these secret advantages in the
most diversified ways to individual shippers, and
in particular the so-called rebate system, is the most
injurious misuse of powers granted to railroad cor-
porations. It renders government control of rates
impossible, makes competition between different
lines, as well as that of the shippers dependent upon
them, dishonorable and unfair, carries corruption
among the railroad employees, and leads more and
1 Roberts, "German Railway Policy," Scribner's Magazine, Feb-
ruary, 1911.
2 Dawson, Industrial Germany, p. 56.
110 SOCIALIZED GERMANY
more to the subordination of the railroad manage-
ment to the special interests of certain powerful
cliques. It is the duty of the government to oppose
this evil, to uphold the principle of the equal treat-
ment of all snippers, and to enforce the legislative
regulations on this subject. The importance of this
problem is only equalled by the difficulty of its
solution." 1
Many special services are performed to aid
shippers. For instance, the railways undertake
to be responsible for the delivery of a shipment, so
that when the consignor has paid the freight, he
need have no more worry about the goods than if
he had sent a stamped letter through the mails.
The railway also obtains for the shipper a bill of
lading when the goods are placed aboard the steamer,
on which he may receive his money. 2
Easily understandable tariff rate-books for com-
bined rail and sea routes are prepared by the rail-
way authorities. They are so simple that any lay-
man can understand them and so complete and
accurate that the merchant can tell the exact price
of shipment of any kind of goods from his city to any
part of the world. 3
Nor have the financial gains of the state led
to indifference to improvements. "Reduction of
freights and the growth of profits have not been at
1 Frank Parsons, The Heart of the Railroad Problem, p. 316.
2 Roberts, "German Railway Policy," Scribner's Magazine, Feb-
ruary, 1911.
8 Roberts, Monarchical Socialism, p. 26.
THE STATE-OWNED RAILWAYS 111
the expense of technical improvements. In the
matter of size of cars, tunnels, terminal facilities, in-
troduction of steel cars, etc., the state railways of
Prussia are making greater progress than other rail-
ways of Europe. Better equipment and improved
terminal arrangements are being introduced side by
side with the reduction of rates and increased profits.
Where the traffic is dense, special depots for par-
ticular freight are provided, instances of which
are the cattle depot and fuel depot of Berlin. The
block system is almost universal." 1 Despite these
services, traders are continually complaining that the
government is making too much money out of the
railroads instead of forwarding goods faster, provid-
ing more trains, etc.
All railroad employees are in the civil service.
There are no political appointments or favoritism.
The higher officials are required to have a university
or technical school education before they may even
take an examination for the service. Engineers
must have had a thorough technical education and
must have practised their profession for eight or
ten years in private employment, before they are
qualified to take the second examinations required
by the state. 2
Prussia and some of the other states are preparing
plans for the electrification of the railroads. The
1 Vrooman, American Railway Probkms in the Light of European
Experience, p. 122.
2 Vrooman, supra, p. 273.
112 SOCIALIZED GERMANY
former state has already electrified a portion of the
line from Magdeburg to Halle. Power is produced
at a central station erected near the coal-mines, and
the government has made a contract for cheap
power for thirty years. The improvement has
proved so successful that the government is now
about to electrify 160 miles of railway in the Silesian
hills district. The states of Saxony and Bavaria
are likewise planning to electrify some of their lines.
The Saxon government has bought coal-mines at a
cost of $11,500,000 with the object of having at its
command an abundance of cheap fuel.
The policy of service is followed in passenger as
well as freight rates. Low rates are made from the
cities to the suburbs. Cheap transportation is also
offered on Sundays and holidays in order to carry the
people to the country. Excursion trains run third
and fourth class coaches which are filled to over-
flowing with men, women, and their families bound
on a holiday. The railways are used far more
generally in Germany than in the United States.
People ride more frequently and on the whole more
universally, despite the higher standard of life in
this country. In 1901 the passenger traffic per
kilometre was 413,820 in Germany, as compared
with 89,721 in the United States. The average
income per mile per person of the railways was
$.0103 in the former country and $.0206 in the latter.
In other words, the average fare per mile in America
THE STATE-OWNED RAILWAYS 113
was exactly twice what it was in Germany. The
average ton-mile freight rates, however, are nearly
reversed, the rate on freight traffic per ton per mile
in Germany being $.013 and in the United States
$.0076. It is difficult, however, to draw conclusions
as to the relative cost to the shipper or the public
in the two countries, because so large a part of the
railway freight traffic in America is made up of raw
materials, like coal, iron ore, lumber and building
materials, and foodstuffs, which in Germany are
transported by water at a very low rate. A fairer
comparison would be by classified articles.
It is repeatedly urged by American railways
that the average freight rate in this country per ton
mile is very much lower than in Europe, and that
while the earnings of our railways in 1910 averaged
$10,769.40 per mile, if the European rate had been
charged, they would have been $14,580 per mile. 1
And it is constantly asserted that the ton-mile rates
in this country are but half what they are in Ger-
many.
Again it is impossible to accept any single factor
in making comparisons of transportation costs. There
are scores of elements which must be taken into
consideration, such as switching and forwarding
charges, demurrage, and the like. As against these
debatable comparisons is the fact that the total
traffic earnings of the American railways in 1911
1 B. S. Winchell, Atlantic Monthly, December, 1912.
114 SOCIALIZED GERMANY
(exclusive of passenger traffic) was $2,168,000,000,
or $23.35 per capita, or $116.75 per family of five
persons. During the same year the total freight
earnings of the German railways were $516,303,000,
or $8 per capita, or $40 per family of five persons.
This is the relative burden of railway freight charges
in the two countries. In Germany, freight trans-
portation costs each person about one-third as much
as it costs the average American, despite the alleged
lower ton-mile charges in this country. In addition,
it should be borne in mind that the German railways
contribute $160,000,000 a year in profits which are
used for the relief of taxation, which is included in
the traffic burden of the German consumer. As
against this, however, there should be deducted the
taxes paid by the American railways to the State
and National Government which taxes are not paid
in Germany.
This but indicates the difficulty of arriving at any
exact basis for the comparison of freight rates in the
two countries. There are so many factors involved
that are not included in the comparison. It may
at least be claimed for the German system that all
of the earnings go to the state in some form or other.
There are no watered securities, no favored con-
tractors, no semicriminal financing, and no attempt
to exploit an industry or a community for the benefit
of stockholders.
I have travelled many thousand miles on the
THE STATE-OWNED RAILWAYS 115
German railways during the past twenty years and
never, so far as I can remember, were the trains
more than a few minutes late upon arrival or de-
parture and I have always been able to secure a
seat. The average rate of fare for a second-class
ticket, which is a better service than the ordinary
coach in America, is 1.8 cents, while the third-class
tickets average 1.1 cent a mile. The first-class
rate is 2.5 cents a mile. An additional charge is
made on express-trains which range from 6 cents
to 50 cents, depending on the distance and the class
in which the person travels.
The head of the state railways in Prussia is the
minister of public works, a permanent salaried
official appointed by the King. The principal
supervisory authorities are the Bundesrat, or Im-
perial Senate, and the Reicheisenbahn Amt, the
members of which are appointed by the Emperor.
The latter body exercises general supervision over
the entire system and sees that the various regu-
lations and enactments are carried out.
In spite of the fact that the railways are owned
by the individual states the administration is under
imperial control. There is no conflict between the
various states.
"The Constitution of 1871 provided for uniform
operation of the railways as part of a co-ordinated
system. That instrument specially reserved to the
Empire the right to exercise supervision over all
116 SOCIALIZED GERMANY
the railways and legislate regarding them in the
twofold interest of national defense and general
traffic facilities. The Federal Governments are re-
quired to administer the railways of the country as
a uniform system in the interest of the general con-
venience and in furtherance of this idea to con-
struct new lines when necessary. Provision is also
made for the interchange of through traffic and to
this end for the interchange of rolling stock. The
central government may construct or authorize the
construction of new railways in any federal state,
even against its will, and it may even exercise the
right of expropriation.
"Before nationalization there were 600 different
sets of rates without counting preferential rates
applying to special cases. After long negotiations
the several state administrations have agreed upon
the rate question, and since 1910 rates for passengers
have been uniform and those for goods virtually so. " 1
In railway matters the Bundesrat, or Senate of
the empire, acts under general instructions agreed
upon by the federated governments, and the mo-
tives of operation agreed upon, are as follows:
(1) To assist internal industry and agriculture
by cheapening the cost of raw materials or equip-
ment for production.
(2) To facilitate export of German products.
(3) To support the trade of German commercial
centres.
(4) To favor German railways against competing
foreign waterways and railways. 2
1 Dawson, Industrial Germany, p. 46.
2 E. Roberts, "German Railway Policy," Scribner's Magazine,
February, 1911.
THE STATE-OWNED RAILWAYS 117
General railway conferences are called from time
to time by the Bundesrat, in which the various
systems have votes according to their respective
mileage, there being 1 vote for a railroad of from 31
to 93 miles; 2 votes from 93 to 186 miles, etc. A
permanent rate commission prepares the business
for the conference. There is a subdivision of mem-
bership called the traders' committee, consisting of
five representatives of agriculture, five of manufac-
turing interests, and five of distributing and com-
mercial interests. These are elected by the cham-
bers of commerce and the boards of agriculture
of the country, and these fifteen, together with a
member from the Bavarian government, recommend
to the permanent commission authoritatively "any
adjustment of rates equitably among the zones of
traffic into which the empire is apportioned, so that
a shipper in one part of the country shall not be at a
disadvantage in internal trade through his geographi-
cal location." 1
The central railway office organizes and controls
the rolling stock and equipment of the railways and
serves as a centre for administration, from which
technical improvements are initiated, weighed, and,
when approved, are pressed on the railway ad-
ministrations of the various states. There is also
a series of district advisory councils, or committees,
composed of representatives of the great economic
interests. For the rest, each state manages its own
*E. Roberts, Scribner's Magazine, February, 1911.
118 SOCIALIZED GERMANY
lines and, as far as possible, regulates its policy ac-
cording to what it considers the best interests of its
own population and territory. 1
So far as the shipper is concerned, the railways of
Germany are all one system. There is no struggle for
traffic, no conflict over territory, no dispute with the
state. "It is a striking fact," says Dawson, "that
at present over 31,000 miles (in 1907) of railways
(either railways belonging to the state or private
lines managed by the state, though mostly the
former), representing over six hundred million pounds
of invested capital, are working with perfect smooth-
ness and success without the aid of boards of direc-
tors, private capitalists, meetings of shareholders,
who, as a consequence, are able to employ their
activities in other and more advantageous ways." 2
Even an exhaustive enumeration of the service
activities of the German railways gives but a partial
idea of the extent to which they contribute to the
industrial life of the nation. The railways are an
integral part of the empire. This is the most im-
portant thing. They function as part of its life
just as do the roads and highways, just as does the
circulatory system of the human body. In place of
a conflict with the nation, the states, and the cities
over every possible question, the railways anticipate
the needs of the community and provide for them.
1 Dawson, Industrial Germany, p. 53.
2 Dawson, Evolution of Modern Germany, p. 208.
THE STATE-OWNED RAILWAYS 119
Where differences of opinion arise, the adjustment is
on the basis of the public interest, the questions
involved being discussed from this point of view
alone. Instead of a struggle on the part of stock-
holders and directors to secure the maximum of
profits or dividends, the struggle of the state officials
and chambers of commerce is to secure the maxi-
mum of service, either in accommodation to the
public or in profits to the state. There is thus a
unity of purpose, the only debated questions being
those of state policy.
Another advantage arising from state ownership
is the divorce of the railways from politics. There
are no stockholders, directors, or attorneys in the
Reichstag, the legislatures of the states, or the coun-
cils of the cities. They make no campaign con-
tributions and are not influential with the press.
They carry on no publicity bureaus and maintain no
expensive lobby. Railway legislation is considered
with an eye single to the public service. This is a
great gain, possibly the greatest gain of all. That
Germany is not inherently free from the activity
of private interests in politics is seen from the influ-
ence of the agrarian or Junker class in Prussia and
the empire. It is seen to a lesser degree in the class
legislation of the big taxpayers and house owners
of the cities. The general honesty and disinterested-
ness of the German official is not alone attributable
to the traditions of the country. It is found as well
120 SOCIALIZED GERMANY
in the fact that much of the privileged wealth which
in this country is in private hands is owned in
Germany by the state. This of itself has excluded
corrupt influences from public life and in so doing
has purified the source from which much of the
corruption in America has come.
CHAPTER VIII
CANALS, WATERWAYS, AND FREE PORTS
WATERWAY development, as a means of cheapen-
ing freights and the development of inland centres,
has gone hand in hand with the extension of the
railways, and in recent years the waterways have
been receiving the greatest attention. This is re-
markable in view of the immense profits which the
state receives from the operation of the railways,
which profits have undoubtedly been materially
reduced by water competition.
The programme of waterway development has
been thought out for many years to come and on a
most elaborate scale. It includes the linking up of
all the great ports of ocean entry with the rivers
and inland centres by ship canals and river systems,
capable of carrying very heavy traffic. In addition,
splendid harbors have been built along the Rhine,
and on the North and Baltic Seas, with free ports
at Hamburg, Bremen, and Liibeck. A network of
canals is to unite the Rhine, the Danube, the Oder,
the Weser, and the Meuse of sufficient dimensions
to carry large craft. Already the register of canal-
boats has been raised from 150 to 600 tons. Trans-
portation by canals and rivers is closely integrated
121
122 SOCIALIZED GERMANY
with the railways through splendidly equipped ter-
minals, which facilitate the easy transshipment
of freight from one to the other, while the larger
towns on the rivers and ocean harbors have built
the most completely equipped docks and warehouses
for the development of trade and industry. 1
Cheap water transportation is another explana-
tion of Germany's industrial progress. It has been
planned with the same far-seeing intelligence that
characterized the railway system, with which it is
closely related in its administration. Some idea
of the magnitude of the water traffic is evidenced
by the fact that while the total goods carried in 1911
upon the railways aggregated 408,879,000 tons, the
goods upon the waterways totalled 76,632,000 tons,
or more than one-sixth of the amount carried by rail.
The total navigable waterways in the empire amount
to 8,600 miles, one-fourth of which, or 2,200 miles,
are in canals or canalized streams. During twenty-
five years Prussia alone has spent $250,000,000 on
canal undertakings.
A comprehensive imperial waterway programme
was authorized in 1905. It includes two great
undertakings: one, the Rhine- Weser project for a
canal to connect the former river with the Dortmund-
Ems Canal, from the latter to the Weser, the en-
largement of other canals, and the canalization of the
river Lippe, the estimated cost of which was $62,687,-
1 See chapter IX.
CANALS, WATERWAYS, AND FREE PORTS 123
500. The second, the Oder project, includes the
building of a ship canal from Berlin to Stettin, at
a cost of $10,750,000; improvements in the water-
ways from the Oder to the Vistula, at a cost of
$5,290,000; connections with Breslau, costing $4,-
937,500; and various other plans. The total esti-
mated cost of these two undertakings is $83,750,000,
which sum, however, will be greatly exceeded.
When these projects are completed, the Rhine
will be connected with the Weser in the east, the
Danube in the south, and the Meuse in the west.
The rivers Elbe, Oder, and Vistula are already con-
nected, and the canal now being built from the Rhine
to Hanover will probably be continued to the Elbe.
Other proposed waterways are a canal from the
Neckar to the Danube, to cost $27,500,000, and a
64-mile canal from the Danube at Ulm to Lake
Constance, to cost $20,000,000. There are great
engineering difficulties in these projects, in the first
case a difference in level of 900 feet, and in the
second 540 feet, but these will be overcome. One
of the most colossal undertakings proposed is the
opening of the river Rhine to the sea in German
territory. The Rhine now enters the North Sea in
Holland, and an enormous amount of German
traffic is handled at Rotterdam and Amsterdam,
which it is desired to divert to German seaports.
An influential association has actively promoted
this idea.
124 SOCIALIZED GERMANY
The most notable features in the act of 1905,
authorizing the Rhine- Weser and Oder projects, are
the wide powers of expropriation of adjoining land
reserved to the government and the provision for a
state monopoly of the towing service on the Rhine-
Weser Canal and its branches.
In view of the improvements in transit facilities
on the main rivers (Rhine, Oder, Weser) and some
of their tributaries, the Agrarian party, which has
opposed waterway development because of fear of
agricultural competition, insisted that dues be paid
"on rivers regulated in the interest of navigation."
Prussia promised this amendment without consult-
ing the other states, although it involved an altera-
tion in the constitution, which expressly prohibits
dues on the natural waterways of the country. But
the constitution was changed and the other states
were induced to acquiesce, Bavaria, for example, by
the promised canalization of the Main. The plans
include a river board for each river, upon which all
the principal interests concerned should be repre-
sented, and the dues to be charged were to be uni-
form on all the rivers. The government claims the
purpose of the dues is not to earn surpluses for the
state, but to cover actual costs by an "inconsider-
able addition to freightage rates."
In the construction of these great canal projects
"rivers are crossed, ascents and descents of hun-
dreds of feet are made with facility, and ships lifted
CANALS, WATERWAYS, AND FREE PORTS 125
and lowered bodily in troughs instead of by the old
and slow method of locks." l
So comprehensive is the waterway development
that goods can be sent from the mouth of the Rhine
direct into Switzerland and the south of France
in one direction, and to Wurtemberg, Bavaria, and
Austria in another. Merchandise bought in Ham-
burg can be despatched by river and canal every
yard of the way from that port to Berlin, or even
to Silesia in the extreme south of Prussia. The
canals have made Berlin, 400 miles from the sea,
a great port, second only to the North Sea ports, and
three cities on the Rhine. Before long, Berlin will
be in touch with the Rhine in the far west and the
Danube in the south. Berlin's in and out traffic in
1910 amounted to 5,750,000 tons, to which should
be added the traffic of the suburban towns, exceed-
ing 3,000,000 tons. Between Berlin and all the im-
portant towns accessible by river and canal regular
sailings are arranged; e, <?., between Berlin and Ham-
burg and Breslau there are several sailings a day
including, at least, one express boat.
The importance of the national waterways is
shown in the following table:
GOODS CARRIED IN 1911 IN TONS
TOTAL
HOME TRADE
FOREIGN TRADE
Waterways
Railways
76,632,000
408 879 000
43,304,000
346 420 000
34,328,000
53 870 000
Dawson, Industrial Germany, p. 68.
126 SOCIALIZED GERMANY
The cost of shipping a ton of corn from Hamburg to
Berlin by water is about one-sixth as much as by rail.
The Berlin-Stettin Canal was opened on June
20, 1914, in the presence of the Kaiser. It has 40
bridges, one of which carries the canal over the
Stettin railway, and 4 locks, rising altogether 120
feet, and each lock capable of taking two vessels
of 600 tons simultaneously. Later a ship trough
hoist will be added if the traffic justifies the expense.
This new waterway is planned to raise Stettin to a
position on the Baltic comparable to that of the
harbors of Hamburg and Bremen on the North Sea.
The canal involves an investment of $12,500,000,
and it is estimated that 3,000,000 tons of freight
per annum will be shipped through it.
The waterways are used for the handling of heavy
bulk freight, such as coal, iron ore, lumber, grain,
and the heavier articles of commerce, whose im-
mediate delivery is not important. On these com-
modities very low rates are charged. And this is
one reason why the railway freight rates in Germany
are higher than in this country. For the waterways
carry one-sixth as much freight as do the railways.
Were the heavy bulk freight, which goes by water,
subtracted from the freight by rail in America, and
a comparison made of similar commodities, it might
be found that freight rates by commodities were as
low in Germany as they are in America.
The canals and navigable rivers are operated in
CANALS, WATERWAYS, AND FREE PORTS 127
connection with the railways, which are further
operated in connection with the docks and harbors
in which every provision is made for the cheap and
easy transshipment of freight from one to the other.
There is no conflict between water and rail trans-
portation; no conflict between the public and private
owners over the possession of the water-front. All
of these agencies are operated together as a unit, for
the promotion of the domestic and foreign trade of
the empire. They are all part of a co-ordinated
whole.
The free ports of Hamburg, Bremen, and Liibeck
complete the transportation system of the empire.
They have profoundly aided the growth of the
merchant marine. They provide cargoes and make
these ports great clearing-houses for the trade of the
world. The cities of Hamburg, Bremen, and Liibeck
are among the oldest of the free cities of Germany.
They controlled the Hanseatic League, which in
turn controlled the trade of the north for centuries.
They carried on wars of offense and defense. They
came into the empire as independent states and later
secured concessions which enabled them to retain a
portion of their ancient trading advantages by grants
of authority to maintain free ports within their
harbors.
German statesmen realized that the carrying trade
of the world is performed by those countries that
have substantially free trade. They recognized
128 SOCIALIZED GERMANY
that water transportation will go hundreds of miles
to escape tariff barriers. The protective tariff killed
the Spanish trade; it destroyed the rich and pros-
perous cities of the Netherlands. The abolition
of the Corn Laws by England opened up the ports
of that country when the ports of all the rest of the
world were closed, and brought to her cities the
carrying trade which had previously been distributed
among many nations. And for fifty years England
has been mistress of the seas for the very simple
reason that ships could come to her ports without
the payment of customs taxes; they could discharge
their cargoes and find other cargoes awaiting them
without delay. There were no obstacles, obstruc-
tions, or tariff barriers of any kind to interfere with
traffic. It is this that has built up her carrying
trade during the last fifty years. Her ports are
counters, or market-places, for the making of a
million transactions and the distribution of the
most diversified products of every clime. And
to-day the carrying trade of the world is performed
by those countries that have free; trade, or an
approximation of free-trade conditions. They are
England, the free ports of Germany, and the ocean
ports of Belgium, Holland, and Denmark, which are
low-tariff countries. The bulk of the carrying trade
is done by Great Britain and the German ports.
Goods are brought to these ports from America, the
Continent of Europe, from Asia, the Indies, Africa,
CANALS, WATERWAYS, AND FREE PORTS 129
South America, and the islands of the seas, where
they are entered for consumption or manufacture,
or reassembled for distribution again to the places
of ultimate purchase.
A description of the free port of Hamburg indi-
cates the operation of the system. The free port
consists of a large number of basins, many of them
cut into the land, with quays jutting out into the
river. Upon these quays are railroad tracks with
cranes for the easy transfer of freight into the near-
by sheds. In the larger outside basins are many
mooring posts which provide anchorage for vessels
transshipping cargoes in the stream. A number of
warehouses are operated by the authorities as a
part of the port. Goods are stored in the ware-
houses for re-export or for ultimate consignment
into Germany or other countries of Europe.
The free port is considered as foreign territory
by the Customs Department. It is surrounded by a
customs line, guarded by customs officials. The line
is designated by high iron palings along the land
side; and along the river is a floating palisade
guarded at either end by customs officials. At the
land and water entrances of the free port are cus-
toms booths at which duty is paid on goods when
they enter the harbor proper.
All of the harbor pilots are ex officio customs in-
spectors. Under their guidance ships pass to their
berths in the free port unmolested by customs
130 SOCIALIZED GERMANY
officials. There are no declarations of dutiable
goods to be made; no customs officials are taken
aboard with the delays attendant upon their pres-
ence. When a ship is cargoed ready for sea, a cus-
toms pilot takes her to the mouth of the river.
There is less hindrance to the free movement of the
ship within the free port than in the ports of England.
The free port contains a number of industries
incident to the care and feeding of employees, ship-
yards for repairs, and other industries relating to
the outfitting and provisioning of ships. Big river
barges of from 600 to 800 tons capacity move from
ship to ship for the transshipment of freight.
The free port is controlled by public authori-
ties, although it is partially privately operated by
the warehousing company which has erected ware-
houses upon public lands.
A number of means have been devised to facilitate
the care and handling of goods. Goods to be im-
ported pay duty on the spot; or the importer may
have a running account against a deposit made by
him in the form of government bonds. Provision
is also made so that goods may be shipped with a
customs certificate to the inland consignee, who pays
the duty on delivery. Similar procedure is provided
for goods forwarded in transit through Germany to
other countries.
By reason of the free port, as well as the industrial
development of Germany, Hamburg has become
CANALS, WATERWAYS, AND FREE PORTS 131
the second seaport in the world. It does more busi-
ness than London or Liverpool, and is a close second
to New York. The total foreign commerce of the
port is just short of $2,000,000,000. It exceeds that
of London by $100,000,000 and far exceeds Liverpool
in imports.
Students of Germany are in agreement as to the
value of the free port as an agency in the country's
development. Mr. Edwin J. Clapp in his treatise
on the free port of Hamburg says:
"The first advantage of the free port is in facili-
tating re-exportation; indeed the importance of the
re-exportation trade is large and, above all else, led
to its creation. In the free port foreign merchants
can maintain sample or consignment stocks. Bonded
warehouses do not offer the same opportunity for
unhindered movement of merchandise within a port.
Everything must be done under the control of cus-
toms men. In Hamburg there is no need of counting
and verifying pieces when a re-exportation is made.
A bonded warehouse cannot offer the same facilities
for various manipulations necessary to prepare the
goods for the consumer, such as cutting wines and
mixing coffees.
" Perhaps, the chief advantage of the free port lies
in the facilities it offers for the rapid frictionless dis-
charge of ships with dutiable goods, whether des-
tined for re-exportation or shipment inland.
u The free port of Hamburg lets the Hamburg mer-
chants store their goods duty free, and offers them
complete freedom of manipulation for re-exporting
them or for sending them inland, as the market die*
tates."
132 SOCIALIZED GERMANY
The free port is one of many marvellous adjust-
ments which Germany has made to overcome natural
or artificial limitations on her growth. It is in-
dicative of the far-seeing intelligence bestowed upon
the laws of trade. Through it many of the ad-
vantages of free trade are secured without sacrifice
of the protective-tariff policy. By means of it, the
merchandise of the whole world can be brought to
German ports and there be warehoused for an in-
definite period, or it can be reshipped into other
bottoms awaiting cargoes to some other port. Or
the merchandise can be exhibited in sample for
purchase by inland buyers. The free port creates a
world terminal, a world market, a world clearing-
house, the basis of shipping, of international trade
and finance, and a great aid to domestic industry as
well.
CHAPTER IX
HARBORS AND RIVER SHIPPING
A THIKD important factor in the elaborate trans-
portation system of Germany is the water terminal or
harbor, with its docks, warehouses, and means for the
transshipment, forwarding, and housing of freight.
Adequate terminal facilities are only secondary in
importance to the means of transportation. Only
recently has this been appreciated in any country.
Belgium has built deep waterway canals to her inland
cities with splendid dockage and harbor facilities,
while Manchester, England, has built a ship canal
to the sea with a complete inland harbor, all under
public control. Germany has constructed the most
remarkable water terminals of any country. Tens,
possibly hundreds, of millions of dollars have been
spent upon them. They are designed by the best of
engineers and are encouraged by the state authorities.
The harbor is far more than a deepened waterway
with projecting piers for the docking of boats. It is
a completely equipped water and rail terminal, with
railway connections, sidings, and switches, with
great cranes, warehouses of all kinds, and an in-
dustrial district close by, suited to the development
133
134 SOCIALIZED GERMANY
of industries which require close connections with
transportation facilities. Such water terminals are
to be found wherever natural advantages or the in-
genuity of the engineer could justify the expenditure.
The Rhine cities have been largely built up by the
wonderful harbors, which are to be found from the
boundary of Holland to the headwaters of navigation.
From Mannheim, the head of big navigation, 1 down
to Emmerich on the Dutch frontier, cities have
spent immense sums on the development of their
harbors. There is keen rivalry between these cities,
each of which tries to attract to itself as much
of the Rhine traffic as possible and in addition se-
cure its raw materials and breadstuffs cheaply as
well as a cheap export route. "Each of the cities
wanted to gain for its forwarders the transfer be-
tween rail and water for the largest possible terri-
1 The building of the Baden railway line (1846) from Mannheim
to Basle killed at a blow the Rhine shipping above Mannheim. This
could the more easily be done because above Mannheim the river
is more shallow and dangerous and traffic upon it paid higher rates
than below that point.
The lower Rhine was at first also hard hit by the railroads when
these showed themselves capable of carrying "merchandise as well
as merchants." Here the traffic revived, however, and has indeed
steadily grown, due in large measure to the preponderance of bulk-
goods traffic, which was then just beginning to take an important
place in German exports and imports. In 1840, for instance,
we find cane-sugar and coffee the chief articles going up-stream.
In 1907 the chief articles were iron ore (38.3 per cent, of the total) ;
English coal (11.4 per cent, of the total); and wheat (10.5 per cent.).
The chief articles going down-stream in 1840 were coal, 37 per cent.,
and oak and pine, 16.3 per cent. In 1907 they were German coal,
48.8 per cent.; sand, gravel, etc., 15.3 per cent.; manufactured iron,
10.9 per cent. In the changed traffic only coal has held its place.
-Clapp, The Navigable Rhine, p. 34.
HARBORS AND RIVER SHIPPING 135
tory, to win for its warehouses and silos the widest
possible dominion. " l The harbor and harbor facili-
ties are not operated as a source of direct profit.
Charges are low and usually go toward expenses of
upkeep. Dusseldorf has spent 18 million marks on
her harbor and operates it at a yearly loss of
400,000 marks. "Yet Dusseldorf thrives and is
the envy of the older commercial and industrial
cities on the Rhine; Dusseldorf is able to look be-
yond the immediate receipts of a tax on traffic." 2
A first-class harbor must have sufficient water
area for many boats to load and unload at the same
time and move about without disturbing one another.
The harbor area is usually provided with many
basins separated by tongues of land bearing rail-
road tracks, often double, so that cars can be loaded
and switched without loss of time. Quay walls are
usually built perpendicular, so that boats can come
close in within reach of the cranes.
Close by the harbor, and operated in connection
with it, many cities have provided an industrial
harbor, Industriehafenj containing sites for industrial
concerns. These, too, are owned by the cities, the
sites being sold or leased on easy terms. These
sites are particularly advantageous for concerns
receiving barge loads of raw materials. At first
it was the iron industry, then the chemical, that
settled in these harbors, both of which were depen-
1 Clapp, p. 53. 2 Idem, p. 121.
136 SOCIALIZED GERMANY
dent upon the Rhine traffic. But later the cheap
water rates attracted a great variety of industries
to these harbors. All sorts of industries are to be
found in the Mannheim industrial harbor "from
steam flour mills to a mirror factory." The harbor
and adjacent industrial district are situated a con-
siderable distance from the residence section, which
does not suffer in consequence from the smoke of
the factory chimneys.
"The harbor is administered as a unit by the city
that built it, not with the purpose of making money
or even expenses out of it, but with the purpose of so
cheapening transfer between boat and rail that a
great hinterland can send and receive goods over
the river port. Freight-handling machinery, such
as cranes for package freight and cantilever hoists
for coal, facilitate and cheapen the transfer of freight.
Substantial sheds, warehouses and elevators on the
river bank shelter the goods and ship them inland
by rail. Railway tracks connect directly with the
sheds and warehouses, as with the quay wall along-
side which the vessels lie." 1
The largest harbor on the Rhine is the Duisburg-
Ruhrort harbor, which is really a harbor group. The
harbor at Ruhrort, which belongs to the state of
Prussia, is the most important member of the group.
Ruhrort, from its vicinity to the coal-fields, was
destined to be a coal harbor, and as soon as railway
connections were made to the coal-fields it began
1 Clapp, p. 120.
HARBORS AND RIVER SHIPPING 137
to take on importance as a transfer point for coal
from railroad to river. It was equipped with coal
tips for the rapid loading of coal onto the river boats.
These tips can grasp twenty-ton cars and tip them
till they empty their contents down a chute and into
the waiting barge. At present the harbor possesses
eleven of these tips, each capable of loading 2,000
tons in ten hours. Improvements in the harbor
have been paid for out of harbor dues since 1868,
when the Ruhr tolls were abolished.
The other members of the Duisburg-Ruhrort group
are the municipal harbor of Duisburg and the
railroad harbors at Hochfeld and Ruhrort, the two
latter passing over to the state with the railways
when the roads were transferred to state ownership.
In 1905, as the result of an agreement between
Duisburg and its rival Ruhrort, all the harbors of
the group, except Hochfeld, came under the manage-
ment of the administration of the Duisburg-Ruhrort
harbors. In 1907 the water traffic of this harbor
group was 31 million tons, as great as Hamburg's
seaward traffic.
In the harbors of Mannheim and Ludwigshafen,
on opposite sides of the river Rhine and at the head-
water of big navigation, we have a group similar to
that of Duisburg-Ruhrort. The two cities are directly
opposite, Mannheim in Baden and Ludwigshafen
in the Bavarian Palatinate, on the left bank of the
river. This group, which includes also the harbor
138 SOCIALIZED GERMANY
of Rheinau, on the southern outskirts of Mannheim,
has a total area of 500 acres and a river commerce
of 10,000,000 tons (1907). The Mannheim harbor
was built by the state of Baden (except the industrial
harbor belonging to the city) and acts as a feeder
for its railways. The state not only charges no dues
in its harbor, but charges the lowest freight rates on
goods transshipped at Mannheim. Mannheim has
gained materially through its harbor. "In the five
years 1899-1904, in spite of the bad times, Mannheim
had through its industrial harbor increased its taxes
by 6 million marks and its laboring population by
1,000 persons. " Mannheim has a river traffic about
twice the seaward traffic of Bremen.
Between Duisburg and Mannheim many other
cities on the Rhine have built or modernized their
harbors. Among them are Crefeld, Miihlheim,
Cologne, Dusseldorf, Worms, and above Mannheim,
Carlsruhe (which with its shipments of lumber from
the Black Forest has become the chief lumber ex-
porting city on the Rhine), Frankfort and Offenbach
(on the Main), and Strasburg, to mention only the
more important. The rivalry between these cities
compels them to adopt the latest improvements in
harbor equipment. This is why the Rhine harbors
are the finest river harbors in the world.
Most of the goods traffic on the Rhine is up-stream,
in the shape of foodstuffs or raw materials for in-
dustry. Many of the boats going up-stream loaded
HARBORS AND RIVER SHIPPING 139
come down empty. This means very low water
rates for manufactures that can be exported over
this route. The relation of Germany's imports to
exports along the Rhine was 1 to 3 in 1840. In 1907
the proportion was 2^ to 1. "The r;ver has be-
come the route that furnishes a great industrial na-
tion cheaply with its raw products and foodstuffs/'
says Clapp. 1 Iron ore and grain form two-thirds of
the imports up the Rhine. In 1907, 59 per cent,
of Germany's imported iron ore came over the Rhine
route; 64 per cent, of her imported wheat and spelt,
and 45 per cent, of her rye. Only one-fourth of her
exported coal, however, went down the Rhine, al-
though coal forms one-half of the total goods sent
down-stream.
In 1907 the total traffic on the Rhine amounted to
64.5 million tons, of which 41.4 million tons passed
through German Rhine harbors. The traffic on the
Rhine passing the German border station, Emmerich,
increased 400 per cent, from 1885 to 1907. Most
of this was moved up-stream (28.9 million tons).
Two-thirds of the German Rhine traffic consists of
exports and imports from foreign countries, and
only one-third is internal traffic. The chief articles
sent down-stream are manufactured iron, soda, salt,
stone, sand, gravel, and brick. The discrepancy be-
tween the amounts of goods imported and exported
on the Rhine is not so great, however, when we con-
1 Clapp, supra, p. 48.
140 SOCIALIZED GERMANY
sider value rather than tonnage, as the down-stream
traffic includes many manufactured articles.
The floating stock on the Rhine has been con-
tinually modernized. Barges now have a capacity
of between 1,500 and 3,000 tons and are made of
steel. Tugboats can usually pull up-stream a barge
train of 6,000 tons. Great navigation companies
of long standing and merit operate through lines
from upper Rhine ports to the sea harbors, and have
agents in important inland cities who collect and
distribute freight transshipped between river and
rail at Mannheim and other Rhine ports. 1
The harbor groups of Duisburg-Ruhrort and
Mannheim handle between them 75 per cent, of the
total traffic of the German Rhine ports, or 'about
31.4 million tons out of 41.4 million tons (1907).
Duisburg-Ruhrort is the great bulk-goods harbor.
Ninety per cent, of its traffic in 1907 consisted of iron
ore, grain, and wood arriving; and coal, coke, pig
and manufactured iron departing. The remaining
10 per cent, of its traffic is made up of sand, ore,
cement, stone, and fertilizer. This is the doorway
through which the Rhenish- Westphalian industrial
district receives its raw materials and the grain for
its workers, and through which it ships its products
of coal, coke, and iron. The water traffic of Duis-
burg-Ruhrort has grown steadily and is now (1907)
greater than that of any other German river harbor.
1 Clapp, supra, p. 121.
HARBORS AND RIVER SHIPPING 141
Mannheim lies 354 miles up the river from Rotter-
dam. It is still the head of navigation for six months
of the year. It serves a great territory, its hinter-
land extending far east into Baden, Wiirtemberg,
Bavaria, western Tyrol, and Switzerland and west
to the French border. The reason its influence does
not extend farther into France is that the French
government lays a special tax on goods received
through a foreign harbor. Mannheim supplies these
districts with coal, coke, grain, and petroleum. But
more particularly, Mannheim is the piece-goods
harbor, with a great diversity of traffic. Besides
grain and raw materials, it receives valuable articles
of consumption, such as coffee, fruit, wine and to-
bacco, and machines for factories. The threads of
inland communication over the South German rail-
ways concentrate in Mannheim, which is the trans-
fer point between cheap and expensive means of
communication for large parts of South Germany
and Switzerland.
The Mannheim harbor has received state support
from the beginning and has been specially fortunate
in its co-operation with the railways. Indeed the
harbor of Mannheim itself (except the industrial
harbor) the oldest and most important of the group
of harbors at this point was built by the Baden
state railways, which give their lowest rates to
goods transshipped at Mannheim. These rates hold
good not only for goods immediately sent forward
142 SOCIALIZED GERMANY
but also for goods stored in the warehouses, silos,
and magazines, thus encouraging a large whole-
sale trade in the city. In the city itself is an indus-
trial harbor, which Mannheim began to build in
1897 and completed six years later. It is about
1,500 metres long and has a maximum width of 300
metres. The sites in this harbor were immediately
occupied, a considerable part of the city's chemical
factories, as well as metal furniture and instrument
factories, are situated upon it. These demand great
quantities of coal and iron pyrites. They send a
variety of products down-stream, which naturally
has an effect in lowering the water rate up-stream.
Simultaneously with the building of the "Indus-
triehafen" went the laying out of a network of
railway connections. More than 50 kilometres
of track have been laid in the vicinity of the
quays. 1
Ludwigshafen, opposite Mannheim, was simi-
larly built by the railways of the Bavarian Palatinate
"to give that city a chance in the great transship-
ment traffic at the head of navigation. " But most
of its business is carried on by Mannheim people.
The harbor at Rheinau, just south of Mannheim,
was built by private persons, though its adminis-
tration is now in the hands of the Baden rail-
ways. 1
1 Emile Egger, in Revue des Sciences politiques t January- June,
1913.
HARBORS AND RIVER SHIPPING 143
The traffic of this group of harbors has grown at
the following rates :
Mannheim: 1870 41,000 tons
1893 2,200,000 "
1901 5,145,000 "
1909 6,085,000 "
Rheinau: 1901 562,000 tons
1903 1,011,000 "
1909 1,797,000 "
Ludwigshafen : 1870 135,000 tons
1909 2,178,000 "
Care is taken to protect the waterways from un-
fair and killing competition, such as was adopted
by the railways in this country against the canals.
"In Germany private railroads did not long con-
tinue to employ the methods we know so well hi
their efforts to paralyze the competition of the
Rhine: refusal of prorating agreements, refusal of
transfer facilities, unfair rates for working with the
river as compared with their rates for working
against it." 1 The railroads were bought up by
the state in the seventies. When the state roads
found themselves prospering, and making large sur-
pluses, they did not reduce rates all around, but
rather turned the surpluses over to the state as
revenue, which the state has come to depend on.
"If reductions of the Prussian rates in general
are prevented by financial considerations, reductions
in these rates for the sake of exterminating water-
1 Clapp, supra, p. 119.
144 SOCIALIZED GERMANY
way competition are still more efficaciously pre-
vented. The waterway interests are represented in
Parliament as are the exporting interests, dependent
on the cheaper waterway transportation. The pub-
licity of government rates makes it impossible for
the railway officials to exercise any judgment in
the matter. Rates tending directly to incapacitate
the waterways would be regarded as a measure
against the good of the country. The waterways
and the harmonious relations which the railways
are compelled to have with them are a counter-
balance against the generally fiscal policy of the
state railways. " l
It is this co-operation between rail and water that
has done so much in encouraging the cities on the
Rhine to build water terminals.
In France, where the railroads are for the most
part in private hands, the situation is very different.
The waterways are almost completely cut off from
the railways; that is, only an insignificant amount
of goods is transferred from one to the other. Ri-
valry between water and rail way causes this situa-
tion, which is unfavorable to industry and com-
merce. In England the railway companies bought
up the canals long ago and put them out of service.
Our own Mississippi, which might have played a
part similar to the Rhine's, has been prevented from
doing so by the railways, " which have not only dis-
criminated against the river in rates, but have re-
fused transfer facilities and have often bought up
1 Ckpp, p. 120.
HARBORS AND RIVER SHIPPING 145
the land along the river bank, so that no rival
railroad could work with the river. " x
In 1906 the traffic on the entire Mississippi River
system (16,000 miles) was 19.5 million tons, which
represents a decrease of 31 per cent, from the traffic
in 1889. The traffic on the Rhine passing Emmerich
had increased about 400 per cent, during the same
period. 2
1 Clapp, supra, p. 68. * Idem, p. 123.
CHAPTER X
MINES, FORESTS, AND AGRICULTURAL LANDS
ONLY second in importance to the railways and
waterways are the many other industries operated
by the empire and the individual states. These
include coal and iron mines, great landed estates
and forest preserves, as well as many purely com-
mercial undertakings. The various kingdoms, cities,
and communities have owned great landed estates
from very early times. Those of the towns and
villages are survivals of the communal ownership
of land, which was very general in the Middle Ages,
while the agricultural estates and forests of the
states were the domain lands of individual Kings
and princes, who in many instances were the strong-
est of the feudal proprietors within their territory.
The King was a great estate owner, and differed
from the lesser nobility in being the largest pro-
prietor in the kingdom. And, fortunately for the
nation, these estates were not squandered or given
away to favorites as in England; nor were they con-
fiscated by revolution and sold, as in France. The
agricultural, forestry, and mining possessions of the
various states had their origin in these hereditary
146
MINES, FORESTS, AGRICULTURAL LANDS 147
possessions, to which the public has wisely retained
ownership.
The following table indicates the extent and value
of the mining properties of Prussia alone (1911): l
SUBSTANCES
EXTRACTED
No. OP
MINES
PRODUCTION
TONS
No. OF
WORKERS
VALUE IN
MARKS
Oil
22
19,708,974
88,751
224,902,290
Lignite (coal) . . .
Iron, lead, zinc,
copper, silver.
Potash ... .
5
5
5
340,260
119,802
585,785
470
3,304
1,772
1,084,620
12,017,889
7,555,340
Calcaire
3
585,785
1,124
2,829,411
Salines
5
122,937
803
3,414 264
Amber
1
391
1,043
2,137,778
46
21,463,934
97,267
253,941,592
At the present time the domain lands of Prussia
exceed 1,000,000 acres. Nearly 150,000 acres have
been added between 1903 and 1906. The most
important holdings are in the eastern provinces,
in which the holdings are as follows: Pomerania,
161,577 acres; East Prussia, 149,735; Brandenburg,
134,950; and West Prussia, 130,185. The other
states are also large landowners, Saxony having
domain lands of 123,257 acres. Additions are con-
stantly being made to these holdings. Land in
the neighborhood of towns, which has risen in value,
is frequently sold and the profits reinvested in
cheaper lands in the country districts, with the
result that the state not only extends its domains,
1 L 3 Exploitation des Mines dans le Royaume de Prime, by O.
Henry-Gre'ard, chapter I.
148 SOCIALIZED GERMANY
but it does so through the increase in land values
and at no expense to the treasury.
The state lands are used as experiment stations, to
teach the neighboring farmers the latest ideas in ag-
riculture. Where the land is leased, it is usually for
an eighteen-year period, and a high standard of cul-
tivation is expected of the lessee. The management
of the farms by the state is on a strictly business
basis. There is no philanthropy in its dealings,
the state being not unlike a private landlord in its
relation to the tenants.
Forests have also been owned by the states
and cities from early times. About the middle of
the eighteenth century a great impetus was given
to the acquisition of forests by a fuel scarcity.
There was no coal at that time, no oil, and com-
paratively little peat, and during a succession of
severe winters there was much suffering. As a
consequence, many of the state governments formu-
lated forest policies, the motives of which were to
secure a sustained yield of wood and timber. It
was then established as a policy that no more wood
should be cut than was produced in a given year.
Later, when coal was discovered, the necessity for a
fuel policy ceased, but the policy of forest conser-
vation had become established and was continued
for other reasons. To-day barely one-half of the
forests are in private hands; one-third belongs to
the individual states, and one-sixth to the locaJ
MINES, FORESTS, AGRICULTURAL LANDS 149
communities. The forests are managed by state
foresters, trained in special schools of forestry.
From this source a large revenue is derived for the
relief of taxation.
Professor William Lazenby, a forestry expert,
says of the German forests:
"It is small wonder that the art of forestry has
reached a stage of intensive development that no
other nation can rival. . . . Through generations of
practical tests and experiments, with many failures
at first but with a persistency worthy of the cause
and characteristic of the race, German sylviculture
has attained a high degree of perfection. Probably
no state has developed a more intensive forest sys-
tem or has done more to place forestry on a sound-
financial basis than Saxony. The average rate of
revenue from all the state forests of Saxony is 2J^
per cent. They have grown in value for the past
100 years at an annual rate of 3 per cent., so that
the total income, counting both cash returns and
latent revenue is 5J^ per cent." 1
In a report issued by the United States Depart-
ment of Agriculture, it is stated:
"Forest experts of all nationalities agree that
Germany is in an enviable position as regards her
lumber supply. No nation in the world makes
more thorough utilization of its forest resources.
German forestry is remarkable in three ways : it has
always led in scientific thoroughness, and now it is
working out results with an exactness almost equal
to that of the laboratory; it has applied this scien-
1 Popular Science Monthly, December, 1913.
150 SOCIALIZED GERMANY
tific knowledge with the greatest technical success;
and it has solved the problem of securing, through
a long series of years, an increasing forest output
and increasing profits at the same tune. Start-
ing with forests that were in as bad shape as many
of our own cut-over areas, Germany raised the
average yield of wood per acre from twenty cubic
feet in 1830 to seventy-five cubic feet in 1908.
During the same period it trebled the proportion
of saw timber secured from the average cut, which
means, in other words, that through the practice
of forestry the timberlands of Germany are of three
times better quality to-day than when no system
was used. In a little over half a century it increased
the money returns from an average acre of forest
sevenfold, and to-day the forests are in better con-
dition than ever before."
The kingdom of Prussia alone realizes over 100,-
000,000 marks net a year from her cultivated forests.
The mines are situated in different parts of the
country. Amber comes from the rivers of the
Baltic and East Prussia, lead from Silesia, and zinc
from the Harz. In addition, quarries, porcelain
factories, smelting-works, mills, bathing establish-
ments, foundries, and other activities have been de-
veloped by the individual governments.
Under the German law mineral resources are re-
galia, as they were in the Roman Empire, it being
the prerogative of the state to preserve or exploit
the mineral resources in the manner and at a rate
best suited to the common welfare. 1 In line with
1 Doctor Jung-Hermsdorf, Engineering Magazine, March, 1911.
MINES, FORESTS, AGRICULTURAL LANDS 151
this principle, Prussia enacted a law in 1907 pre-
serving to the state the exclusive right of searching
and mining coal and salts, while a similar measure
extended the power of the state still further and
empowered it to take over any discovery of mineral
resources on private lands at a fixed valuation. 1
This policy of state control over mineral lands
relates back to early times. For hundreds of years
the lords of the manor extracted minerals from their
lands. In addition, in Silesia and the Harz, the
princes had reserved to themselves all mineral rights
upon their property. When they were dispossessed
of their holdings, the mines passed to Prussia and
were lodged in her public domain, where some of
them still remain. The law of 1907 was designed
to restore to the state the right to explore for coal,
rock salt, potash, magnesium, etc., as a corrective
of the power of private monopoly, which was rapidly
controlling these fields. Under this law the sole
right to open new mines in most parts of the king-
dom is reserved to the state, private enterprise in
these fields being dependent upon state approval,
which is granted under such conditions as the de-
partment of mines may impose. 2
Under these various laws Prussia has become
one of the largest coal operators in the kingdom.
It now produces 25 per cent, of the Upper Silesian
1 Roberts, Monarchical Socialism in Germany, p. 5.
2 Dawson, Evolution of Modern Germany, p. 206.
152 SOCIALIZED GERMANY
coal output and more than one-half of the output
in the Saarbrucken fields. It has, however, no
independent ownership in Westphalia, the centre
of the coal-mining industry. Several years ago the
government came into conflict with the Westphalian
syndicate in its desire to have representation in the
coal operations of that region. In order to secure
this participation, Prussia determined to buy a con-
trolling interest in the shares of the Hibernia Coal
Company, which mines 7 per cent, of all the coal in
the Rhine-Westphalian district. Shares in this
company were purchased through the Dresdener
Bank, until a majority of the capitalization had
been acquired. The announcement of this purchase
so angered the owners that they increased the capi-
talization and issued new shares to themselves, in
order to reacquire a majority of the holdings. The
matter was taken into the courts, but ultimately
the government yielded in the controversy.
There is strong sentiment in Prussia for the com-
plete nationalization of the coal-mines, which is ad-
vocated by many leading economists, like Wagner
and Schmoller. As it is, the state produces about
20,000,000 tons of coal annually, or about 10 per
cent, of the total output, which is, however, almost
completely absorbed in the state iron and steel
works, by the railroads, the navy, and other public
institutions. For these reasons the state has exer-
cised but little influence as a competitor in this
MINES, FORESTS, AGRICULTURAL LANDS 153
field. In the administration of the mines the govern-
ment follows regular commercial methods. It charges
current prices for its output, the same as the private
operators, and, in consequence, exercises but little
restraint on the coal monopoly.
Prussia has been a dominant factor in the pro-
duction of potash since 1879, in which year a syn-
dicate was organized under the direction of the
state and two private concerns. The syndicate
later enlarged the field of its operations by the
opening of fresh mines. In the management of
this syndicate a Prussian official is chairman.
The agreements as to price control of the potash
syndicate expired in June, 1909, and could not be
renewed because one of the more powerful members
believed that more money could be made by the
operation of the private mines to their fullest ca-
pacity. When it became evident that a working
agreement was impossible, the Prussian Cabinet
recommended to the imperial government a measure
establishing a complete compulsory syndicate, which
was finally adopted. Under this law, which runs
for twenty years, each of the 65 mines is allotted a
certain percentage of the output, the prices for
which are fixed by the Federal Council. Should the
wages be reduced by any company, its percentage
of output is correspondingly reduced, while detailed
regulations protect the workmen in their hours of
labor and compensation. The statute is so drawn
154 SOCIALIZED GERMANY
that mine proprietors, for their own convenience,
have been obliged to recreate the syndicate. 1
The purpose underlying the nationalization of
potash is to conserve the resources of the nation.
Under the law equal opportunity is accorded all
producers, big and small, to operate, a certain quota
being assigned to each mine, depending upon its
producing capacity. But the government fixes the
maximum prices for export. 2
In the early years of the potash syndicate Prussia
was represented by 20 per cent, of the entire pro-
duction, but new mines were opened and the inter-
ests of the government fell to only 7 per cent. In
consequence, the power of the government dimin-
ished in the councils of the syndicate, and prices
were increased and agriculture suffered. The state
then purchased the Hersyna mine at $7,500,000,
after which it was able to control 11 per cent, of the
output. When an objection was raised in the Diet
that the state had paid too high a price, Minister
Delbriick stated:
"The question has been repeatedly asked whether
the state could not have attained its ends more eco-
nomically by waiting for a more favorable time to
purchase. Yes, a business man who wished to make
big profits might argue so, but the state is buying
for reasons of public welfare and public interest.
The object of this purchase is to make it strong
1 Roberts, Monarchical Socialism, p. 100.
2 Jung-Hermsdorf, Engineering Magazine, March, 1911.
MINES, FORESTS, AGRICULTURAL LANDS 155
enough to serve the public interest even without
the syndicate, if necessary." 1
The principles which guided the government in
undertaking control of the potash production were
as follows :
(1) The belief that production on a great scale
must succeed individual production, just as factory
succeeded cottage industry.
(2) A syndicate, after supplying the internal
market is able, with a relatively small additional
cost, to turn out a surplus for the foreign market.
(3) Syndicates have given life to smaller enter-
prises that might otherwise have been mercilessly
killed by competition. The syndicates systematize
production and take in smaller works when they
have grown to be worthy of attention. The potash
syndicate grew from 4 mines in 1879 to 65 mines in
the present statutory syndicate, and more are pro-
vided for.
(4) No strong party seeks to restrain the growth
of syndicates. The Socialists are not opposed. On
the contrary, they see in it a step toward the reali-
zation of the future state.
In 1904, at a convention in Frankfort, the Socialists
made the following declaration upon this question:
"The working classes have no occasion to disturb
the revolutionary process of the syndicate system
1 Dawson, Evolution of Modern Germany, p. 206.
156 SOCIALIZED GERMANY
through reactionary legislative attempts, because
every progressive step in the centralization of capital
whereby the interests of the masses are separated
from the interests of property teaches impressively
and visibly the irresistible superiority of nationally
and internationally organized and centrally directed
production over the scattered production of free
competition. This development is, therefore, a step
toward the realization of socialism." 1
As a result of its activities the state virtually con-
trols the potash industry, although it actually pro-
duces but a small part of the output. The prin-
ciples set forth by the government in assuming this
connection involve, says Roberts:
"The acceptance by Parliament of the principle
that the state has the right of compulsory regula-
tion of private production may have a profound
effect upon the future in Germany. In the potash
production it has enabled the government to exer-
cise the vital powers that it would have over prop-
erties, were they owned by the government, without
buying them. Parliament would almost certainly
have refused the 200,000 marks or more which
would have been required to buy the mines. The
government did not controvert, indeed it accepted
the idea that other natural products might also
be controlled by statutory syndicates." 2
It is probable that this compromise course of
partnership between the state and private corpora-
tions will be extended to other industries, if it works
1 Roberts, Monarchical Socialism, p. 104.
2 Idem, p. 100.
MINES, FORESTS, AGRICULTURAL LANDS 157
as expected in the potash industry. The present
policy, however, is toward the encouragement of syn-
dicates working under the sanction of the govern-
ment rather than of legislative checks upon them,
along the lines of anti-trust legislation in America.
This procedure is entirely in harmony with the
German policy of trusting the government. Doctor
Jung-Hermsdorf, writing from the standpoint of a
patriotic German, says:
"The object of the government is to avoid busi-
ness fluctuation and depressions as far as possible,
because they bear hardest on the poor; to preserve
the home market from panics, cutting excessive
profits on the one hand and making for continuity
of employment on the other. The state can do this
only by gaining control over capital for production,
the organization of trade and the fixing of prices,
in addition to regulating wages and working con-
ditions. . . . While the authority of the state is in-
variably supreme, its functions are of progressive
variety." 1
This writer, representing probably the point of
view of the ruling classes, thinks the government
should confine itself to regulating industry through
partnership rather than ownership, except in the
case of natural monopolies. He says:
"State partnership and control, besides steadying
business, has the further great advantage that it
strengthens the confidence of domestic and foreign
1 Engineering Magazine, March, 1911.
158 SOCIALIZED GERMANY
investors. . . . But the state will not go into activi-
ties of a higher order, where creative ability and
elasticity are decisive factors. In these private
enterprise can do better." 1
Germany faces the monopoly problem with more
frankness than does America. The Socialists claim
that the only solution is through the transfer of
large industry to the state itself, and many promi-
nent professors r in the university urge this pro-
gramme as to the mineral resources of the nation.
The government, however, has not fully accepted
this view, although it has advanced further than any
other nation in this direction. And in this evolu-
tion the government has moved from one position
to another. At first it was neutral toward large
combinations of capital, which have invaded most
of the larger industries, such as the iron and steel,
coal, glass, chemicals, sugar, spirits, and leather.
Now, however, the government is inclined to be
friendly to the idea of large industry, but to subject
it to inside rather than outside control. Where the
state itself owns industries it has itself entered the
syndicates, while the state-owned railways give
special rates to them, as a still further encourage-
ment.
Despite this fact, Germany recognizes the dangers
of monopoly. The secretary of state for the interior
said in the Reichstag, May 4, 1912:
l ldem.
MINES, FORESTS, AGRICULTURAL LANDS 159
"In the syndicates are growing up organizations
which are assuming the character of private monop-
olies, which may become a good deal more dangerous
than state monopolies. I consider it not improbable
that we may have to gradually transform private
monopolies into state monopolies. On the other
hand, we are not yet ripe for such a measure." 1
Professor Sehmoller, one of the leading professors
of political economy, urges that the state should
have representation on the boards of directors of
the syndicates. He says: "In any event, it is neces-
sary that the state should acquire an influence on
the syndicates. It is desirable that there should
be an agreement between buyers and sellers, per-
haps negotiated by an imperial board. ... In a
country in which private railways have passed into
the state's hands and in which fiscal mining has
been begun on a large scale there is certainly nothing
extraordinary in setting limits to the formation of
trusts. "
Public ownership is being urged by some as a
means for relieving the financial needs of the empire.
New sources of revenue are being constantly sought
for military and social purposes. The agrarian classes
are opposed to any extension of the land taxes or
those which fall upon incomes and inheritances,
while the indirect taxes are already very high. Fiscal
necessities may lead to further incursions into the
field of industry, and such incursions will be received
1 Dawson, Industrial Germany, p. 143.
160 SOCIALIZED GERMANY
with but relatively little protest. In any proposals
for the nationalization of industry, the government
can always count on the support of the Socialists
and generally of the agrarians, who fear increased
tax burdens and who have but little financial interest
in the great industrial undertakings.
The future attitude of the government as regards
regulation and control is indicated in a recent an-
nouncement that the government intended to es-
tablish a monopoly in petroleum, to break the mo-
nopoly of the Standard Oil Company. Under this
proposal the government did not itself plan to enter
the business, but rather to create a legal monopoly
in a private company, the capital of which is to be
supplied partly by banks already interested in the
petroleum industry and partly by public subscrip-
tion. After the company is formed it is to take
over all of the existing wholesale businesses, with
their warehouses and plants, and in case of inability
to reach satisfactory terms, the state will lend its
powers of expropriation for the purpose. In the dis-
tribution of the profits of the new company four-
fifths are to go to the state and one-fifth to the
shareholders.
CHAPTER XI
THE ATTITUDE OF GERMANY TOWARD THE
SOCIAL PROBLEM
GERMANY hates waste in any form. She has
taught the world the value of the " by-product."
This is one of her contributions to industry. Other
countries have adopted her methods of industrial
salvage, but none of them, with the possible excep-
tion of Denmark and Switzerland, has followed her
example in the working out of a programme for
saving the waste of human lives which the mill and
the factory produce.
Some years ago the imperial minister of the in-
terior stated in the Reichstag: "If Germany has
experienced a vast industrial expansion equalled by
no other country in the world during the same time
it is chiefly due to the efficiency of its workers, but
this efficiency must have suffered had we not se-
cured to our working classes by the social legislation
of recent years a tolerable standard of life, and had
we not as far as possible guaranteed their physical
health."
Germany, it is claimed by her statesmen, has
secured industrial efficiency by the action of the
state. The aid of the government has been ex-
161
162 SOCIALIZED GERMANY
tended to the worker just as it has been extended to
the landowner, who is protected from the compe-
tition of American wheat by the high tariff; to the
manufacturer, who is secured from competition in
like manner; and to the ship owner, who is subsi-
dized from the nation's treasury.
The state has its finger on the pulse of the worker
from the cradle to the grave. His education, his
health, and his working efficiency are matters of
constant concern. He is carefully protected from
accident by laws and regulations governing fac-
tories. He is trained in his hand and in his brain
to be a good workman and is insured against acci-
dent, sickness, and old age. When idle through no
fault of his own, work is frequently found for him.
When homeless, a lodging is offered so that he will
not easily pass to the vagrant class. When sick,
he is cared for in wonderful convalescent homes,
tuberculosis hospitals, and farm colonies. When
old age removes him from the mill or the factory, a
pension awaits him, a slight mark of appreciation
from society, which has taken in labor all that his
life had to give and left him nothing more than a
bare subsistence wage.
Despite his hatred of democracy, Bismarck saw
the benefit of such a programme. It was he who
promoted the insurance laws against accident, in-
validity, sickness, and old age. These measures
were inspired partly by the history and traditions of
GERMANY AND THE SOCIAL PROBLEM 163
Prussia, partly by the desire to undermine the rapidly
growing Socialist party, partly by an appreciation
of the value of such legislation to the state. State
concern for the dependent classes has been the tra-
ditional policy of Prussia for centuries, and Bis-
marck found a sanction for his proposals in the
precedents of the Prussian Kings as well as in the
common law and the mandates of Christianity, to
which he always appealed. In support of his mea-
sures he referred back to similar measures of the
Great Elector, Frederick William I, and Frederick
the Great as well as to the liberalizing legislation
of Stein and Hardenberg in the early years of
the nineteenth century. The Hohenzollern mon-
archs had never been out of sympathy with the
common people as were the Hapsburg and Bourbon
dynasties. And much of their popularity is traceable
to this fact. And Prussia has always avowed that
the welfare of the state was identified with the wel-
fare of the common people. Frederick the Great
carried through many projects of state socialism
for the upbuilding of Prussia. He brought artisans
from other countries to build up new industries,
he built canals and harbors, and carried through
many other undertakings. The Prussian common
law contained many provisions for the protection of
the poorer classes; it was part of the obligation of
the crown to support those who could not support
themselves, to provide employment, to prevent
164 SOCIALIZED GERMANY
destitution, and to check idleness. This is the legal
sanction of state and municipal aid to the dependent
poor, which is exclusively a public rather than a
private function in Germany. And Bismarck relied
on these traditions of the common law as well as
the paternalistic measures of previous times in the
defense of his policies. He even found legal support
for the "right to work" in the ancient law of the
land. As early as 1878 he stated: "I will further
every endeavor which positively aims at improving
the condition of working classes." In this the Em-
peror joined. In opening the Reichstag in 1879 the
Emperor announced: "A remedy cannot alone be
sought in the repression of Socialist agitation. There
must be simultaneously the positive advancement
of the welfare of the working classes. And here
the case of those work-people who are incapable
of earning their own livelihood is of the greatest
importance." In 1881 the Emperor said again:
"That the state should interest itself to a greater
degree than hitherto in those of its members who
need assistance, is not only a duty of humanity and
Christianity by which state institutions should
be permeated but a duty of state-preserving policy
whose aim should be to cultivate the conception
and that too among the non-propertied classes,
which form at once the most numerous and the least
instructed part of the population that the state
is not merely a necessary but a benevolent institution.
GERMANY AND THE SOCIAL PROBLEM 165
These classes must, by the evident and direct ad-
vantages which are secured to them by legislative
measures, be led to regard the state, not as an in-
stitution contrived for the protection of the better
classes of society, but as one serving their own needs
and interests."
Bismarck protested constantly against the laissez-
faire individualistic indifference of the state to the
weaker members of society. In a speech in the
Reichstag he said:
"Herr Richter has called attention to the respon-
sibility of the State for what it does. But it is my
opinion that the State can also be responsible for
what it does not do. I do not think that doc-
trines like those of ' Laissez-faire, laissez-aller/ 'Pure
Manchesterdom in politics/ 'Jeder sehe, wie er's
treibe, Jeder sehe, wo er bleibe/ 'He who is not
strong enough to stand must be knocked down and
trodden to the ground/ 'To him that hath shall
be given, and from him that hath not shall be taken
away even that which he hath/ that doctrines
like these should be applied in the State, and es-
pecially in a monarchically, paternally governed
State. On the other hand, I believe that those who
profess horror at the intervention of the State for
the protection of the weak lay themselves open
to the suspicion that they are desirous of using their
strength be it that of capital, that of rhetoric, or
whatever it be for the benefit of a section, for the
oppression of the rest, for the introduction of party
domination, and that they will be chagrined as soon
as this design is disturbed by any action of the
Government."
166 SOCIALIZED GERMANY
In 1884 he even proclaimed the doctrine that a
man has a "right to work." "Give the working
man the right to work as long as he is healthy, " he
said, "assure him care when he is sick; assure him
maintenance when he is old. If you do that, and
do not fear the sacrifice, or cry out at state social-
ism directly the words "provision for old age" are
uttered, if the state would show a little more
Christian solicitude for the working man, then I
believe that the gentlemen of the Wyden (Social
Democratic) programme will sound their bird call in
vain, and that the thronging to them will cease as
soon as working men see that the government and
legislative bodies are earnestly concerned for their
welfare. "
And he further said:
"Yes, I acknowledge unconditionally the right
to work, and I will stand up for it as long as I am
in this place."
Then, continuing in the same strain, he said about
the man who would work but could not work:
"I am healthy, I desire to work, but can find no
work."
Such a man, he said, is entitled to say, "Give me
work," and that the state is bound to give him work.
In the discussion in the Reichstag over his social
measures, Bismarck said in 1882:
GERMANY AND THE SOCIAL PROBLEM 167
"It is the tradition of the dynasty which I serve
that it takes the part of the weaker ones in the
economic struggles, "
and, in defense of his proposal for a system of uni-
form sickness insurance, he said:
"Experience has abundantly shown that the uni-
versal adoption of sickness insurance, which must
be characterized as one of the most important
measures for the improvement of the condition of
the working classes, cannot be effected along the
lines of free [voluntary] legislation."
In discussing the various measures which he had
in mind for the protection of the working classes
Bismarck said :
"The end I have in view is the establishment of
an institution having State support, and extending
to the whole Empire, for the maintenance of old
and infirm persons."
In these proposals Bismarck had the support of
Emperor William I. In 1881 the speech from the
throne in support of further legislation stated:
"The care of those work-people who are incapable
of earning their livelihood is of the first importance.
In their interest the Emperor has caused a bill for
the insurance of work-people against the conse-
quences of accident to be sent to the Federal Coun-
cil a bill which it is hoped will meet a need felt
both by work-people and employers. His Majesty
hopes that the measure will in principle receive the
assent of the Federal Governments, and that it will
168 SOCIALIZED GERMANY
be welcomed by the Reichstag as a complement of
the legislation affording protection against Social-
Democratic movements."
Along the same lines the speech from the throne
continued :
"These classes must be led by the evident and
direct advantages which are secured to them by
legislative measures to regard the State not as an
institution contrived for the better classes of society,
but as one serving their own needs and interests.
The apprehension that the Socialistic element might
be introduced into legislation if this end were fol-
lowed should not deter us. So far as that may be the
case it would not be an innovation, but a further
development of the modern idea of the State, the
result of Christian ethics, according to which the
State should discharge, besides the defensive duty of
protecting existing rights, the positive duty of pro-
moting the welfare of all its members, especially
those who are weaker and in need of help, by means
of judicious institutions and the employment of those
resources of the community which are at its dis-
posal."
The same spirit now animates the business and
commercial classes of Germany, even though they
protested against the original proposals of Bismarck
and the many other measures of social reform which
have been adopted in recent years. As indicative of
the general attitude of the employing classes, the
following is quoted from a publication issued by the
Frankfort Chamber of Commerce, which says:
GERMANY AND THE SOCIAL PROBLEM 169
"The 'Manchester School' has had its day and
since it had full sway a great change has come over
the civilized nations, marked by an increased in-
fluence of the governments at the expense of in-
dividualism.
"Slowly at first, but then in ever increasing mea-
sure mankind realized that the doctrine of 'Laisser
f aire, laisser passer ' was a vicious one and that the
Darwinian tenet of the survival of the fittest should
not apply to human beings. True enough this
knowledge did not emerge from purely altruistic
motives, but was a result of the conviction that
the road with the fingerpost-inscriptions, ' Elbow
room for everybody' and 'Everybody for himself
and the devil take the hindmost/ was a short one,
leading to nowhere.
"It had become obvious to leaders of men, like
Bismarck and Gladstone, that the new methods
of modern machinery and large capital had created
forms of employment unknown before, that huge
urban agglomerations had been called into existence
and that the national agriculture of old-world coun-
tries like France, England and Germany were being
exposed to a great strain by the competition of the
virgin soils of new lands.
"Furthermore the new conditions in industry,
commerce and agriculture had brought about a
change in the personal relations between employer
and employed; these formerly patriarchal relations
became impersonal in proportion as the numbers
of workmen and other employees increased. Great
portions of the populations saw themselves help-
less and shelterless in case of death, disaster, and
disease. Germany was the first state to recognize
the threatening danger and, in order to minimize it,
adopted the system of compulsory insurance. Prince
170 SOCIALIZED GERMANY
Bismarck and his imperial master William I. were
the prime movers in this great legislative work, but
we think it is only just to mention it, that certain ele-
mentary forms of taking care of those in distress
existed before and not only in Germany. In this
country the relief organizations of the guild corpora-
tions provided in case of death and sickness, in
England the ' Friendly Societies' did this sort of
work, and other countries have similar institutions,
but Germany was the first country where the govern-
ment stepped into the place of private enterprise."
The insurance laws have been in force for thirty
years and to-day Germany is a unit in approval of
the legislation which has been enacted. There is
no protest from manufacturers or employers. Every
one seems to realize the value of these measures in
the increased efficiency of the work-people, whose
health and well-being is greatly improved by virtue
of the protection afforded them. There is no attempt
to cripple the laws by hostile amendments or to evade
their obvious intent. The employers co-operate in
the administration of the insurance laws, in the local
employment agencies, and in the co-operative build-
ing associations, which, with the aid of public funds,
have erected working men's dwellings in nearly
every large city in the empire. And a generation's
experience has amply justified the wisdom of Bis-
marck's programme. It has in a measure softened
the relation of employer and employee, although it
did not check the growth of the Social Democratic
GERMANY AND THE SOCIAL PROBLEM 171
party or weaken its requests for further concessions
to its political and social demands. But it has con-
tributed greatly to the efficiency and well-being of
the working classes. It has relieved them of the
haunting fear of sickness, old age, and destitution.
It has completely checked the tendency to emigrate
and has identified the working classes with the state.
It is not improbable that the devotion and patriotism
of the German people in the present struggle is
largely traceable to the solicitous care which the
state manifests for her citizens, a solicitude which
has been the traditional policy of Prussia for cen-
turies.
CHAPTER XII
CARING FOR THE UNEMPLOYED
GEEMANY does not officially recognize the declara-
tion of Bismarck that a man has a right to work.
But the state does many things to insure the oppor-
tunity to work just the same. It seems as though
the nation said: "It costs $2,000 to raise a boy to
manhood. That much is taken from the wealth
of the community. It is wasteful to expend this
sum for a man's upbringing and then permit him to
be idle, to become a tramp, to be maimed or killed
in the factory, or to be disabled through sickness."
So the state makes provision for the protection of its
human assets. Not that the motive is as sordid as
this, although industrial and military efficiency is
always in the mind of the Kaiser and his ministers.
How is this achieved? In a great variety of ways.
A comprehensive programme of human salvage has
been worked out. In the first place, there are the
\l labor exchanges, which are models of administrative
efficiency. There are nearly three hundred of them
in the empire which report regularly to the imperial
statistical office in Berlin. They exist in every
community and fill over 1,000,000 positions every
year. They are maintained partly by the cities,
172
CARING FOR THE UNEMPLOYED 173
partly by private agencies. They are great clearing-
houses for skilled and unskilled labor of both sexes.
They have the hearty support of employers and
generally of the employees. Few of them charge
any fee. The exchange in Berlin, the largest and
best in the empire, secures over 100,000 positions
annually. It was established in 1888, and is main-
tained at a cost of $25,000 a year. It occupies a
splendid four-story building, probably a hundred
feet front on Gormanstrasse. In the centre of
the building is a great open hall capable of seating
1,400 persons. There were probably 600 men wait-
ing for work when I was there. Here the men sit,
grouped in sections, distributed according to their
employment. When a call is received by mail or
over the telephone, the men in the employment
desired are called to the desk. The wages and con-
ditions are explained, and if satisfactory the men
are given a card to the employer.
Priority is given to the married men as well as to
those first registered. On one side of the hall is a
buffet, where beer, cigars, and food are sold at a
trifling sum. There are cobblers and tailors who
do jobs of mending. A shower-bath can be obtained
in the basement for a cent. There is a smaller
room and canteen for the skilled workers, and
another for women workers in another portion of
the building. Connected with the registry is a free
dispensary and medical-inspection bureau. By these
174 SOCIALIZED GERMANY
simple precautions the men are kept strong and
presentable. They do not suggest the vagrant, and
when they go to the employer they are not down
and out in appearance as are the men who roam the
streets and live as best they may in private lodging-
houses or saloons in America while looking for em-
ployment. The exchange preserves the self-respect
of the worker. There is no suggestion of charity
about it and the general appearance of the men in-
dicates that they are for the most part free from
the. haunting fear of poverty so characteristic of
the unemployed in this country.
Many of the exchanges make special provision for
apprentices. Boys and girls about to leave the ele-
mentary schools are brought to the exchange before
they leave and are given an opportunity to regis-
ter. As a result, many of them have completed all
arrangements for work before they leave school.
Different policies are adopted by agencies in case
of strike or labor dispute. These policies are:
(1) To ignore such disputes altogether and to
send men as if there were no controversy.
(2) To record vacancies caused by a strike, and
to advise the men of such opportunity, but to also
advise them of the disputes.
(3) To suspend operations within the range of the
dispute during its continuance.
(4) To act in each case upon the decision of the
local industrial court.
CARING FOR THE UNEMPLOYED 175
In most registries the policy adopted is to advise
applicants for work of existing wage controversies.
These agencies command the confidence and sup-
port of both employers and employees. They are
rapidly driving the private employment agencies
out of business. The number of places filled by the
public exchanges reporting from 1909 to 1911 were
as follows:
YEARS
POSITIONS FILLED
BUREAUS REPORTING
1909
731,848
230
1910
877,042
250
1911
1,055,784
267
The municipal agencies act in concert by reports
sent to a central agency in the capital of each of
the states so that the surplus labor in one market
can be sent to another. In addition connections are
maintained with the country districts so that agri-
cultural labor can be supplied during the harvest
season.
This is the first step in the problem of unemploy-
ment. It is a recognition of the social nature of the
problem of the inability of the worker to control
his work, to own his tools, or to find the place for
which he is most fitted without terrible waste of
time and energy. The labor exchange is not un-
like the clearing-house system of the banks or the
credit agencies of modern business.
Provision is also made in an adequate way for the
176 SOCIALIZED GERMANY
wandering worker, the honest artisan seeking a job.
Germany does not assume that a man out of em-
ployment "with no visible means of support" is a
semicriminal. The courts do not place him under
arrest as a suspicious person, as do many of our
cities. Thousands of men in America are unjustly
branded by the ignorant policy which we pursue.
They are started on the road to trampdom, va-
grancy, and crime by the disgrace which we place
upon them. Germany recognizes that hard times,
a strike, or a lockout, the introduction of a new ma-
chine, are all conditions which the workman can-
not control. It accepts the wandering worker as a
part of the fluidity of modern industry and provides
for him in a variety of ways.
Lodging-houses or working men's hotels are to
be found in almost every community. By means of
them the worker can travel from place to place,
even though he is without money or immediate
employment. These lodging-houses are called Her-
bergen. Some of them are conducted by the cities,
others by private philanthropy. In 1904 there were
462 of these Herbergen in Germany, containing
20,000 beds. They lodge over 2,000,000 persons
annually of whom a large number are paying
guests.
In order to secure admission, the worker must be
able to produce a passport showing that he has
recently been at work. He can pay for his lodging
CARING FOR THE UNEMPLOYED 177
and breakfast (about twelve cents) or he can work
for four hours for them. The rule is " morning work,
afternoon walk." The work is usually of a simple
kind, such as chopping wood. Over half of the
Herbergen have savings-banks in connection with
them, deposits being made by the purchase of
stamps. The Herbergen are usually in close con-
nection with the labor registries, and many of them
make provision for permanent pay boarders. They
are really cheap working men's hotels. To such an
extent have these institutions developed in the
industrial regions of South Germany, that vagrancy
has practically disappeared, as has that class of
crimes usually committed by the vagrant class.
The labor colony is another institution for the
worker. It is open to those who have lost their grip
through drink or are unable to find work through
the labor exchange. The labor colony reaches a
much lower class than the labor registry. There
are upward of forty of them in the empire. They,
too, are partly private, partly public. They are not
penal colonies to which men are sent, but are purely
voluntary. Men enter and leave when they will.
Upward of 10,000 persons made use of these col-
onies in 1908. They are exclusively agricultural,
and attract mostly the unskilled worker. They are
located on cheap land, which is brought under cul-
tivation by the labor of the men, who produce
potatoes, vegetables, and similar products for their
178 SOCIALIZED GERMANY
own consumption. Probably 75 per cent, of the
men who come to the colonies have been in jail.
Yet, strangely enough, there is practically no in-
subordination and no difficulty in preserving dis-
cipline.
None of these agencies create work where no
work exists. Neither the labor registry nor the
Herbergen open the door of the factory or meet the
emergency of industrial depression. They do not
create opportunity where none exists; they merely
attempt to unite the workless job with the jobless
man. They prevent men from losing their grip
during a period of waiting. Nor do they provide for
the mechanic with a family who is face to face with
starvation by reason of the closing of the factory.
During the industrial depression of 1914-15 in
America, unemployed men petitioned the councils of
many cities to provide temporary relief work. They
did not want charity; they wanted work. But the
cities were powerless to relieve the situation or had
no inclination to do so. State laws bind the localities
in such an inflexible manner that they cannot act
on an emergency when it arises. They can only
cope with such problems as the distant legislature,
with little knowledge of city needs, makes provision
for. Here again Germany is far in advance of other
countries. She recognizes that the worker has a
right to be protected from starvation and to expect
something more than a visit from the charity organi-
CARING FOR THE UNEMPLOYED 179
zation society. "Distress work" is often provided
to meet emergencies. It is usually limited to the
winter months. Cities disclaim any legal or moral
responsibility in the matter; they do not recognize
"the right to work," but they provide work in con-
siderable measure, nevertheless. They distribute
public contracts so as to give the maximum of
relief and require contractors to employ only local
men. Extraordinary conditions are met to some
extent by development work, such as excavations,
street paving, sewer construction, forestry, wood-
chopping, and the like. Applicants for distress work
must be residents of the city and must be heads
of families. It is true the work performed is not
of the best, and it is more costly than that done
through regular channels, but it saves the self-re-
spect of the worker and to some extent recognizes
his right to work. In a larger sense, it saves the
community from the vagabonds, tramps, and semi-
criminals, who are the inevitable wastage of every
period of hard times.
Many other services are performed by the cities.
Warfare is waged against infant mortality and pro-
vision is made for the inspection of school children.
States and cities co-operate in the holding of con-
gresses and exhibitions for the instruction of the
people along hygienic lines. Leaflets are distrib-
uted for the purpose of training mothers in the
feeding and care of infants. Infant dispensaries
180 SOCIALIZED GERMANY
and clinics are operated, as are model kitchens and
milk stations. In Berlin there are many dispen-
saries for the instruction of mothers in infant-feeding.
These dispensaries are in charge of experts, assisted
by doctors and nurses. They are used mostly by
the working-class families, who receive free aid if
they are unable to pay for it. Milk for children
is distributed at a low price and the mother is in-
structed in many ways in the rearing of her child.
Recreation is also a public function. Cities pro-
vide many agencies for the leisure life of the people.
The people are not left to the self-interest of com-
merce in their leisure hours, and the opportunities of
the working class for recreation are more generous
than those of the average well-to-do citizen in
America. Every city of any size has from one to
three fine military bands, which give performances
afternoons and evenings in the parks and zoological
gardens. They play the best of music. The larger
cities maintain splendid symphony orchestras or
choral societies. Municipal restaurants are main-
tained where wines, beer, and refreshments are sold
at moderate prices. The cities and the states also
maintain opera-houses and theatres where the best
of classical and modern productions are offered at
a low price. Subsidies are granted or the opera-
houses are let to managers at a very low rental. By
these means the drama and the opera are encouraged;
they are a part of the life of all classes. Through
CARING FOR THE UNEMPLOYED 181
them a knowledge of the best of German literature,
drama, and music is inculcated. In Germany the
leisure life of the people is a matter of public con-
cern. It is one of the overlooked agencies in the
explanation of German culture.
CHAPTER XIII
LABOR AND INDUSTRIAL COURTS
SPECIAL courts are also provided to relieve the
worker from the delays and costs of litigation which
the regular court procedure involves. They are
administered jointly by employers and working men
through representatives selected by them who act
as arbitrators rather than as legal judges. Free
legal aid is also furnished by many cities to those in
distress, the bureaus being conducted on the same
basis as the free medical dispensary. They are
usually to be found in connection with the labor
exchanges or the herbergen and are widely used by
the working classes.
The labor courts originated in France, where the
first industrial court, conseil de prud'hommeSj was
established in 1806. The courts spread through
France, later into Belgium, Switzerland, and Italy,
and then into Germany. It was not until 1890 that
Germany enacted a general law for the establish-
ment of industrial courts.
The German industrial court consists of a presi-
dent, who is neither a worker nor an employer, and
an equal number of worker and employer members,
called assessors. The courts are usually divided
182
LABOR AND INDUSTRIAL COURTS 183
into sections, each of which has jurisdiction over dis-
putes in certain trades or groups of trades. Members
are elected from the workmen body and the em-
ployer body in each of these groups. The Berlin
court, consisting of 420 members, has eight sections.
Qualifications for membership in the courts are:
The candidate must be at least thirty years of age,
a citizen in good standing, and must actually be
employed in the trade over which the court has
jurisdiction. Members are elected for not more
than six years, and must live in the district of the
court at the time of his election. The employer
body elects the employer assessors and the workmen
body the workmen assessors. Elections may take
place at intervals of from one to six years, but no
term of office can be longer than six years. The
local regulations of the Berlin court provide that
assessors shall serve for a term of six years, but that
every two years a third of each category shall be
replaced. Trade-union officials who devote their
entire time to the union are excluded from member-
ship in the courts, as they are not considered to
be actually at work in the trades they represent.
Nevertheless, many trade-union officials are members
of industrial courts and practically all the workmen
assessors belong to labor organizations. Assessors
are considered as holding honorary offices and are
compensated only for actual loss of time, workmen
and employer members receiving exactly the same
184 SOCIALIZED GERMANY
compensation. The president, of course, is a salaried
official and is a lawyer.
The jurisdiction of the industrial courts extends
not only to disputes between workers and employers,
but also to disputes between different workmen
hired by the same employer. They have jurisdic-
tion over all industrial employments. In addition
to the ordinary industrial courts there are special
courts for single occupations, such as mining. The
industrial courts do not touch the commercial field
at all. For employees in this field there are the
Kaufmannsgerichte or mercantile courts, loosely con-
nected with the industrial courts (Gewerbegerichte).
Side by side with the system of industrial courts,
and limiting their jurisdiction, is a system of guild
courts for the settlement of disputes between the
members of guilds and their working people. Em-
ployees of the naval and military departments are
also excluded.
The jurisdiction of the industrial court is not
limited by the amount at issue, as it is in France,
where the councils of prud'hommes may decide cases
only where the value involved is less than 1,000
francs. Moreover, the jurisdiction of other courts
is excluded by the industrial courts, where these
exist. Disputes over wage contracts, payments, and
sometimes discharge without notice are the most
usual class of cases which come before these courts.
The procedure in the industrial courts is very
LABOR AND INDUSTRIAL COURTS 185
different from that of the ordinary courts. The aim
is conciliation, and as a matter of fact more than
half the cases that come up are settled in this way at
preliminary hearings. In such cases the functions
of the board of conciliation are practically performed
by the president alone, although he may ask the
assistance of assessors at such preliminary hearings.
If both parties unite in asking it, the president may
at the close of such a hearing render a valid decision,
even without assessors. Should attempts at con-
ciliation fail in the preliminary hearing, they may be
renewed at any stage of the proceedings.
The part taken by lawyers in the ordinary courts is
entirely suppressed in the German industrial courts.
Attorneys are not permitted to appear either as
representatives or as assistants. The parties must
appear personally, or if this is impossible they may
be represented by persons who are themselves sub-
ject to the jurisdiction of the court employers or
workers in some industry in the district. Proceed-
ings are much less formal than in other courts, and
the president takes a more active part in them. De-
cisions are based upon law and the customs of the
trade as interpreted by the members of the court.
Of the cases which are not conciliated many are
withdrawn without being contested or are settled
by judgments by default. In 1908 less than 17 per
cent, of all cases coming before the industrial courts
were settled by formal judgment after a hearing of
186 SOCIALIZED GERMANY
the parties. In Berlin the proportion was even less
9 per cent. over 90 per cent, being adjusted with-
out trial.
Every effort is made to settle cases quickly. In
1908 less than 1.5 per cent., even of those cases which
were brought to judgment, lasted over three months.
Fees are reduced to a minimum and cover only the
actual cost of hearing the case, securing witnesses,
etc. These are two of the main advantages of the
industrial courts. Those expenses of the courts
which are not met by fees are met by the munic-
ipality or municipalities over which the court has
jurisdiction, or, as in the case of the German min-
ing courts, by the state. Sessions of the court are
held in the late afternoon or evening, especially in
smaller places, so as to interfere as little as possible
with the working hours of employers and workmen.
Appeals may be taken from the decisions of the
industrial courts to the regular courts, but only when
the amount involved is more than 100 marks. The
amounts usually involved in cases before the in-
dustrial courts are smaller than this. In 1908 not
more than 7 per cent, of the appealable cases were
taken to a higher court.
Besides their purely judicial functions, the indus-
trial courts have certain administrative functions.
Opinions upon industrial questions may be de-
manded of the courts by government officials.
Moreover, the courts may present proposals to leg-
LABOR AND INDUSTRIAL COURTS 187
islative bodies, and they sometimes conduct legal-
information bureaus.
Collective disputes and strikes also come before
the industrial courts. This is one of their most
important functions. When the court sits as a
board of arbitration, its powers and composition are
quite different from what they are in personal dis-
putes. It is one of the duties of the president of
the court to keep in touch with trade unions and
employers' associations, to secure early information
of threatened strikes and lockouts and try to per-
suade the warring parties to call upon the industrial
court to act as a board of arbitration. This can
only be done, however, when both parties agree to it.
The court, acting as a board of arbitration, is com-
posed of the president and of arbitrators selected
in equal numbers by each side. These arbitrators
may or may not be assessors, but they must not be
concerned in the dispute. Where no agreement is
reached, the decisions of the court are not binding
upon the parties, but these decisions are made pub-
lic, and public opinion is relied upon to secure sub-
mission to the award. Collective disputes are being
brought to these courts for settlement as the sys-
tem gains public confidence. In three-quarters
of the cases agreements are reached, and in most
of the others the awards of the court are accepted
by both parties. In many cases, however, it has
been found impossible to effect a settlement.
188 SOCIALIZED GERMANY
"The most important service of the industrial
courts in collective disputes, however, is perhaps
the assistance which it has rendered in the forma-
tion of wage contracts and trade agreements. In a
large number of cases which do not appear in the
statistics of the work of the board of arbitration,
the presidents of industrial courts have presided
over meetings of representatives of the two sides
at which such agreements have been formulated." 1
The industrial courts have a voluntary central
union, which maintains archives in which are to be
found the reports, decisions, and trade agreements
effected by the courts. The central union also pub-
lishes an official organ: Gewerbe und Kaufmanns-
gerichte.
Every city of over 20,000 population must have an
industrial court, and smaller municipalities may have
them if the local authorities desire or if the workers
and employers concerned take the initiative. In
1908 there were in Germany 469 industrial courts,
which handled 112,281 cases. It should be added
in explanation of the large number of industrial
courts in Germany that more than one court may be
established in a district. That is, if in a district a
court exists which is restricted to certain industries,
another may be formed to deal with disputes in
other occupations. The courts are state courts.
Most of the cases brought before the courts are
1 " Industrial Courts in France, Germany, and Switzerland, " by
Helen L. Sumner, Ph.D., in Bulktin of the Bureau of Labor, No. 98,
January, 1912.
LABOR AND INDUSTRIAL COURTS 189
complaints by workers against employers. Of the
14,522 cases handled in 1908 in the Berlin court,
702 were brought by employers and 13,820 by
workers. These courts are much more popular
with the workers than with employers, because it is
the workers who fear they will not get justice in the
ordinary courts, and also because of the dispro-
portionately large expenses attached to a suit where
only a small amount is at issue. In districts where
no industrial courts exist the number of complaints
brought by employers is much larger.
On the whole, the courts meet with general ap-
proval, only minor points calling forth criticism.
For instance, the provision of the law which assigns
foremen and managers to the class of workers or to
that of employers, according to whether they receive
less or more than 2,000 marks salary, is considered
unfair.
The theory underlying these industrial courts is
that the labor contract is a peculiar kind of contract
which requires special rules, and that the relations
arising from it tend to become more and more com-
plicated, thus necessitating special machinery for
their regulation. The court is really an adaptation
of the jury system, the difference being that the
jurors are more closely in touch with the problems
brought before them, the customs of the trade and
industrial conditions, than an ordinary jury would
be. Moreover, these courts receive hundreds of
190 SOCIALIZED GERMANY
cases that would slip through the coarser mesh of
the ordinary court, owing partly to the expense and
long delays of the latter, which are particularly
discouraging to the workers. Cases involving as
small an amount as 5 cents have been brought
before the industrial court. It is encouraging to the
poor man to feel that he can get justice, however
petty the stake may seem to the wealthier man.
Speaking of these courts a German writer says:
"By its friends, indeed, the industrial court law is
considered as the Magna Charta of the German
workman. In this court, the labor world of Ger-
many has for the first time found an effective in-
strument for the prevention of wage reductions and
other violations of the labor contract. There is no
state institution, he adds, to which workmen cling
with more love or with warmer admiration." 1
In districts where there is small-scale production
the number of cases brought before the courts is
apt to be larger than where large-scale production
is the rule. This is due to the fact that conditions
of labor are so well standardized in big factories, that
workers are afraid of being blacklisted, etc., and
so are willing to endure small losses. In small
shops, however, and in such industries as building,
the manufacture of clothing, and the preparation of
food and drink, more disputes are likely to arise.
1 Jastrow, " Sozialpolitik u. Verwaltungswissenschaft," vol. I, p.
405, in Bulletin of Bureau of Labor, No. 98, January, 1912.
LABOR AND INDUSTRIAL COURTS 191
In so far as the functions of the courts as arbitra-
tion boards are concerned, it is felt that their work,
while valuable so far as it goes, can be of no use
when a strike spreads over many cities, as did a
recent ship-builders' strike in various ports, or when
it becomes national in scope. A bill was therefore
brought before the Reichstag (1911 or 1912), which
provides for the establishment of an arbitration
board for the entire German Empire, to deal with
collective disputes extending over more than one
city, the industrial courts, however, to retain their
functions in the settlement of local disputes.
These are the more important agencies provided
for the care and protection of the worker in his em-
ployment. They indicate the attempt of the state
to keep in touch with the changing nature of in-
dustry and to legislate accordingly. Public opinion
and legislation do not lag many years behind the
problem, as they do in this country. Thought keeps
abreast of industrial conditions as they present
themselves.
CHAPTER XIV *
SOCIAL INSURANCE AND SOCIAL DEMOCRACY
THESE are some of the means employed to pre-
vent waste, to keep the producing power of the
nation at a maximum, to protect the worker and
save him and his family and the community from
the demoralizing effects of hard times and irregular
employment. The programme stops far short of
a solution of the industrial problem, and the Social-
ists have but little sympathy with these palliatives
as in any sense remedial. But from the point of
view of the individual and society it is far in advance
of anything yet developed in America, although as a
social programme it fails in that it does nothing to
create more jobs or bring about a juster distribution
of wealth. Neither the labor exchanges or the lodg-
ing-houses or the relief agencies increase money
wages or the general standard of living.
One can speak with more enthusiasm of the pro-
tection assured the worker from accident, sickness,
and old age through, the insurance funds. Even
the Socialist admits that these are steps in the right
direction and have materially improved the condi-
tion of the working classes.
192
SOCIAL INSURANCE AND DEMOCRACY 193
The insurance laws date back to the early eighties,
a generation ago, when Bismarck was engaged in
his struggle with the rapidly growing movement
for social democracy. He hoped through remedial
social legislation to undermine the following of the
party. But Bismarck was more than a political
opportunist when he said in 1882: "It is the tradi-
tion of the dynasty which I serve that it takes the
part of the weaker ones in the economic struggle."
And in discussing the various measures which he
had in mind for this purpose, Bismarck said in the
course of a debate: "The end I have in view is the
establishment of an institution having state support
and extending to the whole empire, for the main-
tenance of old and infirm persons," and in another
speech on the same general subject he said:
r 'The domain of legislation which we enter with
this law . . . deals with a question which will not
soon disappear from the order of the day. For
fifty years we have been speaking of the social ques-
tion. Since the passage of the Socialist Law I have
continually been reminded that a promise was then
given that something positive should also be done
to remove the legitimate causes of Socialism. I
have had the reminder in mind tola die up to this
very moment, and I do not believe that either our
sons or grandsons will quite dispose of the social
question which has been hovering before us for
fifty years. No political question can be brought
to a perfect mathematical conclusion, so that book
balances can be drawn up; these questions rise up,
194 SOCIALIZED GERMANY
have their day, and then disappear among other
questions of history; that is the way of organic de-
velopment."
This was the appeal of Bismarck in support of his
proposal for a comprehensive series of laws for com-
pulsory insurance against accident, sickness, and old
age, spectres which pursue the average working man
from youth till old age.
The insurance laws for sickness were enacted in
1883, for accidents in 1884, and for old age and in-
validity in 1889. All this legislation was codified
and amended by the law of 1911, which embodies the
experience of previous administration.
Insurance against sickness is provided for those
employed in factories, mines, workshops, quarries,
transportation, and other industries. Employees
of public enterprises are also covered, as are agri-
cultural laborers, household servants, teachers, and
practically all wage-earners receiving less than 2,000
marks a year. The sickness-insurance funds are
of various kinds. There are local funds provided
by the parishes for all of the trades within their
limits; while many of the large industries have
funds of their own, as do the miners and the build-
ing trades.
All of the funds provide for free medical and sur-
gical attendance, hospital treatment and supplies,
as well as sick pay from the third day of sickness.
The benefits amount to from one-half to three-
SOCIAL INSURANCE AND DEMOCRACY 195
fourths of the daily wages received by the bene-
ficiary or the income upon which his assessment is
based. The pay is continued for not more than
twenty-six weeks, after which time, if the illness
still continues, the burden is transferred to the acci-
dent-insurance fund.
The sickness-insurance fund is maintained by con-
tribution from the working men, the employers,
and to some extent from the community. Generally
the employee pays two-thirds of the premium and
the employer one-third, the liability of both being
ascertained by periodic reports from the employer
as to the number of employees liable to insurance.
The premiums are collected by stoppage, the em-
ployer deducting the assessments of the employees
when wages are paid, which, along with his own
share, are then transmitted to the fund. The ex-
pense to the worker is from 1^ to 4 per cent, of his
wages.
The administration of the funds is largely in the
hands of boards chosen by the employers and the
employees. General meetings are held, to which
all persons who contribute to the fund may come,
at which meetings the delegates who have charge
of the insurance are elected.
A second insurance fund is provided against
accident. The provisions of this law cover sub-
stantially the same classes as those covered by sick-
ness insurance, and the method of administration
196 SOCIALIZED GERMANY
is substantially the same. Every employer is bound
to provide insurance against accident. Upon open-
ing a factory he automatically becomes a member
of the trade association covering his business, and is
bound to contribute to the insurance fund. This
fund is managed by the executive board of the trades,
which has power to classify trades and fix the danger
schedule. But better than this, the board has power
to enforce rules and appliances for the prevention of
accidents. If a member refuses to abide by the
ruling of the board, he may be fined for his neglect or
his danger rating increased.
By this means the employers are stimulated to
introduce safety devices, while the special knowledge
on the part of the individual trade association leads
to a better administration of the rules than would be
possible on the part of the state. In all of these
matters the employees are consulted. They are
also allowed representation on the executive board.
Benefits under the accident-insurance law are not
left to judicial inquiry. The employee is not put to
the expense and delay of a long litigation. Even
though the employee is negligent, he is entitled to
compensation, unless there should be evidence that
he intentionally brought the accident upon himself.
Here, as in sickness, the cost of human losses in in-
dustry is shifted in part onto the cost of production.
It is passed on to the community where it belongs.
It is treated as an inevitable incident to industrial
SOCIAL INSURANCE AND DEMOCRACY 197
conditions. Germany does not compel the worker
to make a vicarious sacrifice for the community.
The amount of the compensation paid depends
upon the wages of the employee and the extent of
the injury. If he is wholly incapacitated by the
accident, he receives a full pension, which amounts to
two-thirds of his yearly wage. If he is still able to
work, the pension is adjusted to his earning ability.
In case of accident which results in death, an imme-
diate payment of about one-sixth of the yearly wage
is paid. In addition to this the widow and depen-
dent children are pensioned, the widow until her
death or remarriage and the dependent children up
to their fifteenth year. In this event the annual
pension does not exceed 60 per cent, of the annual
wage.
Not only is the German workman insured against
sickness, which marks the beginning of much of the
poverty of our cities, as well as against the accidents
of industrial establishments, but since 1891 prac-
tically all German working men and working women
over sixteen years of age are insured against old age.
Those whose earnings exceed $500 are not covered by
old-age insurance nor are the higher class of em-
ployees and servants. The administration of this
branch is carried on by insurance societies, which
cover certain sections, or by the state at large. All
of them are under the supervision of the state and are
controlled by the employers and the employees. The
198 SOCIALIZED GERMANY
old-age funds are supplied by the employers and the
employees, who contribute in equal shares to the fund.
To this the empire adds $12.50 toward every pen-
sioner. The cost to the worker is about the same
as the sickness insurance. In order to enjoy old-
age insurance persons must have made their pre-
scribed contributions to the fund; they must have
been members for a certain length of time and have
either become disabled or reached their seventieth
year. The premiums of the employees are deducted
by the employer weekly and are attached to cards
by means of stamps at the time of the payment of
the wages.
The amount of the old-age benefit received, it is
true, is not very large. It is not sufficient in itself
to support the recipient. It amounts to from $27.50
to $60 a year, according to the wages enjoyed or the
premiums paid by the beneficiary.
An overwhelming majority of the population are
covered by one or all of these insurance funds. The
population of Germany is 67,000,000, or approxi-
mately 13,000,000 families. In 1908 there were
13,189,509 persons of all classes insured against
sickness. The contributions amounted to $91,491,-
000, and the insurance paid out in benefits of all
kinds was $82,762,000. The number insured against
accident in the same year was 23,674,000, the amount
collected was $51,887,000, and the compensation
and benefits paid to the insured and their dependents
SOCIAL INSURANCE AND DEMOCRACY 199
was $39,471,000. The number insured against old
age and invalidity was 15,554,000; the contributions
by the employers and the employees amounted to
$71,470,500, and the sums paid in pensions and
other benefits, $45,369,000. The average amount
of old-age pensions paid in 1905 was about $40.
During the twenty years from 1885 to 1905 the sick
benefits paid to working people amounted to $687,-
820,000, the accident benefits to $229,475,000, and
the old-age and invalidity since 1891 to $290,540,000.
All told there has been paid the colossal sum of $1,-
276,835,000 by these three insurance funds. Of this
total the working classes paid less than one-half,
the employers a somewhat larger share, while the
empire contributed $96,700,000.
Speaking of the insurance funds and their bene-
fits, Professor W. J. Ashley, of England, says:
" (1) Two-thirds of all the wage-earning work-
people in Germany are insured against sickness, and
can confidently look forward to receiving, in case of
need, both medical assistance and pecuniary relief;
i. e., there is a much narrower fringe of people totally
unprovided for. (2) A considerable part (one-third)
of the cost is compulsorily borne by the employers.
(3) Thirteen out of sixteen wage-earning work-
people have a right to a small pension in case of
permanent incapacity, or on reaching the age of
seventy a far larger number than the few who in
England benefit by friendly society pensions. . . .
The pension is small, varying from about two shil-
lings to five shillings a week. But, added to other
200 SOCIALIZED GERMANY j
means of livelihood, it will often make all the differ-
ence between a pinched but possible existence and
absolute starvation; and it is to be remembered
that it can be claimed as a right and not as a charity.
(4) Almost two-fifths of the cost of this is also
compulsorily borne by the employers." 1
The cost of these insurance schemes is a substan-
tial burden to the employing classes. Yet, in spite
of the increased ^cost which it entails, German in-
dustry has not suffered in competition with the
world. The system is empire-wide, and the contri-
butions assessed against the employer are passed
on to the cost of production like any other charges.
It is also probably true that the efficiency and well-
being of the working classes has been so greatly
improved that the employers themselves have gained
by reason of the insurance.
One cannot exaggerate the effect of the insurance
legislation on the mind of the worker. The fear,
uncertainty, and even terror which are ever present in
his mind are relieved. The contributions, it is true,
are not very generous; the worker is compelled to
make contributions to the funds, and the administra-
tion of the law has some defects. But even the So-
cialists are inclined to admit the advantage of these
laws. Edmund Fischer said of them in 1905:
"Let the Industrial Insurance legislation be de-
preciated as it may, it must nevertheless be con-
1 The Progress of the German Working Classes in the Last Quarter
of a Century, p. 18.
SOCIAL INSURANCE AND DEMOCRACY 201
f essed that the old-age and invalidity pensioners take
quite another social position to that of the incapaci-
tated grandfather of twenty-five years ago, who was
a load upon his children or was exposed to the
scandal of being maintained by the parish. Every
increase of the pensions is thus a piece of civilizing
work. The social laws are, it is true, only founda-
tion walls, but they are these at least, and for that
reason they are the beginning of a great fabric of
human solidarity."
Taking a more practical view of the question,
Herr Paul Kampfmeyer, the Socialist writer, said
recently in the Sozialistische Monatshefte : "The
German industrial insurance legislation has had
almost the same effect for labor as protective leg-
islation. It means an actual economic gain of a
milliard and a half of marks" ($375,000,000).
Aside from the positive accomplishments of the
state in these lines of social reform, one is impressed
with the seriousness with which the cities as well
as the nation are considering the whole question
of protection and care of the people. There are
numerous conferences, attended by representatives
from the empire and the various states, from the
cities, the universities, and the philanthropic socie-
ties. The best thought of the nation is given to
the study of ways and means for the solution of the
many problems which arise in connection with un-
employment, with the hazards of industry, with the
poor and the destitute members of the community.
202 SOCIALIZED GERMANY
Poverty has not been abolished in Germany.
Industrial depression takes its tribute there just
as it does with us. But the impressive thing about
it all is that the nation views these questions with
something of the same seriousness that it does the
building of dreadnaughts, railways, or canals, the
adjustment of taxes, and the building of cities. It
calls to its aid the state and the municipality for the
training of the body and the mind as well as for the
keeping of the worker in as high a state of efficiency
as possible.
It is, of course, difficult to measure the effect of
this legislation or to make accurate comparisons of
labor conditions in different countries. There are
so many elements involved. And it is hard to por-
tray the exact conditions of the working classes.
The German artisan works long hours at exhausting
labor; his wages are low in comparison with those
which prevail in America; housing conditions are
very bad, not only in the city but in the country,
and the worker is far from enjoying the freedom of
action or the hopeful outlook of this country. Pov-
erty of the most distressing kind still prevails, the
life of the people is in many ways poor and sordid,
the unrest of the workers and their political demands
are all justified by conditions. It would be false to
suggest that Germany had made any revolutionary
changes in these matters or aimed at a programme
of industrial justice or political equality. But some
SOCIAL INSURANCE AND DEMOCRACY 203
things can be accepted. In the first place emigra-
tion has almost ceased from the German cities. The
worker is better satisfied with what he gets at home
than by the promise of greater rewards in the new
countries. He has the assurance of protection
against the worst misfortunes that can befall him ;
and if he does not amass wealth he at least knows
that sickness, accident, and old age have lost some
of their terrors. The legislation of Germany has
been directed against the misery and waste of the
worker rather than against his low wages or his in-
dustrial and political status. These are gains which
he has to make for himself. And the worker recog-
nizes that fact. It is for these that he organizes
into the trade-union, it is this that lures him to the
Socialist party, it is this that lies back of the cease-
less propaganda that is carried on.
And it should be noted that this paternalistic
legislation has not had the effect which Bismarck
anticipated. It has not reduced the Socialist vote,
which has grown from year to year with almost un-
checked rapidity. In 1871 the party elected 2
members to the Reichstag, in 1875 9, in 1877
12. In 1871 the total vote was 124,655, in 1875
it rose to 351,952, and in 1877 to 493,288. Despite
the repressive laws adopted after the attempt on
the life of the Emperor and the enactment of the
insurance laws which were expected to satisfy the
worker, the growth in the Socialist vote continued,
204
SOCIALIZED GERMANY
although the vote in 1881 fell to 312,000. In 1884
it rose to 539,000, in 1887 to 763,000, in 1890 to
1,427,000. Since then the vote as well as the rep-
resentation in the Reichstag has continued to in-
crease with each election. The vote and the rep-
resentation in subsequent years are as follows:
YEABS
TOTAL VOTE
REPRESENTATIVES
ELECTED TO
REICHSTAG
1893
1,787,000
44
1898
2,107,000
56
1903. . .
3,011,000
81
1907
3,259,000
43
1912
4,250,000
110
Political agitation and compulsory education
have created a hunger in the mind of the German
workman for further enlightenment. More than any
worker in the world, he seems to realize the value
of knowledge and its aid to him in the bettering of
his condition and the enrichment of his life. And
the German worker has evolved many agencies of
his own for satisfying this new desire.
One of the Socialist deputies in the Reichstag
recently said: "You do not know the workman's
pride. We support ourselves by the work of our
hands, and on labor work ourselves upward. We
have painfully educated ourselves in the evening and
night hours, while to you education came without
effort, yet I would not exchange intellectual power
with you."
SOCIAL INSURANCE AND DEMOCRACY 205
Many opportunities for culture have been created
by the workmen themselves. Educational associa-
tions are to be found in the towns, many of which
have existed for years. More recently they have
become training-schools for socialism. Special edu-
cational committees are formed in connection with
the local trades council, or trade-union, which pro-
vide intellectual and recreative opportunities for
members of the Social Democratic party. Lectures
are given on socialism, science, history, ethics, and
natural science. The stereopticon is widely used.
Musical, literary, and dramatic performances are
also held, as well as exhibitions for the dissemination
of general knowledge. The Socialists have a school
in Berlin where classes are held throughout the
winter months, in which such subjects as political
economy, sociology, jurisprudence, history, rhetoric,
and other subjects are studied. The classes do not
begin until nine o'clock and last for an hour and a
half. Similar institutions have been arranged in
other cities, there being no charge or an insignificant
one for attendance. The only condition is that the
member shall belong to the Socialist party. In
Munich the Working Men's Educational Associa-
tion offers twenty courses of lectures, varying from
two to twelve in number, and the subjects studied,
among others, are the following: "Introduction to
political economy," "agrarian reform and policy/'
"political and culture history of the nineteenth
206 SOCIALIZED GERMANY
century," "evolutionary periods in Bavarian his-
tory," "history of political parties in Germany,"
"industrial insurance," "international law," "the
development of co-operation in Germany," "modern
poets and thinkers," "Albrecht Diirer," "the
German language," and "theories of criminal
psychology."
The lecturers are for the most part political and
party leaders, members of 'parliament, trade-union
leaders, editors, and social authors. The economic
subjects are most popular. They are listened to by
crowded audiences of working men and women who
attend them after a long day's work.
The working men, as in Belgium and Denmark,
are also developing an artistic and dramatic life of
their own. In Berlin there is a " free people's stage/'
where dramatic performances of a high order are
given at a small cost. The cheap and tawdry finds
no place in these performances, the dramas being
mostly of a political and social order. Such names
as Schiller, Ibsen, Hauptmann, and Sudermann
are the most popular. There are tragedies of
Shakespeare and Goethe as well as good modern
comedies. The same organization provides sports
and recreation on Sunday in the suburbs, the chil-
dren being led to then- playgrounds by bands and
members of the working men's party.
In recent years the temperance movement has
taken hold of the German working man. Germany
SOCIAL INSURANCE AND DEMOCRACY 207
is the last country in the world where prohibition
would seem a hopeful propaganda, yet during recent
years the agitation for temperance has made great
headway. Drunkenness has never been a German
vice, even though the Germans and especially the
Bavarians are great beer-drinking people. But the
idea has gained ground that the use of alcohol is
detrimental to the individual worker as well as the
working-class movement. And socialism has pro-
moted the policy of abstention. The movement is
not a moral one. Nor is it stimulated by such or-
ganizations as exist in America and England. It is
purely utilitarian and is inspired by a growing ap-
preciation of the evils which result from the use of
alcoholic beverages. This is not the only influence
leading to temperance in Germany. Yet it is prob-
ably the most influential one. The extent to which
this movement has reached the working classes is
seen in the fact that during twenty years the con-
sumption of beer has fallen in Munich from
to 64J4 gallons per head.
CHAPTER XV
HIGHER EDUCATION-PROVIDING THE
EXPERT
ONE need not be an expert to appreciate the
extent to which German science contributes to in-
dustry, trade, and the arts of war. And one need
not be an educator to see in the schools of the
country one of the great, possibly the greatest of
all, influences in her almost single-handed power.
Germany is the land of the schoolmaster. The edu-
cators and the war minister are the guiding spirits
in her life. Beginning at the top, there are 21 uni-
versities with an enrolment of 66,000 students.
These are not colleges in the American sense of the
term, preparing students for a Bachelor of Arts
degree; they are advanced institutions, conferring
the degrees of Doctor of Philosophy, of Law, Medi-
cine, and Science. The gymnasium corresponds
roughly with our colleges; the university with the
postgraduate departments of Harvard, Columbia,
Johns Hopkins, Chicago, and a half dozen great State
universities, which enroll in these advanced courses
not to exceed a few thousand men. Germany could
be put inside the confines of Texas and still leave
room for Switzerland. Yet this relatively small na-
208
HIGHER EDUCATION 209
tion geographically has a great army of men pre-
paring for the severest kind of competition in the
business, professional, and scientific walks of life.
Higher education had its beginning in the awaken-
ing of Germany following the Napoleonic oppression.
The University of Berlin was founded in 1810. It
was followed by Breslau, 1811; Bonn, 1818; and Mu-
nich, 1826. There had been universities before of
the mediaeval type, but these new state foundations
were part of a consciously directed movement, to
recreate Germany, like the political and industrial
reforms of Stein and Hardenberg.
Friedrich Paulsen says of the founding of the
University of Berlin:
"It had been intended, from the first, to become a
centre of German science and learning an im-
perishable monument of the strength and self-sacri-
fice which enabled the prostrate state to rise again
and at the same time of the spirit in which this ele-
vation was effected. The king himself at one time
defined that spirit by saying that the Prussian state
would have to make up for its loss in physical by
intellectual forces. The new idea that came in with
the University of Berlin was that the university
should be above all the workshop of free scientific
research. From the very beginning the first quali-
fication for membership on the teaching staff was
skill in scientific research rather than teaching ability.
University work was divested of everything that
smacked of the school or secondary school." 1
1 German Education Past and Present, book 4, chapter II.
210 SOCIALIZED GERMANY
The same spirit animates the universities to-day.
The German student enters the university after he
has completed his leaving examination from the
Gymnasium. He enters it as men in America enter
the professional school, with a definite faculty and
a definite goal before him. He has generally chosen
his profession; he is preparing for life, and the uni-
versity is definitely adjusted to his choice. There
are faculties of the greatest variety of subjects,
many of them definitely designed for the civil service,
whether it be law, state administration, the adminis-
tration of cities, education, or science. And back of
the efficiency of Germany in all her governmental
activities is the training provided in the universities
and technical schools, which is a prerequisite in most
instances to examination for the state service.
Following 1870 a new development took place in
higher education. It involved an emphasis upon
natural sciences, above all on chemistry, with tech-
nological practice, through which " science has liter-
ally been turned into a gold-mine." New fields of
research and new chairs are continually being added,
while new types of universities are being opened like
those of Frankfort and Diisseldorf .
Growing out of the emphasis upon exact science,
eleven technical universities (technische Hochschu-
leri) have been established. They have the same
standing as the regular universities and require an
equally exacting training, though with less Latin
HIGHER EDUCATION 211
and Greek. These schools train for the higher
technical professions, such as architecture, engineer-
ing, chemistry, mechanical engineering, naval en-
gineering, and are one of the contributing factors to
the scientific achievements and the highly trained
civil service of the state. These universities are
generally located in the large cities. They enjoy an
extraordinary prosperity and attract students from
all countries.
Speaking of the technical colleges, Professor
Cooley says:
"No other institutions seem to have been more
important in promoting the great industries of Ger-
many. They illustrate Germany's patient toil and
tenacity in seeking success in the industrial world by
rational means and scientific methods. They are
institutions devoted to the adaptation of science and
education to the necessities of economic life. " 1
These technical universities enroll 17,000 students,
which, added to the attendance at the universities,
brings the total enrolment of the higher research in-
stitutions up to 83,000.
But the opportunities for advanced education do
not end with the universities and technical schools.
There are 3 schools of mines, 8 agricultural colleges
attached to the universities, 5 veterinary colleges,
and commercial colleges of advanced rank at Leipsic,
Cologne, Frankfort, Aix-la-Chapelle, and Hanover.
1 Vocational Education in Europe, p. 173.
212 SOCIALIZED GERMANY
Prussia has an agricultural college in Berlin with de-
partments for the sugar industry and the manufac-
ture of yeast and starch. There are forestry schools
for those preparing to enter the government for-
estry service. Berlin has a school of town-planning,
Diisseldorf has recently opened a college of municipal
administration, and Frankfort has just dedicated a
municipal university, similar in rank to the older
foundations of the empire.
In addition to the above there are 424 commercial
and industrial schools of lower rank, which prepare
men for business and industrial pursuits, whose
courses include modern languages, international law.
and business efficiency.
Other special schools are provided by the cities,
planned for particular purposes or for boys and girls
of talent. There are textile schools in those parts
of Germany where the textile industry prevails.
Essen has schools devoted to training in the iron
and steel industry, while similar schools exist for the
building trades, for machine trades, and for other
industrial ends. Altogether there are 200 such
special high schools, in addition to the technical
and commercial universities.
The training received in these schools explains the
wonderful skill of the German workman; the facility,
ingenuity, and diversity of German industry. Of
special influence in this field are the higher schools
for industrial art, which cultivate the faculty of
HIGHER EDUCATION 213
imagination and invention rather than mere tech-
nical skill. Some of these schools are general, some
are special. But in each case they endeavor to
adapt their courses of study to local industrial con-
ditions. This is particularly true of the industrial
art schools, like those of Munich, Frankfort, and
Dlisseldorf. In these schools we find courses for
decorators, furniture designers, scupltors, modellers,
and jewellers, while many of the schools have other
courses for engravers, etchers, enamellers, litho-
graphers, book designers, and landscape-gardeners.
There are courses in women's artistic handicrafts.
All of these schools have workshops to protect the
pupils from becoming mere draftsmen. 1 Evening
and Sunday courses are provided for workmen who
cannot afford to attend the schools during their
working hours.
When we consider the universities, technical
schools, commercial colleges, and special schools of
various kinds, enrolling several hundred thousand
students, specializing to the last degree along every
line of thought, science, and industry, and compare
this provision for the training of a nation with the
educational equipment of England, France, or even
the United States, we find an explanation, for the
most part an overlooked explanation, of the founda-
tions of modern Germany; of the industrial discover-
ies, the contributions of science to industry, the
1 Cooley, Vocational Education in Europe.
214 SOCIALIZED GERMANY
development of the by-product, of intensive mining
and agriculture, and the expansion of the state from
an agricultural country of a generation ago into the
most dominating industrial nation of modern Europe.
There are faults in the system. There is a terrible
pressure of highly educated men struggling for every
opening. There is complaint of overwork, of de-
fective eyes and even of defective physique as a
result of overtraining and too great pressure. There
is undoubtedly individual waste and countless disap-
pointed ambitions. All these are vicarious costs
which the expansion of higher education involves in a
country of relatively limited opportunities. But
education itself has created opportunities. It has
created new industries. The wonder is not that the
overcrowding is so great, but that it is relatively so
little, in view of all the conditions.
Undoubtedly Germany is the most highly educated
nation in the world. She took the lead in the move-
ment for the universalization of higher education.
Her universities and technical schools attract men
and women from all over the world. They have pro-
foundly influenced higher education in the United
States. They gave us the postgraduate course, the
seminar, and the idea of research. Our higher
universities were modelled upon those of Germany,
just as our colleges were modelled upon those of
Great Britain.
But education in Germany is not top-heavy by
HIGHER EDUCATION 215
any means. It is built from the bottom up, with
compulsory education for all classes from six to
fourteen years of age. There is no illiteracy in
Germany, or practically none. It amounted to .03
per cent, in 1905. In France illiteracy is 14 per cent.,
in Great Britain 13.52 per cent., in Italy 30.6 per
cent., in Austria 26 per cent., in Hungary 40.9 per
cent., in Russia 61.7 per cent., while in the United
States it is 7.7 per cent.
Education is prized by all classes. It is looked
upon as the one avenue of advancement. It is
almost exclusively public and is generously sup-
ported by taxation. Individual cities have de-
veloped educational programmes of their own to
meet local conditions, to encourage industry, to at-
tract residents. Above the minimum standard pre-
sented by the state they have added new schools and
colleges designed to promote their local needs. The
schools are for the most part big and spacious. They
contain the most modern equipment, and the ele-
mentary schools are surrounded by playgrounds.
Next to the army and the navy, education receives
the most solicitous thought of the state. It is recog-
nized by Kaiser, minister, local authorities, and the
people as the open road to national greatness and
power.
Below the universities are the secondary schools,
the gymnasia. These correspond roughly with our
colleges and high schools in the age of the pupils,
216 SOCIALIZED GERMANY
but not in the methods employed. The gymnasia
lead directly to the university, the average length
of preparation before the pupil is ready for college
being twelve or thirteen years, about the same as it is
in this country. But the work in the gymnasia, so
far as study goes, is much harder than it is in this
country and the student is much more thoroughly
trained than he is with us.
After a careful study of America, Doctor Georg
Kerschensteiner, director of the Munich schools and
the leading exponent of continuation along vocational
lines, makes this comparison with the German and
American type of secondary education: 1
"It is undeniable, that the average intellectual
maturity of the German pupil at entrance to the
university is considerably higher than the average
intellectual maturity of the student entering the
American college. In my opinion this is due to
several causes. In the first place it is due to the
fact that the stricter scientific method that charac-
terizes the work of the secondary school as compared
with that of the elementary school, begins too late,
if it is postponed until the fourteenth year, as in the
United States. The habit of strict logical thinking
cannot be inculcated early enough. But the un-
sifted scholastic material of the common school
does not permit the same intellectual demands upon
it as the selected material of the secondary school.
Thus the secondary schools of the United States
1 "A Comparison of Public Education in Germany and the United
States," Doctor Georg Kerschensteiner, United States Bureau of Edu-
cation Bulletin, 1913, No. 24.
HIGHER EDUCATION 217
not only start their work too late, but they have to
eliminate immediately in their students various
habits of purely empirical thinking, a condition with
which the German secondary school does not have
to contend. Admittedly the secondary school in
Germany begins too early when it starts at nine
years of age, but just as surely does the American
secondary school begin too late."
The gymnasium teacher is thoroughly prepared.
He must spend at least four years at the university.
This is followed by a searching state examination
and a year of pedagogical training. And the teach-
ing is excellent. The secondary schools have highly
equipped teachers, in so far as preparation and ex-
aminations can insure them.
The discipline in the German gymnasia is very
different from that of the student in the American
high school or college. "The American high school
student, " says President Pritchell in the Fifth Report
of the Carnegie Foundation, "acquires a superficial
knowledge of many subjects and learns none with
thoroughness. He lacks the hard fibre in intellec-
tual discipline. " 1 The reverse is true in the German
gymnasia. There are no electives. The pupil must
take the course as laid out by the state or leave school.
And he is trained to painstaking intellectual effort.
He acquires patience, persistence, endurance, and
thoroughness, which are the virtues promoted by
1 United States Bureau of Education Bulletin, 1913, No. 24. " Com-
parison of Public Education in Germany and the United States."
218 SOCIALIZED GERMANY
German education. On the other hand, the German
gymnasia fail to foster many of the qualities of the
American high schools or colleges. They do little
to promote initiative, good-fellowship, and cheer-
fulness. There are none of the many out-of -school
activities which are characteristic of secondary and
college education in America.
The high schools, or gymnasia, are divided into
three groups, each leading to a definite goal. Up to
very recently the classical gymnasium was the pre-
vailing type. It trained for the university, with the
emphasis placed upon Greek and Latin. By changes
inaugurated in 1901 the monopoly of the classics was
overthrown and provision was made for new types
of preparatory schools leading to the technical high
schools and the special universities. The Realgym-
nasium teaches Latin but no Greek; it favors the
modern spirit and emphasizes modern languages
and science. The Oberrealschule, however, teaches
neither Latin nor Greek, but restricts its teaching in
the main to subjects of practical importance along
scientific and mechanical lines. All three types have
common instruction in German, history, and religion.
It is only through the classical gymnasium that one
may enter the faculties of theology and philosophy
in the higher universities.
A great advantage of the long gymnasium course
of nine years is that it permits a mastery of a limited
number of subjects rather than a diversified smatter-
HIGHER EDUCATION 219
ing of many. In the Oberrealschule in Charlotten-
burg, for instance, six years are devoted to the
natural sciences. Similar periods are devoted to
physics, chemistry, and mathematics, while from six
to nine years are given to English, history, French,
German, and geography. This is the foundation
upon which the student enters the university and
the technical school. The work has been confining,
examinations are difficult, and the student has ac-
quired the ability to concentrate, to master a given
subject. He knows how to work.
When the boy enters the university a reaction
comes. During the first semesters many of the
students loaf; they enter the student corps; they
invite their souls to the many things denied them
during their gymnasium course. This is the play-
time of the German student, and he takes advantage
of the opportunity. He registers at the university
and is free to attend classes or not, as he sees fit.
The only necessity is to meet the final searching
examinations, which are oral as well as written, pre-
liminary to his Doctor degree. He usually goes
from one university to the other, in order that he
may study under the recognized leaders in his par-
ticular branch. And then during the last eighteen
months or two years of his course he reads widely
and prepares for his examinations, usually with an
eye upon one of the professions or the state or munic-
ipal service.
CHAPTER XVI
ELEMENTARY EDUCATION
PRIMARY education is compulsory for eight years,
and for ten months in the year, all over Germany.
The compulsory age is generally from six to fourteen.
The length of the school year varies from forty to
forty-two weeks, all vacations together amounting
to about nine weeks in the cities and eight weeks in
the country districts. In the United States the
length of the school year is often as low as eight
months and sometimes as low as five or six months.
The average number of school days in the year
1900-01 for the United States was 144.2. It ranged
from 76.1 in North Carolina to 191 in Rhode Island.
It is true that North Carolina, which had not even
a compulsory education law (1912) is the least ad-
vanced State in this respect, but there are twenty-
seven States in which the average attendance was
less than one hundred days, or between three and
four months. The average child in Germany spends
more weeks in school and more hours each day in
study than does the child in the more advanced
cities in this country.
The German Volksschule (people's school) and
220
ELEMENTARY EDUCATION 221
Burgerschule (citizens' school), with their eight-
year courses of study, correspond with our own ele-
mentary schools. They do not prepare pupils for
high-school work, for those who plan to continue
their education into the gymnasium, or secondary
school, transfer to the latter after the third or fourth
year of the elementary course. As a consequence
the pupils in the elementary schools are more homo-
geneous; here they receive their whole formal school
education, from which they go out into the world
of trade, business, or farming, as their necessities
require.
The great majority of the pupils attend these pub-
lic schools, which are supported by public funds, and
tuition is usually though not always free. In Saxony
a small fee of about $1.25 or $1.50 a year is required
of the parents, unless they are unable to pay.
The purpose of these schools is eminently prac-
tical. They train the children in religion, good con-
duct, and especially patriotism, which is empha-
sized in a great variety of ways. In addition, they
receive general instruction in civic and political life.
Morality is taught through religion, children of
each creed being taught separately. Behavior is
taught; etiquette is made a special point. The chil-
dren learn how to address older persons, how to
enter and leave a room. They acquire the ability
to express themselves clearly and succinctly; how to
observe and classify their observations.
222
SOCIALIZED GERMANY
Thoroughness (grundlichkeit) is the prevailing note
in the elementary schools. Much harder work is
demanded of the pupils than of our own. Not only
is the school year considerably longer than in the
United States, but the programme for the last three
or four years of work calls for thirty-two hours each
week, as compared with twenty-five, the usual
number in this country. 1
Considerably more morning work is done than in
our own schools but less in the afternoon. School
begins at eight and meets every week-day, including
Saturday. The work is usually over at one or two
o'clock, and the school day is broken up by frequent
recesses. In addition, children go to bed early and
rise early. In many cities they may not frequent
1 The range of studies in the elementary schools (Biirgerschulen*) of
Berlin is as follows:
SUBJECT
6TH YEAR
?TH YEAR
STH YEAR
Religion
Hours
per Week
4
Hours
per Week
4
Hours
per Week
4
Reading, language, spelling
6
6
6
Geography
2
2
2
History . .... ...
2
2
3
Arithmetic
4
4
4
Geometry
3
3
3
Nature study, including physiology,
elementary physics, and chemistry
Drawing
4
2
4
2
3
2
Singing
2
2
2
Gymnastics
2
2
2
Writing
1
1
1
32
32
32
*The Biirgerschulen are of a slightly higher grade than the Volksschulen,
which are the predominant type in the country districts.
George Koeppel, Elementary School Teacher, December, 1912.
ELEMENTARY EDUCATION 223
places of public amusement after 8 P. M. The con-
trol of the school authorities in these matters is
similar to that of the police.
Subsidiary schools of different types are provided
by many cities to make the ordinary schools more
efficient. Some cities have established help schools
(Hilfsschuleri) , for slow-minded children. These
schools have shops for modelling, pasteboard and
wood work, as well as exhibition rooms for the pupils'
work. The classes are small. These are not schools
for the feeble-minded. The feeble-minded are taken
care of in special institutions, usually in the country.
They correspond rather with our ungraded classes.
The Hilfsschule, however, is much more thoroughly
organized and successful in meeting the problem
of the backward child. 1 Mannheim has a system
of forderklassen, also located in separate buildings.
These are designed for children who, through lazi-
ness, lack of ability, etc., have failed of promotion.
Mannheim has another series of classes for those of
special ability, who are given special opportunities
for study and advancement.
In Munich, where vocational training has been so
wonderfully developed, the last year of the elemen-
tary course is designed to steer the boy toward a def-
inite calling and out of the blind-alley occupations.
He spends five hours a week for five months in the
year in the metal-working shop of the school and the
1 Koeppel, Elementary School Teacher, December, 1912.
224 SOCIALIZED GERMANY
same amount of time for the remaining five months
in the wood- working shop. Girls in nearly all the
classes keep their own kitchen-gardens. Similar
special schools are found in other cities.
Education in Germany is highly centralized.
Many experts feel that it is too much so. The edu-
cational programme emanates from the government
rather than from the local authorities, and the people
are accustomed to accept it without protest. De-
spite this fact education commands more considera-
tion and thought on the part of state and municipal
authorities than it does in England or America.
Doctor Georg Kerschensteiner admits that the Ger-
man system makes it difficult for local authori-
ties to try experiments and that where too great
paternalism prevails old methods are likely to be-
come sanctified by tradition. 1 Yet Kerschensteiner
and his wonderful day continuation schools of Munich
are in themselves a refutation of this comment, as
are the achievements of such cities as Frankfort,
Cologne, and Dlisseldorf .
Education is under the control of the individual
states, as it is in the United States, and within the
state the system is much more uniform than it is
with us. At the head of it all is a state department,
usually the Department of Education. Sometimes
there are two executive heads, one for general and
one for industrial education. The universities are
1 United States Bureau of Education Bulktin, 1913, No. 24.
ELEMENTARY EDUCATION 225
immediately under the minister, whose jurisdiction
over the schools is exercised through local depart-
ments, which represent the government, but differ
for different types of schools. Below the minister
and the state department are district inspectors,
in some respects like our own superintendents, but
with this important difference that they are officers
of the state. The inspector's authority is much more
than supervisory, for he has wide powers over the
internal management of the schools. He controls
teaching, discipline, and other matters. Under him
are inspectors for each community, who serve as
chairmen of the local committees. In towns this
committee represents the municipal authority. The
cost of the local school system is paid chiefly out of
local taxes, with subsidies from the state. 1
State control over the schools is also maintained
through the regulations governing the training and
examination of teachers, who are licensed to teach
only after they have passed a state examination.
Then they become part of the state civil service.
The government determines the courses in the semi-
naries for the training of teachers and the amount
and quality of work to be done by students preparing
to teach in the secondary schools. Thus the second-
ary schools are sure of having highly trained teachers,
whether it be in the largest city or in the smallest
village. This uniformity of standards, while it de-
1 Shadwell, Industrial Efficiency, vol. II, p. 401.
226 SOCIALIZED GERMANY
presses individual initiative and experiment, has the
advantage of uniform excellence in preparation.
State regulations similar to the above exist with
regard to the university and technical schools, in
which we do not find that variation in standard
which prevails in this country.
In addition to the standardization of education
within the state there is substantial uniformity be-
tween the systems of the several states. A state may
excel in one branch of education, as does Bavaria in
vocational education, but the differences are not
fundamental.
The teachers are highly trained. In Prussia there
are 129 seminaries for teachers, all but 9 of them
for men. The training lasts for six years, although
in Prussia only three are spent in the seminary and
three in special institutions preparatory to it, main-
tained by the state or the municipality. After hav-
ing been admitted to the service, teachers are pro-
moted by competitive examinations or by reason of
their recognized achievements. They have the
privileges of civil servants, enjoy partial freedom
from military service and exemption from municipal
taxes, are paid a relatively high salary and have the
assurance of a pension on retirement. Thus the
position of the teacher is assured so long as he is
guilty of no infraction of the laws. As a result of
these conditions and the pressure for admission to
the state service three-fourths of the teachers in
Prussia are male. The majority of the teachers in
ELEMENTARY EDUCATION 227
this country are female, the distribution in 1901
being 306,063 female and 123,941 male. And the
preponderance of the woman teacher is increasing.
One of the consequences of this is a great wastage
of teachers. Many women marry and drop the pro-
fession, while many men enter it as a stepping-stone
to something else. The same is true in England.
In neither country is teaching a standard profession
as it is in Germany, while in neither country is so
much attention given to the training and preparation
of the teaching staff.
The physical health and well-being of school
children is cared for with the same thoroughness
that characterizes education. Medical inspection
is general. All of the large cities and most of the
small towns have school physicians who examine the
child on entering school, who call in the parents and
advise them of any special dietary or other needs.
Accurate records are kept, especially those of back-
ward children. There is an annual congress of the
Association for School Hygiene which is attended by
school physicians from all over the country and is
designed to unify the system of medical inspection.
Strasburg has maintained a municipal dental
clinic for school children since 1902, which example
has since been followed by Darmstadt, Essen, and
other cities. In 1906 Berlin organized a Central
Committee for the Dental Care of School Children,
which was liberally subsidized by the Prussian
government.
228 SOCIALIZED GERMANY
Some cities have established open-air schools in the
woods, Waldschulen, for sickly and anaemic children.
To these schools children are sent if they cannot be
properly cared for at home and brought up to nor-
mal condition. Instruction in these woods schools
is given in the forenoon and each period of recitation
is followed by a period of active exercise. The num-
ber of Waldschulen is increased year by year, as are
the walderholungsstdtten, or recreation resorts in the
woods, where there is no regular instruction, and the
aim is merely improvement in the health of the
children. Parents who are able to pay for their
children's treatment in these places are expected
to do so.
The feeding of needy school children has also made
rapid progress. Experiments were made along this
line as long as forty years ago. By 1896 the number
of cities which had made provision for feeding school
children had increased to 79, some of which gave
breakfast, some luncheon, and a few both. In 1908
the number had risen to 124 cities of over 20,000
population and to 70 with populations of from 10,-
000 to 20,000. l
Physical culture and gymnastics have been de-
veloped with great thoroughness during the last two
decades. In most schools three hours per week are
devoted to physical training, while in Prussia all
schools have daily calisthenics which, wherever pos-
1 Doctor Hinze, Soziale Kultur und Volkswirtschaft, p. 302.
ELEMENTARY EDUCATION 229
sible, are provided out-of-doors. Gymnasium courses
for boys provide drills which will later be of use to
them when they serve with the colors, such as rapid
falling down, rising, etc. The regular physical
training is supplemented by long walks in the coun-
try, with practice in distant vision, in calculating
distances, and the development of the sense of direc-
tion, etc. During the spring and summer frequent
outings are taken to the woods and places of his-
toric interest. One sees groups of school children
daily walking through the country, at the zoological
gardens, in the parks, art galleries, and museums.
Schulerwanderungen is another form of recreation,
in which groups of twenty or more boys or girls from
the upper grades spend from five to six days on long
walking tours with a sympathetic teacher.
The government has done much to encourage lo-
cal societies for physical culture. These societies ar-
range for trips to the country, which are encouraged
by cheap railway fares and arrangements for sleeping
in the barracks and other public institutions. Cities
and rural communities provide exercise halls and
funds for these societies. Prussia appropriated two
and one-half million marks in 1913 to assist in
the development of the recreative activities of the
schools. Schools are also generously equipped for
physical culture. Many of them contain gymnasi-
ums, while 72 cities have 500 elementary schools
with bathing facilities.
230 SOCIALIZED GERMANY
It is difficult to overstate the influence of education
upon the life of Germany. And it is almost wholly
the product of the last generation. Education is
woven into the fibre of the empire. It is not a de-
tached thing, separate and apart. It is an agency
for meeting every possible want and anticipating
every need. It not only prepares the boy and girl
to live, it prepares them to work, and to work in the
most efficient way possible. And along with the most
minute specialization there is a background of cul-
ture and familiarity with cultural things that ena-
bles even the poor to enjoy literature, art, and music
as well as the beauties of nature. The deadening
influence of modern industry with its automatic
processes has the counteracting influence of general
and special education, so that the variety of training
which modern industry has destroyed is supplied
through the school and the opportunities for life
which the school opens up. Education is also closely
integrated with industry through the college, special
schools, and vocational training, while a love for the
Fatherland, a veneration for the Hohenzollerns, a be-
lief in the destiny of the empire, and a willingness
to sacrifice everything for the state are some of the
by-products of an educational system which, if not a
model that can be copied by other countries, is at
least a suggestion of the commanding position which
education will probably enjoy in the civilization of
the future.
CHAPTER XVII
VOCATIONAL EDUCATION PREPARING THE
CHILD FOR LIFE
COMPREHENSIVE as are the provisions for ele-
mentary, secondary, special, technical, and university
training, they by no means complete the catalogue
of the educational agencies of Germany. It was real-
ized by educators that elementary education did not
prepare the boy and the girl for the particular work
which they desired to follow; it provided no knowl-
edge of industry, trade, or even the domestic sciences.
The continuation school was designed to meet this
need. It is another of Germany's contributions to
modern education. It is designed for those whose
education stops with the elementary school and who
are beginning to earn their living, and is based upon
the fact that only 8 per cent, of the boys continued
their education beyond the lower grades. The con-
tinuation schools are designed to reach the other 92
per cent, of the student body.
The continuation school had its origin in a small
way in Rhineland and Westphalia. Attendance was
at first voluntary. But the schools did not draw
many pupils from the trades. Employers and em-
231
232 SOCIALIZED GERMANY
ployees considered it a waste, and the experiment
seemed destined to failure. The same thing was
true in other towns, even in Munich, where the con-
tinuation school had reached its widest and best
development. Voluntary continuation schools with
Sunday and evening classes were not a success un-
til Doctor Kerschensteiner converted the schools of
Munich into a compulsory system obligatory upon
all who had left the elementary schools.
The Munich idea is now coming to prevail all over
the empire, and compulsory continuation education
is accepted by the people as a necessary adjunct to
the elementary school. As long ago as 1891 an
imperial law opened the way for its extension. This
has been followed by subsequent decrees, by which
certain local authorities were empowered to estab-
lish compulsory schools. Under the existing regu-
lations employers are required to give their em-
ployees under eighteen years of age leave of absence
from work so that they may attend these schools
during the hours prescribed by the authorities. At
the present time all of the large towns of Prussia
have availed themselves of these powers and have
inaugurated continuation schools. Almost all the
other states of the empire have followed Prussia's
example. And the compulsory feature is enforced.
In Hamburg, for instance, employers hiring helpers
of from fourteen to seventeen years of age must
supply the authorities with their names, and they
VOCATIONAL EDUCATION 233
as well as the parents and guardians are under
obligation to see that the young people attend these
schools.
Thus far the compulsory principle has been en-
forced for the most part in the larger cities. Within
the last few years legislation has been enacted ex-
tending permissive powers to smaller towns and
country districts. Substantial subsidies are granted
by the state for the building of these schools. Within
a few years' time compulsory continuation educa-
tion will be universal throughout the empire.
The normal length of attendance required in these
schools is six to eight hours per week for three years,
the school year being forty weeks long. In Berlin
and in many other cities girls must now attend as
well as boys. Thirty thousand boys attended com-
pulsory continuation schools in Berlin in 1912 in
over 1,000 classes, which included all trades, and
149 classes in commercial branches with 4,416
pupils. 1
The system has grown with great rapidity. A
report of the United States Bureau of Education
states that
"In 1910 Prussia had 1,818 industrial continua-
tion schools (gewerbliche fortbildungsschuleri) with
321,226 students; 59 association schools with 5,831
students; and 285 guild schools, with 11,592 students.
Of the industrial continuation schools 1,749 had
1 Koeppel, Elementary School Teacher, February, 1913.
234 SOCIALIZED GERMANY
compulsory attendance and 69 had optional at-
tendance. In former years there were many more
optional schools, as compared with the proportion
to-day, and this proportion is growing. . . . Pre-
viously the municipalities received no support from
the Prussian state for these continuation schools.
Now, however, the state is subsidizing them and
conditioning this help upon compulsory attendance,
and most of the communities have adopted it. ...
Compulsory attendance stops with the 18th year.
. . . Attendance at a recognized guild school re-
lieves the boy from attendance at the public indus-
trial continuation school." 1
The instruction in these schools, both in the trade
subjects and other subjects, is made to fit the needs
of the pupil as nearly as possible. In the arithmetic
course checks, drafts, and bills of exchange are
studied. The bookkeeping instruction is adapted
to the trade in which it will be used. In the classes
for factory workers only such instruction is given
as is considered of value to the permanently depen-
dent worker. There is instruction in industrial regu-
lations relating to apprentices and journeymen (the
apprentice system is still holding its own in Germany
alongside of the factory system), order and discipline
in industrial operations, the hygienic requirements
of the workshop, the co-operation and division of
labor. Then there is the training for good citizen-
1 U. S. Bureau of Education Bulletin, 1913, No. 9. See also J.
Saxon Mills, in Fortnightly Review, vol. 101, January- June, 1914 ?
and Geo. Koeppel, in Elementary School Teacher, February, 1913.
VOCATIONAL EDUCATION 235
ship. The boy is shown the connection of the indi-
vidual calling with the common life of the family, the
workshop, community, state, and empire; and he is
taught the genesis and system of important public
institutions, reverence for the laws, loyalty to the
home and Fatherland, and interest in the affairs of
the town and the nation. The pupils learn about the
workings of the local municipality and its depart-
ments, public hygiene and sanitation, protection and
insurance of workers, industrial and district courts,
etc., and the most important facts about the con-
stitution, administration of the state, army and
navy, and colonies. In the field of physical educa-
tion there is compulsory study of personal hygiene
and elementary physiology and optional athletic
training, which is fostered in every possible way
by contests, walking tours, etc. The schools also
frequently provide for optional attendance at con-
certs, lectures, and other forms of educational
activities. 1
The needs of the trade and the wishes of employers
are considered to the fullest possible extent. If an
employer has several apprentices they may be sent
to the school on different days in the week, so that
he will never be left short-handed. In the seasonal
trades, such as those of the carpenters and painters,
the work in the school may be diminished in the busy
season and correspondingly increased in the off sea-
1 U. S. Bureau of Education Bulletin, 1913, No. 9.
236 SOCIALIZED GERMANY
son. These schools can, of course, carry speciali-
zation further in the large cities, but even in the
smaller towns many varieties of trades are provided
for, though allied trades are often united. Thus all
the workers in the metal or wood working trade may
be united in one class. The Munich system, which
is the most highly developed of all, provides classes
and equipment for not less than fifty-six trades, and
the system is still growing. 1
The United States consul at Magdeburg says of
the continuation school :
"One of the aims of the industrial school is to give
the youth such instruction in language, government,
civic affairs, industrial laws, business customs, trade
practices, hygiene, sanitation, etc., as to fit him to be
an efficient employer or self-dependent workman,
an intelligent citizen, and a capable member of soci-
ety." 2
Moreover, there is nowadays a growing importance
attached to journeymen's and masters' certificates,
and the continuation school is doing its part in pre-
paring its pupils in these lines.
One important object of the continuation school
is to counteract the tendency of modern shops to
limit the work of the boy to a few manipulations in
a small field of the trade in which he is working,
1 U. S. Bureau of Education Bulletin, 1913, No. 9.
2 Ralph C. Benson, U. S. consul in Magdeburg, in U. S. Bureau of
Education Bulletin, 1913, No. 9.
VOCATIONAL EDUCATION 237
leaving him helpless and ignorant in regard to all
the rest. 1
Magdeburg, with a population of 287,000, is typi-
cal of the more progressive of the German cities in
the matter of education for commercial and indus-
trial pursuits. After completing the compulsory eight
years' schooling, the boy of fourteen who is not
going to take up professional studies must choose a
trade. The school authorities help him find a suit-
able apprenticeship. He must go to the continua-
tion school a certain number of hours a week during
his apprenticeship, and thus the authorities keep
control over his education till the seventeenth
year.
The continuation schools are divided into two
groups the trade and the commercial schools, the
former giving instruction adapted to the particular
trade the pupil is interested in. In 1913 there were
classes for bakers, butchers, barbers, waiters, paint-
ers, decorators, tailors, blacksmiths, cabinetmakers,
and various other trades. Even if the boy does not
wish to become a skilled workman and has no ambi-
tion beyond being a messenger, street-cleaner, or
house servant, the city insists that he shall spend
three years at the continuation school. The same
regulations hold in Erfurt.
For boys who have been placed in the commercial
establishments of Magdeburg there is a requirement
1 Geo. Koeppel, in Elementary School Teacher, March, 1913.
238 SOCIALIZED GERMANY
that they shall spend six hours a week for three years
in the continuation schools, where their practical
education is supplemented by theoretical training.
The subjects taught are accounting and bookkeep-
ing, business correspondence, commerical geography,
business law, and civil government. Should the
boy wish to study still further, he may enter a
Handels-hochschule for higher education in commer-
cial subjects.
The main continuation school in Barmen, with an
attendance of 3,751 pupils in 1913, had 131 classes,
divided up as follows:
34 classes for textile trades.
5 classes for lace-making trades.
16 classes for machine-tool making.
3 classes for art forging.
3 classes for plumbing, electric installation, etc.
4 classes for furniture and weaving-loom mak-
ing.
2 classes for house carpentry.
3 classes for house painting and decorating.
2 classes for shoemaking, saddlery, upholstery,
tailoring.
1 class for gardening.
2 classes for typesetting and book printing.
3 classes for bookbinding and box making.
2 classes for lithography and engraving.
4 classes for baking and candy making.
1 class for butchers.
VOCATIONAL EDUCATION 239
1 class for barbers and wigmakers.
39 classes for messengers and helpers.
2 primary classes.
4 classes for weak-minded. 1
The teachers have been specially prepared for
teaching their particular branches, and in addition
to their daily instruction they give occasional lec-
tures on different subjects. No classes are held
after 8 P. M. or on Sundays. All pupils receive four
hours instruction each week in trade and civic rela-
tions, composition, arithmetic, and bookkeeping.
Besides these, pupils in various trades requiring skill
in drawing receive additional hours of instruction
in this subject. Carpenters, engravers, gardeners,
and other trades receive two hours of practical
drafting; electricians and machinists, two hours of
drafting and one of physics; builders, lithographers,
engravers on wood, metal, and stone, four hours of
practical drawing; tailors, four hours of drawing,
with practical cutting and fitting. For the prac-
tical work in the various trades each teacher, who
is himself a master, has a complete collection of the
materials used, the necessary tools and machines
and models of work in his trade.
The cost of tuition is ten marks per year, to be
paid by the pupil's employer, and he must also allow
1 "Reports on Continuation Schools in Prussia," U. S. Bureau of
Education Bulletin, 1913, No. 9.
240 SOCIALIZED GERMANY
the apprentice to attend the school at the proper
time.
The American consul at Barmen reports:
"The results are excellent, it is said, and the manu-
facturers and masters have learned that the instruc-
tion well repays the small sacrifice of time and
money. " 1
Frankfort-on-the-Main is divided into three dis-
tricts for purposes of continuation education, and
each district has provision for both commercial and
industrial education. Courses are free and com-
pulsory for all boys and girls between the ages of
fourteen and seventeen who have left school to earn
their own living.
The commercial course covers general commercial
knowledge (handelskunde) , commerical arithmetic,
bookkeeping, economic geography, citizenship (bur-
gerkunde), commercial correspondence and hand-
writing for all who show need of such training. Two
hundred and forty hours of instruction per year are
required.
The industrial division provides technical and
economic instruction of a practical but not experi-
mental character in every conceivable handicraft.
Classes are conducted by practical experts. Be-
sides the regular trades, such as baking, tailoring,
1 George Eager, U. S. consul at Barmen, in "Reports on Continu-
ation Schools in Prussia," in U. S. Bureau of Education Bulletin,
1913, No. 9.
VOCATIONAL EDUCATION 241
etc., there is instruction for day-laborers and even
for deaf-and-dumb scholars.
An English observer commenting on the continu-
ation school says:
"The classes unquestionably fulfil the magnani-
mous purpose expressed in the opening sentence of
the annual report 'The object of the compulsory
continuation schools is to develop and perfect the
vocational equipment of the scholars and to help
to build them up into valiant men and citizens. ' " l
Many students of the obligatory age do not attend
these schools but go to schools like the splendid
Industrial Art School (Gewerbeschule) , where a small
fee is charged and the curriculum is more extended.
In the Frankfort obligatory schools alone in 1913
there were 6,901 pupils and 250 classes.
In Munich the continuation-school system reached
its earliest and one of its best developments. In that
city every boy between the ages of fourteen and
eighteen (or seventeen, if his apprenticeship is only
for three years) must attend in the daytime some
school belonging to the continuation-school system.
There are seven of these schools distributed about
the city, each housed in a large, well-equipped
building. Each has a higher division for journey-
men, foremen, and master workmen. Three more
such buildings are in course of construction (1914),
at a cost of $500,000. Fifty-six trades have classes
1 Saxon Mills, in Fortnightly Review, January- June, 1914.
242
SOCIALIZED GERMANY
in these schools. The following course for brass
workers is typical of the Munich schools : 1
B
LOURS PJ
SB WEE
t
Age
14-15
15-16
16-17
17-18
Trade arithmetic, bookkeeping
1
1
1
1
Business composition, essays, and
reading
1
1
1
Citizenship, sensible living, and
hygiene
1
1
1
1
Information about trades, goods,
and tools
1
1
Drawing
3
3
2
3
Practical work
2
3
7
7
7
8
The first three subjects are invariably taught in
all trades, though the actual treatment is adapted
to each particular trade. The practical work of the
last two years for the brass workers is of a higher
grade than the boys are likely to get at their occu-
pation. One must actually see the photographs of
the school workshops even for the chimney-sweeps
to realize how seriously the training is carried out.
The upper division of the Munich industrial con-
tinuation schools, which is only obligatory on jour-
neymen and masters, has the following subjects in-
cluded in its course of study :
Technical Part. Free-hand and mechanical draw-
1 R. H. Best, The Problem of the Continuation School and Its Suc-
cessful Solution in Germany.
VOCATIONAL EDUCATION 243
ing, trade drawing, chemistry, physics, geometry,
workshop and laboratory practice, knowledge of
goods.
Commercial Economic Courses. Arithmetic in
general, bookkeeping, exchange and commercial
law, computation, and business organization.
General Courses. History of the trade, commercial
geography, hygiene, lectures on industry in general,
insurance laws, etc.
The most serious complaint heard against the
schools is that they tend to make the pupil dis-
satisfied with the conditions which he finds in the
shop in regard to sanitation, etc. Sometimes, too,
the school has equipment which the employer lacks. 1
Special advanced divisions of the trade-schools
have been developed in many cities. They are
either in the same building as the continuation
school or are carried on as special schools. They are
well equipped with workshops and lecture-rooms,
and the classes are taught by teachers who are ex-
perts in their trades. Such schools are to be found
in Frankfort, Dresden, Leipsic, and many other
cities, but it is in Munich that they are most highly
developed. The teachers are required by the munic-
ipalities to keep up with the latest developments
in their occupations, exhibitions, etc., and must
know thoroughly the commercial requirements of
1 Bruno Rauecker, in Muenchener Volkswirtschaftliche Studien,
1911, p. 119.
244 SOCIALIZED GERMANY
the trade, so that they can teach their subject in a
"commercial" way, as opposed to the "school-
master" fashion. A fee is required of the students,
which in Munich is about $5 a year. l
Till recently girls were required to attend only
three hours a week in the continuation schools in
Munich. Domestic science was the chief subject
taught, although the girls were permitted to attend
the boys' trade classes, which few of them did. In
the fall of 1914, however, continuation schooling
became compulsory for girls for the same length of
tune as for boys. Their schools are divided into
three parts: (a) domestic economy; (6) commercial
section; (c) technical section. The domestic-econ-
omy instruction has just been made compulsory for
all servant-girls and untrained workers in facto-
ries and girls who stay at home to help in the house-
hold after their elementary schooling. Commercial
courses are obligatory for all girls in business or
shops, and technical courses for those in industries
and trades, so far as they are trained workers. The
table on page 245 shows the course laid out for the
domestic-economy section in the Munich schools. 2
Needlework is optional because the girls have
learned all there is to know about plain sewing in the
elementary schools and the course in needlework in
the continuation schools is of a more advanced kind.
i n. H. Best, The Problem of the Continuation School and Its
Successful Solution in Germany, p. 40.
2 Kerschensteiner, The Schools and the Nation.
VOCATIONAL EDUCATION
245
HOUBS PEB WEEK
Class 1
Class 2
Class 3
Compulsory subjects:
Religion
1
2
2
1
1
2
2
1
1
2
2
1
1
Housekeeping and hygiene
German
Accounts and domestic (later busi-
ness) bookkeeping
The training of children
Voluntary subjects:
Needlework . .
6
2
3
3
6
6
3
2
2
6
7
4
2
2
6
French
English
Technical drawing
14
13
14
Educational experts are a unit in their approval
of these schools as a preparation for trade and in-
dustry. A report of the United States Bureau of
Labor says:
"To sum up: 'The German industrial schools are
achieving in large measure the purpose for which
they were established industrial efficiency. They
are not yet fully developed, nor are their types finally
fixed. They constitute a living, growing movement,
which gives every promise of increasingly fruitful
results on industry and on the comfort and culture
of the German people.' " *
As to the influence of the German educational
1 Holmes Beckwith, "German Industrial Education and its Lessons
for the United States, " in U. S. Bureau of Education Bulletin, 1913,
No. 19.
246 SOCIALIZED GERMANY
system on industry the British consul-general for
the district of Diisseldorf says :
"German success in commerce and industries is
generally admitted to be due to the German govern-
ment's exemplary and exceptionally excellent educa-
tional system. For the last thirty years the schools
and colleges have been turning out young men pro-
vided with a better education than can be obtained
in the majority of other European countries. Of late
years in particular, continuation schools have proved
a most valuable asset of the nation. ... It stands
to reason that a nation's population which has had
the benefit of five years' extra schooling over its
neighbor is bound in the long run to forge its way
ahead of its neighbor, even if originally both nations
were on an equality, mentally and physically. (This
writer includes in the five years' schooling the two
years spent in the army 'that true university of
manners and manhood. ') The continuation schools
have proved the value of the knowledge they impart
to their boys and girls, making them fitter and more
able to succeed in the struggle for existence. ... It
is not a question of attending a few evening classes,
when the boys are tired out by their hard day's
work; by law the employer is forced to give every
boy and girl enough free time during the day to
attend eight and sometimes ten hours a week at the
school during the working hours. . . . Going as they
do from the elementary schools to the continuation
schools, and from these into the army, the boys are
continuously under some supervision and training,
which is so necessary at that age. They are taught,
besides their trade, cleanliness, self-respect, disci-
pline, the art of taking care of their health all of
VOCATIONAL EDUCATION 247
which is of the utmost value during the whole of their
life." l
Continuing, the writer says:
" It may in the long run not avail us to maintain a
two-ship power against Germany if we allow Ger-
many to maintain a two-school power against us.
The more perfect social organization of the German
people, their stronger national consciousness, and,
above all, their fuller equipment in school and col-
lege for the practical duties of life and citizenship
these are more formidable advantages in the secular
struggle for survival and supremacy than the mere
piling up of mechanical armaments. " 2
1 British Diplomatic and Consular Reports, 1913. Cd. 7048, pp.
72-73, quoted by A. Saxon Mills in Fortnightly Review, January-
June, 1914.
2 A. Saxon Mills in Fortnightly Review, January- June, 1914. The
author had been describing the chaotic condition of continuation
education in England, where not more than 13 per cent, of the
children who left school at the minimum age continued their edu-
cation in night school, and of this 13 per cent, only a small fraction
attended any length of time. It was a case of tired teachers trying
to teach tired pupils.
CHAPTER XVIII
SANITATION AND HEALTH
IN another chapter we have seen that Germany
has a high birth-rate and a higher percentage of
births over deaths than any other country except
Russia. Reference has also been made to the elab-
orate provisions for the health of children, for their
inspection by school physicians, for out-of-door
schools and recreation, for the supervision of fac-
tories and the introduction of sanitary and hygienic
appliances. Public hygiene is a highly perfected
profession in Germany. Each city has experts on
the subject who enforce stringent sanitary rules,
while frequent conferences are held, attended by
state and municipal officials. Like education, health
is the subject of the most serious official concern.
The object aimed at is not only the prevention of
disease but the maintenance of the highest possible
working efficiency of the individual. Sanitation and
preventive medicine in all its branches is another
form of the German war on human waste.
A great stimulus was given to the whole subject
of public health by the social insurance laws for
protection against accident, sickness, invalidity, and
old age. If the worker could be kept in health the
248
SANITATION AND HEALTH 249
demands on the funds would be reduced to that
extent. Added to the solicitude for the soldier and
the worker was the economic concern of the state
and of industry to keep mortality and invalidity as
low as possible. And the immense insurance funds
accumulated in the hands of the state provided a
reservoir for elaborate expenditures for better houses,
for the building of sanitariums, hospitals, convales-
cent homes, tuberculosis farms for the care and recu-
peration of those weakened by disease. Just as the
municipal savings-banks offered resources at a low
rate of interest, for the building or purchase of pub-
lic-service activities, so the moneys gathered to-
gether from all over the empire in small contributions
from millions of workers made it possible to carry
forward an elaborate programme of preventive
medicine.
While public health in America is regulated almost
exclusively by the local authorities, which make such
regulations as they choose, in Germany the empire,
the states, and the municipalities all exercise wide
supervision of the subject. In addition to the vari-
ous authorities charged with administrative respon-
sibility an Imperial Board of Health, formed in 1876,
serves as a bureau of research and advice for the
empire as a whole. The board carries on investi-
gations and places its researches at the disposal of
state and local authorities. Such problems as water-
supply, disinfection, and the disposal of sewage are
250 SOCIALIZED GERMANY
the kind of subjects with which it is primarily con-
cerned.
Health administration, like education, is a matter
of state rather than local concern. It falls within
the jurisdiction of the Interior Department as in
Prussia, or the kulturministerium. In this field
the state authorities have large powers which they
exercise in co-operation with the local authorities.
In Prussia, for instance, the state health depart-
ment has charge of all measures for the fighting of
infectious and certain other diseases. It examines
plans for water-supply and sewerage, supervises
hospitals of all kinds, and, in general, advises local
authorities in matters of sanitation and public
health. It also exercises further control over local
authorities through the district medical officers, who
may vote on local health committees, and even
convene them. In Baden, the state authority is
responsible for the execution of the sanitary laws,
as a police authority. It "administers the state
laws and local by-laws and regulations relating to
the sale of milk, the inspection and sale of meat, the
trade in poisons, the manufacture of mineral waters,
the use of beer stills, the businesses of barbers,
masseurs, quack doctors, and uncertificated den-
tists. 1 This wide extension of the police functions
in the domain of health administration is typical
of other states as well.
l Dawson, Municipal Life and Government in Germany, p. 193.
SANITATION AND HEALTH 251
The local health administration is organized as
follows :
In the larger states municipal authorities are re-
quired by law to form local committees to co-operate
with the state in the administration of the laws. In
Prussia such committees must be formed in all
communes with more than 5,000 population and
may be formed in smaller places. The town council
determines the size of the committee. A medical
practitioner and building expert are usually among
the members. Membership on these committees
is honorary and may not ordinarily be declined.
The term of office is at least six years. In large
towns subcommittees are often formed. The local
health committees are required to familiarize them-
selves with the general sanitary conditions in their
districts, particularly in such matters as housing
conditions, cleanliness of streets, water-supply,
public abattoirs, trade in foodstuffs, conditions of
schools, effect of industries of the neighborhood on
public health, the condition of the poor and sick
and institutions for their care, public baths, ceme-
teries, etc. It is their duty to support all sanitary
measures taken by the police authority, acting in
accord with the " circle " medical officer. They must
instruct the people upon questions of public health,
investigate evils that may cause the spread of disease,
and initiate proposals for the improvement of sani-
tary conditions. Committees are expected to meet
252 SOCIALIZED GERMANY
at least four times a year and to make periodic
visits of inspection and special visits at times of
floods, epidemics, etc. Each city has also its own
municipal medical officers. Sometimes the chief
of these officers is given a place in the executive, as
is the case in Berlin and Charlottenburg. Some-
times his rank is simply that of head of a depart-
ment dependent upon that body. 1
In the matter of hospitals, cities are required by
law to provide only for the care of infectious diseases,
and indirectly for the care of the sick poor. Up to
twenty-five years ago the hospitals were used only
by the indigent sick. Since the passing of the social
insurance laws, a great extension of hospital service
has taken place. All the larger towns, indeed, go far
beyond the legal requirements in the extent and
quality of their hospital service. The total number
of public hospitals in Germany in 1885 was 1,706;
in 1907 it was 2,222, an increase of 30 per cent.
Still more significant is the increase in the number
of beds, which rose from 75,000 to 138,000 within
that period, an increase of 83 per cent., compared
with a rise of 42 per cent, in the population. Most
of the money paid by the sickness-insurance societies
for the treatment of insured persons ($15,000,000 in
1911) is paid to the public hospitals, which charge
the societies less than cost, or a sum varying from 50
cents to 80 cents a day. Wonderful hospitals have
1 Dawson, supra, p. 192.
SANITATION AND HEALTH 253
been erected in recent years. They are equipped
with all scientific requirements. The Virchow hos-
pital in Berlin cost $3,125 per bed for erection
and equipment, but most of the others cost con-
siderably less than that. Infectious diseases are
usually treated in connection with the general hos-
pitals, but to meet the exigencies of epidemics most
of the larger towns have buildings in reserve which
can easily be turned into isolation hospitals.
Cemeteries in the big cities are laid out like parks
and gardens. They are as free as possible of de-
pressing influences. Charges for grave sites and
other services are regulated by law. In Prussia
they are limited to actual cost. Many towns, in-
cluding Diisseldorf, Stuttgart, Frankfort-on-the-
Main, and Mannheim, carry on the business of
undertaking, and here, too, the charges are low.
The cremation movement is making rapid prog-
ress, although it has hitherto met much ecclesiasti-
cal opposition. There are (1913) 29 crematories in
operation in Prussia and 11 in the other states,
nearly all owned by the communes.
Stringent measures for the inspection of food and
drink have been adopted by all the states, and in-
spection is becoming increasingly thorough. The
laws are enforced by the sanitary police, with the
co-operation of the local authorities. The govern-
ment of Wiirtemberg is making special efforts to in-
sure the purity of the milk-supply, and has placed
254 SOCIALIZED GERMANY
direct responsibility on the communes supplying
the milk. The city of Munich has four groups of
food inspectors: (1) market inspectors for all food
which comes into the municipal markets; (2) inspec-
tors for all the milk entering the city; (3) 21 district
inspectors and assistants for the inspection of the
city's food-supply in general, and (4) inspectors for
all meat coming from outside the town, who examine
at the railway station.
Analytical laboratories for the examination of
food have been established in many cities. Berlin
has a particularly well-equipped one, which serves
for the analysis of industrial material as well as the
food-supply, and for chemical and bacteriological
investigations in general.
Berlin is also in possession of a splendid system
of treating sewage. The city has an irrigation farm
of 44,000 acres, planned by the late Rudolf Virchow.
About 400,000 cubic yards of sewage from the city
and environs is treated daily. Nearly one-half the
total area of the sewage farms is devoted to irriga-
tion purposes and 11,600 acres of the remainder
consists of corn land, small holdings, and laborers'
gardens, dykes, railways, etc. Breslau, Magdeburg,
and other cities have similar farms, but of smaller
extent. The marked decrease in the mortality from
typhoid is largely due to the connection of houses
with the sewage system. In 1870 when there were
15,000 properties unconnected with the system in
SANITATION AND HEALTH 255
Berlin, the death-rate from typhoid was 7.7 per
10,000 of the population. By 1900, when all prop-
erties in the city were connected with the system,
the rate had fallen to 1 in 25,000 and is now even
lower. 1
Charges for street scavenging and the removal of
house refuse are usually assessed against owners of
property and are only rarely met from general
revenue. In some towns the local authority provides
the necessary vessels and supplies empty, disinfected
receptacles for those removed.
Public baths are an institution in nearly all the
larger towns, especially those towns situated on
rivers like the Rhine and Elbe. " In 1910 there were
335 separate bathing establishments in public hands
in 51 towns with a population exceeding 50,000,"
beside the still greater number of privately owned
establishments. Nearly all these towns owned
several swimming-baths. In 1913, 72 towns had
among them equipped 500 school buildings with
baths. The municipal bathing establishments of
Munich are among the finest in the empire, although
many other cities have establishments on almost
as magnificent a scale. The charge at the largest
and most sumptuous of the baths in Munich, which
was a gift to the city, and is managed by the munic-
ipality, is from 3 to 6 cents for the working classes,
yet in spite of this low charge it pays its way. Over
1 Dawson, supra, p. 199.
256 SOCIALIZED GERMANY
600,000 persons a year use the various baths in
Munich. In addition to the ordinary baths some
towns have medicinal baths for the benefit of in-
sured persons. On the whole the public baths are a
source of loss to the towns, but this fact is not con-
sidered by the local authorities because of the more
important demands of public health.
Practically all German cities are well provided
with parks and open spaces within their adminis-
trative area. Barmen, with 12.5 per cent, of its to-
tal area in green open spaces, has 20 square yards
of green for each inhabitant; Duisburg has 22 square
yards and Diisseldorf 24. These are all factory
towns. In planning new areas the rule is to reserve
a certain proportion of the land for recreative pur-
poses. Besides, there is the forest and woodland be-
longing to the cities, which is often converted into
natural parks.
Up to quite recently, German cities paid little
attention to provisions for playgrounds. The am-
ple park space was beautifully kept and carefully
guarded from the inroads of youngsters, and this is
still the rule in most parks. In recent years, how-
ever, parks of a new and more truly recreative type
have been provided by many of the larger cities.
The Treptow Park in Berlin is an example of this
kind. Here adults as well as children may indulge
in all sorts of exercise, even bathing and swimming.
Gravelled play spaces have been laid out in some
SANITATION AND HEALTH 257
of the older parks and in most of the small neighbor-
hood parks. Cities, once convinced of the necessity
for play spaces, have energetically provided them.
Recent statistics show that Breslau has 84 public
playgrounds for children; Cologne 54; Hamburg 46;
Erfurt 39. Berlin has 310 acres of playground
space, some of it being levelled ground, some of it
grass, besides a number of large playgrounds in the
outlying districts to which children are taken on
holidays. These resorts were used by over a quarter
of a million children in the summer holidays of 1913,
nearly half of the children being transported there
free. Philanthropic organizations co-operate with
the school authorities in equipping these playgrounds
with apparatus and with tents for rainy weather and
in organizing games.
CHAPTER XIX
THE WAR UPON DISEASE
THE most important advances in health protection
have followed the social insurance laws. Statistics
showed that 15 per cent, of the claims for disability
pensions of males are due to tuberculosis and 9.5
per cent, of those of females. This fact and the
powers granted the invalidity-insurance institutions
to place invalided workers in a hospital led these
institutions to undertake a wide-spread campaign
against disease, through the erection and operation
of sanatoria, the promotion of better housing proj-
ects, and financial assistance to the anti-tuberculosis
movement in general. Imperial, state, and munic-
ipal authorities co-operated in this campaign.
The most wonderful series of tuberculosis sana-
toria have been erected by the insurance institutions,
beginning with 1 in 1896, and increasing to 37 in
1909, which provided treatment for 22,734 patients,
male and female, during the latter year. A number
of other sanatoria have been erected by communal
and provincial authorities, largely with funds loaned
at low rates of interest by the insurance institutions.
The aggregate amount loaned for this purpose up to
December, 1909, was 13,062,625 marks, of which
258
THE WAR UPON DISEASE 259
1,252,607 had been repaid. By 1911 there were 99
public tuberculosis sanatoria of both kinds, besides
a large number of private sanatoria, some of which
provided for wage-earners at reduced rates.
The economic results of institutional treatment
in the tuberculosis sanatoria, which averages about
75 days in length, are carefully checked up for a
period of five years in the case of each patient dis-
charged with special reference to "restored earning
capacity, " which in the sense of the invalidity-in-
surance institutions means that the discharged per-
son is able to earn at least one-third of his wage-
earning capacity previous to the disease. In the
case of patients discharged in 1905 with their earning
capacity restored within the meaning of the insurance
laws, 76 per cent, retained their earning capacity
till the end of 1905; 63 per cent, to the end of 1906;
54 per cent, to the end of 1907; 48 per cent, to the
end of 1908; 44 per cent, to the end of 1909. The
proportions for women were somewhat better, being
78 per cent, for the first year and 52 per cent, for
the last. The proportion of patients discharged
with earning capacity restored grows larger every
year. In 1909 it was 83 per cent, for males and
females; and 86 per cent., if the cases in which treat-
ment lasted only 14 days or less are omitted from
the calculation. Success of the treatment depends
largely, of course, upon the stage of the disease when
the patient goes to the sanatorium. In 1909, 92
260
SOCIALIZED GERMANY
per cent, of those admitted in the first stage of the
disease were discharged with earning capacity re-
stored. About 5 out of every 1,000 patients dis-
charged require readmission during the year of dis-
charge, 59 after one year ; 68 after two years, 45
after three years, and 33 after four years. 1
The anti-tuberculosis campaign has made great
headway in Germany during* the last few years. In
1910 the sum of 480,964 marks was expended for aid
and support of the general movement, of which al-
most 300,000 marks was in the form of subventions
to tuberculosis dispensaries and information bureaus.
There are also sanatoria for tuberculous children
(22 in operation in 1911) and 86 preventoriums for
those likely to become tuberculous, which give treat-
ment free or at very reasonable rates. In addition
there are over 100 forest day and night camps and
open-air schools. For far advanced cases, 96 homes
x The economic results of institutional treatment in the case of
employees of the Prussian-Hessian railway system by years, 1904-
10 were:
YEARS
No. OF
PATIENTS
UNDER
FULL
TREATMENT
PATIENTS FULLY ABLE TO WORK AFTER
1
YEAR
2
YEARS
3
YEARS
4
YEARS
5
YEARS
6
YEARS
1904..
1905..
1906..
1907..
1908. .
1909..
1910..
716
810
1,180
955
1,152
1,268
1,422
Per
Cent.
81.7
85.3
85.8
81.0
82.6
86.4
85.9
Per
Cent.
74.6
76.7
78.1
73.0
75.4
72.3
Per
Cent.
66.6
71.9
73.0
68.9
75.2
Per
Cent.
63.0
68.2
69.8
65.6
Per
Cent.
59.6
65.2
69.0
Per
Cent.
64.0
THE WAR UPON DISEASE 261
for incurables were in operation in 1911; also 17
convalescing homes for patients discharged from
sanatoria and 33 observation stations, chiefly in
connection with sanatoria or general hospitals, for
the study of incipient cases. Systematic warfare
against the disease is waged by a large number of
tuberculosis associations throughout the German
Empire, the work being directed and, if necessary,
financially helped by the German Central Committee,
which is under the protection of the German Em-
press, and whose honorary presiding officer is the
imperial chancellor. This committee receives a
small imperial subsidy of about $14,000 annually.
During the year 1910, the committee expended
177,300 marks in the form of financial aid in the es-
tablishment of sanatoria, 33,316 marks for tuber-
culosis museums, besides the money spent for prop-
aganda, etc.
Largely as a result of the campaign against tuber-
culosis the death-rate from the disease has progres-
sively declined. For the empire as a whole it dropped
from 23.08 per 10,000 during 1895-9 to 18.45 dur-
ing the period 1905-9. In cities the rate fell from
27.4 during the period 1890-4 to 17.9 in the period
1905-9. The rate in Berlin fell from 34.7 per 10,000
in 1880 to 17.9 in 1909; in Bremen, from 39.7 to
15.1; in Cologne, from 41.4 to 15.6; in Dresden,
from 36.9* to 17.7; in Essen, from 40.9 to 10.
The total amount expended for treatment and
262 SOCIALIZED GERMANY
care of tuberculous wage-earners in the empire in
1910 in special sanatoria erected for the purpose was
about 17,500,000 marks, this being in addition to
the sum spent in methods of prevention and the
national campaign against tuberculosis, in which in-
surance institutions have co-operated together with
the government authorities of the empire, the states,
and municipalities. Only a limited number of those
suffering from the disease can be accommodated
and given full treatment in the sanatoria, one out of
every 13 or 14 at most.
The tuberculosis dispensary has also had a re-
markable development in recent years. In 1908
there were only 175 of these institutions, but by
1911 the number had increased to 528. The number
of forest day and night camps increased from 82 in
1908 to 98 in 1911. There were in that year 15
forest schools for tuberculous children and 2 agri-
cultural colonies for tuberculous wage-earners. The
work of the dispensary is to examine for symptoms
of the disease, after which it aims particularly at
improving the hygienic conditions of the patient's
home. During the four years ending October 1,
1908, the Berlin information bureaus and tuber-
culosis dispensaries medically examined 82,006
persons for symptoms of the disease. They also
examined, reported upon, and put in a more or less
sanitary condition the homes of 45,583 tuberculous
wage-earners.
THE WAR UPON DISEASE 263
A more far-reaching effort is being made to combat
tuberculosis by improving housing conditions of the
wage-earners a movement which is being vigor-
ously pushed and liberally supported by the insurance
institutions as well as through provincial and com-
munal authorities. Up to December 31, 1910, 320,-
000,000 marks had been furnished by the invalidity-
insurance institutions in the form of loans for building
purposes. The government keeps strict watch over
the plans of housing projects, in order that specula-
tion may be eliminated and the public good pro-
tected.
The invalidity-insurance institutions, comprehend-
ing in their membership practically the entire wage-
earning population, seek to keep the morbidity-rate,
as distinguished from the death-rate, as low as
possible. It is these institutions and not the life-
insurance companies that have been active in the
anti-tuberculosis campaign.
A report of the United States Bureau of Labor
comments on the war on tuberculosis as follows:
"The marvellous results achieved in the German
Empire through the intelligent co-ordination of pub-
lic and private agencies enlisted in the effort to re-
duce the mortality from tuberculosis to a minimum
entitles the German experiment, as the first and most
successful of its kind, to the admiration of the entire
civilized world. Whether what has been done has
paid for itself in a strict financial sense is wholly
secondary to the social results which have been
264 SOCIALIZED GERMANY
achieved, and which have unquestionably conferred
an infinite amount of good upon the German people
engaged in German industry in successful compe-
tition with the economically more advantageously
situated wage-earners of many other lands/' 1
J "Care of Tuberculous Wage Earners in Germany," Bulletin of
the United States Bureau of Labor, No. 101.
CHAPTER XX
GOVERNING CITIES BY EXPERTS
THE German city is a cross-section of the nation.
It is Germany at her best. Here, as in the army,
the navy, and the civil service, one finds the most
highly organized efficiency and honesty. Corrup-
tion is almost unknown. There is no such thing as
the spoils system or favoritism. The higher munic-
ipal offices are filled with men prepared for the
profession of administration by education, long ex-
perience, and achievement. The council, too, com-
mands the services of the business and professional
classes, who serve without pay and give of their time
in an unstinted way to the community.
The city is also a cross-section of the state in its
sovereignty. It has large powers and great freedom
of action. It controls private property just as it
controls persons. It owns many things and operates
them in the public interest. There is a solicitous
concern for the health, well-being, and happiness of
the people, and an intelligent understanding and
approval of municipal socialism by all classes that
is not to be found any place else in Europe.
Rule by an economic class prevails in the city as
265
266 SOCIALIZED GERMANY
it does in the state. Just as Prussia is governed
by the great estate owners, so the city is governed
by the large taxpayers, by the business and com-
mercial classes, who, under the three-class system of
voting, have a preponderating power at the polls.
They elect the members of the city council, who, in
turn, select the burgomaster and members of the
magistrat. In Prussia the working classes have but
few representatives in the council and could not
under any circumstances control the administration.
Forty-five years ago there were but few large cities
in Germany, and they were capitals of the two score
kingdoms, principalities, and free cities. During
the intervening years urban population has grown
rapidly, possibly more rapidly than in America.
This is particularly true in Prussia and along the
lower Rhine, where industry has developed with
such astounding rapidity.
Diisseldorf had but 70,000 people in 1871. In
1910 it had 356,000. Frankfort-on-the-Main grew
from 80,000 to 401,000 during the same period.
Berlin was a capital city of but 800,000 in 1870. To-
day it contains 2,064,153 people. There are thirty-
three cities in Germany whose combined population
is over 12,000,000 people. This is 18 per cent, of the
whole, while the total urban population equals 49
per cent, of the total. Since 1880 the urban growth
has been particularly rapid. Breslau increased in
population by 86.9 per cent, in thirty years from 1880
GOVERNING CITIES BY EXPERTS 267
to 1910, Cologne by 253 per cent., Dresden by 248
per cent., Hanover by 146 per cent., Nuremberg by
234.1 per cent., and Chemnitz by 188.1 per cent.
During the same period Cincinnati increased in popu-
lation by 42.8 per cent., Buffalo by 173.4 per cent.,
New Orleans by 56.9 per cent., Providence by 113.9
per cent., and Rochester by 144.1 per cent. Taking
the empire as a whole, urban population increased
from about 30 per cent, in 1870 to 49 per cent, in
1910. There are now 47 cities of over 100,000 popu-
lation, while the total urban population amounts to
over 30,000,000.
Fortunately the machinery of administration was
admirably suited to meet the problems created by
this rapid urban growth. The municipal code has
remained but little changed since the reforms of
Baron von Stein in 1808. The cities have great
freedom of action in matters of local concern. They
are almost sovereign in their control over purely
domestic matters. Doctor Albert Shaw says:
"There is in the German conception of city
government no limit whatever to the municipal
functions. It is the business of the municipality
to promote in every feasible way its own welfare
and the welfare of its citizens." 1
This idea of municipal autonomy runs back to
early times. During the later Middle Ages the towns
obtained grants of freedom from the overlords by
1 Municipal Government in Continental Europe, p. 323.
268 SOCIALIZED GERMANY
conquest or purchase. Many of the towns in fact
were free from all obligations except those to the
empire, and some of these free cities like Frankfort,
Hamburg, Bremen, and Liibeck retained their free-
dom down to very recent times. Even to-day Ham-
burg, Bremen, and Liibeck are free and independent
states within the empire.
Freedom is one explanation of the achievements
of the German city. It also explains the attitude
of officials and citizens. The people have a love and
regard for their cities; they desire to serve on the
council or voluntary committees. They also bear
taxes with unusual willingness and submit to con-
trol of the community for the common interest.
Back of all other explanations of the German city
is its sovereignty, its autonomy, its freedom. It is
free to make experiments, which, when successful, are
adopted by other communities.
In addition, the administrative machinery is very
simple. The municipal code provides for a large
council elected by districts, and an administrative
group or magistrat presided over by the burgo-
master or mayor. In addition to its ordinary activ-
ities the city performs many services for the state,
such as the control of the church, the supervision of
education, the insurance funds, and many other
services which in this country and in England are
carried on by the state or left in the hands of pri-
vate individuals.
GOVERNING CITIES BY EXPERTS 269
The town council is a large body; much larger than
in the United States. The council of Berlin consists
of 144 members, of Charlottenburg 72, of Breslau
102, of Diisseldorf 36, and of Bonn 39. The mem-
bers are elected from wards for a term of six years.
The majority of the members of the council must be
house owners.
There are 92 house owners out of 144 members of
the council in Berlin, 37 out of 72 in Charlotten-
burg, and 53 out of 102 in Konigsberg. This tends
to make the council conservative. In addition the
method of election precludes any popular control of
the city, just as the constitution of Prussia and the
empire preclude any popular control of the state
and the nation. This is especially true in Prussia,
where the " three-class" system of voting prevails.
This excludes the working class from any real par-
ticipation in the government and, as it works out in
practice, lodges the control in from 5 to 10 per cent,
of the voters.
In ascertaining the power of the electors, tax-
payers are listed according to the amount of income
taxes paid by them just as they are for state elec-
tions to parliament. The taxpayers are then di-
vided into three classes, each one of which elects one-
third of the town council. The classification is made
as follows: beginning with the highest single tax-
payer, as many are checked off as are necessary to
make up one-third of the receipts from the income
270 SOCIALIZED GERMANY
tax. This group elects one-third of the council.
The process is continued to make up the second class,
which elects another third of the council, while the
third list, which contains the great majority of the
electors, elects the remaining third. For instance,
in Berlin, in 1912, out of 386,736 qualified electors,
91.5 per cent, or 353,704 were in the third class, and
were permitted to elect but one-third of the council,
while 936 were in the first class, and 32,096 in the
second class. Between 8 and 9 per cent, of all the
electors elected two-thirds of the members of the
town council. In the city of Essen, at one time,
four individuals made up the first class of voters.
The qualifications for the suffrage differ in the dif-
ferent states. In Bavaria a system of proportional
representation prevails, while the other southern
states have modified their system to some extent
in the direction of democracy.
This three-class system of elections is another in-
dication of the caste-like organization of Germany,
for just as the empire is governed by the landed aris-
tocracy of Prussia through the constitution of 1871
and the unfair distribution of seats, so the cities are
ruled by the big taxpayers, the bankers, landowners,
and business men. Neither in the cities nor in the
states is there any belief in democracy or any pro-
vision for the expression of the popular will.
The town councillor is the only official elected by
the people. The mayor or burgomaster is chosen
GOVERNING CITIES BY EXPERTS 271
by the council, as are his assistants who form the
magistrat. Together they form the administrative
branch of government, and are the centre of the
municipal system.
The burgomaster is a distinguished official, the
most distinguished in the city. The position is one
of great dignity, and is the final goal toward which
subordinate officials aspire. Generous salaries are
paid, while on the expiration of his term of office the
burgomaster receives a substantial pension for the
remaining years of his life. In addition he has large
powers, and in many cities is a member of the Prus-
sian House of Lords. Berlin and some of the larger
cities have an ober-burgomaster and another burgo-
master, while Munich has an ober-burgomaster and
three other mayors. Most towns, however, have
only a single chief executive.
Unlike America and England, the mayors are
chosen for long periods, usually for twelve years.
On the expiration of their first term they may be re-
elected for similar terms, or appointed for life. In
Wurtemberg, the mayor is chosen by the citizens
directly, but in all the other states he is chosen by
the town council. The selection of the mayor as
well as the members of the magistrat must be con-
firmed by the government in Prussia and Bavaria,
although this provision is not found in the other
states. In some cities the mayor is nominated di-
rectly by the King. Usually the royal assent is
272 SOCIALIZED GERMANY
given as a matter of course, but in some instances
the crown has rejected the choice of the council,
and in Berlin where such rejection occurred, the city
was without a burgomaster for some years. If the
selection fails to secure the royal sanction the coun-
cil makes another choice, and if this is not ap-
proved the appointment is made by a district presi-
dent until an acceptable selection is made.
Here, again, is an example of Prussian statecraft,
of centralized control combined with local freedom.
Under this system the cities must always conform
to the will of the King of Prussia. There is no
chance for the development of democratic or revo-
lutionary ideas, for the burgomaster and members
of the magistrat are the controlling officials of the
city. They make the policies of the municipality
and carry them into execution. And they are always
responsible to the King, who not only approves of
their selection, but through this approval controls
their advancement as well. In addition the In-
terior Department supervises the activities of the
city. It exercises a centralized veto upon its under-
takings. It directs education, controls the police,
and is itself responsible for the administration of the
property of the church, the insurance funds, and
many other activities which are delegated to the
city for performance. So long as all goes well there
is little interference, for the central authorities are
sympathetic to the idea of municipal freedom. And
GOVERNING CITIES BY EXPERTS 273
so long as the executive officials conform to the will
of the higher officials there is complete co-operation
and encouragement. But should the city select an
official who is persona non grata to the King, should
too radical ideas be fostered, or too new and too ad-
vanced socialistic proposals be undertaken, the
central authorities would interfere and the city
would ultimately be compelled to bow to the royal
will.
The powers of the German burgomaster are some-
what similar to those enjoyed by mayors in this
country. He presides over the magistrat and directs
its proceedings. He also subdivides the work
among his associates. He can even intervene when
the town council suggests some act outside of its
power or in derogation of his position. His power
of removal is limited, however, to the right of sus-
pension.
While there are no special qualifications for the
office of burgomaster, men are usually selected who
have had long training and experience. Usually
they have taken a university or technical course
with the civil service in view and subsequently
have served in a subordinate municipal position
from which they have risen to the post of burgo-
master in a small town. When a vacancy offers in
some other city a number of candidates present
themselves. Often men enter municipal service
through the town council or the state civil service.
274 SOCIALIZED GERMANY
In the larger cities men are selected because of dis-
tinguished achievements elsewhere. For instance,
Doctor Martin Kirschner was first a judge, later he
was elected to the post of town councillor in Bres-
lau. From this he was appointed the city's legal
adviser, and in 1893 he was called to become one
of the burgomasters of Berlin. Subsequently he
was elected chief burgomaster, which position he
held until shortly before his death. Doctor George
I. Bender, the chief burgomaster of Breslau, also
entered the municipal service through the law. He
became a magistrat in the city of Thon, and in 1888
was elected burgomaster of that city. In 1891 he
was chosen to chief burgomaster of Breslau. Prob-
ably the most distinguished municipal official in
Germany was Doctor Adickes, of Frankfort-on-the-
Main, who entered municipal service as burgo-
master of Dortmund at the end of the Franco-
Prussian War. Here he served for four years. In
1877 he was chosen burgomaster of Altona, and in
1883 became its chief burgomaster. In 1891 the
city of Frankfort-on-the-Main called him to that
city as burgomaster, which office he held up to 1913.
During this time he raised the administration of
that city to a high order of excellence. Under his
administration Frankfort became a laboratory of
experiments in taxation, in town-planning, in in-
dustrial, housing, and harbor developments. When
he became burgomaster in 1891 the population of the
GOVERNING CITIES BY EXPERTS 275
city was but 180,000; to-day it is 414,000. Frank-
fort suggests a city of 1, 000, 000 people instead of
less than half that number.
Diisseldorf is another example of the same kind
of marvellous municipal building under the inspira-
tion of a competent official. In 1898 Doctor Wil-
helm Marx, a business man, was called to be its
burgomaster. He surrounded himself with other
trained men and proceeded to build a city in the
centre of the lower Rhine region which would at-
tract business and professional classes from the
surrounding territory. Around about Diisseldorf
were Cologne, Essen, Barmen, Elberfeld, Duisburg,
and many other towns striving for population and
commerce. But Diisseldorf became in many ways
the experiment station of Germany. With the aid
of experts it was planned in a big, comprehensive
way to provide for years of growth. All of the public-
service corporations were taken over and operated
by the city. Docks and harbors were built, the
Rhine river front was reclaimed, house and land
policies were promoted, and at the end of his term
of twelve years the indebtedness of Diisseldorf had
been increased to $100 per capita, although 85 per
cent, of this indebtedness was for activities which
involved no burden to the taxpayers.
Diisseldorf is known as the Garden City of Ger-
many. It has attracted numerous manufacturers,
has lured to itself thousands of retired business and
276 SOCIALIZED GERMANY
professional men, and is a great art centre as well
as a place of resort for foreign tourists.
This is but typical of the careers of many mayors
who have contributed so much to the wonderful
cities that have sprung up all over Germany during
the last twenty-five years. They have the support
of equally competent officials and of the community.
Cities compete with one another in various lines of
municipal activities, and in this competition the
mayor is the directing genius. In miniature his
position is not unlike that of a constitutional mon-
arch or the president of a great corporation.
Burgomasters receive high salaries. Berlin pays
the chief mayor $10,000 a year. Frankfort pays
$9,000, Dusseldorf $8,350, Charlottenburg $7,600,
Breslau and Cologne $7,500. Other towns of from
100,000 to 300,000 inhabitants pay in the neigh-
borhood of $5,000 a year. In addition, substantial
perquisites attach to the office. In some towns a
residence is added. Upon the expiration of the
term of office liberal pensions are granted. This is
an obligation even where the mayor has proven
unsatisfactory, and is not re-elected. The pension
usually amounts to from one-quarter to one-half of
the salary received.
Associated with the mayor is an administrative
staff or magistrat, the members of which are also
elected by the council. They enjoy powers analogous
to those enjoyed by the directors of the various
GOVERNING CITIES BY EXPERTS 277
departments under the federal or commission form
of government in America. Members of the magis-
trat are selected by the town council, frequently
after competition, to which men from all over Ger-
many present themselves. The size of the magis-
trat is determined by the council and the number of
activities in which the city is engaged. Berlin has
34 members, Breslau 29, Charlottenburg 25, Dantzig
25, Diisseldorf 12, and Frankfort 24. These cities
are all in Prussia. Dresden has 39 members in the
magistrat, Leipsic 37, Mannheim 31, and Munich 37.
Approximately one-half of the members of the
magistrat are salaried, the other half serve as
honorary advisers. In the smaller towns and in the
states outside of Prussia the unsalaried members
exceed the salaried ones.
The salaried members are selected with special
reference to their fitness for a particular depart-
ment. One is assigned to be director of law, another
of schools, another of finance, another of public
works, another of poor relief. Each is trained by
education and experience for the place to which he
is called. Like the burgomasters, they have gen-
erally risen from post to post, and are frequently
called from one city to another. The salaries paid
are liberal, while an assured position and a pension
on retirement add to the attractiveness of the ser-
vice. The unsalaried members are usually men of
distinction and comparative leisure.
278 SOCIALIZED GERMANY
A much larger number of administrative chiefs
is provided for than in the United States. The
salaried directors alone in the average German city
are twice as numerous as in the average American
city, and including the unsalaried members they
are from four to six times as numerous.
Special provision is made for courses in adminis-
tration in all the universities, while within the last
few years a number of colleges have been opened
for the special training of officials. Diisseldorf
opened a school of administration a few years ago
which covers the whole field of municipal activity.
Cologne has a similar college, while Berlin has a
college of town-planning. The course of instruc-
tion includes finance, taxation, police, health, and
social activities in general. In some towns training
is required as a prerequisite of admission to the
municipal service.
This is the administrative machinery of the Ger-
man city. It is admirably suited to the complex
problems of municipal housekeeping. It is designed
to secure permanence and efficiency. And the city
is viewed not as a political but as a social agency.
The former is but incidental. The main purpose is
to promote the common welfare in every possible
way. And in the carrying out of the idea the state
is an aid rather than a hindrance. It encourages
new undertakings and suggests projects like hous-
ing, land purchase, banking, the building of docks
GOVERNING CITIES BY EXPERTS 279
and harbors, and the promotion of education.
Statistics are gathered and successful experiments
of one town are made known to another. Con-
ferences are frequently held for the promotion of
housing, health, education, and town-planning,
attended by experts from all over the empire.
Municipal administration in Germany is not the
plaything of politics it is the most serious problem
of statecraft, and it commands the best thought of
the empire.
CHAPTER XXI
MUNICIPAL SOCIALISM
THE German cities have carried socialization
further than have the individual states. They own
the greatest variety of undertakings and are con-
stantly extending the boundaries of municipal ad-
ministration. There is no theoretical distinction
between the so-called natural monopolies and com-
petitive industries, although quite obvious principles
of action underlie the policies adopted. The public-
service utilities, such as street railways, gas, elec-
tric light, and water companies which occupy the
streets and require special permits or franchises,
are generally publicly owned. Harbors and docks
are operated as integral parts of the transportation
system and as an aid to industry and commerce.
Housing is treated as a quasi-public utility, while
land ownership and land speculation are engaged in
partly for fiscal, partly for social, reasons. Other
considerations support public banking, markets,
abattoirs, bathing establishments, and restaurants.
These are part of a social programme and are sanc-
tioned by the traditions of the country as well as by
the long-established policy of protecting the com-
280
MUNICIPAL SOCIALISM 281
munity from extortion, monopoly, and the dangers
which the modern industrial city involves.
The policy of municipal socialism is encouraged
by the state, and the laws are adjusted to the easy
acquisition and financing of municipal projects.
At the same time the high character of men in the
councils and the magistracy insure efficiency and
honesty of administration. The average German
city has at its command more diversified talent
and a more highly trained administrative staff, and
it carries on its enterprises with greater economy
and efficiency than most private corporations.
As stated elsewhere, municipal socialism is en-
couraged by the great freedom of action which the
city enjoys. It can experiment as it wills. There
is no inelastic enumeration of powers in the munic-
ipal code. Generally speaking, the city can do
anything an individual or corporation may do. It
is a free and independent entity in the industrial
field and enjoys much of the sovereignty of the
nation. There are no minute and exasperating con-
stitutional or legal limitations upon its powers, no
paralyzing restrictions imposed from above. The
city is free to live its own life in its own way, and
to promote the well-being of its people as the town
council may decide.
Nor are there any constitutional or legal debt
limits upon the cities. The city is as free to issue
loans as a private corporation. It can borrow to
282 SOCIALIZED GERMANY
any extent that it wills and for any purpose, subject
only to the approval of the central administrative
authorities, which must be satisfied that the under-
taking proposed is a reasonably proper one for the
city to carry on.
Here again we see the wisdom of German state-
craft, a wisdom that is unexpected. For Germany
is so autocratic, so fearful of democracy, that we
would expect a highly centralized control of the
city and a jealous supervision of its life, such as is
to be found in France, Great Britain, and America,
where a far greater degree of political liberty pre-
vails but where local government is subject to the
closest and most exacting control by legislative
authorities. But Germany has reversed this policy
and has given the cities autonomous powers not only
over people but over property. It is because of
this fact that German cities have developed as
have no cities in the world. They have been free to
experiment as they willed or their local necessities
suggested.
Cities, too, have long been familiar with the idea
of owning things. Villages and towns have pos-
sessed common lands from very early times, which
are cultivated by the community or leased to
its members. Markets were general in mediaeval
times, as were slaughter-houses, savings-banks, and
bakeries. During the early part of the nineteenth
century many towns provided themselves with
MUNICIPAL SOCIALISM 283
water and gas, which were supplied not so much for
profit as for protection and service.
A revival of communal trading followed the
Franco-Prussian War. It was encouraged by the
Socialists, but was largely brought about by the
business classes. In addition, with the birth of
town-planning, it was generally realized that many
activities must be owned by the city in order that
town widening and improvement projects could be
carried through in an orderly way. This was par-
ticularly true of transportation, for the old towns
were very crowded. Population was congested
within the protecting fortifications and when these
were removed it was necessary to plan not only
the surrounding territory, but to distribute popu-
lation as widely as possible for the purpose of pre-
venting the recurrence of bad housing conditions.
These, too, were years of rapid industrial develop-
ment, which led cities to build docks and harbors
for the encouragement of trade and commerce.
These causes, along with the expectation of sub-
stantial profits which would relieve taxation, com-
bined to promote industrial undertakings, until
to-day the German city has carried municipal
socialism further than have any other cities in the
world.
Municipal ownership in this country and in Eng-
land has been limited to the so-called public-service
corporations, on the assumption that these indus-
284 SOCIALIZED GERMANY
tries differ so radically from competitive pursuits
that they alone are a proper subject for municipal
activity. There is no such clean-cut distinction in
Germany. Each proposal is judged on its merits,
on the need and relative advantages of private or
public operation. Moreover, when it is decided
to take over an existing property that is the end of
it. There is no protracted warfare, no exhausting
delays, no prolonged litigation. The terms of pur-
chase and of transfer are arranged with the sim-
plicity and decisiveness of an ordinance providing
for the condemnation of any other property.
As an indication of the extent to which municipal
socialism has been carried, it appears that of 1,279
Prussian towns of all sizes reporting in 1906, 561
owned their water-works, 440 the gas-works, 201 the
electric-works, 54 the tramways, 426 the abattoirs
and stock-yards, 730 bathing establishments, 38
markets, 19 docks, 42 stone and lime quarries, 17
breweries, 104 inns and restaurants, 45 brick-works,
and 23 mills. In addition, individual cities own
wine cellars, refrigerating-works, bakeries, dairies,
ferries, and other activities. 1 A number of South
German cities carry on wine handling, while others
have printing-works. Nuremberg owns an orchard
and stone -quarries. Almost all cities operate sav-
ings-banks and pawn-shops, and many of them
either own or co-operate in the building of work-
1 Dawson, Municipal Life and Government in Germany, p. 214.'
MUNICIPAL SOCIALISM 285
men's homes. Cities engage in land speculation,
while almost all the larger cities own their own
theatres, opera-houses, and some of the more pro-
gressive ones carry the principle still further and
unite their funds with those of private enterprises
from which they expect to make a substantial profit.
The city of Diisseldorf owns more than half of the
stock of an interurban railway which connects a
number of smaller towns with Diisseldorf. The
company also operates in land speculation.
An even larger proportion of the larger cities own
the public-service enterprises. A report made in
1908 of 85 cities of over 50,000 inhabitants shows
that 79 own their water-works, 65 their gas-works,
63 the electricity supply, 35 the tramways, and 82
the abattoirs or slaughter-houses, while a large per-
centage of the cities between 5,000 and 20,000 and
between 20,000 and 50,000 own these same activities. 1
In the majority of instances the tramways and
gas-works were originally operated by private cor-
porations under grants from the cities. Substantial
revenues were and are received for these conces-
sions. In 1910 Berlin received $1,570,000 in royal-
ties from the private electrical-works. In the same
year Konigsberg received $150,000 and Strasburg
$95,000. The privately owned tramways in 28
of the larger cities paid over $2,000,000 in royalties
in 1910. In that year Berlin derived a revenue of
1 Dawson, supra, p. 216.
286 SOCIALIZED GERMANY
$2,500,000 from concessions of all kinds. But
private ownership has generally proved to be un-
satisfactory and the tendency of municipalities is
to acquire possession as rapidly as possible. The
tramway undertakings of such cities as Diisseldorf,
Frankfort, and Cologne are among the best equipped
of any in the world. The construction work is per-
manent and durable. The rails are flush with the
pavement and the cars are nearly noiseless. The
cars, too, are clean and freshly painted. Inside one
finds maps of routes, while along the streets are
attractive waiting-rooms for the protection of pas-
sengers in inclement weather. The rate of fare in
most cities is 2> cents, sometimes with an ad-
ditional charge for a transfer. In some cities the
zone system is followed with a minimum charge of
2J^ cents for about 2J^ miles, with an additional
charge of 1 cent for the maximum ride, even when
the line extends out into the country. Cheap season
tickets are frequently sold to workmen and school
children. In some cities working men's tickets are
sold for 12 cents a week for two journeys daily,
available during the early morning and in the eve-
ning.
Public ownership of the electricity supply is very
common. As in England, the municipalities had
generally granted concessions to private companies
for the gas supply, but when electricity became a
commercial product municipal authorities generally
MUNICIPAL SOCIALISM 287
undertook the building and operation of the plants.
Within recent years a movement has developed for
the erection of large central generating stations
owned and operated by a number of local commu-
nities, or by communities working with private en-
terprises. These central plants distribute power and
light over a large area. One of the largest of these
stations is at Essen, which supplies more than fifty
communities and covers an area of 2,300 square miles
in its service. The city of Munich owns 51 per cent,
of capital in the company organized to obtain electric
power from a stream in the Alps, while the balance
of the capital is subscribed by individuals.
Nearly all of the cities own their own slaughter-
houses. In fact this is an activity carried on by
public agencies in almost every country of the world,
with the exception of England and America. Con-
nected with the abattoirs are stock-yards to which
the farmers bring their cattle for slaughter. Usually
all of the meat sold in the city is required to be
prepared in the public slaughter-houses, private
abattoirs being prohibited. The most elaborate sys-
tem of inspection is provided, the inspectors being
public officials who have taken a special training as
veterinary surgeons. The fees for slaughtering are
fixed on a basis sufficient to meet the operating costs
and interest charges as well as the ultimate repay-
ment of the cost of the structures by means of a
sinking fund.
288 SOCIALIZED GERMANY
Mpst of the large towns also own their markets.
In the larger cities a series of markets are operated
in connection with the central one, to which vege-
tables and farm products are brought to be dis-
posed of by auction to dealers. In addition there
are many open morning markets in the streets
which are subsequently cleared for traffic. Market
dealers are subject to supervision to see that the
food offered is clean and wholesome, and that the
charges are reasonable. Regulations are also en-
acted to control prices for the purpose of preventing
monopoly or extortion.
Many towns supply milk as a means of reduc-
ing infant mortality. In Berlin the milk provided
by the nine children's dispensaries is produced on
municipal farms. Dortmund has a municipal
dairy, while other towns have co-operative organi-
zations for the supply of pure milk under public
regulation.
During the shortage of meat in 1911 and 1912
many cities took steps to reduce the cost of meat
and fish. Over two hundred towns entered into con-
tracts for the purchase of foreign meat, which was
either sold by the municipality directly or through
butchers at stipulated prices. By this means the
cost of meat was reduced from 20 to 30 per cent.
Similar measures were taken for the purchase and
sale of fish and vegetables. 1 By these and other
1 Dawson, supra, p. 246.
MUNICIPAL SOCIALISM 289
means the German city controls the cost of living
and insures the quality offered for sale. Waste is
reduced to a minimum, as is the chance of monopoly
and extortion. In addition the parcel post is widely
used by housewives who give standing orders to
farmers, who mail meat, poultry, vegetables, and
flowers daily from their farms many miles away.
This is characteristic of the thoroughness and watch-
fulness of German municipal life.
Savings-banks have been operated by German
cities for centuries. They encourage thrift and sup-
ply a financial reservoir for the carrying on of public
activities. The savings-banks do a checking busi-
ness, as do the postal-banks. Over 90 per cent, of
the savings in Germany are in public institutions
of one kind or another. The banks are managed
by an official of the city at practically no cost to
the depositors who receive back the full earnings
on their money which is invested in public securities,
or a limited number of public-utility enterprises of
a social character.
Insurance is also provided. Sometimes it is
offered by the state, as in Bavaria, but more fre-
quently it is carried on by the city. Berlin, Ham-
burg, and other towns have fire-insurance societies,
while in the country districts groups of commu-
nities have organized for mutual insurance against
accident liability. Frankfort has insured itself
against accidents since 1888, and it is estimated
290 SOCIALIZED GERMANY
that from $45,000 to $50,000 has been saved during
twenty years as a result of this action.
Describing the municipal insurance companies,
Mr. W. H. Dawson says:
"The usual method of operations (in municipal
fire insurance societies) is for the town to form a com-
pany for the purpose, providing all the necessary
capital, carrying on the business as an ordinary
public enterprise, taking all risks, and receiving all
profits. In 1910 the total value of property insured
in public insurance enterprises was $18,905,000,000,
of which $16,785,000,000 represented immovable
property. The year's net profits were $3,350,000
and the accumulated funds stood at $63,320,000." 1
Most towns maintain pawn-shops for the relief
of the poor in times of distress. These banks charge
from 1 to 3 per cent, a month, depending upon the
size of the loan and the security offered. They are
also used by small tradesmen to carry over unsea-
sonable goods or to otherwise aid them in the trans-
action of their business.
The municipal savings-banks are of great aid to
the cities in carrying out the undertakings in which
they are engaged. They finance the housing and
land speculation projects, the purchase of public-
service corporations, and the like. The total de-
posits in municipal savings institutions in 55 large
towns in 1910 amounted to $850,000,000. Mort-
1 Dawson, supra, p. 252.
MUNICIPAL SOCIALISM 291
gage banks to aid persons of small means in the pur-
chase of land or the erection of homes are also main-
tained. Large sums have been set aside for this
purpose in recent years. Dresden has made an ap-
propriation of $2 1, 500,000 for this purpose, Diissel-
dorf of $10,000,000, and Aix-la-Chapelle of $5 ; -
000,000.
These mortgage banks make loans on first mort-
gages up to from 60 per cent, to 75 per cent, of the
value of the property at rates of interest ranging
from 3J^ per cent, to 4J^ per cent. Second-mort-
gage loans are also made, but at a higher rate of
interest. In order to take advantage of municipal
loans house owners must first join the association
and make a deposit of $125. After a year they are
entitled to secure a loan. Investigations made in
1913 by the city of Munich showed that 223 munic-
ipal savings-banks had loaned money to the amount
of $775,000,000 on first mortgages at a rate of from
4J^ per cent, to 4% per cent. 1
An estimate was made by the Imperial Ministry
of Finance in 1908 of all towns and rural communities
with more than 10,000 inhabitants and it was found
that the total receipts from undertakings of all
kinds those carried on without special regard for
profit as well as those conducted upon strictly com-
mercial principles amounted in the aggregate to
$126,750,000, or 26 per cent, of all communal re-
1 Dawson, supra, p. 251.
292 SOCIALIZED GERMANY
ceipts. Industrial services are generally operated
at a profit, sometimes a very substantial profit,
although this is not the main motive of operation.
The largest contributions to the city treasury came
from the gas, electric works, and tramways.
Substantial relief to the taxpayers is one of the
gains from these activities.
"The aggregate profits on gas works available in
1910-1911 for the reduction of taxation in seventy-
two German towns with 50,000 inhabitants or more,
were $13,018,500. . . . Again net profits available
for the reduction of taxes were made on electricity
works in 1910-1911 by seventy-two German towns
with 50,000 inhabitants or more, having a combined
population of 14,116,000 to the amount of $9,089,-
500. . . . Taking finally the profits from the tram-
ways available for the relief of local burdens, the
amount yielded in 1910 in seventy-four German
towns with 50,000 inhabitants or over was $3,-
590,000." *
The total amounts received as profits to be used
for the relief of taxation in a number of the larger
cities in 1910 were as follows: Berlin, population
2,071,800, gas-works $1,939,900, water-works $705,-
100, and tramways $42,750; Breslau, population
512,100, gas-works $659,050, electric-works $310,500,
water-works $263,200; Cologne, population 516,500,
gas-works $328,650, electric-works $274,950, water-
works $283,850, and tramways $292,400, or a total
1 Dawson, supra, p. 217.
MUNICIPAL SOCIALISM 293
of $1, 179,850. Dresden, population 548,300, makes
an even better showing. It also owns all of its public-
service utilities. The gas-works earned $782,000,
electric-works $400,250, water-works $45,650, and
tramways $271,800, or a total of $1,499,700. Frank-
fort-on-the-Main does not own its gas service, but
the electric-works yielded $725,400, the water-works
$170,900, and the tramways $368,550. Including
the royalties from the gas-works, the net receipts
from the public-service corporations were $1,426,-
300 for the year. Nuremberg, population 333,200,
owns all the public utilities, and received (1910) a
total contribution for the relief of taxation of $61,700,
while Munich, population 596,500, which also owns
all its public utilities, enjoyed a total income from
these sources of $1,110,100. Taking twelve of the
larger cities, with a combined population of 7,464,-
300, it appears that the net profits amounted to $17,-
107,300, or an equivalent of $2.30 per capita. 1
The profits referred to are the net earnings after
all payments have been made for interest, deprecia-
tion, redemption of capital, and additions to re-
newals and reserve funds. The profits are also in-
dependent of any payments on account of paving
and street cleaning and local taxes.
As a consequence of the policy of municipal
socialism the indebtedness of the average German
city is very high, but as an offset a large part of the
1 Dawson, supra, p. 223.
294
SOCIALIZED GERMANY
indebtedness is for undertakings which are self-sup-
porting and involve no burden to taxpayers, whereas
the indebtedness of the average American city is
for the most part for streets, sewers, parks, schools,
playgrounds, and fire and police equipment, which
are non-revenue producing. The indebtedness of
the German cities is very largely of a profit-making
sort.
The following figures of seven Prussian cities for
the year 1908 are indicative of the extent to which
their indebtedness is for productive undertakings.
The " productive undertakings" enumerated include
street railway, gas, electric light, water, harbors,
baths, etc. The "other purposes" are schools,
streets, sewers, and all non-productive undertakings.
TOWN
POPULA-
TION
TOTAL
DEBT
FOR PRODUC-
TIVE UNDER-
TAKINGS
OTHER
PURPOSES
Berlin
2,001,032
$99,254,000
$64,767,000
$34,512,000
Elberfeld....
Halle
Solingen
Magdeburg. .
Remscheid. . .
Diisseldorf . . .
168,000
176,798
50,961
247,358
69,700
284,439
13,595,000
9,500,000
3,285,000
15,005,000
3,930,000
28,585,000
7,252,000
2,877,000
2,257,000
7,775,000
2,790,000
22,260,000
6,392,600
4,612,000
1,029,000
7,503,900
1,147,000
6,327,000
A similar table of the indebtedness of seven Amer-
ican cities shows the amount as well as the distri-
bution of indebtedness between productive and un-
productive agencies. 1
1 Financial Statistics of Cities, 1909. Bureau of the Census.
MUNICIPAL SOCIALISM
295
TOWN
POPULA-
TION 1910
INDEBTED-
NESS 1909
FOR PRO-
DUCTIVE
PURPOSES
FOR OTHER
PURPOSES
Philadelphia-
Cleveland
Minneapolis..
Indianapolis. .
Denver
Omaha
1,526,383
538,374
294,330
228,690
207,112
122,187
$99,355,026
37,304,908
14,927,202
4,790,401
5,814,419
8,598,997
$30,776,642
5,613,684
1,933,424
22,000
329,200
$68,578,384
31,691,224
12,993,778
4,768,401
5,485,219
Grand Rapids
110,060
3,184,612
1,137,500
2,047,112
Herein is one explanation of the protest against
municipal indebtedness in this country. Our in-
debtedness is "dead" indebtedness. It yields no
return. It is a burden to the taxpayers. And it is
growing rapidly. The German city, on the other
hand, has no fear of indebtedness, for it is usually
represented by profit-making properties. It is
recognized as good business for the city to go into
debt, especially where a financial return may reason-
ably be expected from the investment, either im-
mediatedly or in the future.
Nowhere is Germany seen to such good advantage
as in the city. All classes have a pride in its life,
activities, and achievements; they contribute will-
ingly in taxes for efficient administration and seem
to appraise the returns received in education, com-
fort, and happiness, and to be content with the in-
vestment. Business men on the council give un-
reservedly of their time and treat the trust reposed
in them as a high honor worthy of the best service
they can render. And for the most part their
296 SOCIALIZED GERMANY
actions are disinterested. They have no prejudice
against any kind of undertaking if it will improve
the city or make it more attractive to business,
residents, or tourists. Nor do they hesitate to incur
heavy indebtedness for activities which will yield
returns either for the relief of taxation or the better-
ment of the community. The average per-capita
indebtedness of cities of over 200,000 people is $85,
a sum far in excess of that of America. Many
cities have a much higher debt. Frankfort carries a
municipal indebtedness of $140 per capita, Munich
$125, Diisseldorf $130, and Charlottenburg $130.
In comparison the per-capita debt of Chicago is
but $43.90, of Cleveland $69.29, of Detroit $30.31,
of Washington $44.84, of Milwaukee $32.47, of
Philadelphia $65.09. In this alone we see one ex-
planation of the difference between the German
city and our own. The German city spends gener-
ously. Officials treat the city as a business man does
his business, and they spend accordingly.
And back of this financial and social policy is a
different conception of the city from that which
prevails in other countries, and especially that which
prevails in America. Our conception of the city
is that it is a police agency. It is this and little
more. Expenditures and activities are directed to
the protection of business and the safeguarding
of the individual. We spend generously for our
police and fire departments, for streets and sewers,
MUNICIPAL SOCIALISM 297
for schools, and to an increasing extent for parks,
playgrounds, and health. But the idea of service
is as yet rudimentary. We have consciously re-
frained from entering the field of profit-making ser-
vice (except in the case of the water and electricity
supply) on the theory that this was not a proper
sphere of public activity.
Germany has a far wider vision of the city. The
welfare of the community, of all the people, of all
business rather than a few businesses, is the standard
by which a proposal is measured.
CHAPTER XXII
THE BUILDING OF CITIES
TOWN-PLANNING is another achievement born of
the expert and of state socialism. It is a recognition
of the permanency of the city, as well as its impor-
tance. Town-planning is a recent art. It is scarcely
a quarter of a century old. And during these years
Germany has produced the most wonderful cities
of modern times. This is the more remarkable
because these were years of rapid industrial devel-
opment in which we would have expected business
interests to have insisted upon the utmost freedom
of action and the necessity for non-interference on
the part of the community. Apparently, however,
it was a recognition of the dangers incident to un-
controlled development that led to the control of
property and its conscious direction by the city
authorities in order that the health and well-being
of the people should be protected. Here again the
German city reflects the far-sighted statesmanship
that characterizes the empire; a statesmanship that
is responsible for the social legislation, education,
and state socialism which are so closely related to
the development of the state.
Even the casual traveller remarks on the differ-
298
THE BUILDING OF CITIES 299
ence in city conditions as he enters Germany from
Holland, Belgium, France, or Austria. Whether
he enters at Cologne, Frankfort, or Munich, or comes
by sea to Hamburg or Bremen a new type of city
greets the eye. As he leaves the railway station,
which is usually one of the most commanding
structures in the city, he finds everything clean and
well ordered; the streets are paved with the best
of material and are kept in splendid repair. There
are no disfiguring telegraph wires overhead and
few obtrusive signs or bill-boards to offend the eye.
There is no smoke or dirt, while a uniform building
line indicates the existence of municipal by-laws
for the control of buildings. The streets are fre-
quently parked before the houses, which are often
ornamented with window-boxes, while at intervals
small parks or open spaces are found, beautified with
flowers and statuary. Monumental public build-
ings adorn the city, usually grouped in an intelli-
gent orderly way, while round about the city are
great gardens, parks, or woods in which on Sundays
or holidays a large percentage of the people may
be seen at play. Even the tenements, which are
the almost universal form of dwelling, do not sug-
gest the ugly squalor of the English or American
town, in spite of the fact that nearly 80 per cent,
of the urban population lives amid surroundings
that are far from conducive to the health and well-
being of the people.
300 SOCIALIZED GERMANY
Apparently nothing is left to chance. Everything
is under control. The city suggests a conscious
directing intelligence that looks out from the Rath-
haus as a group of architects might plan a world's
fair; as engineers might design a war-ship; as an in-
dividual erects a great office-building. Everything
suggests intelligence, oversight, and the application
of art and science to the city's building.
The German city is planned with all these ends
in view. Whereas other countries have left the
growth of the city to the unregulated action of in-
dividual initiative, Germany has recognized that
the civilization of to-day is a city civilization and
that the city should be built as a permanent thing.
Officials realize that the license of land specula-
tors, builders, and factory owners not only impairs
the beauty of the city, but interferes with the com-
fort and convenience of others as well.
Town-planning had its beginning with the city-
widening projects made necessary by the rapid
urban growth of a quarter of a century ago, when
population broke over the lines of fortifications
which surrounded the old towns and began to
spread out into the surrounding country. In South
Germany and especially along the Rhine, the cities
were surrounded with walls and fortifications which
congested population within very narrow quarters.
In addition many towns like Cologne, Frankfort,
Nuremberg, Bremen, and Hamburg had been capital
THE BUILDING OF CITIES 301
cities, or rich trading centres with long traditions
of municipal pride born of previous independence
or notable acheveiments. The streets were narrow
and crooked. They were not suited to modern traffic
or the building of street-railway lines. Streets had
to be widened, beautiful old buildings were in dan-
ger of impairment, fine vistas might be destroyed.
About this time, too, sanitary precautions began to
be taken to protect the health of the community,
while the evils of bad housing began to appear. To
meet the needs of a rapidly growing population
builders began the erection of tenements differing
but little from the overcrowded lodgings of earlier
times. Land speculators laid out their property so
as to secure the maximum return from its sale with
no concern for the comfort, convenience, or well-
being of the community. These were the conditions
which confronted municipal authorities in the early
eighties. Out of these necessities the art of town-
planning had its birth.
Town-planning, or Stddtebau, has now become a
recognized art. A number of universities offer
courses of study on the subject which attract stu-
dents preparing for a municipal career. Special
courses have been offered in Berlin since 1907. In
Saxony a similar department has existed since 1910.
In 1912 a college of administration was opened in
Diisseldorf with courses on the subject. In 1910
an elaborate town-planning exposition was held in
302 SOCIALIZED GERMANY
Berlin, and two years later a similar exposition was
held in Dlisseldorf . A large literature has appeared
upon the subject, while a periodical, Der Stddtebau, is
published.
The attitude of the average town is indicated by
the planning announcement of the city of Mann-
heim, which states that "every town in course of
development needs to its extension outward a
uniform and comprehensive building plan. If this
plan is to offer a foundation for the art of town
building it must be drawn up on large lines, must
anticipate the needs of a distant future, and pay
due regard to the requirements of traffic, hygiene,
and taste. The fulfilment of this task constitutes
a very important part of all social reform in our
towns. " 1
This is indicative of the outlook of all city offi-
cials and statesmen. Cities like Berlin, Diisseldorf,
Strasburg, and Munich have held competitions in
which town-planning experts from all over the em-
pire competed. Specifications were first laid down
by the authorities which anticipated the future
growth of the city for years to come. The specifi-
cations were limited to the development of specified
territory to be developed, or provided for a plan for
the entire city and surrounding territory. Com-
petitors were asked to design the traffic streets,
boulevards, parks, and open spaces, so that they
1 Dawson, supra, p. 142.
THE BUILDING OF CITIES 303
would fit into the existing city plan. Provision was
to be made for steam railways, harbors, and indus-
trial districts, for the location and character of public
buildings and schools, as well as hospitals, cemeteries,
and other public needs. With these specifications
before them, plans were prepared by competitors
upon which an award was subsequently made.
In other instances cities employ experts who pre-
pare the city-widening projects in advance of build-
ing. When received, the plans are exhibited for pub-
lic inspection and criticism and when finally approved
they become binding not only upon the community
but upon private builders and landowners as well.
Underlying all city plans is the proper arrange-
ment of streets. This is the foundation of the city.
It is elementary to any city plan. Streets are recog-
nized as being the circulatory system of the city,
too important to be left to the narrow commercial
interests of private landowners or speculators. And
the modern streets in the German city, are de-
signed with the greatest care. They are adjusted
to the uses to which they are to be put. They are
not all alike, each 40 or 60 feet wide and arranged
according to the rectangular plan so common in
America. An effort is made to design streets for
particular needs and uses. Certain streets should
be wide, spacious, and park-like. These are the
main arteries of traffic. Such streets are frequently
from 150 to 200 feet wide. In the centre is a parked
304 SOCIALIZED GERMANY
space with gardens to be used for pedestrians. On
either side are the street-car tracks, sodded so as
to keep down the dirt and the noise. Outside are
the traffic thoroughfares. These are the main ar-
teries of circulation. They usually run out from
the centre of the city like the spokes of a wheel or
form the boulevard system about the circumference
of the city. On such streets builders are required to
set their houses back a uniform distance from the
pavement. Here only detached houses can be built,
which must be a certain distance apart and must
not exceed a certain height. Less prominent streets
are narrower, more cosey and picturesque in their
planning. They are intended for residential pur-
poses. Frequently they are crooked; they come to
a dead end as in mediaeval towns. This is done to
discourage traffic. It also lends quiet and charm.
Other districts are dedicated to industrial uses.
These sections are not arbitrarily chosen, they are
located near the railways, waterways, or harbors.
Where possible they are selected with due regard
to the prevailing winds on the lee side of the town
so that the smoke will be driven from the city rather
than across it. These industrial districts are also
planned with respect to the uses to which they are
put.
Similar ordinances are enacted to control builders
with the aim of securing architectural harmony, the
proper kind and location of houses, the prevention
THE BUILDING OF CITIES 305
of bad housing conditions, and the protection of
the whole community from disfigurement. These,
with the planning of the streets and the restriction
of areas to specified uses, are known as the " zoning
system." The city is divided into districts accord-
ing to its proper use. In each zone there are different
limitations as to the amount of land that may be
built upon, the amount of open space required, the
height of buildings and the distance they must be
set back from the street. The building plans also
indicate the kind of houses that may be erected,
whether villas or apartments. The individual land-
owner would not think of laying out his property for
sale without first consulting the city plans.
The widening plans of the suburban area of the
city of Ulm provide that 17 per cent, of the land
should first be taken for streets, that 13 per cent,
of the lot area should be reserved for back gardens,
and 50 per cent, for front gardens. Only 20 per cent,
of the lot area may be covered by buildings. The
city of Mannheim is divided into three building
zones. In the business district 60 per cent, of the
land may be covered by structures which must not
exceed three stories in height. In the next outer
zone 50 per cent, of the lot area may be built upon,
while the structures may not exceed four stories in
height. In the outlying sections three stories is the
limit, while a similar percentage of the land may be
built upon.
306 SOCIALIZED GERMANY
Cologne provides that only 75 per cent, of the
land may be built upon in the business section, 65
per cent, in the next two outer zones, while in the
suburban residence district only 50 per cent, may be
covered. In the business district of Frankfort 75
per cent, of the land may be covered by buildings
which may not exceed five stories or more than 65
feet in height. In the second outer zone buildings
may be four stories high, but never higher than the
width of the street. For the third surburban zone
two stories is the limit.
As a result of these restrictions architectural har-
mony is insured. There are no sky-scrapers or apart-
ment-houses close beside the detached dwelling.
Nor is one owner permitted to build close to the
street-line, while his neighbor, more thoughtful of
the community, places his house back from the
street. All houses are located the same distance
from the curb-line, while the sky-line is uniform and
rarely exceeds the width of the street. As a conse-
quence the newer sections of the German city pre-
sent a park-like appearance; they have something
of the beauty of the garden cities of England. All
of this is sanctioned as a means of protecting prop-
erty. It insures to the home builder that for years
to come his property will be protected from the in-
trusion of business, tenements, or other objection-
able structures.
In planning new territory provision is made for
THE BUILDING OF CITIES 307
the needs of the city as a whole. At frequent
intervals there are little gardens or play places
which are designed in an artistic way. Some of the
gardens are sunken, others are just off the street-
line so as not to interfere with through traffic.
Sites are also reserved for future public buildings,
for schools, hospitals, and churches. For these pur-
poses cities acquire land in advance of their needs
at very little cost and with adequate provision for
the future.
The community is also protected by ordinance
from signs and other street disfigurements. Most of
the public announcements are placed on kiosks
located in prominent places which are either operated
by the city or leased out to private individuals.
Stations and tram-cars are frequently free from ad-
vertisements. The power to legislate against such
disfigurement rests in an old law of Prussia which
provides that buildings which disfigure the appear-
ance of the city may be prohibited under the police
powers of the city. A law enacted in 1907 carried
this principle still further and authorized the city
to refuse its permission to the erection of any build-
ings that would unnecessarily disfigure streets and
public places, and local authorities are authorized
to adopt by-laws for the protection of the archi-
tectural appearance of leading streets or ancient
historical places. Under these by-laws the erection
of bill-boards and signs depends upon police per-
308 SOCIALIZED GERMANY
mission, but before permission is granted the opinion
of experts or the municipal authorities must be
taken. 1
Commenting on these regulations, Mr. Dawson
says:
"Many Prussian towns have gone further and
have established special municipal offices for advice
to builders and architects upon matters of style
and taste. No charge is made and there is theoret-
ically no obligation to follow the advice given unless
the builder's plans infringe upon the local regulations,
yet the good offices of the municipality are both
freely used and highly valued. The municipality of
Baden-Baden adds rewards to advice, for it gives
premiums every year to architects and builders
whose erections are adjudged to comply most nearly
with certain prescribed conditions as to artistic
design and quality of materials, and best harmonize
with the general architectural scheme of the town.
By the adoption of these and similar common-sense
methods, and by insisting that the building, like
the planning of the town, should be considered as a
whole, it is hoped to prevent the architectural
anarchy which has often reigned in the past, and
even to rectify many mistakes which have been in-
herited from times when the building speculator
was left to his own devices. The amenity of civic
life in Germany is further protected by a law, ap-
plying to the whole country, providing that before
industrial or trading undertakings which would
cause injury or even inconvenience to the neighbor-
ing residents can be established, the consent of the
higher state authorities must be obtained. 7 ' 2
1 Dawson, supra, p. 154. 2 Dawson, supra, p. 155.
THE BUILDING OF CITIES 309
The same intelligent provision is made for indus-
try and commerce that is made for the residence
districts. German cities vie with one another,
much as do the cities of America. They compete
for factories, for residences, for people. And as an
aid in this competition cities make provision for
factory sites and transportation. The cities of
Mannheim, Bremen, Emden, Frankfort-on-the-
Main, and many other towns have purchased large
tracts of land to be resold to industries on easy
terms. These factory areas are usually selected
close by the railways and waterways, and are ac-
quired at farm prices. Thereafter streets are laid
out, transportation connections are made, and the
property is placed upon the market.
This is part of the comprehensive industrial policy
of Germany, a policy that is very common.
"The inquiry made by the Central Office of the
Municipal Congress showed that nearly half of
the 113 municipal authorities questioned had ac-
quired land for industrial purposes and had sys-
tematically offered it to capitalists on advantageous
conditions, and that in many cases their land was
in communication with the municipal docks. It
appeared that in one case the town sold land at half
the cost price solely with a view to attracting new
industries, while in others mortgages on the land
sold were accepted at a low rate of interest. "*
One of the most elaborate undertakings of this
kind is that of Frankfort-on-the-Main, a city of 414,-
1 Dawson, supra, p. 241.
310 SOCIALIZED GERMANY
000 people. Some years ago 1,180 acres of land on
the river Main was purchased at agricultural
prices, which has subsequently been developed into
a great industrial and factory centre. In con-
nection with the project a great harbor was laid
out, the river was deepened, and connections were
made with the state-owned railways. The total
cost of the undertaking is estimated at $18,000,-
000, but the land is now being sold and leased to
builders at figures which are expected not only to
entirely reimburse the city for the cost of the land,
but for the cost of the improvements as well.
New factories are not permitted to go where they
will. They are required by law to locate in these
new industrial sections. Such orders are not made
arbitrarily, however, nor is any injustice done to
landowners. Factory sections are chosen by reason
of natural advantages; they are close by the rail-
ways and waterways, and are supplied with switches,
spurs, and sidings which reduce the cost of trans-
portation to a minimum. This is one of the ways by
which Germany encourages industry. It stimulates
competition, it offers a free play to enterprise by
preventing private control of the means of trans-
portation on the one hand and by offering the best
of sites at very low cost on the other.
In proximity to the factory districts land is laid
out for working men's homes, and here the streets
are planned with this object in view. Parks, play-
THE BUILDING OF CITIES 311
grounds, and public baths are usually provided in
the neighborhood, while the means of transporta-
tion are frequently adjusted to the cheap and easy
distribution of population.
It is because of such well-ordered plans that the
German city is what it is. Individualism and license
are controlled in the public interest, while private
property is subordinated to the public weal. Pres-
ent speculative profits are of secondary importance
to permanent values. Municipal officials build cities
as the naval council erects dreadnaughts, as the
minister of war plans his campaigns.
To the convenience of industry and the comfort
of the home owner and the tenant is added the
pride of the city, a pride expressed in commanding
public structures, in imposing water-fronts, beauti-
ful parks and boulevards, and places of recreation.
Diisseldorf, a city of 350,000 people, is known as the
"Garden City of Germany." It has spent millions
on the reclamation of its Rhine water-fronts, in the
erection of a great exposition hall in which indus-
trial, art, and municipal exhibits are held, in the
acquisition of land and the laying out of public
places. Nearly every Rhine city has developed its
water-front not only as a means for water and freight
traffic but for recreation as well. The embank-
ments upon the river frontage are terraced. At
the bottom are landing stages for water craft; on the
next level are the railway tracks, while above is a
312 SOCIALIZED GERMANY
broad promenade way or park which is used by the
whole population. Berlin has parked its canals,
which carry the most diversified commerce and has
lined them with shade-trees. Dresden stands far
above the river Elbe, upon the summits of whose
banks great public buildings have been erected.
Munich, Leipsic, Frankfort, and Dresden have
expended immense sums in the erection of beauti-
ful town halls, the older ones suggesting the archi-
tecture of the Middle Ages and those more recently
constructed the modern architecture of Germany.
Cities own splendid opera-houses and theatres;
many have zoological and palm gardens, while within
the last few years cities have erected festival halls
which are the favorite places of resort during the
summer months.
The exhibition halls and park of Munich cost
$4,250,000, and those of Frankfort $1,500,000.
They are used for industrial expositions, for the
display of local art, as well as for music, theatrical
performances, and other purposes. The German
cities spend generously for beauty and for recreation,
more generously than any cities in the world. All
this is an expression not only of the affection of the
people for their city, but of their patriotism and
love of the Fatherland as well.
CHAPTER XXIII
MUNICIPAL LAND OWNERSHIP AND HOUSING
PROJECTS
CLOSELY related to town-planning are the land
and housing policies adopted by the cities with the
sanction of the state governments. During the
Middle Ages towns and villages owned consider-
able tracts of common land. Some of this was
within the city limits; much of it was in agricul-
tural and forest land, which was used for the gather-
ing of fuel, grazing, and agricultural purposes.
Common ownership of land by public authorities is
almost universal in South Germany, some of the
towns owning so much land that they are free from
local taxes.
In recent years cities have enlarged their landed
possessions. They have been instructed to do so
by the state authorities and directed to refuse to
sell their holdings. The importance of land to
planning and housing projects has been fully recog-
nized, as has the possibility of using landed posses-
sions for fiscal purposes.
Orders or decrees have been issued by the cen-
tral authorities of Prussia and Saxony pointing out
313
314 SOCIALIZED GERMANY
the far-reaching importance of an adequate land
policy in the solution of the housing problem, as
well as in the control of land speculation, which is
recognized as one of the most serious evils in modern
city conditions. And as a means of checking specu-
lation and the promotion of adequate housing facil-
ities towns are urged to anticipate their growth and
acquire surrounding agricultural land in advance
of the city's development. The minister of the
interior of Saxony has advised the towns "to in-
crease their estates betimes to the extent of their
power, yet to retain all land in their possession, and
only to sell where there is a guarantee that no specu-
lation will take place." When sold, public land is
usually subject to limitations upon the buyer, who
is prevented from speculating on his purchase or
transferring the property so acquired to others.
In some instances the town reserves the right to
buy back the land, while in others the land is merely
leased to the occupier.
Many cities have engaged in large land schemes.
Among them are Mannheim, Leipsic, Charlotten-
burg, Breslau, Halle, Frankfort-on-the-Main, Aix-
la-Chapelle, Diisseldorf, Duisburg, Essen, Elber-
feld, Ulm, and Strasburg. The city of Diisseldorf
set aside a fund of $5,750,000 with which to buy
and sell real estate, just as does a private operator.
The city frankly stated that one of the purposes of
this policy was "to restrain the unnatural augmen-
MUNICIPAL LAND OWNERSHIP 315
tation of the price of land." In addition the city
owns a majority of the stock in a suburban street
railway which is also a large operator in land specu-
lation. By this means it keeps down the price of
land for building purposes and at the same time
shares in the unearned increment of land values due
to the city's growth.
It is quite customary for cities to buy agricul-
tural land for industrial or housing purposes in
anticipation of the laying out of streets or trans-
portation lines. When the development has been
determined upon the land is systematically planned,
the streets are laid out, reservations are made for
parks, playgrounds, and sites for public buildings,
and the balance of the land is either sold or leased
as the policy of the city dictates. Special induce-
ments are made to working men, the land being
sold at a low price and on long terms, the money
for the building being also loaned either directly
from municipal savings-banks or through co-opera-
tive societies organized to promote the building of
working men's houses. From 75 to 90 per cent, of
the cost of the land and buildings is so advanced
by the municipality at a rate of interest of from
2J/ to 4 per cent., which includes the amortization
charges.
Some towns claim that they have completely elim-
inated land speculation. The ober-burgomaster of
Ulm announced at a meeting that that city now
316 SOCIALIZED GERMANY
owns four-fifths of the entire municipal area, and
that in consequence there is no land speculation.
The mayor of Saarbriicken says that in consequence
of the land policy of that city the community itself
has become a large land speculator.
From reports made in 1910 it appears that cities
own from 20 to 80 per cent, of their entire ad-
ministrative areas, not including roads, streets, and
railways. Among these cities Freiburg, in Baden,
owns 77.7 per cent, of its area; Stettin 62.5 per cent.;
Heidelberg 61.1 per cent.; Coblenz 69.5 per cent.;
Augsburg 49 per cent. ; Mannheim 48.6 per cent. ; and
Frankfort-on-the-Main 47.7 per cent.
Berlin owns 5,450 acres within its limits, and 46,-
899 acres outside of its limits. Frankfort-on-the-
Main owns a total of 15,522 acres; Breslau 16,795
acres; Munich 12,792 acres; Strasburg 11,464 acres;
and Stettin 15,972 acres. A number of cities own
estates several times greater than their adminis-
trative areas. 1
During the twenty years from 1890 to 1909 the
town of Konigsberg increased its estates by 3,000
acres. From 1891 to 1908 Munich added 13,771
acres. In the former city about one-half of the land
so acquired was within the municipal boundaries and
the other half outside, while in Munich something
over one-third of the land acquired was within the
city, while two-thirds were outside of it.
1 Dawson, supra, p. 125.
MUNICIPAL LAND OWNERSHIP 317
There seems to be no limit to the ambitions of
the towns in this direction. Kiel now owns a large
part of the land surrounding the city which is let
out in small holdings for market gardening, with
the result that the town has between 4,000 and
5,000 tenants from whom it receives a substantial
income each year. Berlin has been increasing its
municipal estates with even greater rapidity and
recently purchased a single estate of 15,000 acres
at a cost of about $5,000,000. Part of this land
is to be sold or leased for the building of small
homes, but the greater part will be used as a public
park. The towns of Konigsberg and Ulm have
recently acquired the fortifications surrounding the
city and laid them off as parks or for building pur-
poses.
Much of the land so acquired by the cities is
kept as forest land. Of the total of 35,000,000
acres of forests in 1900 the various states owned
over 11,000,000 acres, while the towns and communes
owned 5,645,000 acres more. One town, Frank-
fort-on-the-Oder, owns 15,570 acres of forest land;
Brandenburg owns 11,220 acres; Stettin 10,570
acres; Frankfort-on-the-Main 8,590 acres; and Wies-
baden 4,750 acres; while many small towns own
estates running into the thousands of acres. Most
of these forests are operated for profit on scientific
principles. They are a direct source of revenue.
In other instances the land is divided up for culti-
318 SOCIALIZED GERMANY
vation, and in small villages is apportioned among
the citizens.
Substantial revenues are realized by the cities
from their land holdings. In 1912 Dlisseldorf made a
profit in excess of $100,000 from the turnover of its
municipal land fund. Magdeburg bought land for
$1,500,000 and sold two-thirds of it for $6,500,000.
The land department of Cologne has made a profit
of over $3,000,000 in thirty years' time from its
land transactions. The city of Ulm recently bought
1,280 acres for $1,500,000, and subsequently sold one-
half of it for $2,000,000, showing a cash profit of
$500,000, and an addition of 860 acres to the landed
possessions of the town. 1
The ownership of so large an area of land, fre-
quently equal to one-half of the total area of the
city, makes it possible for the community to carry
out its building and planning projects in a far-seeing
and at the same time economical way. It can
direct population in certain directions; streets can
be planned in a generous way. Spacious sites can
be provided for public buildings, while adequate
provision can be made for parks and open spaces.
Through the ownership of advantageously located
land the city can offer cheap and advantageous sites
to factories, planned in such a way as to give the
best of railroad and transportation facilities. In
addition the ambitious housing plans which the
1 Dawson, supra, pp. 129-134.
MUNICIPAL LAND OWNERSHIP 319
German cities have undertaken can be carried out
with such restrictions as the city itself sees fit to
impose. Moreover, as time goes on the land ac-
quired becomes an asset of very great value to the
community. It is claimed that the sewage farms
acquired by the city of Berlin have increased so
rapidly in value that their sale would enable the
city to completely liquidate its total city debt. Un-
doubtedly the same is true of many other cities.
Through sales and leases substantial revenues are
derived, which are used to keep down the burden of
taxation, while the increasing revenues from forests
and agricultural lands are a source of substantial
profit. Emphasis is placed by all public author-
ities upon the necessity of keeping down the exor-
bitant prices of land speculators, which lead to bad
housing, high rents, and overcrowding. The city
becomes an active competitor against private land-
owners and house builders, and in this way serves
as a check upon private individuals whose specu-
lative schemes form an obstacle to the development
of the towns.
Closely related to the land policies are the am-
bitious housing projects which have been entered
on by most of the larger German cities. No coun-
try in the world has approached the housing prob-
lem as earnestly and scientifically as has Germany.
Officials recognize that private capital has proven
inadequate to meet the needs of a rapidly increas-
320 SOCIALIZED GERMANY
ing industrial population, and that only through
the action of the state itself will proper and ade-
quate housing facilities be afforded. Several official
policies have been adopted for the solution of the
problem. In the first place all new territory opened
up for building is planned by the city far in advance
of operations. The streets are designed for the spe-
cific uses to which the new territory is to be put,
while regulations determine the amount of land that
can be covered by buildings, the distance they must
be located back from the street, as well as their
height above the ground. These regulations apply
to private as well as public buildings. Cities have
also co-operated in the erection of model dwellings,
either by building houses upon municipal land or
by the sale of land to building societies formed for
this purpose. When land is sold directly to working
men easy terms are provided, by which the land is
paid for in annual installments, which include not
only the interest charges but enough to pay for the
whole cost of the house and lot in a certain specified
time. 1
1 For a further survey of the housing projects of German cities, see
Municipal Life and Government in Germany by W. H. Dawson, chapter
VII, and European Cities at Work by the author, chapter IX.
CHAPTER XXIV
THE GERMAN CONCEPTION OF THE STATE
GERMANY presents a new conception of the state.
It has no counterpart in ancient or modern times.
No other people think in the same terms, no other
country has a similar psychology, no other nation
has so completely subordinated the individual. The
Roman Empire in the height of its power is the only
state with which Germany can be compared.
" Fatherland" signifies many things to the Ger-
man; it has many other meanings than patriotic
attachment. And all of the activities described in
the previous chapters form part of German Kultur
as the Germans use the term. Kultur is not lim-
ited to educational and aesthetic things. Kultur in-
cludes history and traditions, politics, statecraft, and
administration; it includes state socialism, social
legislation, the conservation of human life, and the
promotion of the well-being of the people. All of
the individual and collective contributions which
Germany has made to the world form part of Kultur
as the German understands the word. These con-
tributions are colossal. And they are largely social.
This emphasis on human welfare is one of the re-
markable things about the German idea of the state.
321
322 SOCIALIZED GERMANY
Almost all of the achievements enumerated have
been brought about in the short space of a genera-
tion. The greatest advance is coincident with the
reign of William II. Bismarck laid the foundations
of the structure, but his work was horizoned by the
conditions of his generation and the unification of
the empire. It remained for William II to give unity
to the work by harmonizing the landed aristocracy
and the commercial classes with humanism in legis-
lation, and by calling to his aid the scientific thought
of the nation and identifying with the state the con-
tributions of the universities and technical schools,
the scientists and artists, the educators and the
business men.
Unity is the predominant note in Germany. The
nation thinks and acts as a great human mechanism,
adjusted in all of its parts to efficiency and the ad-
vancement of the Fatherland. An ambition for im-
perial power seems to be the conscious motive of the
people. No group has been permitted to sacrifice
the state in its exclusive control. Each class has
accepted sacrifices and limitations on its privileges
when the national welfare was at stake.
Legislation has been balanced. Rights have car-
ried corresponding duties, and privileges a corre-
sponding burden. To the old patriotism of war
has been added a new patriotism of peace, which
has created a public sentiment ready to assume
burdens and sacrifices for the common weal. While
GERMAN CONCEPTION OF THE STATE 323
legislating for production Germany has legislated for
distribution as well. While promoting industry she
has promoted the well-being of the people. While
training her men to arms she has trained them as
artisans, and while granting privileges to the em-
ploying class she has required them to share in the
burdens of the state, to relinquish profitable fields
of investment, and to consider the welfare of the
working class.
State socialism in Germany is of two kinds: first,
productive socialism, and second, distributive social-
ism. One means an increase in the amount of wealth
produced and the other its juster distribution. Of
the two the latter is more important. If we increase
the amount of wealth produced, there is more to go
around, but this does not necessarily improve the
well-being of those who produce, and as a matter of
fact, while the general standard of living in most
industrial countries has undoubtedly advanced dur-
ing the past generation, the gain to the great major-
ity of the people is far behind the advance that has
been made in production and accumulation. And
up to the present time the efforts of lawmakers has
been almost exclusively devoted to the promotion of
production, to the stimulation of invention, to the
encouragement of industry and commerce. The
departments of the government, the appropriations
made, the kinds of activities carried on have behind
them the desire to promote the well-being of the
324 SOCIALIZED GERMANY
capitalist and privileged class. Outside of Germany,
Denmark, and Switzerland, there has been but little
legislation or little official thought to the more
generous distribution of the gains of civilization.
In America and England social legislation that
looks to fundamental reform is not a matter of pri-
mary concern to statesmen. It is but little studied
in the universities. It has awakened no philan-
thropies or endowments for research. There is but
little legislation that has for its object economic
justice or even fundamental change. We have given
protection to domestic industry from foreign com-
petition, we have subsidized the railroads by land
grants, we have encouraged agriculture, but in so far
as social legislation is concerned our official mind is
still in the individualistic stage. Legislation for the
promotion of production has proceeded apace, while
legislation for the individual man, for the worker,
and the great mass of the people has remained in the
Adam Smith, Ricardian age. Only within the last
few years has there been any sign of change.
Germany differs from other leading countries in
the thought that has been given to the distribution
as well as the production of wealth. And no other
country has so greatly improved the well-being of so
large a portion of the people. This is the real ex-
planation of her power; this lies back of her military
achievements; this explains her advance in trade,
the growth in her overseas commerce, and the rise
GERMAN CONCEPTION OF THE STATE 325
of her merchant marine from that of a negligible
position to that of the second maritime power of the
world.
It is almost impossible to enumerate, much less to
translate into our laissez-faire consciousness, all of
the laws and administrative decrees that have been
enacted by the empire, states, and cities during the
past generation. Only the main measures stand out
in relief. But at every turn in conversation with
business men and workers some new measure is dis-
covered that is part of the structure that has made
Germany what she is.
Let us first consider the agencies of productive
socialism, which are designed primarily for increasing
the wealth of the empire. Transportation, which is
the circulatory system of the nation, is organized with
the most painstaking thought to realize the maxi-
mum of service at a low cost. Seaport and river
harbors, navigable rivers, streams, and canals have
been linked up with the railways and city terminals
so as to reduce waste to the minimum. Transporta-
tion is an agency of industry and commerce. Profit
is only incidental. It has been made easy for men
to enter business. Competition has been freed from
as many risks as possible. The capitalist is offered
good building sites by the cities, closely connected
with the means of transportation, and on easy terms.
While syndicates have come into existence and are
encouraged by the state, they are not permitted to
326 SOCIALIZED GERMANY
strangle competition; and new capital is assured an
opportunity and is encouraged to enter any field.
Germany has recognized that the division of la-
bor is no longer confined within a single industry.
Transportation between the different sections of the
empire is almost as important as transportation
within the individual establishment. And Germany
has adjusted her transportation system, her mer-
chant marine, and her credit agencies as though the
state and the outside world were a single industrial
organism.
Rapidly increasing population has to be kept at
work. Little outlet was offered by the colonies,
which have not been a success. And domestic con-
sumption has not kept pace with the growth of the
output. A foreign market had to be found. This
has been achieved by a systematic study of foreign
desires and prejudices, by the adjustment of wares to
foreign wishes, by the careful training of clerks and
business agents, as well as by the building of steam-
ship lines which run to every available market. The
merchant marine as well as the foreign commerce of
the country has grown rapidly.
Industrial and commercial processes are a scien-
tific study. Education has been adjusted to changing
needs. There are technical universities and techni-
cal high schools. In every large city are institutions
devoted to training workers in industry, applied art,
and manual dexterity. Business is a profession for
GERMAN CONCEPTION OF THE STATE 327
which men are specially trained in commercial col-
leges of high rank. Men not only familiarize them-
selves with foreign languages; they spend a number
of years of early life in England, America, and in
colonies, acquainting themselves with manufactur-
ing details and the wants of the most distant
markets.
The European war has promoted the process of
socialization far beyond what it was a year ago.
When the war is over there will undoubtedly be a
great increase in state activity; a wide expansion of
the services rendered and an accelerated movement
toward the socialized state under undemocratic
forms. There will be an expansion of public credit
at low rates of interest for the rebuilding of the in-
dustry and trade of the nation. New industries will
be taken over as a means of lightening the burdens
of taxation. There will be new partnerships be-
tween the state and the syndicates, so arranged as to
secure the co-operation of private initiative and at
the same time realize a share of syndicate profits.
Germany will undoubtedly emerge from the wreck-
age of the war with greater rapidity than the other
nations of Europe by reason of her ownership of so
many agencies that lie at the life of the nation and
particularly by virtue of her long training in co-
operative socialized effort.
Distributive socialism is closely related to pro-
ductive socialism. By distributive socialism I mean
328 SOCIALIZED GERMANY
services performed by the state at low cost or no
direct cost at all. In other countries many of these
services are either not performed at all or are left
to commerce to be exploited. These include the
many non-profitable undertakings of the states and
cities, the provision for education and health, and
the many social services which are supported by
taxation. First in the list of such activities are the
social insurance schemes which distribute to the com-
munity the burdens of sickness, old age, accident,
and invalidity. These in themselves have freed
millions of men and women from fear of the future,
from loss of self-respect, and have kept them as pro-
ducing members of the community.
Distributive socialism has provided labor ex-
changes which eliminate much of the waste of unem-
ployment. It has erected working men's hotels or
Herbergen in every community, to which the wan-
dering artisan can go. Distress or emergency work
provided by the cities relieves the worker during
periods of industrial disturbance, just as does the pro-
tection of the health of the community by sanitation,
by the community doctor, the nurse, the pure-milk
stations, and the convalescent homes. Distributive
socialism receives the savings of the poor in the
municipal savings-bank, and loans the deposits back
again at a low rate of interest for the building of
working men's homes, the purchase of land, and the
maintenance of pawn-shops for the needy. It pro-
GERMAN CONCEPTION OF THE STATE 329
vides municipal houses or apartments, or develops
garden suburbs.
But distributive socialism does not end with the
physical well-being of the working classes, it makes
provision for the leisure life of the people as well.
Cities maintain opera-houses and theatres in which
the best of productions can be heard at a low cost.
Through these the cultural standard of the people
is elevated. There are municipal art galleries and
museums. Cities maintain colleges and academies,
they provide lectures and entertainments. Every
city of any size has its orchestra or military band
which give excellent concerts in the parks and town
halls. The leisure life of Germany is under state
control just as is education. This is an important
function of distributive socialism.
It is by these means that the standard of living of
all classes has been improved. Wages have risen, it
is true, but the war on poverty, on distress and dis-
ease has been waged by the generous use of taxation
and the distribution to the poor of a multitude of
services which in many other countries are the ex-
clusive enjoyment of the few.
And the cost of these services, which in most coun-
tries is shifted onto the poor through indirect cus-
toms and excise taxes, is largely borne by those best
able to bear it. Taxes bear not only on property
but on incomes as well. The rates are progressive,
so that the rich and well-to-do pay more than their
330 SOCIALIZED GERMANY
proportional share. In some cities the income tax
on the very rich for state and municipal purposes
rises as high as 10 or 15 per cent. Cities impose
an unearned increment tax on the rising value of
land, and frankly insist that land values are social
in character, and are the result not of the industry of
the owner, but of the growth of population and
industry. In addition, a large part of the revenues
of the empire, the individual states, and cities comes
from the many productive undertakings owned by
them. Not only have the propertied classes been
dispossessed of the most profitable monopolistic
undertakings, but tax burdens have been imposed
that in America would be considered the most un-
just of class legislation.
Property, business, and industry are regulated
in the public interest. Factories are required to
build where the community decrees. The individual
may not lay out his land as suits his fancy or his
profit, he must lay it out and sell it for such purposes
as the city decides for him. When he erects his
home he must abide by the ordinances of the city
as to the kind of house he will build, the amount of
land it will cover, as well as the height and character
of the building. This is but part of the comprehen-
sive system of town-planning that views the city as
a unit rather than an accidental group of individual
properties. Even banking and credit are largely in
public hands. Over 90 per cent, of the individual
GERMAN CONCEPTION OF THE STATE 331
deposits are in public institutions while the govern-
ment owns a controlling interest in the Imperial
Bank, and through its ownership supervises and
directs the credit transactions of the country.
All this is only a skeleton of the industrial, com-
mercial, and protective agencies that constitute pro-
ductive and distributive socialism. It does not in-
clude the markets and slaughter-houses, the parcel
post, the mines and estates, the forests, and the
multitude of activities that are owned by the cities.
But it suggests the German idea of the state, an
idea willingly accepted by all classes. This is state
socialism, approved by statesmen, business men, the
university, and public opinion generally. It explains
the efficiency of the country, not only in peace but in
war as well. It also explains the psychology of Ger-
many, and especially of Prussia, where state regi-
mentation has been carried to its greatest develop-
ment. And within these social regulations a nation
of 67,000,000 people moves with a remarkable degree
of individual freedom. Instead of stagnation there
are initiation and aggression, not only in industry and
commerce but in social intercourse as well. For the
state draws to its service the most competent men of
the country. There is a desire for service, for un-
remunerated work in the city council, on commit-
tees, in connection with chambers of commerce, and
semipublic bodies, that affects all classes. And by
means of a civil service that weeds out all but the fit.
332 SOCIALIZED GERMANY
the most capable men of the universities and of the
professions make their way into the service and give
their best to the state.
It should not be inferred that there are no faults
in the system described. Paternalism and autoc-
racy involve costs of a most serious character.
They are political, social, and personal. They are
costs to the individual. And as, according to our
conception of society, the state exists for the indi-
vidual rather than the individual for the state, they
are costs to the state as well. And the most serious
price which the Germans pay for an autocratic state
is caste, a caste that runs through the very fibre of
the state. Caste is found everywhere. And it is
not challenged by the majority of the people. It is
assumed that the individual is born to his place in
society and that only in exceptional cases may he
hope to rise from it. That is, of course, most true
of politics which is in the hands of the old privileged
classes who consider that they have an almost divine
right to rule. It extends even to the cities, where
some concessions have been made to representative
institutions.
Caste prevails in all social intercourse. Official
rank carries an authority and distinction not to be
found in any other civilized country. This, too, is
part of the bureaucratic idea of the state. It
strengthens the ruling caste to identify with itself a
large number of people.
Caste rules in education. This is possibly the
GERMAN CONCEPTION OF THE STATE 333
most serious criticism that can be made against the
educational system of Germany. It affects the uni-
versities in which conformity is the open door to
advancement. This destroys criticism, it censors
the intellectuals, it identifies the entire scientific
world with the state, and the state as interpreted by
the ruling caste. This is a fault, unhappily, of higher
educational institutions in other countries, but no-
where is the intellectual and scientific world so
frankly and officially identified with the state as in
Germany. The same is true of the church which is
a state institution.
Elementary, secondary, and technical education
partakes of the same caste system, the same state
control. The individual child is educated for the
station in life to which he is born. Schools are classi-
fied accordingly. The choice once made is in the
majority of instances irrevocable. Moreover, all
education, elementary, secondary, and higher, is
pyramided to a central control. There is state and
for the most part imperial uniformity. Localities
are not permitted to experiment as they do in
America; the local school board is not autonomous
as it is with us. The child is moulded by the state,
to the state's idea of what is best for the state, and
only incidentally what is best for the child. There
is uniformity rather than variety, and in consequence
that initiative so characteristic of America is almost
wholly lacking in the average child.
Prussia has ironed out personal individuality by
334 SOCIALIZED GERMANY
the educational system described. She has also
ironed out much of the individuality of the states,
an individuality that made the Germany of fifty
years ago what she was to the world. And this is a
terrible loss, as is any system that fails to awaken
and keep alive the spontaneity and resourcefulness
of the people.
But these sacrifices are not a necessary part of
state socialism. The institutions which Germany
has developed, and the efficiency that has been
achieved are in no way inconsistent with democracy.
They are rather the consciously desired ends of the
ruling class, which seeks submission rather than pro-
test, and subordination to the state rather than ser-
vice of the state to the people.
There is nothing democratic in the German idea
of the state. The measures enumerated have not
been carried through by the Social Democratic party,
although it has undoubtedly been indirectly responsi-
ble for much of the public opinion that sanctioned
them. There was nothing like a referendum to as-
certain public opinion. Nowhere in German state-
craft is there any belief in democracy or representa-
tive institutions or in manhood suffrage. Even in
the more Democratic states of the south the suf-
frage is limited by property qualifications.
State socialism is a natural outgrowth of feudalism.
It has its roots far back in German traditions and
the experiences of the people. It is the eighteenth-
GERMAN CONCEPTION OF THE STATE 335
century state adjusted to twentieth-century condi-
tions. And it has largely made Germany what she
is, a menace and a model, a problem to statesmen
of other countries, and a pathfinder in social reform.
INDEX
Accident insurance, benefits, 195,
196
Administration, German cities,
267
Administrative agencies, Ger-
man cities, 269
Administrative control, German
cities, 272
Agriculture, 57; scientific meth-
ods in, 58
Architectural restrictions, 306
Artisans', German, hours of
work, 202
Ashley, W. J., 199
B
Ballot, open, 41
Barmen, vocational education
in, 238
Baths, public, 255
Beet-sugar industry, 60
Benefits, accident insurance, 196
Berlin, water traffic of, 125;
Stettin Canal, 126; system of
street sewerage, 254
Birth-rate, Germany, 55
Bismarck, 15; constructive legis-
lation, 54; socialized legisla-
tion, 162; old-age pensions,
166; attitude toward social
insurance, 193
Bremen, free port of, 127
Burgomasters, position of, 271;
qualifications of, 273; salaries
of, 276
Business classes in Germany, at-
titude toward state socialism,
168
By-products developed by Ger-
many, 63
Canals, 123-125
Caste, 44, 332
Cemeteries, 253
Chancellor, 29; powers of, 30
Cities, electoral system in, 47;
population in, 52, 56, 266;
socialism in, 85; regulation by
state, 86; administration of,
267; administrative agencies,
269; administrative control of,
272; power of king over, 272;
sale of food by, 288; indebted-
ness of German and American,
293, 295
Civil service, 21, 88; employees
in, 92
Class rule in Germany, 37
Coal and coke, 68
Coal mines, nationalization of,
152
Colonial expansion, 72
Commerce, German, overseas,
69; influence of education on,
246
Compensation insurance, 197
Conception of state, German, 82,
296, 321
Constitution, Germany, 13, 26
Consumption, standard articles,
74
337
338
INDEX
Continuation schools, 231. See
also Vocational education
Cremation, employment of, 253
D
Death-rate, tuberculosis, 261
Democracy, fear of, in Germany,
282; little of, in Germany, 334
Dental clinics, school-children,
227
Discipline, German education,
217
Distress work, 179
Distribution of wealth, German
thought on, 324
Distributive socialism, 324
District or zone system, 304
Division of labor, 326
Duality, German, 12
Dusseldorf, 135, 275, 311; har-
bor administration of, 136;
industrial section, 135
E
East Prussia, 38
Education, Germany, 17; higher,
18, 208-210; among workers,
205; influence of, on German
industry, 212; prized by all
classes, 213; faults of, 213;
elementary, 220; compared
with United States, 220; prac-
tical nature of elementary,
221; administration of, 224;
state control of, 225; influence
of German, 230; vocational,
223, 231-240; influence of, on
German commerce, 246. See
also Special schools, Technical
schools, Universities
Electoral system, 30, 40, 42;
Prussian, 41; in cities, 47;
three-class system, 47, 269
Emergency work, 179
Employees, civil services, 92
Employment, attitude toward,
172; exchanges, 172
England, laissez-faire in, 80;
wealth in, 53
European war, effect on social-
ism, 327
Expansion, colonial, 72
Experiment stations, farms, 148
Explanation of Germany, 9
Exports, Germany, 65; machin-
ery, 68
Factories, control of, 310
Farms, experiment stations, 148
Feeding school-children, 228
Feudal state, 31
Feudal system, 146
Feudalism in Germany, 10
Food, inspection of, 253; sale of,
by cities, 288
Foreign trade, 68
Forests, German, 149, 317; own-
ership of, 148; earnings of, 150
France, war with, 25
Frankfort-on-Main, 310
Free ports, 127; Bremen, Ham-
burg, Liibeck, 127
French Revolution, 12
German conception of state, 321
German constitution, 13, 26
Germany, explanation of, 9; con-
solidation of, 24
Grammar, working-men's, 206
H
Hamburg, free port of, 127; vo-
cational education in, 232
Harbors, 134-136; Dusseldorf,
136; Mannheim, 141
Health, of school-children, 227;
in Prussia, 250
Help schools, 223
INDEX
339
Herbergen, 177
High schools, 218
Higher education, German, 18,
208-210
Home rule, 267
Hospitals, Germany, 252
Hours of work, German artisans',
202
House owners, influence of, hi
town council, 269
Illiteracy, Germany, 215
Income taxes, increasing wealth
of people, 75
Indebtedness, German cities,
293; American cities, 295
Industrial courts, 188
Industrial progress, Germany, 66
Industrial revolution, Germany,
14
Industrial schools, 212
Industrial sections, 50, 135, 309
Industry, science in, 64; influ-
ence of education on, in Ger-
many, 212
Infant mortality, warfare on, 179
Inspection of food, 253
Insurance, state, 91; social,
192-200; compensation, 197;
amount of payments, 199;
invalid, 262
Insurance funds, administration
of, 195
Insurance laws, social, 170
Invalid insurance, relation to
tuberculosis, 262
Junker, 33, 44; power of, 32, 36
Junkerism, 39
K
Kaiser Wilhelm II, 15; personal-
ity of, 22; ascendancy of, 28
Kerschensteiner, Doctor Georg,
216
King, powers of, 26; power of,
over cities, 272
Krupp works, 66
Kultur, Germany, 321; German
idea of, 4
Labor courts, 182
Laissez-faire, hi England, hi
America, 80; German attitude
toward, 165
Land monopoly, 37
Landownership, 313; effect of,
43
Land speculation, 314
Lawyers, discouraged in labor
courts, 185
Legislation for working classes,
164
Live-stock industry, 61
Lodging-houses, municipal, 176
Liibeck, 127
M
Machinery, exports, 68
Magdeburg, vocational educa-
tion in, 238
Magistrat, 276
Mannheim, 137; harbor of, 141
Manufactures, 33
Markets, 288
Merchant marine, 70
Milk supply, 288
Mineral resources, 61 ; state con-
trol of, 151
Mining properties, Prussia, 147
Mississippi River, 144
Monarchical socialism, theory
of, 83
Monopoly, German attitude to-
ward, 158
Munich, vocational schools in,
223, 232, 240
340
INDEX
Municipal ownership, Germany,
extent of, 283; profits of, 292
Municipal socialism, 280
Music, in public recreation, 180
N
Nationalization, sentiment for,
152
Obedience, 19
Oil monopoly, 160
Old-age insurance, 197, 198; Bis-
marck's attitude toward, 166
Overseas commerce, 69
Partnership,, state and private
industry, 156
Payments, amount of insurance,
199
Physical culture, 228
Pig-iron production, 62
Playgrounds, 256
Political activities, socialized,
204
Political parties, 33; in Reich-
stag, 33
Population, urban, 52, 56, 266;
increase of, 54
Ports, free, 127
Post-office department, 90
Potash industry, 153
Potash syndicate, 153
Profits of state socialism, 92
Prohibition, movement for,
among workers, 207
Property, control of, 330
Protective tariff, 60
Prussia, health in, 250
Psychology, German, 20; influ-
ence of state socialism on, 21
Public ownership, 146; effect of,
on people, 22
Public recreation, 180
Public-service corporations, own-
ership of, 284; profits, 284
R
Railways, state-owned, 95; early
experience with, 95; privately
operated, 96; purchase of, by
state, 97; present mileage, 97;
efficiency of, 97; Prussian, 98;
financial success of, 98; serv-
ice, 103; industrial, 104; Eng-
lish opinions of, 104; stations,
Germany, 105; rebates, 106,
108; discriminations, 106; ex-
port trade fostered, 107; spe-
cial services, 110; improve-
ments, 110; civil service in,
111; electrification of, 112;
passenger fares, 112; freight
rates, 113; burden, 113; ad-
ministration, 115; politics di-
vorced from, 119
Recreation, public, 180; subsi-
dies for, 180
Reichstag, 28; membership, par-
ties in, 33, 35; power of mem-
bers, 36
Rhine, harbors of, 134; traffic
on, 139
Ruling classes, 11
S
Sanatoria, tuberculosis, 259
Sanitation, 248; control of, 249
Savings-bank deposits, 74
Schmoller, Provisor, 159
Schools. See Education
Science, in industry, 64; in agri-
culture, 58
Scientific methods, agriculture,
58
Sickness insurance, 194
Slaughter-houses, Germany, 287
Social insurance, 192 ; Bismarck's
attitude toward, 193; sickness
INDEX
341
insurance, 194; administra-
tion of funds, 195; accident
insurance, 195; attitude of
employers, 196; benefits, 198;
compensation paid, 197; old-
age insurance, 197; number of
persons insured, 198; pay-
ments, amount of, 199; effect
of insurance on worker, 200
Social legislation, 85; Bismarck
and, 162; in America, 324
Socialism, monarchical, theory
of, 83; in cities, 85; distribu-
tive, 324; effect of European
war on, 327
Socialist party, vote of, 203
Soil, Germany, 59
South Germany, 48
Special schools, 210
Standard of living, 76
State, German conception of, 82,
164, 296, 321; partnership
with private industry, 156; at-
titude toward working classes,
201
State control, mineral resources,
151; over cities, 86; in educa-
tion, 225
State insurance, 91
State socialism, influence of, on
psychology, 21; extent of, 89;
Prussian tradition of, 163; at-
titude of business classes to-
ward, 168, 323
Steam-power in Prussia, 63
Stein and Hardenberg, 38
Stettin Canal, 126
Street scavenging, 255
Streets, arrangement of, 303.
See Town planning
Subsidies, recreation, 180
System of treating sewerage,
Berlin, 254
Tariff, 60
Taxation, 75, 329
Teachers, preparation of, 217;
training of, 226
Technical high schools, 210
Three-class electoral system, 47,
269
Town council, 269; influence of
house owners in, 269
Town planning, 298; beginning
of, 300; streets, arrangement
of, 303; districts, or zone
system, 304; widening, city
planned for, 305; architec-
tural restrictions, 306; street
disfigurements, 307; indus-
trial districts, 309
Trade, foreign, 68
Tradition, German, 87; of state
socialism in Prussia, 163
Treaties, 73
Tuberculosis, war upon, 285 ; san-
atoria, 259; death-rate, 261;
relation of invalidity insurance
to, 262
U
Urban population, 52, 56, 266
United States of America, ele-
mentary education in, 220
Universities, German, 18, 208;
attendance at, 208; effect on
students, 219
Vocational education, 231; hi
Munich, 223, 232, 240; Ham-
burg, 232; Magdeburg, 238;
Barmen, 238; Frankfort-on-
Main, 240
Voting, three-class system, 47
W
Wages, increase of, 77
Waste, German attitude toward,
161
342
INDEX
Water-power, Germany, 64
Waterways, development of, 121;
tonnage of, 122; waterway
programme, Germany, 122;
canals, 123; construction of,
124; traffic on, 125; free ports,
127
Wealth, Germany, 53; of Eng-
land, 53; increase of, in Ger-
many, 73
Wilhelm II, 15; personality of,
22; ascendancy of, 28
Workers, attitude of . state to-
ward, 162; effect of insurance
laws on, 200
Working classes, legislation for,
164; attitude of state toward,
201; education among, 205;
grammar, 206; movement for
prohibition among, 207
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