The first Bismarckian system broke down between 1877 and 1879. In 1877 Bismarck, still at odds with the Centre, offered to make Bennigsen, the leader of the National Liberals in the Reichstag, a Prussian minister. Bennigsen thought that this was the preliminary to a fully parliamentary ministry and insisted on bringing in two Liberal colleagues with him. Bismarck refused and, from that moment, was determined on a reconciliation with the conservatives and the Centre in order to escape from National Liberal control. He also had pressing financial motives for this breach. The revenues allotted to the empire by the constitution were from the first inadequate, and Bismarck disliked the dependence on contributions from the separate states which this involved. The National Liberals wished to create direct imperial taxation, in order to increase the power of the Reichstag, and, for the opposite reason, Bismarck was determined to institute indirect taxes. He attempted to introduce a tobacco monopoly but was defeated by National Liberal opposition. Later he had still more urgent reasons for action. Toward the end of the decade, German agriculture faced the challenge of American wheat for the first time. Bismarck was determined to protect German agriculture for reasons of social conservatism and also because he regarded the agricultural workers as the best element for the army in time of war. It was not only agriculture that needed protection, however. German industry too was hard hit by the great economic crisis of 1873, and there Bismarck was determined to protect the domestic iron and steel industry to ensure German strength in wartime. Thus every motive combined to thrust him over into a policy of protection: agricultural protection to satisfy the Junkers, industrial protection to satisfy the capitalists, and an escape from the interference of the Reichstag by the increase in customs dues.

The last of the old duties, inherited from the Zollverein, were repealed in 1877, and a new protective tariff was introduced in 1879. This tariff was opposed by the National Liberal Party, which in 1880 broke in two. One group, which retained the party name, hoped to renew the alliance with Bismarck; the other formed the Liberal Union party, which in 1884 joined the Progressives under Eugen Richter to form the German Radical Party (Deutsche Freisinnige Partei). In response, Bismarck struck a bargain with the Centre. He agreed that the conflict with the Roman Catholic Church should be called off and that any increase in the customs yield beyond 130 million marks a year should be divided among the individual states—a striking illustration of the Centre’s particularism. The new tariff was then passed on June 12, 1879, and Germany became a protectionist country.

Bismarck kept his bargain with the Centre. Falk resigned after being repudiated by Bismarck in the Reichstag. In 1880 Bismarck asserted the power to suspend the May laws in individual cases, and the secular examination for candidates to the priesthood was abolished. Pope Leo XIII, more conciliatory than his predecessor Pius IX, made Bismarck’s task easy. He induced the recalcitrant archbishops of Posen (Poznań) and Cologne to resign, although both were created cardinals for their defense of the faith and called to Rome to serve in the Vatican. Peace was finally concluded in 1887. The peace was a compromise, not a defeat for Bismarck. The Roman Catholic Church preserved intact the education of priests for which it had been contending. In exchange, the Roman Catholic Centre Party accepted Bismarck’s Reich and tacitly agreed to support his policy when confessional issues were not at stake. In fact, the Centre came to occupy a kingmaker position within the Reichstag once its religious concerns were secured.

The attack on the Social Democrats

Bismarck always believed that every political system needed an enemy. The Centre had been the whipping boy of the liberal era, and the Socialists were now chosen to take its place. Bismarck genuinely believed that the Social Democrats, as the followers of Karl Marx called themselves, represented a grave social peril. He took them as seriously as Metternich had taken the threat from “the revolution.” In 1877 the Social Democrats won 12 seats at the general election. Bismarck then introduced exceptional legislation against them but was thwarted by the National Liberal majority. An attempted assassination of the emperor on June 2, 1878, gave Bismarck the opportunity to dissolve the Reichstag and to win the election on the cry of “the social peril.” The Liberals lost some seats and the conservatives gained some. With the passage of the so-called “exceptional laws” on October 19, 1878, the Social Democratic party was declared illegal and its press and its meetings were forbidden.

In practice these laws amounted to little. Social Democrats were still candidates at elections and still sat in the Reichstag, and their journals were easily smuggled in from Switzerland. In all, between 1878 and 1890, only 1,500 persons were imprisoned. But as a political maneuver the attack on the Socialists served its turn. Bismarck secured a conservative majority, and, in the anti-Socialist uproar, no one noticed that the Septennat had slipped through almost without opposition early in 1879.

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Germany: The German Empire, 1871–1914

Bismarck’s other weapon against the Social Democrats was his social policy. Bismarck had never shared the laissez-faire views of the Liberals, and his breach with them freed his hands for measures of social security. The workers too were to be made to feel that they had a stake in the greatness of the German Reich. In 1881 he proposed a system of compulsory accident insurance, supported in part by subsidies from the Reich. This met with opposition from the Liberals, who in 1881 recovered in part from their defeat of 1878, and the Industrial Accident Insurance Act was not enacted until June 1884. The previous year the German Sickness Insurance Act had been effected, and a system of old-age pensions also was subsidized by the Reich. Though the Social Democrats remained theoretically revolutionary, Bismarck’s aim was achieved. The workers came to believe they were benefiting from the efforts of the state.

Foreign and colonial policy (1879–87)

The year 1879 marked an epoch in Bismarck’s foreign policy. Once the empire had been founded, Bismarck’s sole aim was peace and security. This aim never varied, though methods changed. In the first years of the Reich, Bismarck tried to achieve peace by avoiding foreign commitments. He was resolutely impartial on the matter of the Eastern Question, and he convened the Congress of Berlin to bring the Russo-Turkish War (1877–78) to a more satisfying conclusion than had been achieved by the Treaty of San Stefano. Thereafter Bismarck came to see that he must take a more active line if Europe was to be kept at peace.

On October 7, 1879, he concluded a defensive alliance with Austria-Hungary against Russia. Although this guaranteed Austria-Hungary’s survival as a great power, it did not provide German support for its Balkan ambitions. Indeed, Bismarck always advocated a partition of the Balkans between Austria-Hungary and Russia. The Austro-German alliance, far from estranging Russia, won it back to the side of peace and conservatism, and the Three Emperors’ League (June 18, 1881) was a revival, in more modern terms, of Metternich’s Holy Alliance. The League’s precondition was that neither Russia nor Austria-Hungary should have Balkan ambitions, a condition that proved almost impossible to fulfill. To give Austria-Hungary greater security, Bismarck also concluded the Triple Alliance between Germany, Austria, and Italy (May 20, 1882), by which Germany guaranteed Italy against France in exchange for Italian neutrality in the event of a war between Austria-Hungary and Russia. The Triple Alliance was not a vital part of Bismarck’s diplomatic system, and it seemed to become essential to Germany only when his successors failed to keep on good terms with Russia.

Bismarck’s diplomacy became increasingly elaborate in method when a new eastern crisis arose over Bulgaria in 1885. His aim remained the same—to avoid being drawn into a war between Russia and Austria-Hungary and, if possible, therefore to prevent such a war. Since Russia and Austria-Hungary would not agree, each side had to be strengthened so as to maintain the balance between them. On the Russian side, Bismarck concluded the Reinsurance Treaty (June 18, 1887), promising Russia diplomatic support in Bulgaria and at the straits (Bosporus and Dardanelles) and agreeing to stay neutral unless Russia attacked Austria-Hungary. On the other side, Bismarck promoted Mediterranean naval agreements between Italy, Great Britain, and Austria-Hungary (likewise in 1887), which virtually created a Triple Entente opposed to Russia in the Middle East. These complicated arrangements subsequently led some to accuse Bismarck of duplicity, but they served their purpose of averting a new Balkan war. Since Germany occupied the centre of Europe, its policy was bound to be two-faced to some degree.

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Bismarck was long sternly opposed to German expansion overseas. He believed that Germany ran enough risks in Europe without also challenging the imperial interests of Great Britain and France. But when he had to choose between satisfying German national feeling by supporting German expansion in southeastern Europe, and thus identifying himself with Austro-Hungarian ambitions, or by launching colonies overseas, he chose the less provocative course. He had also a subsidiary motive in considerations of foreign policy. Between 1883 and 1885 he strove actively for a reconciliation with France, and he believed that this reconciliation would be easier if Germany were in conflict with Great Britain, France’s colonial rival. Bismarck deliberately chose areas which were on the fringe of British colonial interests in the hope of provoking a violent British reaction: thus South West Africa trampled on the toes of Cape Colony and New Guinea on the toes of Australia. His two tropical colonies, the Cameroons and East Africa, cut across the British plans that were just developing for a new empire in central Africa. The French, however, remained suspicious, and the colonial conflict with Great Britain failed to mature, for the British were too conciliatory. In 1885 Bismarck called off the conflict, as he needed British support for Austria-Hungary. He would have been glad to get rid of the German colonies except for the pressure of colonialist feeling inside Germany.

The German colonial empire was never a serious factor in German economic life. The colonies were an embarrassment, not a source of strength, and important only as an emotional outlet for the growing sense of German power. Though Bismarck had made the German Empire in 1871 by evoking national feeling, he was anxious thereafter to arrest German expansion. His social and political conservatism made him dread a Germany that would dominate all Europe. Hence he sought to divert German nationalism into harmless channels. Toward this purpose, he took up the struggle against the Poles in eastern Germany. This clash had its genesis in the days of the conflict with the Roman Catholic Church and was continued in 1886 by an economic war to eliminate Polish landowners and to establish German colonists in the eastern marches. Although this campaign was directed against a Slav people, it was welcomed by Russia, which was itself in conflict with the Poles. For similar reasons, Bismarck exacerbated the conflict in Alsace-Lorraine. This estranged even German liberals from France and made them tolerate Bismarck’s policy of friendship with tsarist Russia. In essence, Bismarck wished to keep up hostility with France as being less risky for conservative Germany than a struggle for existence in eastern Europe.

This was well shown in the so-called war crisis of 1887. Bismarck had tried to win the general election of 1884 solely on the issue of colonies, but this cry had strengthened the left-wing parties, instead of the conservatives, who were opposed to colonial expansion. By 1887 the time for a new army grant was approaching, and Bismarck knew that he could not carry it through the existing Reichstag. Bismarck therefore deliberately raised the alarm of French revanchism, and his maneuver was successful. The Reichstag threw out the army bill and was dissolved in January 1887. Bismarck fought the election on the cry “the fatherland in danger” and won a majority for his coalition of agrarian and industrial supporters. With 122 seats, the reconstituted National Liberals, the party of capitalist interest, became the largest single party in the Reichstag for the last time. The Bismarckian coalition carried the army bill on March 11, 1887. It was Bismarck’s last triumph.