%LVPDUFNDQGWKH'HYHORSPHQWRI*HUPDQ\9ROXPH 2WWR3IODQ]H,, 3XEOLVKHGE\3ULQFHWRQ8QLYHUVLW\3UHVV 2WWR3IODQ]H %LVPDUFNDQGWKH'HYHORSPHQWRI*HUPDQ\9ROXPH,,7KH3HULRGRI&RQVROLGDWLRQ 3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV 3URMHFW086( :HE$SUKWWSPXVHMKXHGX For additional information about this book http://muse.jhu.edu/books/9781400861088 Access provided by New York University (7 May 2015 20:21 GMT) CHAPTER THREE Wealth and Social Perspective O A LATER German chancellor, Prince Bernhard von Biilow, it was one of the great paradoxes of history that Bismarck—"the statesman who as no other had been a product of the German countryside, the squire of Schonhausen, and the dike reeve of the district of Jerichow, the man of whom his wife could say, long after he had become imperial chancellor, that a cabbage interested him more than all his policies"—had been the "instrument of industrialization. As the proverb says: 'What he weaves no weaver knows.' "' If one accepts Bismarck's image of himself, that of a simple country squire driven by an inexorable sense of duty to serve the state in an urban environment he hated, his career does appear paradoxical. But the image is inaccurate. More of his early years were spent in Berlin than in the countryside; he grew up a city boy, although not by choice. He became a rich man, but more through gifts and investments in stocks and bonds than through farming. While most of his wealth was invested in estates and rural industries, he was no stranger to the world of capitalism. Nor was he unaware of the progress of social change and what it implied for the stability of the old social and polit­ ical order. The interests of agriculture and landowners remained his primary con­ cern; yet he responded to the needs of industrial capitalism and con­ sciously promoted the social amalgamation of the Prussian nobility and upper bourgeoisie. He was also aware that his regime, if it were to en­ dure, could not be based exclusively upon a coalition of propertied elites, but must also serve the interests of the small farmer, rural laborer, ar­ tisan, and factory worker. Yet his vision failed him when it came to prac­ tical policies to be followed in building the broader consensus of social groups and interests at which he aimed, a consensus intended to over­ come the deep fissures in German society and to perpetuate the regime he had constructed. His failure stemmed from the limitations of his own experience and the perspective he derived from that experience, from his narcissistic quest for personal power, and from his incomprehension of the limits of coercion and of materialism in overcoming moral convic­ tions. 1 Bernhard von Biilow, Memoirs (4 vols., Boston, 1931), I, 66. * 67 * 68 * The Reich of Iron and Blood * Bismarck's Fortune In 1838 Bismarck left government service in part because of his low opinion of its financial prospects. He foresaw that he would be at least forty years of age before he could marry and establish a household, by which time he ex­ pected to be "dried out from the dust of the files, a hypochondriac, ill in breast and limbs from sitting." "I hold that the possession of a large fortune is indis­ pensable, if one is to find any pleasure in the service of the state. Only then can I be in a position to appear publicly with the luster I regard as appropriate and, furthermore, be able to surrender easily all the advantages that the office affords as soon as my official duties come into conflict with my convictions or my taste."3 Ultimately Bismarck did acquire a fortune that gave him the in­ dependence he deemed necessary. It was, nevertheless, his career in govern­ ment that led to wealth, rather than the reverse. But for his services to the state and the connections that it brought he would never have been more than a fairly well-to-do country squire. In 1887 Bismarck estimated his net worth at about 12,000,000 marks, as­ serting that in good years when timber prices were high, this capital netted him as much as 300,000 marks, in poor years nothing at all.3 These estimates made to a journalist (not to the tax collector) appear to have been remarkably close to the actual figures. In comparison with his private income, Bismarck's annual salary as chancellor (54,000 marks) was small; he received no income from his other offices in the Prussian government. His expenses were also heavy, varying annually by his own estimate from 150,000 to 180,000 marks.4 There were years when he spent far more than he made. In 1884 Bismarck's gross income reached 408,426 marks, his expenses 526,692 marks, leaving a deficit of 118,266 marks. That year his household expenses alone reached 119,500 marks.5 Higher income and increasing capital permitted debts and deficits on a grander scale. His wealth enabled Bismarck to give some realism • GW, XlV, 16. 3 Moritz Busch, Tagebuchblatter (Leipzig, 1899), II, 220. In estimating his net worth Bismarck apparently forgot 1,000,000 marks that he owed in mortgages to Bleichroder! His financial affairs had become so complicated that it is difficult to be sure, even with fairly good sources, of his net worth and annual income. Although we know how much was invested in all of his estates— except Schonhausen I, which he inherited—it is difficult to know their actual resale value at any one time. Schonhausen II cost 1,500,000 marks; Varzin and adjacent properties, 300,000 marks. Friedrichsruh was worth an estimated 3,000,000 marks when acquired. During 1887-1889 his annual net income from the estates averaged 265,400 marks. By 1890 he possessed a portfolio of securities worth about 1,200,000 marks, which at an estimated 4 percent would have yielded 48,000 marks. Hence a private income of 300,000 marks (excluding salary) appears about right. See Fritz Stern, Gold and Iron: Bismarck, Bleichroder, and the Buiidmg of the German Empire (New York, 1977), pp. 280-303, particularly pp. 291 and 299. 4 Busch, Tagebuchblatter, II, 595; see also the estimate he gave to Eduard Cohen on May 12, 1882, GW, VIII, 448, where the same figure is incorrectly given in marks rather than thalers. ! Stern, Gold and Iron, p. 298. * Wealth and Social Perspective * 69 to his frequent threats of resignation in the 1870s and 1880s. The ways in which it was acquired and invested are important, furthermore, for an under­ standing of the perspective from which he viewed the problems of political economy. Bismarck's father, Ferdinand von Bismarck, owned four estates located in Brandenburg (Schonhausen) and Pomerania (Kniephof, Kiilz, Jarchelin), all of which were heavily mortgaged. From 1821 to 1839 Ferdinand was an ab­ sentee landlord, residing in Berlin, living off rents paid by the leaseholders of these properties. It was a period of depressed prices and low rents in agricul­ ture, and Berlin was fairly expensive. By his gambling, traveling, and high living, furthermore, Otto had incurred debts so "enormous" that he con­ cealed them from his family. Hence he concurred in the family decision to leave Berlin. Otto and brother Bernhard took over the management of the Pomeranian properties in 1838, while Ferdinand assumed that of Schonhau­ sen after his wife's death in 1839. On the father's death in 1845, the sons divided the inheritance. Otto received the two tax-free knight's estates (Rit- tergiiter) of Schonhausen and Kniephof and, as compensation, assumed one- half of the real estate tax on the nonnoble estates of Kiilz and Jarchelin taken by Bernhard. Bismarck's "flight" to the country did not end his financial problems. Knie­ phof, valued at 80,000 to 90,000 thalers, still had an indebtedness of about 38,000 thalers in 1847, while the burden on Schonhausen, valued at about 90,000 thalers, was 60,000 thalers.6 Even if no new debts had been con­ tracted, Bismarck would have needed most of his life to free his property from this encumbrance. Kniephof, too distant to be administered from Schonhau­ sen, was leased in 1847. In November 1848 the master of Schonhausen con­ templated selling the property "in order to put an end to all of my financial embarrassment with one blow." But apparently he succeeded in raising from a friend the 3,500 thalers needed to pay off a pressing creditor. This gave him time to negotiate another bank loan and to lease the estate (except for house and garden) in the following year. Evidently the lessees of Kniephof and Schonhausen knew how to make them pay, but not the owner.7 Together the two estates yielded about 7,300 thalers annually, of which 4,000 went to the 6 See Charlotte Sempell, "Unbekannte Briefstellen Bismarcks," Histcrtische Zeitschrift, 207 (1968), p. 613; Bismarck to Moritz von Blanckenburg, Feb. 12, i860, in [Hans Goldschmidt, ed.], "Neue Briefe von und iiber Bismarck," Deutsche Allgememe Zeitung (July 9, 1937), Vol. 76, Nr. 312-313, Beiblatt. The estimated debt on Kniephof presumes that Bismarck went through with his intention to use funds acquired through sale of the inventory to reduce the mortgage of 45,000 thalers by 6,000 to 8,000 thalers. The estimate of Schonhausen's value is by Ulrich Kuntzel, Die Finanzen grosser Manner (Vienna, 1964), p. 477. 7 Bismarck to Albert von Below, Nov. i, 1848. [Hans Goldschmidt, ed.], "Neue Briefe von and Uber Bismarck," Deutsche Allgemeine Zeitung (July 4, 1937), vol. 76, Nr. 304-305, p. 1, 1. Beiblatt. In 1858 Bismarck still owed 2,000 thalers to Pomeranian friends.