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Rh and men active and a reserve of ex-soldier settlers; the Kiao-Chau garrison (chiefly marines), numbering 2687 officers and men; and various small police forces in Togo, New Guinea, Samoa, &c.

Fortresses.—The fixed defences maintained by the German empire (apart from naval ports and coast defences) belong to two distinct epochs in the military policy of the state. In the first period (roughly 1871–1899), which is characterized by the development of the offensive spirit, the fortresses, except on the French and Russian frontiers, were reduced to a minimum. In the interior only Spandau, Cüstrin, Magdeburg, Ingolstadt and Ulm were maintained as defensive supporting points, and similarly on the Rhine, which was formerly studded with fortresses from Basel to Emmerich, the defences were limited to New Breisach, Germersheim, Mainz, Coblenz, Cologne and Wesel, all of a “barrier” character and not organized specially as centres of activity for field armies. The French frontier, and to a less extent the Russian, were organized offensively. Metz, already surrounded by the French with a girdle of forts, was extended and completed (see ) as a great entrenched camp, and Strassburg, which in 1870 possessed no outlying works, was similarly expanded, though the latter was regarded an instrument of defence more than of attack. On the Russian frontier Königsberg, Danzig, Thorn, Posen, Glogau (and on a smaller scale Boyen in East Prussia and Graudenz on the Vistula) were modernized and improved.

From 1899, however, Germany began to pay more attention to her fixed defences, and in the next years a long line of fortifications came into existence on the French frontier, the positions and strength of which were regulated with special regard to a new strategic disposition of the field armies and to the number and sites of the “strategic railway stations” which were constructed about the same time. Thus, the creation of a new series of forts extending from Thionville (Diedenhofen) to Metz and thence south-eastward was coupled with the construction of twelve strategic railway stations between Cologne and the Belgian frontier, and later—the so-called “fundamental plan” of operations against France having apparently undergone modification in consequence of changes in the foreign relations of the German government—an immense strategic railway station was undertaken at Saarburg, on the right rear of Thionville and well away from the French frontier, and many important new works both of fortification and of railway construction were begun in Upper Alsace, between Colmar and Basel.

The coast defences include, besides the great naval ports of Wilhelmshaven on the North Sea and Kiel on the Baltic, Danzig, Pillau, Memel, Friedrichsort, Cuxhaven, Geestemünde and Swinemünde.

Navy.—The German navy is of recent origin. In 1848 the German people urged the construction of a fleet. Money was collected, and a few men-of-war were fitted out; but these were subsequently sold, the German Bundestag (federal council) not being in sympathy with the aspirations of the nation. Prussia however, began laying the foundations of a small navy. To meet the difficulty arising from the want of good harbours in the Baltic, a small extent of territory near Jade Bay was bought from Oldenburg in 1854, for the purpose of establishing a war-port there. Its construction was completed at enormous expense, and it was opened for ships by the emperor in June 1869 under the name of Wilhelmshaven. In 1864 Prussia, in annexing Holstein, obtained possession of the excellent port of Kiel, which has since been strongly fortified. From the time of the formation of the North German Confederation the navy has belonged to the common federal interest. Since 1st October 1867 all its ships have carried the same flag, of the national colours—black, white, red, with the Prussian eagle and the iron cross.

From 1848 to 1868 the increase of the navy was slow. In 1851 it consisted of 51 vessels, including 36 small gunboats of 2 guns each. In 1868 it consisted of 45 steamers (including 2 ironclads) and 44 sailing vessels, but during the various wars of the period 1848–1871, only a few minor actions were fought at sea, and for many years after the French War the development of the navy did not keep pace with that of the empire’s commercial interests beyond the seas, or compete seriously with the naval power of possible rivals. But towards the end of the 19th century Germany started on a new naval policy, by which her fleet was largely and rapidly increased. Details of this development will be found in the article (see also History below, ad fin.). It will be sufficient here to give the statistics relating to the beginning of the year 1909, reference being made only to ships effective at that date and to ships authorized in the construction programme of 1907:

Finance.—The imperial budget is voted every year by the Reichstag. The “extraordinary funds,” from which considerable sums appear annually in the budget, were created after the Franco-German War. Part of the indemnity was invested for definite purposes. The largest of these investments served for paying the pensions of the invalided, and amounted originally to £28,000,000. Every year, not only the interest, but part of the capital is expended in paying these pensions, and the capital sum was thus reduced in 1903 to £15,100,000, and in 1904 to £13,200,000. Another fund, of about £5,200,000, serves for the construction and armament of fortresses; while £6,000,000, known as the Reichskriegsschatz—or “war treasure fund”—is not laid out at interest, but is stored in coined gold and bullion in the Juliusturm at Spandau. In addition to these, the railways in Alsace-Lorraine, which France bought of the Eastern Railway Company for £13,000,000, in order to transfer them to the control of Germany, are also the property of the empire.

During the years 1908 and 1909 considerable public discussion and political activity were devoted to the reorganization of German imperial finance, and it is only possible here to deal historically with the position up to that time, since further developments of an important nature were already foreshadowed.

In 1871 the system accepted was that the imperial budget should be financed substantially by its reliance on the revenue from what were the obvious imperial resources—customs and excise duties, stamp duties, post and telegraph receipts, and among minor sources the receipts from the Alsace-Lorraine railways. But it was also provided that, for the purpose of deficits, the states should, in addition, if required by the imperial minister of finance, contribute their quotas according to population—Matrikular Beiträge. It was not expected that these would become chronic, but in a few years, and emphatically by the early ’eighties, they were found to be an essential part of the financial system, owing to regular deficits. It had been intended that, in return for the Matrikular Beiträge, regular assignments (Überweisungen) should be returned to the states, in relief of their own taxation, which would practically wipe out the contribution; but instead of these the Überweisungen were considerably less. Certain reorganizations were made in 1887 and 1902, but the excess of the Matrikular Beiträge over the Überweisungen continued; the figures in 1905 and 1908 being as follows (in millions of marks):—