Bismarck Changing Political + Economic Alliancecs

Question 1

When did Bismarck’s alliance with the NL end?

Answer 1

1878

Question 2

What was the economy like in Germany over the 1870’s?

Answer 2

Early 1870’s: Economic boom
- over generous credit policies on the part of German Bankers, free trade policy + influx of capital from French war reparations
1873-4: Economic crash partly due to global financial crisis-> called for change in policy

Question 3

What were the 2 theories of trade during the 1870’s?

Answer 3

Free Trade + Protectionism

Question 4

What is Free trade and who was it supported by?

Answer 4

Having no tariffs on foreign imports and exports
- supported by National Liberals
- Belief that the low cost of imported raw materials reduced the cost of manufactured goods, which could then be sold more competitively abroad-> growth encouraged

Question 5

What is Protectionism?

Answer 5

Introducing duties (especially on imports), encouraging consumers to buy home-produced goods
- supported by the Junker Conservatives (afraid of cheaper goods from Russia and USA)
- Late 1870’s: Most European countries (not Britain) had moved towards this
- Can lead to retaliation by other countries (people stop importing from elsewhere, long term effect), adverse effect on exports
- Lack of import of cheap grain etc, food prices become more expensive (affects the workers)

Question 6

What stake did Free trade hold between Bismarck and the National Liberals?

Answer 6

For Bismarck, to abandon Free Trade would mean ending his alliance with the NL

Question 7

What effect could Protectionism have on imports and exports?

Answer 7

Could lead to retaliation by other countries so could have adverse impact on exports

Question 8

Why did Bismarck abandon Free trade (thus abandoning his alliance with the National Liberals)?

Answer 8

• Pressure groups have formed amongst manufacturers to campaign against protectionism
• Agriculture was facing pressure from cheap Russian and American wheat-> many in the sector were pressuring Bismarck to adopt a protectionist policy
• In the case of war, being self sufficient and non reliant on foreign imports would be advantageous to Germany
• Tariffs provide the government with needed revenue. Amendment to 1879 law meant a limit of 180 million marks on tariff income to the Reich, surplus distributed around the states (source of income for the Reichstag)
• Conservative-minded Prussian Junker class depended on agriculture for their income + were increasingly calling for protectionism + opposed many of the Liberal’s policies
• Economic growth had slowed since the 1873 global financial crisis
• Bismarck could sell protectionism as a patriotic issue-> idea of protecting German industries and jobs could help unification of Germans
• The Kulturkampf had not been successful, and Zentrum were growing stronger together-> could ally with Zentrum to build bridges with the Catholics
• Bismarck was growing increasingly concerned about socialism, and couldn’t rely on the liberals to support him in his campaign against the socialists-> Instead needed the support of the Conservatives + Zentrum
• Russia had adopted protectionism, strains between Russia and Germany over the Balkans in 1877-8, protection could be a way for Germany to retaliate

Question 9

What did Bismarck do in 1876?

Answer 9

Bismarck began to discretely encourage the campaign for protectionism without making any firm commitment to it.

Question 10

What did Bismarck do in February 1878?

Answer 10

Bismarck announces financial reforms. National Liberals lead campaign in opposition, so Bismarck calls and election for June and the National Liberals lose 29 seats, leaving the Conservatives and Centre Party with an overall majority.

Question 11

What did Bismarck do in 1879?

Answer 11

Announced levies on iron, grain, and increasing indirect taxation on luxury goods.
-Duties between 5-7% levied on imported foodstuffs, 10-15% on imported industrial goods.
-The bill was passed by majority made of Conservatives, Free Conservatives, Centre Party and 15 ‘tariff rebels’ from the National Liberals (This ‘rebellion’ destroyed the unity of the National Liberals and led to many leaving to join the more left-leaning Progressive Party.)

Question 12

What happened to the National Liberals as a result of Protectionism being introduced?

Answer 12

-The National Liberals were seriously weakened. In addition to the split within the party, their economic policy had been discredited by the crash and they had subsequently lost the support of industrialists and businessmen.

Question 13

What happened to Bismarck and his political alignment in the 1880’s?

Answer 13

Became more aligned with the centre-right, more conservative
- could move away from a more representative government

Question 14

What did Bismarck demonstrate as his strengths after braking the alliance with NL and promoting protectionism?

Answer 14

-Again, Bismarck demonstrated his skill and opportunism, control over the Reichstag and ability to make and break alliances.

Question 15

How did Bismarck present Protectionism?

Answer 15

-Bismarck presented protectionism as a patriotic necessity and in this way united the Reich.

Question 16

What effect did protectionism have on agriculture, and therefore the supporters of Bismarck?

Answer 16

-Agricultural prices continued to fall, but tariffs protected German farmers from the worst effects of economic depression. Landowners became even stronger supporters of Bismarck.

Question 17

What effect did Protectionism have on consumers, and who did this lead them to politically support?

Answer 17

-Consumers suffered from artificially high prices on basic food. High tariffs had adverse effects on living standards, especially amongst the poor. This led to greater support for socialism and the SPD.

Question 18

How was production and economic growth affected?

Answer 18

• There was a quick recovery in terms of production and economic growth. 1872-3 levels restored by 1880, and urban growth continued.

Question 19

What were the levels of support for the parties of the Reichstag between 1877-78?

Answer 19

National Liberals- decrease in popularity, dramatic change
Zentrum- overall increase in popularity, stable increase
Minorities - increase, Bismarck’s policy isn’t very successful
Socialist - down, seen as less patriotic

Question 20

How did Economic policy change in the 1870s?

Answer 20

• Economic boom in early 1870’s -> over generous credit policies on the part of German bankers, free trade policy, influx of capital from French war reparations
• BUT economic crash in 1873-4 (part of global financial crisis) so called for change in policy
  ‘Economic developments of later 1870’s discredited both economic and political liberalism’

Question 21

Why was the economic boom of 1870 good?

Answer 21

• Good for short term (economic benefit)
• Keep France weak (less finances, reduces change of another surge of war)

Question 22

Why was the economic boom of 1870 bad?

Answer 22

• Bad for short term (French link to Germany have weak link, not happy with Germany so later take money from Germany)

Question 23

How does Germany being 1 state benefit the country?

Answer 23

1 state: trade is easier in Germany, no tariffs + trade boundaries, less tax for goods moving around the state

Question 24

Why did the National Liberals become a split party over protectionism?

Answer 24

Some National liberals aren’t impressed- breach of faith
Some felt it wasn’t the most important policy
Split in the party- made them weaker