No. 287.
Mr. White to Mr. Blaine.

No. 188.]

Sir: On the 17th of November last a royal decree was issued for the establishment in Prussia of an economic council (volkswirthschaftsrath). For some time previous it was known that Prince Bismarck, as chancellor of the empire and minister president of Prussia, desired to strengthen his position as a reformer of the financial, industrial, and commercial affairs of Germany by creating a council of experts on whose freedom from party ties he could rely, and whose opinions should carry more weight in the special matters concerned than those of any mere lay members of the Prussian legislature. The royal decree in question was undoubtedly the result of this view. It opens with the statement that it is desirable to submit bills affecting commerce, manufactures, and agriculture in the first place to a council composed of persons directly interested in these subjects and possessing special technical knowledge. Such a body, it proposes, shall consist of seventy-five members called together for a session of five years. Of these, forty-five are to be selected by the ministers of trade and commerce, public works, and agriculture from among ninety persons nominated by the various chambers of commerce, manufacturing industry, and agriculture throughout Prussia. Of these forty-five, fifteen are to represent commerce, fifteen manufactures, and fifteen agriculture and forestry. The remaining thirty are to be freely selected by the above-named ministers. It is also expressly provided that fifteen of these shall be taken from among workingmen. No one can be nominated for membership who is less than thirty years of age, and any circumstances disqualifying candidates from other public bodies generally, as, for example, bankruptcy, are also to operate against membership in this.

This council is divided into three sections, one for commerce, another for manufactures, the third for agriculture and forestry, and fifteen members selected by the council, together with ten selected by the three ministers, form a permanent committee. The council can be attended by every Prussian cabinet minister or his deputy.

The ministry alone is authorized to frame the regulations of the council, decide when its sittings shall be held, and what measures shall be [Page 462] submitted to it in behalf of the government. Traveling expenses and fifteen marks per day are to be paid to members from the state exchequer.

It was not until January 27, or nearly twelve weeks after the promulgation of the decree, that the first meeting of the council was held in Berlin. Its members proved to be mainly wealthy and experienced merchants and manufacturers, land owners, the better class of farmers, and small but apparently prosperous master tradesmen, with some workmen. Prince Bismarck, as president of the council, delivered an address, in which he indicated the leading idea of the new institution, namely, that as the exigencies of trade prevented the interests of commerce, industry, and agriculture from being represented in Parliament in the same way and to the same extent as the interests of the learned professions, causing the former to appear there by a minority, although in reality affecting the greater part of the population, he had thought it desirable that the government, whose members are themselves surrounded by officials and men of the learned professions, should be able to obtain cool and matter-of-fact judgments, unbiased by party and political passions, directly from a central body of practical men. He also said that the community of interests throughout the whole empire suggested the desirableness of an extension of the council, and expressed the hope that the other state governments would soon join it.

At the second sitting the council began its consideration of the workingmen’s insurance bill, of which I have already given you some account in my No. 182, of the 21st February. After a few unimportant changes were made in this bill it was returned to the government for ultimate transmission to the legislature.

Another bill on which the advice of the council was asked was one dealing with the reconstitution of trade-guilds. Upon this there was more difference of opinion, but it too was in the end sent back to the cabinet without having been materially changed. With the deliberations on this bill the first session of the Prussian Economic Council came to a close.

The hope expressed by Prince Bismarck that all the states of the empire might be induced to send representatives to the council, thus changing it from a Prussian into an imperial institution, seems to be approaching realization. In his capacity as chancellor of the empire he has inserted a paragraph in the budget recently submitted to the Imperial Parliament appropriating 82,000 marks for the establishment and maintenance of an imperial economic council, to be composed of one hundred and twenty-five members, and with which the Prussian council already formed is to be amalgamated. Moreover, the draft of a decree similar in principle to that issued for Prussia has just been placed before the Federal Council.

This decree declares that in the said imperial economic council Prussia shall be represented by seventy-five members, Bavaria by fifteen, Saxony by eight, Würtemberg by six, Baden by four, Hesse by three, the two Mecklenbergs by two, Oldenburg by one, the Thuringian states by three, Anhalt, Waldeck, Braunschweig, Schaunberg-Lippe, and Lippe by two, Lübeck, Bremen, and Hamburg by two, and Alsace-Lorraine by four. The appropriation for the council in the budget is calculated upon its sitting at least for twenty-one days in the year, the permanent committee holding at least forty-two sittings per year; but its terms and sittings are to be entirely under the control of the imperial government which will call the council together whenever its advice [Page 463] is needed. The chancellor is to be its president and the chairman of its various committees.

Hostile criticism upon the Prussian economic council comes almost entirely from the advanced liberal and progressionist parties. Their organs take the ground that it is like a packed jury, the ministers being likely to choose only men who would support their views—even government officials and other persons dependent upon the central power.

Hitherto there has been no opportunity for the expression of any opinion on the subject by the Prussian legislature, Prince Bismarck having used the royal prerogative for the creation of the council on the ground that it is not a legislative, but merely an advisory body.

But whatever may be the opinions of political parties as such, the general impression appears not unfavorable. While it seems generally thought that, as in the case of other important measures, the chancellor has by no means lost sight of the coming elections, it is believed that he is really anxious in this matter to grapple with the difficulties which beset the industry and commerce of the empire, and to avail himself of a new means to revive the prosperity of the nation by throwing more light into the problems of practical political economy, while disarming socialistic agitators by admitting to more direct influence in the state classes heretofore mainly excluded from it.

I have, &c.,