the people
imagined themselves to be suddenly rich. Prices rapidly rose,
extravagant habits spread in all directions, and in the years 1872-73
company-promoting attained to the rank of a fine art, with the result
that sober, hard-working Germany seemed to be almost another England at
the time of the South Sea Bubble. Alluding to this time, Busch said to
Bismarck early in 1887: "In the long-run the [French] milliards were no
blessing, at least not for our manufacturers, as they led to
over-production. It was merely the bankers who benefited, and of these
only the big ones[82]."

[Footnote 82: _Bismarck: Some Secret Pages of his History, _by M. Busch,
vol. iii. p. 161 (English edition).]

The result happened that always happens when a nation mistakes money,
the means of commercial exchange, for the ultimate source of wealth.
After a time of inflation came the inevitable collapse. The unsound
companies went by the board; even sound ventures were in some cases
overturned. How grievously public credit suffered may be seen by the
later official admission, that liquidations and bankruptcies of public
companies in the following ten years inflicted on shareholders a total
loss of more than 345,000,000 marks (L17,250,000)[83].

[Footnote 83: German State Paper of June 28, 1884, quoted by Dawson,
_Bismarck and State Socialism_, App. B.]

Now, it was in the years 1876-77, while the nation lay deep in the
trough of economic depression, that the demand for "protection for home
industries" grew loud and persistent. Whether it would not have been
raised even if German finance and industry had held on its way in a
straight course and on an even keel, cannot of course be determined, for
the protectionist movement had been growing since the year 1872, owing
to the propaganda of the "Verein fuer Sozialpolitik" (Union for Social
Politics) founded in that year. But it is safe to say that the collapse
of speculation due to inflowing of the French milliards greatly
strengthened the forces of economic reaction.

Bismarck himself put it in this way: that the introduction of Free Trade
in 1865 soon produced a state of atrophy in Germany; this was checked
for a time by the French war indemnity; but Germany needed a permanent
cure, namely, Protection. It is true that his ideal of national life had
always been strict and narrow--in fact, that of the average German
official; but we may doubt whether he had in view solely the shelter of
the pre