East Germany Table of Contents
The constitution of 1871 established the Second Reich, a nation-state united on the basis of dualistic constitutionalism. The emperor controlled foreign policy and the combined military forces of the German states. Germany remained a federal union, however, and the aristocratic-monarchical order was preserved in the individual states. The Bundesrat (Federal Council) and the Reichstag (Imperial Parliament) exercised the power of legislation. State rulers were represented in the Bundesrat, whose members held office by princely appointment; the people were represented in the Reichstag, whose members were elected on the basis of universal male suffrage but whose powers were limited by the emperor and the Bundesrat.
Six major political parties predominated: Conservative Party, Free Conservative Party, Center Party, National Liberal Party, Progressive Party, and Social Democratic Party of Germany (Soziademokratische Parti Deutschlands--SPD). The Conservative Party represented Prussianism, aristocracy, and landed property. The pro-Bismarck Free Conservative Party represented nobles and industrialists. The Center Party, although conservative regarding monarchical authority, was progressive in matters of social reform; it represented Roman Catholic institutions in Germany. The pro-Bismarck National Liberal Party was composed of moderate liberals who advocated constitutionalism, a laissez-faire economic policy, secularization, and material progress. The antiauthoritarian and democratic Progressive Party championed the extension of parliamentary prerogatives. The Marxist SPD was founded in Gotha in 1875 from a fusion of Ferdinand Lassalle's General German Workers' Association (1863), which advocated state socialism, with the Social Democratic Labor Party (1869), headed by August Bebel and Wilhelm Liebknecht.
Bismarck's early policies favored the National Liberal Party, which, in coalition with the Free Conservative Party and the Progressive Party, constituted a parliamentary majority in 1871. The federal chancellery published a new commercial code, established a uniform coinage system, and founded imperial banks. The French indemnity payment provided capital for military expansion, railroad construction, and building projects. The Kulturkampf (struggle for civilization) with the Roman Catholic Church resulted in the subordination of church to state and the secularization of the educational system. German financiers and industrialists, citizens of a potentially powerful nation-state who were finally provided with a unified internal market, took ample advantage of investment opportunity. A speculative boom, characterized by large-scale formation of joint stock companies and unscrupulous investment practices, resulted. The Gründerzeit (era of promotion, 1871-73) ended in the stock market crash of 1873.
The crash of 1873 and the subsequent depression signaled the impending dissolution of Bismarck's alliance with the National Liberals. After 1873 the imperial government repudiated liberalism and abandoned free trade. Popular support for German liberalism also waned. Catholic opposition to the Kulturkampf strengthened the Center Party, doubling its popular vote in the Reichstag elections of 1874. In the late 1870s, Bismarck began negotiations with the economically protectionist Conservative Party and Center Party toward the formation of a new government coalition. Conservative electoral gains and National Liberal losses in 1879 brought the Conservative coalition (consisting of the Conservative Party, Center Party, and National Liberal Party) to power. The Reichstag drafted a political program based on protectionism, and an alliance between the landed aristocracy and industrialists consolidated the domestic system.
Data as of July 1987