productions, it can equally raise its own credit by looking after the
reduction of the national debt, and thus improving its financial
position. But payment of debts is, in times of high political tension, a
two-edged sword, if it is carried out at the cost of necessary outlays.
The gain in respect of credit on the one side of the account may very
easily be lost again on the other. Even from the financial aspect it is
a bad fault to economize in outlay on the army and navy in order to
improve the financial position. The experiences of history leave no
doubt on that point. Military power is the strongest pillar of a
nation's credit. If it is weakened, financial security at once is
shaken. A disastrous war involves such pecuniary loss that the State
creditors may easily become losers by it. But a State whose army holds
out prospects of carrying the war to a victorious conclusion offers its
creditors far better security than a weaker military power. If our
credit at the present day cannot be termed very good, our threatened
political position is chiefly to blame. If we chose to neglect our army
and navy our credit would sink still lower, in spite of all possible
liquidation of our debt. We have a twofold duty before us: first to
improve our armament; secondly, to promote the national industry, and to
keep in mind the liquidation of our debts so far as our means go.

The question arises whether it is possible to perform this twofold task.

It is inconceivable that the German people has reached the limits of
possible taxation. The taxes of Prussia have indeed, between 1893-94 and
1910-11, increased by 56 per cent, per head of the population--from
20.62 marks to 32.25 marks (taxes and customs together)--and the same
proportion may hold in the rest of Germany. On the other hand, there is
a huge increase in the national wealth. This amounts, in the German
Empire now, to 330 to 360 milliard marks, or 5,000 to 6,000 marks per