PRUSSIAN FINANCE UNDER BODELSCHWINGH AND ASSOCIATES

Neue Rheinische Zeitung. No. 224, 17 February 1849

Cologne, 16 February. The minister v. Bodelschwingh, “dismissed” in March, is in haste to step forth again from his previous obscurity: v. Bodelschwingh has been elected deputy to the Second Chamber. A worthy choice of the Teltow Peasants’ Association. If the democratic press has so far paid little attention to ex-ministers and other ex-personages, it is now time to shed light on the earlier doings of this species of people. We call to the memory of our readers and of the public prosecutor the official conduct of Herr v. Bodelschwingh as Finance Minister.

Herr v. Bodelschwingh became Finance Minister in the spring of 1842 and held this post until 3 May 1844.

He liked to talk about his official conduct. He was a friend of “disclosures”. Thus he disclosed to the committees of the provincial estates on 24 October 1842 that “the finances in Prussia are subject to a restricted publicity, namely that which is brought about by the triennial publication of the state budget in the Law Gazette.” He further explained the manner in which a Prussian state budget is drawn up. It was based “in the main on averages calculated from the administrative results of the three years preceding the date of the budget’s preparation.”

On 26 October the same Herr v. Bodelschwingh further disclosed that revenues in the last seven years had risen by more than 5 1/2 million thalers, and that a further increase could be reckoned with. (Staatszeitung, Nos. 306 and 307.) At that time one had to believe the Finance Minister, because “restricted publicity” enveloped Prussian finances in impenetrable darkness. Now, however, one must at least doubt the truth of the assurances then given by the Finance Minister, since more recent times have brought many things about the earlier financial administration to light.

The finance budgets published in the Law Gazette are supposed to be based on the averages of the special budgets of the individual administrative branches, which are drawn up according to the actual revenue of the preceding three years. If this is correct, then each budget in the Law Gazette must contain the approximate average of the actual revenues and expenditures of the preceding years. If not, then according to Herr v. Bodelschwingh’s own explanation the budget is false, a forged public document.

In 1844 a budget was published in the Law Gazette (p. 96), which was countersigned by Herr v. Bodelschwingh. This budget closes with 57,677,194 thalers both in revenue and in expenditure. The average revenue and expenditure of the preceding years must therefore have been so high. In reality, however, both revenue and expenditure in the preceding years were far higher. The government later communicated to the members of the first United Diet the results of the financial administration for 1840-46.

According to these,
the revenues the expenditures
1843 73,822,589 thlr. 79,102,787 thlr.
1842 73,876,338 ″ 75,269,431 ″
1841 71,987,880 ″ 74,185,443 ″
219,686,807 thlr. 228,557,661 thlr.

The correct average sum of revenues was therefore 73,228,953 thlr., that of expenditures 76,186,553 thlr. Herr v. Bodelschwingh thus stated both revenue and expenditure too low, and in doing so concealed annually 15,551,737 thlr. of revenue and 18,509,364 thlr. of expenditure. To be sure, these sums might change somewhat with an exact calculation, since the three-year average calculations of the special budgets for the individual administrative branches are not made completely anew for every budget draft and may extend back beyond 1841 and indeed to 1838. However, this will not result in a significant reduction of the concealed sums; for in 1840 the annual revenues again amounted to 71,059,475 thlr. and the expenditures even to 77,165,022 thlr. For the years 1839 and 1838 we lack official data. Yet since, with the same financial legislation and in peacetime, the state’s revenues do not change suddenly but only gradually, it can be assumed with certainty that state revenues in 1838 and 1839 reached at least 70 million thalers.

The finance budget of Herr v. Bodelschwingh is therefore, like probably many of his predecessors and his two successors up to 1848, false. Herr v. Bodelschwingh must have known that he was publishing something incorrect. The real circumstances of the state budget were not unknown to him. The deviations from the truth also stood out so sharply that the government councillor Bergius in Breslau, and after him Bülow-Cummerow, even without knowing the accounts, had publicly pointed out these inaccuracies in advance. To be sure, had Herr v. Bodelschwingh come forward with the truth, his disclosures and speeches before the committees of the provincial diets would have been received quite differently. He could boast under the “restricted publicity” of Prussian finances, where full publicity would have brought him only shame and reproach. He spoke with complacency of the increase in revenues by 5 1/2 million thalers, but concealed that from 1840 to 1843 expenditures exceeded revenues by 14,976,601 thlr. Although the country had to raise 290,746,082 thlr. in these four years, these large sums could not cover the excessive expenditures of 305,722,683 thlr. Such expenditures without war, without adequate representation of industrial and commercial interests abroad, without a fleet, without notable promotion of agriculture and industry at home! Magnificent buildings for the king, favourites among the officials, gifts to Junkers and bureaucrats, and the army with its parades and reviews had cost the country enormous sums. Now certainly, Herr v. Bodelschwingh was not the man to admit this. Hence he drew up a false budget, to persuade the people that less was taken in and less was spent.

However, the fabrication of false budgets is and remains a dubious undertaking. Prussian laws prescribe severe penalties for such malfeasance in office. The finance budgets published in the Law Gazette are, in fact, public documents. No one will doubt that. For the issuing of false public documents by state officials, the Prussian Land Law admittedly does not specify any particular penalty. However, a rescript of 3 June 1831 (v. Kamptz’s Jahrbücher, Vol. 37, p. 407) orders that in such actions the penalties for fraud and, as the case may be, for official offences are to be applied. The Prussian courts have since judged accordingly. Concerning official offences, the Prussian Land Law, Part II, Title 20, § 333, provides:

“He who wilfully acts contrary to the regulations of his office shall be immediately dismissed; in addition, according to the nature of the offence and the damage caused, he shall be punished with a proportionate fine, imprisonment or fortress confinement, and declared incapable of holding any public office.”

Dismissal, declaration of incapacity for all public offices, together with a pecuniary punishment or loss of freedom—this is what the law holds in store for the maker of false budgets. — If Herr v. Bodelschwingh cannot clear himself of the most compelling suspicion of having published a false budget, it is the duty of the judge to impose these penalties upon him. We call upon him and the public prosecutor to clarify the matter.

The fine, imprisonment or fortress confinement is to be determined according to the nature of the damage caused. The damage which Herr v. Bodelschwingh, jointly with his official predecessors and successors, has inflicted upon the country is so great, of such an extent, as only ministers and other highly placed persons can inflict upon an entire people. We shall here ascertain it in terms of its amount, and at the same time remark that in this connection we immediately come upon a new violation of duty by the ministers.

The cabinet order of 17 January 1820 fixes the expenditure requirement for the Prussian state budget at 50,863,150 thalers. Then it continues verbatim: “the aforementioned sum adopted by Me as the requirement for the current administration may under no circumstances be increased. The heads of the individual administrations are personally responsible to Me for this, and the entire Ministry of State is all the more so, since the sum granted by Me will be sufficient in total for the purposes set out in the previous budget statements.” What is understood by the “requirement of the current administration” is clearly and distinctly shown by the further context, since “current administration” is set in opposition to the administration of the state debt. Expenditures of the current administration are all those payments from the public treasury which are not used for the payment of interest on or the redemption of the state debt. As we have seen, according to the cabinet order of 17 January 1820, which has not been repealed to this day, they are never to exceed the sum of 50,863,150 thalers. The cabinet order was published in the Law Gazette of 1820, and it has never been doubted that in Prussia, before the proclamation of constitutional monarchy, orders published in this way had the force of law. Any exceeding of the legally determined sum is therefore an illegal act, a malfeasance in office on the part of the ministers.

The accounts of the state budget for 1840-46 communicated to the first United Diet, and the surveys of the results of financial administration in 1847 submitted to the now dissolved National Assembly, furnish proof that all ministers from 1840 to 1847 failed in their duty every year. They...

have in each year spent more, and indeed significantly more, on the current administration than was legally permitted. For the sake of better clarity, we shall here no longer speak of Herr v. Bodelschwingh alone, but of all the finance ministers from 1840 to 1847. These were, in particular: Graf Alvensleben from 1835 to 1842, v. Bodelschwingh from 1842 to 1844, Flottwell from 3 May 1844 to 16 August 1846, and v. Düesberg from that time until the downfall of the ministry through the March Revolution. All these ministers are equally implicated. A simple presentation of the facts will make it clear how, through a succession of high officials neglectful of their duty, the incipient prosperity of a country is ruined.

Current expenditure, i.e. the annual expenditure after deduction of the portion applied to the state debts, could, as we have seen, legally amount to no more than 50,863,150 thalers.

In 1840, however, there was an expenditure of 77,165,022 thalers.
From which deduct:
a) for debt repayment 8,579,345
b) the sum allegedly delivered
to the state treasury
613,457
Total 9,192,802 thalers.
Thus the expenditure of the current administration is 67,972,220 thalers.
Consequently in this year 17,109,070 thalers were spent illegally.
In 1841 there was an expenditure of 74,185,443 thalers.
and of this for the state debts and for the
state treasury 14,419,563 thalers.
Thus for the current administration 59,765,880 thalers.
Hence, more than the illegal
50,863,150 thalers.
8,902,230 thalers.
In 1842 there was an expenditure of 75,269,431 thalers.
Of this nothing was paid into the state treasury,
and for the state debts there was used 8,684,865 thalers.
Current expenditure therefore remains 66,584,566 thalers.
Hence more than the legal amount 15,721,416 thalers.
In 1843 the expenditure is 79,102,787 thalers.
For the state treasury and for the state debts
there was used 8,261,981 thalers.
The expenditure of the current administration
accordingly amounted to 70,840,806 thalers.
In excess of the legal sum of 50,863,150 thalers

expended 19,977,656 thalers.
In 1844 the expenditure amounts to 78,243,308 thalers.
From which deduct for the state treasury and
for debt interest and repayment 9,252,605 thalers.
so that current expenditure remains 68,990,703 thalers.
that is, more than the 50,863,150 thalers.
18,127,553 thalers.
In 1845 the expenditure amounts to 77,903,361 thalers.
Nothing was delivered to the state treasury.
On the state debts there was used 7,267,082 thalers.
The current expenditure is therefore 70,636,279 thalers.
Hence more than the legal
50,863,150 thalers.
19,773,129 thalers.
In 1846 the expenditures are 78,562,335 thalers.
Nothing was paid to the state treasury, and
on the state debts there was used 7,423,831 thalers.
Expenditure of the current administration remains 71,138,504 thalers.
Thus more than the legal
50,863,150 thalers.
20,275,354 thalers.
In 1847 the expenditures have amounted to 80,392,730 thalers.
From which there is to be deducted 6,207,650
as expenditure for the relief of distress and
7,209,192
for the state debt system, total 13,416,842 thalers.
Hence expenditure of the current
administration remains 66,975,888 thalers.
Thus more than the legal 50,863,150 thalers.
16,112,738 thalers.
Total 135,999,646 thalers.
Almost one hundred and thirty-six million thalers have in the last 8 years under the administration of the ministers Alvensleben, Bodelschwingh, Flottwell and Düesberg been squandered illegally out of the state funds, i.e. out of the property of the people, out of the earnings of the poor! And these people walk about with stars and decorations, and, like Flottwell, still hold high state offices! Recently it came to light in the daily press that a junior barrister – he was considered a democrat – was imprisoned, because he was accused of not having duly handed over 50 thalers. 50 thalers and 136 millions.

It may be that the sum fixed in 1820 was no longer adequate for the state’s needs in recent times. But in that case the government ought to have come forward openly and legally established a new budget. This it would not, and dared not, do. It would not on account of its absolutist aspirations, it dared not because it had to dread laying open the financial administration. Revues with Queen Victoria, christenings, weddings, churches, the bishopric of Jerusalem, the old, half-forgotten writings of Frederick II, knights’ castles, helmets, gardes-lieutenants, Junkers, priests and bureaucrats, etc. etc. – what part these plagues of the people play and have played in Prussian finance is something the people must not know. Thus the Prussian way of managing things was secretly continued and the ministers, even in the face of the positive law, made themselves criminals. Of course, they have as yet found no judge.

How the Prussian financial management under Frederick William IV exhausted the resources of the state treasuries is shown by the following survey.

1840. Balance from previous years 16,949,157 thalers.
Annual revenue 71,059,475 thalers.
Total 88,008,632 thalers.
Deduct annual expenditure 77,165,022 thalers.
Remaining balance 10,843,610 thalers.
1841. Balance from previous years 10,843,610 thalers.
Annual revenue 71,987,880 thalers.
Total 82,831,490 thalers.
Deduct annual expenditure of 74,185,443 thalers.
Remaining balance 8,646,047 thalers.
(The budget prepared by Alvensleben in the Collection of Laws closes with 55,867,000 thalers in revenue and expenditure!)
1842. Balance from previous years 8,646,047 thalers.
Annual revenue 73,876,338 thalers.
Total 82,522,385 thalers.
Annual expenditure 75,269,431 thalers.
Remaining balance 7,252,954 thalers.
1843. Balance from previous years 7,252,954 thalers.
Annual revenue 73,822,589 thalers.
Total 81,075,543 thalers.
Annual expenditure 79,102,787 thalers.
Remaining balance 1,972,756 thalers.
1844. Balance from previous years 1,972,756 thalers.
Annual revenue 75,976,613 thalers.
Total 77,949,369 thalers.
Annual expenditure 78,243,308 thalers.

Deficit of 293,939 thalers.
1845. Annual revenue 77,025,034 thalers.
Deduct the deficit of 1844 293,939 thalers.
Remaining 76,731,095 thalers.
Annual expenditure 77,903,361 thalers.
Thus deficit 1,172,266 thalers.
1846. Annual revenue 75,721,698 thalers.
Deduct the deficit of 1845 1,172,266 thalers.
Remains 74,549,432 thalers.
Annual expenditure 78,562,335 thalers.
Thus deficit 4,012,903 thalers.
(The first United Diet is convened by the patent of 3 February. It grants no credit, however.)
1847. Annual revenue 79,518,543 thalers.
Deduct the deficit of 1846 4,012,903 thalers.
Remains 75,505,640 thalers.
Annual expenditure amounts to 80,392,730 thalers.
Thus deficit 4,887,090 thalers.
In order to meet the most necessary outlays, 4,000,000 thalers are taken from the state treasury and thereby the revenue is brought up to 83,518,543 thalers. Hence, with a deficit in the general state treasury and with the emptying of the state treasury, the old administration began the year 1848. The cash balance has in the 8 years 1840/47 declined from 16,949,157 to a deficit of 4,887,090, i.e. by 21,836,247 thalers. The revenues have
in the 8 years amounted to 598,988,170 thalers.
The expenditures
620,824,417 thalers.
Deficit therefore exactly the sum just calculated of 21,836,247 thalers.
This diminution of the balances cannot be denied, even if the government seeks to veil it by carrying over remnants of revenue and expenditure from one year to another, in such a way that, where a deficit already exists, a fictitious active balance is still entered in the accounts. Thus, in “peace”, in “tranquillity”, in “order”, Prussian finances were ruined by the Prussian government. When the movements of the year 1848 came and the money market suffered, the state could be no support to private individuals, but had, in this time of distress for its own continued existence, to demand new sacrifices. The gentlemen of the bourgeoisie have to thank the Prussian ex-ministers and their accomplices for this. Had these committed no illegal acts in office, then instead of the deficit 136 million thalers in hard cash would have been available and credit would have

been able to be maintained. This is the damage caused, of which section 333 of the Prussian criminal code speaks.

Deficit in the general state treasury, and what revenues! We have found for each year a revenue of over 71 up to nearly 80 million. But these are only the net revenues, they are the surpluses of the various special administrations after deduction of administrative costs. In the case of the taxes, the customs, the post, the forests, etc., all salaries, office costs, etc., pertaining to these branches of administration are deducted in advance, and only the remaining balance is set down as revenue. And yet the country has had to raise the salaries and office costs for the tax, forestry, post, etc., officials exactly as it has had to raise the gratuities and gifts to the senior presidents and commanding generals. These administration costs deducted in advance are estimated in the budget for 1847 at 20,887,541 thalers. If one adds these, then the annual revenues amounted to between 90 and 100 million, the annual expenditures even to over 100 million thalers. Such sums the people raised, and for that – empty state coffers!

The Cabinet Order of 17 January 1820 contained, as we have seen, a regulation for the official administration of the ministers. Herr v. Bodelschwingh acted against this regulation, and it cannot be assumed otherwise than with knowledge and intent. He has therefore once again fallen under the penalty of section 333, Title 20, Part II, of the Prussian Landrecht quoted above. The law imposes upon him cassation, a fine or fortress detention, and the declaration of incapacity for all public offices. Since the damage he has caused the country is of the greatest kind, the highest legally permissible deprivation of liberty must also be applied against him.

The ex-ministers v. Alvensleben, Flottwell and v. Düesberg find themselves in exactly the same situation.

That these gentlemen ex-ministers are obliged to compensate the country for the damage inflicted upon it, i.e. for the 136 million thalers illegally spent, already follows from the civil laws. In addition, the criminal law, according to section 341, Title 20, Part II, of the Prussian Landrecht, ordains:

“Whenever a civil servant cannot make good the damage caused to the state or to a third party by wilful dereliction of duty, he shall, after undergoing his punishment, be detained in a public institution for work for so long, until compensation for the damage has been rendered in one way or another.”

One more trifle! Out of administrative surpluses there were delivered to the state treasury:
From the administration of 1840 613,457 thalers.
″″ ″ ″ 1841 2,837,000 thalers.
″″ ″ ″ 1843 1,000,000 thalers.
″″ ″ ″ 1844 2,000,002 thalers.
together 6,450,459 thalers.
According to the accounts of the state treasury, however, only 6,423,332 thalers from administrative savings have been paid into the state treasury since 1 July 1840. In the general state treasury, therefore, 27,127 thalers more were set down as expenditure for the state treasury than were received by the latter. Herr v. Alvensleben, Herr v. Bodelschwingh, Herr Flottwell and Herr v. Düesberg, what has become of the 27,127 thalers? They were not, perhaps, embezzled?

Will there be found a public prosecutor and a bench of judges for the gentlemen ex-ministers? For the time being, Herr v. Bodelschwingh is a member of the Second Chamber!