Marx in Neue Rheinische Zeitung February 1849

Prussian Financial Administration under Bodelschwingh and Co.

Source: MECW Volume 8, p. 379;
Written: by Marx on February 16, 1849;
First published: in Neue Rheinische Zeitung No. 224, February 17, 1849.

Cologne, February 16. Herr von Bodelschwingh, the Minister who was “dismissed” in March, is in a hurry to step back into the light from the concealment where he has meantime been: von Bodelschwingh has been elected deputy to the Second Chamber. A worthy choice by the Teltow Peasants’ Association.

If the democratic press has hitherto concerned itself little with the ex-Ministers and other ex-individuals, it is now time to illuminate the former doings of this species of persons. We now refresh the memories of our readers and of the Public Prosecutor as to Herr von Bodelschwingh’s conduct in office as Finance Minister.

Herr von Bodelschwingh became Finance Minister in the spring of 1842 and occupied this post until May 3, 1844.

He used to enjoy talking of his conduct in office. He had a predilection for “revelations”. For instance he revealed to the commissions of the estates [329] on October 24, 1842, that “the finances in Prussia are subject to a limited publicity, namely, that resulting from the triennial publication of the state budget estimates in the Collected Statutes”. He went on to explain the manner in which a Prussian state budget is drawn up. It is based “principally on averages calculated from the final accounts of the administration in the three years preceding the drawing up of the budget estimates”.

On October 26 the same Herr von Bodelschwingh revealed further that revenue in the last seven years had risen by more than 5 1/2 million talers and that a further increase was to be expected (Staats-Zeitung Nos. 306 and 307). At that time one had no choice but to believe the Finance Minister because the “limited publicity” surrounded Prussia’s finances with an impenetrable obscurity. Now, however, one must at least doubt the truth of the assurances the Finance Minister then gave, because a number of things have recently become public about the way the finances were formerly administered.

The financial estimates published in the Collected Statutes are supposed to be based on the calculation of the average special budget estimates of the individual departments of the administration, which are produced on the basis of the actual revenue of the previous 3 years. If this is correct, each budget estimate in the Collected Statutes must contain the approximate average of actual revenue and expenditure over the previous years. If this is not the case, the budget estimate, according to Herr von Bodelschwingh’s own statement, is fraudulent, a fraudulent public document.

In 1844 a budget estimate was published in the Collected Statutes (p. 96) which was countersigned by Herr von Bodelschwingh. In this estimate, the sum of 57,677,194 talers concludes both the income and expenditure columns. That then must have been the amount of the average revenue and expenditure of the previous years. In fact, however, both revenue and expenditure in the years before were far higher. The Government later informed the members of the First United Diet of the final accounts of the Exchequer for 1840-46.[330]

According to these the amounts are

 for revenue for expenditure 
184273,876,338 75,269,431 
184171,987,880 74,185,443 

So the correct average total revenue was 73,228,935 talers, and expenditure 76,185,887 talers. Herr von Bodelschwingh therefore understated both revenue and expenditure, to be specific, he failed to mention 15,551,741 talers of revenue and 18,508,693 talers of expenditure for each year. These sums, it is true, might have to be adjusted to some extent when precisely accounted for, insofar as the triennial averages of the special budget estimates for the individual departments of administration are not drawn up entirely anew when each budget is drawn up and may stretch back beyond 1841, indeed as far back as 1838. A significant reduction in the sums not accounted for will however not be produced as a result; for in 1840, annual revenue again amounted to 71,059,475 talers and expenditure to as much as 77,165,022 talers. We have no official figures for the years 1839 and 1838. However, since with the same financial legislation the state income in peacetime does not alter suddenly but only gradually, one can safely assume that the state revenue in 1838 and 1839 totalled at least 70 million talers.

Herr von Bodelschwingh’s budget estimate is, therefore, fraudulent like many, probably, of those of his predecessors and of his two successors up to 1848. Herr von Bodelschwingh must have known that he was publishing something incorrect. The real condition of the state finances was not unknown to him. The divergences from the truth were so conspicuous that Bergius, a Regierungsrat in Breslau, and following him even Billow-Cummerow, without being acquainted with the accounts, publicly pointed out these inaccuracies in advance. Of course, if Herr von Bodelschwingh had come out with the truth, his revelations and speeches before the commissions of the Provincial Diets would have met with a different reception. With the “limited publicity” given to Prussian finances, he was able to cut a fine figure, whereas with full publicity only disgrace and censure would have awaited him. He spoke with satisfaction of the increase of 5 1/2 million talers in revenue, but failed to mention that from 1840 to 1843 expenditure had exceeded revenue by 14,976,401 talers. Although the country had had to provide 290,746,282 talers in those 4 years, these large sums still could not cover the inordinate expenditure of 305,722,683 talers. Such an expenditure without war, without adequate representation of industrial and commercial interests abroad, without a navy, without significant financial assistance for agriculture and trades at home! Magnificent buildings for the King, favouritism in the civil service, presents to Junkers and bureaucrats, and the army with its parades and reviews had cost the country enormous sums. Well, of course, Herr von Bodelschwingh was not the man to confess that. So he drew up a fraudulent budget to persuade the people that less was being taken in revenue and less spent.

The drawing-up of fraudulent budgets is and will always be a dubious undertaking. The laws of Prussia prescribe severe penalties for such misconduct by officials. The budget estimates published in the Collected Statutes are after all public documents. No one will question that. It is true Prussian Law has laid down no special penalties for civil servants drawing up fraudulent public documents. However, a decree of June 3, 1831 (von Kamptz’s Jahrbücher, Vol. 37, p. 407) stipulates that in the case of such acts the penalties for fraud or misconduct by officials are applicable. And the findings of the Prussian courts have since then been in accordance with this. Concerning misconduct by officials, Prussian Law, Part 11, Section 20, § 333, lays down the following:

“Whoever wilfully contravenes the regulations of his office shall be immediately dismissed and furthermore sentenced, according to the nature of the misconduct and the injury caused, to an appropriate fine or imprisonment or confinement in a fortress and declared ineligible for all public offices.”

Dismissal and a declaration of ineligibility for all public offices along with fine or imprisonment are then what according to the law awaits persons who draw up fraudulent budgets. Should Herr von Bodelschwingh not be able to clear himself of the strongest suspicion of having published a fraudulent budget, it is the duty of the judge to pass these sentences on him. We demand that he and the Public Prosecutor should elucidate the affair.

The fine, imprisonment or confinement in a fortress are to be decided according to the nature of the injury caused. The injury which Herr von Bodelschwingh in company with his predecessors and his successors in office has inflicted on the country is so great, is of such magnitude, as can only be inflicted on a whole people by Ministers and other persons in the highest positions. It is our intention here to establish the amount involved; at the same time we observe that we immediately encounter in this connection a further ministerial abuse of office.

The Cabinet Order of January 17, 1820 fixes the necessary expenditure for the Prussian state budget at 50,863,15.0 talers. It then goes on to say verbatim:

“The aforementioned sum, which We have accepted as the requirement for current administration, may in no circumstances be increased. The heads of the individual administrative departments are personally responsible in this to Us, and the whole Ministry of State the more so, particularly as the total sum approved by Us is sufficient for the purposes indicated in the budget instructions to date.”

What is meant by the “requirement of current administration” emerges quite unambiguously from the further context, in which the administration of the government debt is contrasted with “current administration”. Expenditure for current administration means all those payments from the treasury which are not used for paying the interest on or paying off the national debt. These, as we have seen, according to the Cabinet Order of January 17, 1820, which has not been rescinded to this day, must never exceed the sum of 50,863,150 talers. The Cabinet Order is published in the Collected Statutes of 1820, and there has never been any doubt that such orders published before the declaration of constitutional monarchy had legal force in Prussia. Any excess over the legally prescribed sum therefore contravenes the law and is abuse of office by the Ministers.

The accounts for the state financial administration for 1840-46 which were conveyed to the First United Diet and the digests of the final accounts of the financial administration for 1847 which were submitted to the now dissolved National Assembly, provide proof that every Minister from 1840 to 1847 failed each year to comply with his obligations. Each year they spent more, substantially more, on current administration than they were legally entitled to. To put matters in a more balanced perspective, we shall now stop referring to Herr von Bodelschwingh alone, and refer instead to all the Ministers of Finance from 1840 to 1847. To be specific, they were: Count Alvensleben from 1835 to 1842, von Bodelschwingh from 1842 to 1844, Flottwell from May 3, 1844, to August 16, 1846, and von Duesberg from that time until the overthrow of the Ministry by the March revolution. All these Ministers are equally involved. A simple presentation of the facts will make it clear how the nascent prosperity of a country is ruined by a succession of corrupt senior officials.

Current expenditure, that is expenditure for the year, after deduction of the part used for the national debt, could not, as we have seen, legally amount to more than ... 50,863,150 talers.

In 1840 however expenditure was77,165,022talers 
From this subtract:
  for the paying off of debts
  allegedly transferred to the
treasury reserves
What is left is therefore the expenditure on current administration67,972,220talers 
Accordingly in that year were illegally disbursed17,109,070 talers
In 1841 expenditure was74,185,443talers 
Of which the national debt and the treasury reserves took14,419,563" 
Therefore for current administration59,765,880talers 
Thus in excess of the legal50,863,150" 
8,902,730 talers
In 1842 expenditure was75,269,431talers 
Of this, nothing was transferred to the treasury reserves, and the national debt took8,684,865" 
Current expenditure therefore remains66,584,566talers 
Thus in excess of the legal sum15,721,416 talers
In 1843 expenditure was 79,102,787talers 
The treasury reserves and the national debt took8,261,981" 
Expenditure on current administration according to this amounted to70,840,806talers
Above the legal 50,863,150" 
was spent 19,977,656 talers
In 1844 expenditure amounted to 78,243,308talers 
Of this, deduct for the treasury reserves and for paying the interest on and paying off the debts9,252,605" 
So that current expenditure remained68,990,703talers 
In other words, in excess of the 50,863,150" 
18,127,553 talers
In 1845 expenditure amounted to 77,903,361talers 
Nothing is transferred to the treasury reserves, and the national debt took 7,267,082" 
Current expenditure was therefore 70,636,279talers 
That is, in excess of the legal 50,863,150" 
19,773,129 talers
In 1846 expenditure was 78,562,335talers 
Nothing is passed to the treasury reserves, and the national debt took 7,423,831" 
Expenditure for current administration remained 71,138,504talers 
Therefore in excess of the legal 50,863,150" 
20,275,354 talers
In 1847 expenditure amounted to 80,392,730talers 
From this deduct 6,207,650" 
expended on social relief and 7,209,192" 
for the national debt, a total of 13,416,842" 
There remains therefore expenditure on current administration 66,975,888talers 
Thus in excess of the legal 50,863,150" 
 16,112,738 talers
Total 135,999,646 talers

Almost one hundred and thirty-six million talers have been illegally squandered in the last 8 years under the administration of Ministers Alvensleben, Bodelschwingh, Flottwell and Duesberg out of the state coffers, that is out of the people’s purse, the earnings of the poor! And these people are walking about with their stars and their medals, and, as in the case of Flottwell, still hold high offices of state? The daily press recently aired the case of an official in the judiciary — thought to be a democrat — who was imprisoned because he was accused of having parted improperly with 50 talers. 50 talers and 136 million!

It may be that the sum fixed in 1820 no longer corresponded to the needs of the state in more recent times. But then the Government ought to have come forward openly and legally announce new budget estimates. But it did not wish, it did not dare to do so. It did not wish to because of its absolutist hankerings, it did not dare to because it was afraid to lay bare the administration of finances. Reviews with Queen Victoria, christenings, weddings, churches, the Bishopric of Jerusalem, the old, half-forgotten papers of Frederick II,[331] knights’ castles, helmets, Guards lieutenants, Junkers, priests and bureaucrats etc., etc., what role these plagues of the people have played and still play in the finances of Prussia is not for the people to know. So the Prussian management was continued in secret, and Ministers became criminals even in the eyes of the law in force. They have not, of course, found a judge yet.

The manner in which the management of the Prussian finances under Frederick William IV is exhausting the state coffers emerges from the following analysis.

1840. Carried over from previous years 16,949,157 talers
Revenue for current year 71,059,475"
Total88,008,632 talers
From this deduct expenditure for current year 77,165,022"
Balance in hand 10,843,610 talers
1841. Carried over from previous years 10,843,610 talers
Revenue for current year 71,987,880 "
Total82,831,490 talers
From this deduct expenditure for current year at 74,185,443"
Balance in hand 8,646,047 talers
(The budget drawn up by Alvensleben in the Collected Statutes is balanced with 55,867,000 talers for revenue and expenditure!)
1842. Carried over from previous years 8,646,047 talers
Revenue for current year 73,876,338"
Total82,522,385 talers
Expenditure for current year 75,269,431"
Balance in hand 7,252,954 talers
1843. Carried over from previous years 7,252,954talers
Revenue for current year 73,822,589"
Total81,075,543 talers
Expenditure for current year 79,102,787"
Balance in hand 1,972,756 talers
1844. Carried over from previous years 1,972,756 talers
Revenue for current year 75,976,613"
Total77,949,369 talers
Expenditure for current year 78,243,308"
Deficit 293,939 talers
1845. Revenue for current year 77,025,034 talers
Deduct from this deficit from 1844293,939"
Leaving 76,731,095 talers
Expenditure for current year 77,903,361"
Thus deficit 1,172,266 talers
1846. Revenue for current year 75,721,698 talers
Deduct from this deficit from 1845 1,172,266"
Leaves74,549,432 talers
Expenditure for current year 78,562,335"
Thus deficit 4,012,903 talers
(The First United Diet is convened by the Royal Decree of February 3. It does not however vote any credits.)
1847. Revenue for current year 79,518,543 talers
Deduct from this deficit from 1846 4,012,903"
Leaves75,505,640 talers
Expenditure for current year amounts to 80,392,730"
Thus deficit 4,887,090 talers

In order to meet the most necessary expenditure, 4,000,000 talers are drawn from the treasury reserves, by which means revenue is raised to 83,518,543 talers. So the old administration began the year 1848 with a deficit in the treasury, and with the depletion of the treasury reserves. The balance in the current account was reduced over the 8 years 1840-47 from 16,949,157 talers to a deficit of 4,887,090, that is by 21,836,247 talers.

Revenue in the 8 years amounted to 598,988,170 talers
Expenditure 620,824,417"
A deficit therefore of exactly the sum just calculated 21,836,247talers

No denials can undo this reduction in the reserves, even though the Government seeks to conceal it by carrying over balances of revenue and expenditure from one year to another, in fact in such a way that an apparent credit balance is still shown in the accounts when there is already a deficit. Thus in “peacetime”, when “calm” and “order” prevailed, the Prussian finances were ruined by the Prussian Government. When the movements of 1848 came and the money-market suffered, the state was not able to support the private sector but at this time of depression was forced to demand new sacrifices to ensure its survival. The Herren bourgeois have the Prussian ex-Ministers and their aiders and abettors to thank for that. If the latter had not violated the law when in office, there would have been 136 million talers ready cash available instead of the deficit, and credit could then have been maintained. That is the injury caused, to which §333 of the Prussian criminal law refers.

Deficit in the treasury — and just look at the revenue! Every year we have noted a revenue from over 71 to approximately 80 million. But that is only the net revenue, that is the surplus from the various administrative departments after deduction of administrative costs. In taxation, customs, the post-office, forestry etc., all the salaries, office expenses etc. concerning these departments of the administration have been subtracted in advance, and only the remaining balance is entered as revenue. And yet the country has had to pay for the salaries and office expenses for tax, forestry, postal officials etc., as well as the gratuities and presents to the Oberpräsidenten and commanding generals. These administrative expenses deducted in advance are estimated at 20,887,541 talers in the budget estimates for 1847. If we add this, annual revenue amounted to between 90 and 100 million and annual expenditure was actually over 100 million talers. The people produced sums of this order — and an empty treasury is the result!

The Cabinet Order of January 17, 1820, contained, as we have seen, an instruction concerning how Ministers should conduct their official business. Herr von Bodelschwingh has acted, we cannot assume otherwise, knowingly and wilfully in defiance of this instruction. He therefore again incurs the penalty of the abovementioned § 333, Section 20, Part 11 of Prussian Law. The law passes sentence upon him of dismissal, a fine or confinement in a fortress and ineligibility for all public offices. Since the injury he has inflicted upon the country is of the greatest magnitude, the severest sentence of imprisonment permitted by the law must be applied to him.

The ex-Ministers von Alvensleben, Flottwell and von Duesberg find themselves in exactly the same situation.

The civil laws themselves stipulate that these ex-ministerial gentlemen are obliged to compensate the country for the injury inflicted on it, in other words the illegally disbursed 136 million talers. In this case Prussian Law, § 341, Section 20, Part II, decrees:

“Whenever an official cannot make good the injury done to the state or to any third person by deliberate dereliction of duty, he shall, after serving his sentence, be detained for labour in a public institution until such time as the injury has by one means or another been made good.”

And one more trifle! As administrative surpluses the following sums were transferred to the treasury reserves:

From the administration of 1840 613,457 talers
 " "  1841 2,837,000"
 " "  1843 1,000,000"
 " "  1844 2,000,002"
 " "  Together 6,450,459talers

According to accounts relating to the treasury reserves, however, since July 1, 1840, only 6,423,332 talers from administrative savings were transferred to the treasury. In the Government’s current account, therefore, 27,127 talers more were entered as transferred to the treasury than the latter received. Herr von Alvensleben, Herr von Bodelschwingh, Herr Flottwell and Herr von Duesberg, what has become of the 27,127 talers? They were surely not embezzled, by any chance, were they?

Will a Public Prosecutor and a bench of judges be found for these ex-ministerial gentlemen? Meanwhile Herr von Bodelschwingh is a member of the Second Chamber!