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CONTENTS

Preface viii

PART ONE INTRODUCTION

1 The Environment and Economics3
2 Normative and Positive Economic Analysis30

PART T WO HOW MUCH ENVIRONMENTAL QUALITY?

3 Social Choice: How Much Environmental Protection?43
4 Efficiency and Markets69
5 Market Failure: Public Goods, Public Bads, and Externalities89
6 Making Decisions about Environmental Programs114
7 Demand for Environmental Goods133
8 Hedonic Price Methods152
9 Household Production178
10 Constructed Markets199

PART THREE REGULATING INDIVIDUALS AND FIRMS

11 Regulating Pollution219
12 Emission Prices and Fees241
13 Property Rights262
14 Regulation over Space and Time284
15 Regulation with Unknown Control Costs304
16 Audits, Enforcement, and Moral Hazard324
17 Voluntary Actions and Agreements346

PART FOUR ADVANCED TOPICS

18 Managing Risk and Uncertainty367
19 International and Interregional Competition397
20 Environment, Growth, and Development423

References 443
Author Index 465
Subject Index 473
vii
 PREFACE

The first edition of this book appeared in late 1999. Since that time, the book
has been translated into Spanish, Japanese, and Chinese. It has been satisfying to hear
from students and teachers from around the world who have used the book. Comments
are a mixture of general opinions (mostly positive) and constructive suggestions. Overall,
it has been very gratifying to see one’s labors being appreciated and having some effect in
far corners of the globe.
The field of environmental economics has grown significantly since the manuscript
for the first edition of this text was finished in 1998. Over the past decade, the focus of
environmental policy has shifted, and new methods and applications have been devel-
oped in environmental economics. For those reasons alone, a second edition is warranted.
But almost from the day the first edition hit the streets, it has been clear that some sec-
tions of the book could be pedagogically improved, in part by smoothing out the uneven
level of difficulty in different sections of book.
As in the first edition, a real effort has been made to make the text read as if it were
written from a global perspective and for it not to be simply another U.S. text; environ-
mental economics is one of the most international of all fields of economics with active
practitioners in the developed and developing world. To what extent this internationaliza-
tion has been achieved is perhaps best judged by readers from around the world.
The book has been divided into four parts, with Parts II and III constituting the bulk
of the book. The first part (Chapters 1 and 2) serves as an introduction to the topic, pro-
viding some perspective on environmental policy in several regions of the world as well
as a discussion of the distinction between normative and positive problems in environ-
mental economics.
Part II (Chapters 3–10) is largely normative, asking the general question “How Much
Environmental Quality?” Environmental economics has a good deal to offer to help deci-
sion makers make decisions about how tight regulations should be. Cost-benefit analysis
is part of this, where the costs and benefits of a government action are toted up and bal-
anced. However, this is implicitly a normative question, subject to criticisms in terms of
value judgments that are implicit in any normative analysis.
Part III (Chapters 11–17) is largely positive, focusing on regulating firms and indi-
viduals. The basic questions are what does the menu of regulatory options look like and
how do firms and individuals tend to behave when confronted by such regulations?
Part IV (Chapters 18–20) is a set of miscellaneous additional topics. Undoubtedly the
list could be longer; however, most important questions are at least touched upon.
Problems are included at the end of each chapter. Some of the problems are particu-
larly challenging and these have been marked with an asterisk (*).

viii

Book 3.indb viii

 Prefaceix

There is more material in the book than can be covered in the typical one-term class.
When I teach from the book, I try to cover all chapters but pick and choose the subsec-
tions of each chapter. In this way, students are exposed to the important components of
the field of environmental economics.
As in the first edition of this book, a distinction is made between environmental eco-
nomics and environmental policy. As in the first edition, environmental policy receives
short shrift here, primarily because it is such a large topic and not the exclusive domain
of economics.
Furthermore, as in the first edition, a distinction is made between resource economics
and environmental economics, with the latter represented in this book. (At the University
of California, Santa Barbara, we teach environmental economics in one ten-week course
and resource economics in another ten-week course.) However, in the first edition, the
dividing line between resource and environmental economics was time: static problems
generally were considered the domain of environmental economics, whereas dynamic
problems were the domain of resource economics. In this edition, a somewhat different
division is made, using the concept of market failure. In the universe of environmental
and natural resources, when market failure is an issue, it will be considered the domain
of environmental economics. Thus externalities belong to environmental economics but
optimal management of a forest does not (unless an externality happens to be present).
Thus fisheries and other open access resources are also considered part of environmental
economics. From a practical point of view, this change simply implies a few more topics
are included that were not in the first edition.
The book remains targeted at students who have mastered intermediate micro-
economics (and ideally have some familiarity with calculus). In the U.S., these would be
undergraduate economics majors in the last year or two of their baccalaureate degree
program. The book may also be useful for master’s students, though the environmen-
tal policy content is perhaps too low to function as a stand-alone text for professional
master’s students.
As the book moves into the third millennium, so too does the technology supporting
it. A solutions manual is available for instructors adopting this text; please contact your
OUP sales representative for a copy. Also available for instructors and students, via the
book’s companion web site at www.oup.com/us/kolstad, are PowerPoint-based figures
from the text and errata, as they come available.

Acknowledgments
Many people have offered suggestions and comments and I have appreciated the feedback.
Even as minor a comment as a student coming up to me and saying he or she used my
book in a class means a great deal.
Certainly my own students have given me a great deal of useful feedback. I have
taught using this book at UC Santa Barbara, Stanford, MIT and Katholieke Universiteit
Leuven. I have received valuable feedback from the students enrolled in my classes as well
as from the teaching assistants (PhD students studying environmental economics) who
have helped with those classes.
Some of the people who have provided valuable feedback or input are: Ross Mohr
(UCSB), Matt Kotchen (Yale and UCSB), Sarani Saha (IIT Kanpur), Ian Sue Wing (Boston
University), Patricia Silva (University of Copenhagen), Gloria Helfand (Michigan), Rick
xPREFACE

Lotspeich (Indiana State), Richard Porter (Michigan), Haynes Goddard (Cincinnati),

Shreekant Gupta (National University of Singapore), Sasha Golub (Environmental Defense
Fund), Yoshinao Sahashi (Osaka Prefecture University), Lars Mathiesen (Norwegian
School of Economics), Juan-Pablo Montero (Pontificia Universidad Católica de Chile),
Bill Nordhaus (Yale), Charles Perrings (Arizona State), and Stef Proost (Katholieke
Universiteit Leuven). I have also benefitted (though alas, no more) from the advice of the
late David Bradford of Princeton.
I also received a set of detailed comments in preparation for this second edition
from several individuals, including George Parsons (Delaware), Noelwah Netusil (Reed
College), Lori Bennear (Duke), and Eli Berman (UC San Diego). Those comments were
much appreciated.
Two individuals in particular deserve singling out as providing input above and
beyond the call of duly. When Trudy Cameron taught using the text at UCLA she would
send me weekly comments on problems students were having with specific aspects of the
book and suggestions for improvement. Noelwah Netusil of Reed has provided helpful
input over the years. But she also carefully read a good portion of the second edition, giv-
ing me detailed comments which undoubtedly improved the treatment. I am very appre-
ciative of the assistance from Professors Cameron and Netusil.
I know there were other people who have provided input and whom I am inadver-
tently forgetting to thank. My apologies, and please accept a blanket anonymous thanks.
I have also appreciated the work of Louise Cannell at UC Santa Barbara. Even
though her house burned down in the Jesusita Fire of 2009 while helping me prepare the
typescript for this edition, she was always cheery, helpful, and her work timely. Heather
Hodges provided valuable assistance in preparing the index and references.
I am also appreciative of the support from Dr. Luis Fernandez-Herlihy, who has
always encouraged me to keep moving forward and who even read the Spanish and
Japanese translations of the book.
Finally, this book would not be possible without the generous support of my wife
Valerie, who has put up with my parking myself in front of my computer on far too many
occasions. The rest of my family (Jonathan, Kate, Katrina and Tucker) has also been very
supportive. I am very appreciative.
ENVIRONMEN TAL
ECONOMICS
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 P A R T

ONE

INTRODUCTION
This page intentionally left blank
 1
THE ENVIRONMENT AND ECONOMICS

Tell someone you study environmental economics and the usual response is
a look of puzzlement and the query “Just what is that?” A natural reaction, particularly
considering the common belief in some circles that economics is the root of the “environ-
mental problem.”
Environmental economics is concerned with the impact of the economy on the
environment, the significance of the environment to the economy, and the appropriate
way of regulating economic activity so that balance is achieved among environmental,
economic, and other social goals. What distinguishes a morally neutral chemical such as
sulfur dioxide from the pollutant sulfur dioxide is the economy. The polluters who emit
sulfur dioxide do so because it is a by-product of producing some good the public wants;
consumers want the good associated with sulfur dioxide but at the same time obtain
disutility (damage) from the sulfur dioxide pollution. The essence of the environmental
problem is the economy—producer behavior and consumer desires. Without the econ-
omy, most environmental issues are simply research questions of concern to chemists or
biologists with no policy significance.
There is no question that today environmental protection is recognized by societies
and governments around the world, in both developed and developing nations, as being
a top public policy and quality-of-life issue. Although people have been concerned about
environmental quality for decades, or even centuries, the widespread societal recognition
of the importance of environmental protection is a relatively recent phenomenon.
In this chapter we first consider the discipline of environmental economics, a sub-
field of economics. We then turn to a broad treatment of environmental problems and
policy approaches that have been taken to provide society with higher levels of environ-
mental quality.

I. ENVIRONMENTAL ECONOMICS AS A DISCIPLINE

For most goods and services in a modern economy, we rely on markets to match pro-
ducer costs with consumer demands to yield the “right” amount of production (and
3
4CHAPTER 1THE ENVIRONMENT AND ECONOMICS

thus consumption). The problem with pollution is that markets do not work to yield the
socially desirable amount of pollution. This illustrates the breadth of problems that need
answers: What are the incentives for the generation of pollution? What are the costs of
cleaning up pollution? What are the societal gains from pollution control? What is the
right balance between costs of control and gains from control? What regulatory mecha-
nisms can be designed to ensure the right balance between costs and gains? Sometimes
these issues are straightforward; othertimes they are exceedingly complex.
Although the field of environmental economics probably dates to the late 1950s
and early 1960s with the important contributions emerging from the “think tank”
Resources for the Future,1 the field really took off in the 1970s and has been booming
ever since. In the 1990s the payoff began to be seen in terms of influence on environ-
mental policy. Marketable permits for pollution control are now widely embraced,
valuation methods are an integral part of environmental prevention, environmental
valuation is being used to make decisions concerning major public projects with
environmental impacts, and environmental economics is playing a major role in the
current climate change debate. Now, as the world works to develop regulatory means
to control climate change, a very large proportion of proposed regulatory approaches
involve markets for emission rights.
In the sections that follow we will more fully develop several of these dimensions
of environmental economics. We first consider how environmental economics relates
to environmental policy. Next, we examine how environmental economics meshes with
the larger discipline of economics. We then discuss two related terms that have emerged
in the academic and policy world—ecological economics and environmental economics.
How do they differ? Environmental economics is also closely related to resource eco-
nomics. What is the connection and what are the distinctions between them? Finally we
consider several important issues, currently the subject of much research and debate, that
confront the field of environmental economics.

A. Environmental Economics and Environmental Policy

Concern with the environment is not a passing fad but a deep-seated concern, brought
on in large part by the coincidence of high incomes and high population density. If
there were few people in the world, the earth’s environment would be very forgiving and
capable of absorbing most of what humans throw at it, cleansing itself automatically.
The days of low population on the earth have passed; the total number of people on the
planet and particularly the density of people in some parts of the planet magnify the size
of environmental insults, overloading the capacity of the earth for self-cleansing. Income
is also important, not only because rich people tend to consume more and thus gener-
ate more pollution, but also because the environment is often viewed as a luxury good.
For the poor who struggle to keep food on the table, environmental issues often take a
backseat to other more pressing needs related to survival. As people become wealthier,
they turn their attention increasingly to the quality of their living environment, which
ultimately is the planet. Thus if recent trends toward increasing wealth for the people of
the world continue, we can expect concern for the environment to increase over time.
What are the typical issues facing most countries of the world with regard to envi-
ronmental policy? In developed countries, pollution and the preservation of natural envi-
ronments (e.g., wilderness areas) are major concerns. Pollution problems usually involve
 Environmental Economics as a Discipline5

two major issues—what is the right amount of pollution and how can we get polluters to
control their emissions?
Determining the right amount of pollution is not easy. Pollution is generated as a
by-product of producing goods. To determine the costs of pollution control it is necessary
to understand the structure of goods production and how costs will differ for different
levels of pollution. Contrary to what most people might think, this is not an engineering
question. Although it is easy to find out how much it would cost for a piece of equipment
that is placed on a smokestack to reduce pollutants in the smoke (a “scrubber”), to an
economist that is only the tip of the cost iceberg. Faced with the prospect of having to
reduce pollution levels, the firm has many options. These include end-of-pipe treatment,
modifying the production process, modifying the characteristics of the product, relocat-
ing the productive activity to reduce damage, and investing in research and development
to find new ways of controlling pollution. If a pollution permit market exists, the firm
has the additional choice of buying permits to emit, rather than reducing emissions.
Consumers can also reduce consumption of the polluting good. Thus characterizing costs
at a conceptual level, as well as measuring these costs empirically, is a complex question
without easy answers. It is also the domain of environmental economics.
Determining the right amount of pollution also involves determining damages
from pollution. The words “damages from pollution” deceptively suggest that this is a
natural science question, such as counting the dead fish on a polluted lake or determin-
ing the level of pollution at which people begin to get sick. This is an oversimplification
of the multitude of ways pollution affects people and the relative seriousness of these
effects to people. Air pollution in an urban area can cause physical irritation (itchy
eyes, running nose), reduced visibility, degraded visibility (a brown pale), soiled clothes,
decreased lung capacity, worry about adverse effects, increased susceptibility to illness,
and of course illness itself. Some of these effects are tangible, others are very intangible.
Economics is accustomed to condensing this variety of effects into a single measure—
the willingness to pay to reduce pollution. If pollution is bad, people are willing to
devote some of their resources to eliminating the pollution. Leaving aside the fact that
most people think the polluter should pay, one way of measuring the overall magnitude
or importance of pollution reduction to a person is through his or her willingness to
give up something valuable in exchange for improved personal environmental quality.
Measuring this willingness to pay is not easy and is the subject of much research in
environmental economics.
Having characterized the importance of pollution reduction to individuals (their
willingness to pay), it is possible to sum up individual preferences to obtain a societal
willingness to pay to reduce pollution. It is then easy to combine this with the cost of
pollution control to determine the socially optimal amount of pollution reduction. But
how to obtain this? The government could tell each polluter how much to emit, but this
would be analogous to central planning in the old Soviet Union—we know it works up
to a point but has severe problems, particularly when there are many firms and polluters
involved. It is difficult to determine the best way for the government to intervene in the
economy (“regulate”) to yield the right amount of pollution control without excessive
administrative costs or control costs while at the same time providing the right incentives
to undertake research to reduce costs for the future.
So the “simple” job of fixing the problem of pollution is not so easy at the policy
level and can involve hard-to-solve problems, many in the domain of environmental
6CHAPTER 1THE ENVIRONMENT AND ECONOMICS

economics. The examples we have used are from developed economies but a very similar
analysis could apply to a developing country. Air pollution is a big problem in many cities
of the developing world. Water pollution is probably the most severe environmental prob-
lem in many developing countries: water contaminated by human waste kills millions of
people annually. The same issues of costs, demand for clean-up, and how to regulate apply
equally to this question.
Another important type of policy question is the preservation of natural environ-
ments, broadly defined. This could involve preserving wild and scenic areas from devel-
opment or protecting animal and plant species from extinction. Here the primary issue is
providing balance between the forces of development that threaten these environmental
resources and the social value of preservation. How can both sides of this equation be
quantified to help policymakers when they are confronted with very specific decisions
(such as whether to allow logging in a virgin forest)?
These examples could go on and on. The point is that environmental protection usu-
ally involves the intervention of governments in the economy and it is often difficult to
decide on the proper extent and nature of that intervention. Environmental economics
as it is applied to real environmental problems can be invaluable in helping make those
important decisions.

B. Positive versus Normative Perspectives

There are two fundamental uses of economics. One is to try to explain what we see in
the economy around us. Another is to try to explain how we would wish the economy
to allocate and distribute goods and services. The terms positive and normative are
used to distinguish these two perspectives. Positive economics is more value free,
aiming to explain economic behavior: why markets and institutions have evolved as
they have and how they work. Examples are understanding why the price of gasoline
increases when OPEC meets to restrict output and how the spatial distribution of pol-
lution emissions changes when a marketable permit system is established to regulate
sulfur emissions.
Normative economics, on the other hand, attempts to use economic tools to design
government policies to intervene in the marketplace. Inevitably the question arises as to
the “best” way of intervening in the marketplace. Clearly, this requires a way of defining
what is best—a much more value-laden process than merely explaining why the economy
works as it does. Normative and positive examples from climate change are explored in
some detail in Chapter 2.
Unfortunately, when working with environmental problems it is not possible to
restrict attention solely to positive economics. Fundamental to environmental economics
is the notion of market failure. Repairing that market failure typically requires govern-
ment intervention. What kind of government intervention? That is a normative question.
And that is often the question that environmental economists are asked to help answer.
In developing the normative theory of regulation to correct market failure or the public
provision of nonmarket goods, we will try to make clear when value judgments enter the
process of policy formulation. The practicing environmental economist should always
be aware of the problems of venturing into the territory of normative analysis. This is
one reason we turn in Chapter 3 to the question of social choice—the process of making
societal decisions.
 Environmental Economics as a Discipline7

C. Environmental Economics and Economics

Economics is a well-developed discipline with an extensive body of theory, a paradigm
associated with how the economic world works, strong empirical tools, and a number of
branches, or fields of study, associated with pieces of the economy.
The fundamental building blocks of economics are contained in microeconomics—
the theory of the consumer, the theory of the firm, and the theory of market interaction.
This forms the basis for nearly all of economics. Related to microeconomics is the branch
of statistics applied to economic phenomena—econometrics. Microeconomics permeates
all of economics and econometrics permeates all of applied economics.
Branching out from basic microeconomic theory are the several fundamental fields
of economics. These would include macroeconomics (the study of aggregate as opposed
to individual phenomena), public finance (the study of goods not provided by the market
and the study of taxation), industrial organization (the in-depth study of how firms
interact with each other and with consumers and organize themselves into industries),
and international trade (concerned with how distinct and independent economies inter-
act). Each of these major fields is concerned with major portions of economic activity and
each has unique contributions to make to the overall study of economics.
There are a number of applied fields of economics that draw on all of the basic fields
as well as microeconomics. These would include labor economics, health economics,
monetary economics, experimental economics, development economics, international
finance, law and economics, and environmental economics. Each of these applied fields
draws heavily on microeconomics and the basic fields of economics. For the most part,
each of these fields has contributed in some way to understanding economics outside of
its own narrow set of interests. For instance, labor economics has been the source for
many innovations in econometrics that have found application across economics. The
primary contribution of environmental economics has been in the area of nonmarket
valuation, i.e., methods for measuring demand curves for goods when there is no market
(or, equivalently, measuring the willingness to pay or willingness to accept compensation
for nonmarginal changes in environmental quality). Other important components of
environmental economics involve adapting tools developed in other parts of economics
to questions regarding the environment.
The categorization above is by no means unequivocal. I would expect many econo-
mists in one or another of the fields mentioned above to dispute how their field has been
categorized and placed in relation to other fields. To an extent they would be right: there
are many different ways of summarizing the different fields of economics. The point that
is being made is that environmental economics is an applied field, like many other applied
fields in economics. Much of environmental economics involves adapting concepts devel-
oped in other branches of economics (particularly public finance and industrial organi-
zation) and applying them to environmental problems. Some aspects of environmental
economics are unique to the field (such as valuation, mentioned above) and have potential
use in economics outside of the environmental economics field.

D. Environmental Economics and Ecological Economics

This book is concerned with environmental economics. There is another field of study
that largely has grown out of systems ecology called “ecological economics.” These two
8CHAPTER 1THE ENVIRONMENT AND ECONOMICS

fields take quite different perspectives, but are ultimately concerned with helping make
social decisions about environmental problems. Unfortunately, in many non-English
speaking countries the distinction between the two fields is lost in the translation because
of the similarities between the words “environmental” and “ecological.”
A simple distinction between the two fields arises from the fact that environmental
economics tends to involve economists who have extended their discipline and paradigm
to consider the environment, whereas ecological economics tends to involve ecologists
who have extended their discipline and paradigm to consider humans and the economy.
Another distinction between the fields is that ecological economics is very multidisciplin-
ary. In contrast to environmental economics, which is a branch of economics, ecological
economics welcomes and embraces practitioners from a wide variety of fields who wish to
study the environment–society interface. But this is history; the appropriate question to
ask is how do the two fields approach environmental problems and how do they differ?
Ecological economics (as well as conventional economics) is difficult to succinctly
define. One of the leading ecological economists defines the subject as a “field of study
that addresses the relationships between ecosystems and economic systems in the broad-
est sense.”2 The emphasis is on the very long-term health of the ecosystem, broadly
defined (i.e., with humans as part of it). In a 2007 invited lecture to the European Society
of Ecological Economics, Malte Faber argues that an interest in “nature, justice and
time constitutes the defining characteristic of ecological economist.”3 He argues that the
economy must be considered a part of nature, that doing what is just must be a central
tenet of the field, and that the issue of time is oversimplified in conventional economics.
It follows that ecological economics tends to be normative, indicating what soci-
ety should do, rather than positive, describing what society actually does (as discussed
earlier). And one major distinction between the two fields is associated with value and
thus the way in which social decisions are made that depend on measures of value of the
environment. Conventional economists believe that value to society derives from the
individual values held by human members of society. Ecological economists take a more
biophysical view of value. For instance, some ecological economists measure value in
terms of embodied energy content. Thus in comparing a typewriter to a computer, the
appropriate question is which took more energy to create? Less energy is better. This is a
direct extension of ecological theories that ecosystems operate to minimize the through-
put of energy. To these researchers, minimizing the energy content of delivered goods and
services should drive public policy. The criticism leveled at this “energy theory of value”
by environmental economists is that there are many resources in short supply, including
land and skilled people. Reducing the value of a good to the embodied content of any fac-
tor is an oversimplification. Environmental economists believe the value of a good stems
from its embodied content of multiple scarce factors (including energy) as well as how
much value individual people place on the final good. In other words, value cannot be
reduced to a simple physical metric.
A recurring theme among some ecological economists (but not all) is the notion that
economic growth is undesirable. Further, these practitioners argue that a central tenet of
economics is that growth is desirable. To a large extent, this stems from a misunderstand-
ing of growth. Technological progress and education, as well as population growth, have
in fact led to economic growth. But it is not inevitable that this growth be at the expense of
the environment. Consumption can be of material goods (such as steel or motor vehicles)
or it can be of aesthetic goods (such as art or literature).
 Environmental Economics as a Discipline9

However, the greatest distinction between the fields emerges when considering envi-
ronmental problems with very long-time horizons, such as global warming or disposal
of nuclear wastes. As some environmental economists will readily admit, economics has
a difficult time analyzing problems in which costs and benefits span long time horizons.
For instance, storing nuclear wastes can involve potential risks that extend for a quarter
of a million years. The benefits of the storage are reaped by the present consumers of
nuclear power; the costs, if any, are borne by future generations that must live with the
nuclear repositories. The conventional economic approach to this is to add up all of the
costs and benefits, whenever they may occur, but to apply a discount factor to reduce the
importance of future costs in the sum. Inevitably, this means that what happens a century
from now has very little effect on the decisions that are made today. To many people, this
is disquieting. Ecological economists have proposed other ways of dealing with the inter-
temporal decision problem, particularly the notion of sustainability. They argue that we
should never undertake any action that is not sustainable in the long run. In the nuclear
waste example, they would ask: Can we continue to bury waste forever and ever and be
satisfied with the world that results? If the answer is no, then the action is not sustainable.
It is not a matter of balancing costs and benefits. There is some intuitive appeal to such
a philosophy.
Over the past decade, the lines between environmental economics and ecologi-
cal economics have become more blurred, at least based on the content of the journal
Ecological Economics, where environmental economists (as well as ecological economists)
regularly publish. As a case in point, the first edition of this textbook cited no articles
from the journal, whereas the current edition of this textbook cites several. The distinc-
tions are clearly evolving.

E. Environmental Economics and Resource Economics

Nearly all textbooks combine the treatment of environmental and resource economics.
In fact, most graduate programs that have a specialization in the area combine environ-
mental and resource economics into one field. Undoubtedly this is because both concern
the natural world. Environmental economics involves questions of excessive production
of pollution by the market or insufficient protection of the natural world, due to market
failure. Resource economics, on the other hand, is concerned with the production and use
of natural resources, both renewable and exhaustible. Renewable resources would include
fisheries and forests. Nonrenewables would include minerals and energy as well as natural
assets such as the Alps and species of plants and animals.
So we see the distinction between the two areas but we also see the overlap. Typically,
environmental economics is concerned with issues of market failure regarding the
natural world—for a variety of reasons, markets do not function correctly, and as a con-
sequence there is too much of some things (such as pollution) or too little of other things
(such as wild and scenic areas). These problems may be essentially static, where time is not
particularly important; in other cases, long time horizons are the essence of the problem.
For instance, time is not really an issue in deciding on the right amount of air pollution
in an urban area such as London.
Much of resource economics on the other hand is concerned with dynamics. Time is
what makes renewable and exhaustible resource questions interesting. If we log a forest
slowly enough, the forest can regenerate itself and we can continue logging indefinitely.
10CHAPTER 1THE ENVIRONMENT AND ECONOMICS

How fast we extract an exhaustible resource will determine its scarcity in the future, and
thus its price in the future. It is time, rather than the failure of markets to operate prop-
erly, that is the essence of this logging example.
There are overlaps between environmental and resource economics. The manage-
ment of a fishery to deal with overfishing is a good example in which the failure of mar-
kets is important (the fact that fishers may freely enter the market) as well as dynamics
(growth and regeneration of the fishery is what makes it a renewable resource). Global
warming is an example of a pollution problem with a very long time frame. There are
other overlaps, primarily in the preservation of natural environments. These issues
involve time so they could be relegated to resource economics. On the other hand, dam-
age to natural environments is often the incidental result of economic activity with a
different primary purpose. Species loss is usually the result of conversion of habitat to
human use.
So we see that many environmental economics problems (but not all) are static,
whereas many resource economics problems are dynamic.4 Most environmental econom-
ics problems involve market failure, whereas many resource economics problems (but not
all) do not. In other words, there is overlap between the fields. For the most part, in this
book we are concerned with environmental problems involving market failure. As such,
we cover pollution problems but also discuss the management of fisheries.5

II. THE QUALITY OF THE ENVIRONMENT

There are many comprehensive assessments of the state of the world’s environment.6 It
is unnecessary to offer another review here. What we would like to do is provide some
indication of the breadth of problems that are deemed environmental and to gain an
appreciation for what problems are being solved and what problems remain difficult to
solve and are likely to be a focus of attention in the coming decades.
Pollution problems are not new to mankind. There are records of the Romans com-
plaining about the “stink of smokey chimneys.” 7 Pollution control laws in other parts
of Europe date from the Middle Ages. It has always been the case that urban areas have
bad pollution problems, primarily because of the large concentrations of people. People
are associated with emissions as well as being the reason pollution is damaging. But
outside of cities, historically the earth’s size has been vast enough to dissipate even the
most serious environmental threat. What is new is the magnitude of the problem and
the fact that the world is no longer infinite compared to the ability of people to pollute
it. In the 1960s and 1970s many people around the world were galvanized into doing
something to curb environmental degradation. In most countries, significant move-
ments to protect the environment date from this period.8 To a very large extent, the
enormous size of our current world’s population and the high standard of living of por-
tions of the population are responsible for the pressures on the environment. A larger
economy generates more pollution, all other things being equal; richer citizens usually
demand higher levels of environmental quality. And as long as the world becomes more
populated and wealthier, the pressures will only increase. This is not to say environ-
mental problems cannot be solved, only that it will become increasingly difficult to
protect the earth’s environment.
 The Quality of the Environment11

We focus on four main categories of environmental problems: air pollution, water

pollution, toxic emissions, and ecosystem health. This is not to suggest that this is a com-
prehensive list, just that these are four major categories that encompass many of the major
environmental problems faced by man today.

A. Air Pollution
Air pollution is primarily a by-product of energy consumption. Impurities in fuels lead
to emissions of sulfur dioxide and particulate matter. It is a basic fact of chemistry that
burning carbon-based fuels leads to emissions of oxidized carbon—carbon dioxide,
a major greenhouse gas. Because our atmosphere contains significant amounts of
nitrogen in addition to oxygen, burning fuels inevitably leads to emissions of nitrogen
oxides. Tropo-spheric ozone is not directly emitted from fuel combustion but results
chemically from high concentrations of nitrogen oxides (from fuel combustion) and
organic vapors (from paint drying and gasoline evaporating, among other things), in
the presence of sunshine. It has proved to be very difficult to control ozone in many
urban areas of the world.
To a large extent, air pollutants are at their worst in urban areas, due to concentra-
tions of people, both as sources of the pollution (directly or indirectly) and as victims
of the pollution. Air pollution can lead to health problems, including sickness as well as
physical irritation and reduced human performance. The young and those weakened by
other illnesses may be particularly susceptible to the effects of urban air pollutants. Urban
air pollution also damages materials (such as buildings), increases the cost of mainte-
nance (such as increased cleaning requirements), and degrades aesthetics (no one likes to
live in a brown haze).
At a regional level, air pollutants may damage crops (though some sulfur and car-
bon pollution can help crops). Acid deposition is a regional problem in many parts of
the world. Deposition of sulfur and nitrogen-based acids can harm forest and aquatic
ecosystems. Regional haze from nitrogen and sulfur pollutants is also a problem in areas
with less rainfall. Carbon dioxide is a global pollutant in that overall levels in the earth’s
atmosphere lead to increases in the heat-trapping capacity of the atmosphere, which leads
to global warming. Controlling the precursors of climate change is the subject of intense
current international debate.
Some urban air pollutants have been curbed with some success, though not without
cost and not in all parts of the world. Sulfur dioxide emissions in Western Europe, North
America, and the rest of the developed world have been the subject of significant con-
trol over the past two decades. Aggregate emissions appear to have peaked and are now
declining. Table 1.1 shows a twenty-five-year time series for three pollutants for three
countries, one in transition from poor to middle-income (China), one rich (Japan), and
one in between (Iran). Note the dissimilarity among the three pollutants represented.
Carbon dioxide emissions, which lead to global warming, have been increasing over the
period and are higher in wealthier countries. Sulfur dioxide is almost the opposite. In
fact, sulfur dioxide seems to be particularly troubling for the middle-income country,
Iran. With money (income), the problem can be solved, as the Japan data demonstrate.
Suspended particulates (soot) are worse in lower income countries and tend to be less of a
problem as income levels rise. The story Table 1.1 tells is that not all air pollutants are the
same; nor are the same pollutants always the most problematic across countries.
12CHAPTER 1THE ENVIRONMENT AND ECONOMICS

TABLE 1.1 Air Pollution Indicators for Selected Cities and Years

1980 1990 2000 2005

China
GDP per capita (2005 U.S.$)a 523 1,099 2,664 4,076
SO2 concentration (Beijing)b 66 107 71 50
Particulate concentration (Beijing)b 475 413 106 89
Per capita CO2 emissions (tonnes) 2 2 3 4
Iran
GDP per capita (2005 U.S.$)a 7,087 6,254 7,667 9,314
SO2 concentration (Tehran)b 130 165 209 NA
Particulate concentration (Tehran)b 226 261 71 58
Per capita CO2 emissions (tonnes) 3 4 5 7
Japan
GDP per capita (2005 U.S.$)a 18,652 25,953 28,613 30,310
SO2 concentration (Tokyo)b 42 24 19 NA
Particulate concentration (Tokyo)b 61 NA 43 40
Per capita CO2 emissions (tonnes) 8 9 9 10

a
GDP per capita from World Bank, computed using purchasing power parities, in constant
2005 International dollars.
b
Mean annual concentrations in city center (μg/m3). For reference, the U.S. primary ambient
standards are 80 μg/m3 for SO 2 and 50 μg/m3 for particulates (PM10), though in 1997 these were
revised to distinguish between fine and coarser particulates.
Source: World Bank, World Development Report (various issues); World Bank (1992); World
Bank World Development Indicators online database (World Bank, 2009); United Nations
Environment Program (2008); OECD (2006). In some cases, data unavailable for specific year;
adjacent year used.

One of the major nonfuel air pollutants is cholorofluorocarbons (CFCs), substances

that lead to depletion of the stratospheric ozone layer. These substances are now primarily
used as refrigerants. CFCs have been controlled (in theory) by the 1987 Montreal Protocol,
which has had some success. Worldwide production of these chemicals in 1995 was 20%
of the level in 1986. Worldwide production of these chemicals peaked in 1988, dropped to
20% of that level by 1995, and had dropped to 3% of peak levels by 2005.9 One problem is
a growing black market in illicitly produced CFCs as well as rapid increases in CFC use
and production in the developing world. Under the Protocol, the developing world faces
significantly looser restrictions than the developed world, at least for the time being.

B. Water Pollution
Water pollution has traditionally been the result of organic material deposited in water-
ways or lakes. Organic waste is problematic since it needs oxygen to decompose. Thus one
of the measures of the quantity of pollution is biologic oxygen demand (BOD). Oxygen is
of course needed for fish to survive. So if pollution has such a high BOD that the water
body becomes depleted of oxygen, the water body can no longer support much in the way
of life. In addition, with oxygen depleted, decomposition is now from anaerobic bacteria,
which do not require oxygen. Such decomposition tends to be very odiferous. A major
type of organic waste is of course human waste, which usually also involves significant
human pathogens.
Other documents randomly have
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The Project Gutenberg eBook of The German
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Title: The German Fleet

Author: Archibald Hurd

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*** START OF THE PROJECT GUTENBERG EBOOK THE GERMAN

FLEET ***
 THE GERMAN FLEET
BEING THE COMPANION VOLUME TO "THE FLEETS
AT WAR"
AND "FROM HELIGOLAND TO KEELING ISLAND."
BY

ARCHIBALD HURD
AUTHOR (JOINT) OF "GERMAN SEA-POWER, ITS RISE, PROGRESS
AND ECONOMIC BASIS."

HODDER AND STOUGHTON

LONDON NEW YORK TORONTO

MCMXV

CONTENT
CHAPTER PAGE
INTRODUCTION 7
I. PAST ASCENDENCY 19
II. THE FIRST GERMAN FLEET 26
GERMANY'S FLEET IN THE LAST
III. CENTURY 51
BRITISH INFLUENCE ON THE
IV. GERMAN NAVY 80
V. THE GERMAN NAVY ACTS 93
GERMAN SHIPS, OFFICERS, AND
VI. MEN 142
 WILLIAM II. AND HIS NAVAL
VII. MINISTER 155
APPENDIX
—GERMANY'S NAVAL POLICY
I. 183
APPENDIX —BRITISH AND GERMAN SHIP-
II. BUILDING PROGRAMMES 189

INTRODUCTION
In the history of nations there is probably no chapter more
fascinating and arresting than that which records the rise and fall
and subsequent resurrection of German sea-power.
In our insular pride, conscious of our glorious naval heritage, we are
apt to forget that Germany had a maritime past, and that long
before the German Empire existed the German people attained pre-
eminence in oversea commerce and created for its protection fleets
which exercised commanding influence in northern waters.
It is an error, therefore, to regard Germany as an up-start naval
Power. The creation of her modern navy represented the revival of
ancient hopes and aspirations. To those ambitions, in their
unaggressive form, her neighbours would have taken little
exception; Germany had become a great commercial Power with
colonies overseas, and it was natural that she should desire to
possess a navy corresponding to her growing maritime interests and
the place which she had already won for herself in the sun.
The more closely the history of German sea-power is studied the
more apparent it must become, that it was not so much Germany's
Navy Acts, as the propaganda by which they were supported and
the new and aggressive spirit which her naval organisation brought
into maritime affairs that caused uneasiness throughout the world
and eventually created that feeling of antagonism which found
expression after the opening of war in August, 1914.
In the early part of 1913 I wrote, in collaboration with a friend who
possessed intimate knowledge of the foundations and the strength
of the German Empire, a history of the German naval movement,[1]
particular emphasis being laid on its economic basis. In the
preparation of the present volume I have drawn upon this former
work. It has been impossible, however, in the necessarily limited
compass of one of the Daily Telegraph War Books, to deal with the
economic basis upon which the German Navy has been created. I
believe that the chapters in "German Sea-Power" with reference to
this aspect of German progress—for which my collaborator was
responsible and of which, therefore, I can speak without reserve—
still constitute a unique presentation of the condition of Germany on
the eve of the outbreak of war.
Much misconception exists as to the staying power of Germany. The
German Empire as an economic unit is not of mushroom growth.
Those readers who are sufficiently interested in the subject of the
basis of German vitality, will realise vividly by reference to "German
Sea-Power" the deep and well-laid foundations upon which not only
the German Navy, but the German Empire rest.
Whether this history should be regarded as the romance of the
German Navy or the tragedy of the German Navy must for the
present remain an open question. In everyday life many romances
culminate in tragedy, and the course of events in the present war
suggest that the time may be at hand when the German people will
realise the series of errors committed by their rulers in the
upbuilding of German sea-power. Within the past fifteen years it is
calculated that about £300,000,000 has been spent in the
maintenance and expansion of the German Fleet, the improvement
of its bases, and the enlargement of the Kiel Canal. Much of this
money has been raised by loans. Those loans are still unpaid; it was
believed by a large section of the German people that Great Britain,
hampered by party politics and effete in all warlike pursuits, would,
after defeat, repay them. That hope must now be dead.
The German people, as the memorandum which accompanied the
Navy Act of 1900 reveals, were led to anticipate that the Fleet,
created by the sacrifice of so much treasure, would not only
guarantee their shores against aggression, but would give absolute
protection to their maritime and colonial interests, and would,
eventually, pay for itself. The time will come when they will
recognise that from the first they have been hoodwinked and
deceived by those in authority over them. It may be that German
statesmen, and the Emperor himself, were themselves deceived by
the very brilliance of the dreams of world power which they
entertained and by the conception which they had formed of the
lack of virility, sagacity and prescience of those responsible for the
fortunes of other countries, and of Great Britain in particular.
German Navy Acts were passed in full confidence that during the
period when they were being carried into effect the rest of the world
would stand still, lost in admiration of Germany's culture and
Germany's power. The mass of the German people were unwilling
converts to the new gospel. They had to be convinced of the wisdom
of the new policy. For this purpose a Press Bureau was established.
Throughout the German States this organisation fostered, through
the official and semi-official Press, feelings of antagonism and hatred
towards other countries, and towards England and the United States
especially, because these two countries were Germany's most
serious rivals in the commercial markets of the world, and also
possessed sea-power superior to her own.
It is interesting to recall in proof of this dual aim of German policy
the remarks of von Edelsheim, a member of the German General
Staff, in a pamphlet entitled "Operationen Ubersee."[2]
The author, after first pointing out the possibility of invading
England, turned his attention to the United States.[3] His remarks
are so interesting in view of the activity of German agents on the
other side of the Atlantic after the outbreak of war, that it is perhaps
excusable to quote at some length this explanation by a member of
the German General Staff of how the German Fleet was to be used
against the United States as an extension of the power of the huge
German Army.

"The possibility must be taken into account that the fleet of the
United States will at first not venture into battle, but that it will
withdraw into fortified harbours, in order to wait for a
favourable opportunity of achieving minor successes. Therefore
it is clear that naval action alone will not be decisive against the
United States, but that combined action of army and navy will
be required. Considering the great extent of the United States,
the conquest of the country by an army of invasion is not
possible. But there is every reason to believe that victorious
enterprises on the Atlantic coast, and the conquest of the most
important arteries through which imports and exports pass, will
create such an unbearable state of affairs in the whole country
that the Government will readily offer acceptable conditions in
order to obtain peace.
"If Germany begins preparing a fleet of transports and troops
for landing purposes at the moment when the battle fleet
steams out of our harbours, we may conclude that operations
on the American soil can begin after about four weeks, and it
cannot be doubted that the United States will not be able to
oppose to us within that time an army equivalent to our own.
"At present the regular army of the United States amounts to
65,000 men, of whom only 30,000 could be disposed of. Of
these at least 10,000 are required for watching the Indian
territories and for guarding the fortifications on the sea coast.
Therefore only about 20,000 men of the regular army are ready
for war. Besides, about 100,000 militia are in existence, of
whom the larger part did not come up when they were called
out during the last war. Lastly, the militia is not efficient; it is
partly armed with muzzle-loaders, and its training is worse than
its armament.
"As an operation by surprise against America is impossible, on
account of the length of time during which transports are on the
way, only the landing can be affected by surprise. Nevertheless,
stress must be laid on the fact that the rapidity of the invasion
will considerably facilitate victory against the United States,
owing to the absence of methodical preparation for mobilization,
owing to the inexperience of the personnel, and owing to the
weakness of the regular army.
"In order to occupy permanently a considerable part of the
United States, and to protect our lines of operation so as to
enable us to fight successfully against all the forces which that
country, in the course of time, can oppose to us, considerable
forces would be required. Such an operation would be greatly
hampered by the fact that it would require a second passage of
the transport fleet in order to ship the necessary troops that
long distance. However, it seems questionable whether it would
be advantageous to occupy a great stretch of country for a
considerable time. The Americans will not feel inclined to
conclude peace because one or two provinces are occupied by
an army of invasion, but because of the enormous, material
losses which the whole country will suffer if the Atlantic harbour
towns, in which the threads of the whole prosperity of the
United States are concentrated, are torn away from them one
after the other.
"Therefore the task of the fleet would be to undertake a series
of large landing operations, through which we are able to take
several of these important and wealthy towns within a brief
space of time. By interrupting their communications, by
destroying all buildings serving the State commerce and the
defence, by taking away all material for war and transport, and,
lastly, by levying heavy contributions, we should be able to
inflict damage on the United States.
 "For such enterprises a smaller military force will suffice.
Nevertheless, the American defence will find it difficult to
undertake a successful enterprise against that kind of warfare.
Though an extremely well-developed railway system enables
them to concentrate troops within a short time on the different
points on the coast, the concentration of the troops and the
time which is lost until it is recognised which of the many
threatened points of landing will really be utilised will, as a rule,
make it possible for the army of invasion to carry out its
operation with success under the co-operation of the fleet at the
point chosen. The corps landed can either take the offensive
against gathering hostile forces or withdraw to the transports in
order to land at another place."

These declarations of German naval and military policy are of

interest as illustrating the character of the propaganda by which the
naval movement was encouraged. The Navy was to give world-wide
length of reach to the supreme German Army, and enable Germany
to dictate peace to each and every nation, however distantly
situated. An appeal was made to the lowest instincts of the German
people. They were counselled to create a great naval force on the
understanding that the money expended would by aggressive wars
be repaid with interest and that, as a result of combined naval and
military operations, they would extend the world power of the
German Empire, and incidentally promote Germany's maritime
interests in all the oceans of the world.
Those who were responsible for the inflammatory speeches and
articles by which the interest of the German people in the naval
movement was excited, forgot the influence which these ebullitions
would have upon the policy of other Powers and upon their
defensive preparations. It was only after hostilities had broken out
that the German people realised what small results all their sacrifices
had produced. By the words, more than the acts, of those
responsible for German naval policy, the other Powers of the world
had been forced to expand and reorganise their naval forces.
Germany had at great cost won for herself the position of second
greatest naval Power in the world, but in doing so she had
unconsciously forced up the strength of the British Fleet and
dragged in her path the United States, France, Italy, Japan, Russia,
and to a limited extent, but only to a limited extent, her ally, Austria-
Hungary. During the years of agitation the other Powers of the world
had not stood still, as it was assumed in Germany they would do.
First, the British people increased their naval expenditure and more
ships were built and more officers and men were entered; and then
the German Navy Act of 1912 was passed.
It had been the practice of the naval Powers to keep about one-half
only of their ships in full sea-going commission. The armed peace,
before Germany began to give expression to her maritime ambitions,
was a yoke which rested easily upon the navies of the world. As a
British naval officer has remarked:—

"Up to the end of the last century our Navy enjoyed a peace
routine. We maintained squadrons all over the world, and the
pick of our personnel was to be found anywhere but in home
waters. The Mediterranean claimed the pick of both our ships
and men. Here naval life was one long holiday. The routine was
to lay in harbour for nine months out of the year. About July the
whole fleet would congregate at Malta for the summer's cruise.
Sometimes it would be east of Malta, taking in the Grecian
Archipelago and the Holy Land; at others it would be west,
visiting the French and Italian ports, paying a visit to the Rock,
and then home to Malta for another long rest.
"Preparation for war was never thought of. Why should it be?
The French Navy had no aggressive designs, and was much
below our own, both in material strength and in personnel,
while the Russian Navy was partly confined in the Black Sea, the
other part being in the Baltic. And so we, both officers and men,
set out to have a good time. Our ships were kept up to yacht-
like perfection as regards their paintwork, while their bright
work shone like gold, and the road to promotion lay not through
 professional efficiency, but the state of cleanliness and
splendour of one's ship. All kinds of drills and evolutions were
devised, not because of their war value, but because they had a
competitive value, and so ship could be pitted against ship and
an element of sport introduced.
"There was nothing really wrong in all this. The British Navy was
there to maintain for us our title of 'Mistress of the Seas,' and as
no other nation apparently wished to challenge our title, there
was nothing to do but pass away the time as pleasantly as
possible; when the Navy was called on to perform any task it
carried it through with vigour, valour, and efficiency, and
immediately settled down again."[4]

This regime came to an end soon after Grand Admiral von Tirpitz
became German Naval Secretary towards the end of the nineteenth
century. He set the navies of the world a new model. He determined
to take advantage of the easy-going spirit which animated the
pleasant relations then existing between the great fleets. There was
to be nothing pleasant about the German Fleet. It was to be a
strenuous agent of Germany's aggressive aims. In the organisation
of German sea-power new principles found expression. In home
waters and abroad the German Navy was always ready instantly for
war. The screw was applied gradually stage by stage. Under the
German Navy Act of 1912 this aggressive sea policy found its
ultimate expression: it was proposed to keep always on a war
footing nearly four-fifths of the ships in northern waters, while at the
same time the squadrons abroad were to be greatly increased in
strength. Happily, owing to Lord Fisher's foresight and strategical
ability, the British Navy was enabled step by step to respond to each
and every measure taken by Germany. He created for us a Grand
Fleet and when hostilities broke out that fleet took up its war
stations and denied to the main forces of Germany the use of any
and every sea.
German policy operated as a tonic, though not to the same extent,
on the other great fleets of the world. In the summer of 1914
Germany discovered that every anticipation upon which her foreign,
naval and military policies had been based had been falsified by
events. In particular, in adding to her strength at sea and on land,
she had rendered herself weak by creating enemies east and west.
Her navy, which was to have engaged in a victorious campaign
against the greatest naval power of the world in isolation—the rest
of the world watching the inevitable downfall of the Mistress of the
Seas with approval—found arrayed against it not the British fleet
only, but the fleets of France and Russia in Europe and the Navy of
Japan in the Far East.
In studying, therefore, the history of the naval development of
Germany, and contrasting the high hopes which inspired the naval
movement with the events which occurred on the outbreak of war,
and in subsequent months, one is led to wonder whether, after all,
the romance of the German Navy will not be regarded in the future,
by the German people at least, rather as a great and costly tragedy.

FOOTNOTES:
[1] "German Sea-Power, Its Rise, Progress and Economic Basis,"
by Archibald Hurd and Henry Castle (1913, London, John Murray,
10s. 6d.).
[2] "Modern Germany" (Smith Elder, 1912).
[3] Germans always assumed that they could attack the United
States without intervention on our part, just as they assumed that
they could engage in war with us without becoming involved with
the United States. They believed that Germany would fight both
countries in turn—and victoriously.
[4] "The British Navy from Within" by "Ex-Royal Navy" (Hodder &
Stoughton).

THE GERMAN FLEET

 CHAPTER I
Past Ascendency
Like the foundations of the Empire in 1870, the formation of the
modern German Fleet is the result of a movement that had its origin
among the people and not among the Princes of the country. And
this naval movement sprang up and reached its greatest vigour in
those sea-board districts that still sedulously keep alive the splendid
tradition of the Hanseatic League, which, as the strongest maritime
Power of its day, for centuries almost monopolized the trade of
Northern and Western Europe, and with the word "sterling," a
corruption of "Easterling," the name popularly given to its members,
has left on Great Britain the indelible stamp of its former mercantile
domination. For the coin of the Hanse towns, by reason of its
unimpeachable quality, was once universally sought after in England,
and thus became the standard of monetary excellence.
The memories of the Hansa are the "historical foundation" on which
have been based Germany's claims to a leading place among the
maritime nations, and they have played a prominent part in every
agitation for the increase of her fleet. Why, it was asked, should she
not again assume upon the seas that dominating position which she
once undoubtedly held? Why, with her expanding population, trade,
and wealth, should she not reclaim that maritime ascendency which
she forfeited to Holland in the seventeenth century, and which a
hundred years later passed to Great Britain? Why should she not
realize that dream which was in the mind of Friedrich List when he
wrote: "How easy it would have been for the Hanse towns, in the
epoch of their rule over the sea, to attain national unity through the
instrumentality of the imperial power, to unite the whole littoral from
Dunkirk to Riga under one nationality, and thus to win and maintain
for the German nation supremacy in industry, trade, and sea-power!"
It is, moreover, not without significance that the Hansa itself was, in
a sense, democratic, and that, at a time when Germany, as a
national unit, was rendered impotent in the world by her
superabundance of Princes, her citizens were able, on their own
initiative, and by their own energies, to assert their power and
capacity as a maritime people.
The story of the Hansa is full of strange anomalies and antitheses.
Historians differ by centuries as to the date at which the existence of
the League commenced, and just as it never had a definite
beginning, so it has never had a formal end, for to this day two of
the Hanse towns—Hamburg and Bremen—have certain institutions
in common, such as their supreme law courts and their diplomatic
representation in Prussia. For hundreds of years the Confederation
acted, and was treated by foreign Governments, as an independent
State and a great Power, but its composition was never certain and
always fluctuating. From first to last the names of no fewer than
ninety cities and towns were entered upon its rolls, but it is
impossible to say of each of them how often and when it joined or
left the League. Foreign rulers, and especially the English monarchs,
made repeated attempts to obtain from the Hansa an official list of
its members, but compliance with their demands was systematically
evaded on one pretext or another. The League's policy was, as far as
possible, to assert the claims of its members, and to disown
responsibility for those made against them. This policy is pretty
clearly expressed in the following answer returned by the League in
1473 to complaints put forward on behalf of English merchantmen
who had suffered through the depredations of the Dantzic privateer
or pirate, Paul Beneke: "The towns of the Hansa are a corpus in the
possession of the privileges they hold in any realms, lands, or
lordships, and when their privileges are infringed, they are
accustomed to meet and consult, and then to issue for all of them
ordinances against all goods from the countries in which their
privileges have been infringed, that they shall not be suffered in the
commonalty of towns. But they were not making war against
England; only some of the towns of the Hansa, which had been
injured by England, had determined upon it at their own venture,
win or lose, which did not take place in the name of the Hanse
commonalty." The theory of the Federation was, in fact, that it
existed for the purpose only of taking, and not of giving, and it
refused to imply a corporate responsibility by publishing its
membership rolls.
It is impossible, in the space available, to tell in any detail the
fascinating story of the rise of the Hansa to the position of a great
power, with its guild halls and factories in foreign lands, of which the
oldest and most important was the Steelyard, in London. The history
of this institution is believed to go back to the latter days of the
Roman occupation. When the Hanseatic League was at the height of
its power—from the last quarter of the fourteenth to the first half of
the sixteenth centuries, the Steelyard, in London, closely resembled
a state within a larger state. It occupied a site now covered by
Cannon Street Station, extending from Thames Street to the river,
and bounded to the east and west respectively by All Hallows and
Cousins Lane. The Steelyard had something of the appearance of a
fortress and was stoutly defended against attack. The community
within its precincts was governed with monastic severity. Their
affairs were administered by an alderman with the assistance of two
adjuncts and nine counsellers who took part in all the State and civic
pageants of London as a Corporation.
This great German commercial institution on British soil, and the
other houses established in other countries, reflected the great
power which was wielded by the Hanseatic League in commerce.
These German traders, however, realised that their increasing trade
on the seas required adequate defence. Mainly at the instigation of
the merchants of Lübeck, a considerable navy was created, this
German city being dependent for its prosperity mainly upon the
herring fishing and curing industries of Europe. In process of time
the Germans succeeded in driving away English, French and Spanish
rivals, and created a great monopoly of the herring fisheries of
northern Europe, from which they drew immense wealth and on
which depended a number of other industries.
It was mainly for the protection of the Sound herrings that the
Hansa undertook against the Scandinavian States the numerous
campaigns by which it won the keys of the Baltic. The war which
culminated with the peace of Spralsunde in 1370 raised the League
to the rank of a first-class sea Power. Encouraged by its success in
crushing and humiliating Denmark, the Hansa had little hesitation in
measuring itself against England. The towns became associated
through the Victualling Brothers with an active form of corsair
warfare on English shipping.
By its triumph over the Danes, the Hansa secured a practical
monopoly of the shipping and trade of the Baltic and North Sea,
which it held almost unimpaired for nearly two hundred years. In the
words of Gustav Wasa, "the three good (Scandinavian) Crowns
remained small wares of the Hansa up to the sixteenth century," and
as long as this was so the commercial and maritime supremacy of
the League was practically unchallengeable. The manner in which
the Easterlings availed themselves of the ascendency they had now
acquired is a classic example of the ruthless and unscrupulous
exploitation of political power for the purposes of purely material
gain, for they were actuated by no national or ideal aims, but solely
by the desire to enrich themselves. Favoured by the confusion and
chaos prevailing in the lands of their potential rivals, they became
the exclusive brokers through whose mediation the spices of the
Orient, the wines of France, the cloth of Flanders, the tin, wool,
hides, and tallow of England, were exchanged for the dried cod of
Norway, the ores of Sweden, the wheat of Prussia, the honey and
wax of Poland, the furs of Russia, and the myriads of herrings which
every summer were caught in the Sound, and salted and packed on
the coast of Scania. What they aimed at, and what for long years
they substantially obtained, was the disappearance of all flags but
their own from the North Sea and the Baltic. Moreover, a great part
of the carrying trade between England and France also fell to their
lot.
The conditions were such as rendered warlike operations between
England and the Teutonic order inevitable. It is impossible to trace in
any detail the guerilla tactics which were adopted on both sides. It is
only necessary for our present purpose to convey some idea of the
sea power which the Hansa exercised in order that we may better
understand the ambitions of Germany to which the Emperor William
the Second and Grand Admiral von Tirpitz gave expression in the
early years of the twentieth century. At the outset of its career, its
warships were manned by the burghers themselves, but as the fleet
increased in size—it was quadrupled during the first half of the
fifteenth century—recourse to mercenaries became more and more
general. The commanders of the ships were invariably citizens of the
towns which had equipped them, and were frequently members of
the governing council, while the admiral of a fleet was always a
councillor, and usually a burgomaster. The officers of the land forces,
which were raised as occasion demanded, were principally drawn
from the impoverished nobility, whose members welcomed any
opportunity of repairing their shattered fortunes by martial
adventure. Of the naval resources of the League, some idea can be
formed from the fact that, in the war against the Scandinavian
Kingdoms in 1426, it sent out a fleet of 260 ships, manned by
12,000 sailors and fighting men. For the exhausting, if not
inglorious, seven years' war against Gustav Wasa's successor, Lübeck
alone fitted out 18 men-of-war, of which one, the Adler, carried 400
sailors, 500 fighting men, and 150 "constables." Her armament
consisted of 8 carthouns, 6 demi-carthouns, 26 culverins, and many
smaller pieces of ordnance. Among her munitions were 6,000
cannon-balls and 300 hundredweight of powder.

CHAPTER II
The First German Fleet
In one of the window niches on the ground floor of the Military
Museum (Zeughaus) at Berlin lies an old and dilapidated 8-pounder
gun. In its deep and disfiguring coat of rust it is an inconspicuous
object, and, amid that rich and varied collection of artillery from all
the ages, the eye of the casual visitor will not rest upon it for more
than a disparaging moment. And yet few of the treasures of the
museum have a more interesting history to tell, for it is the sole
remaining relic of the first serious experiment in naval and colonial
policy ever made by a German ruler. On an elevation rising from the
beach of Cape Three Points, on the Gold Coast, now British territory,
are still to be seen the crumbling ruins of the fort of Gross-
Friedrichsburg, built there by the Elector of Brandenburg in 1681,
and when the German corvette Sophie visited the spot, with pious
purpose, in 1884, this corroded gun was unearthed from beneath
the weeds and brushwood that have overgrown the decayed
ramparts.
Frederick William, the Great Elector, has been exemplary for many of
his successors. Frederick the Great rightly considered him the most
able of the previous Princes of the house of Hohenzollern, while the
present German Emperor has made a special cult of his memory,
and assuredly had a symbolic intention when he appeared at a
fancy-dress ball disguised as the first of his ancestors who equipped
a fleet and founded a colony.
When Frederick William was called to the Brandenburg throne in
1641 at the age of twenty, Germany was still in the throes of the
Thirty Years' War, and no part of the Empire had suffered more than
his Electorate from the consequences of that unspeakable calamity.
Of all the causes which have contributed to impede the normal
development of the painstaking and industrious German race, none
had so malign an influence as that stupendous conflict. It not merely
delayed civilization, but over vast tracts of country positively
exterminated it. At the close of the war many once flourishing towns
had absolutely disappeared from the face of the earth, and where
formerly a numerous peasantry had tilled its fertile fields a howling
wilderness extended in all directions as far as the eye could reach.
In North Germany to-day an apparently purposeless pond, or a
detached clump of venerable trees, still shows where once a village
stood, and bears mute witness to the ruthless barbarity with which
the religious partition of Central Europe was brought about.
When an end was put to the bloodshed and rapine by the Peace of
Westphalia (1648), the population of Germany had been reduced to
one half—in some districts to one tenth—of its former dimensions.
Many portions of the Empire are even to-day not so thickly inhabited
as they were before the war. Industry and commerce had migrated
to England, France, and Holland; and Leipzig and Frankfort were the
only German towns that had retained any trade worthy of mention.
The Hansa, with its fleets of warships and merchantmen, was but a
memory of the past. Königsberg had no longer a ship of its own; the
trade of Dantzig and Stettin was almost entirely carried in foreign
bottoms; and even Hamburg, which directly had been but
comparatively little touched by the thirty years of chaos and turmoil,
and had benefited from its exceptional connection with England, was
left commercially crippled. At a Hanse Parliament held in 1630, only
Hamburg, Lübeck, and Bremen were represented. Germany had
been so drained of money that barter had generally taken the place
of purchase by coin; wages were paid in the products of labour,
grain, ore, and manufactured goods, and even state officials in some
cases received their salaries in kind.
Even before the war broke out, Brandenburg, a country of barren
soil and few natural resources, had stood far below the rest of
Germany both materially and intellectually. In 1600 the twin towns,
Berlin and Cöln, which faced one another from opposite banks of the
Spree, and have since been merged to form the colossal capital of
the new Empire, contained together no more than 14,000 souls.
Brandenburg and Frankfort-on-Oder each had a population of
10,000. Only two other towns, Stendal and Salzwedel, could boast
more than 5,000 inhabitants. And it was of the mere ruins of this
country that Frederick William formed the foundation-stone of the
Prussian Kingdom and of the German Empire of to-day.
If the Thirty Years' War had produced any form of national
consolidation, if it had increased the authority of the Empire or
resulted in the absorption of the smaller States by the larger, that
would at least have been some compensation to Germany for its
long and terrible ordeal. But exactly the opposite was the case. The
war ceased simply because no one had the will or the strength to
continue it, and a miserable compromise was the result. The only
gainers were the Princes, who, as the wielders of the armed forces,
had been able to enhance their power, and now acquired a larger
measure of independence in their relationships to the Emperor. Their
number remained legion. In the Germany mapped out by the
Westphalian negotiators there were eight electors, sixty-nine
spiritual and ninety-six temporal Princes, sixty-one imperial towns,
and a multitude of Counts and Barons exercising various degrees of
sovereign power.
Frederick William's claim to the title "Great," which was bestowed
upon him by his own generation, has been contested, but may be
allowed to pass. As military leader, diplomatist, organizer, and
administrator, he certainly had unusual gifts. Above all, he excelled
in duplicity and treachery. The most eminent living German historian
has said of him that "both in internal and external politics he acted
with an unscrupulousness so manifest that it cannot be palliated,"
and can find no better excuse for his many deeds of "faithlessness"
and "double-dealing" than that, in this respect, he was merely "the
master of the diplomatic art of his day." The Elector was actuated
solely by his own personal and dynastic interests, and was utterly
devoid of "German" patriotism, for in return for the liberal subsidies
on which he prospered, he undertook, in a secret treaty, to support
the candidature of the French King or Dauphin for the Imperial
German throne, and he was mainly responsible for the truce which
left Strasburg in French hands for nearly two centuries. During the
incessant wars which filled up most of his reign he fought both with
and against every other belligerent. His sword was always at the
disposal of the highest bidder, either of hard cash or of territorial
extension, and by adroit choice of the moment for changing sides he
generally made a profitable bargain. True, he was obliged to restore
the western portion of Pomerania which he had conquered from the
Swedes, but he obtained a much more important acquisition—the
recognition of his full sovereignty in what is now East Prussia.
That region had been wrested from the Slavs by the German orders
of chivalry, founded at the time of the Crusades, and had
subsequently become an evangelical duchy, ruled by a junior branch
of the house of Hohenzollern, as a fief of the Kingdom of Poland. On
the extinction of the ducal line, it had reverted to the rulers of
Brandenburg, and by a timely sale of his military assistance, first to
the Swedes and then to the Poles, the Great Elector induced both to
admit his unrestricted and unqualified rights of sovereignty in the
duchy. His successor persuaded the Emperor to agree to his
assumption of the kingly title for this territory, and it is an interesting
fact—especially in view of the last development of the German
Empire, which in its present constitutional form and in much else is
dependent upon Catholic support—that this elevation was largely
brought about by the intervention of two Jesuit fathers. It was from
the Kingdom of Prussia which was thus established, and which was a
completely independent State altogether outside the competencies
of the Holy Roman Empire, that arose the Hohenzollern ascendency
in Germany, and round it that the new German Empire crystallized.
For this reason the episode is quite germane to our present purpose.
The Germans excel as diligent pupils and patient imitators, and the
Great Elector was no exception to this rule. From his fourteenth to
his eighteenth year he had been educated under the care of
Frederick Henry, the Statthalter of Holland, then the chief Sea-Power
of the world, from whom he had imbibed many ideas as to the
importance of navies, colonies, and sea-borne trade. His connection
with the Netherlands was maintained and strengthened by his
marriage with an Orange Princess, the aunt of William III. of
England, and many Dutchmen entered his service. Among them was
an ex-admiral, Gijsels by name, who assiduously kept alive the
dreams of sea-power which the Elector had brought back with him
from Holland. It was on his prompting that, in 1659, when Frederick
William was embroiled with the Swedes, and found his operations
hampered by the lack of a fleet, an enquiry as to the possibility of
remedying this deficiency was ordered by the Elector. The
investigation resulted, for the time being, only in the compilation of
a memorandum as to a "Brandenburg-Imperial admiralty," and some
fruitless attempts to obtain ships in the Netherlands.
But Gijsels' projects went far beyond a mere fleet. All the world was
then discussing the colonizing activity of the western European
States, and Frederick William's predecessor on the Electoral throne
had conceived abortive plans for founding an East Indian trading
company. What the ex-admiral proposed to the Elector in 1660 was,
that Brandenburg, Austria, and Spain should combine for the
purpose of securing a colonial ascendency, which was to be arrived
at by playing off England, France, and Holland against one another.
Negotiations to this end seem actually to have been commenced,
but they broke down over the jealous suspicions of the diplomatists
approached, and the perpetual turning of the European
kaleidoscope.
During the next fifteen years the idea of a Brandenburg navy
appears to have been allowed to sleep. In the meantime a very
remarkable book had been published, which should be mentioned
here because it contains the essential elements of the programme of
the most modern naval agitation in Germany. The author was
Johann Becher, by profession a chemist, but in his leisure a political
seer of the type of Friedrich List, whose great forerunner he was. His
work, "Political Discourse on the Causes of the Rise and Decline of
Towns and Countries," was published in 1667. Becher had travelled
much, and he wrote:

"In Germany there is hardly any longer trade or commerce; all

business is going to ruin; no money is to be found with either
great or small; on the other hand look at Holland, how rich she
is and how she grows richer every day; that could not be if she
feared the sea as much as our nation of High Germany."

Becher then addressed to his countrymen the following impassioned

exhortation:
 "Up, then, brave German; act so that on the map, besides New
Spain, New France, New England, there shall in the future be
found also New Germany. You are as little lacking as other
nations in the intelligence and resolution to do such things; yea,
you have all that is necessary; you are soldiers and peasants,
alert, laborious, diligent, and indefatigable."

Becher had held positions at various German Courts, and it is not

improbable that his appeal fell upon sympathetic ears among the
entourage of the Great Elector. But however that may be, the war of
Denmark and Brandenburg against Sweden, which broke out in
1675, did actually, for the first time in history, witness a fleet at the
disposal of a member of the dynasty that now occupies the imperial
throne in Germany. True, it was not yet the actual property of the
Elector, but of Benjamin Raule, an enterprising Dutch merchant, who
had migrated to Denmark, and now laid a naval project before the
Brandenburg sovereign. His proposals were readily acceded to, and
he received permission to fit out a flotilla of two frigates and ten
smaller vessels, and to operate with them under the Brandenburg
flag against the Swedes. The Elector merely stipulated that he
should receive 6 per cent. of the value of all prizes captured. Raule's
vessels rendered substantial service in the capture of Stettin, and of
that much-coveted strip of the Pomeranian coast which was so
essential to the realisation of Frederick William's maritime
aspirations.
The Elector's hopes were disappointed by the Treaty of St. Germain,
under which he was compelled to restore this precious booty to the
intrusive Scandinavians, but in the meantime his naval plans had
taken a wider scope in fresh contracts with the resourceful
Dutchman. In the first of these, Raule undertook, for a monthly
subsidy of 5,000 thalers,[5] to maintain a fleet of eight frigates and a
fire-ship, mounting altogether 182 guns. Shortly afterwards the
terms of the agreement were extended, and at the commencement
of the year 1680, twenty-eight ships of war, with a total of 502 guns,
were flying the red eagle of Brandenburg.
Though robbed by the peace of the coast-line and seaports on which
he had counted as the base of his maritime power and the recruiting
ground for his fleet, the Elector did not allow himself to be
discouraged, and he very soon found fresh work for his little flotilla
to do. The greatest master of German mercenaries at that date, he
had, a few years previously, hired a portion of his army to Spain for
use against the French. As repeated applications for the price of this
support had proved unavailing, he now determined to collect the
debt, which amounted to 1,800,000 thalers, by forcible distraint.
Accordingly six ships, which were followed at an interval of some
months by three others, were sent out to attempt to intercept the
silver fleet on its way to the Spanish Netherlands. The vessels were
almost without exception commanded by Dutchmen, but were
mainly manned by Germans, though the crews included many
English, Dutch, Danish and Norwegian sailors. Naturally the soldiers
carried on board were drawn from the Brandenburg army; and
orders were given that they should be trained in ship's work
"because we are disposed to use the same permanently for the
navy."
Though the flotilla did not fulfil either its immediate or its ultimate
purpose, the expedition was notable for two reasons. In the first
place, a large Spanish warship, the Carolus Secundus, with a
valuable cargo of lace on board, was captured, and so became the
first war vessel that was actually the property of a Hohenzollern
State. In the second place, the quest of the Spanish silver resulted in
a sea-fight, which, in respect both of the force engaged and the
losses sustained, still heads the record of naval warfare under a
Hohenzollern flag.
A detachment of four ships, cruising in the neighbourhood of Cape
St. Vincent, sighted a fleet of a dozen Spanish frigates, which had
put out for the special purpose of chasing the Germans from the
sea. The Brandenburg commander, thinking that this was the
anxiously-expected silver flotilla, bore down upon it, and did not
realise his mistake till it was too late to avoid something of a conflict.
Before he could succeed in man[oe]uvring his ships out of range of
his overwhelmingly superior enemy, he had lost ten men killed and
thirty wounded; and since that day Germany had fought no more
terrible battle on the sea until the war broke out in 1914.
Another section of the Elector's fleet cruised for several months in
West Indian waters without achieving much result, while the
retaliatory measures adopted by the Spaniards secured a safe
passage for the silver ships and rendered it prudent for Frederick
William to abandon his daring and risky enterprise.
Meanwhile the Elector had allotted his infant navy a task of a
different character. Soon after entering the service of Brandenburg,
Raule had drawn up plans of colonization, and in the same year in
which the fruitless search for the silver convoy began, he obtained
permission to try his luck on the Gold Coast, and got together a
syndicate to finance the undertaking. The Elector was wary, and
declined to risk pecuniary participation, but he ordered that "twenty
good healthy musketeers, together with two non-commissioned
officers," should be placed under Raule's command. One of the
principal objects of the expedition was to secure a share in the
profitable trade in slaves which was then carried on between the
West Coast of Africa and North America, but modern German
historians for the most part ignore this feature of the enterprise.
The two vessels despatched on this errand reached the Gold Coast
in safety, but aroused the resentment of the Dutch already settled
there, who confiscated one of them, and compelled the other to quit
African waters. However, the leader of the expedition had by that
time managed to conclude what served the purposes of a treaty with
certain native chiefs, who thereby placed themselves under the
suzerainty of the Elector, and consented to the erection of a fort in
the district under their control.
On the strength of this questionable document, an "African
Company" for the "improvement of shipping and commerce wherein
the best prosperity of a country consists," was called into existence
in the year 1682. In the charter of incorporation, the Elector
promised to protect the Company against "all and everyone who
may undertake to trouble, incommode, or to any extent injure the
same in its actions in free places on the coasts of Guinea and
Angola"; but both the naval and the military commanders were
charged to keep at a respectful distance from "all Dutch Company
fortresses, as well as those of other potentates, such as England,
France, Denmark, etc." The capital of the Company was the modest
sum of 50,000 thalers. Of this Frederick William contributed only
8,000, and the Electoral Prince 2,000 thalers, while almost half of
the total was supplied by Raule, who had by now become "Director-
General of the Brandenburg Navy."
The two frigates in which the second Gold Coast expedition shipped
cast anchor off Cape Three Points on December 27th, 1682, but
some difficulty was experienced in finding the chiefs who had
"signed" the provisional treaty and who were each to have received
a ratification engrossed in letters of gold, "a silver-gilt cup, and a
portrait of his Electoral Highness." Frederick William had also issued
instructions that his black allies and their wives were to be
entertained on board the warships.
After a great deal of trouble, some other chieftains of the "Moors,"
as they are called in the official correspondence relating to this
matter, were hunted out and induced to contract a second and
definite treaty; and on January 1st, 1683, with due ceremony and
much beating of drums, blowing of trumpets, and firing of guns, the
Brandenburg flag was hoisted over "the first German colony." The
flagstaff had been planted on a little eminence, which was
subsequently, with all speed, transformed into the fort Gross-
Friedrichsburg, and no doubt the rusty cannon now in the Zeughaus
at Berlin is one of the half-dozen which had been mounted on the
hill on the previous day in preparation for the great occasion.
In the following year the headquarters of the African Company was
removed from Pillau to Emden. This latter town was not situated on
Brandenburg soil, and the manner in which the Elector secured a
footing in it is both instructive and characteristic of his easy methods
of intervening and making a good bargain wherever an opportunity
presented itself. It chanced that at that time the Estates of East
Frisia were at loggerheads with their ruler, and they appealed to
Frederick William for assistance. Nothing loth, he landed a force by
night, and by a surprise attack seized the castle of Greetsiel, which
thus became his naval base. By an agreement with the town of
Emden he subsequently acquired the right to station within its walls
a "compagnie de marine" for the service of the African Corporation.
This force, which was gradually increased to three, and temporarily
to four, companies, and ultimately received the name of the "Marine
Battalion," was drawn upon to man both the ships and the forts in
Africa.
The transfer to Emden brought other advantages besides an ice-free
port, a base on the North Sea, and an abbreviation of the route to
Gross-Friedrichsburg, for the East Frisian Estates and the Elector of
Cologne were both persuaded to invest largely in the African
Company in consequence of the change.
In the year of the Emden agreement, the Brandenburg Navy was
formally founded by the establishment of an "Admiralty" at Berlin.
The Cabinet order by which this institution was created shows that
the fleet then in full possession of the State comprised 10 ships, with
240 guns, while Raule was still under contract to provide 17 further
vessels. The permanent personnel consisted of 1 vice-commodore, 5
naval captains, 3 officers of Marines, 12 mates, and 120 seamen. In
1686, the Elector took the Company entirely into his own hands, and
simultaneously acquired a station on the island of St. Thomas, in the
West Indies, as a place of call for the ships engaged in the slave
traffic. He had also at that time made preparations for forming an
East Indian trading company (at a much earlier date he had
unsuccessfully attempted to acquire Tranquebar, on the Coromandel
Coast, from the Danes) and for fitting out an expedition to China and
Japan. These schemes, however, came to nothing.
The settlement at Cape Three Points had by no means an easy
existence. Fever made fearful ravages among the garrison, which,
when the first reliefs arrived, after an interval of nearly a year and
threequarters, had been reduced by sickness from ninety to sixteen
men. Everything that was needed for the construction of the fort,
even building-stone, had to be brought thousands of miles across
the sea from Germany. The Dutch traders in the neighbourhood had
at once raised objections to the new colony, and, as their protests
were unheeded, stirred up the natives against its members. It was
only after prolonged negotiations at The Hague that the Elector
secured a full recognition of his right to the settlement. And none
the less the Dutch West India Company continued to harass the
German colonists, appropriating their ships, and turning them out of
a couple of subsidiary fortifications which they had erected at other
points along the coast. Gross-Friedrichsburg and Taccroma, another
of the four Brandenburg stations on the Guinea littoral, for several
years maintained themselves only by the menace of their guns.
These untoward events are believed to have preyed upon the mind
of the Great Elector, and to have hastened his end. At the time of his
death, in April, 1688, Brandenburg and Holland were on the brink of
war over the Gold Coast affair.
His successor on the Electoral throne in one very important respect
reaped what Frederick William had sown, for he obtained the title of
King of Prussia, by virtue of which, far more than from any
specifically imperial prerogatives, William II. holds his present power
in Germany. Frederick I. was a vain man, who was more interested
in appearances than in realities, and cared more for the pomp and
ceremonies of Court life than for the solid business of colonisation
and slave-trading. As a source of revenue, with which to defray the
cost of his empty extravagances, the African undertaking was feebly
encouraged to continue its work; but, deprived of the directing brain
and the stimulating enthusiasm of its founder, it soon sickened and
languished. Accada and Taccarary, the two settlements which had
been seized by the Dutch, were delivered up after a lengthy
squabble, but the fortifications of the latter had been destroyed, and
they were not rebuilt.