Krupp Scandal Shatters Germany's Industrial Idol.

New York Times 100 years ago today, April 27, 1913:
    Germany's excitement over the Krupp scandal is not due alone to the rarity of graft cases in that country, or to the fact that it touches her in her most sensitive place — the army. It is due partly to the fact that the Krupp establishment has come to be looked upon as a national institution, and that every German has been immensely proud of it as one of the glories of the Fatherland.
    And now to discover that this great industry has stooped to the bribing of officials — a fact admitted by the Krupp firm, after the charge had been made in the Reichstag — and that it had been supplying French newspapers with material for war-scare articles, so as to induce the German Government to buy more armament from the Krupps, is more to Germany than a scandal. It is a catastrophe.
    The charges were made in the Reichstag by Dr. Leibknecht, the Socialist Deputy, ami in the columns of the Vorwaerts, the Socialist newspaper. It is a coincidence that it was that newspaper which ten years ago printed another scandalous story about the Krupps, which caused the death of the then head of the works, Friedrich Alfred Krupp.

Results of Inquiry.
    It was impossible to refute him, because the Minister of War, Gen. von Heeringen, was obliged to admit then and there that an inquiry was going on which had already revealed that "one of the Krupp officials" had bribed officers to reveal certain information. The following day the Krupps issued a statement in which they admitted that their representatives in Berlin had maintained "friendly relations" with their former "comrades" of the War Department for the purpose of obtaining "business information," and had bestowed small presents "on certain under officials."
    It was on Friday that Liebknecht exploded his bomb and forced von Heeringen to reveal that secret inquiry and on Saturday that the Krupps made their admission of bribery. On Sunday The Vorwaerts published the text of the instructions sent by the Deutsche Munitions und Waffenfabrik to its Paris agent to "leave no stone unturned" to persuade some popular French newspaper to publish a statement that France intended to double her orders for machine guns. The object was to get the German Government to order machine guns from the Deutsche Munitions and Waffenfabrik. On Tuesday the popular indignation had risen so high that Gen. von Heeringen's plea for a suspension of judgment until his private inquiry had done its work was forgotten. The Budget Committee of the Reichstag voted to appoint a Parliamentary Commission of Inquiry into the scandal. This commission, however, despite the protests of the Socialists, was not vested with power to send for persons and papers.
    Although the Krupp works date from 1810, when Friedrich Krupp established his forge at Essen, it was his son, Alfred Krupp, who was the real founder of the industry. Friedrich died practically bankrupt in 1826, leaving little more than the secret of his cast-steel process to his son, and it was thirty years before any striking results were achieved. It was in 1810 that Friedrich Krupp purchased a small forge in Essen, where he devoted himself to the problem of manufacturing cast steel, but though the article was put on the market by him in 1815 it commanded but little sale, and the firm was anything but prosperous. He employed only three workmen.
    Alfred Krupp was born April 26, 1812, and at the time of his father's death was only 14 years old. His mother carried on the works until Alfred reached his majority, so that twice in the history of the works have they been managed by women. The present head of the industry is Bertha Krupp, the granddaughter of the woman who became its manager in 1826.
    The Krupps had so little money that Alfred, on his father's death, was compelled to leave school to assist his mother. He displayed a phenomenal aptitude for the foundry business, and the works developed with increasing rapidity after his influence was felt in their management. By 1848 the firm had expanded so that 122 workmen were employed.
    As late as 1848, the year in which his mother relinquished the sole management of the works into his hands, he melted the family plate to pay his workmen. To-day the mighty industry furnishes employment to a majority of the workmen of three titles and a dozen coal and iron mining towns. The ships built from it, equipped with its steel, and armed with its cannon, are on all the seas, and wherever steel is used the name of Krupp is known. The capital of the firm now is about $60,000,000. It was in 1847 that Krupp scored his first real success, when he made a three-pounder muzzle-loading gun of cast steel. At the great London exhibition of 1851 he exhibited a solid flawless ingot of cast steel weighing two tons, thus establishing the fact that an important firm existed in Germany capable of turning out samples of excellent workmanship. The Essen works were everywhere spoken of and the output watched with the closest interest. The manufacture of weldless steel tires for railway vehicles was another invention which followed soon after.
    The making of heavy ordnance, which has made the name of these works famous the world over, was not then a prominent part of the business. One of the first large orders he got for firearms came four years after the London exhibition, when Prussia gave him the contract for her new breech-loaders. The Khedive of Egypt followed this with a large order for war material, and Russia followed with contracts for large quantities of new weapons.

The Famous Krupp Guns.
    While the Essen works were designed for general foundry work, the output for many years has consisted almost entirely of heavy guns; but it was not until 1846, twenty years after his father's death and thirty-six years after the founding of the firm, that Alfred Krupp began gunmaking. His first results were pieces of small calibre. As he became interested in the science, and as his discoveries in steel casting developed, the size and weight of the cannon he was able to construct increased steadily until these war monsters, which have become world-famous, became common occurrences in the Essen works.
    The Krupp field gun is the basis of the mobile artillery of Germany, Austria-Hungary, Italy, Russia, and Turkey. Under the administration of Friedrich A. Krupp, Essen turned out the great pieces which guard Germany's fortresses and are mounted in her coast defenses. Krupp answered Krupp from the emplacements of Port Arthur against the siege batteries of Japan. And side by side with the instruments of war Essen placed a thousand and one steel products, illustrating Alfred Krupp's first and chief maxim: "No good steel without good iron," used in to-day's tools, machinery, railroads, and ships.
    Krupp ordnance has roared all over the world. Some of the guns that fired at Dewey's squadron at Manila came from Essen. The siege guns used in the Franco-German war and in use at the bombardment of Paris were from this factory, and the Parisians' terror of them was not diminished by the memory of one of the Krupp masterpieces which had been exhibited in their city in 1867. It weighed 15,000 kilograms, and made away with $800 worth of powder and iron every time it was fired. After that war the Krupps refused to make cannon for France. As the business grew collateral industries were developed, and Essen, which had been a tiny village, expanded to a town of over 100,000 inhabitants, all dependent on the Krupp industries. Coal mines, coke ovens, iron mines, steamships, railroads, and blast-furnaces were bought. In 1872 Alfred Krupp owned 414 iron ore diggings, and when his son Friedrich died he owned over 500.
    Upon Alfred's death, July 14, 1887, Friedrich A. Krupp became the head of the establishment. It has been said of him that he devoted himself to the financial, rather than the technical side of the business, but in 1902, at the annual meeting in London of the Iron and Steel Institute, the Bessemer gold medal for scientific research was awarded to him. This is one of the highest honors that can be paid to any man in the iron trade. It was given to him for his discoveries in the manufacture of armor plate. The son was thus following in the footsteps of his father.
    Both Alfred and Friedrich A. Krupp declined titles. One was offered to the father by King William, afterward Emperor William I., in 1864, and William's son, the present Emperor, renewed the offer to Krupp's son. Neither would accept.
    At the time of his death he was by far the richest man in Germany, and was called "the German Morgan." The Imperial income tax returns showed that in the year before his death he had a yearly income of between 20,000,000 marks ($4,760,000) and 21,000,000 marks. The second wealthiest man in the empire had an income of only 5,000,000 marks.
    He directed in his will that the firm should be changed into a stock company. This was done, but Bertha Krupp, his daughter, who married Dr. von Behlen und von Halbach, holds all but four shares of this company. She is not only Germany's wealthiest woman, but its wealthiest subject and greatest taxpayer.
    Hence she has been called "the Queen of Essen," and "Our Lady of the Cannon," and other romantic names. At the age of 18 there descended upon her the greatest industrial inheritance the world has yet known. She was 16 when her father died, and attained her majority in 1904.
    In 1912 the Krupp centenary was celebrated. Although 1910 was the hundredth year after Friedrich Krupp's establishment of the works, 1912 was the centennial anniversary of the birth of Alfred Krupp, and the two events were commemorated in the latter year. The Kaiser and the most notable men in Germany, including many of royal rank, took part in the celebration.

Welfare Work at Essen.
    A striking event of the jubilee week was the gift of $3,500,000 by the firm for charitable purposes. Three million marks, or $750,000, were given directly to laborers and officials, the latter receiving a month's salary and the former 5 to 100 marks, according to their length of service.
    The remainder of the 14,000,000 marks was given in part as follows: Five million marks for investment to afford a fund to give the older employes a vacation with pay; 1,000,000 marks for a pension fund for officials, a million for women and children, two millions to Essen, with the provision that a million thereof must be used for a museum of art, half a million thereof for playgrounds, and the other half million for free beds in hospitals, &c., for all needy citizens of Essen, and two millions for athletic grounds and institutions, &c., for the army and marine.
    Welfare work, however, was no new thing with the Krupps, who had become interested in the thing before the name was heard. Alfred Krupp had worked out for his employes a sick, death and unemployment benefit plan, which was used by Bismarck as the groundwork when the Iron Chancellor desired to make the beginnings of State compulsory insurance.
    Essen is a city now of 150,000 population, and it owes its existence as a city to the Krupp works. But there is hardly a city in the world which is governed more in the communistic spirit than this. It is one of the very earliest places in which co-operative stores were established. They have been in existence there for over fifty years. "Bertha Krupp," says one writer, "may be the 'queen' of Essen, but her workmen conduct their own affairs without molestation. She limits her 'interference' to gifts of money, by which institutions of mutual good to the workmen may be established."
    Schools, hospitals, and a convalescents' home have been established for the benefit of the Essen people and carried on under an elaborate system in which paternalism and co-operation each plays an important part.
    The workmen's colonies, particularly the later ones designed under the supervision of Friedrich A. Krupp, are planned with a sense of beauty and variety. There is Friedrichshof, in which the old tenement structures have been remodeled; and Altenhof, the home of the retired workmen, a lovely environment of peaceful leisure for the aged.
    The colony scheme was begun by Alfred Krupp in the sixties, when the rapidly increasing numbers of his workmen made it certain that unless steps were taken to arrange in a wise way for the social conditions surrounding them, undesirable congestion and its attendant squalor must arise.

The Krupp Model Colonies.
    A sick fund had already been founded in 1853, a pension fund in 1856, and the co-operative stores in 1858. But it was not until 1863 that the first "model colony" was begun.
    For twenty years Alfred Krupp aided his workmen in making their cottage homes the best in Germany, and upon his death in 1887 Friedrich A. Krupp took up the responsibility and bore it until his death in 1902. His widow then gave $250,000 to be devoted to the improvement of Essen, and when Bertha was married in 1906 it was reported that she and her husband would give an additional $400,000 to the benevolent institutions of the place.
    The hospital, the baths and the schools, which were, begun over 25 years ago, have had libraries and gymnasiums added to them. In 1909 Bertha Krupp and her husband decided to erect at Essen, in memory of their baby son, a splendid maternity home, where the wives of the Krupp workmen should be cared for free of charge.
    From the three men whom Friedrich Krupp employed, the 122 whom Alfred Krupp had in his employ 20 years after he look charge, the force working for the Krupps had grown to 50,000 at the death of Friedrich A. Krupp in 1902. The establishment now comprises 60,000 workmen and 6,750 engineers and clerks.
    The works comprise five separate groups, the first of which is the Essen Steel Works, with proving grounds at Meppen. Tanger-Hütte, and Essen. This group includes the Milhofener-Hütte, with its four blast furnaces; the Herman-Hütte, with three blast furnaces, and the Sayner-Hütte, with coal and iron mines.
    The second group is the Friedrich-Alfred Iron Works in Rheinhausen; the third, the Annen Steel Works; the fourth, the Gruson Machine Works, at Magdeburg-Buckau, and the fifth, the Germania shipyards, at Kiel.
    The Essen Steel Works alone comprise some sixty-odd departments, covering an area of about 500 acres, and housing 7,200 machine tools, 17 roll trains, 187 hammers, 81 hydraulic presses, 397 steam boilers, and 569 steam engines, more than 2,200 electric motors, and 900 cranes.
    Almost in the centre of the Essen Works stands the original Krupp factory and a family house, maintained intact, in accordance with the directions of Alfred Krupp. It bears this inscription:

    Fifty years ago this cottage was the home of my parents. May none of our workmen have to go through the struggle which the building up of these works has cost us. The success which now so splendidly has rewarded our faith, our anxiety, and our efforts, was doubtful during twenty-five long years.
    Let this example serve as an encouragement to others in difficulties. May it increase the respect for the many small houses and the great sorrows which often dwell in them.
    The object of work must be mutual welfare; the work is blessed, then work is prayer. May all, from the highest to the lowest amongst us, work with the same earnestness to found and secure his own future success. That's my greatest wish.
    Essen, February, 1873, twenty-five years after my assuming charge.
            ALFRED KRUPP.