Economic Developments in the Second Reich

Developments Overview 1890-1914:

• Vast expansion of the economy and military
• Germany became one of Europe's dominant powers
• In the 2nf stage of the Industrial Revolution- electical, chemical and automobliles (1st was heavy machinery and industry inc. coal and steel)
• Development was encouraged by the population increasing by 20million people, totalling nearly 50 million
• By 1914 Germany was one of the worlds most industrious countries alongside the US and UK
• BY 1890 industrial production had triples

Output of Coal:

• 1890= 109.3million tonnes
• 1913= 191.5million tonnes

Output of Coal Throughout Europe:

• 1910 Germany= 222million tonnes
• 1910 Britain= 268million tonnes
• 1910 France= 38.4million tonnes

Output of Steel:

• 1890= 2.2million tonnes
• 1913= 17.9million tonnes

Growth of Railway Network:

• 1880= 33,83km total
• 1890= 42,869km total
• 1913= 63,000km total

Growth of Chemical Industry:

• 1897= 84,000 tonnes of ammonia produced
• 1907= 287,000 tonnes of ammonia produced
• 1907= 1,402,000 tonnes of sulphuric acid produced
• Early 1900s Germany was producing over 75% of the worlds chemical dyes

Growth of Electrical Industry:

• 1901-1915 electrical energy production increased 150%
• 1913 Germany controlled 50% of the worlds electrical trade

Reasons for Economic Success:

• Development of chemicals and electricals
• Bismarck's tariffs protected German goods by increasing the price of imported goods
• Higher education made increasing providiond for development of skills necessary for the changing industry
• Expansion of overseas trade= by 1913 G was a major exporting nation, with the volume of exports becoming 4x larger from 1880-1913. 60% of exports went to Russia, France and Britain, and most of the remaining went to South Africa, Latin America and the Ottoman Emprie. 1890 exports= £135million and 1913= £495 million
• Banking systems had no state control so they had close links with businesses and heavy investment in industrial research, trade and economic development
• Growth in population, which increased 20million to almost 50million people which provided labour and a market, with the young more willing to adapt to new skills needed
• Creation of cartels= an association of producers in similar trades, which allowed easier access to new info and developments. 1875=8, 1887=70, 1900=300 and 1911=600
• Access to raw materials= Ruhr, Saar and Silesia had coal, Ruhr and Alsace-Lorraine had iron-ore and Alsace-Lorraine had potash

Reasons for Economic Success:

• Unification allowed for more efficient coordination of industry, with French indemnity from the Franco-Prussian war and inflation from the 1871 currency reform giving easy credit for industrial growth
• Germany geography meant raw materials were available throughout the Empire, and transport was easy due to a flat northern plaine for railways and navigable rivers like the Rhine and Elbe

Economic Weaknesses:

• 1873-96 the world trade recession hit German industry
• This meant a falling demand in textiles and engineering products
• agriculture faced a lot of hardships

Despite this Germany was still a strong economic force

Agricultural Strengths:

• Rootcrops (potatoes and sugar beet) encouraged a revolution in agriculture, as they faciliated faster crop rotation and provided extra fodder for livestock
• By the early 20th Century Germany was producing 40million tonnes of potatoes a year, one tonne for every German adult
• More than 4million acres of land were brought under cultivation from 1880 to 1900
• Farm machinery and fertilisers were beginning to become available and those who invested greatly increased their yield
• Growth of towns and the protection given to German grain growers after 1879 created opportunities for more enterprising farmers to supply food to a growing domestic market

Agricultural Mixed Results:

• A more business like cultivation of the land occurred, meaning seasonal work was used more frequently
• The building of new railways and roads brokedown isolated communities and exposed farmers to outside competition
• Growing numbers of peasants moved to cities. 1871= 50% of the pop. in agriculture, 1907=35%
• In the 1880's the share of agriculture in the GNP was 40% but by 1914 was only 25% (1880s= 35% for industry, 1914=45%)

Agricultural Failures:

• A decline in agricultural prices and therefore in the income of farmers and landowners
• Landowners who failed to modernise production methods or did not adapt to changing market conditions were forced to sell up
• A series of bad harvests in the late 1870s was compensated for by the import of US grain