German Economy 1871-1890

The German economy, between 1871 and 1890 had certain aspects. This includes:

These all contributed to the economic boom of 1871-1890

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The German economy, between 1871 and 1890 had certain aspects. This includes:

These all contributed to the economic boom of 1871-1890

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Growth of Industries

During Bismarck's period of chancellorship:

German industrialisation had progressed.
This was because German manufacturers began to capture the domestic markets from the British.
Increases in production included:
- German coal production
- The Steel production, by 700%
There was an expansion of the German merchant marine expands.
All of this contributed to Germany becoming the WORLD'S SECOND LARGEST EXPORTING NATION OF COAL, STEEL & IRON ORE

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Nationalisation of railways had also contributed to the German economy:

The main idea of the railroads, was to support and increase INDUSTRIALISATION.
This was where heavy lines crossed the RUHR & other industrial DISTRICTS & provided good CONNECTIONS to the parts of Hamburg & Bremen.
Railways were nationalised in Germany between 1879 and 1884.
24,000/28,000 km of rail roads were nationalised

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The German economy was contributed by the growth of banking:

The post-war BOOM PROVIDED a STIMULUS to the German banking industry.
7 BANKS, such as the REICHBANK, DOMINATED COMMERCE & INDUSTRY, by the mid 1870s.
These banks combined a CAPITAL of 2,500 million marks.
They arranged PRIVATE LOANS to industry & public loans to the state.
This ENCOURAGED new industries:
- Electricity
- Chemistry
Bankers & industrialists both contributed to the FINANCE CAPITALISM

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The growth of cartels came about when independent companies joined together:

This was where firms agreed upon prices, to AVOID COMPETTION & ACT as one single firm.
From 1875, there were 8 cartels, which INCREASED to 210 in 1890.
Cartels became more attractive when there were harder times.
The most dominant cartels were the Rhenish Steel Syndicate & the Ruhr Coal Syndicate.
They had enormous influence over the economic & political developments of the Reich.
Cartels enabled German industrialists to break into FOREIGN MARKETS, by lowering their prices.
Therefore, Germany began to compete with Britain & international markets.

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State socialism improved the economy and working conditions in Germany:

This involved different measures, such as:
- The MEDICAL INSURANCE & SICK PAY introduced in 1883.
- OLD AGE PENSIONS introduced in 1889.
Bismarck also felt that they must meet the growing demand for ECONOMIC PROTECTIOISM.
However, the National Liberals opposed this as they believed in FREE TRADE.
Demands for PROTECTIVE TARIFFS arose from the STEEL INDUSTRIES in the mid 1870s.
Bismarck moved towards the OLD CONSERVATIVE idea of TARIFFS & TAXES

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