Kaiserreich
Colonialism
Kaiserreich
Science, Technology






The Kaiserreich
the Economy, 1871-1890



Government expenditure widely exceeded government revenue, the large excesses in the early 1870es being explained by the wars of 1866 and 1870-71. Yet the German government could finance such a spending policy because of the REPARATIONS paid by France, a total of 5 million Gold Francs, paid in rates since 1871.
The German economy went through a strong period of growth 1871-1874, when it (like economies all over Europe) was hit by the recession of 1873. In 1880 the economy began to slowly pick up; the boom excelled in 1888.
The period is called the GRUENDERZEIT (founder's era, 1870-1900), as many of Germany's larger enterprises were founded in this period, which internationally is referred to as the SECOND INDUSTRIAL REVOLUTION. WERNER VON SIEMENS produced electric appliances, KRUPP, STINNES, HOESCH and THYSSEN became leading steel producers.
The state pursued a mixed economic policy, a combination of interference and non-interference. In order to protect the domestic steel industry and agriculture, protective tariffs were raised from imports. The new currency, the REICHSMARK, was based on a GOLD STANDARD as opposed to the hitherto practised combined gold and silver standard; soon, most industrialized nations would follow Germany's example. The German Mark became a model for stability.
The state nationalized the infrastructure, such as RAILROADS (federal control est. 1878/1887). Universities also were nationalized; schools, insofar they were not state-owned (most were run by the catholic resp. lutheran church) were regulated by the state administration.
Germany's economy, despite the crisis of 1873, generally expanded. The general standard of living improved. This is indicated by a significant drop in the numbers of emigrants leaving Germany for the United States.


German Government Revenue and Expenditure, 1871-1890
Source : B.R. Mitchell, International Historical Statistics 1750-1988, pp.797, 811, 890
figures in German Marks; NNP = Net National Product
Year

1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
1881
1882
1883
1884
1885
1886
1887
1888
1889
1890
Revenue

n.d.
182,000,000
263,000,000
253,000,000
253,000,000
311,000,000
244,000,000
242,000,000
282,000,000
294,000,000
367,000,000
362,000,000
355,000,000
375,000,000
369,000,000
388,000,000
417,000,000
507,000,000
629,000,000
661,000,000
Expenditure

n.d.
1,407,000,000
1,370,000,000
673,000,000
634,000,000
679,000,000
569,000,000
784,000,000
550,000,000
550,000,000
612,000,000
604,000,000
587,000,000
615,000,000
638,000,000
694,000,000
677,000,000
1,020,000,000
1,111,000,000
1,354,000,000
NNP

n.d.
14,013,000,000
16,627,000,000
17,950,000,000
19,544,000,000
18,242,000,000
17,966,000,000
17,414,000,000
17,814,000,000
16,678,000,000
16,902,000,000
17,330,000,000
17,489,000,000
18,540,000,000
18,731,000,000
18,935,000,000
19,280,000,000
20,716,000,000
22,749,000,000
23,676,000,000







EXTERNAL
FILES
German Railway History, from DB Museum
DOCUMENTS Moncure D. Conway, An Iron City besides the Ruhr, from Harper's New Monthly Magazine, March 1886 pp.495-518, from Cornell Digital Library Collection


This page is part of World History at KMLA
First posted in 2000, last revised on November 12th 2004

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