Economic Flashcards
What was Germany like economically in 1789?
- Most skilled workers belonged to powerful guilds which prevented free competition and economic progress
- There was no common tax system
What were the economic impacts of Napoleon’s rule of Germany in 1806?
- The German economy was subordinated to French needs
- Therefore, many Germans were affected by sharply rising prices and heavy taxes
What economical reform did Germany make under French rule?
-In 1810 the power of the Prussian guilds was broken
What level of economic co-operation was there in the German Confederation in 1815?
- The possibility for commercial co-operation was a part of the federal act but local jealousies meant nothing significant was done
- German states had their own currencies, their own systems of weights and measures and their own laws on trade
What was the Zollverein?
- In 1818, Prussia set up their own customs union by abolishing the many customs barriers within her territories
- A low rate of tax would be charged on goods coming into Prussia but a high rate of tax on those passing through to other states
- As Prussian territories dominated Northern Germany this was very inconvenient to other states
- In 1834 it became known as the Zollverein and by 1836 25 of the 39 states had joined
What was the economic significance of the railways?
- They made it cheaper to transport goods
- They created demand for commodities which encouraged economic activity
- Encouraged coal production and demand for iron and steel
What were the economic causes of the 1848 revolutions?
-Bad harvests had caused food shortages and some German peasants, struggling to feed their families, were having to move to towns to find work
What were the economic weaknesses of the Frankfurt Parliament?
-It was unable to collect taxation and many workers lost faith in the parliament due to their Industrial Code
What was the Austrian attempt to replace the Zollverein in the early 1850s?
- Austria’s strong new chancellor, Prince Schwarzenberg, wanted to over-power Prussia further following Olmutz in 1850
- They wanted to replace the Zollverein with an Austrian-dominated customs union
- The smaller states would not accept this plan, which accordingly collapsed in 1852
- This showed Prussia was stronger than Austria economically
What were the reasons for the economic success of Prussia in the 1850s?
- They had a good education system from primary schools to university which produced more skilled, intelligent workers
- They had a plentiful supply of coal, iron and chemicals
- They had a good system of communications by railways which grew from 5,865km in 1850 to 18,876km by 1870 (more than tripled)
- Railway development encouraged other industries such as coal, iron and steel
- Krupp’s iron and steel works found jobs for thousands of Prussians
How did the Prussian economy grow in the 1860s?
- Industry and trade grew massively
- Coal production grew from 1,961,000 tonnes to 8,526,000 from 1850 to 1865 (more than quadrupled)
- The relative power of Austria and Prussia seemed to shift with Prussia’s economic power building with their industries and railways
What was the significance of cartels?
from 1870
- In Germany, cartels were seen as a sensible means of achieving economic planning, eliminating wasteful competition and promoting efficient large scale production
- In 1875 there were only 8 cartels and by 1905, 366 existed
What changed economically with the German Constitution of 1871?
- There was a national bank, the Reichbank, and a national currency, the Reichmark
- There was a uniform commercial code with a special court to enforce it
- The Reichstag was limited in collecting tax and so collected from federal states (Prussia contributed the most and so had the most control)
What was the 1879 Tariff Act?
- It was influenced by the bad harvests of German agriculture in the late 1870s as well as the importation of cheap wheat from the USA and Russia
- In July 1879, a tariff bill passed through the Reichstag and duties were imposed on imports
- Protective tariffs drew north and south closer together and promoted the growth of a large internal market
- Tariffs served to protect German jobs
What impacts did colonies have economically?
-Bismarck hoped colonies would provide new markets and raw materials
What was Caprivi’s tariff reform?
- Caprivi put a bill forward to the Reichstag to reform the 1879 tariff bill
- He negotiated commercial treaties with Austria, Italy, Russia and other states from 1891-4 to reduce tariffs on agricultural imports in exchange for favourable rates on German goods
What was the Agrarian League?
- The Agrarian League was formed in 1893 and were against tariff reforms
- It soon had 300,000 members and became an effective pressure group with a virulent anti-Caprivi campaign
What were the Navy Laws?
- They were laws passed from 1898-1900 that granted money for building new ships for the Navy
- The Naval League was an interest group set up in 1898 on Tirpitz’ initiative that supported the expansion of the German Navy
What was the new Tariff Law in 1902?
- In 1902, von Bulow reversed the tariff concessions arranged by Caprivi
- The new tariff laws restored the high duties on agricultural products which reflected the power of the Agrarian League
What law was passed in 1902?
-A law passed that increased customs duties on Russian grain, effectively keeping it out
What was Germany’s population like between 1890-1914?
- It grew from just under 50 million to almost 68 million
- This provides both the market and the labour force for an expanding economy
What was the state of the economic front in Germany leading up to and during World War One?
- Although economically strong, Germany was far from self-sufficient and depended on imported oils and lacked raw materials such as copper and nickel
- In 1914, Germany established a ‘War Raw Materials’ department that directed labour, controlled the railways and introduced rationing
- Germany was running a huge financial deficit pre-1914, so the government simply printed money which caused inflation
- The blockade, a series of poor harvests, conscription and led to a decline in grain production and thus caused bread rationing in 1915
- Workers had to work longer hours due to the ‘Auxiliary Service Law’
What was national income like in 1919?
-National income was two thirds of what it was in 1913
