The Eastern European Economy, 1815-1989

THE ECONOMY OF EAST CENTRAL EUROPE, 1815–1989 This comprehensive survey examines the dramatic changes in the economies of Eastern Europe, set in the political context of the region. The Economy of East Central Europe, 1815–1989 reviews two centuries of modernisation in the countries on the western border of the former Soviet Union. Wide in scope and including detailed and informative chronologies, David Turnock traces the economic history of the region within the wider political and ideological context. This exhaustive and thorough review brings together the entire scope of the modernisation process, from the first phase of modern national development in the Balkans and the impact of imperial systems on the area as a whole, to the feeling of ‘unfinished business’ at the end of the Second World War, and continuing up to the end of communism, evaluating the contrasts in the region between the northern and southern states, domestic division between dynamic and backward areas, and the increasing emphasis on the opening up of frontier regions. Balanced and informative, The Economy of East Central Europe, 1815–1989 is essential reading for all those with an interest in Eastern Europe or economic history. David Turnock is Emeritus Professor at the University of Leicester. His main research interest is in post-socialist countries, especially those in Eastern Europe. He is the author of The Making of Eastern Europe: From the Earliest Times to 1815 (1988) and Privatization in Rural Eastern Europe: The Process of Restitution and Restructuring (1998).

THE ECONOMY OF EAST CENTRAL EUROPE, 1815–1989 Stages of transformation in a peripheral region

David Turnock

LONDON AND NEW YORK

First published 2006 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2006. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2006 David Turnock All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Every effort has been made to ensure that the information in this book is true and accurate at the time of going to press. However, neither the publisher nor the author can accept any legal responsibility or liability for any errors or omissions that may be made. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Turnock, David. The economy of East Central Europe 1815–1989: stages of transformation in a peripheral region/David Turnock.—1st ed. p. cm. Includes bibliographical references and index. ISBN 0-415-18053-8 (hardback: alk. paper) 1. Europe, Eastern-Economic conditions. 2. Europe, Central-Economic conditions. I. Title. HC244 .E255 2005 330.943′0009′034—dc22 2005005338 ISBN 0-203-48622-6 Master e-book ISBN

ISBN 0-203-59843-1 (Adobe eReader Format) ISBN10: 0-415-18053-8 (Print Edition) ISBN13: 9-78-0-415-18053-5 (Print Edition)

For Nicolae Muică with thanks for his companionship over some three decades of field study in rural areas across Romania

CONTENTS List of Figures

ix

List of Tables

xii

List of Abbreviations

xiv

Preface

xv

Introduction: Modernisation in East Central Europe PART I The nineteenth century

1 10

1 The region at the start of the nineteenth century

12

2 Political structures, agriculture and industry

30

3 Infrastructure, transport, tourism and energy

105

PART II 1914–45

153

4 The First World War, political structures, agriculture and industry

155

5 Infrastructure, transport, energy and tourism

208

PART III The communist era

265

6 Economy, industry and agriculture

267

7 Infrastructure, services and settlement

328

8 Regional planning and environmental change

379

9 Conclusion

419

Chronology outlining salient political, economic and social events

422

Bibliography

475

Index

503

LIST OF FIGURES 0.1 Physical geography, including major towns and state boundaries 2 for 1945–89 1.1 Political geography of the eighteenth century

13

1.2 The Reşiţa industrial region

24

2.1 The two-field system at Rogoz, Máramaros (Maramureş)

57

2.2 Settlement and ethnicity in the Apuseni Mountains

61

2.3 Industry in Poland in 1900

69

2.4 Industry on the Pürglitz (Krĭivoklát) Estate in Bohemia

72

2.5 The textile manufacturing centre of Łódź

77

2.6 The coalmining settlement of Anina

91

2.7 Industrial regions of Romania 1902

94

2.8 Forest railways in the Eastern Carpathians

100

2.9 Employment in industry in Banat and Transylvania 1910

102

3.1 Waterways in the northern part of the region

110

3.2 Railways in Germany and Poland to 1900

115

3.3 Towns in Hungary 1787–1910

129

3.4 Development of the Bârzava Valley for the Reşiţa metallurgical industry

135

3.5 Urban population 1910

141

4.1 States of East Central Europe after the First World War

158

4.2 Employment, illiteracy and natural increase in Central Europe c. 176 1930 4.3 Crop production and cereal/potato surpluses and deficits by region c.1930

181

4.4 Meat production in Central Europe c. 1930

182

4.5 Forest railways in the Covasna area of Transylvania

202

4.6 Industry in Romania in 1941

205

5.1 Railway development in Germany and Poland since the First World War

210

5.2 Railway projects in Romania since the First World War

211

5.3 Development of railways in Albania and Yugoslavia since 1918

212

5.4 Electricity generation and transmission c. 1940

223

5.5 Proposed electrification regions for Romania

224

5.6 Urban development 1910–50

233

5.7 Industrial areas of Zagreb

235

5.8 East Central Europe during the Second World War

239

5.9 Lignite working around the Brüx (Most) area of northern Bohemia

252

6.1 Communist states of East Central Europe

268

6.2 Forced labour in communist Romania

278

6.3 Industrial centres in Poland in the 1970s

294

6.4 Rural industry in Hungary

296

7.1 Regional variations in employment at the end of the communist era

329

7.2 Hydropower in the Romanian Carpathians

342

7.3 Urban growth 1950–90

357

7.4 Commuting in the Romanian Carpathians

367

7.5 Cooperatives and key villages in the Nitra area of Slovakia

371

7.6 Romania’s ‘sistematizare’ programme

373

7.7 Housing in Poiana Mărului, Braşov County, Romania

376

8.1 Urban agglomerations in Poland

388

8.2 Industrial Location Plan for Poland 1983–90

392

8.3 Decongestion in Upper Silesia

395

8.4 Yugoslavia’s central place system and electricity network

399

8.5 The environment of the Sudetes in the 1980s

414

LIST OF TABLES 2.1 Rural geography of the Habsburg Empire 1900–10

54

2.2 Employment in industry in Poland 1879–1913

70

2.3 Coal, oil, iron and steel production in Poland 1800–1920

80

3.1 Urban development in Hungary 1787–1910

130

3.2 Population of towns 1870–1990

138

3.3 Urban growth by country 1870–1990

139

3.4 Urban growth rates by population size groups 1870–1990

139

4.1 Population 1920–39

161

4.2 Population and industrial activity in relation to Europe 1938 162 4.3 Trade balances 1920–38

163

4.4 Land distribution by farm size c. 1930

177

4.5 Employment in industry in 1930

183

4.6 Changing occupational structures in industry 1920s and 1930s

184

4.7 Industrial production, consumption and trade 1934–7

184

4.8 Mineral resources and production 1928–38

191

5.1 Economic sectors: working population and national income 227 1930s 5.2 Aspects of population and agricultural dependence in the

228

1930s 5.3 Rural population 1900–90

229

5.4 Germany’s through-roads in Ostdeutschland

246

5.5 Coal, steel and electricity production 1913–43

249

6.1 Population, urban development and capital cities 1950–90

277

6.2 Growth of crude steel production under communism

297

7.1 Power stations in Yugoslavia to 1983

343

7.2 International tourism 1983–7

350

7.3 Existing towns and new towns proposed under Romania’s ‘sistematizare’ programme

373

7.4 Proposed rural centres in Vâlcea County, Romania

374

8.1 Investment in Romania 1950–89 by county groups

380

8.2 Employment in Romania 1960–89 by county groups

382

8.3

384– 85

Hungarian settlement system

8.4 Urban agglomerations in Poland 1979

389

LIST OF ABBREVIATIONS Comecon

Council for Mutual Economic Assistance (CMEA)

CSCE

Conference on Security and Cooperation in Europe

ECE

East Central Europe

ECECs

East Central European countries

FDI

foreign direct investment

FSU

Former Soviet Union

FYP

Five Year Plan

GATT

General Agreement on Tariffs and Trade

GDR

German Democratic Republic (East Germany)

GNP

gross national product

GOP

Gornośląskię Okreg Prsemyslowy (Poland)

MFN

most favoured nation

NATO

North Atlantic Treaty Organisation

NEM

New Economic Mechanism

OSCE

Organisation for Security and Cooperation in Europe

ptp

per thousand of the population

SEE

Southeastern Europe

SEECs

Southeast European countries

SOE

state-owned enterprise

TEM/TER

Trans-European Motorway/Railway

UNRRA

United Nations Relief and Rehabilitation Agency

VVB

Association of Publicly Owned Enterprises (GDR)

WOG

Large Economic Association (Poland)

PREFACE

This book is a development of previous work which aimed at tracing the historical geography of the communist states bordering on the then Soviet Union and comprising a territory known at the time as ‘Eastern Europe’. The situation has now moved on and we now refer to the region as ‘East Central Europe’ thereby reserving the ‘east’ for the former Soviet states themselves. However, the historical geography of this area remains an absorbing topic, albeit with a shift in the focus from the background to communism to the reorganisation of a major component of Europe’s periphery. Since the previous book was published in 1989 scholarship has also moved on and the present work aims at an updated and in-depth study of one component: the economic geography of the modern period starting in 1815 but now extending through the communist period since this has now passed into history and can be reviewed in its entirety. For this reason the boundary of the study area remains unchanged even though it is anomalous to include the core of the German Empire in the European periphery and not the Habsburg counterpart: Vienna. The book includes a ‘stock-take’ of the situation in 1815 since the protoindustrialisation that took place in the eighteenth century in a number of German and Habsburg territories is an important part of the story even if the southeast remained relatively backward. What the book tries to demonstrate is the complexity of the struggle by a peripheral region to develop its political power from a position of economic inferiority. The state became proactive in economic development although the political geographies and the economic programmes were highly contested. Imperial and national approaches underpin the nineteenth century and early twentieth centuries respectively, followed by the communist era which involved extreme state intervention while the dominance of Moscow compromised—without entirely suppressing—national integrity. The sad conclusion is that despite Herculean efforts the exercise of independent political power has incurred heavy economic costs since G.Berend’s paper of 2002 sees the region as being further behind the West now than it was in 1815. And the question for the future is whether a more integrated Europe will be more successful in achieving convergence, at least as far as East Central Europe is concerned. However, for most of today’s English readers there is the challenge of an unfamiliar historical context which is addressed not only through the contextual material in each chapter but the chronologies which offer some detail on political, economic and social events. The alternative placename spellings, replete with diacriticals, are a minefield in themselves, and—except for some ethnically stable villages—the approach here has been to use the names that were official at the time and

to quote the present one in brackets on the first occasion each name comes up in a particular chapter. Fairly complete listings appear in books by authors such as N.J.G.Pounds (1969 pp. 877–9), while R.H.Osborne (1967 pp. 325–44) helps with pronunciation. This modest work of synthesis would not have been possible without the researches carried out in historical geography and in economic and social history over recent decades and listed in the bibliography, which is however restricted to English language works apart from key statistical and cartographic sources. In addition I am grateful to countless individuals and institutions across the region for helping me in my travels around the region over the past four decades. In particular, the study of urban population trends—albeit compromised by inconsistencies over dates and boundaries—would not have been possible without help from Karl Martin Born (Berlin) who kindly supplied data for German towns from Neumann’s Orts- und Verkehrs-Lexikon (1900) and Amtliches Gemeindeverzeichnis (1939); also Branislaw Domański and Włodzimierz Kurek (Kraków) recommended Polish sources and gave me general information, particularly for Upper Silesia; while Branislav Djurdjev (Novi Sad), Dražen Njegac (Zagreb) and Caedmon Staddon (Bristol) provided some census data for the southern republics of Yugoslavia, Croatia and Bulgaria, respectively. Martin Hampl (Prague) helped me with the location of rural industrial centres on the Křivoklát estate while several colleagues—Krystyna Carter (London) for Polish; Vladimir Drgona (Nitra) for Czech and Slovak; and Erika Nagy (Békéscsaba) for Hungarian—have assisted over linguistic details. Peter Jordan (Vienna) discussed the history of Pula while Dražen Njegac (Zagreb) clarified matters relating to the city’s industry. Petr Pavlínek (Omaha) commented on the history of coalmining in the Most area and Claudia Popescu (Bucharest) gave me information on the organisation of agriculture and the planning of new towns in Romania’s Vâlcea county. Field study in Romania has been important for several studies included in the book, especially those concerned with heavy industry in Reşiţa, the timber industry in the Carpathians and rural settlement projects in Poiana Mărului and Rogoz. This work has been done over a number of years and would not have been possible but for Nicolae Muică (Bucharest), to whom this book is dedicated, as well as my wife Marion and a number of local contacts. Some of the maps from the earlier work have been recycled but many are entirely new drawings expertly drafted by Ruth Pollington in the Leicester University Geography Department. Finally, Routledge have been very supportive of my efforts over the years and for this present volume I am particularly grateful to Jane Blackwell, Philippa Grand and Vicky Peters. David Turnock Leicester, August 2005

INTRODUCTION Modernisation in East Central Europe As defined for the purposes of this book, East Central Europe (ECE) has an area of 1.27 million sq.km and a population of 137.8 million (1985) with an overall density of 102 persons/sq.km (Figure 0.1). The maximum longitudinal spread is some 26 degrees (about 1,300km) between the Italian-Slovenian frontier and the Danube Delta but is reduced to only 400km between Hungary’s Austrian and Ukrainian frontiers before widening again to some 1,200km at 51 degrees north in the territory of East Germany and Poland. Northsouth distance reaches its maximum between 40 degrees north in southern Albania to 55 degrees north in northern Poland, a distance of some 1,650km. The region’s coherence arises from the adoption, by monopoly communist parties, of elements of the former Soviet system of government, including socio-economic development through a command economy guided by central planning. There was some relaxation after Stalin’s death in 1953 underpinned by Red Army withdrawals from the Balkans—though not from East Germany and other countries of particular importance for transit—but maintenance of communist power was guaranteed by the Brezhnev Doctrine which legitimised Warsaw Pact intervention in Czechoslovakia in 1968 on the grounds that a threat to the system in one country was a challenge to the alliance as a whole. Now there is unity through transition policies; these are also characteristic of the former Soviet republics, although the latter no longer comprise a superpower centre. However, it is usual to divide the region into two halves: a northern tier comprising the relatively welldeveloped states of Czechoslovakia, East Germany (GDR), Hungary and Poland; and a southern, Southeastern European (SEE) group taking in Albania, Bulgaria, Romania and Yugoslavia. The latter area found the Soviet system particularly relevant to economic development in the second half of the twentieth century, along with Soviet technology and raw materials, while the more sophisticated northern economies with considerable democratic experience were arguably constrained by the Soviets’ extensive approach. There are significant constraints in the mountains, however. Just over a fifth of the land is higher than 500m. To an extent the mountains help to block maritime climatic influence and accentuate drought risk. Despite high sunshine levels in the south, the geopolitical base for the development of nation states is often problematic, e.g. for Albanians and Macedonians, encouraging autonomy within

The economy of east central Europe, 1815-1989

Figure 0.1 Physical geography, including major towns and state boundaries for 1945–89

2

Introduction

3

imperial structures rather than outright independence. Remarkably large agricultural communities were supported in the past, although remoteness from marauding armies and feudalising landowners were also significant factors, as was the high incidence of disease in the lowlands in early modern times. However, the mountains are not a continuous barrier except in the case of the Dinaric ‘wall’ complicating inland penetration from the Adriatic. Instead there is often easy access through ‘corridor valleys’; making the Balkan lands a ‘commercial and cultural crossroads’ (Lampe and Jackson 1982 p. 3). There are niche situations in the intramontane depressions ‘formidable enough to preserve native particularism and to prevent widespread diffusion of the competing foreign influences’ (ibid.). Yet subsistence farmers must concentrate on the hardiest cereals, such as rye in the Carpathians. Minerals are scattered and do not offer scope for major metallurgical complexes comparable with the Ruhr. Industrial growth has been limited, though significant in contact cities drawing on complementary resources and in the depressions which are also useful for ‘hiding’ strategic industries. On the other hand, the mountains are still heavily forested and the woodlands are very important commercially, with exports of raw timber now diversified by manufactured products such as board, plywood and furniture requiring a greater degree of processing. Meanwhile, the scenic attractions of the mountains with cultural landscapes indicative of settlement continuity and pluriactivity have become important resources for tourism. Complementary lowland areas, particularly the North European Plain and the plains associated with the Danube (the Pannonian Plain—known to Hungarians as Nagyalföld— and the Lower Danube or Wallachian Plain) comprise fertile land interspersed with less tractable sands. The latter have often supported only poor grazing (like the Hungarian ‘puszta’) or woodland, although more recently the supply of irrigation water has opened the way to more intensive uses. However, conditions are very dry in the southeasternmost parts of the region: Dobrogea, Moldavia and eastern Wallachia (Bărăgan steppe) have an annual rainfall below 50cm and irrigation is therefore critical. In the past much of the land was used to rear livestock and grow cereals for export. But the growth of population and industry means that more land is needed to feed the population and generate agricultural raw materials. The trade surplus has been turned into a deficit and by the 1980s there was a considerable net import of cereals. On the farms cereal crops are complemented by sugar beet and fodder, while additional areas are devoted to textile crops, oil plants such as sunflowers, tobacco and a range of medicinal and aromatic plants. There are also vegetable gardens, orchards and vineyards with considerable export potential. Livestock rearing has become more intensive (contributing to the cereal deficit) since meat production is an important indicator of rising living standards. Fish are also more important: caught by trawlers in distant waters to supplement the traditional fisheries along the Adriatic, Baltic and Black Sea coasts, the inland rivers (the Danube Delta and floodplain lakes) and fish ponds which are particularly numerous in southern Bohemia. The whole region is within 500 kms of the sea except for the eastern parts of Hungary and Slovakia and adjacent areas of Poland and Romania. This book follows earlier work in historical geography (Turnock 1988, 1989) which provided a context for the communist revolution and the transformation of the region through central planning under which national interests were often constrained by the hegemony of the Soviet Union. Now that fifteen years of transition have occurred it is appropriate to examine the traumatic communist interlude and to ask whether it was a

The economy of east central Europe, 1815-1989

4

perverse interruption of a ‘natural’ progression towards greater integration among the nations of Europe as a whole or a constructive stage of development which may in some way have been ‘inevitable’ in the sense that, even if Soviet influence had been eminently benign, there would have been an extension of state intervention in the economy and curbs on the deployment of private capital. For the time was ripe for industry based on old technology—limiting capital while maximising employment—since the 1930s brought home the weakness of overconcentration on agriculture. The comprehensive rejection of communism by the neoliberal ethos of transition states in the early 1990s should not totally obscure the rationale of the former system as an escape from the frustrations of backwardness on Europe’s periphery, even though the excessive overriding of the real costs of production—in the strategic interests of the Soviet Union— was on balance a burden to the region. But the post-communist phase is promoting a surge in scholarship that is assessing the pre-socialist era without the in-built ideological hostility of the recent past. The immediate pre-communist period may seem inevitably ‘bad’ for somehow failing to deliver faster growth and so ‘justifying’ the communist phase, yet it may also be seen as an alternative constructive phase confronting the same basic challenges as the communists in the transformed context of post-1918 nation states and the drive for industrialisation given the deteriorating terms of trade for farmers and the strategic imperatives arising from a vulnerable position sandwiched between Germany and the USSR. Western writers no longer plough a ‘lonely furrow’ in enquiring into the debates of the inter-war years that went way beyond class conflicts and workers’ demonstrations. It also seems appropriate to extend the discourse back into the nineteenth century to deal with the first phase of national development in SEE in the modern period and also to consider the impact of imperial systems on the area as a whole. In this way the book provides a review of two centuries of modernisation under rapidly changing political and technological conditions, with the latter underpinned by a shift from a rural to an urban emphasis. HISTORICAL EXPERIENCE: CONTESTED STATE FRAMEWORKS THROUGH THE AGES A key element in the historical context is the changing position of the region from one centrally placed astride the migration routes and (in the case of the SEECs) integrated into the Roman Empire to one occupying the margins of the oceanic trading system with a major role as exporter of primary commodities. The region was certainly congenial for settlement and agriculture in prehistory, playing a part in the diffusion of crops from the Middle East to Western Europe. Prehistoric settlers found the relatively warm and dry lands of the Danube and Morava-Vardar corridors gave easy access to new farming lands as forest was cleared, especially on the light loess soils. The amber routes exemplify the region’s transit role, transmitting cultural influences from the Balkans to the coniferous and deciduous woodlands of the North European Plain, where German and Slav colonists initiated economic developments which eclipsed the Balkans in medieval and modern times. With access provided by such rivers as the Elbe, Oder and Vistula, surpluses could be marketed through the Hanseatic trading system. Yet ECE lost out when the historic trading axis from the Mediterranean to the East was eclipsed by the great discoveries

Introduction

5

which stimulated economic advance and technological innovation in Western Europe. During the Industrial Revolution, with its coal-based technology, it was impossible to escape from a largely colonial relationship with the West because few large industrial regions developed. ‘Peripherally’ provides an essential context through the perpetual economic challenge of ‘catching up’ with the advanced countries and competing for the attentions of their capitalists. It also directs interest to the trickle of ideas about development options that were not strictly in keeping with Western models which may not be entirely redundant despite the present momentum for EU enlargement, involving Western engagement with the Balkans on a scale that could not have been imagined until recently. Industrialisation lies at the root of the economic advance, although the medieval period laid some of the foundations. For example, in the Saxon Erzgebirge there was woodland clearance for agriculture in eleventh and twelfth centuries, followed by widespread clearance for mining in the fifteenth and sixteenth centuries after rich finds of silver and tin were made in many places: wood was needed for smelting and was also used in mining, and wider supply areas were necessary. But progress was not sustained through time or space, although when long-distance trade was disrupted by conflagrations like the Thirty Years War, towns were needed for local marketing on landed estates, e.g. Głogów; also for defence (the Brody fortress), administration, religion and learning, not to mention the residences of magnates (e.g. Zamość) and the meetings of the gentry (indeed it was common for towns to be private, i.e. subordinate, to their owners). However, the early modern period brought a major setback through war and an accompanying agrarianisation (Bogucka 1996). While Warsaw grew tenfold from the late sixteenth to the late eighteenth century (10,000–100,000) and Gdańsk showed roughly 50% growth (40,000–58,000), other leading towns in Poland either stagnated or declined. In the context of somewhat reduced boundaries towns of 2,000 or more declined from 155 to 51, while those smaller than 2,000 fell from 1,132 to 523. A peripheral position in Europe does not explain all the complex changes in the region’s political make-up which are crucial to an understanding of the constraints imposed on the development of nations, which have been continually reconstituted. It has been the region’s fate that after Roman intervention in a complex tribal structure evolving through prehistory (incidentally providing a cultural foundation for the countries of Albania and Romania), small dynastic states have been subjected to further waves of imperialism. It is important to recognise the economic, social and political consequences of the Ottoman advance and the absorption of Balkan territory; for the problems of economic backwardness and virulent nationalism which have dominated the region’s politics in modern times can be traced back to the constraints on reform in the Ottoman Empire which first entered Balkan territory in the fourteenth century. And although the north was more closely integrated economically with Western Europe, the Polish state was undermined by a series of partitions orchestrated by the Habsburg, Prussian and Russian empires. Thus the modern era was grounded in the economic requirements of major powers whose political and industrial heartlands were to varying degrees external to the region. The book takes off at this point with a summary of modernising trends during the eighteenth century and highlights a degree of polarisation as the empires encouraged development in specific areas through new laws and the economic stimulus of wider markets through improvements in transport and the removal of internal trade

The economy of east central Europe, 1815-1989

6

barriers. Large areas were to become marginalised as rural peripheries where the privileged elites were bolstered by neo-feudalism, and migration was virtually the only solution to the crisis of underemployment. The nineteenth century This is the starting point for the detailed narrative. The political map for the middle decades would highlight the Habsburg, Ottoman and Russian empires, along with the German states, among which Prussia was gaining ascendancy. The dynamism of the north can be seen in the relatively early demise of the feudal system, for change began in the Habsburg Empire with the ‘Serfdom Patent’ of 1781—and reform occurred in Prussia in 1807—although the formal completion came only in 1848, with Russia following in 1861 and Romania in 1864. But long before the mid-nineteenth century customary obligations were being converted to cash payments in order to increase economic efficiency, whereas in the backward areas formal abolition changed little: it gave the lords freedom to exploit what were now their personal possessions, while peasants stranded on their smallholdings were obliged to enter into labour contracts to undertake estate work for low pay (or for no wages at all if the deal was tied to sharecropping) with traditional social relations perpetuated. Understanding society in much of the region has to be grounded in the logic of peasant farming and the struggle to secure basic needs from small plots of land using simple technology. The other side of the coin comprised a small urban-based middle class constrained by limited demand for local industry and delayed reform of guild systems, while the contributions of the aristocracy to modernisation were seen more through military service and administration (even the Prussian elite became a class of hereditary state servants) than through enterprise. There was hardly a yawning divide between north and south, although the latter was relatively slow to develop significant growth areas. The Habsburg-Ottoman ‘tug-of-war’ was resolved by the southward expansion of Vienna’s imperial borderlands. The Habsburg borderlands were not substantially richer than territories immediately to the south—which in some respects industrialised earlier—but they did enjoy relatively enlightened and principled government conducive to the development of civil society while the remaining Ottoman lands were being contested by the emerging nations of the Balkans and wider imperial designs. A novel situation arose whereby the Danubian principalities were subject to Ottoman suzerainty, yet remained vulnerable to Habsburg occupation before being placed under Russian protection until 1856 and subsequently the now independent state of Romania fell into the German economic orbit by the end of the century. However, the political configuration was not dictated solely by the balance of power between the major actors on the world stage, for the ethnicity of the region was such that nationalism ensured a measure of ‘locally dictated developments’ whereby the nations of ECE were able to make a difference. But the ‘state-led nationalism’ of Western Europe contrasted with ‘state-seeking nationalism’ as ‘Balkanisation’ spawned a tier of new nation states when it became evident that the Ottomans had little to offer their Christian population at a time of increasing national awareness. Meanwhile, the Habsburgs agreed on a share of power between Budapest and Vienna, and the political transformation was completed by US-sponsored self-determination at the end of the First World War which left many Germans and Hungarians stranded by the collapse of the imperial structures.

Introduction

7

Huge infrastructural overhauls were therefore needed during the decades on either side of the First World War, highlighting the very close link between economics and politics. But the economic challenge was all the greater because a ‘natural’ division into agricultural and industrial regions—based on physical and demographic resources, entrepreneurial skills and social organisation—was no longer feasible. Agricultural regions were by definition poor and overpopulated while industrial regions were strong (notwithstanding the demographic basis of much of the protoindustrialisation in the eighteenth century). How was industrial growth to be accelerated? While the UK industrial revolution was largely due to spontaneous private forces able to stimulate continuing demand (though not without some preconditions satisfied by the state), Germany and the Habsburg Empire relied on investment banks which emerged from urban banks providing credit for the nobility and large merchants—as well as governments—although there were rural banks to tide peasants over after a bad harvest (a function which otherwise fell to itinerant pedlars). Following the Austrian National Bank of 1816, commercial banks followed in the second half of the century, like the Creditanstalt which specialised in agricultural credit. Banks could stimulate pride among ethnic groups, like the Czechs, Slovenians and Ukrainians in the Habsburg Empire, and they could also fuel antiSemitism. The SEECs started setting up their national banks—as well as commercial and agricultural banks—during the second half of the century. But the more backward European economies also needed direct government investment and initiative, as Gerschenkron (1962) and Spulber (1966) have pointed out. For national security demanded that industry should expand and if entrepreneurs were not available the state would have to do the job. Indeed this book is very much concerned with the role of the state to the point where ‘too strict a dichotomy between Balkan capitalism and socialism obscures the continuity across the last century of powerful government institutions and nationalistic ideologies’ (Lampe and Jackson 1982 p. 13). The new nation states now had to temper comparative advantage and free trade (and the reality of underemployment and overpopulation) with protection through strategically significant, employment-maximising ideas of self-sufficiency to relieve rural poverty combined with strict regulation of foreign capital. Yet the resource base for selfsufficiency was by no means compelling in the south where the new nations struggled to modernise through agricultural surpluses that could be overtaken by harvest failure or tariff war (which suddenly forced the Serbs to switch from livestock exports to meat packing). Romania became one of the world’s leading cereal exporters with rail as well as sea transport available, yet all this was but a means to an end: industrialisation with a politically motivated land reform programme to give peasants greater security and independence, which unfortunately came too late to prevent the peasant revolt of 1907. Agrarian parties arose to advocate this complementary strategy although some idealists saw land reform, with village cooperatives and credit organisations, as an almost complete alternative to urban-industrial expansion, attracting the support of some socialists—though not communists, given the dichotomy of individual versus collective—and even nationalists when there were ethnic distinctions between peasants and landlords. They emerged in the half century before 1914 when world market forces upset traditional rural society and when extended suffrage boosted the potential for parliamentary success.

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The twentieth century The twentieth century greatly extended the modernisation project through further Kondratieff cycles linked with an ongoing and increasing radical political transformation. Despite the overwhelming moral arguement for self-determination, the Versailles system was unstable enough for the British geographer H.J.Mackinder to appreciate the strategic importance of ECE to both Germany (seeking eastward expansion into the Eurasian heartland) and Russia (looking for security on her western frontier). He advocated a security system for the new democracies, but this was only achieved to the limited extent of the Little Entente in view of major foreign policy differences between the states of the region themselves. By the late 1930s Germany was casting a shadow and substantial territorial changes were made to create a Greater Germany (‘Grossdeutschland’) and allow a larger stake in the region for Bulgaria, Hungary and Italy. Measures were taken to simplify the ethnic structure through resettlement (including population exchanges). And the need for an alliance with the Soviet Union to challenge Germany involved a nearhopeless quest for compromise between the interests of nation states like Poland and the aspirations of the Soviets to regain lost territory. Meanwhile, national industrialisation was gaining momentum with greater desperation as the setbacks in agriculture that followed the fall in world agricultural prices after 1929 ushered in a trend towards increasing state intervention going way beyond the first steps in grain marketing. Given acute capital shortage it was impossible to safeguard the traditional sectors and adopt new technology at the same time. Thus Berend (1996 p. 360) takes lessons from history to argue that in both the 1870s and 1930s the region could not accommodate changes ‘and responded by attempting to save and protect the obsolete sectors in its economy’. However, Germany took advantage of the opportunity to carve out an economic empire in ‘Fortress Europe’ and from the later 1930s until 1945 the region struggled to reconcile national industrialisation with the demands of the German war economy. The degeneration into communism in the late 1940s meant an extension of the war economy in the Soviet interest, with some additional momentum through perceived benefits in national reconstruction and cohesion. It was maintained—indeed entrenched—‘against a background of threatening hostilities: the Korean War, the NATO embargo on deliveries of strategic goods and counter-measures by Comecon members’ (Kaser and Zielinski 1970 p. 31). While the eastern territories of Poland, Czechoslovakia and Romania were lost to the Soviet Union in 1945, the region as a whole became a tier of satellite states subject to communist party monopoly power and an economic blueprint based on the Soviet FYPs of the 1930s. Yet, while there was certainly a revolution in the region during the late 1940s, it was the 1920s which required a new start in building states within revised boundaries, while the 1930s made it clear that the state would inevitably play a leading role. Subsequent decades merely perverted this trend in the Soviet interest with consensus gained through sacrificing much of the region’s social capital to Stalin’s paranoia. The latter’s death in 1953 came too late to halt a process which had already com prehensively devoured the non-communist leadership and even made inroads into the new elites through charges of nationalist deviations. Yet it was also too soon for the image of the party to be unduly tarnished and nearly four decades of unprecedentedly rapid growth—in pursuit of a perverse ‘war economy’—had to be sustained on the basis of distorted external relations and a cynical disregard for majority public opinion. Whatever benefits accrued from the strategies adopted they were

Introduction

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fundamentally flawed because each nation’s aspirations were deliberately manipulated. Elites felt they had a vested interest in unbalanced development as they had a century earlier; what was different was the removal of an ethnic distinction between the elite and the mass of the population. The book therefore ends on a distinctly ambivalent note for the progress of the region for the last half century has been based on a false premise and the current reconstruction has not only to restore balance through recovery in the primary and tertiary sectors but comprehensively rebuild the flagship.

Part I THE NINETEENTH CENTURY

1 THE REGION AT THE START OF THE NINETEENTH CENTURY In political terms the nineteenth century was based on firm reaction to a Napoleonic revolution that arose out of the Enlightenment and its increasingly liberal interpretations. Napoleon’s arrangements in Europe involved a French Empire extending way beyond ‘natural frontiers’ to include an Elbe-Baltic corridor (separating Denmark-Norway from the German ‘Rhine Confederation’), Tuscany, Illyria and northeastern Spain; with dependencies in western Germany (where the Rhine Confederation brought the Holy Roman Empire to an end), Italy, Naples, Poland (or the Grand Duchy of Warsaw) and Spain; rounded off by more or less unwilling allies in the Habsburg Empire and Prussia. The impact in ECE was most apparent in Illyria and Poland and it is fascinating to speculate on the consequences for the region had Napoleon’s intervention been durable enough to establish a Yugoslav piedmont at the head of the Adriatic and safeguard Poland’s integrity so as to establish an impetus for nation state development far ahead of the Balkan countries that emerged in the second half of the century. Following the disaster of the First Partition in 1773, Poland’s attempted recovery through a constitution grounded in Enlightenment merely provoked a Russian invasion of 1792 and a Second Partition in 1793, whereupon T.Kościuszko’s rebellion in 1794 against foreign overlords ended with the capitulation of Warsaw and the Third Partition in 1795. Under Adam Czartoryski the Poles then took advantage of Napoleonic pressure against Prussia to forge a pact with St Petersburg under the ‘Puławy Plan’ to restore Poland in union in Russia. But this ‘Slavic’ initiative was overtaken by Napoleon’s progress to the extent that the Grand Duchy of 1807 also recovered the territory taken by the Habsburg Empire and Prussia in the last two partitions (less Białystok). Following Tilsit, the arrangement was a ‘gift’ to the Poles for supporting Napoleon and there was always the hope that full independence might be restored in the future. The Poles persevered although the continental system meant they could not export for economic growth (while Britain’s embargo on the emigration of artisans slowed down attempts at adaptation). Instead they sent troops to assist Napoleon in Italy and Spain and shouldered the obligation of paying off a mortgage owed to Russia as the former partitioning power. Napoleon’s intervention was probably seen as being as radical at one pole of the political spectrum as did Stalin’s at the opposite extreme a century and a half later.

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Figure 1.1 Political geography of the eighteenth century. Note the selfcontainment of the region highlighted by the marketing of cloth from Brünn.

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There was reaction everywhere—even in France—but within the region the liberal turn would certainly have evoked a more positive response in some areas than in others according to the north-south divide (Figure 1.1). Progressive trends were already evident in the Habsburg Empire through the enlightened absolute rule of Maria Theresa (1740– 80) followed by the Josefinian era which started with the emancipation of serfs on the royal estates. Overpopulation in the north created a force for protoindustrialisation which in turn brought increased agricultural production and gave natural resources greater value, as changing attitudes towards woodland demonstrate. After centuries of destruction, which left the forests intact only in inaccessible areas, it was time for a more sustainable approach. Protection gave a basis for reconstruction after extensive erosion through the needs of agriculture as well as mining and smelting, demonstrated graphically for the Erzgebirge by Thomasius (1994) who refers to widening supply areas for industry as well as clearance through colonisation by Bohemian exiles, especially in the west. Under the Teresian forest regulations in Carniola 1771 customary rights were retained in state forests only and there was a further shift towards personal ownership under Josefinian legislation (not to mention some temporary innovations under the French). Yet while mobilisation of human resources based on individual rights might strike a chord in the ‘European’ north where modernisation was already under way, it was unclear if similar processes could operate in the backward ‘alien’ southeast preoccupied by the challenge of repopulation in devastated areas vacated by the Ottoman withdrawal of 1699. In spite of the shortage of people in this part of the region, few would concede that feudalism and guild systems should be ended to overcome constraints on mobility for rural labour. An enlightened thinker B.Skerletz (d. 1797) sought fiscal incentives for foreign manufacturers in Hungary and proposed resettling Jews in industrial areas and Roma in rural areas (Horvath 1991 p. 184). The rationale was all to do with boosting enterprise and creating demand, from which the state would gain through taxation. An under-populated region—with the risk of famine for people on tiny holdings—could deliver little, yet the population might double in fifty years if the barriers could be set aside. In the event, the elites clung to their privileges in backward areas and liberal regimes were restricted to special cases such as the steppelands where landowners encouraged settlement by ‘slobozeni’ free from feudal obligations. THE NORTH Brandenburg-Prussia and Saxony Germany’s unification was of course a long way off but the great military successes of Friedrich der Grosse were reflected by the rapid growth of Berlin in a forward position between the Elbe and Oder rivers with a developing network of roads and canals. Its industries were but a shadow of what would follow the departure of the French, not to mention the stimuli arising from the Zollverein and the railway age, but porcelain and silk manufacture were established (the latter responsible for the appearance of a factory town) while the ‘Königliche Eisengiesserei’ (Royal Iron Foundry), established in BerlinPankow in 1803 was part of a strategic complex of powder mills and cannon foundries which also had the role of supplying steam engines to stimulate technological advance in

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private industry (though the first private foundry did not emerge until 1821). Further afield lay a constellation of industrialising regions. The immediate hinterland was largely agricultural, but expansion in Silesia (annexed by Prussia in 1745) was indicated by suburban growth outside the walled towns of Schweidnitz (Świdnica) and Waldenburg (Wałbrzych). Here, Prussian mercantilism precipitated a surge of activity in textiles soon after the takeover of the province, with flax spinning schools in new villages where workers were able to make cash payments in lieu of feudal obligations. There was pressure from Irish and Scottish competition at the end of the century; and some locational shift from the deforested lowlands to the foothills of the Giant Mountains (Riesengebirge) which could better meet the fuel needs of the linen bleaching process. There was also a boost for business in Pomerania with Friedrich II’s decision to make Bromberg (Bydgoszcz) the capital of Netze (Notec) district—acquired through the partition of 1772—and completion of the Bromberg (Bydgoski) Canal in 1773–4 (linking the canalised Brahe (Brda) and Netze rivers to connect the Oder and Vistula systems). Enterprise in textiles spread to other parts of Poland that fell temporarily under Prussian administration in 1793 and 1795. A clothiers’ village was established at Dąbie on the Ner (southeast of Koło, between Konin and Kutno) in 1799—a model for later settlements. Other developments included Wizna, east of Łomża in 1799 and Pułtusk on the Narew north of Warsaw in 1803. Meanwhile, Saxony was diversifying in a big way, taking off from the ravages of the Thirty Years War when many miners began making paper, textiles, glass and toys. Saxony was the most highly industrialised part of Germany, with a medieval history of mineral and handicraft production which provided a basis for proto-industrialisation in a territory with indifferent agricultural resources. Raw materials and power supplies combined with a dynamic trading city (Leipzig) and a positive attitude in government to guild restrictions combined with peasant emancipation. While linens came from Bohemia for finishing, there was a domestic woollen industry in the Elbe and Mulde valleys which progressed through the application of water power to spinning machines in Ernstal in 1782; while Mittweida had fifty looms in 1790. The cotton industry was introduced in Chemnitz and Plauen by Dutch/Swiss immigrants using British yarn before the Napoleonic Wars. It seems that cotton was imported from Macedonia for the first spinning mill which opened in 1800 on the Würschnitz River at Harthau using British machines and instructors (though local engineers were soon engaged). There was also a transition to cotton from linen in Zittau and from worsted in Vogtland (where embroidery and lace also expanded). Cloth was initially finished in Augsburg and Hamburg but calico printing started in Plauen as a service to rural manufacturers—and the printers then linked back to cloth production and organised a putting-out system to create a steady flow of material. There were furnaces and forges in the Erzgebirge, along with a furnace (1725) and four forges on Muckenburg estate (Lauchammer), with an engine for the blast in 1803. There was particular dynamism in two mining areas. First, the deepening of the Mansfeld copper mines required cooperation in driving longer drainage adits: the 14km ‘Froschmühle’ (Unterrissdorf-Klostermansfeld) with associated shafts and ‘light holes’— providing air while allowing some ore and waste to be raised— was followed by the Glückauf tunnel (Benndorf-Wimmelburg), started in 1730, and the Zabenstadt Tunnel (Hettstedt-Zabendorf), started in 1778. Soon after, in 1783, the Boulton and Watt engine

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was put to work at Mansfeld when horse-driven pumps were unable to lift water to the level of the drainage tunnels. The same trends were evident in Upper Silesia with an interest in iron mining, but an even greater greater commitment to lead and silver mining around Beuthen (Bytom) and Tarnowitz (Tarnowskie Góry) dating back to the early medieval. Surface exploitations were extended underground and—with the stimulus of rising prices and the invention of silver separation—pumping to depths of 50m, with the aid of belts, chains and ropes, was installed from the fifteenth century, given the high level of the water table which made the Silesian mines much more difficult than their Bohemian and Slovak counterparts. Adits were also driven from the late sixteenth century with investment by the local nobility and other small capitalists; draining into the Klodnitz (Kłodnica) and Malapane (Małapane). Four adits at Tarnowitz had a total length of 8.2km by 1700 (of which 5.9km were underground). With very gentle river gradients it was often necessary to combine adits with pumping (the latter involving a lift of 60– 70m). The first steam engine was installed at Tarnowitz in 1788 and there were six in Upper Silesia by the end of the century. Adits started at greater depths reached up to 14km in length: from Bobrownik (Bobrowniki), near Scharley (Piekary Śląskie), through Trockenberg (Sucha Góra) to the upper Klodnitz (Kłodnica) Basin and through Tarnowitz and Oppatowitz (Opatowice) to the Malapane. Counting main and branch adits, there were 200km in the Tarnowitz area by the early nineteenth century. And such was the demand for timber (12 million oak beams were used in the Tarnowitz mines in the sixteenth century) that whole forests disappeared. Meanwhile, water power was harnessed for iron furnaces, sawmills and fulling mills, creating many ponds in the process. Mining provided a stimulus to industry. In the case of Mansfeld there was a successful engineering enterprise established at Rothenburg a.d.Saale with the help of an English mechanic to supply engines to the both the copperfield and the Schönebeck salt works near Magdeburg; as a result of which heavy industry came to be located in this city. Meanwhile, Upper Silesia was processing ores and long before the first Prussian government initiatives of the late eighteenth century the area was deeply affected by smelting at Malapane. However, engineering began soon after Friedrich took the province from the Habsburgs, for royal ironworks were set up at Kreuzberg (Kluczbork) and Malapane as strategic industries. Under the Mining Law of 1769 the state could designate appropriate areas as crown mining concessions, as a result of which both the Malapane iron industry and the Tarnowitz lead industry were extended. Malapane had previously been endowed with new blast furnaces in 1753–4, taking advantage of local timber and water power—not to mention proximity to the navigable Oder—which made for an important role in the Prussian armaments industry. Further capacity was installed under the 1769 act and when Friedrich moved to reorganise the iron industry in 1781 F.W.von Reden—responsible for all the royal mining operations in Silesia—produced a series of innovations concerned with coke smelting, steel making and engineering. Malapane remained very much at the centre: the Scottish technician John Baildon— recruited by von Reden—was able to cast sections for bridge building, but steam pumps were also manufactured, including one for the Tarnowitz mine, and an English-made atmospheric engine was installed in a new mine at Friedrichsgrübe opened in 1786. But as demand for energy increased the coalfield exerted a stronger influence on industrial location. On the basis of Baildon’s experience at Carron in Scotland, blast furnaces were

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now completed at Gleiwitz (Gliwice) in 1796—the first built outside Britain using coke—and also at Königshütte (Chorzów) in 1801. And the Tarnowitz engine was transferred to Gleiwitz 1794 with the relocation of lead smelting to Friedrichshütte in 1789 where coke was available. Calamine was extracted and used in the brass industries of Gleiwitz and Tarnowitz, as well as Breslau (Wrocław). However, in contrast to Mansfeld, this was a remote region, very close to Russian territory, and downstream activities were situated in less vulnerable places: thanks to the new Klodnitz Canal from the Oder to Gleiwitz which advanced slowly into Upper Silesia during 1788–1806 to reach the royal coalmine in Hindenburg (Zabrze) sunk in 1791. With the programme of waterway development carried out on the Oder during 1796–1836 it was possible to connect with the canals leading to Berlin and the Elbe Valley. The Habsburg Empire The Czech lands While Slovakia was still an important mining area, with Neusöhl (Banská Bystrica) and Kremnitz (Kremnica) active throughout the century, there was substantial protoindustrialisation to the northwest through an iron industry comprising 59 furnaces and 179 hammer ponds in 1798 while engineering was launched in 1814 by completion of the first steam engine on the Watt principle—destined for a Brünn (Brno) factory—by J.Baildon who was lessee of the Stiepanau (Stepanov) ironworks. However, demand was driven by a textile industry arising out of population increase in the north where, despite poor soil, density was much higher than in cereal-growing areas. Flax growing was established in the Middle Ages and cloth was exported through Bavaria from the sixteenth century through agents—representing such Nürnberg families as the Gewandschneiders and Pellers—who organised putting-out systems supported by landlords through the customary labour they controlled. Linen also moved north for finishing in Saxony because the Finke and Loose families of Zittau were putting-out in Böhmische Neustadt (Dolni Bĕlá) through agents who went round on horseback to check quality; while some cloth went to Silesia, where Greiffenberg (Gryfów) was a leading centre; and some export down the Elbe was organised by English and Dutch traders. Fourteen hundred domestic spinners were recorded in 1775 at Neugedein (Nová Kdyné) and 7,000 in 1838, and there were large numbers in the other areas of northeastern Bohemia such as Friedland (Frýdlant) and Reichenberg (Liberec). However, R. Allason—an exporter of linen to England—established bleaching and dye works for local finishing of cloth generated by his own putting-out systems (supplemented by market purchases) at Deutsch Gabel (Jeslonné), Georgenthal (Jiřetín), etín), Kreibitz (Chřibska), Rumburg (Rumburk) and Schluckenau (Šluknov). There were also some peasants who became rich enough to operate as entrepreneurs, with feudal dues commuted to cash payments. In the case of woollen cloth there was a state company in Linz with which some 17,000 Bohemians were associated in 1786. Indeed some wool was sent out as yarn when spinning was organised at Neuhaus (Jindřichův Hradec) in 1765 to supply a stocking factory in Austria. There was also interest in cotton when prohibition was removed in 1763, despite the need to import the raw material.

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Factories started to appear through the agency of the religious houses or feudal lords seeking rural development. A model is provided by Count Waldstein’s woollen industry at Oberleutensdorf (Horní Litvinov) where skills were first acquired through work for the nearby Ossegg (Osek) monastery in the late seventeenth century. Waldstein’s cloth gained a reputation equal to English or Flemish products, although he could not compete on price. With such developments manorial bureaucracies had to adjust to cash payments in lieu of feudal obligations, rising local demands for food and timber and the disturbance arising from the appearance of foreign workers and other strangers outside their jurisdiction. Other examples include Krzizanau (Křižanov) in 1794 and Namiest (Námĕšt) in 1795; demonstrating a link with engineering in the latter case since Count Haugwitz was an early producer of woollen spinning machinery. Unusually, Count J.von Kinsky—with his Burgstein (Sloup) estate at Kreibitz—set up a dyeworks to process the linen woven by his domestic workers but later spurned the advantage of supervision in a factory by installing cotton looms in his workers’ houses, reasoning that production could increase without the need for extra buildings and profits were greater thereby. This is a good example of an autonomous industry which arose from Kinsky’s encouragement— through a spinning school (1756) and printworks (1759)—to the point where almost every local family was tied up with the business. However, it was more usual for expertise to come in from outside, organised by the bourgeoisie. Vienna merchant J.M.Schmidt established a woollen mill at Neugedein on Count von Stadion’s estate under an agreement to employ serfs and buy local food and firewood. There were mills for combing and for fulling, dyeing and finishing (the latter rebuilt as a more modern establishment in 1845) while outworkers did the spinning and weaving: in 1838 540 worked in the factory and 7,000 outside. Meanwhile, J.J.Leitenberger, a craftsman dyer, purchased his freedom in 1750 and went abroad to complete his apprenticeship, returning to Bohemia to marry the daughter of a master dyer at Wernsdorf (Verneřice) in 1758 and inherit the factory in 1764; whereupon the business was expanded and modernised. Leitenberger then went into cotton with a mill in Prague to escape the constraints of feudalism (citizens in a royal town were free) though he later bought—and modernised—a cotton factory at Josefsthal (Josefův Důl) which may still be operating today, having been sold out of the family in 1904. He also engaged a craftsman to build English jennies, water frames and mules. While there were some failures due to bad management, disputes and neglect, there was usually success under efficient bourgeois management. Habsburg encouragement of industry Such developments would hardly have been possible without an enlightened approach to industry by the Habsburgs in a situation where smallholders and cottagers ‘have nothing except an isolated dwelling and earn a miserable living for themselves and their children by weaving, spinning and handicrafts’ (Klima 1974 p. 49). Since tradition favoured a single heir to each agricultural holding, work in textiles supported a growing landless population in the Bohemian mountains. A subsistence crisis, like that of 1770–1, was seen as potentially destabilising through unrest or emigration while intervention was also favoured by the pronatalist logic of mercantilism whereby a greater population would contribute to financial and military power. Overriding the parochial interests of the guilds

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and sections of the aristocracy underpressure of falling living standards, ‘central government succeeded in creating within four decades an environment propitious for economic development’ (Komlos 1986 p. 430). A government ‘Kommerzien Direktorium’ (Commercial Board) planned industrial development in Vienna during 1746–72, while free trade was extended from Austria in 1775 to Galicia (1784), Hungary (1851; internally unified in 1784) and Dalmatia (1880). By contrast, internal barriers in Prussia were not modified until 1818. Quality ordinances sustained new spinning schools in Bohemia, while protectionist measures in 1764 blocked foreign textiles (especially Silesian wool and linen) and in 1784 there were prohibitive tariffs on all industrial goods which persisted until the mid-nineteenth century. Subsidies were advanced on woollen goods in 1768, while in the 1780s local government could help small producers (there had previously been weaving rents in 1755 to support mountainous regions) and in 1787 large factories could establish warehouses in all provincial capitals. Yet there was also a need for social reform since feudal lords extracted licence fees from the yarn collectors who were serfs ‘taking the spinners’ yarn, sorting it according to quality and carrying it to the weekly markets of nearby towns for sale to weavers’ (Klima 1974 p. 51). As early as 1766, a civil servant noted the con tradiction between feudalism and industrial development and wanted to see traders purchasing their freedom so they would have more encouragement to develop trade. Theresian policy sought to maximise freedom for trade and industry ‘to permit the peasantry to increase its income and thus stave off the Malthusian threat by participating in protoindustry’ (Stokes 1987 p. 37). Rents payable by the peasantry were lowered in 1775 to encourage agricultural intensification, while a reduction in labour services to just thirteen days (for those without land) freed up time for work in industry which was considered much more elastic than agriculture in terms of scope to increase output. At the same time, industrial work was properly regulated when contractual relations were demanded in 1775 and the peasants were free to work for whom they liked. This measure increased efficiency and broke down the huge putting-out organisations that had been bolstered by servile labour. Josef II then acted in support of labour mobility in 1781 by allowing serfs to marry—and also to move if they were not in debt (a significant development towards complete abolition). By the end of the eighteenth century there were more workers in cotton than linen, and non-noble entrepreneurs were starting to challenge the dominance of the aristocracy. Reform stopped with Josef’s death in 1790 but what was in force continued: a significant achievement ‘given the unequal distribution of privilege which prevailed’ (Komlos 1986 p. 480), although failure to institutionalise change eventually fomented revolution in 1848. Meanwhile, there were measures to reduce the power of the guilds, seen as a conservative force potentially hostile to the innovations of Flemish immigrants. Thus a survey of imperial estates was made on the presumption that ‘in a perverse way the introduction of a new technology might be easier with the untutored peasants of the Bohemian manor’ (Freudenberger 1977 p. 31), although when industry was first allowed in rural areas (1732, but 1740 for cotton spinning and weaving) the master craftsmen had to be incorporated into the guilds of the nearest town. Hence the experiment over a woollen industry at Kladrau (Kladruby) on the Pardubitz (Pardubice) estate in the 1750s, though it lost money and was relocated in Brünn the following decade, where it survived until the 1780s. The town was obviously a better location for large-scale production but

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some rural areas proved to be viable. A self-reinforcing growth process set in as cheap yet competent labour attracted more orders, and in turn stimulated earlier marriages and a growth in the labour supply which kept costs low through limited opportunity. Family income rose sufficiently to justify higher rents and ensure further landowner interest in industry, though charcoal smelting limited access to firewood while land endowments to incoming key workers could limit what was available for community subsistence. Meanwhile, pressure on the guilds continued. The emperor could sanction industries by licence or privilege and these remained free of guild control (from 1776 provincial authorities could also give such approval). In 1754 industries serving distant markets were classified as ‘commercial’ and were outside the guilds; in 1760 all weaving industries were declared open professions; in 1781 pig-iron production was deregulated; and in 1818 glass factories could be set up by people without ‘special education’. Transport in the north An efficient market system needed better communications and Germany set the standard for road improvements through links from the western cultural centres passing through the central highlands to reach the ‘colonial’ lands in the east. The Hellweg led from Köln to Magdeburg and Berlin—thence to Stettin (Szczecin); to Danzig (Gdańsk) via Frankfurt a.d.Oder and Posen (Poznań); and further northeast through Bromberg and Thorn (Toruń). Another key route connected Frankfurt to Eisenach on the approach to the Thuringian passes, leading through Erfurt to Halle-Leipzig, Dresden and Breslau. And long-established routes also led from Nürnberg to Thuringia either by Coburg and Jena or Plauen and Zwickau. However, roads were still in a bad state in the eighteenth century and a shortage of vehicles also hampered the transport of heavy goods. There were coach services for passengers—one network served the lands of the Archbishop of Magdeburg from the late seventeenth century—and there was an expanding network of post offices in Brandenburg-Prussia by the beginning of the eighteenth century with specific ‘post routes’ scheduled for improvement (including some short cuts and other new projects). Otherwise there was little development in the east, although Friedrich der Grosse improved strategic roads—like the one from Schweidnitz to Glatz (Kłodzko)—in defence of Silesia. Even so, it was only in 1793 that a modern highway was built from Berlin to Potsdam. The rivers were much used for transport. But there were natural hazards as well as tolls and some towns could compel merchants to use their harbours, e.g. the staple ports on the Danube upstream of Budapest; also Magdeburg, Dresden and Pirna on the Elbe. Moreover, shipping guilds (usually at the staple ports) could monopolise traffic on certain stretches of water. The stronger states did improve their waterways. Brandenburg-Prussia had a major interest in canal building to connect the navigable rivers and the old eastwest trending glacial channels were ideal for the purpose. By the seventeenth century routes to the Oder were identified using the Havel and Spree valleys (respectively north and south of Berlin). But while the northern route was realised at the time by the Finow Canal—from the Havel near Liebenwalde to the Oder at Oderberg—and rebuilt by Friedrich der Grosse after destruction in the Thirty Years War, the southern ‘Friedrich Wilhelm Canal’ project was only realised in the eighteenth century through the ‘Neuer Graben’. However, the latter had the great merit that goods from Silesia could avoid

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Frankfurt a.d.Oder which was considered a great obstacle to trade. Furthermore the completion of the Plauer Canal in 1745 from the Elbe to the Havel at Plauen near Brandenburg gave access to Hamburg although there were still many tolls levied and goods from the east had to be transshipped in Berlin. The Plauer Canal was also useful for moving salt eastwards from Schönebeck. Meanwhile, there were local navigations in Uckermark facilitating grain and timber exports: the Templin and Wehrbellin canals in 1745 and 1766, respectively. Improvements at the Oder mouth involved the Swine as an outlet from the Stettiner Haff to the Baltic in 1729 and Swinemünde (Świnoujście)—on the site of the old fishing village of Swine—secured municipal rights at this time. Further south road conditions were relatively poor though the Habsburg Empire had an effective system extended in line with military adventure such as the short-lived occupation of Oltenia (western Wallachia) during 1718–39 when a road was pushed down the Olt Valley. Some canal building was linked with the Danube. The TiszaDanube Canal followed the Treaty of Svistov (Silistra) in 1791 and aimed to link Pannonia with the Adriatic to facilitate grain export; a privileged grain company was contemplated (also salt was brought down the Tisza on rafts from Maramureş). Work started in 1793–4 from Becej on Tisza to Bezdan on Danube—with locks at Stapari, Vrbas and Gradište—in the context of a concession including estate agriculture with milling and brewing at Apatin, and distilling at Kula. The canal opened in 1802 and— with a late nineteenth-century development from Mali Stapari to Novi Sad—was not superseded until the Danube-Tisza Canal was built after the Second World War with a link between Becej and Dan Palanka just upstream of the Romanian frontier. However, the planned westward extension of the canal did not materialise: it was to comprise the Vukovar-Šamac Canal and improvement of the Sava to Karlovac to meet the road to Rijeka or a possible waterway extension (proposed in the mid-eighteenth century) towards the Gorski Kotor highlands with locks from Karlovac to Brod na Kupi. There was a concession in 1801 but geological problems were encountered and the canal could not be sealed properly. Instead, a road was started in 1803 and finished by the French after 1809. Greeks were prominent in the cereal trade between Hungary and the Adriatic—and the reverse flow of Italian manufactures—following the rise of Fiume (Rijeka) and Trieste, aided by former’s sugar refinery arising from Maria Theresa’s ban on the import of refined sugar in 1755. The northern peripheries The north was not modernising at a uniform rate, for much enterprise in Poland arose only when Catholic landowners sought to maximise the economic value of feudal privileges whereby peasants had to deliver 25–50% of their harvest to the lords—plus two or three days’ labour each week as ‘robota’. This ‘second serfdom’ was organised by Jews who managed the economy of grain growing and marketing which provided the gentry with their luxuries. They ‘may have enabled the Polish nobles to delude themselves into thinking of their sense of disorder as ultimately functional and truly viable’ without the need for bridge-building between the classes (Levine 1991 pp. 137– 8), but they were slow to see the limitations of a single-crop economy and dependence on serf labour which added up to domestic failure for which the Jews were convenient scapegoats. Industrial change was seen most clearly in the imitation of Prussian textile

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villages through the 1779 plan for Ludwinów as a centre of commerce and handicrafts on the Vistula opposite Kraków’s Wawel and Kazimierz quarters. A private landowner encouraged handicrafts at Nowy Dwór in 1780 and A.Tyzenhaus, a royal treasurer for Lithuania, planned manufactures in eastern Poland at Kunsztów near Grodno. A similar approach was taken in the eastern and southern borderlands of the Habsburg Empire where the Hungarian and Polish nobility were reluctant to countenance any diminution of their privileges and used serf labour to create jewels such as the Esterhazy Palace, finished in a reclaimed swampland in 1776. These were transitional areas, exemplified by the reference to the partly German Habsburg crownland comprising the Bukowina ‘Corridor’ (acquired in 1775 and joined to Galicia between 1786 and 1849) that was seen as ‘Halb-Asien’—notwithstanding the fact that it was also the ‘gradina veselă’ (fertile garden) of Romanians. Meanwhile, Transylvania was another landlocked Habsburg province, this time under the control of Hungarian nobility. Although there was a livestock surplus which could be marketed on the hoof there was no opportunity to specialise in arable farming for ‘bad roads and the more affluent estates of Inner Hungary barred the way to the growing markets of Budapest and Vienna’ (Lampe and Jackson 1982 p. 78). Indeed there was a cereal deficit which drew in grain from the Romanian principalities, given the low tariff of 3% negotiated with the Porte in the eighteenth century. A snapshot of the Romanian majority village of laroshéviz (Topliţa) at the end of the eighteenth century shows that 227 households belonged to three proprietors and all but nineteen ‘inquilini’ (without land) worked a small subsistence holding ‘sesie’ (and access to common grazing and woodland) in return for farm and forestry work on the owner’s estate. The 208 holdings averaged 1.65jug (1.78jug equalling lha) but since some had as much as 9.25jug others must have been quite small. Settlement in Galicia and Transylvania After the setback of seventeenth- and eighteenth-century wars, Habsburg annexation of Galicia under the Polish partitions (1772) was accompanied by a measure of recolonisation. Germans from the Rhineland gave a boost to Bochnia—a centre of enhanced administrative importance close to the trade routes—through exploitation of the salt mines and fuller exploitation of the forests and the agricultural potential. The Habsburgs also presided over the growth of the iron industry in Galicia. Ustrón (first mentioned 1305 as an episcopal estate in the Silesian Beskid) acquired a foundry to work up low-grade iron ore, while Kuznica in the Zakopane area of the Tatra was engaged in mining and foundry work. There was a measure of urban and commercial growth. The small Middle Beskid town of Sucha Beskidzka in Galicia saw its seventeenth-century castle—now the local museum—redeveloped in the baroque style with a surrounding park. Merchant communities were moving into new houses while the beginnings of tourism based on the curative properties of mineral waters originated in this period, especially the ‘szcawa’ waters containing ferruginous substances. Renamed Krynica, the village of Krzenycze in the Beskid Sadęcki Mountains acquired its first spa amenities in 1793, while Żegiestów-Zdrój also emerged in the same area. Szczawnica in the Pieniny— a medieval monastic estate village that passed to the Polish crown in the fifteenth century—was another eighteenth-century spa which expanded considerably after the Hungarian Szalay family bought the estate in 1834 and built the landscape park and local

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housing. Finally Ustrón also became a health resort when hot slag from the local iron industry gained a therapeutic use in the ‘gierzymowe’ baths. However, since virtually the entire mountain system was now under the control of Vienna, the greater rhythm of commercial activity and systematic resource exploitation could be seen more widely. A great transformation occurred in the Banat Mountains, at the southwestern extremity of the Carpathian system, where a major settlement programme followed the recovery of territory from the Turks in 1699 (Figure 1.2). In comparison with other regions with a ruling noble class, the emperor was the sole landowner here and a planned colonisation went ahead. Lowland Banat became a place of multi-ethnic Catholic colonisation, while a

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Figure 1.2 The Reşiţa industrial region mining programme for the adjacent Carpathians was undertaken by the ‘Banater Bergwerk-Einrichtungs-Kommission’ set up in 1717. As skilled miners were brought from Bohemia, Styria, Tyrol and Zips (Spiš), a copper smelter was opened at Oravicza

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(Oraviţa) in 1718 and an iron furnace at Bogsan (Bocşa) followed in 1719; the latter expanded into a large metallurgical complex on the edge of the Steyerdorf (Anina), Dognecea and Semenic Mountains with the Reschitza (Resica/Reşiţa) furnace of 1771 as the main element. Nearby in the Poiana Ruscă there were installations in the Bistra Valley (now Oţelu Roşu) in 1795; later at Ruschitza (Ruşchiţa) in 1828 and Rusca Montană (1830). Reference should also be made of the coal first discovered within the woodcutting community of Steyerdorf (Steierdorf) in 1790 and the mining industry which developed in the early nineteenth century with skilled workers from Bohemia and Slovakia. Rather special circumstances also arose where security considerations called for a military frontier against the Ottoman Empire: established in 1762 and dissolved only in 1881 after Hungarian pressure through the 1870s. Seven regiments were raised in the eastern sector extending from Banat to the eastern Carpathians and the work of the state in the frontier region was clearly a significant force for modernisation. In the extensively researched northeastern Rodna Military District—later the Naszód (Năsăud) Frontier District—twelve Companies were formed during 1762–83, each recruited from a group of villages. Under military planning there was a consolidation of the Greek-Catholic parochial structure and provision of a state education system through elementary ‘Trivialschulen’ from 1770 and a high school in Naszód in 1771. Medical and sanitary programmes provided effective barriers against the spread of plague from Moldavia in 1815 and cholera from Wallachia in 1830. Commerce expanded in a network of central places with their fairs and road systems, while the promotion of agriculture included attention to cereals, vegetables, potatoes, textile plants and fruit trees, along with stock rearing and allocation of grazings. Indeed this is the basis of landholding today apart from some ‘abusive’ transfers to non-frontier communes in the communist period. Regulation extended to hunting and fishing as well as forestry, mining and manufacturing; with the latter advanced through instruction in spinning, weaving and fulling, and a growth of water-powered cereal mills as well as the first water-powered sawmills (‘joagăre’) in Maieru and Parva in 1766. Beer and spirits were produced in Naszód from 1765, paper at Prundul Bârgăului from 1768, while a great lime furnace (‘varniţa’) was built at Parva in 1777. It is also notable that settlement was consolidated so that Nepos was transformed between 1775 and 1783 from a scattered settlement north of the River Samos (Someş to a compact linear belt along the main valley. New settlement occurred in the heavily forested Ilva Valley as colonists moved from Maieru and Rodna to establish dispersed com munities at Arşiţa, Recele and Secături before consolidating under the frontier regime as Ilva Mare, Măgura Ilvei and Poiana Ilvei. From the ‘mini-basins’ along this secondary morpho-hydrographic axis the meadows and forests on the high surfaces could be more fully utilised. Meanwhile, Habsburg modernising pressures displaced some Romanians eastwards across the Carpathians— hence the ‘Ungureni’ communities emigrating from areas of Hungarian influence—but the scale should not be exaggerated. Handicrafts in the rural areas might be compromised by the monopolies maintained by the guilds in towns like Hermannstadt (Sibiu) which were closed to Romanians. An industrial axis developed along the Cibin with ample processing water, while canals were engineered at a higher level from other streams to supply the town centre (for street cleaning, fire fighting and fishponds as well as drinking) with the surplus diverted to the

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Cibin. However, since little water power was available, a separate industrial community developed at Heltau (Cisnădie) and there were opportunities for the rural Romanians of Mărgineni Sibiului. They maximised their agriculture through maize, potatoes, fruit and apiculture while their pastoralism was extended to other areas including Banat and the Gurghiu-Căliman area of north Transylvania; moving progressively further afield over the next century in response to population growth and fiscal pressures. But increased wool production arising from the expansion of the transhumance system eventually had positive implications for local industry: hence the multiplication of the fulling mills (‘piua’) especially at Saline, Sibiel and Tilişca. There was also a growth in food and wood processing: while the ‘joagar’ originated in the sixteenth century, the number increased rapidly in the eighteenth through the ‘joagăreni’ of Gura Râului, Raşinari, Sadu and Tălmaciu who produced wooden roof tiles and exported sawn timber to Wallachia. Corn and fulling mills were usually built within the village perimeters for security, whereas the sawmills were more scattered in order to economise on transport. As the forests and mountain pastures were more fully exploited the remoter villages like Jina gained ground. Elsewhere, there were high surfaces which provided scope for colonisation at a time of growing population pressure. Typically the new settlements on the higher ground were hamlets—each representing a gradually expanding kinship group—comprising individual farmsteads which often involved an enclosed courtyard appropriate for sheep rearing in exposed areas subject to the depredations of wild animals. In Transylvania the high surfaces of the Apuseni Mountains and also the platforms at Bran and Poiana Mărului near Braşov exhibit settlement at this time to very good effect. The Haţeg peasants arrived in the Petroşani Basin in the upper Jiu Valley and also the ‘Ţinutul Pădurenilor’ on the eastern flanks of the Poiana Ruscă. And beyond the Carpathians in the Mehedinţi Plateau of Oltenia people were breaking out from the village cores in the late eighteenth century in order to settle on individual farms carved out of the community demesne: perhaps initially a ‘palanca’ or shelter, developing into a more substantial temporary dwelling or ‘conac’, an outlying grazing station inhabited seasonally by some family members (a practice which still survives in many parts of the Romanian Carpathians). The pressure of a growing rural population extending its grip over the intermediate slopes and plateau lands of the Carpathians was not without its risks. Galician registers of the late eighteenth and early nineteenth centuries reveal con version of meadows and pastures to arable and much logging, driven by land settlement linked with profit and high taxation. At the same time variable weather and the poor condition of some of the land increased the risks of harvest failure with consequent instability in the ownership structure. On the Carpathian margins, oats were grown much more extensively and accounted for 80% of the land cropped at the end of the century; with the balance taken mainly by potatoes and clover. The forests were being seriously eroded (and beekeeping declined as a result), with the frequent appearance of the Polish placename element ‘poręba’, referring to the cutting of timber—often in connection with industrial settlements producing charcoal and tar within the forests. As the beech and fir receded there was some degradation as intensive run-off carried much more sediment to the rivers (Lac 2000 p. 204). The damage would have been greater had a grand conception of timber export by rafting on the regulated tributaries of the Vistula been realised. Ivanička (1999 p. 212) refers to the devastation of woodland in Slovakia by the eighteenth century

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through mining, industry (bricks, glass and potash) and timber exports. However, an increase in wood prices demonstrated the need for the improved forest management regime worked out by the Forestry Faculty of Banská Štiavnica Mining College. More generally, the Theresian period saw forest management codes issued from 1769 (in parallel with stronger individual ownership rights). In Galicia fast-growing pine and larch were favoured over deciduous forest dominated by beech. All this impacted on pastoral farming since the landlords demanded higher leasing fees—and therefore forced more intensive grazing—while trying to prevent further erosion of woodlands, to which end the keeping of goats was often forbidden. In some cases shepherding associations or cooperatives retained a hold on their pastures (as in Tĕšin and Vsetín) while in Hukvald the forestry interest predominated and seasonal sheep farms were eliminated by the middle of nineteenth century. THE SOUTH Ottoman territories were devoid of modernisation through lack of a uniform administration and industrial development constrained by the tendency to specialise in the export of raw materials. But even so agriculture could hardly develop in a progressive manner. Ottoman officials—and the feudal cavalry—were supported by the ‘timar’ (estate) system although holdings were not inherited and did not carry feudal jurisdiction over the peasants. But during the seventeenth and eighteenth centuries these ‘spahis’ were able to convert their fiefs into ‘chiftliks’ functioning on the basis of servile labour, and demands tended to increase (or peasants might be driven off the land altogether). Finally in 1831 the ‘timar’ system was abolished but only for the rural population to be left in a state of dependence on native landowners which saw the Albanian ‘bajraktars’ presiding over rigid patriarchal societies torn by blood feuds. The extent of autonomy had already been demonstrated by Ali Pasha who was the Turkish governor in Yanya (Ioannina) during 1782–1822 and attracted the sympathy of Greek Christians before he was finally dislodged (after a two-year siege) when Sultan Mahmud II saw Ali as a threat to his reforming and centralising policy. Romanian lords operated in the same spirit since a ‘boyar’ class evolved from village leaders and claimed a share of the peasant’s grain crop as ‘dijmă’. However, until the nineteenth century labour service (‘clacă’) was rarely demanded to the full legal extent—and it was not used extensively to work demesne land—while obligations could usually be paid off by cash from livestock sales. Commerce was limited because Istanbul claimed a monopoly over wheat: European ships could not enter the Black Sea after 1592 while Turkish ships could not take goods into the Mediterranean without taxation. Surpluses were collected by traders from Dubrovnik who were initially favoured by the Ottomans, although the eighteenth century saw commercial aptitudes emerging elsewhere—particularly among the Greeks who were able to create a political bourgeoisie active in banking and administration. ‘Greek’ merchants—including Jews and Hellenised Orthodox peoples using Greek as the language of commerce—paid low prices for compulsory deliveries (‘zaharea’) of agricultural products, which diverted the peasants into maize because it yielded well (especially with vegetables between the rows) and was exempt not only from ‘zaharea’ but from all taxation.

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It seems that the trading system was initially efficient, with a command economy maintained through administrative and military hierarchies working in a market system of towns interconnected by trading caravans. But it failed to modernise in the era of factory industry, and growth was stifled as intermediaries intercepted the flow of wealth heading for Istanbul. Although the Danube route was open after 1718—under the Treaty of Passarowitz (Požarevac)—the river was little used below Pressburg (Bratislava) on account of the water mills, strong currents (convict labour was used on the tow paths until steam power) and the Hungarian nobility’s desire for isolation to safeguard feudalism. Even when regular steamships were provided in 1831 little was done to relieve constraints on navigation at the Iron Gates until funding by Hungarian state subsidies in 1896–7. Much of the region depended on roads of abysmal quality so that journeys were slow and expensive (not to mention security risks in the case of unstable areas of the Balkans). It was a laborious business gathering surpluses and distributing essentials such as salt which was taken inland from the Adriatic at the points where ‘old contracts’ specified that it should be produced: the Bojana Valley, Dubrovnik, Cattaro (Kotor) and the Neretva Estuary. Dubrovnik derived much profit from salt and Ston saltworks continued to supply its area, successfully competing with Slav enterprises at Budva and Sutorina (Erceg 1993). Until better roads allowed the use of carts, thousands of horses (each carrying packs of up to 100kg) would carry salt inland and provide a basis for exchange trade on the return journey. The Romanian principalities emerge as an interesting case since they lay on the margins of the empire, enjoying a degree of autonomy through Ottoman suzerainty. The use of a succession of short-term Greek ‘Phanariot’ rulers had negative results through their exploitative attitude, though Bucharest became the largest and wealthiest Balkan city by the end of the eighteenth century as the Phanariots required luxurious housing and services and consigned wheat to Istanbul (whose wheat monopoly became ever more important after the Ottomans lost their southern Russian territories in 1783). However, the Treaty of Kucuk Kainarji (1774) gave Russia a protectorate over Moldavia and Wallachia and also the right to intervene if any Balkan Christians were threatened. This was promising enough for Moldavian volunteers to accept Russian objectives as their own during the 1787–92 Russo-Turkish War. But despite some Russian success with the Porte in easing the burden of rule through Greek Phanariot princes, Russian influence in Moldavia seemed rather less progressive when the eastern part of the principality (Bessarabia) was annexed in 1812 as the price for ending their occupation (Broadus 1981 p. 367). Meanwhile, the Habsburgs had occupied Oltenia during 1718–39 and had begun the ‘Partition of Moldavia’ by taking Bukowina in 1775 (by 1782 both the Habsburgs and Russians had their agents in Bucharest). There was, however, an economic stimulus because—despite the challenges of the established Habsburg borderlands—there was a mutual interest in trade and an ‘inadvertent promotion of economic ties’ between the principalities and Transylvania (Lampe and Jackson 1982 p. 107) sanctioned by commercial treaties, and Balkan commodity surpluses became increasingly valuable to the Habsburgs as the expansion of cereal growing in Hungary reduced the scope for livestock rearing. Romania’s boyars were certainly encouraged by a sharp increase in cattle, horse and pig prices after the start of the Napoleonic Wars. Meanwhile, these northern markets were valuable for Ottoman peripheral territories given the disorganised domestic market and the dangers of travel in bandit country. Indeed cereals were also

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needed in Balkan deficit areas such as Bosnia and the Habsburg Military Frontier. Close Serb-Habsburg relations from 1699 made Belgrade a transit point for Ottoman-Habsburg trade, but when war reduced the Ottoman outposts to chaos Serb traders moved their business northwards, as did some of the peasants. This ‘new and essentially economic migration hastened the final weakening of Ottoman authority and the emergence of independent Balkan states’ (ibid. p. 49). There was also opportunity for the Serb peasants of Šumadija to increase their pig herds using acorn fodder from the oak woods. Free peasants from mountain districts—like the Vlachs of Macedonia—traded their handicraft products and surpluses of wool, cheese and skins in both the Habsburg and Russian empires. As a result they improved their homes and churches, even it the threat of brigandage caused consolidation in key towns—like Kruševo, Monastir (Bitola) and Veles—and some migration to Belgrade and Banat. And while Armenian, Greek and Jewish traders left little scope for the Bulgarians, some peasants from the Rhodope and Stara Planina went to Hungary and Russia in the late eighteenth century. CONCLUSION ECE was anything but unified. It was a highly differentiated region—even within the Habsburg or Prussian domains—and in many areas insecure, with the Balkans consigned to an alien pattern of development after a long period of continuous association with the rest of the continent. Industrial growth was occurring as technology from the West was implanted and it was clear that population growth was sustainable, even if there were still plagues of biblical proportions in the Ottoman lands that would call for quarantine regulations. As Komlos (1989, 2000) argues, the ‘Malthusian’ agenda of growth triggering subsistence crises through diminishing returns was being liberated by an alternate ‘Boserup’ thesis of population growth as the spur for protourbanisation and technological change—which could not be expected to take place in a vacuum. The nineteenth century would pauperise the less fortunate but there was no major subsistence crisis and a growing working population was possible. Yet the run-up to the nineteenth century was demonstrating polarisation between cores and peripheries. The Czech lands were developed as the main Habsburg industrial base while Saxony played a similar role in the German lands—with the great trading emporium at Leipzig and a major centre of manufacturing in Chemnitz where the textile industries of the Erzgebirge were being consolidated. There were a number of other growth points of which those in Prussia were outstanding, but regions without obvious potential were consigned to an agricultural role and their elites were then able to make a virtue out of necessity with an appropriately conservative social policy. So the Habsburgs kept Hungary in a state of feudal subjection as the empire’s breadbasket (for the warmth of the Great Plain gives Hungary an agricultural potential comparable with that of the Balkan states) and industrialisation took off only after the famous ‘Ausgleich’ (compromise) of 1867.

2 POLITICAL STRUCTURES, AGRICULTURE AND INDUSTRY A NEW POLITICAL STRUCTURE Following the Napoleonic upheavals it was, as Lord Castlereagh put it, the duty of politicians to ‘bring back the world to peaceful habits’ (Knapton and Deny 1965 p. 4). The Congress of Vienna (1814–15) achieved a broad measure of success over reconstruction in Germany, Italy and Poland; thanks to a spirit of cooperation among restored hereditary monarchies and new enlarged kingdoms within a ‘Concert of Europe’ which convened congresses to deal with threats to stability. A further massive conflagration was prevented for almost exactly a century (apart from the Crimean interlude). However, the three eastern powers were largely responsible for redrawing the map of Europe, with a balance of power between them. The Russians, who had contributed so much to the overthrow of Napoleon, obtained the greater part of Poland (more than had been gained under the eighteenth-century partitions) and held on to Finland and Bessarabia (gained in 1809 and 1812, respectively); Austria regained Dalmatia and Istria as well as portions of Carinthia and Carniola; Prussia made progress in Saxony as well as the Rhineland, but regained only part of her Polish territory which Napoleon had appropriated for his Grand Duchy of Warsaw. These powers were highly reactionary after 1815 and rightly saw nationalism as a threat to empire. In the Habsburg Empire the notion of balance inherent in the ‘Metternich System’—named after the empire’s highly intelligent foreign minister—was based on a frank recognition of conflicting ethnic elements (German, Italian, Magyar, Romanian and Slavic) that only an absolute power could mediate successfully, even though the grand design trampled on the aspirations of the peoples of ECE after the stimulation of the Napoleonic era. The compromise—such as it was—would clearly not be sustainable as the nineteenth century turned out to be a period of unprecedented change across Europe with the growth of urban-industrial interests, and while the basic outline proved durable there were continual struggles and adjustments and significant changes in the balance among the great powers of the region which finally erupted in the First World War. The cavalier attitude towards the nations of ECE was well exemplified by Poland which was again divided in 1815 between three parties ‘committed to make Polish lands as useless as possible to the power of the others’ (Pogonowski 1987 p. 163), although at least the mortgage imposed by Napoleon in 1807 was liquidated. Poland was still acknowledged as an entity since the Duchy of Warsaw became the Kingdom of Poland (Congress Poland): an autonomous constitutional kingdom within the Russian Empire, endowed—thanks to Prince Adam Czartoryski—with as liberal a constitution as any in Europe. Some Russians might delude themselves that Slavophilism provided a bond between the two peoples—even if the Poles never acknowledged this—and most were pragmatic enough to accept that denying cultural autonomy would be counter-productive, even if the Polish gentry had forced grain surpluses from Orthodox peasants on to the urban markets under the oppressive feudalism of the sixteenth-eighteenth centuries. At

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the same time, the Grand Duchy of Poznań was separated from Napoleon’s duchy of 1812 and placed under Prussia, while the free city of Kraków acted as ‘the symbolic capital of the divided Poland’. But these trappings of autonomy would not last. The kingdom was demoted to the status of Russia’s Western Region after the 1863–4 insurrection and subject to Russification, while Poznań was Germanised (as Posen) and Kraków was annexed by Austria (as Cracow) as early as 1846, although there was still Polish culture at Cracow and Lemberg (Lviv) universities and access by Polish representatives to the Vienna parliament confirmed Galicia as a Polish Piedmont in the minds of a people whose national consciousness had certainly benefited from the Napoleonic experience. Polish was given official status in 1869 (when Vienna was happy to support all cultural activities of anti-Russian character) and Poles on the Austrian side were the first to engage Russian forces in 1914. Galicia was also seen by Ukrainians—a separate nation—as a Piedmont, although the Polish schools were the better organised and education in Galicia was effectively Polonised. Meanwhile, the Ottomans also made concessions to nationalism with self-government for Serbia in 1817, while the principalities of Moldavia and Wallachia—simultaneously under Ottoman suzerainty and Russian protection—were blessed with constitutions in 1829. Even so, constitutions did not guarantee liberalism and democracy, for in the great empires dominating ECE control was exerted by hereditary dynasties entrenched in power and disposed to cooperate with each other in the interest of stability. Tsar Alexander of Russia presented European leaders at Paris with his Treaty of Holy Alliance under which rulers would agree to govern their states as branches of the Christian community and render mutual service to each other. There was a somewhat ad hoc approach to crises, but the imperial governments were able to preserve the spirit of the 1815 accords and stave off a general conflagration (briefly threatened in 1848) despite peasant emancipation, significant advances in constitutionalism and the Ottoman concession over Greek independence in 1832. Yet the conservative forces ruling over modernising industrial states were eventually confronted by the more ruthless nationalism of the age of Realpolitik. The German Empire Consolidation and modernisation in Germany was carried over to a new German Confederation (a loose union of thirty-four sovereign states and four free cities—each with its own assembly) placed under the permanent presidency of the Habsburg Empire. It acted as a stabilising force, but it was a poor substitute for a genuine national state. Meanwhile, Prussia gained ascendancy through the Zollverein, a free zone arising out of the measures taken in Prussia in 1818 to abolish all internal customs barriers while constructing a tariff wall against other German states. These pressures led ultimately (in 1834) to the customs union of 18 states with a total population of some 20 million. The organisation expanded further through the adhesion of Baden, Hannover and Oldenburg by 1853 and Holstein, Mecklenburg-Schwerin and Schleswig by 1866, and was a major contribution to the growth of German unity. It was not a prerequisite for political unification, but it brought fiscal benefits to member states, and free trade within Germany allowed for greater specialisation between the farmers of East Prussia and Posen and the industrialists of the Rhineland and Saxony. News of revolution in France in 1848 provoked demonstrations in Berlin—prompting the promise of a representative

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constitution and subsequently a dramatic statement from Friedrich Wilhelm IV that Prussia would soon merge itself into a united Germany. Uprisings in other states including Saxony were effective in transforming the confederation into an assembly of democratically elected representatives at Frankfurt, where middle-class values crystallised in support of economic growth and concerted action against foreign competition. But there was disagreement over the issues of central versus federal government, the role of the monarchy (given a significant radical, republican element) and territorial extent: should the non-German areas of Prussia and the Habsburg Empire be included in a Grossdeutschland? The Kleindeutsch arguments of ethnic coherence were persuasive—signalling an aggressive nationalism (echoed in Hungary) combining the nation state with a pseudo-colonial ‘periphery’ where German interests would predominate despite non-German ethnic majorities. However, the Frankfurt initiative was effectively vetoed when Friedrich Wilhelm refused the imperial crown, allegedly because it was offered by ‘master bakers and butchers’ rather than brother monarchs. Bismarck and Unification Prussian strength was boosted when Wilhelm I ascended the throne in 1861 and appointed the anti-liberal Otto Karl von Bismarck (of the right-wing Junker party) as his minister-president. It is difficult to separate the process of German unification from the personality of Bismarck: an ambitious administrator who realised that conflict with the Habsburg Empire was inevitable. The balance swung decisively with the Prussian victory over Austria at Königgratz (Hradec Králové) thanks to a brilliantly efficient mobilisation that made full use of the developing railway system at a time when Habsburg troops were deployed on the southern front against what appeared a more immediate threat from Italy. Prussia now annexed several German states to create a continuous territory from the Niemen to the Rhine, with overwhelming authority over a North German Confederation of twenty-two states from which Austria was excluded. The Franco-Prussian War yielded Alsace-Lorraine and also gave an opportunity for Prussia to win over the southern German states and establish the new empire with Wilhelm I proclaimed emperor of a united Germany at Versailles in 1871: ‘the most powerful national state that continental Europe had even seen now came into being as the consequence of the most ruthless exercise of Realpolitik and military force’ (Knapton and Deny 1965 p. 157). Bismarck’s appetite was now satiated and peace was maintained throughout Europe until the First World War apart from relatively localised struggles in the Balkans. With the trial of strength now resolved, Germany and the Habsburg Empire secretly agreed in 1879 to come to each other’s aid if attacked by a third party and this Dual Alliance became a Triple Alliance through Italy’s adherence in 1882. Serbia was also associated with this defence system in 1881, followed by Romania in 1883—although this was difficult (despite Carol I’s pro-German stance) given the neo-feudal oppression of Romanians in Transylvania exposed by the National Party in Bucharest and also conceded by progressive Hungarians. Meanwhile, in the ECE context, Bismarck’s style can also be seen in his desire for good relations with Russia. ‘After 1870 as the armaments race in Europe increased in intensity year by year, the efforts of the great powers to save themselves from a fratricidal war took on an always greater sense of urgency’ (Scott 1978 p. 399). Hence Bismarck’s

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alliances which gave stability through an international balance of power giving imperial Germany precedence. Italy wanted security vis-à-vis both Austria and France but had to accept the status quo in Central Europe. Bismarck consolidated Germany’s position through the Dreikaiserbund (Three Emperors’ League) of 1872–3, which meant he had to overcome Habsburg-Russian tensions over Slav freedom (championed by Russia as a means of regaining a position in Europe after Crimea): note the Congress of Berlin to reverse some Balkan gains of 1877–8. After renewal in 1883, the Dreikaiserbund was replaced by a Reinsurance Treaty (1887) confirming the Balkans as a Russian sphere and agreeing to German and Russian ‘benevolent neutrality’ in a future war unless Germany attacked France or Russia attacked the Habsburg Empire. This was the pinnacle of Bismarck’s diplomacy. He resigned in 1890 (to be replaced by L.von Caprivi) in the face of the headstrong Wilhelm II. The Reinsurance Treaty lapsed and when the Russian harvest failed France offered aid, leading to a military alliance in 1894: agreeing to mobilise if either partner was attacked by Germany (or any Triple Alliance country). The UK then joined what became a Triple Entente in 1907 (after the Entente Cordiale with France in 1904). As tension increased at the turn of the century there was heavy spending on armaments which took some 5% of national income in France and Germany and 6% in the Habsburg and Russian empires. But Germany’s encirclement was arguably an inevitable consequence of her rise to great power status, rounded off by a substantial colonial programme (sparking the Morocco Crisis in 1905–6). Her response to the threat of isolation by land and sea was appropriately resolute: military planners were forced to adopt the Schlieffen Plan for quick, decisive and total victory, especially in the West, and saw in the First World War the stark choice of world power or downfall. Colonial societies and ‘Drang nach Osten’ German colonial societies were complemented by a Pan-German League formed in 1893 whose members advocated German domination over much of ECE (and the Low Countries) to achieve a Greater Germany. It was considered regrettable that the 5.5 million Germans who emigrated to the USA in the nineteenth century could not have been held on the eastern and southeastern marches to bolster German economic and political interests. There could be no doubt about the importance of trade with the Habsburg Empire and with the Balkans, to say nothing of the Middle East where German businessmen followed up Wilhelm II’s visits to the sultan in 1889 and 1898 by accumulating a collection of railway concessions—enough to open the prospect of a Berlin-Baghdad railway when a 2,300km extension to the Anatolian Railway was agreed in 1903. But while Germany reorganised the Turkish army, the French were equipping Bulgarian and Serb forces so that Ottoman failures in the Balkan War of 1912 could be seen as ‘Creuzot’s victory over Krupp’. Poland was also an area of critical importance since Palacký’s notion of German-Slav antagonism gave Berlin a sense of mission through ‘Drang nach Osten’. Initially there were good relations between Germans and Poles in the Grand Duchy of Poznań, though little manufacturing developed apart from food processing and handicrafts. However, 1848 brought a general desire for liberalism which quickly broke down over Polish desires for ‘national’ reorganisation. A Polish ‘Duchy of Gniezno’ was proposed in the eastern part of Prussian Poland whereupon the whole of Poznań became an integral part

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of the Prussian monarchy (as Posen; see above). The poorer Jews supported neither party but others tended to support the Germans, especially in the north and west where Germans were in the majority. German nationalists viewed the Poles ambivalently as actual or potential internal enemies of the state (‘Reichsfeinde’) and a sense of provocation was deepened by Bismarck’s appreciation that enlightened attitudes towards the Poles would not be appreciated in St Petersburg if Russia were forced into some accommodation with its own Polish population. Polish nationalism had to be seen as a threat that might mean the loss of territory to a Polish state and Bismarck asserted that ‘Polish nationalism cannot be judged humanistically and impartially by us but only antagonistically’ (Blanke 1981 p. 9). His first strategy was the ‘Kulturkampf’ which sought to frustrate the growth of Polish nationalism through the activities of the Catholic Church by placing all schools under the supervision of state inspectors (1871) before the teaching of Polish in elementary schools was stopped altogether (1887). Nevertheless, the ethnic balance tipped in favour of the Poles because the effects of a high birth rate—and some Polonisation of German Catholics—were exaggerated by out-migration of Germans linked with the competition suffered by local small-scale industries on account of large urban-based factories in the west that now had the benefit of cheap distribution by rail. Transit trade with Russia was also hard hit by customs regulations, and the slump in farm prices depressed the agricultural sector along with related industries like timber, spirits and wool. German technicians could earn more in the west while German retailers were eliminated by Polish boycotts. Most went to Brandenburg-Berlin and Westfalen, but many went abroad in the 1870s and 1880s. Of course, ethnic Germans con stituted the bulk of the migrants since they were in a better position to adjust to life among co-nationals in the west; Poles would usually stay only briefly in alien German-speaking areas before returning home with money to buy land. Somewhat ineffectual action was taken to remove the Russian Poles employed by German landowners—exploiting cheap labour to bolster their profits—before the more positive approach of the ‘Ansiedlungsgesetz’ (Settlement Law) of 1886 which gave rise to an ‘Ansiedlungskommission’ to purchase estates so that Polish farmworkers could be replaced by independent German peasants. However, the German peasant farmers assisted by the act were also anxious to use cheap labour and so the Poles remained, albeit with a change of employer. Caprivi was personally less antagonistic towards the Poles and expulsion orders against foreign workers were revoked in 1890. There was frankly little alternative assuming that German farmworkers could not be compelled to remain in the east and employers could not be made to pay higher wages. There was also a changing international context—with strains between Germany and Russia reaching the point where Poles might become a factor in a future two-front war embroiling Germany with both Russia and France—and some softening of measures taken against Polish language teaching. These changes were hardly fundamental and the limited reconciliation arose simply because ‘both sides were more or less conscripted into a closer relationship by fear of outside forces’ (ibid. p. 147). Ethnic Germans in the east still advocated a radical policy: hence the Germanising ethos of the ‘Ostmarkenverein’ (1894)—an Association for the Advancement of the German Nationality in the Eastern Marches— followed by a new Expropriation Law in 1908 and the colonial society ‘Gesellschaft zur Förderung der Inneren Kołonisation’ in 1912.

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Reference should also be made to the ‘Hebungspolitik’ of 1898: a programme of public spending to increase the attractiveness of the eastern regions. There was much new building in Posen, including a Royal Academy (later university) and the Kaiser-Wilhelm Library; and improved communications by both rail and water as the Warta was regulated and Posen port developed. Clearly there was a will to act but the programme was undermined primarily by the reluctance of Germans to compensate for the continuing exodus from the eastern periphery. Although Caprivi would not repeal the Settlement Law, rising land prices and a shortage of suitable German applicants reduced its effectiveness. While Germans dominated urban industry, the civil service and the railways, the gains made by Polish landowners between 1896 and 1914 went a long way to cancel out the losses of some 245,000ha from 1861 to 1896; many of them successfully adopted capitalist farming and extended rural industrialisation. Tariff policy Broadly speaking there was a conflict of interest between industrialists who wanted high tariffs to protect themselves against more efficient foreign producers and agrarians who believed that high tariffs for manufacturers would lead to retaliatory measures harmful to cereal exports which relied on free trade. Hence a compromise position of low tariff levels in the Zollverein, incidentally reciprocated when Metternich’s policy of high tariffs was modified with the aim of joining the club. But the situation was rather different when protection was quickly reintroduced in Germany in 1879 through an alliance between ‘rye and iron’. Agrarian interests now demanded protection, especially with the onset of depression when cheap food imports from Russia and the US undermined living standards among a farming population used to high incomes. But Bismarck’s modest increase in tariffs was a signal that the great eastern landowners would not be allowed to stand in the way of industry’s growing need for access to world markets in order to boost efficiency, specialisation and income growth (although even the moderate tariff increase had an adverse effect on production and accelerated emigration to the North America). However, it was difficult to avoid a spiralling effect given the tariff increase in the Habsburg and Russian empires in the 1880s. German retaliation culminated in 1892 when the Farmers’ League, a political group representing the now-uncompetitive Junkers and their academic supporters, pressed their views in crucial tariff debates. High tariffs then brought prosperity to the land—and generated more jobs for Poles in the eastern provinces—but this recognition of the political influence of the Junkers did nothing to encourage peasant proprietorship. The case for an ‘Agrarstaat’—requiring Germans to pay a high price for food—rather than a pure ‘Industriestaat’ was argued out on the basis of a physically fit rural population with a high birth rate that was more useful for the defence of a country than the physically inferior populations crowded into industrial towns. Autarky would also remove the risk of military weakness arising from excessive dependence on imports. The attempt by Caprivi in 1894 to negotiate simultaneous tariff reductions in Germany, the Habsburg Empire and some West European states (followed by Serbia and Romania in 1893 and Russia in 1894) gave a boost to industry—with a reduction in emigration in the late 1890s and a redirection of migration flows to the German cities—but eventually generated enough opposition to remove the chancellor

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from office. The controversial ‘Central European system’ lapsed in 1903 and tariffs resumed their upward trend. Compromise in the Habsburg Empire Support for German interests was clearly seen in the Habsburg Empire after 1850. The centralised system of A.Bach dispensed with local diets and concentrated a huge German-speaking bureaucracy in Vienna. This formula was drastically modified in 1867 when, in the wake of a catastrophic defeat by Prussia in the brief seven-week war of 1866, the empire was not only expelled from the German Confederation but forced to negotiate with the Magyars led by E.Deák and Count G.Andrássy to transform the state into a Dual Monarchy (Austria-Hungary). Nevertheless, concern over ‘encirclement’ (especially Russian pressure on her borderlands) made an entente appropriate and German capital flowed from 1867. When demand inflation sparked off a series of trade deficits from 1908 Germany also helped with emergency loans in 1913–14. A Central European customs union was fully established in 1891 through a series of Caprivi treaties linking Germany with the Habsburg Empire (and Italy, Switzerland and Belgium). Food from the empire moved to Germany along with oil from Galicia—following German investment by Deutsche Petrol—which helped gather support for an abortive OderDanube Canal project in the 1890s. The empire was still a major political force in the south and policy aimed resolutely at reducing Russian influence after Crimea. With German support, the Russian patronage for Bulgaria at San Stefano (1877–8) was reduced by the Berlin Congress in 1878. And after taking over the administration of Bosnia and Herzegovina after the rebellion of 1875–8, the province was formally annexed in 1908—following the Young Turk revolution—as part of a more active policy by foreign minister Von Aehrenthal during 1906–12 which included railway development in the South Slav lands. Relations with Serbia deteriorated until a crisis was provoked in 1914 by the assassination of Franz Ferdinand in Sarajevo by a Serb nationalist, whereupon Austrian bombardment of Belgrade caused Russia to mobilise. Until then the empire had an advantage because Russia was a net importer of capital and could not afford to invest in the region. For example, she could not summon finance for the Oriental Railway through Bulgaria in the early 1880s when ‘the occupying Tsarist army and officials could surely have used such a loan to consolidate their influence in the new Balkan state’ (Lampe and Jackson 1982 p. 90). But the empire was placed under great strain in the late nineteenth century as a result of the growth of nationalism. More powerful groups like the Magyars tried to maximise their influence while the weaker nations came to see the Dual Monarchy in a more negative light as an obstruction to their own ambitions. Yet stability arising out of the long continuity of administrative practice made collapse inconceivable before 1914. The principle of federation was widely supported. However, by 1918 interest in the principle of an imperial framework to provide security for small nations in the region—very strong in Palacký’s time—had switched to the radical alternative of national independence for which there was a growing number of precedents in the Balkans at the turn of the century. Only the smaller groups still found the imperial framework congenial. In Austria the Germans remained a distinct minority, with 34.8% of the population in 1910, by which time the Magyars in Hungary had achieved a majority of 54.5%. The

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Germans struggled to maintain ascendancy over the Slavs (Czechs, Poles, Slovenes and Ukrainians) and a significant Italian element. Yet, despite their refusal to take these peoples into a full partnership, there was a measure of cooperation from Czechs and Poles in the Vienna Reichsrat (parliament). Indeed Count Taafe’s rule (1879–93) was based on a combination of Catholic, Czech and socialist parties against German liberals. As a nation without a state the Czechs secured an important cultural concession in 1882 with the establishment of a separate university using the Czech language; securing a measure of equality with the Poles who already had universities at Cracow and Lemberg. The Jews were also cooperative as a result of emancipation by the end of the 1850s: they could escape the restrictions of ghetto life and adopt the values and lifestyle of liberal middle-class Gentile society. As H.G.Wanklyn (1940 p. 187) put it, ‘there is no denying the contribution of the Jews to contemporary economics: whether as tax gatherers, distillers, small traders, millers, manufacturers or timber merchants they had a lively sense of the resources of the region and knew in spite of many limitations how to make use of them’. Interestingly, census questions in Prague about everyday language after 1880 revealed a split between German and Czech which gradually shifted in the latter’s favour as the poorer Jews began to identify more closely with the Czech majority in the city. Hungary The Habsburg link was applauded by progressives in the early nineteenth century as the basis for Westernisation where nations on the margins of the Ottoman Empire were often judged to be Oriental in character. It seemed desirable to associate Hungarian culture with Europe’s Franco-German core provided her nationality would be safeguarded. A national idea then arose out of a Magyar renaissance, reflecting the ideals of the liberal aristocracy for agricultural development and emancipation in the 1830s and 1840s which generated strong literary and political impulses. Hungarian became the official language of the kingdom in 1844 and while liberals advocated an inclusive society giving nonMagyars a share in a superior culture, this was not heeded in 1848 when Kossuth rejected the idea of a multi-ethnic Hungarian state and thereby ensured that non-Magyars would back the forces of reaction in Vienna to defeat the revolution. But repression under martial law gave way to cooperation with Vienna in 1854, with economic development as the overriding concern. The emperor was subsequently disposed to fulfil Hungarian aspirations that went beyond progress in industry, transport and trade: there was a boost for the Church with money for Esztergom Cathedral in 1855 and tacit approval of the goal of ‘equitable dualism’. Ultimately, the victory which eluded the Magyars in 1848 was achieved in 1867 under Andrássy’s leadership when the Ausgleich maintained a unitary state yet with the Hungarian concession of giving up the dream of full independence balanced by freedom to promote the doctrine of a culturally superior Magyar race with a historic mission to control the southeastern marchlands which were drawn into the Hungarian ‘half of empire with the boundary on the Leitha River separating Austrian ‘Cisleithania’ from Hungarian ‘Transleithania’. The economic provisions were renewed every ten years through long negotiations, but an acute constitutional crisis occurred when failure to renegotiate in 1897 led to ‘years of

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obstruction’ (up to 1903) and the election of a nationalist coalition in 1905, which eventually governed until 1910. A nationality law in 1868 proclaimed all Hungarian citizens as members of the ‘Magyar’ nation irrespective of their mother tongue, yet each minority could use its own language and develop autonomy in educational and religious spheres. But in 1879 the teaching of Hungarian became obligatory even in non-Hungarian schools—a requirement reinforced by laws in 1883, 1891 and 1893. Substantial resources were put into the establishment of state schools while high standards were imposed on the religious denominations—which had run virtually all the primary schools before 1867— necessitating acceptance of state subsidies and the official interference that came with them, culminating in Count A.Apponyi’s 1907 law which secured government control over teachers by declaring them civil servants (requiring com petence in Hungarian and the right to a salary which many school managers in minority areas could not afford). The net result was the dominance of Hungarian as a language of instruction in all schools and a sharp reduction in the number of primary schools teaching in minority languages. Such actions made the minorities despair, for there was great frustration among national groups that tried to set up cultural facilities, for example reading rooms which were seen as having a political purpose against the interests of the ‘Magyar nation’. But the context lay in Vienna’s sole concession over renegotiation of the Ausgleich: in each army regiment the prevailing language (‘Umgangssprache’) would reflect that which most soldiers understood and not the mother tongue of the majority. Since the Hungarians had always wanted their own forces, an army where more regiments operated in Hungarian was a way forward. Hence the coalition government accepted Vienna’s terms in 1906 but then took measures in line with a chauvinistic policy to make ‘the language issue the crucial element of its goal to create a Hungary of thirty million Magyars’ (Sugar 1981 p. 301). The only substantial concession was made with Croatia through the ‘Nagodba’ of 1868, allowing autonomy in internal affairs with a governor (‘ban’) and parliament (‘sobor’) in Zagreb and Croatian as the official language. But even here all railway employees had to master the Hungarian language. There can be little doubt that Magyarisation was effective while resentment was not always universally felt since the educated classes saw economic and social benefits in conversion to the Magyar cause. Romanians, Slovaks and southern Slavs aired their grievances at a Congress of Nationalities in Budapest in 1895, but the group broke up due to internal divisions after only four years of opposition to government policies. The economy Meanwhile, Hungary’s economy within the Habsburg fold was based primarily on agriculture with cereal and flour exports catching up the traditional livestock sector during the first half of the nineteenth century. The aristocracy remained firmly in control: not only did differential tariffs (established in 1756 by Maria Theresa) favour exports of Hungarian farm products—as they did those of Austrian manufactures—but the ancient privileges of the aristocracy were confirmed by Leopold II, and—by 1830—they expropriated large areas of land cleared by free peasants of the previous generation. The events of 1848 changed the legal status of the nobility, who no longer held seigneurial rights, as well as the peasantry, who ceased to perform compulsory labour, but there was

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no redistribution of land and a middle class did not emerge. The so-called Liberal Party was controlled by the aristocracy (as was the Independence Party, perpetuating the spirit of 1848) and ruled from 1875 to 1906 with K.Tisza as premier, thanks to corrupt elections, rotten boroughs and patronage. The extent of aristocratic control was remarkable for ‘the magnates accepted the state as their own and used it for their own purposes’ (Stokes 1987 p. 73): a few prominent landowners could exercise ultimate control and they were able to mobilise the landless peasants who worked their lands. When industrialisation got under way after 1873 the political potential of the bourgeoisie remained largely dormant because Tisza saw to it that the leaders of the successful Jewish industrial and banking community were ennobled and thereby absorbed into the establishment (rather as in Prussia where the Junkers reached an understanding with industrialists that safeguarded their property and status). The Ottoman Empire and the successor states The Ottoman Empire was unable to offer the same positive response to developments in Western Europe. There was a breakdown in isolation with the arrival of diplomats and merchants but the prominence of non-Muslims in agriculture, commerce and industry encouraged the establishment to concentrate on its great vested interests of administrative and military matters. The Ottoman economy adjusted to the industrial revolution by concentrating on the export of foodstuffs and other raw materials without any commitment to modernisation. Until 1880 there were clear fiscal objectives through high tariffs for exports that generated resources for the army and palace, yet were quite inappropriate as stimuli for economic development. Since agriculture, industry and commerce were required only to satisfy existing consumption, there could be no sense of economic and technological dynamism, and ambivalence was shown towards skilful immigrant craftsmen and traders. The Anglo-Turkish commercial convention of 1838 was appreciated for its political and strategic benefits at a time of crisis in Egypt, even though free trade posed a threat to local industry. While crafts were undermined only slowly in the interior regions, the industries started around Istanbul in the 1840s by Sultan Mecid could supply only the army, while foreign capital needed ‘the institutions and the adaptability adequate to channel these resources in the direction that best served the country’s interest’ (ibid. p. 22). The infrastructure remained poor with only a sparse railway system developing late in the century, while the Islamic prohibition on usury was strong enough to delay the development of commercial banking and credit (the imperial bank established in Istanbul in 1863 served only the needs of the state). Foreign loans were largely for military use and a loan in 1870 linked with the Oriental Railway project to join the European system was essentially a political, administrative and strategic venture (railways inland from Constanţa and Varna were built by British firms taking advantage of the empire’s growing foreign trade). However, the Ottomans took a significant initiative in Midhat Pasha’s Danube Vilayet arising out of the 1864 reform seeking centralisation of provincial government and a growth in tax revenues. As an experiment in regional development—to overcome the disruption caused by a Circassian migration from the Crimea (1862–3) that gave rise to banditry—Midhat built roads and introduced both farm machinery and savings banks for agricultural credit, but on too small a scale and without efficient organisation so that

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rising tribute encouraged Bulgarians to support national revival by the 1870s. Moreover, the relatively stable period 1880–1914—dominated by the reign of Sultan Adbulhamid (1878–1908)—showed concern for economic development and the Western system of free enterprise with some acceptance of the use of tax revenues for development and infrastructure. There was a leap in imports for consumption and growing investor confidence as the empire paid off old debts in an orderly manner and contracted new ones. As banks with general commercial functions became prominent in the 1890s Turkey was arguably poised for an economic upsurge at the beginning of the twentieth century, but instead the country descended into eight years of war, for the division between the Turkish bureaucracy and Christian merchant communities (as revolutionary vanguards) fermented into an antagonism that was to become the basis of Balkan nationalism. The Ottomans paid a heavy price for their failure to modernise and seek the betterment of the individual through some feeling of identity. In the absence of any sense of common citizenship the empire could not survive. Christians traditionally held an inferior position in Ottoman society, providing the tax support for the military establishment and for other functions of state. An edict of 1856—marking the beginning of the ‘Tandzimat’ (Reform) period which lasted until 1876—declared the equality of all Ottoman citizens through ‘Osmanlilik’ or Ottomanism. But reform began in the military sector and was a slow and sometimes contradictory movement to maintain the integrity of the state during a period of near constant warfare. It promised the ultimate secularisation of government but no reform was radical enough to abolish the ‘millet’ system: a well-meaning concession allowing all groups to enjoy their own local administration which actually served to institutionalise Muslim privilege. Hence the Christian interest lay in moving from a ‘millet’ to a national consciousness with protection by the great powers as an interim measure as integration became a lost cause. It was ‘to be doubted if any programme of reform could have preserved the Ottoman Empire as a multinational state whose citizens would have been content to remain within its control’ (Jelavich and Jelavich 1977 p. 326). The Young Turk movement, with a secularist conception of fatherland (‘vatan’), forced even the Muslim Arab intelligentsia to shed their loyalty to the Ottoman state. The nation states of Southeastern Europe The Vienna Congress did not address the looming Eastern Question and since there was no guarantee for the ailing Ottoman Empire the Habsburg and Russian empires competed for Balkan territory. Under the Treaty of Adrianople (1829) Russia gained unprecedented influence in the marchlands: free passage in the Balkans and free access to the Dardanelles Straits for merchants; protection over the principalities; and a guarantee for Serbian autonomy. The Habsburgs were naturally concerned about this level of influence and after the Crimean War the Treaty of Paris (1856) called for the demilitarisation of the Black Sea and territorial adjustments in the Danube Delta (thereby giving Russia no role in the new Danube Commission). Furthermore the treaty cancelled Russia’s Balkan protectorate functions (in the principalities and Serbia)—and her right to intervene in Ottoman affairs on behalf of Orthodox Christians—in favour of an international guarantee. There followed a further setback when Russia’s patronage for a ‘Big Bulgaria’—the result of a pan-Slavic front against imperialism during the Russo-Turkish

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War of 1877–8—was blocked by the Congress of Berlin. She did, however, have the satisfaction of the Triple Alliance and a prompt response from her allies when the Ottomans attacked her Crimean ports in 1914. Meanwhile, there was considerable progress towards the formation of nation states that were nominally independent, yet economically and politically subservient to the great powers and their sensitivities over Russian designs on the Balkans and the Straits. There was a developing sense of nationalism despite the lack of ‘enlightenment’, which seemed to evade Ottoman territories, for Balkan Slavs were ready by the 1830s to assimilate national ideologies in order to ‘jump in one gigantic leap from Ottoman medievalism to romanticism, liberalism and socialism’ (Sugar 1975 p. 507). Yet while the state institutions were modelled on the West, ‘the actual content of political activity was more consistent with traditional status societies than with the more legalistic societies from which the state forms were copied’ (Stokes 1987 p. 74). The new nations were rarely able to realise their territorial ambitions in full since they tended to become mutually antagonistic, to say nothing of claims against the imperial powers which could not be effectively advanced until the Balkan Wars of 1912–13 and the First World War. In the development of nationalism much depended on the improvements in education but it is very significant that national Churches provided cultural, moral and political leadership. Since Ottoman systems of regulation had to be transformed by building up native entrepreneurship without an adequate security framework, there had to be a disproportionate emphasis on heavy industry and armaments. The infrastructure included the building of railway systems that were purely embryonic in the Ottoman period. And while the elites initially favoured low tariffs in order to push the agricultural surpluses of their estates into more developed parts of Europe (and to maintain good relations with the powers) stagnating grain prices in the 1880s undermined the credibility of an industrial policy linked to agricultural exports and forced a general extension of tariff barriers which provided an umbrella for domestic manufacturers. However, despite the developments in the resource regions (delivering timber, fuels and minerals, cereals and livestock) and the activity at the ports, the remarkable changes in the capital cities created major spatial antagonisms which had not been adequately addressed when Balkan tensions erupted into the First World War. But the rurality of the region remained an enduring characteristic, reflected in a balance of concern in the minds of visionaries between agrarian reform, in the interests of economic and social progress in the countryside, and urban-industrial development to solve the ‘peasant problem’ by reducing population pressure on limited land resources. Serbia and Montenegro National feeling was manifest in revolt against Turkish misrule in the very early years of the nineteenth century. A Serb uprising (1804) was precipitated by rebellious Janissaries and was not crushed until Ottoman victory in 1813. Trade with the south was disrupted: the economy was crippled and isolated. In 1815 a second rebellion gave M.Obrenović the opportunity to negotiate autonomy for the ‘pashalik’ of Belgrade where selfadministration was conceded by formal Ottoman decrees in 1830 and 1833 (arising out of bribery of Ottoman officials financed by the rapid expansion of the Serbian livestock trade to the Habsburg lands, the largest slice of which Obrenović himself controlled). It

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was significant that the Ottomans had eliminated the old medieval nobility, while the Serb uprisings got rid of the Turkish landowners. So it was comparatively easy for Obrenović to contain the potential challenges from churchmen and military figures and pose as the sole peasant leader. His abdication in 1838 left a peasantry that was almost totally undifferentiated (although the extended family ‘zadruga’ was beginning to collapse) apart from a small percentage of landowners with holdings of moderate size. Since shops were usually denied permits and subjected to high taxes it was only in the 1840s that rural shops began to eliminate the itinerant pedlars; while country fairs and inns (‘kafane’) also provided a commercial network. Indeed the 1838 constitution—in the mould of the Romanian ‘Organic Statutes’—established virtual free trade and a further surge in business which saw imported manufactures undermining craft workshops. Towns became Serbianised for Serbs were able to take over trade from many of the Greeks and Jews who had been in control in the early part of the century but were subjected to discrimination over documentation, citizenship and residence in the 1830s and 1840s. But urban expansion was constrained by the freeing of internal trade in 1838. Meanwhile, Montenegro was able to escape the full force of Turkish domination, given the determination of the tribesmen to exploit the excellent opportunities for guerrilla warfare in barren limestone country around Cetinje. But it was also possible for Montenegro to gain advantage from the major struggles between the empires and in 1799 the Ottomans formally recognised the country’s independence and the incorporation of Brda. These extended frontiers were successfully defended thereafter, with some gains in the Grahovo area in 1858. But efforts to obtain a footing on the Adriatic at Cattaro (1815) and Budva (1840) were resisted by the Habsburgs. Serbian independence was achieved in 1878 (with territorial expansion into the Niš triangle) and modernisation was based firmly on the West European model of national and class interests. Banking developed slowly in the early 1870s based almost entirely on domestic capital, although most traders were still forced to borrow from local money lenders and many had to get short-tern credit from the Habsburg lands. A bureaucracy emerged while the prince (king after 1882) managed the parliamentary system by switching support between the Serbian Radical Party (founded 1881) and the rival Liberal Party. The Radicals built up the infrastructure, including education, transport and the military, but did little for farming apart from the foundation of a few agricultural schools and plant breeding establishments. However, they also reduced the tax burden on the peasants (partly by lax application of the rules, including a reluctance to chase up arrears) and appeared to be championing their interests through a populist programme even though the party was controlled by intellectuals. The Liberals played a complementary role in popularising national unity and revitalising the Kosovo legend so that—with momentum contributed by the example of Italian unification—Serbia was seen as a core around which other southern Slav nations might coalesce given the inspiration of the medieval state of S.Dušan and Napoleon’s ‘Illyrian Idea’. Still more grandiose was the notion of a Balkan League that might draw Bulgarians, Greeks, Romanians and southern Slavs into a confederation with Belgrade as the appropriate capital. However, these ideas lacked realism as long as Serbia remained a small, backward state. Even in the context of the southern Slav peoples, subservience to Belgrade was controversial: indeed, it was repellent to the relatively developed and Westernised Croats especially in view of

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Serbia’s primitive political organisation focusing on the rival Karadjeordjević and Obrenović families. Links with the Habsburg Empire were strengthened under Milan Obrenović (1868–89) by Serbia’s request for support over boundary revisions at the Congress of Berlin, leading to a general economic agreement in 1880 that increased Serbia’s dependence. But dynastic change in favour of Peter Karadjeordjević in 1903 then produced sweeping reforms including reorganisation of commerce, bringing new trade and customs arrangements with Bulgaria and the Ottoman Empire in 1905. Vienna was also dismayed when modernisation of the army led to a contract with Schneider-Creusot of France rather than Škoda of Bohemia. The border was closed to Serbian exports in 1906, and annexation of Bosnia and Herzegovina in 1908 was related to a desire to increase pressure on Serbia. By the time the commercial war ended in 1911 Serbia had radically diversified her trade. Territorial gains in the Balkan Wars (limited only by Habsburg support for Albania) had an electrifying effect on the southern Slavs which precipitated the crisis of 1914. These gains were, however, controversial because they defied the wishes of the Macedonian people as represented by the Internal Macedonian Revolutionary Organisation (IMRO) founded in 1893 with a governing principle (announced in 1896) to achieve full political autonomy for Macedonia (and Adrianople) through internal revolution. After a failed revolt in the Monastir (Bitola) region in 1903, IMRO was torn between the options of complete independence or a merging into a Greater Bulgaria (1905) until Serbia was joined by Bulgaria and Greece in the partition of 1913. Of course, Serbia and Greece were totally opposed to IMRO while Sofia was ambivalent because one wing of the organisation supported Macedonian union with Bulgaria although she received only a small share of the spoils. Meanwhile, Montenegro gained a short coastline between Antivari (Bar) and Ulcinj after the Congress of Berlin, along with further interior territory around Nikšič. Further gains emerged out of the Balkan Wars as the ‘sancak’ (province) of Novipazar was partitioned between Montenegro and Serbia, thereby paving the way for a union movement that was already gaining momentum when the First World War started as a reaction to King Nikola’s alliance with Italian interests, although the ‘odbor’ (union) was not achieved until Nikola’s overthrow following civil war in 1918–19. Montenegro’s political and economic achievements were remarkable considering the meagre resources of the country and suspicions among the powers that annexation of coastal territory would result in a Russian naval presence (producing the stipulation in the 1878 treaty that Montenegrin waters should remain closed to the warships of all nations). Romania ‘From the Principalities subjected to the rule of the Phanariot princes as early as 1821, and which were destined to form the nucleus of the future modern state, to the national Romanian state forged in 1859, there was a huge leap which covered less than half a century’ (Berindei 1988 p. 23). The ‘boyar’ landowners maintained pressure for the restoration of native rule through the late eighteenth century but it was only in 1821, following the great Greek upheaval, that the Porte abandoned the system of indirect rule through Phanariot appointees and restored native princes the following year. Since the

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cosmopolitan merchant class was not a political force, this was significant in opening the way for a surge of Enlightenment under the Western-educated boyar youth which included cultured individuals such as V.Alecsandri, G.Asachi, N.Bălcescu, C.Golescu and M.Kogălniceanu. Russian influence also proved very positive when the occupation of 1828–34 (‘the sixth in a series of Tsarist occupations since 1711’) brought in Count P.Kiselev—as plenipotentiary in both principalities—to ‘convert the territory into a bulwark against the Ottoman Empire’ (Lampe and Jackson 1982 p. 91). The need for better regulation resulted in constitutions in the form of the Organic Statutes (1830) driven through in the teeth of boyar objections. There was a new government machine with a council of ministers and efforts were made to improve agriculture and health services, but a progressive Russian regime in the principalities did not lessen the greater attractiveness of trade with the Habsburg Empire, undertaken by a growing number of Jewish merchants arising from immigration which the Russians could do little to control (though they were barred from holding land and—like other traders and artisans—from settling in villages). Commercial growth arose from the removal of the Ottoman monopoly under the Treaty of Adrianople, the opening up of the Black Sea and adoption of a fairer fiscal system. The cereal output could now enter the world economic circuit. The Crimean War brought to an end the Russian protectorate and the restoration of Moldavian control over the mouth of the Danube through the transfer of southern Bessarabia which had been lost to Russia (along with the rest of the province) in 1829. There was a surge of popular pressure for unity and despite Habsburg and Ottoman interference the ‘divans’ set their sights on ‘united principalities’ by electing the same prince (A.I.Cuza) in both Moldavia and Wallachia. The powers then accepted the inevitable with the Wallachian capital (Bucharest) the clear choice for the new administration as the largest town in the region. Economic and social change accelerated with attention to defence, public health, industry and transport. There was a growth of small industry (artisan workshops) especially in Bucharest, while a national coinage was introduced in 1867 and there were 1,300km of railway by the time independence was achieved in 1878. The modernisation of the country went ahead to consolidate the economic underpinnings of independence with the benefit of cereal, oil and timber exports and a more supportive fiscal regime. The growth of cereal exports was particularly impressive in the immediate hinterland of the ports. The feudal issue was settled in 1864 but the slow pace of urbanisation meant that there was an expanding rural population which had to be supported largely by sharecropping and labour contracts on estate land. Yet while more land was ploughed, yields and prices were not dynamic enough to secure significant improvements in living standards so that governments became increasingly preoccupied with economic and social crises, especially after the peasant revolt of 1907. Political power rested with the landowning Conservatives and urban entrepreneurial Liberals, but those who entered public life could not maintain a grip on power because King Carol (who as Prince Carol had replaced Cuza after the coup against the latter in 1866) switched his support between the two parties. Neither party was prepared to compromise with the Jewish middle class which became a strong force in the towns (inevitably, since they could not live in the countryside or own land). The Liberals resented the Jews as economic rivals and hounded them out of even such minor business as peddling in the villages; and while the

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Conservatives valued Jews as estate managers they lacked the maturity to recruit them as a political force. Meanwhile, Romanian industry was hit hard by foreign imports in the years just before independence when there was a limited market, a lack of domestic capital and skilled workers, and, crucially, no effective system of protection and national industrial growth (but extractive industries like oil and salt were doing well). However, all the domestic issues of the kingdom were overshadowed by the issue of union with Transylvania. Although official action was constrained by Romania’s secret treaty with the Habsburg Empire there was growing cultural contact, and the continuing lack of unity across the Carpathians was seen as an unnatural situation, not unlike the partitioned Poland. Bulgaria During the Ottoman period Bulgarian nationalism was constrained by the domination of the patriarchate by Greek bishops, although a history book in Bulgarian was published in 1762. But it was only in 1870 that Russian pressure produced a Bulgarian Orthodox exarchate, and a national church leader outside the authority of the Greek patriarch seems to have fomented greater political activity. Rising tribute increased Bulgarian sympathy for the national movement, but another consideration was Turkish preference for Bulgarian community leaders (the ‘chorobadzia’ who were successful traders operating within the Ottoman Empire), mayors and tax collectors in each town with the result that small councils were established to represent different interest groups, notably craftsmen and merchants. These innovations were stimulating because the chorobadzia were closely associated (as tithe collectors) with the Phanariot Greek hierarchy of the Orthodox Church and could therefore apply pressure from the business community for improved education facilities in the Bulgarian language which contributed to cultural and economic development as well as a rise of national consciousness. Then the severe Turkish response to the carefully organised rising of 1876 brought about a Russian invasion with Romanian support. But the large Bulgarian state carved out of Ottoman territory in 1877 under the Treaty of San Stefano was unacceptable to the other powers despite much sympathy for the Bulgarian cause. The Russians had to submit their treaty for ratification by the Congress of Berlin, as a result of which only a small Bulgaria was recognised as a self-governing state under Ottoman suzerainty while Macedonia and Eastern Rumelia were returned to Ottoman rule (albeit with a measure of autonomy in the latter case). This was welcomed by Serbia, with claims to some of Bulgaria’s 1877 territory, but it constituted a setback for the Russians whose influence in Balkan affairs was greatly reduced. However, although some Russians denounced the Congress, they could not afford to go to war with the other powers, and northern Bulgaria could be seen as the nucleus for a future independent and unified state. In the event Russian tutelage was resented by the Bulgarians who made surprisingly rapid progress in pursuit of a larger state by absorbing Eastern Rumelia in 1885 (despite Serbia’s violent opposition), while suzerainty was rejected by a unilateral declaration of independence in 1908. Unlike the situation in Serbia in 1878 Bulgaria had no ready-made administration, but a stable regime was established under Ferdinand Saxe-Coburg in 1887 (he became king in 1908) and Bulgaria was led into the First World War on the side of the Central Powers

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in the hope that further territorial gains would help re-establish the generous frontiers of early medieval Bulgarian empires. It was the liberal intelligentsia who dominated the Turnovo constitutional convention and controlled the government in the early years after the departure of Turkish landlords left Bulgaria a country of smallholding peasants. The role of the prince was quite decisive in a situation where there was no natural party of government supported by the peasants, who were faced with low commodity prices and heavy tax burdens. The prince established his personal power with the help of conservatives and instability linked with war with Serbia and unification with Rumelia was overcome by authoritarian methods which undermined the Turnovo constitution and gave rise to the fraudulent ‘making’ of elections typical of Romania, Serbia and even Hungary, where the magnates relied on rural support delivered by coercive methods. There was attention to infrastructure as in Serbia, but the peasants did not escape a heavy fiscal burden. Radical opposition came from the ‘Bulgarski Zemedelske Naroden Soiuz’ (Bulgarian Agricultural National Union: BANU) formed in 1899 to mount what turned out to be a successful campaign against collection of tithes in kind during a period of rising cereal prices, although it was not until after the war that their charismatic leader A.Stamboliski was able to make an impact in parliament. The union found a useful role in developing producer cooperatives (‘druzhbi’) which established stores and provided insurance funds and agricultural extension services. The latter included credit facilities—that is, mortgage loans—through the Bulgarian Agricultural Bank which emerged from the rural savings banks (organised by Midhat Pasha in the 1860s) to comprise a single organisation with headquarters in Sofia by 1903. Trade was relatively limited (Bucharest, Istanbul and Selanik) at this time, for the Bulgarians did not possess a borderline offering longdistance trading opportunities. However, an artisan-trader class developed in the upland towns, manufacturing army equipment for the Ottomans on the basis of the inherited guild system which ‘nicely served the political apprenticeship of this growing commercial class’ (Lampe and Jackson 1982 p. 152). Albania Shqiptar (Albanian) national consciousness was slow to develop, and culture was for long associated with the Catholic and Orthodox Churches (in the north and south respectively) rather than politics. It was among the Muslims of that revolutionary intellectuals first emerged in the 1840s thanks to Greek schools which helped to overcome cultural isolation. The idea of preserving Muslim Albania in the context of a reformed Ottoman Empire seems to have given way—in the face of strong Hellenisation during the 1870s— to an alternative conception of an Albanian nation securing its future in a post-Ottoman context on the basis of language and national literature. Thus ‘a generation of Albanian patriots when forced to identify either on the basis of language or religion came to the conclusion that the survival of the “komb” ultimately depended on the survival of the language’ (Kolsti 1981 p. 40). But it was only in 1908 that an All-Albania Congress in Monastir agreed to adopt a modified form of the ‘Union Alphabet’ which evolved among Ghegs in northern Albania in preference to the ‘Istanbul Alphabet’ used by Tosks in the south (and phased out only in 1915). The really critical period for Albanian nationalism began when the Young Turk revolution ushered in a new constitution removing

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recognition of ethnic groups (declaring all citizens to be ‘Osmanli’) which had the effect of transforming an Albanian cultural movement into a national revolt, especially among the Catholic Malissori on the Montenegrin frontier. However, while Greeks and Slavs welcomed anti-Ottoman sentiment, neither wished to facilitate an Albanian state, and with the collapse of the Ottoman army and a final Turkish withdrawal from the Western Balkans after the Balkan War in 1912 it was largely because of Austrian and Italian insistence that the growth of Serbia (and to a lesser extent Greece) should be curbed that a separate Albania was recognised; although arguably without any basis in Albanian nationalism this policy might not have been viable. In 1912 a national assembly in Vlorë declared independence, with strong support from Italy (wanting a foothold) and Austria (wishing to block Serbia’s expansion to the sea). By contrast, Montenegrins and Serbs saw the Ottoman Albanian territories as the potential spoils of a Holy War and atrocities committed against Albanians betrayed genocidal instincts at the grass roots. And while Serbia was denied direct access to the sea, Albanian territory was partitioned to allow the Serbs to regain Kosovo and Uskub (Skopje), which had been integral parts of the medieval Serb state (Rašca) that the Turks has captured through fighting at Kosovo Polje centuries earlier. AGRICULTURE Introduction on core-periphery relations and peasant emancipation At the start of the period agriculture was a labour-intensive business grounded in feudalism which gave the landowners an exalted social status. Predictably for the European periphery there were no crop yields above the European average outside Germany. The Austrian section of the Habsburg Empire came close but other territories were well behind (though for wheat Hungary was just below average and Romania just above). On the other hand the region was a significant meat supplier and stocking levels were high in relation to cropland. Agriculture became more efficient as labour was diverted to the towns and investment in infrastructure boosted output. Increasing liquidity led to a decline in barter and increased the commercialisation of agriculture, raising the probability that financial sector growth contributed to the acceleration of output at the turn of the century. In the growth areas feudalism was quickly superseded by cash payment. Peasants could not be coerced into performing transport services with their own draught animals but they could still carry out such work in return for wages. W.Długoborksi (1975 p. 129) remarks that in the transport of mining-smelting products ‘the owners of mines and ironworks used almost exclusively hired peasant draught-horse services’ and for some peasants this activity became their main source of income, relegating agriculture to a secondary role. Agricultural labourers ceased to be paid in kind and hence there was a growing demand for small shops which ‘appeared with resilient promptitude where they were needed by the population which they could then serve regardless of the weather and the time of day’ (Csato 1977 p. 418). Elsewhere, the social realities could not be taken out of the picture. If compelling industrial potential would not give the lords a new role in business, there could be a ‘rejoicing’ over backward area status because the old relations would remain in force

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with a formal abolition of serfdom bringing no fundamental change: requiring merely a new form of dependence involving labour contracts for estate work (including sharecropping on peasant-cultivated land) to supplement activity on small owneroccupied farms. Even in Hungary and eastern Germany (Posen) the aristocracy retained privileges despite growth. But Dashkalov (1997) explains that in the more backward peripheral areas nineteenth-century modernisation could not overcome the town-country cleavage in view of a rural outlook rooted in small peasant agriculture: a conservative reaction rooted in peasant values with rural civilisation the base of an authentic national identity (influential regarding the fascist and communist projects). This traditional outlook was naturally strongest where the peasantry had no choice but to stay on the land. There were dangers of withdrawing from the land: what else was there but limited industrial work or emigration? The substantial landless rural population in Transylvania gained only marginally from the sale of estate land which was bought up by the banks and mortgaged to a mainly Romanian peasantry. In Russian Poland the peasantry remained isolated from the lively pace of cultural change in the towns, being ‘atomised into a number of closed independent village communities each of which independently had to undergo the slow and cumbersome process of breaking its social and cultural isolation [and] finding ways to participate in the life, values and activities of the nation’ (Obrebski 1976 p. 25). Peasant revolts might have been a protest against repression but equally a cry for rescue from a state of stagnation when the forces of modernisation seemed to be passing by; with particular sensitivity when the negligence could be blamed on an alien group. The late eighteenth and early nineteenth centuries saw both anti-Habsburg and anti-Ottoman protest with particular interest attaching to the former, which in both the Apuseni Mountains and Pannonian Plain saw the peasants isolated from currents of modernisation. Indeed the 1831 ‘Cholera Uprising’ in Hungary spawned the rumour that landlords and Jews were poisoning the rural population and the upheaval generated momentum for social reform in the hands of enlightened people like I.Széchenyi, leading to the abolition of serfdom in 1848. The late nineteenth century produced the Bosnian Crisis (1875–8), which began as a peasant revolt in Herzegovina, and risings in Bulgaria (1875–6). Meanwhile, Romania experienced outbursts against speculators and absentee landlords in 1888–9, followed by the 1907 ‘jacquerie’ that began with anti-Semitic rioting in northern Moldavia. ‘The end of serfdom generally included a division of lands that favoured landlords. Peasants gained title to roughly one-third of former estates but lost access to common pastures and woodlands’ (Sowards 2000 p. 568). However, there were major differences according to the arrangements for bringing feudalism to an end, for example the contrast between Austria and Hungary. In Austria the majority of those emancipated gained security of tenure over all the lands they had previously cultivated, while former landowners were compensated for the loss of labour services and debarred from purchasing peasant-owned land. This helped preserve the peasant class because peasants could only sell land to other peasants. Nevertheless, emancipation brought change as holdings in the open fields were consolidated and more dispersed settlement forms evolved with farmhouses standing on newly enclosed holdings laid off from the roads. In some cases the original village core was reduced to just one element in a more complex structure. An alternative model awarded land to both the peasants and feudal lords while in Posen compensation payable to landowners for emancipation was a burden on the

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peasantry until the 1870s, forcing them to earn additional income off the farm (and often on estates). A further hazard was the subdivision of the small peasant farms arising out of emancipation. ‘Thoughout Galicia the system of bilateral inheritance, which ideally divided parental lands between all offspring, inevitably led to the diminution of peasant farms’ (Pine and Bogdanowicz 1982 p. 71) even if some sons and daughters could be ‘bought out’ when they left the land. The problems were further exaggerated in the event of disease and potato crop failure, such as occurred in the 1870s. More than a quarter of Galicia’s population had emigrated to the USA by 1914. There was virtually no new land that could be broken in: the Podhale village of Tymowa, first settled in the seventeenth century and poor even by Galician standards, developed out of necessity despite lowquality soil, a short growing season and a limited crop range. In Hungary (and in Bukowina and Galicia) the estates were kept largely intact and the majority of peasants received no land apart from their tiny plots. The peasants had little option but to accept low wages for estate work because there was often no other employment available: the old social relationships were recreated in a new form. This could involve sharecropping where owners did not have capital to provide equipment and wages: they were guaranteed a steady income without the need to take any particular interest in their land and could enjoy a leisured retreat to a comfortable townhouse with the estate management left to an agent. Thus J.Komlos (1979 p. 60) denies that the abolition of serfdom was either ‘a sufficient or necessary condition for the rapid transformation of the countryside’. Society in the Balkans A special case concerns the power of the peasantry where there was no native aristocracy, as in Bulgaria and Serbia. On the Habsburg Empire’s Military Frontier where settlers owed military service for their land, reform was accomplished slowly between 1869 and 1886. And in Bosnia and Herzegovina where the Habsburgs inherited a system that obliged peasants to support the military activities of Muslim landlords and the Turkish overlord the tenures were gradually changed to freeholds after 1879. However, this change could be accomplished without affecting the local custom whereby the individual household (‘kmet’) would integrate with others—usually about ten in all—to form a kinship group (‘zadruga’) which worked all the constituent holdings on a communal basis, thereby comprising a unit of both settlement and landholding. Even when agrarian bank credits were available in 1909 to separate out the individual farms a third of the peasants chose to retain the traditional structure. In Bulgaria a rising tax burden and more efficient collection procedures weakened the Ottoman ‘chiftlik’ (estate) system so that expropriation and subdivision transferred more land to smallholders after the ‘Tanzimat’ era had produced some small/medium farms worked by Bulgarians. However, if there were no large estates to tax then fiscal burdens were likely to fall on the peasants. Thus, while small, fragmented holdings predominated after 1878 (with some success in cashcropping through the rose oil industry around Gabrovo), the peasants were discouraged by rising harvest tithes; and a switch of payment from cash to kind under the poor harvest conditions of 1899 led to the formation of BANU (as already noted) so that as a result peasant politics became a burning issue before and after the First World War.

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The case of Romania The situation was very different in Romania where the lords evolved from village leaders who took over the best village lands and—as a boyar class—gained great influence as the nineteenth-century elite. Demesnes were worked less thoroughly than in the north and the boyars exploited the peasants on the Ottoman model. For when Ottoman officials and feudal cavalry were supported by lands granted by the sultan for life (but without inheritance, and without feudal jurisdiction over peasants), it was common for these fiefs to be administered illegally as chiftliks where peasants were obliged out of economic necessity to work as sharecroppers under terms which might be onerous enough to foment national revolutions. Estates became more prominent in the principalities when the opportunities to supply grain as well as livestock to Istanbul (and to Western Europe after 1828) ‘encouraged boyars to attempt to secure rights to the agricultural production of villages’ (Stokes 1987 p. 52), and they controlled the plains not through landownership so much as their rights to collect tithes. While demographic setbacks and insecurity combined with transhumance to prevent tight control of a sedentary population in the eighteenth century, the nineteenth-reality was quite different thanks to more ordered government and a resumption of population growth. The boyars gained clear access to power with the Ottoman abandonment of rule through Phanariot Greeks and their replacement by native princes. Labour requirements were raised before the end of the eighteenth century while in 1815 settlement on boyar land became a privilege rather than a right, and tithes were raised from a tenth of the production to a fifth. Even when Kiselev’s Organic Statutes of 1831 legally restricted peasants’ smallholdings to a maximum of two-thirds of the estate land, production continued to focus on small-scale operations. Peasants disliked working as estate labourers and resisted surveys that might result in a loss of land; while the owners (or the merchants renting their lands) ‘were apparently more interested in maximising their short-term cash income than in organising production for long term’ (Lampe and Jackson 1982 p. 223). They would rent additional estate land (‘prisoare’) to peasants (without survey) through contracts requiring payment in cash or kind rather than feudal labour services (increased by the codification of tasks in such a way as to take far longer than the customary twelve days). This exploitative arrangement facilitated a monetisation process and was very rewarding to the owners who ‘used not only the threat of surveying but also the growing peasant demand for land to increase rents sharply’ (ibid. p. 223). Thus, capitalist farming was introduced on the basis of neo-feudal obligations which made labour extremely cheap. While there was some mechanisation on the estates the process was limited by the fact that the labour was not supplied by a rural proletariat but rather by a ‘peasantry of subjugated smallholding sharecroppers’ (Stokes 1987 p. 54). In 1848 a provisional government attempted to study agrarian problems with the idea of freeing the peasants and establishing them on adequate holdings for which the estates would be compensated. But the reaction which followed the arrival of Ottoman forces saw a revision of land rights in favour of the boyars in 1851, paving the way for greater use of peasant labour on estate reserves—though this ‘second serfdom’ also saw the peasantry encroaching on estate land so that cultivation on peasant-worked land increased faster than on estate reserve land. All this facilitated a growing grain output, though with low yields given the technology employed and the recurring drought conditions. In 1858 the boyars became landlords (‘moşierii’) while the 1864 reform formally abolished

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feudalism and gave the peasants two-thirds of the estate land—although the holdings were small and prohibition on the sale of holdings prevented any evolution towards viable family farms—while the landlords obtained legal title to the remainder (the best one-third!) and gained further through the secularisation of monastic lands. Both peasants and landlords could access state land but even so the average peasant holding declined from 1896. When leasing more demesne land for sharecropping a curious legal formality tied the contract to unpaid labour on another portion of the estate! As landlords leased the management to agents by competition, contracts had to bring a profit and so they became more onerous for the peasants. This was especially the case after 1895 when cereal prices stagnated in the face of North American competition, and when the flagging latifundia system was taken over by rapacious Jewish estate managers (‘arendaşi’) seeking the cheapest possible peasant labour, with adverse consequences for public health through long hours of peasant work and the virtual absence of protein in the diet. In 1904 the Liberals sanctioned peasant cooperatives which could compete for sharecropping leases but the system did not make significant progress because only rarely could the cooperatives compete with the ‘arendaşi’. Owners actually preferred wage labour by landless Romanian peasants and seasonal Bulgarian, Macedonian and Serb migrants (the latter also prominent in Bulgaria and Hungary) but most failed to create a stable basis for capitalist farming since they entered world markets not ‘as profit-seeking farmers but as tribute-seeking rentiers’ (ibid. p. 55) while German and Hungarian farms still secured greater efficiency. It was only after the First World War that the system was revised in favour of wider peasant proprietorship and heavier state taxes. Germany German agriculture contributed to the country’s economic miracle with the encouragement of a high protective cereal tariff set in 1879 and raised through the 1880s, although J.A.Perkins (1981) emphasises the desire of owner-occupiers to maintain the value of their land through higher technical inputs in the main arable areas. Progress was most evident in potatoes and sugar beet, with particularly high capital and labour inputs in the latter case: raw sugar yield per hectare in Germany was 38% higher than in the Habsburg Empire and 31% higher than in France. However, labour was required on a seasonal rather than a permanent basis and this resulted in the ‘Instleute’ system whereby cottagers were provided with a smallholding in return for the labour of the holder and one other person when needed—although further intensification eventually required the return of these holdings to the owner and the adoption of a system of wage labour for seasonal migrants. Thus peasants from the Eichsfeld district near Erfurt went to work on the sugar beet farms of Halle and Magdeburg in the 1840s and by the end of the century the habit of going to Saxony (‘Sachsengängarei’) was well established in central and eastern Germany. The system also affected Habsburg territories (especially Galicia), Italy, Russia (Poland and White Russia) and Scandinavia so that in 1914 there were some 430,000 seasonal agricultural workers migrating to Germany across international frontiers (more than a quarter of them Russian Poles). Some farms were extremely large and were integrated with processing. The Nagel farm near Halle, which started in the 1840s when two brothers gave up their craft as stonemasons and purchased land—100ha, gradually enlarged to l,414ha by the time of

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their deaths in the mid-1880s—was subsequently endowed with a sugar factory, flour mill and distillery (the latter producing alcohol from potatoes and molasses). The farm continued to expand under new management to reach 2,146ha in 1900, by which time a second sugar factory was working on the estate. Given the management problems of such complex operations there seems to have been a preference for the alternative model whereby large sugar factories, enjoying scale economies, worked in conjunction with a number of separate farms. But either way it is clear that the Junkers, who were politically powerful in Germany before the First World War, were efficient managers of successful businesses rather than reactionary survivors of some bygone feudal age. Artificial fertiliser was a critical factor in the situation since the organic manure from cattle fed on sugar beet pulp would not have been sufficient to maintain high yields. The availability of potash in central Germany (initially a waste material generated in the course of salt mining) helped to make the Magdeburg area a leader in the agricultural revolution. Potash sales rose sharply after J.von Liebig discovered its value as fertiliser in 1861 to reach 0.3 million tonnes in 1870, 0.7 million in 1880 and 8 million in 1910. Nitrate came from Chile while domestic industry yielded ammonium sulphate from coke ovens and phosphate (basic slag) from metallurgical works. Fertiliser dressings per hectare in Germany rose from 3.1kg/ha in 1878–80 to 42 in 1913–14 (18.9kg of superphosphate, 16.7 of potash and 6.4 of nitrogen). The Eastern Question Here there was a slow start to intensification given the peasant stake in the land under feudalism, and uncertainty over the impact of the new farming technology on the sandy soils of East Prussia. There was little progress in the early nineteenth century as long as farmer protection (‘Bauernschütz’) safeguarded peasant land. But Dickler (1975) traces the progress of Prussian ‘regulation’ which established a free market in land (1807); individual property rights to replace privilege (1811); landlord access to a third of peasant hereditary possessions—half the non-hereditary possessions—while peasants without ownership rights got nothing (1816); and enclosure of commons (1821). As peasant pasture and subsistence arable became available, 1 million hectares of peasant land went to the estates through regulation or buy-outs of land from peasants weakened by the new regime. These changes gave a boost to the Junkers in production for export in the context of rising cereal prices: wheat and rye gained at the expense of barley—used locally for brewing—and the oats required for horse feed and gruel; justifying investment in land reclamation and drainage as well as rotation systems involving potatoes and clover. In the process the peasant middle class was weakened—to a greater extent than in Saxony where the level of ‘protection’ was greater—and more people became free labourers (‘Tagelöhner’). Output increased but the social change was also reflected in higher infant mortality linked with the relative increase in the role of potatoes in the rural diet; a consequence of the potential for cereal exports and the need for other appropriate crops in the rotation system. Smallholders and wage earners left with a bit of land after commutation of feudal dues and services and enclosure of the commons ‘may have adopted the potato as the only way to avoid starvation given the amount of land made available to them’ (Dickler 1975 p. 290). It is significant that while potato cultivation in Central Europe followed famine in

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1770–2, rapid growth came later with the steep rise in cereal prices: for by releasing land and labour, potatoes gave rise to improved rotation and enabled land under major crops to increase faster than male workers. It was also significant that the growth of root crops brought higher cereal yields since the latter benefited from the fertiliser applied to sugar beet at the start of the rotation cycle, the methods of cultivation and the manure supply. Tracing the progress of sugar beet on eastern Junker holdings from the 1850s, Perkins (1981) notes the dependence on cheap seasonal labour when many former farm workers went into industry. He explains how the distinction between farm servants (‘Knechte’)— who lived on the farm and worked with draught animals—and ‘Instleute’ cottagers was reduced by the latter’s evolution to ‘Deputant’ status involving a smaller plots and more regular work (though both variants became less prominent with the growth of seasonal work, much of it done by women). In particular, dependence on migrant Poles developed the capitalist ethos which broke down traditional employer-employee relations inherited from feudalism and reduced Junker control over the rural population in general. Habsburg Empire The contrast between core and periphery was very strong. Bohemia and Moravia lay adjacent to the German provinces of Saxony and Silesia with a relatively large number of 20–50ha farms to justify capital investment to raise yields. But the estates were also progressive and the cheap labour of smallholders was not exploited simply to enjoy higher living standards without any obligation to modernise and innovate. This was not so much an issue of ethics as one of demand—in an industrial area—coming from private households and food-processing factories, while rural-urban migration removed population pressure on the land and precluded a subsistence mentality (though in any case the primogenital inheritance law forbade the subdivision of peasant farms before 1869). Cultivation of hops and sugar beet was linked with breweries and sugar factories served by road and rail transport; and the introduction of the crops was often financed initially by the industries themselves. Apart from some early cultivation at the time of Napoleonic continental blockades, sugar beet growing really began with the opening of the Seelowitz (Židlochovice) factory in 1837. Tariff barriers against imported sugar were stimulative but probably more important were the compensation payments received by landowners in connection with the abolition of serfdom because these capital reserves enabled the larger estates to build sugar factories. By the 1870s production was similar to Germany but relatively low consumption in the empire made for a considerable export surplus. And the need to compete in foreign markets was a spur to increase efficiency, with profits ploughed back into research that would improve quality and reduce costs. Germany established a clear lead in output from the 1880s but the empire was still a major world producer. Of course, while industrial crops symbolised a productive agriculture, bread and fodder cereals and potatoes were far more important in areal terms. But the business environment was such that almost all sections of the farming population had an interest in removing checks to the capitalist mode of production. The situation is well summarised by Kolossa (1969) who contrasts the developed economy in the west— with modern, large-scale farming and a bourgeois outlook—first with Carniola and west/central Hungary where capitalist agriculture developed at the turn of the century, and second with the eastern and southern regions that were relatively backward and

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retained the peasant character that was also characteristic of alpine areas (Table 2.1). Industry was a major influence, increasing the proportion of non-occupational agrarian landowners, reducing the scale of the peasant community and stimulating small landholders to assume a bourgeois outlook with involvement in capitalistic market situations and a more urban lifestyle. The strength of the landowners and the total population not engaged in agrarian pursuits correlates with farm size (particularly when the larger holdings are considered), with incomes and with the use of hired labour. Bohemia and Moravia can be distinguished from Austria, Carniola and Hungary, with Bukowina, Croatia, Dalmatia and Galicia in the lowest category. Nevertheless, Moravia’s median farm size remained low, while Croatia did relatively well in terms of income. Hungary Here a relatively backward agriculture was transformed in the late nineteenth century when farmers were able to bypass local markets and export to Austria,

Table 2.1 Rural geography of the Habsburg Empire 1900–10 A

B

C

D

E

F

G

H

Austria 15.6 51.7 2.4 5.6 5.82 13.97 28.48 6.23 Bohemia 27.8 67.9 2.3 6.1 10.11 23.25 16.76 11.53 Bukovina 9.0 29.1 1.6 3.1 2.08 3.33 56.34 3.17 Carniola 14.6 38.1 4.8 11.4 2.95 14.16 14.89 4.08 Croatia 8.4 18.0 3.4 6.3 4.17 14.05 n.a. n.a. Dalmatia 8.1 17.5 1.4 3.0 1.13 1.58 39.26 1.30 Galicia 5.6 27.1 2.3 4.3 3.22 7.41 42.61 2.66 Hungary 13.8 33.5 2.5 6.2 5.01 12.37 n.a. n.a. Moravia 25.3 38.9 1.9 5.4 11.34 21.55 23.36 9.11 Key: A Percentage of owners not engaged in agrarian pursuits (1910 but Croatia and Hungary 1900) B Ditto for the total population (1910 but Croatia and Hungary 1900) C Median farm size (ha) 1900 D Ditto: largest 25% 1900 E Average net income per hectare (guldens) 1900 F Ditto for the median farm size of holding 1900 G Percentage of operations using hired labour 1902 H Ditto industrial hired labour 1902 Note: There is a correlation between Columns A and B, with high values in developed areas where many peasants were seeking new occupations in manufacturing, trade and administration. Columns C–F show variations in farm size and income—highlighting the need for additonal income in many cases. Source: Kolossa 1969 pp. 425, 428 and 430

particularly wheat and maize that were good estate enterprises. In 1912 Austria took 99.8% of Hungary’s wheat exports compared with 97.9% for flour, 89.2% for maize and 79.9% for cattle. This achievement required a massive growth of wholesale commerce, for the grain trade was the largest branch in the commercial sector. Another key issue was

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the development of financial institutions. Although the first savings banks emerged in the 1830s, the number rocketed from 1,255 in 1890 to 5,014 in 1913—especially village savings and loan associations—transformed by Raiffeisen-type savings and loan cooperatives (Held 1980 p. 95). There was also an annual growth in productivity of 1.7– 2.2% (depending on the source of the calculations) during 1867–1913 compared with 4.5% and 6% respectively in industry. Since landowners were able to keep a tight political grip on the country they were able to maintain their privileges by keeping many medieval institutions alive, while promoting legislation (for agricultural export subsidies and rural credit facilities) to help create a modern commercial agriculture. Yet, although relatively extensive by Austrian standards, it was difficult for agriculture to compete against North American and Russian grain, so the tariff wall around the empire—within which high prices could not easily be undermined—was a great comfort (especially with added value through flour milling). Hence the genuine development effort by landowners exemplified by Count Széchenyi, a pioneer of stockbreeding, mechanisation, agricultural banking and rural transport. There was increased output in cereals, potatoes and sugar beet through marshland drainage, the practice of ley-farming (which replaced rigid rotations) and the use of artificial fertilisers—during the 1890s—and improved seed. Yields were broadly comparable with the best in Europe, though Germany (with Belgium and Denmark) maintained a strong lead for sugar beet. On the other hand, it could be argued that the country’s social development was constrained by the grip of the estates (landholdings exceeding 5,750ha) which increased their stake from 2.26 million hectares (8.4%) in 1867 to 5.46 (19.4%) in 1914— particularly at the expense of medium-sized farms, reduced from 12.03 million hectares (44.9%) to 8.92 million (31.6%) at a time of stagnating cereal prices (many being owned by credit institutions, the Churches and central/local government). The strength of the titled nobility was particularly marked in Transdanubia. After 1900 most medium and large farms were using machines—iron ploughs and traction engines (for ploughs, seed drills and threshing machines)—to supplement draught animals, while small farms used draught cattle, horses and manpower, and hand-operated machines that became available in the 1860s and 1870s. Note that holdings below 20ha accounted for 45.6% of land— slightly more than holdings of over 100ha (43.9%). However, this meant reduced demand for labour at harvest time and while the smaller farms (below 115ha) remained stable (and the number of viable holdings increased only slowly), there was a rapid turnover among the farming population reflecting the social costs arising from the failure of smaller farms (and landless labourers) to prosper on the basis of indifferent price levels in the last quarter of the century and the deployment of steam-driven machines across the plains. Seasonal unemployment brought harvest strikes and deeper unrest may have been avoided by diversification of agricultural exports after 1880 with more emphasis on labour-intensive sectors: animal breeding, poultry and horticulture which equalled grain and flour by 1914. Development of small-scale farming depended on rural education which was relatively poor in backward areas. It also needed a stronger cooperative system supported by Liberal politicians as a way of containing the agrarian socialist movement. The law for the organisation of the National Central ‘Orszagos Kosponti Hitelszovetkezet’ (Office of Credit Cooperatives: OCC) was passed in 1898 to secure working capital and organise village branches. The government underwrote 1 million crowns’ worth of shares matched by large credit institutions in Budapest. OCC had 712

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associations in 1899 and 2,425 in 1913—covering 61.8% of all settlements in Hungary and the credits extended to borrowers rose from 25.4 to 279.6 million crowns over the period (Held 1980 p. 96). But on the whole the differences between large and small farms tended to increase. Hungary’s borderlands Agriculture was relatively backward in the borderlands (as in Bukowina and Galicia), apart from some islands of improvement like the large Croatian estates near Zagreb and the railway route to the north. Traditional farming systems persisted even after the abolition of serfdom and it was common for the peasants to operate a two-field system whereby all agreed to alternate between their allotted strips in the two parts of the village so that one of the fields would be available for grazing continuously (Figure 2.1). A three-year cycle has also been noted where maize, barley, rye and potatoes, first autumn sown then spring sown, would follow the fallow year. It was sometimes well into the twentieth century before this practice broke down in favour of individual decisionmaking and restriction of cooperative grazing arrangements to recognised common pastures where animals were tended by a member of the community working on a daily rota system. Cooperation was even more extensive (especially in remote areas) and the government was supportive, although there had to be a central organisation in Budapest, as in the case of the cattle insuring union (1898); the ‘Hungya’ food cooperative (1898) and the ‘Fructus’ distillery union (1917). Local initiative was very important, for development in western Slovakia around Skalica arose when a local doctor (L.Blaho) and the Catholic priest (L.Okánik) started a farmers’ food union in the town in 1897; followed by a farmers’ and vintners’ union in 1901 and another for dairy farmers in 1903. Congresses were held from 1906, allowing local produce like the Modra wine to be exhibited. Cattle insurance cooperatives sprung up in Nyitta (Nitra) and Trencsén (Trenčin) and development spread eastwards into central Slovakia. Voluntary sheep breeding unions were provided for in the Theresian shepherding regulations of the period; operating under orally preserved customs established in key regions like Bravacovo in the upper Hron. The union at Kochanovce (near Trencsén) generated savings on a scale that allowed it to assume a credit function, but the agricultural revolution in Hungary served ‘to choke off the borderlands from principal markets’ (Lampe and Jackson 1982 p. 287), so these overpopulated areas were left largely with an agricultural role tied to local markets that showed little expansion in view of the lack of strong industrial development. Indeed, since the railways allowed distant producers—with their economies of scale—to meet much of local demand for manufactures, the towns were unable to absorb significant numbers of rural people. Agriculture had a major subsistence function for provinces like Bucovina and Galicia which maintained the custom of early marriage (and hence large families) through an era of falling mortality rates. Rural labour was cheap and provided no incentive to mechanise, so productivity and incomes remained low. In 1902 farms of less than 5ha accounted for 80.3% of all holdings in Galicia, 85.7% in Bucovina and 87.4% in Dalmatia, and incomes were kept low by the subsistence demands of large families: the emphasis was on maize while cash crops failed to make headway (the wine industry in Dalmatia was overtaken by the eastward spread of phylloxera). Until emigration to the New World became an option at the turn of the

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century the best opportunities lay in seasonal work in Germany or the ‘core’ provinces of the empire. Southeastern Europe There was scope for food exports to Central and Western Europe using railways and steamships once national governments restored public order and imposed quite

Figure 2.1 The two-field system at Rogoz, Máramaros (Maramureş) high monetary taxes that obliged the peasants to produce marketable surpluses to finance the import of manufactures. The Ottoman grain monopoly was set aside in the principalities in 1829 and in Bulgaria a decade later, so Balkan grain was entering Western Europe in significant quantities from the 1840s. At the same time there was a profitable livestock trade from the principalities to the Habsburg Empire and from Bulgaria to Istanbul to meet the Ottoman army’s demand for meat and leather. However, North American competition in cereals caused a downturn in prices after 1873, while rural population growth and a finite land area subject to drought made it impossible to maintain per capita export growth in real terms. Yields advanced slowly to 11.3qu/ha in

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1911–15 (the average for the three states) from 9.5 in 1862–6 (Romania and Serbia only) (Lampe and Jackson 1982 p. 188), but the per capita area sown declined while the per capita export was static after 1900 (indeed there was no labour productivity increase in Romania after the early 1890s). Thus peasants found their work less rewarding, even though real taxation decreased, while the terms of trade for primary producers did not worsen significantly. There were also problems for Romania when pig exports to the Habsburg Empire faced a prohibitive tariff from 1882 (which gave Serbs some respite, as noted below) but when higher German tariffs were imposed on pigs from the empire in 1885, Hungarians demanded that the domestic market should be reserved for them alone, and in 1896 Vienna used a veterinary pretext to stop all pigs entering (a move triggered by renegotiation of the 1867 customs agreement which was due every ten years). While the vulnerability of the overpopulated Balkan states made a protective regime for industry irresistible during the 1880s—even though jobs in the factories could not be created quickly enough to ease pressure—agrarians advocated tariff reductions that might (with reciprocation by the Habsburg Empire) improve the condition of the peasantry over the short term. Other proposals were put forward, like the radical agrarian programme presented in V.Kogălniceanu’s pamphlet of 1906 demanding a new regime of labour contracts and stronger banks with the means to purchase estates for subdivision. As already noted, peasant frustrations in Romania boiled over the following year but it was not until 1921 that radical land reform was achieved. Serbia Serbia is an interesting case because the national economy was based on small family farms in contrast to large estates—with a privileged aristocracy and servile peasantry— seeking economies of scale and capital-intensive production. The 1863 census revealed 93% of the population living in communities below 2,000 and ‘nearly all rural dwellers were members of settled farm-owning peasant families’ (Palairet 1995 p. 41) who could be given land by the commune (‘opština’). Within communities there was remarkable equality, especially in poorer areas: the tax burden was imposed uniformly on a capitation basis, although incomes were higher in the fertile lowlands where peasants got involved in the pig trade as prices rose through the 1830s. Support from the Habsburg Empire against the Ottomans influenced trade but exports were affected by a doubling of pig numbers in Hungary during 1870–95, by which time the empire was itself a net pig exporter. Initial closure of the Habsburg market to Serbian pig exports in 1895–6 and the five-year customs war of 1906–11 (encouraging a switch to meat packing)—and the entire ‘Pig War’ episode of 1905–11—saw the Habsburg share of Serbian imports fall from 60% to 19% (90% to 18% for exports). Interestingly it is argued that this tended to maintain the ‘zadruga’ beyond the time when its defence rationale had disappeared and land tax liability was transferred to individual families (1835). The ‘zadruga’ certainly evolved according to the constant state of flux of family arrangements as sons/brothers decided to stay or leave—with prosperity making for stability and stress leading to fragmentation. But the institution was always more prominent in ‘the comparatively commercialised rich accessible lowland district of Belica [part of the western “Šumadija”] than in the barely monetised poor remote highland area of Trnava’ (ibid. p. 104) because the ‘zadruga’ owned more real estate per capita than conventional family

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farms in a situation where several married couples would generate a significant workforce for swineherding (which was productive employment for women). Since livestock comprised the key cash crop there was little cereal production beyond subsistence needs (including maize for the animals) and townspeople had to pay high prices. With the meadows all important, the larger peasants did not find it worthwhile to market crops: profits were invested in shops, stables, warehouses, watermills and taverns and despite occupying ‘some of the richest potential grain-bearing land in Central Europe’ (Palairet 1995 p. 88), the cultivated area rose less sharply than the rise in population. Paradoxically, in the hills farmers had to sell cereals to get money to pay taxes and in the process they ‘tended to oversupply local grain markets and [probably] to supply grain to the lowlands’ (ibid. p. 107) so grain prices were low in remote mountain towns like Užice where ‘grain would be dumped on an ill-developed market which could scarcely absorb it’ (ibid. p. 100), while costs for exchange goods were high because of remoteness from import competition. Meanwhile, viticulture was left to small peasants who needed to sell for cash, for there was little quality production (better wines were imported from Hungary). Some diversification occurred through dried plums (prunes) from northern Serbia. When the brandy markets were closed in 1880 through revised Habsburg and Ottoman tariffs, Bosnian entrepreneurs came in with wholesaling experience and a plum-drying technique which produced an agency/credit network stimulating farmers to devote some land and labour to plums for export (Lampe and Jackson 1982 p. 177). At the same time, the tobacco monopoly was never so complete that it destroyed the subsistence sector in the countryside. Agricultural expansion in new lands In various ways the rural population sought new opportunities where the options of migrating to the towns or foreign parts were not available. Harvest workers competed with sharecroppers on the grain estates while other seasonal migrants found casual work in factories, forests and mines in order to maintain their homes in the countryside. Indeed, a little-explored feature of industrial development at this time was the way that it continued to integrate with a rural way of life despite the factory system. But there was still scope for colonisation, including remote rural areas where increased land might be created by terracing, as occurred widely in Transylvania. There was continuing scope in the steppelands of Bărăgan and Dobrogea. N.Todorov (1998) has described the migrations from the Balkan Mountains, Macedonia and Thrace by people wishing to take up farming in this area or to engage in commerce at the famous Bazargic Fair. And when the flow of German immigrants to the Habsburg Military Frontier on the southwestern edge of Pannonia was discouraged by a property requirement (300 florins per family) in 1829, the Hungarian authorities opened a colonisation office in Budapest and even recruited Slovaks from the Tatra because ‘acálfí’ were deemed sufficiently Magyarised to represent Hungarian interests. Recent research has also drawn attention to the Adriatic islands which were refugee centres for families escaping the Ottoman grip on the mainland. The Kornati Islands were being occupied by fugitives and by people from Murter (from the early seventeenth century) using the open pastures increasingly for cattle—and sheep which devastated the remnants of woodland—as well as olive growing, followed by viticulture in the nineteenth century (until phylloxera enabled olives to make

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a comeback after 1900). It was people from Murter who eventually controlled most of the islands, such was the pressure to find new land, allied with Austria’s progressive land tax which meant that the fiscal burdens of the extra land were relatively low due to the tiny holdings on the island of domicile. Land on the Kornati Islands was secured in four purchases (‘kupovština’) from 1851 to 1896—and the islands were partitioned by drystone walls during 1896–1926 (Kulušić 2000–1), while a cannery at Sali on Dugi otok encouraged fishing. The Hungarian ‘tanyák’ and transhumance in the Romanian Carpathians The isolated farmsteads of the Great Plain of Hungary emerged after the Turkish occupation through more intensive use of land beyond the central dwelling and stable zone in the eighteenth century, whereas previously only herders had stayed out in barns on the puszta. After the Turkish withdrawal there was little settlement within 20km of Kecskemét, where population increased from 10,000 in the eighteenth century to 21,318 in 1871—when there were just 1,308 people in the plains beyond the town. The barns were now inhabited permanently and the colonisation was extended through new arable lands created by river regulation and drainage work at the end of the nineteenth century when intensification made it necessary to occupy the ‘tanyák’ permanently. Village housing was then given up in favour of a dense ‘tanya’ network based on fruit and vine growing between the Danube and Tisza; transforming the sandy Kiskunság degraded by overgrazing and resulting sand-blow (where shepherding survived until the early twentieth century) and tobacco in Nyírseg. The colonisation was facilitated by freehold tenure of parcels at a time when industrial development was lacking, though the towns remained important for commerce and family contacts. During the 1880s, when half of Hungary’s established vineyards were ravaged by phylloxera, the landless cotters showed great resolve and dedication in the way they set about pioneering to rebuild and intensify agriculture on the puszta. It is also appropriate to recall longwave transhumance which enabled some communities to grow well beyond the capacity of the local agriculture, particularly in the case of the ‘margineni’ (border) communities around the towns of Hermannstadt (Sibiu) and Kronstadt (Braşov) where early growth was based on links with German industrial and trading com munities. The Treaty of Passarowitz (1718) opened the way for journeys of twelve to fourteen days to winter sheep in the Lower Danube Valley and parts of Dobrogea such as the Batova Valley (‘la vallée sans hiver’). In March they would return home, taking advantage of the Zimnicea floodplain grazings en route. When problems arose through cultivation of steppes from 1860s and tighter border controls (some precipitated by the customs wars between Romania and the Habsburg Empire during 1886–1900), some moved on to work seasonally in Bessarabia to look after large landowners’ flocks while others reached the open spaces of Crimea and the Caucasus to enjoy a better environment that avoided the hard winters and dry summers in Bessarabia. Some also turned to peddling (‘comerţ ambulant’) along the old routes or set up as craftsmen and traders in the towns of southern Transylvania or northern Wallachia. At the same time the shift towards crop production for the market did not preclude further peasant colonisation of the high ground for stock rearing, woodcarving and subsistence farming. Statistics collected by Apolzan (1987) in the

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Apuseni show the contact area with the Transylvanian Plateau—west of Kolozsvár (Cluj), Torda (Turda) and Gyulafehérvár (Alba Iulia)—to be an ethnically mixed area with a clear Romanian majority on the higher ground, especially the upper Arieş Basin above Câmpeni, with significant amounts of pasture and woodland per capita, complementing the stronger arable element at the contact. Population figures for 1860– 1941 then show a strong upward trend in the upper Arieş compared with the lower (Figure 2.2). Significantly the upper Arieş offered a succession of surfaces particularly the Măguri-Mărişel convenient for settlement and pastoralism with woodland retained on the steep slopes pitching into the valley system. INDUSTRY Despite low per capita income and agriculture’s persistence as the leading occupation— with widespread poverty—industrial development was substantial. Since the state carried responsibility for defence and often played a prominent role in railway development (seen as having important security implications) it was logical that it should also take a lead in industrialisation, especially in Hungary and the SEECs where industry was introduced into relatively backward areas. There was

Figure 2.2 Settlement and ethnicity in the Apuseni Mountains a high level of concentration which was inevitable given that industry represented a relatively new innovation, but the tendency was reinforced by the uneven distribution of inputs and infrastructure, not to mention political and strategic considerations. There was a generally high level of technical training for the German workforce as the state

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purposefully combined its industrial raw materials with the scientific skills of the universities, technical schools and commercial institutes, but elsewhere provision was less generous and the supply of managers in the Habsburg Empire was dependent on the Technische Hochschulen opened in Prague (1806), Vienna (1815), Brünn (Brno; 1849) and Budapest (1860). Gerschenkron (1962) argues that backward economies favoured a large scale of business. This was not always true for many industrial units were quite small and catered for an essentially local demand. But they were much larger when there was a reliance on export markets, as in the case of milling and capital goods in Hungary. Large companies in the Habsburg Empire like the Prague Iron Company (Pražská Železâŕska Společnost) and the leading coal companies in Brüx (Most)—Brüxer KohlenBergbau Gesellschaft and Nordböhmische Kohlenwerks-Gesellschaft—opened the way for cartelisation which began with the agreement between the Witkowitz (Vitkovice) Mining and Foundry Works and the Teplitz (Teplice) rail mill in 1877. Vertical integration during the 1870s was followed by horizontal concentration during the 1880s business upswing. Cartelisation was a particularly prominent feature of German industry and followed from a degree of ambivalence over the virtues of competition on the home front and an instinctive preference for the ethos of the pre-industrial state bureaucracy. The cartels might inhibit innovative action in the short term but ‘in the long run they could function as a further stimulus to economic development by sustaining the level of profit or by facilitating further technological innovation’ (Milward and Saul 1977 p. 53). The role of the banking system Gerschenkron also contrasted the self-generated industrial revolution in the UK with developments in ECE that required the assistance of investment banks, although textile industries were able to keep abreast of modern technology by ploughing back their profits. This can be seen in the international flow of capital, given the major German investment in the Habsburg Empire: Kr3.52 billion in 1914, compared with 0.19 billion for the UK, which was the largest export market after Germany and the second largest source of imports after Germany. Indeed, for Germany, the excess of imports over exports was more than cancelled out by earnings from shipping and foreign investments, which included chemicals and electrical engineering in the Habsburg Empire; metallurgy and oil drilling in Romania; and steel in Russian Poland. From the Habsburg Empire’s point of view, the need to acquire foreign financial resources become particularly urgent during the two decades or so before the First World War when a growing import surplus began to develop. One-eighth of Austrian industrial securities were in foreign—mainly German—hands in 1901 (Teichova and Cottrell 1983 p. 35). At the end of 1913 the Dual Monarchy’s total foreign indebtedness amounted to approximately Kr9.75 billion ‘and the debt servicing burden so imposed was only partly alleviated by investment in the Balkans’ (Cottrell 1983 p. 309). Within the empire, Austrian capital was crucial for building Hungarian heavy industry, although it meant that much of the iron ore production was exported direct to Austrian territories in a raw state, and in the early years of the Ausgleich pig-iron production grew much more slowly than iron-ore output. For the whole period 1867–1913 iron-ore production rose from 0.3 to 2.1 million tonnes while pig iron rose from 0.1 to 0.6 million tonnes.

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The Balkan states had their central banks which issued national currencies to displace foreign denominations but at the same time they were constrained by an overriding obligation to foreign creditors to remain tied to the gold standard. However, with their monetary systems thus tied to the French franc, some foreign banks channelled in outside capital. The German banks—Disconto-Gesellschaft and Bleichröder Bank of Berlin— invested in Romanian oil after 1895 and Deutsche Bank took over Steaua Română in 1902. Foreign banks concentrated on under-writing state loans as ‘the first large-scale infusion of European capital into the Balkan economies’ (Lampe and Jackson 1982 p. 321), but the depression of the 1870s induced some ‘reluctant imperialism’ among the great European banks which were very slow to open branches in Balkan capitals. Despite the German challenge to Habsburg exports there was little interest in Balkan economic penetration because capital was sucked into the Czech lands and Hungary. Austrian capital arriving after the 1873 depression proved to be an all-important catalyst at a time when domestic accumulation would have been insufficient, but a serious problem was always the lack of self-sufficiency in fuel. Meanwhile, few foreign firms jumped tariff barriers, though J.P.Coats had branch plants in the Czech lands and Hungary at the beginning of the twentieth century. Another example concerns Mannesmann of Düsseldorf with works in Komotau (Chomutov) in Bohemia which were registered in the Habsburg monarchy and gained a strong position in the Habsburg tube cartel along with Witkowitz and three other large tube companies. The company also became majority shareholder in Röhrenswerke of Schönebrunn (Klimkovice) on the western edge of the Mährische-Ostrau (Ostrava) industrial complex. The role of banks can be seen more significantly at the domestic level, although assessments vary from the most positive (Fremdling and Tilly 1976; Tilly 1986) to the more sceptical (Neuburger and Stokes 1974). Much investment occurred through joint stock limited liability companies with credit from development banks. The banks concentrated on the large, strong companies and were not prominent over risk-taking and innovation—though they did sponsor large vertically integrated coal-iron-steel companies and were involved with the Mannesmann seamless tube development in the 1890s. Invention of seamless rolled tubes by R. & M.Mannesmann arose from the financial backing of W. & F.von Siemens who were connected with Deutsche Bank. Even so, there are mixed feelings about the role of banks in German industry: some writers have emphasised reciprocal support and influence. Meanwhile, Habsburg banks became much more involved in medium- and long-term business from the late 1880s, especially in heavy industry. Although not highly profitable, in Carniola it was ‘decisive in creating mining and metallurgical sectors’ (Lampe and Jackson 1982 p. 312). Banks were crucial to Škoda’s expansion into armaments which was financed by Boden-creditanstalt and Böhmische Escompte-Bank; while the Bohemian sugar industry was assisted by Živnostenská Bank. Hungarian banks became cautious after the 1873 crisis, but there was some revival of interest from the mid-1890s with the growth of industrial joint stock companies, but not on the scale of Creditanstalt (Austria) and Deutsche Bank (Germany). The Hungarian banks were less specialised and while there was a rapid growth of financial institutions during the two decades before 1914 the processes of amalgamation and of branch formation were relatively slow. Some large Hungarian companies—like Rimamurány Salgótarján, Manfréd Weiss and Salgótarján coal mines—were independent of banks, while the sugar industry was closely connected with the Hungarian General

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Credit Bank. Some companies might have more than one bank represented on the board, for while the First Hungarian Economic Machine Factory developed a connection with the National Banking Corporation (NBC) in 1897, the Commercial Bank was also represented on the board after acquiring the majority of NBC shares in 1916. Indeed, during inflation more than one bank was needed. Also there might be changes in banks (Pogany 1989). In SEE there was only limited involvement in industry by Bulgarian private banks compared with Bucharest’s Banca Marmorosch-Blank, established by a family of Habsburg-Jewish immigrants who switched to merchant banking from the Leipzig wholesale trade and encouraged the Vienna-based Götz timber company to extend its operations to Romania after 1873 (Lampe & Jackson 1982 p. 258). Germany Germany’s economic performance over the half century before the First World War was a truly remarkable exemplification of Gerschenkron’s thesis on latecomer countries. Assisted by a rapid growth of both population and workforce to levels exceeded in Europe only by the Russian Empire, Germany contributed 15.7% of world manufacturing (exceeding the UK share of 14%). Thanks to data supplied by F.B.Tipton (1976), it is evident that the transformation at the end of the century was particularly impressive, with 0.63 jobs in industry for each one in agriculture in 1882 rising to 1.22 in 1907. At the same time, structural change brought jobs in building materials, engineering, metallurgy and mining into parity with those in food processing, textiles and clothing compared with a ratio of only 0.6 to 1 in 1882. There was particular strength in steel, chemicals and electricity. The east-west regional split was quite striking with a more rapid growth of population and employment (and specifically employment in industry and in the tertiary sector) in the west and the faster decline of agricultural employment in the east. So as heavy industry made headway in the east the ratio was slightly more favourable than the all-German figures already quoted: 0.66 and 1.24 compared with 0.61 and 1.19 in the west. Some regions like Magdeburg and Saxony were able to develop their engineering industries based on the requirements of agriculture and food processing, but this was not generally the case for ‘the east developed no processing centres comparable to Chicago and Kansas City in the United States, nor did Berlin seem willing or able to full this role’ (ibid. p. 108). The picture in the east was highly uneven. Berlin-Potsdam dominated the picture with 2.9 times the average growth of population, 3.5 times the average growth of employment and exactly double the average growth of employment in industry. Magdeburg, Merseburg, Oppeln (Opole) and Saxony especially showed up well while all the other regions were well below average. The impression is one of powerful migration currents focusing on Berlin where migration was equivalent to 11.6% of the resident population each year (on average) from 1876 to 1890, falling to 4.2% between 1891 and 1905. Apart from Potsdam, there were negative rates throughout the east although they were naturally lower in the more industrialised areas which were able to gain some benefit from the Russian market.

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Habsburg Empire Growth was persistent but modest by German standards. In 1910 just 22.1% of the working population was employed in industry compared with 55.1% for agriculture (a ratio of 0.4, compared with 1.22 in Germany in 1907). Growth was relatively rapid after 1880 with recovery from the depression of the mid-1870s and some stimulus from the dynamic German economy, but the average rate of growth of industrial production from 1880 to 1914 was only a fraction above 4% compared with 3% during 1840–80. The structure was diverse and saw considerable change. Textiles were most prominent in midcentury when the empire’s cotton industry was greater than that of the Zollverein, but the share was only a quarter by 1910. The relative decline reflected an abundance of labour and hence a leisurely pace of mechanisation (even though equipment was readily available in Saxony) and the inefficiency of locationally separate spinning and weaving branches: exports of yarn and cloth (e.g. to the Balkans) were balanced by imports of higher-quality products. Meanwhile, there was growing strength in chemicals, metallurgy and engineering that constituted a third of all industrial production at the turn of the century (thanks to the ambitious railway and public works programme during the premiership of E.von Körber and the discovery of oil in Galicia where production rose from 0.03 million tonnes in 1880 to 2 million in 1909). Even so, heavy industries were less prominent than in Germany (as well as France and the UK) and Habsburg industry in general was very dependent on a protected domestic market. Hungary In the late nineteenth century the country’s primary economic role as food supplier to Austria (in return for the latter’s industrial products) was complemented by a significant amount of manufacturing. The proportion of the working population employed in industry doubled after the Ausgleich from 8.6% in 1870 to 17.1% in 1910, and the employment generated was of the greatest social and economic importance at a time when the mechanisation of agriculture was responsible for serious rural unemployment. Some industry was associated with food production (brewing and milling) but the rest emerged from a new potential revealed by the railway system in combining individually modest resource bases. Although heavy protection was impossible because of the risk of retaliation against agricultural exports, it was considered important to stimulate heavy industry in the national interest—especially in the production and maintenance of railway equipment: 1873 saw the opening of the Hungarian State Railway Machine Works just a few years after the State Iron Works was founded at Diósgyőr (1868) to produce rails and munitions. A law for the encouragement of industry was passed in 1881 in response to growing concern over the high level of emigration and the need for more tax revenue after heavy borrowing in the 1860s and 1870s led to chronic budgetary deficits in the 1880s. The stimulus of tax exemption prompted a burst of investment by the Budapest banks and was followed by interest-free loans under the Industrial Promotion Law (1890), tax rebates (1899) and shareholding (1907) for particular sectors, especially textiles, which was to receive 57% of all subsidies (though in total they amounted to only

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2% of total investment by private industry and their impact could hardly have been dramatic. Hungary had to cope with a lack of self-sufficiency in fuel, for coal consumption was always higher than production with imports rising from 12.7% on average during 1851– 73 to 32.2% during 1896–1913, even though the Tatabánya-based Hungarian General Coal Mining Company and the Salgótarján Company raised output from 4.8 million tonnes in 1860 to 102.7 million in 1913, of which 2.4 million and 89.5 million respectively consisted of lignite. On the other hand, there was much help over infrastructure such as housing and services for workers which would otherwise have placed heavy burdens on the shoulders of entrepreneurs. Nevertheless, growth rates consistently above those of Austria after 1886 enabled Hungarian industrial output to reach 30% of the Austrian level in 1914 compared with only 16% in 1841, so Hungary ‘ameliorated to a considerable extent her relative backwardness’ (Komlos 1981 p. 6). However, while trade with Austria highlighted the exchange of food for manufactures, the pattern with the rest of the world was almost the reverse. Hungary’s policy was economically irrational in the context of the empire as a whole because there was a deteriorating balance of payments situation after 1900 as the Dual Monarchy ceased to be self-sufficient in food and yet increased imports of industrial plant and raw materials. But thanks to this highly motivated regional interest within the common market Hungary was able to set off on the road to separate economic development, and despite the complication of boundary changes (which cut off many Budapest firms from their suppliers of raw materials and intermediates) there was a solid base for the fully independent state that emerged after the First World War. Agrarian interests sought to exclude industrialists from the House of Representatives in the late 1890s (reflecting the agrarian, anti-industrial sentiment of the Hungarian ruling class), but the National Association of Hungarian Industrialists was founded in 1902 to reverse this trend when industrialists felt the government was more concerned with protection against food imports than support for industrial exports. There was a strong Jewish representation so the organisation was quite liberal and without the right-wing inter-war leanings of Austrian and German equivalents. There was little fear of the working class in Hungary—which strengthened the bond between industrialists and landowners in Germany. Russia and the Balkans There were considerable opportunities in the east and southeast. The technical lead of several decades enjoyed by the Kingdom of Poland (over other parts of the Russian Empire) by virtue of its relatively early industrialisation gave its manufacturers a competitive edge especially when German entrepreneurs crossed the frontier and set up textile and iron industries in Łódz and Sosnowiec, respectively. Although Russian industrial output rose substantially in value from Rb1.12 billion to 4.58 billion during 1887–1908, Poland’s share fell only slightly from 14.7% to 12.6%. Meanwhile, as already noted, the emerging capitalists of the Ottoman Empire had to overcome the ambivalence of the Muslim elite. Great damage arose through the trade conventions signed in 1838 which prescribed very low duties for imported Western manufactures while guilds remained an obligatory form of organisation for commodity producers and

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even for new branches of manufacturing. Moreover, since a lack of security was ‘one of the greatest obstacles to larger and more permanent investments in industry’ (Todorov 1983 p. 306), people preferred to move their capital around and if necessary to take it out of the country: hence commerce, money lending and real estate were often preferred outlets for capital. But successor states took vigorous action over the economy, education and security. Given a lack of compelling raw materials, only native entrepreneurs—with the necessary knowledge of local conditions—could come to terms with the initially low expectations and it was usually resident Jews or ethnic Germans who sought out Central European capital rather than the reverse. Despite the lack of capital and business experience there was a record of substantial growth from the late nineteenth century which provided a basis for a more comprehensive approach to modernisation in the context of enlarged national economies after 1918. The drive came from population growth and a less rewarding cereal trade. Whereas the elites initially favoured low tariffs in order to push the agricultural surpluses of their estates into more developed parts of Europe (and to maintain good relations with the powers) stagnating grain prices in the 1880s undermined the credibility of an industrial policy linked to agricultural exports (all the more so in view of agricultural protectionism in some countries) and forced a general extension of tariff barriers. It was also essential for the state to take a lead and establish heavy strategic industries linked with defence and with state monopolies like the national railway companies, while erecting tariff barriers to encourage light industry on the basis of private enterprise or foreign investment. In 1873 tax exemptions were granted in Romania and Serbia and these first measures later grew into more comprehensive schemes to stimulate industry, including free building land, customs-exempt imported raw materials, concessionary railway freight charges and some production subsidies. Usually there were stipulations over the scale of mechanisation (to ensure a significant level of production), the number of employees (usually 20–5 minimum) and the training of native workers. Further protective legislation was passed in Romania in 1882 and 1887 (with a Mining Law in 1895 which opened up the oil industry to foreign investment) and Serbia in 1898, while Bulgaria’s initial rates of 1883 were raised in 1897. There were further laws in Bulgaria in 1904, Serbia in 1906 and Romania in 1906 and 1912 (as well as a survey in 1901–2)—all of which generated bitter conflict with the Habsburg Empire, for Romania’s tariffs on finished and semifinished imports—averaging 20% ad valorem—were certainly high enough to deter some European manufactures. Hence there was ‘a climate in which entrepreneurs could believe investment in domestic industry would yield at least long-term prospects for satisfactory profit’ (Lampe and Jackson 1982 p. 269). On the other hand, ‘overvalued exchange rates may have aided infant industries by reducing the cost of imported machinery but also helped to restrict already small domestic markets for manufactures by passing on the high price of agricultural exports to urban consumers. The resulting pressure to raise industrial wages, backed by an emerging socialist movement, discouraged local manufacturers still further’ (ibid. p. 589)—with excess capacity and cartel restrictions evident after 1900. After good progress in the 1890s (a decade blessed for the most part by high cereal prices) momentum showed signs of flagging when living standards ceased to grow, the virgin cereal lands were fully occupied and world prices stagnated. Moreover, the saturation of the home market suggested that an industrialisation policy based on

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substitution had largely run its course, though perhaps not in textiles where import levels were still high. But there were significant variations between countries. In Romania, where 40% of the seats in the legislature went to urban representatives who backed protection strongly, industrial growth to 1914 averaged 6–8%—possibly going as far back as 1880 (Jackson 1986 pp. 60–1) while the country also became the world’s fourth-largest wheat exporter through ruthless exploitation of peasant workers on estate farms. Meanwhile, population pressure was lower in Serbia and the national assembly was more representative: Skupština peasant representatives did not want to pay more for domestic manufactures (normally lacking the efficiency or scale economies to generate export) supplied to a protected home market. So Serbian industry was constrained by the political strength of the peasantry which heaped more of the fiscal burden on the nonagricultural population, partly through indirect taxes on what were considered to be urban luxuries. Protection of the agrarian population may not have been a deliberate act to avoid proletarianisation by holding it in tutelage through low taxation, but it is certain that the latent strength of peasant power in opposition blunted attacks on their interests— not to mention the likelihood that squeezing the peasantry in the interest of protected state industrialisation would reduce morale, depress agricultural exports and accelerate ruralurban migration. In Bulgaria too it was the small non-farm population which supported the rising cost of government: when protective legislation arrived relatively late, as a response to the agricultural depression, it failed to target specific branches and lacked the support of a strong party like the Romanian Liberals. Industrial regions: the ECE industrial core—Jena-Łódź-Budapest It has been observed by F.E.I.Hamilton (1970) that this area comprised the ECE’s industrial core which could be seen as a major outlier of the West European industrial system with its heartland in the Ruhr. While evading precise definition—indeed ths review will include extensions to Berlin and Magdeburg—it was a region with considerable industrial experience dating back to early modern times and a great capacity for adaptation. For example, the historic glass industry of Thuringia survived through scientific glassware at Ilmenau and optical industries in Jena where the famous ‘Carl Zeiss Jena’ arose out of a partnership between the owner of a fine mechanical business and the optical specialist E.Abbe in 1876. The latter gained sole charge after buying out Zeiss’s son (following his partner’s death in 1888) and teamed up with O.Schrott who delivered glass of the required quality and enabled production to extend from microscopes into optical instruments of all kinds. In 1891 Abbe handed over his assets to a Carl Zeiss Foundation to provide pensions, medical assistance and housing loans—also to finance retooling at the factory. But the region cannot be regarded as homogeneous and cohesive: rather—as is suggested by the diverse patterns produced in the Polish territories (Figure 2.3; Table 2.2)—it was a zone comprising many separate systems (each with its own historical and structural profile) distributed across several countries and drainage basins, and unified only by relatively high levels of employment in industry and relatively well-developed urban and railway networks. There was a major divide between the German and Habsburg complexes. The Silesian coalfield, with its functional links by

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rail and water transport with Berlin, was complemented by traditional areas of metal and textile production in Saxony and Thuringia and the rising central German chemical complex. To the south lay the Habsburg system based in the Czech lands and functionally tied to Vienna, notwithstanding the availability of the Elbe/Labe navigation to the North Sea, with a separate—newly established—complex in Budapest. Boosted by tariff protection, the Czech lands were important for Habsburg coal and iron production; as well as beer, alcohol and flour; porcelain and glass; and textiles. In 1902 56% of Austria’s industrial workers were from the Czech lands, despite only limited Czech ownership. The region also included some Polish industry in Dąbrowa and Łódź that was bound into the Russian economy, with relatively little use made of the Vistula navigation which could have integrated the Habsburg and Russian lands. Indeed, while Western Europe developed a substantial waterway network, ECE’s industrial triangle never attracted the investment

Figure 2.3 Industry in Poland in 1900 to connect the Danube with the Elbe, Oder and Vistula (which would have provided a comparable facility) and instead was forced to rely heavily on railways for its integration, given the close coordination of construction in the border areas. The Danube was of some value for Hungary but it was again the railways that linked the resource-based industries

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of Slovakia and Transylvania with Budapest and connected the capital with the Adriatic port of Fiume. The estate complex Food industries increased the demand for agricultural products and many were located in rural areas where they competed with urban-based establishments. There was a growth of sugar beet refining from the 1830s—with clear interdependence with government policy—through small refineries built on large farms in central Germany and Lower Silesia (with the most suitable soils) with the by-product pulp and molasses valued for animal fodder (as important a consideration as the sugar itself in the early days). The estates were also locations for breweries and distilleries—along with starch factories, corn mills and sawmills—all of which were absorbing bourgeois capital after 1870. For example, in Hungary agricultural distilleries were assisted by the first Industrial Promotion Law of 1881 (offering tax exemptions for

Table 2.2 Employment in industry in Poland 1879– 1913 Kingdom of Poland Prussia Galicia Upper Silesia 1879 1894 1904 1913 1882 1895 1907 1902 1875 1907 Factories 2148 2025 3413 4369 1996 3902 4986 n.a. n.a. n.a. Workers (thousands) 97.6 180.2 334.8 428.8 n.a. n.a. n.a. 89.5 18.6 242.8 Mining 12.1 19.7 29.6 33.9 n.a. n.a. n.a. 23.0 42.8 110.7 Metals/Metallurgy 15.7 29.6 73.0 90.4 10.2 14.8 29.1 10.5 24.0 47.3 Minerals 4.5 8.6 20.3 27.9 8.1 14.2 24.1 12.0 4.5 21.9 Wood n.a. n.a. n.a. n.a. 3.7 10.1 19.4 11.2 1.3 9.8 Textiles 29.3 81.5 138.9 175.4 2.8 7.8 8.5 8.8 2.1 16.5 Food 30.4 24.5 29.4 37.7 12.7 28.9 28.7 15.1 5.6 19.7 Others 5.6 16.3 43.6 63.5 5.0 7.4 12.1 10.1 1.3 16.9 Notes: Figures for industrial sectors are percentages of the total employed in industry Source: Jezierski 1994 pp. 105–8

new factories). They proved viable on the estates where they competed with the distilleries of industrialists. The sugar industry has been most fully researched and it appears that the first-generation factories (eliminated by the competition with cane sugar) were followed by a second generation of highly capitalistic operations that hired rural workers during agriculture’s ‘dead season’. Sugar beet refining became a major business, with the ‘diffusion’ process pioneered at Seelowitz in Moravia by J.Robert, the son of the founder of the first sugar beet factory in the Czech lands. The process spread quickly and for a time machinery was exported to France and Germany. However, technology favoured very large factories by the end of the century—because of the increasing scale of efficient diffusers (which extracted juice from beet). Thus in the early 1900s the Cukrownia enterprise for sugar and alcohol—established in 1882 at Kulmsee (Chełnża) near Thorn (Toruń) in Posen Province—processed more beet per season than the entire quantity handled by the 145 factories of 1840. Hence the many factory closures at the

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turn of the century when small units were marginalised by the higher costs of obsolete technology. By this time the factories were producing raw sugar which was sent to the refineries (much raw sugar from the east went to refineries in the west) whereas initially the sugar beet processors had sold white sugar in their local market area. A consequence of larger factories was the need to intensify beet production in local supply areas. Field railways were built from the 1870s while land purchase or leasing became a necessary evil, despite the strain on capital. While it is impossible to discuss all the local industries in detail, a general shift to urban locations reflected the importance of railway distribution and the need for labour in very large units like the breweries of Pilsen (Plzeň), where steam power was applied and improvements in the production of chilled lager helped the town to become one of the great European producers. Meanwhile, in Budapest the first flour mill opened in 1839 and another ten were operating by 1867—although it was only around 1900 that more than half the wheat exported from Hungary was sent out as flour. The catchment was extended over the plain and included some imports from Romania. Success was based on high-quality wheat from the south and the milling system patented by A.Mechwart— using iron rollers with a spirally cut groove—and manufactured by the Ganz engineering works (set up originally by A.Ganz, a flour mill employee of Swiss origin, to produce electrical machinery for the industry in 1878). By the 1890s Budapest was Europe’s Minneapolis—one of world’s great flour-milling centres. Pürglitz Estate Few studies of individual estates are available but Pürglitz (Krĭvoklát) in Bohemia is a case in point—a former royal hunting area of 628sq.km long managed by the Fürstenberg family (which held on to the Krušovice and Povlčin areas until 1945) and now a protected area on either side of the Berounka Valley between the towns of Beroun, Kladno, Rakovnik and Zbiroh (Figure 2.4). The valley has been threatened by dams (highlighted in a study of 1911–13 to improve Elbe navigation)

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Figure 2.4 Industry on the Pürglitz (Křivoklát) Estate in Bohemia but there is also a history of small industrial projects (along with new roads and social services) which were part of Bohemia’s economic boom—especially under Karel Egon II (1803–54). There was a considerable iron industry based on the local charcoal and the

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ores of the Krušna Hora (60,000qu/year with a 30–45% iron content). Estate director F.Nittinger was responsible for two iron furnaces at Nový Jáchymov, built during 1810– 19 by Prague Polytechnic principal F.J. Gerstner; also a forge of 1824–6 at Roztoky near Pürglitz Castle; followed by a rolling mill and six puddling furnaces in 1842–3 at Stara Hut (Hýskov) on a former ironworking site. Another four furnaces produced iron from 1857 at Nová Hut (Nižbor) and there was further capacity at Karlova Hut after the Fürstenbergs purchased the Králův Dvůr Estate and built furnaces. The industry declined from the 1870s as the charcoal furnaces were overtaken by the coke-based industry at nearby Kladno and all had closed by 1905 whereupon the charcoal-making disappeared (having been made for centuries at the top of the Klíčava Stream near Řevničov and also near Chyňava). But the estate was primarily concerned with wood production and agriculture—the latter endowed with several new buildings (e.g. Amálie, Karlov and Požáry) during 1860–5 after massive forest damage. There were numerous breweries, distilleries, sawmills and other installations—including a spa at Merkovka and a hydropower plant at Rakovnik. And timber transport to Prague was facilitated by the Lány horse railway of 1830 which entered the forest in the northeast sector. The lower section is still used after modernisation for steam working as part of the Bustchrad (Buštĕhrad) system (1863) needed to supply the city with coal. The textile complex The geography may be tackled historically by starting with the medieval legacy arising from the continental trade routes which maintained relatively intensive commercial and industrial activity along the east-west trending ‘Hellweg’ and its linking routes south to the Danube. The highlands of Thuringia, Vogtland and Erzgebirge comprised distinct industrial and farming systems grouped around Leipzig Bay; and textiles combined with metals/metal manufactures, glass, paper, ceramics and wood (including musical instruments) across the wider Leipzig-Dresden-Plauen triangle. Restructuring of the industry involved the use of machinery in towns situated below the Erzgebirge foothills from Plauen to Zittau, including Flöha, Willisbach and Zschopau where water power first located them, with local specialisation according to different types of cloth. Leipzig was a centre for woollen/worsted manufacturing which was also based in Thuringia (e.g. Thüringer Wollgarnspinnerei); the lace industry of Vogtland was mechanised in Plauen with the assimilation of the Heilmann embroidery machine imported from Switzerland in the 1850s; while linen developed in Lobau and Zittau. Cotton spinning began during the Napoleonic Wars and transition to steam began in 1831 whereupon the factories were drawn down from the upland valleys. Chemnitz became the great centre of the cotton industry although there were also mills in Pössneck while Crimmitsschau and Werdau were noted for their yarns manufactured from Indian cotton. With the removal of internal customs barriers Saxony did well in the Zollverein from 1834 and had the distinction of destroying the cotton weaving industry in Berlin (where clothing became the main concern). As the ‘Manchester of Saxony’ Chemnitz had access to the Elbe waterway and the web of railways which was plainly taking shape from the 1850s. There were eventually lines to Berlin (via Elsterwerda and Juterbog) as well as a coal supply route from Lugau and Zwickau. And railways pushed up the Erzgebirge valleys to emphasise the city’s growth pole function. Nineteenth-century Leipzig developed as Saxony’s

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commercial centre although the Prussian frontier came close on three sides. It was largely in the hope of maintaining freedom of commerce for Leipzig’s fairs that Saxony joined not only the Middle German Commercial Union in 1828 and the Zollverein in 1834, but the North German Confederation in 1867 and the empire 1871, despite reservations about a Prussian customs system spreading all over Germany. Meanwhile, the textile industry in Silesia first assumed commercial importance in the sixteenth century but did not develop like its Rhineland counterpart as a major factory-based activity. During the critical mid-nineteenth-century years both coal and iron cost considerably more at the factory gate. Because of poor transport, the lack of social overheads and industrial linkages industry, the marginal efficiency of investment in textiles was thought to be very low. Artisans working in textiles in Silesia (and in Posen) were affected by the loss of Polish markets, where new artisan settlements were promoted during 1815–30 at a time of competition from factory production in Western Europe (Ostrowski 1966). But some compensation arose from the growth of engineering, for example in Breslau with Eisenbahnwagenbau and Linke-Hofmann-Lauchhammer. Habsburg Empire Here again the roots can be traced back to eighteenth-century Bohemia where the growing and spinning of flax could be virtually a full-time occupation—complemented by other activities in weaving, finishing and marketing. The woollen industry was also prominent in the Czech lands and while much of the cotton industry was located outside the region in Lower Austria, Vienna and Vorarlberg, there was considerable capacity in the Czech lands arising initially from the stimulus of continental blockade. Based on cotton imported through Hamburg and yarn from Austria proper, handspinning was replaced by 1835 when there were still 100,000 domestic weavers in the Friedland (Frýdlant), Leitmeritz (Litomĕřice) and Reichenberg (Liberec) areas of northern Bohemia and some in the south around Tabor. The stimulating business climate also attracted initiative from merchants and artisans who moved into the finishing section and extended factory working upstream. J.G.Berger, a cotton/linen wholesaler of the 1770s, purchased a bleaching/ fulling mill at Reichenberg in 1793 and extended into spinning and weaving passing on an efficient integrated business at his death in 1810. (His manager F.Römheld took over the Wallenstein business referred to below.) The most celebrated case concerns the journeyman J.J.Leitenberger who married the daughter of a Wernstadt (Verneřice) ice) dyer and took over his father-in-law’s works in 1764 (mentioned in the previous chapter), brought the outworker system under his control and introduced factory working to all stages of production. Some elements of the aristocracy wanted slow industrial expansion (for Vienna—and the Hungarian nobility—were particularly concerned about the risk of destabilisation). But the flood of cheap textiles after the Napoleonic Wars forced Bohemian entrepreneurs to increase the productivity of their skilled workers through building modern factories with the aid of British mechanics and technicians who were no longer constrained from migrating to the continent. There was also innovation in machinery since initial use of British cylinder printing machines and French panel printing methods gave rise to Leitenberger’s own machine in 1836 which would print six to eight colours simultaneously. The family interest was maintained throughout the nineteenth century and one of the factories—the Josefsthal

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(Josefův-Důl) printworks—survived into the late twentieth century. It was only in the 1880s that mechanised spinning and weaving became more important than the traditional methods. Mechanised spinning began in the 1820s in Reichenberg and in mid-century reached Moravia where the craft industries at Humpolec, Iglau (Jihlava) and Neuhaus (Jindřichův Hradec)—drawing wool from Hungary or Poland—eventually succumbed, though traditional linen and wool weaving was still present in the Brünn area half a century later. It was significant that aristocratic owners who lacked the skill and technical knowledge to keep up to date with progress in Western Europe were usually able to find middle-class partners on whom complete responsibility eventually devolved. Thus F. Römheld, with long experience in cotton mill management (see above), became joint proprietor and manager of the Count Wallenstein cloth factory at Oberleutensdorf (Horní Litvinov) in 1819. Romheld modernised the factory and obtained a steam engine from Reiff & Luz located near Brünn in 1826. The stock of mechanical spindles in Bohemia rose from 18,000 in 1805 to 550,000 1850 and 4.9 million 1914. Although there was a large printworks in Leitmeritz, Prague was the great finishing centre for the Bohemian cotton industry, accounting for half the total amount of cotton printed in the region at mid-century. The origins lay in the Sánger mill on the Moldau (Vltava) in 1766 but the great expansion came after 1825 with new mills outside the walled city in Karolinenthal (Karlin) and Smichow (Smichov) by 1830 and Ovenec (Bubeneč) by 1850. Growth came to a halt with the raw cotton crisis of the 1860s followed by the collapse of the Vienna banks in the following decade. Poland There was much activity in the Congress Kingdom in the 1820s based on the encouragement of textiles in the western part of the province, with planned village settlements inspired by the artisan towns of eighteenth-century Great Poland and contemporary Prussian colonisation in Brandenburg. Fiscal incentives were available for entrepreneurs in selected areas with water power while government provided town halls, churches and houses. Thus Zgierz was launched in 1820 on a government-owned estate east of the town, followed by Gostynin (1821), Gábin (1822–3) and a complex of developments close to the decadent market town of Łódź where settlement on state land was handled efficiently by the ‘voivode’ R. Rembieliński. The programme started with a new town for clothiers (producing handmade woollens) promoted during 1821–3 with an octagonal market opposite the old town and a weavers’ village (Łódka) laid out in 1824 along Piotrkówska. There was also a spinners’ village in 1825 and the village of Ślązaki in 1827: both were situated to the east of Piotrkówska and south of the Jasien—718 plots in all. There were plots for artisans producing cotton and linen cloth (double plots for linen spinners who also grew flax) while areas along the Jasien itself were reserved for fulling and for cotton mills that would take over the corn milling sites. (Despite the watershed situation between the Oder and Vistula there was spring water for processing and power.) Figure 2.5 shows the Łódź area and the state demesne of the nineteenth century (roughly delimiting the Greater Łódź of the present day) where dispersed village settlement was transformed by planned settlement to create a new town which gradually incorporated the villages of Widzew, Wólka and Zarzew. There were also eight new textile towns promoted by private landowners who expected to make money from leases

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and municipal charges: Babiak (1815–16); Ozorków (1816); Aleksandrów (1822); Krasnosielc (1822); Poddębice (1822); Zduńska Wola (1825); Konstantinów (1830); and Tomaszów Mazowiecki (1830). However, while the Congress Kingdom encouraged Western capitalists and skilled workers to settle, the uprising in 1830 brought a devastating response through the fiscal barrier that was then erected on the boundary of the empire proper, causing investors to use Białystok as the most accessible location within the empire. A Polish magnate residing in the town had introduced woollen handicrafts in the eighteenth century and a factory was built in 1824 before the ‘take-off’ occurred in 1831 when Russia extended her customs regime to the Congress Kingdom and blunted the competition of the Łódź area. However, the tariff barrier between Poland and Russia was then removed in the 1850s while the ‘gold tarrif’ of 1873 effectively priced other imports into Russia out of the market and gave Łódź even stronger FDI incentives so that it quickly became the ‘Polish Manchester’ and by 1914 was the second-largest Polish city after Warsaw. Penetration of the Russian market was now all the easier given the advantage of rail transport. While the tariff war with Germany raised duties on cotton in 1893, 1894 and 1903 so that the price of raw material was too high for Poland to compete in world markets, the availability of the Russian market proved a major incentive for Poland, which was industrialising relatively early (with the additional incentive of relatively easy raw material smuggling). Of course, Łódź was like a thorn in the flesh of Moscow’s textile manufacturers who sought a renewed customs frontier against Poland, especially in 1886 when a bad harvest reduced demand—and prices—for textiles, but her privileged position was not seriously dented by this further round in the ‘Moscow-Łódź War’ (waged in the ministries of St Petersburg) and the boom in Russian Poland continued into the 1890s. A formal customs barrier could not be erected within the empire and Polish cotton producers were penalised only by higher import duties on raw cotton. But it gave some renewed incentive to Białystok where the number of textile factories increased from 47 in 1879 rising to 113 in 1922. By the 1850s the craftsman model had been overtaken by the steam-powered factory system. Thus the small handicraft workshops and commercial units merely generated capital for the entrepreneurs of the next phase. For ‘it is a highly characteristic fact that the later proprietors of the great spinning and weaving plants

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Figure 2.5 The textile manufacturing centre of Łódź in Łódź were overwhelmingly recruited from among the merchant-entrepreneurs’ (Straszewicz 1959 p. 74). The skilled labour of the area was now irresistible to German industrialists who jumped the tariff barrier to produce cotton cloth for the Russian market. As the large plots of Łódź were redeveloped for factories and housing, the steampowered mills helped to cement a large industrial complex as the formerly separate handicraft villages fused together, with Piotrkówska (the traditional axis of movement linking the old market centre with the bridges over the Łódź and Jasien rivers) emerging as the main thoroughfare within a more uncompromisingly urban pattern. Machinery was installed in the 1850s and direct access to the Warsaw-Vienna railway in 1866 gave Łódź a big advantage over other towns in the area. Redevelopment meant that population ‘reached 250,000 before the built-up area had spread substantially beyond the original streets and plots’ (Dawson 1979 p. 377). Around each courtyard (in the centre of the original plots) ‘small factories, workshops and warehouses were cheek-by-jowl with tenements. Large mills occupied the plots along the small streams in the town, but the watershed site offered far fewer plots of this type than were required and some mills were built around the outside of the planned area of the town in freely but haphazardly developing suburbs and drew their water from boreholes’ (ibid.). Workers’ tenements combined with the palaces of entrepreneurs like Scheibler. In 1897 570 people were employed per cotton factory, compared with 34 in 1870. But the water supply became increasingly contaminated, while the town retained a colonial character with poor wages and living conditions for the workers and handsome profits for the owners. The woollen industry was less dynamic in view of the demise of the Polish army following the 1830 insurrection, which seriously affected Zgierz in particular. But the industry also graduated to a factory scale of operation around 1870, sustained by the

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migration of workers from Saxony, and it employed about as many workers as the cotton trade by 1900 (some 50,000), with centralised spinning and finishing (partly mechanised) and a putting-out system for weaving. The foreign entrepreneurs stayed close together (on account of the variable quality of the infrastructure and also for social reasons) in an area where growth was still restricted to the state demesne until 1925, when large areas were unsuitable for development on account of poor drainage or forest cover. But the situation was logical in the context of skilled workers who came from both Germany (Chemnitz, Dresden and Zittau) and the Habsburg Empire (Böhmisch Leipa (Česka Lípa), Jungbunzlau (Mladá Boleslav) and Reichenberg). However, by the 1860s most workers were descendants of local families who had worked in industry for up to three generations. There was restrained dispersal to Pabianice and Zgierz, but it may have been restricted by lack of suitable labour outside the area affected by the early nineteenthcentury government initiative in Congress Poland. The heavy industrial complex The region contained some metallurgical industries using charcoal furnaces which were part of the estate economy and the supply of metal was a stimulus for the engineering industry: thus the Waldstein ironworks turned out steam engines while Blansko produced spare parts and Friedland made boilers. Until the end of the 1870s charcoal furnaces still accounted for more than half the production of the Czech lands, partly the result of the persistence of the estates in the ownership structure: it was only in 1880 when Böhmische Montan Gesellschaft took over the Fürstenberg interests and rationalisation was no longer constrained by local considerations outside the industry that the loss-making Křivoklát ironworks was closed in favour of coke smelting at Kladno. Meanwhile, Thuringia’s iron industry was killed off by the exhaustion of its ore in the eighteenth century but experienced a partial renaissance when rail transport supplied inputs for the engineering industry, for example machine tools at Ruhla and Saalfeld; spinning machines at Eisenach; and blast furnace accessories at Schmalkalden, which once had a large iron industry. As local raw materials were exhausted in Saxony, iron production shifted from the landlocked Lauchhammer Estate to the Elbe trading artery at Riesa—eventually with a Siemens-Martin steel furnace and new rolling mill (ultimately taken over after 1918 by a Breslau (Wrocław) locomotive firm to form Linke-Hoffman-Lauchhammer). There was also a large state-owned ironworks developed in Poland during 1820–30 based on ore and charcoal along the Kamienna River in Kielce Region: the Ostowiec-StarachowiceSkarżysko-Końskie axis, with blast furnaces in some twenty-five separate locations (including the villages of Chlewiska, Parszów, Rzuców and Samsonów); rolling mills at Mlyny, Nietulisko, Przysucha, Ruda Maleniecka and Stielpia; and metal manufacture at Baczyna, Bliżyn, Pomyków and Suchedniów. This was associated with a programme of river regulation, dams and canals to support the iron industry by creating a basis for ‘groups of cooperating factories along fast-flowing rivers’ (Ostrowski 1966 p. 40). There was some change to the use of coke with Ostrowiec and Starachowice as the principal locations (Czapliński and Łodogórski 1981 p. 35).

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Upper Silesia In what was Europe’s largest coalfield west of Ukraine, there were 4,500sq.km of coal measures that were easy to exploit with seams thicker than 2m available at a depth of less 1,000m over two-fifths of the workable field. Ninety per cent of seams sloped at less than 15 degrees and these included important deposits of coking coal in the west (commanding premium prices) contrasting with material of lower calorific value (with more ash and sulphur) in the east, especially to the southeast of Sosnowiec. Up folding— occurring along a 30km ‘saddle’ from Sosnowiec to Hindenburg (Zabrze)—brought seams of up to 8m of the best coal almost to the surface and mining was concentrated here until the end of the century when new technology led to six mines at Rybnik and three beyond Tychy. Lower Silesia’s output from the Waldenburg (Wałbrzych) area was overtaken in 1822 but still in the 1860s most mines were no deeper than 80–100m: 65m for the highly productive Königsgrübe. Activity was most brisk in the west around Hindenburg where coking coal was available for supply to the Donnersmarck furnaces (Table 2.3). However, the shallow mines brought subsidence problems and while the consequences were not severe on open heathland the urban fabric was seriously affected. In the late nineteenth century some attempts were made to fill the underground spaces with sand but this was not done on any scale until after the Second World War. The railways gave a fillip to coalmining: not only did they consume coal but they offered a vastly improved transport service to what the Oder could provide. For, despite the Klodnitz (Klodnice) Canal (1812) which linked the coalfield with the Oder (Odra) at Cosel (Koźle), the limited draught posed a problem for heavy coal barges and there was no access east of Hindenburg. However, Silesia had to compete with other coalproducing areas of Germany, and although ‘exports’ accounted for over 70% of output in 1901 (after 40% in 1868) growth was slower than in the Ruhr (2.5 million tonnes in 1860, 16.9 million in 1890 and 43.4 million in 1913), for the advantage in production costs— which helped to compensate for a peripheral position in Germany—had been wiped out by 1900. Ruhr competition became stronger still with the completion of the Mittelland Canal, connecting with the older Dortmund-Ems Canal and providing an efficient transport system into the heart of Silesia’s traditional marketing area. This affected the metallurgical industry because it was cheaper for Berlin engineering firms to work up Silesian pig in the capital instead of supporting integrated works in the east. Mention has already been made of F.W.von Reden’s work in Silesia and in particular the opening of the royal ironworks in Gleiwitz (Gliwice) in 1796. Von Reden’s successor, who took over in 1802, expanded the munitions industry at Malapane (Małapane) but also began producing calamine at Königshütte (Chorzów) to make Prussia the world’s leading producer thanks in part to education and housing programmes which attracted skilled miners and engineers. The Prussian state was much less active after the Napoleonic Wars, but despite capital shortage the landowners maintained momentum. At Pless (Puszczyna) the coal lay too deep but the Mikolów outcrop was more accessible and the mining company Plessische Bergamt was established. Meanwhile, Henckel von Donnersmarck—owning much of the Gleiwitz-Kattowitz (Katowice) saddle—built the furnaces of Antonien (Ruda Ślaską), Baildon at Kattowitz and Laura (Siemianowice). Puddling was adopted in the 1830s and remained the

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dominant method of refining until late in the century. A Breslau merchant of Italian origin (N.Caro) established the Hermina (Labędy) steelworks 1848 and took over the Bobrek steelworks in Beuthen (Bytom) in 1883; W.Hegenscheldt from Westfalen opened a wire factory in 1853 and also bought the Baildon steelworks in 1865; and Hahn u.Huldschinsky opened a steel pipe mill 1867 (with Siemens-Martin furnaces in 1890) and manufactured additional products like railway wheels. Caro and Hegenscheldt joined forces in 1887 to form Oberschlesische Eisenindustrie für Bergbau und Eisenhüttenbetrieb (Obereisen)—opening a new rolling mill in Gleiwitz 1899 and a coal mine in 1912. They also

Table 2.3 Coal, oil, iron and steel production in Poland (thousand tonnes) 1800–1920 Coal Oil Iron Steelg f Kingdom Galicia Prussia Galicia Kingdom Prussia Kingdomf Prussiaf 1800 4a 5a 87.a . n.a. n.a. . . 1820 17 10 147 . n.a. n.a. . . 1830 69b 30b 361b . 13.1b 18.4b . 9.9b 1840 118 30 539 . 28.2 37.6 10.1 24.7 1850 108 39 975 . 15.6 71.4 10.2 47.2 1860 197 96 2447 . 22.8 89.3 17.6 85.9c 1870 321 188 5854 . 28.4 230.6 14.5 158.2 1880 1268 319 10011 32 43.9 336.1 99.5 257.8 1890 2450 610 16863 92 127.3 508.6 125.0 387.6 1900 4036 1167 24829 347 298.4 747.2 341.0 788.7 1910 5465 1346 34461 1766 249.9 901.4 404.0 1159.0 1920 4499e 1577e 39958e 773e 418.4d 994.6d 595.3d 1463.6d a b c d e f g Key: 1805; 1825; 1866; 1913; 1918; Upper Silesia only; includes puddled iron Note: the highest recorded figures during the period covered by the table were recorded for coal in 1913: Kingdom 6,834; Galicia 1,971 and Prussia 43,435 Source: Jezierski 1994 pp. 98–100

acquired Czestochowa ironworks (then in Russia) and expanded vertically through other takeovers including a local lead-zinc mine, enamelling plants in Rybnik—as well as Berlin and Breslau, coal mines in Waldenburg, iron mines in the north of Hungary (i.e. Slovakia), a tool factory in Warsaw and other assets in Germany, Russia and the UK. Then in 1905 the Huldschinskywerke was incorporated into the Ballestrem family’s Oberschlesische Eisenbahn-Bedarfs (Oberbedarf) which controlled the Friedenshütte (Pokoj) integrated iron and steel plant of Antonienhütte; also other steel plants, rolling mills and foundries, plus the iron mines in Slovakia. This group moved its headquarters to Gleiwitz and acquired the Ferrum pipeworks in Kattowitz plus ammunition and wagon works in Berlin. Local ores contained too much phosphorous and since they were hardly prolific the scale of production was too small to justify the Bessemer converter, even with the Gilchrist-Thomas solution to the phosphorous problem; while open-hearth steelmaking was largely precluded by the lack of scrap. Ore was brought in from Schmiedeberg (Kowary) in Lower Silesia and also from the Habsburg Empire, Russian Poland, Sweden and Spain. From the 1870s imports of ore from Sweden and Ukraine

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were regular and accounted for half the total consumed by 1900. Production in 1914 was 995,000 tonnes of pig iron and 1.4 million tonnes of steel. Regional institutions were based in Kattowitz, which first emerged as a central place when G.Winkler transferred the seat of his estate business while his manager F.W.Grundmann secured the railway link with Breslau via the Oberschlesische Bahn in 1846, providing markets for coal and a benchmark for the development of new industrial capacity. Urban status followed in 1865: until then Beuthen, Gleiwitz and Myslowitz (Mysłowice) were the only urban centres. Kattowitz enjoyed district (‘Kreis’) status and was the seat of institutions like the Union of Upper Silesian Mining and Metal Entrepreneurs (1882) and the regional headquarters of the state railways (1895). But there were also company headquarters in Gleiwitz which meant managerial and clerical jobs— also quality residential areas and good education and health services, plus parks, sporting facilities and a theatre. Subsidence problems ruled out tall buildings, and purchase of large estates by colliery companies (to avoid claims for structural damage) led to a readiness to pander to agrarian instincts and accommodate miners in two-storey houses with allotment gardens. More generally the smaller towns were content with two- or three-storey buildings (‘Burgerhauser’) accommodating six families in apartments. The coalfield was divided by the German-Russian frontier and so the eastern portion (Dąbrowa) developed a separate industry behind tariff barriers. The coal was relatively poor and some imports were needed from the German section, while Ukrainian ore was being supplied by the end of the century. Some German firms jumped the tariff barrier to refine and roll imported iron at Dąbrowa Górnicza and Sosnowiec and gain free access to the Russian market. Huldschinsky built steelworks at Sosnowiec (1881) and Zawiercie (1901)—also in Kharkov further east—after the Russians imposed tariffs against imports. But there was some tension when German capitalists moved and combined anti-Polish attitudes with loyalty to the tsar. Berlin and Magdeburg Berlin took pride of place in engineering through the concentration of firms especially in electrical engineering. Municipal lighting and transport systems opened up enormous markets, given the extent of Berlin’s electric tramways and railways, not to mention those of five provincial cities which exceeded half a million in population by 1914. As the domestic market became saturated plenty of business was found elsewhere in Europe and overseas. Industry in Berlin was dominated by two giants: Allgemeine ElectrizitätsGesellschaft (AEG) and Siemens-Schuckert. The latter originated in the cable and telegraph business started by W.von Siemens, a former Prussian army officer, which scored an impressive lead for Germany in the industrial application of electrical energy with several notable innovations, including manufacture of the first dynamos. Siemens was not so active in harnessing electrical energy for domestic and industrial consumers and this important branch of the industry was advanced by the merger with Schuckert’s firm in 1903. Work on current distribution, using the patents of Edison and others, was also pursued by E.Rathenau, whose AEG was one of the biggest electrical firms by 1890 and larger than the Siemens and Schuckert concerns prior to their merger. Both firms had branches all over Germany and employed thousands of workers abroad but their

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headquarters remained in Berlin where Siemens in particular stamped an identity on a particular suburb appropriately named Siemensstadt. The building of steam engines was already established at the beginning of the period, especially in Berlin and Magdeburg. Berlin’s industry was greatly enlarged by additional firms in 1837 (Borsig), 1842 (Wöhlert) and 1844 (Hoppe). Magdeburg, meanwhile, was the centre of Prussian Saxony: a major sugar market and industrial centre on account of the availability of lignite and potash at nearby Stassfurt. Production included fertilisers, pharmaceuticals and saccharin (the latter developed by Saccharin Fabrik). Engineering developed through repair shops in 1838 (and later building facilities) by Vereinigte Hamburg-Magdeburger Dampschiffarhrts Gesellschaft at Buckau, followed in 1862 by the works of a former Hamburg-Magdeburger employee (Wolf) who gained reputation for steam engines for agricultural use. Machinery for the sugar industry was another interest. Other eastern engine manufacturers were located in Breslau in 1833, Chemnitz in 1847, and Landsberg a.d. Warthe (Gorzów) at an unknown date. Engine building linked backwards to textile machinery in the case of Hartmann in Chemnitz (mentioned below) who built his first engine for internal use. In Berlin both Borsig and Wöhlert progressed to locomotives in 1840 and 1846 respectively, with Schwartzkopft (Berliner Maschinenbau) as a later development; while AEG and Gothaer Waggonbau had aircraft departments complemented by the specialist producers in Halberstadt, Leipzig, Schwerin and Staaken (the last two being the Fokker and Zeppelin plants, respectively) which were all in business by the end of the First World War. All this development was part of a policy evident throughout German engineering to diversify and thereby seek orders from a large number of domestic and overseas customers; in contrast to the American practice of extreme specialisation and standardisation. The agricultural engineer R.Sak of Leipzig made many different types of plough, to cope with farming conditions in different parts of Europe, and although J.Zimmermann (later Chemnitzer Werkzeugmaschinenfabrik) standardised the production of machine tools the factory was still making steam engines to order in 1913. Saxony’s engineering skills were evident in a wide range of equipment, musical instruments and toys. But as a result of Napoleon’s continental blockade Chemnitz gained a dominating position in the production of textile machinery, associated with the leading engineers like R.Hartmann, C.G.Haubold and J.Zimmermann: steam engines were produced from 1822 and jacquard textile machines from 1827. A significant local customer for steam engines was the Mansfeld coppermining complex which installed its first engine in 1833 when the mining had reached a depth of 140m. Mining was consolidated (to twenty mines in 1860) to concentrate on the richer material where deeper mining would be profitable. In the 1860s the last great drainage tunnel for the Mansfeld syncline was started at Friedeburg (31km; completed in 1879). Shafts going below this level depended entirely on steam pumping: gaining a further 60m in the 1860s and 370m (total depth 560m) by 1914, while production increased from 1,510 (1860) to 21,116 tonnes (1899). Smelters were transferred from water power locations to the Mansfeld Plateau—Krughütte (1870) and Kochhütte (1880; though the valley smelter of Eckardthütte was active until 1926)—and despite maximising production of slag bricks large conical tips began to dominate the landscape. Copper company housing was provided at Augsdorf, Benndorf, Helbra and Klostermansfeld, while officials and the

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middle class lived in Eisleben where the population increased from 10,800 in 1860 to 25,100 in 1905. Habsburg Empire (Czech lands) The empire had a small share of the Upper Silesian coalfield that forms Polish territory today but output was only a modest 2.0 million tonnes in 1913 compared with 6.8 million for the Russian section. Nevertheless, there was a base for heavy industry in the Mahrische-Ostrau (Ostrava) area (which passed to Czechoslovakia after the First World War). A modern industry first superseded the charcoal system when in 1826 the Archbishop of Olmütz (Olomouc)—owner of Friedland ironworks—decided to build blast furnaces and puddling plant on the coalfield at Witkowitz. The first furnace (lit in 1830) used charcoal but coke was used in additional furnaces built in 1836 and 1837 (though problems in coking meant that charcoal furnaces were not closed until the 1870s). By this time the project had attracted the attention of the Rothschilds, a Viennese banking family who appreciated the value of the works in connection with their railway contract for the Nordbahn (Vienna-Bochnia). Through the support of the Rothschilds, Professor Riepl of Vienna Polytechnic was able to visit the UK in 1830 and recruit British experts who were on hand when puddling began at Witkowitz. The Rothschilds eventually bought the works outright in 1845 and increased their stake in the industry through purchase of iron mines at Marienthal (Mariánské Údoli). Between the 1830s and 1870s steam power was applied to blasting, hammering and rolling. The Bessemer converter was introduced at Witkowitz in 1866 and Kladno nine years later, encouraged by the railway demand for steel rails. However, there were problems with the local iron ores until the Gilchrist-Thomas dolomite lining was available (in 1879 at both places, revaluing the Nučice ores) and heavy reliance was placed on the non-phosphoric ores of Styria (transfer of ore being balanced by a return flow of coal, with the transport costs deemed acceptable in the context of a protected home market). A surge of railway demand in the 1880s was met by installation of Siemens-Martin open-hearth furnaces which could accept scrap as well as pig iron (though Styrian ores were still indispensable, especially at Witkowitz). There was also a shift in production to Komotau (Chomutov) where steel was made in 1872 and a tube mill installed by Mannesmann. This was an expanding coalmining area (23 million tonnes in 1914) which included opencast workings at Brüx, especially after 1900, with wide distribution including Bavaria, Prussia and Saxony, as well as Bohemia. Viennese capital also found its way into the Nučice iron mines and the blast furnaces and puddling plant at Kladno where the Prague Iron Company introduced coke smelting in 1856. Kladno was a long-established centre of ironworking but it was overtaken by the Mährische-Ostrau area with its ample coking coal and close connections with the railway industry. The contrast was underlined by the presence of a purely Czech labour force at Kladno and the retention of smallholdings whereas Mährische-Ostrau experienced immigration from Galicia and Silesia. The Bessemer converter arrived in 1875 when one of the two blast furnaces was using Styrian ore to produce pig iron for the Bessemer converters while the other used a mixture of ores (including some local phosphoric material) to turn out forge iron. However, it was only at Teplitz, where Bessemer converters were installed in 1873, that reliance on ‘imported’ ores was total.

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Development in northern Bohemia was linked with the expansion of coalmining, most evident at Brüx—beginning after 1740 for use in local industry (brewing/distilling and brick/lime working). Initial small-scale mining in shallow pits was transformed in scale by steam-powered industry after 1830: there were 150 mines in north Bohemia in 1847 but 1,000 in 1855 (Pavlínek and Pickles 2000 p. 91). The Aussig (Ústí)-Komotau railway of 1870 opened up markets in both the Czech lands and Saxony—hence deeper pits and larger opencast mines by Britannia from the UK (1866), Brüx of Austria and the AngloAustrian North Bohemia Company (1871), Brüx-Dux-Komotau (1874), taken over by the Austrian state after bankruptcy, and Lom (1888), all with headquarters in Brüx (ibid. p. 92), which experienced a boom in public and commercial buildings plus villas for the coal barons and working-class quarters for miners whose numbers had increased from 4,000 in 1848 to 26,000 by 1914 (30,000 in northern Bohemia in 1900) with plenty of cultural stress between German and Czech employees as the latter became relatively more prominent. A.Klima (1975) has demonstrated the close connection between textile and engineering industries because it was through small workshops set up inside textile factories to maintain machinery that some specialist engineering firms developed, although it was in Brünn (outside the main textile region) where Austria’s first steam engine was built in 1814. One workshop at Schwarzenberg (Šlapanice) near Brünn was started in 1821 by two Germans, J.Reiff and H.A.Luz. A steam engine was built for the Offermann factory in Brünn and it has already been noted that another was supplied to the Wallenstein factory in 1826. In 1836 the business was relocated in Brünn as an independent concern. In another instance a group of mechanics, including the Britons D.Evans and J.Lee and the Czech C.Danek, all with experience at the Breitfeld mill, set up their own engineering business in the Prague district of Karolinenthal (Karlin). Two brothers from the UK, E. and J.Thomas, acquired some experience in installing steam engines and started their own factory in 1829 in Reichenberg which was relocated to an old spinning mill in Karolinenthal in 1832 in order to enjoy a more central position in Bohemia and closer proximity to supplies of iron. It became the largest machine building plant in Bohemia in the first half of the century with a wide range of products including a rolling mill supplied to Křivoklát ironworks in 1842. Meanwhile, one of the Thomases’ associates, T.Bracegirdle, set up his own plant close to Reichenberg at Gablonz (Jablonec) in 1835 where a good water-power site was developed. His looms became a speciality and he moved to Brünn in 1843, perhaps encouraged by personal associations with Offermann and the prospect of cornering the Moravian market. He went on to build steam engines, installing his own foundry and rolling mill. Interestingly, these examples show links going forward to the major late nineteenth century engineering industries of the Czech lands. Consolidation occurred in Brünn in 1872 (seven years after Bracegirdle’s death), giving rise to the famous Erster Brünner Maschinenfabrikgesellschaft (Prvni brenská strojirna). Metal came from Witkowitz and it was this supply that drew more of the engineering towards the Mährische-Ostrau complex, including the coach factory at Nesselsdorf (Kopřivnice) which later built cars and lorries. The Thomas factory was eventually absorbed into the Škoda company which started in Pilsen (Plzeň) by manufacturing sugar refining plant in 1859 at what was then the Wallenstein engineering works (taken over by E.Škoda in 1869), before diversifying in armaments in 1890 using

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steel from plant installed within the works the previous year. Converted into a joint stock company with the aid of Kreditanstalt in 1899 it opened a motorcycle factory in Jungbunzlau in that year and started car production there in 1905; serial production followed at Nesselsdorf in 1906 and Prague in 1907. Škoda also became a major armaments supplier for the Habsburg army, subsequently serving the Czechoslovak state and its allies in the Little Entente during the inter-war years, the Axis during the Second World War and the Warsaw Pact forces during the communist period. Finally the needs of the sugar beet industry also gave rise to the Prague engineering firm of C.Danek (founded in 1854) which was merged into the massive Českomoravská-Kolben-Danek (ČKD) enterprise in 1927 along with Prvni Českomoravská (which started manufacturing mining machinery and metallurgical plant in 1871—later water turbines, refrigerators, locomotives and motor cars) and Emil Kolben’s factory of 1896 producing power station equipment. Habsburg Empire (Hungary) Here the state supported the iron industry which encountered strong demand through the upsurge of railway building after the Ausgleich. A steel mill established at Diósgyőr in 1868, equipped with Siemens-Martin open-hearth furnaces, became part of a large state metallurgical works which was Hungary’s second-largest steel producer in 1913 after Resicza in Banat. Mention should also be made of the company Rimamurány-Salgotarjan created in 1881—in an area of long-standing charcoal ironworking dating back to 1770— by the amalgamation of foundries in Borsodnadasd, Ózd and Salgótarján, leading to open-hearth furnaces at Ózd and a focus on finished products at Salgótarján. And small ironworks was later opened at Zolyombrezno (Podbrezová) near Beszterczebánya (Banská Bystrica) and other units in Banat and Transylvania including Resicza and Vajdahunyad (Hunedoara). These works made some metal at source and under the railway company Staatseisenbahngesellschaft Resicza produced both rails and locomotives. But engineering tended to develop within each market region and remote production was rather exceptional. Hence the flow of metal to Budapest, complementing the transfer from Silesia to Berlin. As the Budapest and Vienna banks promoted engineering close to the main markets ‘Transylvanian machine works remained essentially repair shops’ (Lampe and Jackson 1982 p. 314). There were also rolling mills in Budapest in 1838 long before the State Engineering Works built its first railway locomotive in 1873, and Manfréd Weiss became a significant arms producer. Reference should be made to the stimulus that came from flour milling: A.Ganz, the flour mill employee of Swiss origin who set up his own factory in Budapest to manufacture milling machinery, diversified into electrical machinery in 1878. Ganz were producing turbines (mostly for export) and milling machines in the 1880s and a patent was obtained in 1885 for AC transformers—through work by O.Bláthy, M.Déri and K.Zipernowski. Locomotives and rolling stock were another speciality: the first electrically powered locomotive was designed in 1896–8 by K.Kándo. Hungary’s first internal combustion engines were also built: a petrol-driven tricycle in 1900 was succeeded by a two-stroke automobile in 1902 and a four-cylinder vehicle in 1905 (followed by the first tractor 1912). As Ganz-Mávag (and now Ganz-Hunslet) the firm remains one of the most important in Hungary. Manfréd Weiss started producing canned

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foods for the army in 1884 but moved into cartridges and magazines in 1895 (after relocating to Csepel on account of fire and explosion risks). The firm grew into a major munitions complex by 1914 as it showed a knack for anticipating the army’s requirements. The new location gave space for a foundry and rolling mill built in 1896 followed by a copper rolling mill in 1899. United Incandescent Lamps at Újpest also established a leading position. The chemical complex Germany This industry was grounded in the needs of the textile industry for bleaching and dyeing materials and the alkali required for the manufacture of glass and soap. As the key commodity, sulphuric acid was produced in the region from the seventeenth century but it was the evolution of the lead chamber process from experiments in Berlin (1768) and Breslau (1779)—burning sulphur (or sulphur-containing ores like iron pyrites) and condensing the gas—that created the basis for diffusion through the region. Several chemical works were established around Berlin in the early nineteenth century, notably Kunheim in 1826 (relocated at Kreuzberg around mid-century) and the Prussian government’s soda plant at Schönebeck. There was a rising demand for cosmetics, pharmaceuticals and photographic materials in which Berlin firms were able to specialise. But the heavy chemical industry was progressively relocated to the lignite field in Merseburg. A remarkable concentration in this part of central Germany arose first from the salt of Nordhausen used to produce sulpuric acid (‘Nordhausen acid’)—the source of bleaching powder—in the seventeenth and eighteenth centuries and subsequently through the discovery of salt deposits at Stassfurt near Magdeburg in 1856 in an area well endowed with lignite and with transport links available by both the Saale River and the developing railway system. Salt production was boosted by its use in explosives, glass and soap to reach 16 million tonnes in 1938 (including production from Nordhausen). It is important to add that the salt lay beneath an overburden of potassium chloride, known as ‘Abraumsalze’—also found at Aschersleben, Leopoldshall and Wintershall—which was appreciated by sugar beet growers and thereby formed the foundation of a major fertiliser industry, with output rising from 100,000 to 3 million tonnes during 1865–1900. The importance of hard coal as a fuel and raw material initially became critical in drawing sulphuric acid production (using the Leblanc and Solvay processes) to western Germany—along with the production of derivatives like soda and dyestuffs—even though the lead chamber was pioneered in the east. But a new phase of growth occurred in central Germany in the second half of the nineteenth century at a time of technological ferment in the chemical industry when major new investments were being made. At this juncture value attached to the lignite and the ‘Abraumsalze’ while the railway system (supplementing the Saale/Elbe navigation) could distribute production across Germany. Additional value accrued from what was perceived as a strategically valuable location in the heart of the country (far from the eastern and western frontiers) in the context of the First World War and the subsequent policy of economic autarky. Technological breakthroughs included the electrolysis of brine as an industrial process for the production of caustic soda and chlorine—demonstrated in the 1880s—followed by

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the discovery (in 1892) that the heating of lime and carbon in an electric furnace gave rise to the compound calcium carbide which could be readily converted into acetylene— useful for cutting and welding and also a source of acetic acid and alcohol—and moreover an intermediate in fertiliser production arising from the fixation of nitrogen to form calcium cyanide. Another important line of development was associated with coal tar (analine) and the use of this material as an intermediate in the production of synthetic dyestuffs. Although discovered accidentally (in the course of attempts to synthesise quinine for medical use) the bright colours of analine dyes were widely appreciated and gave rise to much research in a field where students of Germany’s advanced system of technical education were able to prosper. By 1914 the industry involved a small number of vertically integrated enterprises which were to a large extent responsible for the technology being used. The 1890s brought a cluster of installations to Bitterfeld, then a small settlement on the Mulde south of Dessau. The most important investment was made in 1895 when Chemischefabrik Griesheim, a firm operating in the west, decided to employ the electrolysis of brine process using the local salt and lignite. This was a radical location decision which ‘was unquestionably the chief force in making this area the centre of the German electro-chemical industry’ (Findlay 1948 p. 124). Within a few years the company was greatly enlarged by mergers and takeovers and—in its renamed form Griesheim-Elektron—it concentrated its entire chlorinated hydrocarbon capacity at Bitterfeld and made bleaching powder on a particularly large scale. Also, one of the larger mining and fertiliser companies at Stassfurt joined with Aussiger Verein (see below) to set up a subsidiary at Bitterfeld to operate an electrolytic caustic soda and chlorine plant. And the expanding Kunheim company in Berlin went on from an initial relocation to the edge of the city (Niederschöneweide in 1885) to set up further plant in Niederlausitz (Grosskoschen) and also in Bitterfeld. The latter arose out of a successful venture in 1867 when Kunheim combined with two other Berlin firms to create a small analine works on the eastern edge of the city at Rummelsburg which opened in 1869. This business—named Aktiengesellschaft für Analinfabrikation (Agfa)—was extremely successful with its cotton dyes and photographic materials when it resumed operations at Treptow after the Franco-Prussian War; so much so that the Bitterfeld project was undertaken in conjunction with lignite mining. A separate factory for photographic materials was opened at Wolfen near Bitterfeld in 1909. Bohemia Parallel developments occurred when D.Hirsch established his Prague factory to provide acids for calico printing in 1835 and F.X.Brosche was similarly engaged, although his product range extended to paints, printing inks and pharmaceuticals. In 1839 his chemist developed a two-chamber system for sulphuric acid using chlorinated limestone. The first major chemical producer was J.D.Starck, whose sulphuric acid plant at Davidov near Zwittau (Svitavy)—based on the vitriol schist of Komotau—dates to 1810. Over the next forty years the firm became a multi-plant enterprise with a wide product range, including superphosphate in the 1840s at Kaznau (Kaznĕjov) with a private source of coal from the Falknov (Sokolov) Basin and was exporting as far as the Rhineland at the time of his death in 1841. Other locations, which were based on local coal, included Lipnice, Silberbach (Stříbná) and Rychnov. In this way Bohemia resisted both Prussian and Saxon

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competition in heavy chemicals. Further coal-based establishments at Hruschau (OstravaHrušov) in 1851 and Aussig in 1856 supplemented sulphuric acid production with the Leblanc soda process (eventually overtaken by the Solvay process involving the electrolysis of brine). Lead chambers supplanted the old Bohemian production method geared to a concentrated but expensive acid (oleum) but the traditional industry recovered through capacity at Kolín in 1871 and Pozsony (Bratislava) in 1873 when the dyestuffs industry required a more concentrated product (at least until the lead-chamber system was modernised through the ‘contact’ process, employing a platinum catalyst). Indeed the local production of oleum gave a boost to dyestuffs in Bohemia, despite strong German competition. A long-established Prague firm specialising in oleum-based intermediates entered the trade and the Hruschau factory (later taken over and expanded by Aussig) did likewise. There was some spread of soda manufacture to Bosnia, Galicia and Transylvania, while German chemical companies were attracted to the Russian Empire by high tariff protection and the coal available in Dąbrowa: a sulphuric acid and Leblanc alkali plant was built at Sosnowiec while an electrolytic plant appeared south of Łódź (though salt for the latter had to be brought from the Donbas) and a dyestuffs factory operated at Pabianice. Other industrial regions The Baltic ports The ports acquired a range of industries. Steam engines were built in Elbing (Elbląg) and Stettin (Szczecin) from 1837 and 1851 respectively, a business not unconnected with shipbuilding established in these places—which in Stettin included ocean liners, beginning with a contract in 1887 from the Hamburg-Amerika Line—and also in Danzig (Gdańsk). Food industries were prominent in Stettin after two local merchants (H.Dohrn and J.F.Veltkusen) founded a sugar refinery in 1817 that grew into the huge Baltische Rübenzuckerfabriken with commerce assisted by the Zollverein and improved transport facilities in both the port as a result of the hinterland road/railway construction and improved port facilities. As Berlin’s outport, Stettin’s industry was particularly diverse, with milling, brewing and distilling; timber, furniture, paper, pulp and cellulose; cement and refractories; phosphate fertiliser; not to mention the Kraftwerk blast furnaces linked with the Henckel-Donnersmark mines in Upper Silesia. The hinterland included Posen, which received some government aid to improve the city and reduce emigration by the German community. The firm of H.Cegielski started with farm machinery (after agricultural supply business, 1846) and then moved to larger premises to build locomotives and rolling stock. Steam engines were made in Neubrandenburg from 1840. The Adriatic ports: Trieste and Fiume (Rijeka) These comprise a further industrial region along with their hinterlands in Carniola and Croatia. Import of Egyptian cotton gave rise to the Aidussina (Ajovščina) spinning mill of 1828 (with a steam engine to supplement water power in 1843) which marks the beginning of modern industry in Carniola. An integrated spinning and weaving mill in Laibach (Ljubljana) followed in 1837, associated with the British entrepreneur

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W.Moline. There was also a glass industry established in 1824 and cane sugar refining began in Laibach in the 1830s—later in Fiume and Trieste—only to be eclipsed by Czech sugar beet in the last quarter of the century. The railway to Trieste opened up small coalfields on the supply line to Italy. The coal of Trifain (Trbovlje) was first developed by Laibach and Trieste businessmen to support the sugar industry, but Viennese investors bought the mines in 1873 with the help of Wienerbankverein, leading to modernisation and the quadrupling of output by 1912 (Lampe and Jackson 1982 p. 312). The coal was used by the glass industry (referred to above), enabling it to make the transition from potash to gas, although it was eliminated through Czech competition in the railway age. The coal was unsuitable for coking but it could be used for the puddling process introduced first at Gulenstein (Štore) in 1836, where coal displaced charcoal in 1840, and later at Ravne near Celli (Celje)—linked with the scattered iron industry of the upper Sava. Some of the former’s capacity was dismantled in 1898 and transferred to Donawitz in Styria but other units survived at both locations. The iron industry of Carniola was eventually consolidated by Krainische Industrie Gesellschaft (with German capital) through an integrated works at Assling (Jesenice) when the railway arrived in 1870, with Siemens-Martin technology added in 1891 when ownership passed to a Viennese arms firm with access to military orders. Exhaustion of local ores resulted in the transfer of pig-iron production to Trieste in 1897 (convenient for the working-up of imported ores and British coking coal), but the remaining capacities were inherited by the Yugoslav government after the First World War and diversified through electric steel making based on the hydropower potential after a successful venture at Fala on the Drava with Swiss capital during the war. Meanwhile, Fiume—a free port from 1776—saw growth accelerate after access was provided by a narrow-gauge spur from the Vienna-Trieste railway, widened in 1873. Although cut off from Vienna by the Ausgleich (interrupting the flow of timber and iron) and deprived of its sugar industry through competition from sugar beet, the port then concentrated on papermaking and shipbuilding; the latter flourishing with the introduction of iron and steel, with spread to Pola (Pula). The railway from Budapest and Zagreb arrived on the ‘Hungarian Littoral’ in 1862 and boosted flour exports. But the rail links were by no means comprehensive: the link with Zagreb allowed Croatian rough woollen cloth to develop a market (after previous failure against British and Czech production), while lack of a direct link with eastern Slavonia discouraged the textiles in Osijek where the silk industry did not survive the 1860s. On balance ‘it seems doubtful that Rijeka’s export tonnage could have multiplied tenfold from 1870 to 1910 or the building of steamships [today its major industry] gotten under way had the attraction of Trieste not been checked by Austro-Hungarian rivalry’ (Lampe and Jackson 1982 p. 300). Industrial areas in the Habsburg borderlands and Southeastern Europe Southwestern Transylvania and Banat Reference should be made to some compelling resource industries, beginning (chronologically) with the goldmining in the Western Carpathians at Vörös Patak (Roşia Montană) near the small town of Abrud which is worth examining in view of the

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excellent detail provided by Paget (1850) and the contrast in technology and capitalisation offered with the coppermining at Mansfeld already addressed. The whole mass of the fortress-like hill of Csetátie (Cetate) contained gold and was being worked opencast and gradually cut away (as it still is today) in contrast to underground mining techniques used by the Romans. For ‘there are no large capitals employed in working these mines; they are entirely in the hands of poor peasants who work them either singly or in small associations of two or three persons. When the mountain was richer, government found it worthwhile to work on its own account but since it has become poorer none but the peasants—it is said—can get a good profit out of it’ (ibid. p. 298). It was explained how the peasants applied for grants of mountain space in square yards; family groups would then operate, with the father boring and blasting while one son took the horse and its panniers to the crushing mill operated by the mother and another son, with the crushed ore then carried to Abrud: ‘all these processes are carried out in the rudest possible manner [with] no less than 500 crushing mills and washing floors within the space of a couple of English miles’ (ibid. p. 299). The mills ‘consisted of a single small wheel, generally deficient in half its buckets, which moves three crushing poles— none of which go equally and one of which is generally wanting or broken’ (ibid. p. 299), yet the peasants got rich and had fine houses in the village. Some peasants collected ore lying on the pathways where it was found ‘glittering in the sun’ after some natural sorting of material on the stony surface by rain, showing that the notion of ‘streets paved with gold’ was no idle romance but ‘a serious reality’ (ibid. p. 300). The ‘little metropolis’ of Abrudbánya exhibited ‘wealth and luxury which he [the traveller] little expects to see in the midst of the wildest natural scenery’ with fine houses for government officers and people benefiting from this ‘lucky mining adventure [with] mining operations on every side’ (ibid. p. 295). Paget (ibid. p. 97) also visited the Hoffman iron furnace and casting mill at Ruskberg (Nădrag) which produced lead shot with the help of a 44m crag acting as a natural ‘shot tower’: ‘molten lead falls through a cullinder into a basin in the brook below’. Wood was cut for the factory and a system of steam drying had been perfected for treating green timber. However, he did not visit the large state-owned mining and ironworking activities in the Resicza area—founded originally in the

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Figure 2.6 The coalmining settlement of Anina. Note that the mines at Ciudanoviţa, David Lisava and Miniş are modern pits for uranium and clay eighteenth century using charcoal as the furnace fuel—which were privatised by STEG under the financial pressures of the Crimean War. STEG eventually com pleted the Steierdorf-Bazias coal export railway to the Danube in 1863 (Figure 2.6), eventually substituting a surface railway from Lisava to Anina for a tunnel which would have run directly from the coal seams at Kubeck. And although the coal was subsequently redirected from the Danube to the Resicza furnaces (Bessemer converters and SiemensMartin open-hearth furnaces were installed in 1868 and 1876 respectively), production continued to be taken as far as Oravicza (Oraviţa) over this mountain railway which

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constitutes the most remarkable part of a sustained industrial endeavour central to the modernisation of the Krassó-Szöreny (Caraş-Severin) District. Enterprise by the Hungarian state was subsequently responsible for metallurgy at Vajdahunyad combining local ores with coal from Petroszény (Petroşani). Other emerging industrial complexes in the Carpathian areas of the Habsburg Empire did not involve such a large scale of planned settlement, but they were locally significant: especially the mining and metallurgical industries at Ózd and Salgótarján. Bosnia and Herzegovina The Habsburg occupation of 1878—a prelude to annexation in 1908—brought state involvement in the economy in order to increase provincial tax revenues, meet the costs of administration and so reduce dependence on joint occupation credits. A railway network was built on a narrow-gauge basis primarily for troop movements; and in order to maximise revenue from commercial traffic freight rates per kilometre increased with total distance whereas the reverse would have been appropriate for the stimulation of industry. However, there was a flurry of activity, for an iron industry was built at Vareš in 1891: there was coal as well as ore available but as the former was of poor quality charcoal from the extensive forests was used instead. The forests were taken into state ownership and large concessions were awarded to entrepreneurs like the Bavarian O.Steinbeis who gained control of 45,000ha of forest in the Doberlin (Dobrljin)-DrvarJajce triangle in 1892. Narrow-gauge railways collected timber in the forests and were also available for transport of sawn timber from the Doberlin and Drvar factories to the quayside at Sibenico (Šibenik) where the company built its own wharves. There was also a chemical industry featuring calcium carbide at Jajce and soda at Lukavac (the latter supplied with brine from the salt deposits of Donja and Tuzla). An oil refinery at Bosanski Brod imported its crude in order to send products to Hungarian territory on the opposite side of the Sava. The profile was completed by a range of food processing industries: brewing, canning, distilling, tanning and tobacco manufacture. There was no integrated programme but the results were impressive for a backward province that stood apart from the main lines of communication. Bulgaria Large-scale industry was almost completely absent before 1850 and even in the second half of the nineteenth century progress was extremely uneven. Bulgaria developed some food processing and leather industries—including sugar beet refining, meat packing, canning and flour milling. There were some large mills at Russe and other Bulgarian Danube ports exporting to the Ottoman Empire, but the inefficiency of shipping reduced both quality and profit. And in the hinterland small native-owned mills could not make adequate profits (and could not afford rail transport) once wheat prices rose during the last pre-war decade. Bulgaria also had an iron industry at Samokov south of Sofia, linked with the production of agricultural implements, but the prospects for competition with imported machines seem to have prevented an investment in coke smelting after 1850 when capital was switched to banking and commerce. However, it is in any case doubtful

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if Bulgaria had adequate coal and iron ore to sustain a profitable iron industry at this time. Romania Significant clusters of industry developed here. Attempts by the princes of Moldavia and Wallachia to introduce factory industry to their respective capitals—Iaşi and Bucharest— were frustrated by the backward war-torn environment for which monopolies and tied labour forces were inadequate compensation. However, although the landowners were not brought under political control in the 1830s to the extent that Count Kiselev would have wished, there was a growth of commerce along the Danube (reflected in the development of the river ports, especially Braila and Galati, where food industries developed) and improvement of the road from Bucharest to Brassó (Braşov) in Transylvania. The Assan milling, oil-pressing and distilling enterprise in Bucharest stood out as the most impressive mid-century development (and one of the first to use steam power). Craft skills in the rural areas were of some significance when organised on a workshop scale to cope with orders from the towns. Thus the Kogălniceanu military clothing factory at Târgu Neamţ (1858) was grounded in the reputation of the area for woollen textiles fostered by the Neamţ monastery. Despite attempts at import substitution for iron and paper (especially in Moldavia), heavy industry did not make an appearance until after the unification of the principalities. The Mehedinţeanu refinery opened near Ploieşti in 1859 while the 1860s saw progress in foundry work and engineering in Bucharest. The building material industry was encouraged by growth in all the Balkan capitals but Romania did best with the Bucharest market (with its large population including many high-income families), and the cement industry experienced technical innovation by the boyar Prince Bibescu using the family fortune to introduce the rotating oven in 1908. However, the main surge of growth occurred in response to tariff protection (first offered to the paper and sugar industries in 1881–2) which precipitated a five-year tariff war with the Habsburg Empire after 1887. Romania had a range of agricultural and mineral raw materials (outstandingly oil) and migration of Romanians from the Habsburg Empire after independence contributed to the reservoir of skilled labour. In the main industrial area, which extended from the Danube at Giurgiu to the Hungarian border at Predeal, Bucharest supported a wide range of activities (including engineering, textiles and food processing) while Ploieşti shared with Câmpina the oil refining and oilfield engineering business of the Prahova oilfields (Figure 2.7). Giurgiu had a ship repairing business and a sugar factory while Comarnic produced cement, Azuga beer and clothing with textiles and wood processing at Busteni. A second cluster in Moldavia was based in the Siret Valley from Paşcani to Adjud where the railway ran parallel to the Siret and raw material arrived from the Carpathian valleys, especially the Bistriţa and Trotuş: with wood processing at Piatra Neamţ (also paper at Letea and textiles at Buhuşi) in the former, with coal at Comăneşti and oil production at Moineşti in the latter. A third cluster covered the ports of Brăila and Galaţi with engineering and some processing of the cereals and timber drawn to the port. With over 77% of all the country’s employment in large-scale industry (the balance fell to scattered nodes like the provincial capitals, with textile industries, and Botoşani, with flour milling

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Figure 2.7 Industrial regions of Romania 1902 associated with an agricultural market close to Austrian Bukowina), Romania illustrated in microcosm the core-periphery contrasts already noted in the Habsburg Empire and Germany. Serbia Some meat-packing developed when the border was closed to live exports in 1895–6 and it was consolidated in the face of the 1906–11 pig war. Apart from local crafts there was an offshoot of the Bulgarian textile industry in the Leskovac and Niš areas annexed in 1878. It involved braid, hemp rope and woollen cloth; well founded on local raw materials but constrained in its evolution to a factory system by the conservative outlook of the artisans which discouraged investment. And there were further problems when the Bulgarian market was closed by the Serbo-Bulgarian War of 1885–6. The few native entrepreneurs able to effect the transition tended to relocate in Belgrade. Food processing made some progress, but in modern mills turning out fine white flour there was a tendency to overcapacity as exporting proved difficult. The Belgrade ‘klanica’ (meatpacking plant) opened by the Serb engineer M.Savčič in 1897 was a success but the high prices paid for live animals in Vienna discouraged processors elsewhere in Serbia. Urban construction generated a market for building materials while state defence and railway building supported an engineering industry, nevertheless constrained by the low level of technical education and the need to import metal. However, the pace accelerated after Austria initiated a tariff war in 1906 to subordinate the economy; whereupon Serbia found other markets for livestock and boosted industry to reduce dependence on the

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empire still further. Over 400 manufacturing enterprises were established between 1906 and 1914. Backward areas Forceful investment policies might ideally have been applied to all backward areas, but much was left to private enterprise which failed to gain significant momentum. Industries serving local markets tended to cluster in the main towns and also along the key railway routes. Galicia saw growth along the ‘Inner Carpathian Railway’ (Żywiec-Nowy SączJasło-Krosno-Zagórz) of 1882–4 and the oilfields around Gorlice, Jasło and Krosno: exploitation began in 1851 near Krosno—the town where I.Łukasiewicz distilled oil for the first time—at a laboratory scale. But without valuable raw materials competition with the main industrial cores was almost impossible. A pattern of specialisation seems to have been encouraged by a tacit acceptance of pseudo-colonial status for the empire’s peripheral territories lacking a large urban-based middle class anxious to invest in manufacturing, except where German and Jewish communities played a significant role: for example, through the textile industry’s transition to a factory system in areas of German settlement around Hermannstadt and Kronstadt. It has also been argued that feudal traditions had a strong hold on the minds of the upper and middle classes, making them despise both manual work and commercial gain; while ‘the peasants generally lacked the skill and capital, let alone the legal freedoms, to become entrepreneurs’ (Mellor 1975 p. 185). The attachment of the peasant to the soil was so great that mines and factories in the Balkans were frequently unable to find sufficient workers willing to stay permanently and thereby acquire real skill. Most of the workers stayed for only a short time and then returned to their farms. Transylvania The issue may be taken further with respect to Transylvania where the feudal lords retained their status after 1848 because their incomes were safeguarded by the arrangements relating to the formal abolition of feudalism and the continuing oversupply of agricultural labour. This left the peasants with few escape routes, although the overpopulation of the countryside was eventually relieved by migration and 87,000 Romanians left during 1908–13, virtually a fifth of all those who left Hungary at this time. Agriculture serving the modest internal market was relatively inefficient, while the cost advantage of abundant cheap labour could easily be offset in eyes of potential industrialists by lack of skills, low productivity, raw material shortages and high transport costs to markets outside the region (given the limited local market which—in the railway age—could easily be supplied from the industrial cores with proven efficiency and economies of scale). So it was appropriate that the east should remain agrarian. AustroBohemian magnates were always concerned about the possibility of competition from Hungarian nobles who would not pay taxes: hence ‘a coalition between the Habsburg state and Bohemian industrialists that excluded manufacturing from Hungary’ (Verdery 1983 p. 176). Furthermore, the Habsburgs were happy to bypass the German business community in Transylvania ‘preferring to deal with international merchants who could assure them access to eastern raw materials and markets for Austro-Bohemian

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manufactures’ (ibid. p. 177) although this prevented accumulation of merchant capital in Transylvania. Habsburg industry was not the most efficient even in its core locations and regional policies (subsidies and tax exemptions) as protection against Bohemian manufactures would hardly have paid dividends. The overriding aim was reduced dependence on foreign loans and increased self-sufficiency. There was capital from the great banks of Budapest and Vienna to support pockets of growth where potential existed, while relations with the Ottoman Empire ‘allowed Balkan traders to join German farmers and Italian bankers in carving out modernizing enclaves in the economy of the imperial borderlands’ (Lampe and Jackson 1982 p. 78). So the aim for Transylvania was integration through an agricultural bias to livestock while complementary industry made modest progress. Yet there was no export surplus since trade in timber and grain was more than balanced by imports of livestock, cotton, wool (including aba) and tobacco. The empire was also dependent on Balkan traders, faced with ‘sporadic restriction tempered by a reluctance to alienate them or the Ottoman Empire from which they came’ (ibid. p. 60). Discrimination against Transylvania (and Galicia) may have been accentuated by a cynical acceptance of backwardness by regional elites which had a political impact through the complex web of state-building, economic change and ethnicity. Romanian nationalism was already prospering in the context of the Habsburg-nobility struggle over centralisation, given the support of the Uniate Church, for the Habsburgs singularly failed to convert the Romanian peasants to Catholicism during the eighteenth century despite the clash between collective gains and the individualism of Enlightenment. Although Korea’s revolt was firmly put down—at a time of revenue crisis on feudal estates just as Habsburg tax reforms were being perfected (Verdery 1983 p. 344)—the Hungarian nobles gained little compensation for damage to their estates. Reactionary lordly attitudes in Transylvania were again apparent in 1848 for the Transylvanian Diet rejected emancipation in 1846—even with the support of the most commercialised estates producing sugar, oil and alcohol—when the opposite was being widely advocated across Hungary as a whole. With limited mining and manufacturing, this negative attitude to capitalism kept the peasants on the land and delayed improvement through a Transylvanian Agricultural Society that had been established only in 1844 (ibid. p. 357). Feudalism was soon dismantled during 1848–54 but change was too slow and the Magyars then settled for dualism which allowed for a Hungarian civil service and industrial establishment in Budapest (built up from eastward-moving capital) which imposed itself on Transylvania through a colonial relationship. There was improved access to commodity markets but the peasants had to work on the estates to pay compensation for their plots (rendered progressively less viable through partible inheritance) with further agricultural work through sharecropping. Informal methods predominated, including payment in kind to migrant ‘highlanders’ for casual labour even on the largest Romanian farms (ibid. p. 240). Meanwhile, the progressive influence of the Saxons was undermined by outside competition and intrusion into their commercial niche by Armenians, Jews and Wallachians, although with larger farms and smaller families they could modernise with machinery and cash wages for their workers (ibid. p. 346). Not surprisingly they found it hard to decide whether to ally with the Hungarians or Romanians as the latter were ‘persuaded that a viable economy could be organised only on a national basis [whereupon] they sought to create a Romanian agriculture, a

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Romanian industry and Romanian banks’ (ibid. p. 220). They had most success in banking and credit: starting with ‘Albina’ in 1872, 274 banks—mostly small and agricultural—were established by 1914. Hungarian assimilation tactics could never succeed because as a predominantly rural people with Orthodox and Uniate traditions, the Romanians were ‘protected from the assimilative power of the cities in the central industrial regions which served as foundries of Magyarisation’ (ibid. p. 223). Progressive Hungarian leaders like I.Tisza (premier during 1913–17) wanted to deal with Transylvania’s Romanians—as the largest minority in Hungary—to bring them into the mainstream of public life and weaken their links with Bucharest. Yet there could never be compromise over the Magyar character of Hungary which barred proportional representation for Romanians at all levels of government. The capitalist forest economy Logging was a commercial activity which became cumulatively very extensive in the mountain regions and especially the Carpathians during the late nineteenth century. The industry was not new because wood cutting to serve the mining and metallurgical industries was widespread. But the decline of mining in the traditional areas of the early modern period—like the Erzgebirge—and the introduction of coking in the iron industry encouraged the idea of sustainable forestry for a wider market. H.Cotta worked for the Grand-Duke Karl August of Saxony-Weimar-Eisenach at a private forestry school at Zillbach near Meiningen and then—as director of Saxony’s Forest Survey Office—was able to move the school to Tharandt where it became the Royal Saxon Forest Academy in 1816, extolling the virtues of sustained yield. This was also a time when species change was advocated, and Pürglitz in central Bohemia was just one of many estates affected by ‘spruce mania’ that called for artificial renewal after 1780 (with great dangers in terms of vulnerability to disease and storm damage). Meanwhile, pine was being promoted in the lowlands. The idea was to meet the new demands from the paper and building industries, soon to be followed by the need for railway sleepers and telegraph poles. A new generation of factories was created on the edge of the forests in the early part of the century: for example, the Harmanec paperworks opened by F.S.Leicht on the edge of Beszterczebánya (Banská Bystrica) in 1829 and then massively expanded by the Hüttner family during 1892–5 when railway access meant that the three paper-making machines could despatch 600 wagonloads each year. (After a serious fire in 1904 it was rebuilt by the Hazai Bank of Budapest and gained direct railway access to Beszterczebánya.) Forests were revalued and the inexorable of clearance for agriculture came to an end after a period of four to five centuries when it is calculated that sheep grazing on the flat summits of the Balkan Mountains—exploited for Muslim markets in Asia—lowered the timberline by several hundred metres from the high level of 1,800–1,950m in the Holocene. In Carniola in the railway age the local woodlands were well situated not only for local industry (including a paper industry started in 1843) but in relation to the timber deficit area of the Mediterranean with export through Trieste. A shift to management for a sustained wood yield brought resistance to agricultural pressures seeking more grazing opportunities and the lords were keen to tighten their control as the forests were seen to offer real value through logging—although some were prepared to address the issue of customary rights by turning over a portion of their forests to the community (or to

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individuals in proportion to the size of their holdings) on condition that claims to the remaining areas would be relinquished. It was the same in Russian Poland after 1864, for whereas the landlords had first welcomed peasant efforts in land clearance and reclamation (against a share of the crops) they now rationalised the woodlands and saw the peasant agrarian and pastoralist as the greatest enemy of a young forest: ‘his penetration was stopped, his free access refused, his legal titles questioned, his customary rights denied and his utilization of the land ordered to comply strictly with the law’ (Obrebski 1976 p. 42). Transport systems Transport from the forests to the sawmills became an important consideration. The rivers could often be used for floating, with timber dams (‘opuşturi’ in Romania) to release an extra boost of water to cope with shallow sections (beechwood was too heavy to float but there was little demand for this before 1918). A canal built by the Schwarzenburg family to link the Svetla tributary of the Vltava with the Danube above Linz (1778–1823) opened up the Vimperk and Plakenstejn forests, while further investments made on the Vltava for the Spitzenberg Canal (1854–62) made it possible to float timber through the difficult Horni Plana section. By contrast the Morava was not so widely used, since very rapid flow in the upper reaches contrasted with extremely sluggish conditions lower down. However, apart from some rapids on the upper reaches (the Váh above Zsolna (Žilina), for example) the Slovak rivers provided a useful contact with the Danube and rafters from Kralovany (at the Orava-Váh confluence) would work through to the Black Sea until the 1870s when the railways captured the long-distance traffic. Much use was also made of the Drava and Sava to deliver timber to such places as Novi Sad, Pančevo and Zemun, while the Bistriţa and Maros (Mureş) were among those used in Romania and Transylvania, respectively. In the railway age attention shifted to more local facilities to move timber to sawmills built at strategic points on the network: localised floating might be possible but narrow-gauge railways were widely adopted by the 1890s. They could be used in valleys not suitable for floating but were in any case superior because waste was reduced while equipment and workers could be transported as well as timber—and as long as there was a gentle down-valley gradient, timber could move largely by gravity with locomotives of only modest power required (indeed some early railways worked by gravity with loaded trains controlled by brakesmen and with horses to return empty wagons). They proved to be quite adaptable with a minimum curvature of only 30m and scope for horseshoes in tributary valleys to moderate gradient. Various gauges were used but the Bosnian gauge, of 76cm became standard by the end of the century. While small sawmills were widely scattered (including peasant-owned installations based on water power) large units which included furniture- and/or papermaking as well as sawmilling used nodal points well below the main forested massifs: Pardubice and Strakonice in Bohemia; Poprad, Rózahegy, Ružomberok and Zsolna in Slovakia; Ljubljana in Slovenia (along with paper/pulp mills as Medvode, Veržej and Vevče). Some entrepreneurs gained control of extensive domains where they acted as the local development agency like Steinbeis in Bosnia, already discussed. The railways were a force for modernisation with the infrastructure a means of developing tourism and/or facilitating access for hydropower development.

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Transport systems in Romania Long before the nineteenth century Carpathian timber was taken into the deforested lowlands as part of an exchange economy between complementary natural regions, but commercial sawmilling in the mountains started around 1885, a decade later than in Transylvania. There was some large-scale cutting of oak in the hills of Muntenia and Oltenia as peasants sold land cheaply to the timber companies, failing to realise how efficiently these companies would provide infrastructure in remote areas. And when the state became a large landowner after the secularisation of monastic lands in 1863 and organised a forest service (with a ‘Codul Silvic’ enacted in 1881) woodland was again sold cheaply at a time when the state lacked the means to invest in transport itself. Moreover, after 1901 legislation gave a boost to wood processing and the number of sawmills increased from 45 in 1900 to over 90 in 1910; exceeding the annual timber increment. The sustainable option of felling small parcels in succession and leaving each to regenerate was often ignored in favour of rapid clearance of a large concession which caused considerable erosion and prevented long-term use of the transport infrastructure. Rafting on the Olt began in 1890 from Gura Sadului to Turnu Măgurele (300km) with processing at Râmnicu Vâlcea, Stoeneşti, Slatina and Turnu Măgurele, while localised timber floating occurred in Transylvania on the Sebeş from Bistra and Oaşa to the Petreşti mill and on the Vaser to Vişeu de Sus (after the long-distance rafting on the Tisa was stopped by the arrival of the railway in Sighet in 1872). Many railways connected with the developing mainline system and these were laid in a stable, permanent way using transverse sleepers that were suitable for locomotives. But some lines were isolated from public railways, like the Găineşti system west of Fălticeni, which nevertheless included an inclined plane (1892) to connect two levels. And in Transylvania some lines were built with wooden rails (and a very narrow gauge of 60cm) for animal traction, for example at Finiş near Belényes (Beiuş). The best conditions were on the Romanian side of the Eastern Carpathians where a mainline railway followed the contact and there were valleys drained by tributaries of the Siret offering easy conditions for construction. Indeed some of the valleys were opened up by public railways: the Bistriţa in 1885—with forest lines from Tarcău in 1899 and Piatra Neamţ (Valea Cuejdiului) after 1908—and the Trotuş in 1899. The Bistriţa was remarkable for the retention of rafting above Piatra Neamţ which gave rise to a number of isolated forest railway feeders at Borca in 1890 and Crucea in 1909. Further north in Austrian territory the Bukowiner Lokalbahn (to Varna and Moldoviţa in 1889; and Putna and Nisipitu in 1898) was the trigger for the Orthodox Church’s estate (‘Religionsfonds’) to expand logging and gradually create a system under its own control which comprised 1,200km of roads and 228km of railways (by 1910) in the Falcău, Frasin, Gura Humorului, Moldoviţa, Nisipitul, Păltinoasa, Putna and Voroneţ areas. On the Transylvanian side where the commercial impulses were stronger, several forest railways were triggered by the arrival of standard-gauge lines, for example the completion of the arc Kronstadt-Csiksereda (Miercurea Ciuc)-Gyergyószentmiklós (Gheorgheni)Szászrégen (Reghin)-Marosvásárhely (Târgu Mureş)-Torda (Turda) in 1909 set off a spate of construction from Subcetate, Marosheviz (Topliţa) and Rastoliţa—one example being the Mures Valley Wood Production Company line which reached the upper Bistricioara Valley from Maroshéviz (Figure 2.8) which highlights the Buzău,

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Figure 2.8 Forest railways in the Eastern Carpathians Kovaszna (Covasna) and Vrancea areas shows the Sepsiszentgyörgy-Kezdivásárhely (Sf.Gheorghe-Târgu Secuiesc) branch of 1891 which provided the base or two lines built simultaneously to the upper Bâsca catchment around Komando (Comandău) at an altitude of 1010m: one from Brateş which required a spiralling track to gain height and another— belonging to Grödel’s Transylvanian Forest Company—from Kovaszna which used an inclined plane at the head of Valea Zânelor. The company cut timber in the Bâsca Mare

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Valley and then acquired land in the Bâsca Mică in 1904 (on the Romanian side of the border) which required a railway extension over the watershed at Halom. These new systems superseded an older exploitation which used carts to take timber from a sawmill built in 1878 at Gyula, several kilometres south of Komando. Meanwhile, the Nehoiaşu branch (1911) enabled the Götz empire to push forest railways up the two Bâsca valleys and eventually make contact with the Grödel system based on Komando. The Tişiţa system was built by the Austrian Count Mikes from the main line at Mărăşeşti during 1903–16, but although the system was easy to build along the Şuşiţa to Soveja, it was then necessary to cross the watershed to the Putna Valley and penetrate the narrow Tişiţa Valley which required some tunnelling. It was also notable for the use of a lubricated wooden trough (the ‘goanga’) whereby horses could pull tree trunks down short tributary valleys. Handicrafts and other peasant industries A major compensation for any lack of factory industry was the prominence of handicrafts and domestic/workshop activities of all kinds. These have rarely been surveyed in any detail but they appear to have been prominent everywhere and in some respects—through the logic of service industries and the supply of appropriate goods in areas with enhanced spending power—were more prominent in areas with factory industry than those without. Around Laibach one of the minor facets of industrialisation begun before 1900 was the production of straw hats in Domžale where the water power of the Kamniška Bistrica River was a significant resource. But in remoter areas with a labour surplus and suitable raw materials it was not difficult for local craftsmen to undercut factory-made goods, often working on a casual or seasonal basis to complement the demands of agriculture. The list of activities was often quite substantial, depending on the local materials. Food and drink was provided for each farm but local corn milling was needed and there were often surplus cheese and brandy to be marketed. Domestic wool processing and blanket weaving required the services of water-powered fulling mills. Areas with plenty of timber would be selling wooden utensils and even sawn timber and furniture, while metalworking, lime burning and potting were specialities in areas with appropriate raw materials. Rural industry was assisted by the cooperative movement which is underresearched for Slovakia, although Marluliak (1995) mentions the sack-makers’ union founded in 1868 at Myjava which reflects the importance of wool and weaving in the Carpathians. Production of spirits from potatoes and beets also made for cooperation and the first cooperative distilleries were set up in Dolná Rišňovce and Horná Rišňovce in 1904. Similar arrangements were made for wooden products from Podjavorina and Stara Tura in 1903; and for basket-making at Bardejov and other municipalities in Trenčin County and Považie-Milochov in 1913. Milk production for ‘bryndza’ cottage cheese and other dairy products developed on the same basis, especially in the Zvolen area. Reference should also be made to purchasing cooperatives for tradesmen in towns, for example drapers in Prievidza (1884); tanners in Stará Lubovňa (1906); woodcarvers at Rajec (1909); and furniture-makers in Žilina (1913), though they were mostly short-lived. In the case of Transylvania, Anastasiu (1922) quotes Hungarian statistics for 1910 to show the role of small-scale industry (Figure 2.9). Employment in industry (by

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Figure 2.9 Employment in industry in Banat and Transylvania 1910 county) reached 50,000 or more in most western parts of the province (including the eastern edge of the Pannonian Plain which passed to Romania after 1918) but was clearly much weaker in the east. Agriculture always employed more and, predictably, the margin tended to be greater in the east than the west (although not by a large margin because of the greater intensification and arable bias on the edge of the plain). But it is also clear that small-scale industry, while always less important for employment, maintained a considerable stake in all counties except Caraş-Severin, Cluj and Timiş. Bulgarian rose-oil Statistical coverage of this major speciality suggests an annual output of 1,000–2,000kg during the 1840s–1880s rising to record levels of 3,430kg in the 1900s (which included some very high output years in 1904–7 and 1909, when 4,000kg was exceeded) and 2,740 in the 1910s (Palairet 1999). The oil, which was much sought after by the Western cosmetics industry, was produced by two stages of distillation (in small stills) using Rosa Damascana which found ideal conditions in the ‘Rose Valley’ of Bulgaria between the

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Stara Planina and Sredna Gora. The business may have spread from Persia with roses introduced to Bulgaria by the Ottomans. The earliest references come from a French traveller who observed trade at Kazanlik in 1791 when there was export to France. It seems that the business was originally dominated by Turks with distillation by merchants like Papazoglu and Hristov controlling the business. After Bulgaria’s liberation the Turks were displaced through ethnic cleansing and Bulgarians moved in; though they did not have the skills initially and growing ceased in the Koprivshtitsa area by the 1880s. The market shifted from Adrianople to the Kazanlik/Karlovo area of Bulgaria which was visited by traders arriving from Istanbul who re-exported the oil to Europe. However, the Bulgarian peasants were able to do their own distilling using stills of 1101; total numbers seem to have increased from 253). in 1859 to 7,290 in 1892 and 14,500 in 1912. Rising prices forced rose growing to the hillsides, despite lower yields, but also encouraged the search for substitutes and (inside Bulgaria) the adulteration of the oil by palmarosa. This was difficult to control—despite its import being prohibited in 1889—because the ‘congelation’ test could be neutralised by growing more white roses which could allow 5–10% adulteration because of high ‘stearoptene’ richness. Yet Bulgaria enjoyed a monopoly in the late nineteenth century and pressure from buyers over the adulteration problem led to merchant investment in industrial-scale distilling using French technology introduced during 1902–5. The Batsurov firm built a distillery at Kirnare (Karlovo) in 1903, followed by the Hristov, Papazogliu and Papazov families in 1905; although these three new distilleries were responsible for only about 5% of the total output in that year and the business was hardly profitable. This was because the premium for the merchants’ ‘own-distilled’ oil was too small to cover the investment and compensate for a lower yield. Peasants could obtain between a fifth and a third more, partly because they distilled fresher flowers—such was the deterioration in transport that portable stills would have been preferable—while distilling was limited to only one month of the year and capacity then lay idle, although attempts were made to develop other crops such as lavender and mint. Other Bulgarian peasant industry This example of a peasant industry that showed some tendency to achieve a larger scale of activity may be followed up by the case of textiles since SEE shows several attempts in the nineteenth century to use domestic skills on a workshop or small factory scale and develop an organisation capable of servicing orders for clothing from a wider area, including urban customers. For several decades before independence, Bulgaria’s Pomaks were exploiting the wool supply of the Rhodope and other areas with the aid of water power harnessed for fulling. Ottoman support for new factory ventures was very limited although the mills at Sliven (1836) were a focus for the rough woollen cloth (‘aba’) industry which dominated the Sredna Gora and Rhodope. The industry grew out of a workshop started by D.Zheliazkov on the strength of expertise gained in Ekaterinoslav during a brief exile following the Russo-Turkish War of 1828–9. Because supplies of cloth for army uniforms coming from Selanik (Thessaloniki) were inadequate and because the Sliven administrator (‘voyvoda’) was the person entrusted with the supply of aba for military needs, official financial support was given for what was the first true factory in the Balkan provinces of the Ottoman Empire.

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Another rare initiative concerns the Gumusgerdan family who built a woollen mill in the village of Dermendere in 1848: there was water power, a putting-out organisation to support domestic weavers and (as the centre of a ‘chiftlik’) a guild—which was an obligatory form of organisation for commodity producers and even for new capitalist ventures. Spinning machines were imported from the UK while weaving was carried out in domestic workshops. Karlovo had an important braid (‘gaitan’) industry using foot-powered looms introduced into domestic workshops early in the century (although no large-scale factory industry ever emerged); and Koprivshtitsa made progress in building a clothing industry based on aba brought in from Pazardzhik. There was also a clothing industry in 1848 in Plovdiv—already producing coarse cloth for Istanbul. Most small factories were undermined by a flood of cheap manufactures during the 1870s and 1880s; yet one ‘gaitan’ artisan in Gabrovo—I.Kalpazanov—opened Bulgaria’s first mechanised textile factory in 1882 by investing profits from lucrative wartime trading in machinery. So by independence there was some textile production in partly modernised factories. ‘With women’s wages less than 40% of the male average, Bulgarian textiles thus made connections with the cheap supply of rural labour that largely eluded manufacturers in Balkan capitals’ (Lampe and Jackson 1982 p. 246); yet exports faced an 8% Ottoman tariff until independence and there was competition from artisans and from Austrian and British imports. Indeed Sofia preferred to import its textiles and only in 1906 did a Bulgarian entrepreneur and Czech technician open a small woollen factory to compete with imported Central European goods. There was little advance in installed power or fixed capital per worker in this branch over the two decades before 1914 (ibid.). Cotton cloth made some advances, although the slow spread of cotton cultivation prevented any significant backward linkage into agriculture. Meanwhile, the demise of the urban craftsmen was particularly rapid after independence because the Ottoman market was lost; not to mention the emigration of the conservative Turkish population.

3 INFRASTRUCTURE, TRANSPORT, TOURISM AND ENERGY TRANSPORT Navigation The idea of freedom of navigation on the major rivers—with the easing of tolls and restrictions—gained ground as a result of the Congress of Vienna, and new arrangements, including the reduction of tolls, were eventually made for the Danube in 1856 and the Elbe in 1863. Internationalisation of Elbe was of the greatest importance for the Habsburg Empire and shipping companies were founded in the 1820s. Sachsische Dampfschiffahtsgesellschaft linked Bohemia and Saxony in 1826, and 1841 saw both domestic services between Prague and Mĕlník and international services to Dresden. A chain-drive ship was tested in 1866 and in 1886 the ‘Kette Deutsche Elbeschiffahtsgesellschaft’ (owned by German and Habsburg interests) proved highly competitive with its 740km of chain from Mélník to Hamburg. However, the railway challenge produced a grouping in 1903—Vereinigte Elbeschiffahrtsgesellschaft, with headquarters in Dresden—and finally in 1907 a union of private shipping interests was established; although this monopoly was then challenged by two new companies there was a measure of cooperation between them. Meanwhile, river improvements affected the Oder in Silesia (1848–58) while new canals around Berlin modernised both routes to the Oder and culminated in the Berlin-Stettin Ship Canal of 1914. Although the Vistula was used for navigation with regular passenger sailings from 1852 (Wocławek was reported a steamship port in 1853), there were no improvements in Russian territory. But although the Habsburg and Russian empires failed to cooperate over the basin as a whole, the former implemented river regulation and drainage in Sandomierz, affecting tributaries like the San (where work began in 1907) and the Wisłoka (where work went on over sixty years). The gradient between the Wisłoka and San mouths declined during 1857–87, while stream density decreased and the width of the main rivers was reduced (the San had been 800m wide), though depth increased by up to 3m, banks were consolidated and meanders cut off. Swampland disappeared as ground water level fell from just beneath the surface by 2–4m, which affected the forests as well as large swamps and peat bogs near Nisko and Rudnik. In the case of the Oder catchment in present-day Poland statistics produced by Bielecka and Ciołisz (2002) on the land-use changes from the nineteenth century through to 1992 show a sharp decline in the area of marshland and surface water (1,140 to 830 sq.km)—as well as agricultural land (41,230 to 35,390)—to allow for the expansion of forests (17,660 to 20,770) and settlements (2,740 to 5,770).

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The Danube The greatest progress was made on the Danube in the 1830s with the introduction of steamers which could make relatively easy progress upstream against the strong current. Expansion of shipping took place through the leading companies such as Erste Donau Dampfschiffahrtsgesellschaft (DDSG) while from a base at Sisak, the Sava-Kupa Steamship Company (‘Savsko-Kupsko Parabrodsko Dionicarsko Drustvo’) started to handle freight and passengers to Zemun in 1844 when there was still a Turkish garrison in the Belgrade fortress. Other substantial ports were at Šamac and Županija on the Sava and Vukovar on the Danube. The Ottomans accepted through-shipping from Pannonia, but problems remained through watermills as well as the ‘boat bridges’ linking Buda and Pest and the need for lightering at the Iron Gates where the Romans had previously found it necessary to build a towpath and where a new road was now provided by Count Széchenyi between Baziaş, Újmoldova (Moldova) and Orşova during 1834–7. Only after the Congress of Berlin were taxes authorised to finance a programme of six new works, the most important of which involved blasting out a 4.5km canal for 700-tonne barges to bypass the most difficult section. It was completed in 1895 but since there were no locks and upstream traffic still had to contend with the strong currents, towing was provided by a winch steamer, replaced after Allied seizure during the First World War by a locomotive running on an isolated section of railway built along the canal bank. With more powerful conventional steamers coming into service this system remained adequate until the Iron Gates hydropower and navigation complex provided a permanent solution in the communist period. A winch steamer also operated at Szvinica (Sviniţa). Short canals were built to Sarviz in 1840 (following the Temesvár drainage canal dated around 1710) while a Danube-Tisza Canal through Sombor in 1803 threw off a branch (named after Franz Josef) to Novi Sad in 1875. And, although the purpose was flood control and not specifically navigation, this is an appropriate point to mention the major works carried out during 1846–96 to shorten the course of the Tisza: Somogyi (1979) reports that from a starting point at Tokaj, the plan by the hydaulic engineer P.Vásárhelyi involved 114 separate cuts totalling 136km which replaced 589km of meandering river: a saving which reduced the river length in the regulated section from 1,211 to 758km. Meanwhile, 266 new cuts (212km) replaced 791km of meanders on the Körös/Criş rivers while 68 cut-offs on the Drava (75km) replaced 243km of winding river channels. On the Lower Danube shipping was frustrated by the Russians because after the Ottomans conceded navigation rights in the Black Sea (1744) they gained a stranglehold over the rivermouth by advancing their frontier from the Chilia Channel at the northern edge of the delta in 1812 (when the Porte ceded the territory between the Dniester and Prut, known as Bessarabia), to Sulina in 1817 and to the southernmost Sf. Gheorghe Channel in 1829—the latter sanctioned by the Treaty of Adrianople (and accepted by the Habsburg Empire in 1840) which also conferred the right to operate a quarantine station at Sulina as a Danube ‘cordon’ against plague from Bulgaria. Perversely, it seemed, Russia took few precautions at Odessa but was most diligent at placing agents at all quarantine stations in the principalities to maximise obstruction through the ‘the practice of the utmost rigour, as if the plague were actually on board every ship that arrives’ (Skene 1854 p. 367). Extreme inconvenience seemed calculated to frustrate any growth of commerce that might threaten Odessa, for only ‘protection money’ paid at the Russian Embassy in London was guaranteed to simplify the formalities. Meanwhile, traditional

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techniques were neglected while Russia lacked the resources to improve the river and cut through the notorious offshore bar that required the use of Greek lighters. The system was abused by dishonesty and also disrupted by gales: on one December night in 1855 24 sailing ships and 60 lighters were forced ashore with losses of both life and cargo. A British engineer did not exaggerate when he described the area as ‘a wild open seaboard strewn with wrecks, the hulls and masts of which—sticking out of the submerged sandbanks—gave the mariners the only guide where the deepest channel was to be found’ (Hartley 1873 p. 239). The Habsburg Steam Navigation Company tried to avoid Sulina by trans-shipment from Chernevodo (Cernavodă) to Kustendje (Constanţa) but the latter’s harbour was not adequate. A portage railway opened in 1860 (and an alterative route from Silistra to Varna in 1866) did not provide an adequate solution. There was talk of an alternative quarantine system at the mouth of the Sf. Gheorghe Channel but a Turkish settlement would have been needed and the approach was difficult due to mudbanks. The Crimean War removed the stranglehold, for the Russian frontier was pushed back well clear of the delta when the settlements of Cahul, Cetatea Alba, Chilia, Ismail and Reni were returned to the principality of Moldavia. And when this decision was reversed in 1878 (in Russia’s favour) the frontier advanced no further than the Chilia Channel (to which it returned in the Soviet period). International jurisdiction over the Danube was generally desired—following the Crimean War—but a commission of riparian states would have meant Habsburg dominance so a European commission (representing the great powers and Romania) was preferred. It was originally formed in 1856 to clear the river of debris but an initial twoyear lifespan was progressively extended and eventually perpetuated for an indefinite period (1883) to ensure a major force for stability in the Balkans—although ‘the existence of an autonomous agency on Romanian soil was an affront to Romanian nationalism’ (Frucht 2000 p. 215). It became clear that major works were needed and that one of the three main channels would have to be selected for improvement. But while the southernmost Sf. Gheorghe Channel offered the shortest journey to the Dardanelles Straits, there was little settlement there at the time and provisional work carried out at Sulina (preferred by shipping in general at the time) seems to have been the determining factor. Canalisation of the channel (undertaken in 1858–61 and consolidated in 1878–81) was remarkably successful in providing a deeper channel over the bar and set in train a series of projects which progressively straightened the whole Sulina River (1868–1902) and shortened it from 84 to 63km. While the total investment was probably greater than the cost of improving the Sf. Gheorghe Channel (where the meanders were straightened out only during the communist period, but with no intention of creating a major ship canal) it was undertaken gradually and could be financed from toll revenue. Meanwhile, the territorial adjustments of 1878 were initially much resented by Romania because not only were her territorial interests being managed by the great powers but she was ‘compensated’ for the loss of the relatively urbanised southern Bessarabia territory (the counties of Cahul, Cetatea Alba and Ismail) with the backward Turkish province of Dobrogea which offered some 250km of Black Sea coastline. However, the Romanians made a virtue out of necessity and converted the old Kustendje into the modern port of Constanţa. Rail access from Bucharest was secured by the extension of the existing Constanţa-Cernavodă line across the Danube (by means of the Carol I Bridge designed by the Romanian Anghel Saligny and finished in 1895) to Feteşti

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and the continuation of the railway across the heart of the Bărăgan to the Romanian capital. Other railways subsequently radiated from Feteşti to Buzău (with a branch from Faurei to Brăila and Galaţi) and Ploieşti. These railways (along with the pipelines which were eventually laid alongside the track) carried the bulk of Romania’s export staples: cereals, timber and oil. Constanţa offered a greater depth of water than the 7.3m available (by dredging) to Brăila and the combined land-sea route to the Straits was much more direct than the circuitous Danube waterway (even allowing for the straightening of the Sulina Channel). It is certain that additional interest arose from the desire for a trade route entirely under Romanian control, given the understandable ambivalence felt towards the European Danube Commission over the compromise of national sovereignty. Canal systems There were economic and strategic interests in considering the linkage of the region’s major rivers by canals, after connections between the Elbe, Oder and Vistula by the Plauer/Finow and Bromberg (Bydgoszcz) canals had been made by Prussia during 1743– 85. Further east, Russia’s Augustów Canal (1830) connected the Vistula Basin through the Narew with the Niemen—to divert Polish commerce from Danzig to Libau in Latvia—and the Bug-Pripet link followed in 1841. Elbe-Oder connections were improved by the Ihle Canal from the Elbe to the Plauer Canal 1866–71 and in order to link the Danube and Rhine-Main, Ludwigs Canal 1836–45 extended from Bamberg on the Main to Dietfurt on the Altmühl close to the Danube at Kelheim, although despite 100 locks it was narrow and shallow with capacity limited to 130-tonne vessels. The united Reich of 1871 then fixed minds on the need for bulk transport where railways couldn’t cope. From 1871 to 1905 developments included canalisation of the Saale from the Elbe confluence to Halle and the Unstrut (Halle-Breteben) during 1882–90; the upper Netze (Notec) 1879–82; and the lower Netze (1891–6). A new harbour was built on the Elbe in Dresden in 1891–3 and the Kaiserfahrt was put in hand during the 1890s (completed in 1900) from Swinemünde (Świnoujście) to Stettin. Work in the Berlin area got under way on the Havel from the Elbe to Spandau (1875– 82) while the Havel-Oder Canal (Spandau-Hohensaathen) via the Finow Canal was improved during 1874–85 (Figure 3.1). The Oder-Spree Canal from Fürstenberg was reconstructed during 1887–97 and extended by the Teltow Canal (Potsdam-Köpenick) of 1901–6 to allow 600-tonne boats to bypass Berlin. It was now easier to reach Hamburg and some trade switched from Stettin. Work on the upper Oder extended from the Neisse mouth to Cosel—including the canalised Alte Oder to bypass Breslau (1891–7)—leading to a big growth in coal traffic through the harbour of Cosel with three docks constructed in 1895–1907. In East Prussia there was access into the hinterland of Elbing for the Elbing River was navigable by small vessels to Drausen See (Drużno Lake) and thence by the Oberländischer Canal to Liebemühl (Miłomłyn) where the Deutsch-Eylau (Iława) and Osteroda (Ostróda) routes divided. Full use was made of the lakes: Roethlot See (J.Ruda Woda) to reach Liebemuhle and then Geserich See (J.Jesiorak) gave access to Deutsch-Eylau while Ostroda was reached by way of Drewenz See (J.Drwęckie). The canal even continued further northeast to Schilling See (J.Szęlag Wlk.) possibly in order to transport timber from the extensive forests of the area. The canal took sixteen years to complete (1844–60) using Dutch engineers and was unusual for the series of inclined

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planes (on which boats were carried in cradles, with cable haulage powered by watermills)—rather than locks—to climb from Drausen See to the lake plateau at Małdyty. It offered summer cruises between Elbing and Osteroda (a tradition which is still alive). The Königsberg (Kaliningrad) Sea Canal was completed in 1901 to Pillau (Baltijsk) and the Pregel above Königsberg was navigable by small craft as far as Tapiau (Gwardiejsk) and by small boats to Insterburg (Chernyakovsk). At Tapiau a short cut was made to reach the Deime (Diejma)—a minor river flowing into Kurisches Haff (Zalew Wiślany)—with a minimum depth of 1.2m and often used by small coasters in ballast going to Memel (Klaipeda) for cargoes. Then an alternative route was made between Königsberg, Tilsit and Memel by linking rivers flowing into Kurisches Haff with short canals. From Labian near the mouth of the Deime small craft could proceed by the Grosse Friedrichs Graben and Seckenburger canals into the Gilge and so to Tilsit; from this town vessels went down the Russ into Kurisches Haff and finally into the Memel River at Schmelz where the König Wilhelm Canal of 1863–73 gave access to the town. Königsberg was boosted by the Russo-German Commercial Treaty of 1894 whereby Russia accorded the same railway tariffs to German Baltic ports as her own and Königsberg traffic increased three times to 1913 through Russian imports and exports (only to fall off sharply after 1919). The Prussian Waterway Law of 1905 was a milestone in the process of boosting capacity. There was a focus on the Ruhr-Elbe project previously rejected in 1883,

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Figure 3.1 Waterways in the northern part of the region. Note that the map includes some canal projects and water-supply arrangements relating a later period 1893, 1899 and 1901 through opposition from Silesia (fearing the erosion of its market for coal) and also from lignite interests in Hannover and Prussian Saxony. However, the

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project went ahead as far as Hannover in 1905 (balanced by money for further Oder improvement and the extension to Cosel harbour) but tolls were again levied so that coal carried on this new ‘Mittelland Canal’ would not be so competitive. The 1905 act also provided for the Berlin-Stettin Ship Canal—completed in 1914, with new harbours during 1917–19, and involving the Berlin-Spandau Canal, the Havel River, the Hohenzollern Canal (Havel-Oder)—duplicating much of the route of the old Finow Canal to the Oder at Oderberg (with a new Niederfinow lift at the entrance to the river); and the lower Oder. As part of a carefully balanced plan, Oder-Vistula links were to be improved and in 1908 the Masurian Ship Canal was authorised to connect Königsberg’s head of navigation at Królewiec with Mamry in the Masurian lake country (earlier work had connected Kisajno with Niegocin in 1765–72 and Sniardwy with Pisa in 1849): work started in 1911 and was to require ten locks to cope with a difference in altitude of 111m. But the project was interrupted by the First World War and resumed only in 1934, although it remained incomplete notwithstanding Hitler’s plan for strategic industries in the lake country during the Second World War. Elsewhere in the region the need for canals was less clear cut, so railways (which provide a more equitable transport network) tended to block waterway improvements. In the Habsburg Empire, where the Danube provided a direct outlet to the sea in the south, the problem was one of forging connections northwards to the Elbe and Oder basins so that manufactures from the Czech lands and coal from Silesia could be obtained more cheaply. Abortive initiatives culminated in the Black Sea-Baltic Sea proposal of 1901: a Danube-Oder canal along the March (Morava) Valley would throw off links to the Elbe and Vistula and a second canal from the Danube at Linz would join the Moldau near Budweis (České Budĕjovice) while the Moldau itself would be canalised to Prague to join the Elbe (Labe) navigation. This inspired a political initiative by Premier Von Körber to bring the nations of the empire together through public works, but these were not financially viable and improvement of the empire’s links with Baltic and North Sea ports threatened the new ‘Tauernbahn’ which aimed at improving Bohemia’s links with the Adriatic port of Trieste. Nevertheless, this Danube-Oder canal from Pressburg (Bratislava) to Kosel (Koźle) was sanctioned in law in 1901 and plans were drawn up in 1910, although they were never implemented. Other abortive projects included canalisation of the Vistula at Cracow (Kraków), a link with the Dniester and canals to the ports of Fiume, Trieste and Selanik (Thessaloniki): the latter involving a long canal from the Danube through the Morava-Vardar Corridor. Roads The greatest efforts were made in Germany when moves towards integration during 1815–71—under the Germanic Confederation (1815–66), the North German Confederation (1866–71) and the Zollverein (from 1834)—focused much attention on the road network. Soon after the Napoleonic Wars Prussia improved the road from Berlin to the Rhineland, and also built roads to improve north-south links through the Thuringian principalities of Gotha and Meiningen; to link Magdeburg to both Bamberg and Hamburg (partly to provide ‘free roads’ between the Prussia-Hesse-Darmstadt Customs Union and that of Bavaria-Württemberg). Meanwhile, Saxony had a motive for improving roads when she joined her neighbours in setting up a rival Middle German Commercial Union

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to prevent Prussia controlling the commercial routes from Hamburg to Frankfurt am Main and Leipzig. But plans to improve these links—and also Leipzig-Frankfurt—did not materialise and after the formation of the Zollverein the roads built in the era of struggle were somewhat marginalised in favour of traditional routes. Meanwhile, most roads were narrow with sharp bends and steep gradients, with a surface that was rough and dusty in summer and muddy in winter. Journeys were slow and dangerous—for example, forty hours from Berlin to Breslau (O’Dell and Morgan 1945 p. 444)—despite Prussia’s concern to improve transport to the eastern borders. Some industrialists in Upper Silesia had to cooperate over provision of better roads to minimise the closure of furnaces (reported at Halemba) when coal and iron could not get through. There were other improvements in the middle of the nineteenth century when road and railway building went together. The capital cost came from public funds (in contrast to the British turnpike system) while maintenance was financed from toll revenue until these charges were phased out during the last third of the century (though not until 1915 in Mecklenburg Strelitz). Passengers were largely catered for by the post office and coach passengers doubled between 1840 and 1855, with decline setting in only after German unification (1873). However, in the railway age the average passenger journey and freight haul by road was indicative of an essentially feeder role. The Habsburg priority was for a Budapest-Vienna road—with links with Fiume and Trieste, respectively—and connections between major provincial towns. Otherwise good roads were rare: for example, Spalato (Split) to Sinj and Trogir (Dalmatia) which was mentioned in 1815. There was some development in the interior for trade, though local people would travel on foot or on horseback while shipping served the coastal areas. Some improvement came with the post coach (‘diligence’) while much use was made by local contractors of sprung ‘tabletop’ wagons (‘fuvaroskocsi’) on the better roads in Hungary: a big improvement on the basic cart or ‘szeker’. Meanwhile, the emerging Balkan nations were driven by strategic concerns, especially in the light of sluggish railway growth. The growth of a bureaucracy in Serbia needed tax revenue which in turn stimulated trade and the need for secure travel. Significant improvements to the primitive road system did not come until 1845, but conditions remained poor on the borders of Montenegro and Serbia with the Ottoman Empire given the absence of compelling economic potential, while the Italian economic and geopolitical thrust had relatively localised objectives. So there was business for the horse caravans operating from railheads like Mitrovica and Uvac, distributing imports from Selanik and Trieste respectively, and stimulating a limited amount of local trade as agricultural products (cattle, cheese, honey, skins and wool), timber and wax were exchanged for cereals, coffee, salt, sugar and tobacco. But the alignment of the few railways that did penetrate the ‘Dinaric Triangle’ was of course unfavourable to ports like Dubrovnik, Durrës and Vlorë, while roads that were modernised to handle wheeled traffic, and help compensate for the lack of railways, tended to be determined by administrative and strategic considerations. Thus in Montenegro, Cetinje, Nikšič and Podgorica were connected with the coast at Antivari (Bar) and Cattaro, while in the Ottoman Empire Shkodër had its link with the coast at San Giovanni di Medua, while Monastir (Bitola) and Yanya were oriented towards Santi Quaranta (Sarandë). Meanwhile, the Via Egnatia from Durrës and Monastir remained in a poor condition. In Bulgaria the Turkish military road from Khaskovo south to Komotini was improved after

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the Balkan Wars and there were important road links from Sofia to the Aegean via the Struma Valley and with Uskub via Kustendil and Kumanovo (also a potential railway route from the Danube to Selanik, but one the Turks were reluctant to support for fear of Bulgarian expansion into Macedonia). The infrastructure in these areas remote from railways seems to have been particularly poor in terms of public health and living conditions generally, although the poverty of the high karst and the malarial swamps of the Albanian coast may have discouraged investment in railways as a force for modernisation among the outposts of the Balkan periphery. Railways Germany It was the railway that really made the difference: allowing for the easier assembly of raw materials and the wider distribution of manufactures; while easing barriers to export. The first lines in Germany were industrial feeders (recorded in the Harz Mountains and Upper Silesia) but in 1833 the economist F.List proposed a system of radial routes from Berlin to Stettin, Danzig, Breslau, Prague, München/Lindau, Basel/Paris, Köln/Antwerp and Hamburg/Lübeck. Curiously, however, the Prague line was to reach Dresden via Leipzig which would also have a direct link with Magdeburg. This reflected the importance of the Elbe axis which lay at the core of the Saxon state. But the programme was too radical for immediate fulfilment and developments took place piecemeal, beginning with the Leipzig-Dresden line of 1839. Lacking a satisfactory navigation, Leipzig sought a link with the Elbe at Dresden: not the nearest port on that river but one that lay in the same state of Saxony; though the line first reached the Elbe at Alten and then crossed the lowland via Reisa (instead of Meissen and the Mulde), requiring the Machern Cutting and Oberau Tunnel (500m). It was only ten years later that the much shorter link was made to the Elbe at Magdeburg. Chemnitz was linked with Elbe at Riesa in 1852, the Zwickau coalfield (1858) and the Erzgebirge valleys. Meanwhile, another visionary developer, C.J.Meyer, tried to develop local networks to generate centrality: his interest lay in the Thuringian towns of Eisenach, Gotha and Weimar (and the minerals in their hinterlands) which he tried to place at the centre of a German railway system. But plainly every town cannot be a railway hub and although Meyer founded Deutsche EisenbahnschienenCompagnie and built a rolling mill complex at Neuhaus near the Sonneberg furnaces during 1845–7 his plan was outflanked by the Hamburg-Munich and Prussian east-west concepts. Berlin, Magdeburg, Dessau and Dresden (also Braunschweig) were all linked by 1845. The following year saw Berlin connected with Bremen and Hamburg—and with Breslau via Frankfurt a.d.Oder—extended two years later to the Habsburg frontier at Oderberg (Bohumin) to meet the line from Vienna, while in 1851 another route was open between Berlin and Vienna via Dresden, Prague and Brünn. Meanwhile, the Ruhr had been reached via Oschersleben, Braunschweig, Hannover and Minden in 1847 and a major route to Plauen via Leipzig opened in 1851, including the famous Göltzschtal Viaduct (576m long and 73m high) built at Reichenbach im Vogtland from 1846 as three viaducts—with brick and granite arches—on top of each other. By 1853 there was a connection to the northeastern frontier at Königsberg, apart from the Vistula bridge—of some 500m—at Dirschau (Tczew) which was not ready for another four years: one of

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several major mid-century bridges including the Bober at Bunzlau (420m) and the Neisse at Görlitz (472m) in 1844–6; to be followed by the Mulde at Göhren (425m) in 1870–1 and the Elbe at Riesa (350m) in 1877–8. The Prussian Östbahn had an important strategic role and its construction raised eyebrows in the liberal West where commercial considerations were respected over military and political interests. Later developments included links with the Baltic ports: Stralsund via Neubrandenburg in 1878 and RostockWarnemünde via Neustrelitz in 1886—the latter financed by the Norddeutscher-Lloyd Shipping Company to encourage use of its steamers to Denmark (Figure 3.2). Until German unification was achieved, the political clout of German states could influence the route of railways and the Berlin-Hamburg railway was forced to deviate northwards beyond Wittenberge in order to meet Mecklenburg’s insistence for a convenient junction for a line to the state capital of Schwerin whereas the best route would have been along the Elbe Valley: it could not use the Hannover side of the river because of that state’s insistence on the terminus being built in Harburg on the opposite side of the river from the ‘Freistadt’ of Hamburg. It was to avoid Hannover’s territory that the route to the west through Minden (already mentioned) was duplicated in 1853 by taking a longer path through Erfurt, Kassel and Altenbecken to Paderborn—somewhat shortened with the cooperation of Braunschweig by using the latter’s detached territory of Kriensen to reach Altenbecken. After unification separate state railway companies continued to exist until 1920 (whereupon it was possible to realise Bismarck’s dream of a fully united railway administration with the formation of Deutsche Reichsbahn) and so Berlin-Köln trains continued use of the Kriensen-Altenbecken route even though it was longer and slower than the Hannover alternative. And the legacy of rivalry between Prussia and Saxony lived on through the decision to improve sections of the Berlin-HalleSaalfeld-Nurnberg route and switch traffic from the Saxon route via Leipzig, Vogtland and Hof. The latter was, in turn, part of ‘the progressive building programme of the Saxon government which hoped to benefit by the geographical situation of its state at the eastern extremity of Bohemia and was therefore well placed to profit from the route way joining south Germany to Silesia and the northeast which lay through its territory’ (O’Dell and Morgan 1945 p. 207). Finally, the successful use of railways in the war with the Habsburg Empire in 1866—often referred to as the ‘Eisenbahnkrieg’—helped to ensure that a united Germany would contemplate railways for strategic reasons. The military pressed for a purely military railway from central Germany to the Rhine that would be part of a so-

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Figure 3.2 Railways in Germany and Poland to 1900 called ‘Kanonenstrasse’ connecting the eastern and western frontiers: this involved some new construction from Blankenheim on the flanks of the Harz Mountains to the Lahn Valley and required a purely military railway for training purposes, developed close to the Berlin-Dresden main line between Schöneberg, Zossen and Jüterbog during 1875–97. Strategic considerations made national coordination more important than avoidance of monopoly and although a single German company was not achieved until 1920 Prussia’s railways were nationalised during 1876–86 and amalgamations with the Braunschweig and Hesse systems took place in 1885 and 1896, respectively. The growth of the German economy required the doubling and even quadrupling of track and also justified construction of cut-offs to shorten the distance to places on the radial routes from Berlin: hence the direct line to Dresden via Elsterwerda in 1875 and the link with Sühl across the Thuringian Forest via the 3km Brandleite tunnel under Thuringerwald. Königsberg trains were re-routed first from Stettin to Frankfurt a.d.Oder and Küstrin (Kostrzyn) in 1857 when major bridges over the Vistula and Nogat between Dirschau and Marienburg were completed; then to Küstrin direct in 1867 before the detour via Bromberg was avoided by a cut-off through Schneidemühl (Piła) and Dirschau in 1873—the same year that another huge cut-off enabled trains for the Russian frontier

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at Eydtkuhnen to proceed directly from Bromberg and Thorn to Insterburg and avoid Königsberg which lay on the first route to Eydtkuhnen opened in 1861. Electrification was pioneered by W.von Siemens who produced a locomotive in 1879 for the Berlin Exhibition. Siemens and AEG used a test track at Zossen-Marienfelde in 1903 while the Prussian State Railway also carried out tests between Dessau and Bitterfeld before 1914. However, conversion occurred on a significant scale only after the First World War. Accelerated construction of branch lines (‘Nebenbahnen’) was a great help to agricultural areas and progress was accelerated by legalisation allowing unguarded level crossings in 1878 where the maximum speed was 30km/h (15km/h for important crossings). Other concessions included the absence of fencing and signalling and the need for only one track inspection daily (previously three). Reference may also be made to two rather unusual local railways. The Thüringerwald line from Ilmenau to Schleusingen comprised 30km of standard-gauge adhesion railway (with a maximum gradient of 1 in 40) and five rack sections (6.2km in all—ultimately converted for conventional working) with a maximum gradient of 1 in 17. The slow progress in crossing the mountains by this route precipitated the straighter low-level route through the Brandleite Tunnel. The Prussian Harz Railway opened in 1885 between Blankenburg and Tanne—running across two ridges with ten rack sections of 0.3–1.6km and a maximum gradient 1 in 17. It climbed from Halberstadt to Blankenburg (106m), Hüttenrode (477m) and Rübeland (384m) to the highest point at 503m, thence to Rottenhütte at 431m and Tanne at 460m, using tank locomotives that could work at 25km/h on the adhesion sections and 12km/h on the rack. A hydropower scheme eventually flooded the upper section (beyond Königshütte) while sufficient conventional locomotive power was available to dispense with the rack in 1926. Electrification in the interest of the heavy mineral traffic followed in the GDR era. Saxony gave strong encouragement of narrow-gauge branches to reduce costs even further: starting with Kirchberg-Wilkau, twenty-three systems were built during 1881–98 (with expansion until 1921) and made an important contribution, especially to the industries of the Erzgebirge valleys. Altogether, 541km of Germany’s 919km of narrow gauge (in 1940) were in Saxony. Particularly extensive narrow-gauge systems in Germany included the metre-gauge Harz system connecting Gernrode, Nordhausen and Wernigerode (1886–97), while lowland examples include the 225 route kilometres comprising the 600mm Mecklenburgishe Pommersche Schmalspurbahn based at Anklam. Mention should also be made of urban railways such as the Berlin Ringbahn (1867– 77), divided into north and south semicircles by the Stadtbahn (1874–82) serving Charlottenburg-Schlesischer Bahnhof, with junctions at Stralau-Rummelsburg in the east and Halensee and Westend in the west. This inner-city system meshed with a new generation of mainline stations like the Anhalter Bahnhof of 1880. As in Budapest and Bucharest, separate terminal stations persisted, in contrast to Prague (where the main through station opened in 1906 superseded the older terminus breaching the eastern walls in 1845) and Belgrade. While surface railways were extremely disruptive the option of using electrification for elevated or underground lines was highly contoversial despite a certain degree of credibility deriving from the 1893 Chicago World Fair. The Siemens Hochbahngesellschaft of the 1880s was held up by concern over noise and the devaluation of properties until 1897. Meanwhile, the U-Bahn proposed by AEG in the 1890s faced outright rejection until people were eventually convinced by engineering

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solutions. It was finally on the basis of a mixture of elevated and underground railways that the 10.1km line from Warschauer-Brucke to Zoologischer Garten with a branch to Potsdamer Platz was finished 1902, providing enhanced mobility needed to access cheaper suburban housing. And it should not be overlooked that privately owned industrial railways played a crucial role within large mining and heavy industrial enterprises. Many of these systems used narrow-gauge (as has been noted for the Carpathian forestry lines). In the case of the Mansfeld copperfield over 100km of narrowgauge railway replaced the cableways that had previously connected the mines with the smelters: first from Ernst mine near Helbra to Kochhütte in 1871 and subsequently from the Hermann, Martin and Otto mines to Kraghütte by 1904. Other examples concern the Hungarian heavy industrial complexes of Miskolc and Resicza in the 1870s and Vajdahunyad in 1900. In the case of Upper Silesia over 150 mines and metallurgical/engineering works were connnected by 158km of narrow-gauge industrial railways developed from 1857 by the privately owned Oberschlesische EisenbahnGesellschaft. Habsburg Empire Some early railways were built as accessories to navigations. The first to be opened connected the Labe at Prague with the Kladno-Krĭvoklát resource area: this was the Prague-Lány horse railway of 1830. More ambitious was the 120km Budweis-Linzer Pferdebahn to connect the Danube and Elbe basins (Freudenberger 1997). It was conceived by F.A.von Gerstner who wrote ‘Über die Vortheile der Anlage einer Eisenbahn zwischen der Moldau und Donau’ (Vienna 1824). Like his father, he sought to link science and technology with economic development and had considerable drive as a young professor at Vienna Polytechnic. The dream of linking the two river systems (and more generally connecting the North Sea and Baltic with the Adriatic and Black Sea) was of particular interest in Bohemia in getting the production of the estates into Austria and it had given rise to canal projects (most recently in 1807 by Böhmisch Hydrotechnische Privetgesellschaft). Von Gerstner’s concept was supported by the Elbe riparian states meeting at Dresden in 1819 and the following year he was authorised to undertake a feasibility survey by the imperial commerce commission (though the greatest enthusiasm always came from Bohemian landowners with whom the family enjoyed close relations). He demonstrated that a canal would be very difficult—requiring a minimum of 234 locks—and would hardly be profitable when the much more straightforward Canal du Midi (in France) was only barely viable. But some thought a railway unreliable (and still did even when the line opened in 1833) and when the concession was allowed in 1824 the bureaucratic agencies in Vienna were still hankering after a Trieste-Vienna-Elbe canal (incorporating the Wiener Neustadt Canal), though it created a conflict with local Bohemian interests seeking a direct link with Upper Austria. The cost was estimated at a million gulden (i.e. 40,000 per Austrian mile, which was comparable with the costs of road building). A major factor seems to have been the lack of money in the state treasury to finance a canal whereas (illogically) a railway was seen as being within the capacities of private capital. But while the shareholders were happy for Von Gerstner to begin work on a line that could be used by locomotives (and on the most difficult section in order to demonstrate the technology) they dismissed him in 1829 and the work was completed in

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1833 by M.Schönerer as a purely horse railway (reconstructed in 1854)—while Von Gerstner went on to build the first railway in Prussia. It is not clear how profitable the line was: it certainly carried passengers, salt and general merchandise and caused some initial disquiet among local traders, but the project also had trouble over land acquisition, shoddy work and fraudulent contractors. And it cost double the estimate, which was much more than the Viennese banks had agreed to. It was converted for locomotive use by 1860. Progress towards an integrated system in the Habsburg Empire came quite early through the Nordbahn which was an important interest for the Rothschild bank—already associated with the Witkowitz ironworks which produced the rails. The Vienna-Brünn line of 1838 provided a launchpad for extension through Moravia to join the German and Russian networks through Bohumin in 1848, although the aim was also to reach the saltmining area of Bochnia and throw off branches en route to Olmütz (Olomouc) and Troppau (Opava) as well as Brünn. The Olmütz branch of 1841 was then extended to Prague in 1845 and met the railways of Saxony at Tetschen (Dĕčín) in 1851. The Südbahn was opened to Trieste in 1850 by way of Marburg (Maribor) and Laibach; towns that soon afterwards gained connections respectively with Budapest (1860) and Zagreb (1862). Indeed construction was quite brisk until the stock market crash of 1873 by which time virtually all the main towns of the empire had been reached. At this point the state tended to take over from the banks as the main driving force, given the perceived strategic importance of railways and—especially from the Habsburg perspective—their value in appeasing national groups. The Berlin-Vienna link assumed great importance in view of the close economic and political ties between the two states. The original route via Bohumin (1849) was 779km long and a substantial reduction to 683km was achieved by a direct line to Dresden via Elsterwerda (1875) and thence via Tetschen, Kolín and Iglau. Other options were provided by the routes through Prague and Brünn (1851) and via Gorlitz, Reichenberg and Jungbunzlau (1872). Most lines in Bohemia were entirely conventional, but the rack system was used on the steepest sections of the Reichenberg-Gablonz-Tannvald (Tanvald) system in Bohemia (1894). F.Krisik was associated with a pioneer electrification project over 26km at Tabor in 1903. Hungary The first railway in Hungary parallelled the Danube between Budapest and Vác in 1846 while the Crimean War placed a premium on securing coal for Danube steamers which resulted in the horse railway from the port of Baziaş to Oravicza and the mines of Steierdorf in 1856 which was converted for locomotive working throughout in 1863; a Vienna-Baziaş boat train then connected with Danube steamers that offered an Istanbul service via the Cernavodă-Constanfa Railway and the Black Sea ferry. Expansion in Hungary was particularly rapid and the radial system around Budapest was a significant factor in the city’s explosive growth. Following the line to Vác (1846), the radial lines opened in 1847 to Sopron and Szolnok, in 1850 to Vienna via Pozsony (Bratislava) and Garnserndorf—with the Marchegg cut-off in 1870—in 1854 to Szeged and 1855 to Győr. An all-Hungarian route to the Adriatic started immediately after 1867 and opened to Fiume in 1873 in the mode of the earlier Südbahn to Trieste (1856)—although the line was economically disastrous until railway rates were fixed so that there was an advantage

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in exporting agricultural produce this way. Meanwhile, the main line from Pozsony to Zsolna (Žilina) in 1873 developed out of an earlier horse railway—as far as Nagyszombat (Trnava)—which was not completely eliminated until the Sered branch was converted for steam working five years later. After state railways had been privatised during the Crimean War (e.g. Südostlicher Staatsbahn was sold to Staatseisenbahngesellschaft (STEG) in 1855) it was Count Tisza’s policy to create a national system (MÁV) controlling the lines to the main cities. This produced a series of takeovers continuing into the 1880s and finally the STEG network in 1891. Hungary used rack railways in Budapest (Déli-Svábhegy to Szabadsághegy in 1874 (Széchenyihegy 1890)); also at Ózd and Salgótarján in the 1880s; and the central section of the Karansebes (Caransebeş)-Subcetate line in 1908. And narrow gauge played a major role when Bosnia and Herzegovina was annexed and the Habsburgs took over a standard-gauge line built by the Ottomans from Doberlin to Banja Luka. Since narrow gauge (760mm) was deemed more appropriate in rugged terrain new construction began at Slavonski Brod (on the standard-gauge Zagreb-Belgrade railway) and reached Sarajevo in 1879, continuing southwards to reach Dubrovnik in 1906 and the naval base of Cattaro (Kotor) in 1901. But a planned link with Spalato proceeded no further than Bugojno (1894). Success with the narrow gauge led to a rapid take-up in Hungary for local railways—after the first local railway (Szeged-Kikinda-Periam in 1870) had used standard gauge—with the encouragement of legislation in 1880 providing subsidies and virtual free passage on roadside verges and dykes. Hungary was also very innovative with electrification of urban railways: the city line in Budapest (1887) was followed by other underground and surface railways in the capital (serving Csepel, Szentendre and Törökbalint) and the Budapest-Vác-Gödöllö line 1911. Given the challenging conditions on some lines like the steeply graded section from Brassó (Braşov) to the Romanian frontier at Predeal that eventually required the superior power and adhesion of the Mallet system in 1914, interest was generated more widely after the Ganz chief engineer (K.Kándo) tested a three-phase 500V locomotive in Budapest in 1899. The short Miskolc-Diósgyőr line was electrified in 1906, followed by two other short branches in 1912 (Poprad-Tatranská Lomnica and Trenčianská TeplaTrenčianske Teplice) and the Arad-Pâncota/Radna system in 1913. A commercial railcar was developed for this line by Janos Weitzer of Arad in 1906 but it did not perform satisfactorily and steam traction was used from 1907 until conversion. The final pre-war project was the Pozsony-Vienna electrification of 1914. The development of railways into the Balkans involved ‘compromises between economic rationality and the exigences created by shifting political sands, entrepreneurs of questionable ability and integrity, engineers trading on reputations acquired in Western Europe but often failing to make good on them and regional interests neglected in favour of not very well-aimed governmental power plays’ (Rosegger and Jensen 1995 p. 428). The Habsburg interest lay in a ‘Drang zum Meer’ to market manufactures largely uncompetitive in Western Europe while simultaneously improving internal links with ‘the predominantly agrarian regions of Hungary and the eastern Habsburg provinces of Galicia, Bukowina and Transylvania and especially the German towns of Transylvania’ (ibid. p. 429). In 1842 the Budapest parliament considered thirteen new railways for Hungary including the lines from Budapest to Nagyvárad (Oradea) and Kolozsvár (Cluj), extendable to Nagyszeben (Sibiu) and Brassó, and to Arad, Gyulafehérvár and

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Nagyszeben. But it was only in 1847 that construction reached Szolnok and the Theissbahn did not reach Arad and Nagyvárad until 1858. As regards Transylvania, the Hungarian interest of binding the province to Budapest clashed with Vienna’s desire to develop trade, while interests in Hermannstadt and Brassó were keen on links with Bucharest and their iron industry saw markets in railway building, while the benefits of ‘Notstandsarbeiten’ (emergency works) were appreciated by those sensitive to poverty problems. Meanwhile, the Kaiser Franz Josef Orientbahn to Semlin (Zemun) was conceived in the hope of reaching Istanbul via Serbia: founded in 1856, it merged with the Südbahn in 1858 and was completed to Semlin in 1870, while the line to Istanbul took shape only in the 1880s with construction from Budapest through Subotica to Belgrade in 1883 and a link with the Ottoman system in 1888. Planning in Transylvania was somewhat in advance of this for the Budapest-Nagvárad-Brassó line (with connections for Gyulafehérvár and Nagyszeben) was approved in 1854, although such were the tensions between Austria and Hungary (and between Brassó and Nagyszeben) that construction east of Arad and Nagyvárad was delayed until the 1860s. A team sent to Transylvania in 1856 recommended a Black Sea railway via Arad, Nagyszeben and the Buzău Pass to give the easiest access to Wallachia in the direction of the Black Sea, though bypassing Ploieşti and Bucharest meant that the Wallachian government was disinclined to grant a concession to the Rothschild brothers, who had the support of Vienna. Romania primarily wanted a median route through Wallachia to connect with the Hungarian system at Orşova or Baziaş—links with Brassó and Nagyszeben were not initially high priority—while Vienna objected to this on the grounds of vulnerability to attack by Turks at Ada Kaleh. But an ‘Eisenbahnausschuss’ (railroad committee) recommended a concession for an Arad-Gyulafehérvár line— whereupon a law of 1865 authorised the government to grant the bidder an eighty-fiveyear concession—which went to Erste Siebenburger Eisenbahn in 1866. After 1867 railroad planning passed to the Budapest Ministry for Public Works and Communications which outlined a comprehensive scheme for 4,800km ‘to avoid line planning entirely by applicants for concessions’ (ibid. p. 439). Hungary was now happy with a railway to the Black Sea to provide competition for DDSG—hence the 509km Ungarische Ostbahn (Nagyvárad-Brassó—plus the Gyulafehérvár branch to meet the Siebenburger Bahn from Arad). An alternative Balkan route was suggested when the Lemberg-Czernowitzer Eisenbahn of 1866 was extended to Suceava in 1869, but it depended on an extension to the Black Sea for viability. There was first a plan to reach Iaşi, which involved a charge of bribery against the concessionaire Von Ofenheim—reflecting the hazards of building in a backward area in the context of the Habsburg state’s ‘ambivalent and ineffectual sponsorship…recklessly granting concessions without sufficient attention to the economic soundness of projects’ (ibid. p. 433). Until the all-rail route to Istanbul was available the best route was by the Habsburg Empire and Romanian railways to Giurgiu with riverboat connections to the portage railways and a Black Sea steamer for the final leg of the journey. Southeastern Europe Early railway building consisted of short railways to extend the hinterland of the Adriatic and Black Sea ports. After the Ottoman Empire had granted concessions for the portage

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railways of Kustendje-Chernevodo (1860) and Varna-Russe (1866)—with British firms taking advantage of the empire’s growing foreign trade—Wallachia’s first railway ran from Bucharest to the Danube at Giurgiu (1869) while Priština in Macedonia was connected with Selanik in 1873. After showing fleeting interest in a system linking Istanbul with Belgrade and Russe in the 1850s, the Ottomans allowed long-distance railway schemes to lapse until 1869 when a line to Sofia, Priština and Sarajevo seemed to have administrative and strategic value in bypassing Belgrade to link with the Habsburg system at Doberlin (Dobrljin) where the branch from Sunja crossed the Una. It would include branches from Adrianople to Dedeagach and Yambol (a launchpad for Ruse), from Plovdiv to Burgas and from Priština to the Serbian frontier. A foreign loan was obtained and work began at both ends so that Yambol was reached in 1875 while Doberlin was linked with Banja Luka. The rest of the scheme was aborted through the death of Ali Pasha in 1871 and when building resumed the principal connection was with Belgrade via Sofia and Niš (completed in 1887), while lines in Bulgaria were decided upon in Sofia. These projects were both controversial but the political objective of isolating Serbia was not feasible given the difficulty of negotiating the mountainous terrain of the western Balkans: hence the convention of 1881 whereby the Habsburg and Ottoman empires reluctantly agreed with Serbia to use the Belgrade route. There were also ambitions for railways crossing the southern part of the region from west to east, giving Russia access to Serbia and allowing Italy to penetrate the region from the Adriatic. Montenegro’s first railway—connecting the port of Antivari (Bar) with Virpazar on Lake Scutari in 1909—was based on the concept of a grand portage railway to the Danube at Kladovo or Vidin (suggested in 1901) with an Adriatic terminus at either Virpazar or San Giovanni di Medua (Shënjini). This project may be seen in the context of Italian penetration which could have extended along a railway axis that would eventually join the Romanian system at Turnu Severin (from Kladovo) or Calafat (from Vidin). Romania would in turn give access to Russia. But this was the exact opposite of the line the Habsburgs had wanted to forge with the Ottoman Empire. Nothing happened over the 1901 initiative, although two years later the Montenegrin government set up a state tobacco monopoly to be administered for fifteen years by an Italian company: plantations were set up using skilled labour from Italy and a factory opened in Podgorica. When the Virpazar railway did proceed—on the basis of agreement between the Montenegrin government and the Antivari Company in 1906—it was in direct opposition to construction of a narrow-gauge line from Sarajevo which reached the Ottoman frontier at Uvac in the same year; a line which Count A.Aerenthal wanted to extend through a territory known as the Sancak/Sandschak of Novipazar—hence the ‘Sandschakbahn’ project—to meet the Ottoman railhead of Mitrovica where the railway had arrived in 1874. The difference in gauge might be accepted in the interest of opening up shipping routes to Egypt and the Far East, although a more local commercial goal (albeit a lower priority to the Habsburgs) would have been a link between Užice and Spalato using the branch lines to Jajce and Vardište). However, peace did not last long enough, for the Young Turk upheavals were followed by the Balkan Wars and the First World War. Despite the ‘big picture’ of great power conflict the nation states were able to persevere with their respective domestic agendas. The Ausgleich occurred before Croatia could be tied firmly to Vienna by rail—since the line from Graz which reached Laibach in 1849 proceeded only as far as Zagreb in 1862—and instead Hungary was quick to

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connect Zagreb with Budapest in 1870 and then Fiume in 1873 (while a proposed OsijekFiume line was vetoed). Hungarian interests also ensured that the link with Romania would not become an embarrassment; for an embargo was placed on export of animals (with heavy duties on other exports) which made it easier for Romanians to resist Austrian manufactures which were injuring domestic industry—whereupon German manufactures took over. For her part Romania was able to ensure that the lines from the Habsburg Empire served national interests at the same time: notably the axis from Vârciorova (on the frontier near Orşova) to Bucharest and Constanţa. Bulgaria was not pleased to find herself on a Istanbul-Belgrade railway that provided no access to her own ports on the Black Sea. Yet the supporters of the Orient Railway did not want to see traffic diverted and it was only in 1889 that Bulgaria managed to raise funds for a line to the coast which advanced from Yambol and reached Burgas the following year. Lines were also built to Pernik (1893) and Varna (1897), while the journey from Plovdiv to Burgas was made more direct by the line to Stara Zagora in 1910. Another railway crossed the Balkan Mountains (Stara Zagora to Gorna Oryakhovitsa) in 1913 to complete the south-north link with the Danube the Turks had envisaged years earlier. Improved transport and its impact The railway system was a highly significant achievement. The network varied in density from 116km per 1,000sq.km in Germany to 69km in Hungary and 13km in Russia. Yet per head of population only France did better than Hungary with its extraordinary ‘Gründung’ whereby 6,353km of track were built during 1847–73 with an explosive surge after 1867 that gave priority to grain-growing areas. But there were huge distortions through uneven quality of provision, especially in the south where rail and road networks were sparse and their quality inferior. Established urban hierarchies were reinforced by their evolving railway systems and endowed with industries which reflected their labour and market potentials (with distortion in areas with particular raw materials and skills). The change in freight handling in Hungary was dramatic with the share for carts falling from four-fifths in 1850 to less than 1% in 1900 (when rail accounted for 92.3% and steamships 7.4%) while the total freight increased form 2,500 to 46,000 tonnes. In the Balkans the change was much less dramatic. By steam train from Budapest, Debrecen and Vienna were less than nine hours away compared with forty by post coach to Debrecen and twenty-eight to Vienna in 1847. Even within the shipping business there was a big change on account of steam power: in 1914 there were 338 steam-ships and 1,500 barges in Hungary whereas in 1867 there had been 135 steamers and 523 barges towed by draught animals. The journey time by steamer to Vienna was twenty hours (more than double the time by rail) but this was a tremendous improvement over the eighteen to twenty days needed for a horse-drawn barge. Transport gains were reinforced by telegraph/telephone communications and affordable/reliable mail systems. The telegraph in Hungary was introduced in 1847 when the Pozsony office opened—followed by Pest and Zagreb—and by 1867 the system extended to 17,000km (and 170,000km by 1914). The telephone started operating in Budapest in 1881 and the network extended over some 500,000km by 1914, with 20,000 subscribers in Budapest alone. Yet, despite these alternatives to letters—carried by pigeons and horseback messengers as well as post coaches—the post office handled 800 million items in 1914 compared with 51 million in

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1873 and just 4 million in 1848, reflecting reduced cost and delivery time as well as greater literacy. In terms of communications the Balkan countries were quick to take advantage. Romania had a unified post-telegraph service in 1864 although post offices were classified according to importance and it was the county centres that had the best services with the rural areas relatively poorly provided for outside the administrative hierarchy of districts and communes. Trains in the region were not noted for speed, even in Germany where problems arose from numerous junctions and legislation requiring trains to stop at places of minor importance. But the impact of the railways was of course profound given their close functional links with the entire political, economic and social fabric of the region. Romania’s railways provided a direct stimulus to industry, for heavy industry correlated with railway centres, and such was the extent of the business that the CFR had ‘the largest operating expenses of any enterprise in the pre-war Balkan states’ (Lampe and Jackson 1982 p. 274). The functional links were very close with new factories typically seeking lineside sites (necessarily where private sidings were needed) and the scale of development tended towards a hierarchy reflecting greater centrality of the important junctions. In some cases railway and industry were integrated by business connections. Thus the Nordbahn arose out of desire of the Rothschilds’ Creditanstalt to link up with the Moravian metallurgical industries and the Galician salt mines. There was also a strike in the southeast when a branch from the Gulatehérvár railway of 1857 was built from Piskitilip (Simeria) to the Petroszény coal basin. This allowed linkage with the iron ores of Vajdahunyad where the charcoal-based industry was now modernised so that iron could be despatched to the steel mills and engineering works in Budapest. Indeed it was the Rothschilds’ railway enterprise STEG which acquired the state ironworks at Resicza and enlarged it into an independent centre of steel-making and engineering. Improvements in transport in general and railways in particular cannot be regarded as the cause of all the facets of modernisation that occurred at the time but it is useful to review the trends that could not have taken place without increased mobility at a sustainable cost. There was a revision of patterns of economic specialisation with enlarged supply systems and distribution networks. Great centres of manufacturing could draw in raw materials and semi-manufactures on a greater scale, as well as food, including fresh milk. And the more remotely situated ironworks like Vajdahunyad (1884) could expand through inputs that could now be economically transported over longer distances. Livestock shipments from the Habsburg borderlands doubled between 1896–9 and 1910–13 (compared with only a slight increase from independent Serbia) which compensated for grain output which was declining in per capita terms—and even in yields per hectare—by the end of the century (ibid. p. 320). Stock from Croatian estates near Zagreb posed a threat to Serbia where a switch to meat-packing occurred. This benefited the landowners and also help to strengthen the basis for industrial growth in the area (ibid. p. 295). The railway played an important role in developing internal trade, for the promoters well appreciated the scope for handling the produce of rural resource regions. The railway along the Olt Valley from Nagyszeben to Fogoras (Făgăraş) hugged the villages on the south side because they were convenient points for handling freight flows from Carpathian valleys (also an area of glass-making, distilling and sawmilling); while a major new highway (‘Reichstrasse’) on the south side of the river replaced the older route

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to the north across the Hârtibaciu Plateau. Price variations between town and country became negligible whereas before the railway grain prices in distant provinces were half the Budapest level due to high transport costs (though changes in transport included better use of the Danube and tributaries like the Tisza). The railway was also significant in handling perishables like dairy produce, although much of the market gardening developed around Budapest and other large towns. But Moson farmers were supplying Vienna from the 1890s, while Budapest needed regular deliveries of milk from distant suppliers, organised through over 500 milk processing and distributing cooperatives that developed between 1895 and 1910. In turn this process was a motivating force for intensive cattle breeding. The livestock sector was particularly dynamic: against the level of 1871–5=100 (prices) and 1882–6=100 (exports), beef cattle prices scored 152.7 in 1906–10 and exports 362.3 (Held 1980 p. 93) compared with wheat 88.8 and 79.5 (though flour scored 207.5 for exports, including some wheat coming in from the Balkans under special arrangements). Hardy big-horned grey cattle—slow to fatten and low in milk yield—were replaced by Simmental crosses; yielding the Hungarian spotted cattle which met the rising urban demand for milk. Meanwhile, industrial-scale fattening of pigs focused on the Mangalica breed introduced from Serbia which replaced smoothhaired Hungarian breeds. TOURISM Tourism and recreation opportunities were of course in place well before the railway age when the leisured classes travelled by private coach. It was in the eighteenth century that visitors to the Šumava started to use the trails opened up by woodcutters (catering for a growing glass industry) to appreciate the alpine Black and Devil lakes. The spa at Pieštăny in Slovakia began in 1821 under the local lord Erdodiovcov, with a few wooden buildings needed for mud treatment baths and swimming pools. In Poland convalescence in Włocławek Province became popular through the unique climate of the Ciechocinek salt springs, ‘discovered’ in the 1820s and endowed with their famous ‘teznias’ (tall timber structures, first constructed in 1824–8) which drip salt water—for speedy evaporation—for the benefit of people with respiratory problems who can readily inhale the chloric, bromic, iodic and ferrous mineral salts. Later a spa developed under H.Marconi’s plan of 1845 and the first Vistula steamers were introduced in 1848 to connect Warsaw with Ciechocinek. Rambling and painting trips were also popular in mid-century: Varsovians patronised resorts like Kępa with cafés, dance floors and circus artists, while walkers with historical interests would visit the ruined Gothic castle of the Mazovian princes at Czersk on the Vistula south of Warsaw near Góra Kalwaria. Cycling and rowing became popular later in the century and the first summer housing estates were developing in forests near rivers and reservoirs before 1914. In the south there was a similar combination of health and cultural concerns. People staying at the Krzeszowice health resort would visit Tenczyn Castle and the Baroque ‘White Friar’s’ monastery on the Czerna; while Krynica (where a pavilion was erected over the main spring in 1808) offered not only a promenade but longer walks to Diabelski Kamień (the Devil’s Stone). Cracow people soon discovered the delights of Ojców (now a national park) where guides would lead parties into the caves with improvised ‘torches’.

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But the most impressive development was the transformation of the old mining and metallurgical centre of Zakopane in the Podhale District. A small but distinguished clientele was secured from 1873 when Dr T.Chatubinski of Warsaw started his annual visits, ‘bringing many distinguished friends for rest, recreation and the simple life’ (Davies 1934 p. 43). Sanitary con ditions were not at first suitable for invalids but convalescents were recommended to make the journey and helped to establish Zakopane as a health resort (under the control of a municipal council) with excellent opportunities for artists and—later in the century—photographers, encouraged by Poland’s oldest tourist organisation: Towarzystwo Tatrzańskie. Access improved through the railhead at Chabówka (available when the Cracow-Sanok line opened in 1884)—with transfer to the highlanders’ carts for the last 35km of the journey—but it was with the opening of the branch railway in 1899 that Zakopane became a substantial resort and a curative centre for pulmonary and tubercular diseases. Services improved (with a water supply in 1906 and a hydropower plant at nearby Kuznice which began to supply current in 1920) while many buildings were raised in a style developed by S.Witkiewicz from the traditional Gorale cottage. From mid-century the highlanders were punting tourists through the Pieniny Mountains (offering views of Sokolica) and offering voyages on the Dunajec past Czorsztyn and Niedzica castles. Hiking expeditions took in Rysy or Wysoka peaks, with overnights at the refuge in the Ciężka Dolina Valley, and another popular route went from Zakopane over the Zawory Saddle to the corrie lake of Morskie Oko—with a hazardous descent from Mieguszowiecka Pass to a refuge in the ‘Valley of the Five Ponds’; also to Poprad Lake and Krywán Mountain. The locals would also oblige the visitors with their fiddling and popularised the highland jerkin and wooden axe (‘ciupaga’). Of course, the spas and climate stations in general gained much greater custom and developed a fine architectural style demonstrated by the colonnades at Karlsbad (Karlovy Vary) built in 1861 as the result of a competition. There was a massive expansion at in 1889 (projected by A.Winter) including the Dvorana and Eva baths, the Irma Spa and Thermia Palace Hotel that gained international renown for treating rheumatic and nervous disorders and children’s problems. Smaller spas lacking a direct rail service were able to attract a significant clientele prepared for a coach journey from a railhead several kilometres away. Some eventually attracted branch lines: Moneasa in 1893— thanks to the new owner (F.Enkheim) who took over in 1891 (after the first visitors had arrived in 1854 and the first pavilions were built in 1881); Szovata (Sovata) in 1906; Trenčianske Teplice in 1909; and Krynica in 1911. Borszék (Borsec) could be accessed by 41km of forest railway from the standard-gauge railhead of Maroshéviz after 1909, which was an improvement on the ‘diligence’ which had previously to be taken over progressively shorter distances as the railway network developed: Marosvásárhely (118km) after 1871, Szászrégen (86km) after 1886, Csiksereda (85km) after 1897 and Gyergószentmiklós (30km) after 1907. Meanwhile, the importance of brown coal in north Bohemia meant that the arrival of the railway in the spa town of Teplitz in 1858 brought about a major change in function. But on the other hand scenic charms were such that visitors were happy to make a coach journey of 20km from Nagyszeben to Höhe Rinne (Izvoru de Sus—now known as Păltiniş) at a height 1,452m from 1892 when the resort was established by Siebenbürgische Karpatenverein, though carriages had to be taken from the railway station in the town.

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Overall, by the end of the nineteenth century, the region was endowed with a fine network of inland resorts (taking advantage of the excellent endowment of mineral waters) and cumulatively there was a massive increase in capacity. More people were also visiting attractive countryside. In the Šumava momentum was increased by romantic writings on ‘Böhmerwald’ by A.Stifter (1805–86) and K.Klostermann (1848–1923) to stimulate small resorts like Eisenstein (Železná Ruda) which enjoyed rail links to Plzeň and Prague in 1877. Eisenstein could boast four hotels and a population of 1,500 by 1880. Alpine clubs were developing at this time and the Czech Tourist Club (1888) built hostels for student parties and marked out ‘Šumava hiking trails’. Hunting became more important; so much so that the Bucura summer sheep grazing station (‘stâna’) was abandoned in 1906 when Hungarian landowners preferred to keep the land intact for hunting ‘chamois’ and bears. Meanwhile, the coastal resorts offered alternative opportunities. The Baltic coast was endowed relatively early in the century but the Nordbahn brought much expansion on Rugen where the older Bad Doberan was followed by Binz, Pölitz and Sassnitz, where the Kaiserbad—replete with the large houses of wealthy Berliners, including the Dwasieden Castle by Adolf von Hanseman associated with the Lehrter Railway—was followed by the port in 1896 and train ferry services in 1909. The fishing villages of Koserow, Swinemünde, Wolgast, Wollin and Zinnowitz were also transformed. The Adriatic resorts were opened up by the Trieste-Cattaro steamship service from 1837 connecting Pola, Lussin (Losinj), Zara (Zadar), Sibenico (Šibenik), Spalato (Split), Lesina (Hvar), Curzola (Korčula) and Dubrovnik. But the first tourist association (at Lesina) did not emerge until 1868. It was the arrival of the railway in Fiume (at a particularly fine station at Mitulji) that created conditions for the growth of the winter resort of Abbazia (Opatija) where the first hotel (Kvarner) was built in 1884, followed by Crikvenica (south of Fiume) with its Therapia Hotel in 1893. The Imperial at Dubrovnik was built in 1897. The Black Sea was also being discovered by this time; notably Constanţa with its elegant casino on the waterfront and the adjacent resort of Mamaia where the first building started in 1906. Urban development Towns suffered some disruption with the arrival of the railway. At Medgyes (Mediaş) in Transylvania the line to Brassó cut through the Romanian residential area 100m south of the town wall—requiring a trench and overpass—but much new industry was attracted to the area. Indeed urban functions increased through easier contact with the rural hinterland and commerce in the form of shops, markets and fairs became much more regular whereas previously there were many travelling salesmen and pedlars. There was an increasing availability of standardised products, branded and packaged ready for sale by large factories. Since merchants were no longer involved in the production process (traditionally in finishing), traders needed relatively little experience in manufacturing and special shops therefore tended to replace small industries which had previously been in direct contact with consumers. However, there was a much better level of provision in the Czech lands than in more backward parts of the empire such as Bukowina, Galicia and especially Dalmatia. And the disparities tended to be rather greater for specialised shops than for outlets dealing in foodstuffs and miscellaneous items.

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Hungary developed a relatively massive industrial core in Budapest in the late nineteenth century. S.M.Eddie (1977 p. 353) suggests that ‘the activity of the state in promoting railroads was more important to the growth of Hungarian industry in the late 1880s and the 1890s than was any direct industrialisation programme either at that time or later’. Especially when railway systems were relatively sparse the leading cities gained particular advantage over less favoured rivals. Both Budapest and Vienna sought links with the Adriatic which prevented a project for the Sava Valley from Semlin and Osijek to Fiume (to replace the less efficient river and route) from gaining a high priority. Railway development in eastern Germany was drawn to Königsberg and Posen whose production and trade functions were greatly strengthened as the east became more closely integrated into the German economy. By comparison the smaller agricultural centres (‘Ackerburgstadte’) did not have any great potential and became less dynamic as the century progressed, though junctions boosted nodality. In Bohemia where the railway network was well developed—with energy and manufacturing already dispersed—it was possible to create a complex radial system around Prague, including a local coal-carrying railway—Bustchrad (Buštĕhrad)—to Kladno via Kralup (Kralupy) as well as inter-city links, in addition to a direct line from Vienna to the industrial districts of Bohemia including Iglau, Numburg (Nymburk) and Jungbunzlau. Glancing lower down the hierarchy, ‘all the towns of the Ore Mountains [Erzgebirge] showed a rapid growth in population beginning with the year of their connection to the railway system’ (Tipton 1976 p. 132)—and again the junction towns developed most rapidly. Thus at Aue, where the line from Chemnitz cut across the earlier line from the Zwickau coalfield to the Schwarzenberg ironworkings, the successful Gessner textile machinery works was joined by other enterprises (many started by former Gessner employees) so that in 1905 there were twelve engineering firms in the town employing nearly 2,000 people. Hungary It is worth looking at the transformation in Hungary since statistics are available to show the changes in the urban system during the railway age (1857–1910) and also before it (1787–1857) (Thirring 1912), although for some towns 1869 is taken instead of 1857 and 1830 instead of 1787, while very few figures are available for Croatia before 1857 (Figure 3.3 and Table 3.1). In 1857 only Budapest, Szabadca (Subotica) and Szeged were over 50,000 and there were few towns over 25,000—only Pozsony in the northwest, Debrecen in the northeast and Brassó in Transylvania—apart from a group in the southeast part of the Great Plain: Arad, Hódmezővásárhely, Kecskemét, Makó and Szentes. But a cluster of towns with populations of 10,000–25,000 distributed across the Great Plain contrasted with an outer ring of smaller towns in Croatia, Slovakia and Transylvania (many of them below 5,000, especially in Croatia and Slovakia). However, there was a historic process of settlement nucleation in parts of the plain, linked with security and the Ottoman threat, so that leading towns like Hódmezővásárhely and Kecskemét retained a strong agrarian character. By 1910 there was much more differentiation. The primacy of Budapest was very marked, for it had grown to 880,400 (7.4 times the size of Szeged with 118,300 compared with just 3 times in 1857) but the contrast between the Great Plain and the periphery was reduced through regional hierarchies emerging around centres of over 50,000, although the plain had 11 towns of

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over 50,000 and 26 in the 25,000–50,000 band compared with the periphery (3 and 6, respectively). There was equality in the 10,000–25,000 band, with 24 for the plain and 25 for the periphery, while for the small towns (below 10,000) the plain had only 3 compared with 68 for the periphery. Growth tended to reflect the level in the hierarchy, but there were rapid increases for the periphery’s emerging regional centres: 4 exceeded 50,000 in 1910 (Fiume, Kołozsvár, Pola and Zagreb) and another 5 reached 25,000– 50,000. There was also fast growth among several towns in the 10,000–25,000 band: Besztercze (Bistriţa), Dées (Dej), Gyulafehérvár, Marosvásárhely, Székelyudvarhely (Odorhei) and Torda (Turda) in Transylvania; Kassa (Košice), Lozonez (Lučenec), Iglo (Spišska Nová Ves) and Rózahegy in Slovakia; Slavonski Brod and Vinkovci in Croatia. Also the group in the upper Tisza: Beregszász (Beregovo), Máramarossziget (Sighet), Munkacs (Mukačevo) and Sátoraljaújhely. Some small towns were picking up district functions: Bjelovar Djakovo, Koprivnica, Opatija and Požega in Croatia; Trencsén and Zolyom (Zvolen) in Slovakia; Cziksereda (Miercurea Ciuc), Deva and Karansebes (Caransebeş) in Transylvania. By contrast the larger towns of

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Figure 3.3 Towns in Hungary 1787– 1910 the Great Plain show slower growth except for the ring on the margin: Arad, Nagyvárad and Temesvár in the east; Győr, Pécs and Szombathely in the west. While the towns of the plain grew by 2.2% per annum compared with 1.9% for the periphery, the picture is reversed if Budapest is discounted with 6.9% as against 2.4% for the 50,000–100,000

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group; 1.9% against 1.6% for 25,000–50,000; and 1.8% against 0.3% for 10,000–25,000. During the earlier period faster growth occurred on the plain except for in the 25,000– 50,000 group where the 5 towns in the periphery grew marginally faster than the 41 on the plain.

Table 3.1 Urban development in Hungary 1787– 1910

Size groups (,000s)

1787– 1857 Plaina A B

Periphery Croatiab Slovakiac Transylvaniad Total C A B C A B C A B C A B C A B

C

100– 1 186.9 3.7 1 186.9 3.7 499.9 50–99.9 2 116.2 2.5 2 116.2 2.5 25–49.9 6 215.3 1.4 1 26.8 0.7 1 26.8 0.7 7 242.1 1.3 10–24.9 41 664.9 0.8 5 77.2 1.0 5 69.0 n.a. 1 16.4 1.6 4 60.8 0.9 46 742.1 0.9 5–9.9th 9 67.1 1.3 19 130.1 0.7 7 54.4 n.a. 10 70.9 0.6 9 59.2 0.8 28 197.2 0.9 Below 5 6 20.0 0.3 44 147.2 0.2 21 57.7 n.a. 24 77.4 0.0 20 69.8 0.5 50 167.2 0.2 Total 651 270.4 1.3 69 381.3 0.5 33 181.1 n.a. 351 64.7 0.3 342 16.6 0.7 134 1651.7 1.0 1857–1910 500 and 1 800.4 6.2 1 800.4 6.2 over 100– 1 118.3 1.7 1 118.3 1.7 499.9 50–99.9 10 701.3 2.4 4 249.1 6.9 3 188.3 8.2 1 60.8 3.7 14 950.4 2.6 25–49.9 26 822.1 1.6 5 178.3 1.9 1 34.0 2.0 1 44.2 3.2 3 100.1 1.5 31 1000.4 1.6 10–24.9 24 299.9 0.3 25 343.2 1.8 10 141.4 1.6 7 97.5 2.0 8 104.3 1.9 49 643.1 0.9 5–9.9 2 14.1 0.5 36 261.0 1.5 11 76.1 2.3 11 75.2 1.1 14 109.7 1.4 38 275.1 1.4 Below 5 1 1.5 0.1 32 111.1 0.3 8 28.3 1.0 16 51.7 0.0 8 31.1 0.6 33 112.6 0.3 Total 652 757.6 2.2 102 1142.7 1.9 33 468.1 3.0 35 268.6 1.2 34 406.0 1.6 167 3900.3 2.1 Key: A number of towns; B total population (,000); C average percentage growth per annum; a Includes upper Tisza Basin, Bacska and the eastern axis from Szatmárnémeti (Satu Mare) to Fehertemplon (Bela Crkva); b includes the whole of the present state territory for completeness but the map does not include the Dalmatian towns: Dubrovnik (7,700 1857, 12,700 1910), Sibenico (6,600 and 13,700), Spaleto (10,400 and 21,500), Trogir (3,000 and 3,300) and Zadar (8,300 and 18,100); c includes the present state territory apart from Pozsony; d includes all towns other than Máramarossziget (Sighet) and the Szatmárnémeti-Temesvár axis Source: Thirring 1912 pp. 52–4

Poland Data have also been found for Poland (Jelonek 1956). For the 545 towns with comparable data the overall picture was one of growth averaging 3.1% per annum during both 1810/16 to 1869/71 (1.27 to 3.44 million) and a second period extending to 1910 when

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the total was 7.70 million (some context is provided by Figure 2.3 and Table 2.2, above). These figures are higher than those of 1% and 2.1% relating to Hungary, although the periods are not quite comparable. When the different-size groups are examined, 236 towns smaller than 5,000 in 1910 (totalling 700,000; 540,000 in 1869/71 and 280,000 in 1810/16) grew by 0.7% in the second period but 1.7% in the first. The same situation of lower growth rates in the later period appeared clearly in two other categories: 168 towns in the 5,000–9,000 group (1.12 million in 1910; 700,000 in 1869/71 and 310,000 in 1810/16) grew by 2.2% in the first period but by only 1.5% in the second; 87 towns in the 10,000–24,900 group (1.27 million in 1910; 620,000 in in 1869/71 and 230,000 in 1810/16) grew by 3.1% in the first period but by only 2.6% in the second. However, the 33 towns in the 25,000–49,900 group (1.10 million in 1910; 440,000 in 1869/71 and 140,000 in 1810/16) grew by 3.9% in the first period but only marginally less—3.8%—in the second. Finally, the 21 largest towns (3.52 million in 1910; 1.15 million in 1869/ 71 and 310,000 in 1810/16) grew by 4.7% in the first period but 5.2% in the second. The period is thus a highly consistent one of higher growth rates in ascending order through the size groups with a gradual shift from relatively weaker to relatively stronger growth when the second period is compared to the first. Moreover, the performance is superior to Hungary in all categories for both periods except in the case of Budapest, although the performance of Hungary’s larger provincial towns would have been closer to that of Poland but for the remarkable dynamism of Upper Silesia (including adjacent parts of Russian Poland: Częstochowa and Dąbrowa) where a group of 12 towns forming the axis from Gleiwitz to Dąbrowa Górnicza—of which 6 were larger than 40,000 in 1910: in descending order from Sosnowiec (98,700), Częstochowa (74,900), Königshütte (72,600), Beuthen (67,700), Gleiwitz (67,000), Hindenburg (63,400) and Kattowitz (43,200)—comprised a total of 610,000 in 1910 compared with 120,000 in 1869/71 and an insignificant number in 1810/16—with an average growth of 10.6% per annum in the later period. Łódź did even better with its population advancing from 514 in 1810/16 to 50,500 in 1969/71 and 423,700 in 1910 (averaging 18.5% per annum in the second period) while Białystok was also very small in 1810/16 but exploded from 16,500 in 1869/71 to 80,300 in 1910 (16.5% per annum). Some much smaller towns were also highly dynamic: Włocławek had just 2,000 in 1810/16 but after steamship services started on the Vistula in 1853, the railway arrived in 1862 and the river was bridged three years later, population rose to 11,800 in 1869/71 (8.6%) and 37,100 in 1910 (5.4%). There were fifty-three factories in the town by 1914 including the first Polish-based paper mill. As regards the regional centres, Warsaw advanced from 77,700 to 276,000 (4.6% per annum) in the first period and reached 895,400 in 1910 (5.6%) while Breslau grew from 68,100 to 208,000 and 512,100 (3.7% in both periods) and Posen also showed consistency over the two periods (4.4%) as the population advanced from 16,100 to 56,400 and 156,700. Cracow showed much greater primacy in the railway age with growth from 25, 300 to 54, 100 in the first period (averaging 2%) increasing to 174,200 in 1910 as a result of 5.6% average annual growth. The other leading towns in Austrian and German Poland (leaving aside the ports referred to below)—Bromberg Görlitz (taking both sides of the Neisse), Liegnitz (Legnica) and Przemyśl (all exceeding 50,000 in 1910)—had a total population of 28,800 in 1810/16 rising to 108,200 (4.9%) and 265,000 (3.6%). This performance was almost identical to that of the regional

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administrative centres of Russian Poland: in descending order they were Lublin and Kalisz (exceeding 50,000) followed by Radom, Piotrków, Płock, Kielce, Siedlce, Suwałki, Łomża and Chełm, with only the last-named falling below 25,000. The total population rose from 37,100 to 148,500 and 368,400 to produce an annual average growth of 5.3% in the first period and 3.7% in the second. Thus the Polish experience suggests that the railway did not necessarily accelerate urban growth overall but— predictably—brought about a greater emphasis on the leading regional and industrial centres. Ports Railways contributed to the selective development of ports on the Baltic, the Black Sea and the Adriatic. On the Baltic Stettin was the leading port, growing from 21,300 in 1810/16 to 76,300 in 1869/71 and 236,100 in 1910, with a rather faster rate in the second period (5.2%) than the first (4.5%), given the improved links with Berlin. It was rapidly catching up on Königsberg which itself grew from 122,600 to 246,000 during 1870–1919 (2.5%). Commercial arrangements were such that the port was not too gravely embarrassed by the Russian frontier. The same situation applied at Danzig (Gdańsk) where growth during 1869/71–1910 (2.3%) was slightly below the 2.5% registered earlier in the century athough population nevertheless grew from 37,100 to 89,000 in 1870 and to 170,300 in 1910. On the Black Sea there was a growth of traffic at Constanţa thanks to the railway service and substantial capacity in the port itself (though the all-important breakwater was built only at the end of the century). Indeed Romania had a much better rail network for grain shipment to the ports than Serbia, while Bulgarian lines in the northern grain belt came only after 1900. Nevertheless, Varna (41,400) was considerably larger than Constanţa (27,200) in 1910, though Burgas did not exceed 20,000 until the inter-war period. On the Adriatic the strongest growth occurred in the north where Fiume and Trieste were supported by Hungary and Austria, respectively. Of course, the railways played havoc with the established patterns of trade because regions lost the isolation they had previously enjoyed from distant lower-cost producers. Thus while industries that were particularly favoured by virtue of raw materials or by labour and entrepreneurial skills prospered from widening markets, activities that were less efficient for whatever reason were likely to contract with the loss of protection previously enjoyed by high transport costs. Not that railway tariffs were necessarily hugely competitive, for it cost more to send cotton yarn to Bohemia from Vienna by rail than from Manchester by water (canal, sea and river). However, the cotton textile industry that started in Slovenia in 1828 using Egyptian raw material imported through Trieste was badly affected by competition from the Czech lands when the Südbahn opened in 1854, as was the local glass industry dating to 1824. But the boot was on the other foot when it came to production based on wood processing, given the ample raw material available, and the paper industry at Laibach became profitable enough to attract Viennese as well as local capital so that operations were modernised in the 1870s. The local coal was sufficient to resuscitate the traditional iron industry on the basis of Styrian ores and the markets in the Trieste shipyards. The Trifain coal mines, which had been left in a depressed state by the decline of sugar refining industry—hit by the growth of sugar beet—were now modernised and a large new steelworks was built at Assling in 1891. There was

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considerable manipulation of freight rates: while Slavonian competition with Budapest was checked by high freight rates to the city and low rates in the opposite direction, Budapest-Fiume freight rates were reduced to the Austrian level after the Hungarian government took full control of the network in 1891, while high Austrian rates on the line from Fiume to Trieste also discouraged Hungarian use of the latter port (Lampe and Jackson 1982 pp. 299–300). There was relative decline at Dubrovnik which was endowed by a railway link only late (1906) and on a narrow-gauge basis—quite inadequate to allow the town to recapture its once extensive Balkan and Pannonian hinterland. Shipping companies transferred their allegiance, especially after Ploče was built at the mouth of the Neretva in 1937 and subsequently endowed with a railway connection (now converted to standard gauge and electrified). Railways reached Sebenico and Spalato from both Bosnia and Serbia via Prijedor (narrow gauge) and Croatia via Ogulin (standard). Military installations These needed railways for easy deployment. Thus in the area where the German, Habsburg and Russian empires came together—the so-called ‘Dreikaiserecke’ (Three Emperors’ Corner) there were great camps—Posen for Germany, Cracow for the Habsburgs and Ivangorod (Dęblin, near Radom) and Novo Georgievsk (Zakroczym, near Warsaw) for Russia—that were all railway based. However, the Russians were highly discriminating over railways that crossed their frontiers which meant that there were major tasks of rationalisation for Poland in the post-imperial period after 1918. In relation to the lengths of frontier involved there was a striking contrast in the frequency of rail links (a) between the Russian Empire and her German and Habsburg neighbours and (b) between these two neighbours themselves. Prussian army fortifications also included the fortress at Thorn (Toruń)—where the main railway to East Prussia crossed the Vistula. It was built during 1878–92 to act—along with Graudenz (Grudziądz) and Kulm (Chełmno) on the Vistula downstream—as a block to any Russian attack from the middle Vistula on East Prussia (although the Russians were to be defeated in 1914 at Tannenberg (Stebark) south of Osteroda on the southwestern edge of East Prussia while the Bolsheviks were subsequently halted at Warsaw in 1920). The military role might substantially extend the population growth linked with trade and industry. Thorn grew from 6,900 in 1810/16 to 17,700 in 1869/71 (2.8%) and 46,200 in 1910 (4%) with its fortress operational by this time, although the town was somewhat constrained in its regional role by Bromberg: 4,100 in 1810 but 27,700 in 1870 (10.2%) and 57,700 in 1910 (2.7%). For the Habsburg Empire the alignment of the Carpathian arc in relation to the northeastern frontier made for military concentrations along the contact zone that was accessed by the axial route from Cracow to Lemberg and Czernowitz (Čhernivci) while also being supported by the various trans-Carpathian railways which certainly had a strategic rationale. The Habsburg geopolitical interest in the Adriatic produced a dramatic response when it was challenged by the unified Italy; whereupon Pola was established as a major naval base—with Cattaro (Kotor) as a subsidiary—supported by the Istrian State Railway that arrived from Trieste in 1876. Pola was the second city of Croatia in 1910 (57,800, having overtaken Fiume). However, it lost its role with the empire’s demise after the First World War and transfer to Italy while the subequent shift in Yugoslavia’s favour in 1945 led to ethnic replacement which has only recently restored the population total to

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its 1910 level. Meanwhile, Romania’s forces were located with an eye to railway access to the frontiers, though it is interesting to see how the railways built along the eastern (Prut) frontier with Russia between Dorohoi and Galati kept well away from the river to stay out of artillery range. The main bastion was Bucharest which lacked significant physical features which could be exploited by the military. Here the largest entrenched camp in the region was tied up with a railway ring (‘centura’) with a constellation of outer forts. The Ottoman approach was to avoid inviting invasion by placing infrastructure in frontier regions once necessary contact had been made with the European system (initially planned through Sarajevo but realised only through Belgrade after agreement in 1888) after which no Turkish railways reached the frontier of the empire. While the Habsburgs thought of closing the gap between Uvac and Mitrovica, the Ottoman logic for reaching the heart of Macedonia (just before the stock market crash of 1873) was to increase the means of quelling disorder in the province. ENERGY Industry was heavily dependent on the steam engine although water power was harnessed extensively and became the basis of Bulgaria’s localised industrial revolution in Gabrovo with installations on the Yantra River serving the wool textile industry (subsequently established in Sliven, Samokov and Karlovo). Water power was also widely used for mills, including many small installations in rural areas. Electricity did not come into general factory use until the 1880s. Both Germany and the Habsburg Empire developed important electrical engineering industries but extensive power distribution systems were slow to emerge and until after the First World War generation involved hydro or thermal plants of less than 1mW capacity supplying essentially local markets. The leading cities were of course moving well beyond this level. Berlin’s large Klingenberg station included capacity for suburban railway electrification, while Kulkwitz near Leipzig opened in 1910 with 24mW; 30mW were installed at Merseburg (Gross Kayna) in 1917. The war years also saw the opening of Zschornewitz to support the new nitrate industry at Piesteritz while the Trattendorf station of 1915 was linked with the aluminium industry at Lauta. Hungary also played a leading role in the region by virtue of the electric machine building by Ganz which began in 1878. Electric lighting was introduced in the 1880s, with Temesvár (Timişoara) claiming a ‘first’ in 1884. Meanwhile, electric trams started in Budapest in 1888 and the first Budapest power plant for electric light was built in 1893. Once again there was a proliferation of small local power plants in the early years: 120 in 1906 across Hungary’s territory. Consolidation on the basis of longer transmission distances began in 1909 and Budapest’s Kelenfold station (15mW in 1917) was outstanding, but the process was essentially one for the period post-1918 (Rath n.d.). Steam generators were sensitive to fuel costs and conferred advantage on coalfield locations, although Romania’s oil residues provided an alternative fuel. Hydropower could often be useful for isolated factories in mountainous regions and in some cases waterwheels were replaced by dynamos. But this variant also offered the possibility of substantial capacities where a succession of power stations could be integrated with public or industrial water supply and timber transport: the Bârzava catchment was

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developed during 1901–16 in this way to meet the needs of the Resicza’s metallurgical complex (Figure 3.4). In the early 1900s there was planning for Sofia’s water supply which included hydropower projects near the city in 1900 and further afield in the Stara Planina in the 1910s; while a report on water resources in 1909 led to the establishment of the first regional water supply bureaux in 1912. Bulgaria’s planners were also looking at the Danube marshlands and the possibility of irrigated rice fields at Plovdiv. Historical studies of water power and supply arrangements are all too few although Haţieganu (1942) looked at the importance of the Cibin for the industries of Hermannstadt before the railway age and noticed a succession of canals which brought water from the Carpathians to the higher part of the town to provide drinking water and a reserve for fire-fighting while the surplus cascaded down to the Cibin. The nineteenth century brought the first long-distance conduit (1894) and a reorganisation of the inherited system which paved the way for some parkland and irrigated gardens. Meanwhile, in Zagreb a stream in Medveščak (adjacent to the old town) provided water power for milling until the location shift towards the railway in the steam age and the eventual culverting of the stream to make way for a new street: Tkalčičeva.

Figure 3.4 Development of the Bârzava Valley for the Reşiţa metallurgical industry

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URBAN AND RURAL SETTLEMENT The towns As already noted, the region was transformed as a result of unprecedented improvements in transport and communications. Large towns of over 20,000 population, capable of generating extensive central place functions and attracting major industries, increased considerably in number, although there were far more in the north than in SEE, given the pronounced lag in urban development in this area. In addition to in-migration the urban areas showed higher rates of fertility and natural increase than the rural districts, and the growth in the labour supply encouraged further industrial development. In the key cities there was immense building activity which included new public buildings and street widening, for example in Warsaw during 1817–19 when Bankowy (now Dzierzynski) Square was created; combined with a consolidated administration and a surge in banking, trade and industry up to the abortive uprising in 1830–1. Efficient services were essential: the problem of high food prices in Buda and Pest in 1852 was solved by providing new market places and by removing restrictions which limited trading to two days per week. Public transport developed through electric trams which meant that the catchment area for workers around each factory widened accordingly, as F.W.Carter (1975) has demonstrated for ČKD employees in Prague. Sensitive to any pressure on their incomes, industrial workers became a new social force, affected by change more than other social groups since farmworkers stayed rural and the middle class was already urban. An attempt has been made to examine urban population change, building up a picture by recording the populations of individual towns of over 20,000 citizens for 1870, 1910, 1930, 1950, 1970 and 1990. Problems arise in the sense that even the official figures are based on estimates and in some cases the data have to be taken from the nearest available year. As far as possible the figures relate to the urban boundaries at the time but occasionally it has been necessary to use figures that have been taken from a sequence that uses present boundaries only. The results are presented in several forms. First, Table 3.2 provides a broad picture using a range of size categories and the state boundaries of the communist period. A second exercise looks at growth rates for individual states (again based on the states of the communist era) built up from individual towns with populations exceeding 20,000 at the start of each period (Table 3.3). A further table examines growth rates for five population size categories with separate calculations for the northern and southern groups (Table 3.4). Finally, Figure 3.5 (and comparable figures in chapters 5 and 7) maps the distributions using the same size categories—for 1910, 1930 and 1990—with the annual rates of change (over 1870–1910, 1910–50 and 1950– 90) calculated for all but the 20,000–50,000 band. For 1870–1910 the picture is grounded in the Universal Geography of E.Reclus (1875). While there was rapid growth— averaging 2.9% per annum—the survey relates to only 99 towns. In 1910 there were 144 additional towns with populations exceeding 20,000 but comparable data for an earlier year is not available. Towns in the SEECs grew much more slowly (1.1%) than their northern counterparts (2.9%)—an inferiority evident in all size groups—and their share fell from 24.2% to 16.1%. Although the data are not presented in a way that conforms to

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fit the prevailing territorial units, a recalculation indicates the towns in the German and Austrian territories both grew by 3%; Hungary by 2.8%; Bulgaria by 1.4%; Yugoslavia by 1.3%; and Romania by 0.8%. However, the Yugoslavia figure is based on the larger Serbia, arising out of the Balkan Wars, and the Montenegro figure on the eve of the First World War: in 1910 Belgrade was the only Serb town to qualify and the situation on the northern border made for the development of strategic industries in Kragujevac (which did not exceed 20,000 until the 1930s). Meanwhile, not even the Montenegrin capital of Cetinje exceeded 20,000. Finally, Poland achieved a remarkably high figure of 6.9% but this relates to only four towns, two of which were Łódź and Warsaw. Germany and Berlin The greatest progress was made in Germany where a planning system was put in place based on the Enteignungsgesetz (1874) and Fluchtliniengesetz (1875). New main streets could be laid out on the desired alignment with building, draining and lighting costs falling to the owners of the frontage sites, but the requirements for the side streets were less specific and private developers were free to line them with tenement blocks (‘Mietskasernen’) rising to the maximum height permitted under the building regulations and extending well back through a succession of courtyards. Eventually concern over public health curbed the worst excesses although stipulation of minimum densities prevented the idea of the single family house from being realised until lower densities were allowed in the outer zones in the 1890s. Furthermore there was no general acceptance of the need to ensure minimum provision of open spaces and public buildings like churches and schools: the progressive Urban Development Law (allgemeine Baugesetz) passed in Saxony was not copied in Prussia, so ‘by 1914 a great gulf had opened up between the more enlightened towns and those which remained in the grip of property-owning interests’ (Breitling 1980 p. 43). However, a new community movement, ‘Neue Gemeinschaft’, was started in 1902, exactly half a century after V.A.Huber had failed with Germany’s first cooperative housing reform association. In Dresden craft workshops were provided by K.Schmidt in 1898; an initiative extended along garden city lines through relocation of housing and workshops in Hellerau (1907) where four districts were laid out with industry, housing and community facilities. Berlin was Germany’s greatest city—the political and financial centre, with a large industrial base—where a population of 172,000 in 1800 rose to 1,559,000 by the end of the century after boundary extension and the dismantling of fortifications. An inspired design for the town hall (1858) arose out of a competition but J. Hobrecht was commissioned by the Prussian government to produce the Bebauungsplan in 1862 with streets 25m and 30m in width delimiting very large blocks of 200×300m (sometimes 400m) to reduce building costs. The workers’

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Table 3.2 Population of towns 1870–1990 (in thousands) 20,000– 50,000 Albania 1870 1 35.0 1910 2 47.2 1930 3 71.6 1950 4 119.6 1970 4 137.7 1990 4 140.0 Bulgaria 1870 5 160.0 1910 7 218.0 1930 9 259.4 1950 19 594.1 1970 28 904.6 1990 23 639.8 Czecho 1870 9 247.3 slovakia 1910 23 733.9 1930 27 775.6 1950 31 890.1 1970 43 1257.4 1990 76 2221.2 GDR 1870 10 312.7 1910 41 1243.8 1930 59 1900.4 1950 73 2413.9 1970 77 2490.0 1990 78 2437.3 Hung 1870 16 429.8 ary 1910 29 912.1 1930 27 837.4 1950 32 973.4 1970 38 1187.4 1990 45 1376.0 Poland 1870 6 154.1 1910 42 1329.1 1930 46 1445.7 1950 48 1468.3 1970 92 2802.1 1990 128 3962.2 Roma 1870 12 339.8

50,000– 100,000

100,000– 500,000

500,000 1 −1 million+ million

3 5

159.1 378.6

1 1 1

108.2 171.3 232.1

3 5 10 18 2

223.1 332.6 733.4 1257.2 115.0

1 1 2 5 10 2

102.8 344.8 282.1 1 885.5 1 1839.8 375.1

8 12 10 17 23 3 7 13 12 17 21 1

560.7 782.9 622.4 1209.2 1640.5 196.3 457.2 903.8 886.6 1213.9 1340.6 71.0

3 5 4 5 10 3 5 8 9 8 12 1

568.4 930.0 896.9 1362.0 2225.3 529.2 1518.8 1548.2 2015.8 1573.8 2183.0 320.0

267.4 416.5 289.5 613.5 754.2 326.3 880.9 898.9 732.3 2037.2 3230.2 170.0

1 2 5 8 2 5 12 16 20 38 1

111.8 220.1 753.8 1271.3 484.0 1161.0 1967.9 2905.0 4218.0 7338.5 222.0

4 6 4 9 11 5 13 14 11 29 48 2

1 1

639.9 885.7 1

667.6 949.2 1 1 1

1

846.3

2 1 2 2

1337.5 617.6 1086.3 1063.4

1 1 1 1 1

1 1 1 1 1 2 1407.5 2 1230.7 1 2 1433.9 3 1870.6 1 4 2832.0 1

Total

1 35.0 2 47.2 3 71.6 5 227.8 8 468.1 10 750.7 5 160.0 8 320.8 13 827.3 27 1848.7 44 3409.2 1140.8 52 4877.6 13 737.4 35 2530.6 45 3437.7 1057.4 46 3466.8 1140.7 66 4969.3 1214.8 110 7301.8 17 1884.5 1888.8 54 5108.6 4338.7 83 10028.6 1189.7 96 7123.6 1096.4 105 7460.4 1284.5 114 8308.8 19 820.8 1110.4 1441.6 1590.3 2001.1 2113.6

34 2289.9 35 2807.3 39 3073.3 53 4555.8 65 5515.1 13 964.4 62 4778.5 1178.9 75 6721.7 77 6539.5 1339.2 145 12267.1 1655.7 219 19018.6 15 731.8

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nia 1910 13 363.3 9 581.0 1 341.3 1930 16 470.0 9 632.0 3 304.3 1 639.0 1950 20 583.9 10 842.0 2 229.9 1970 48 1430.4 11 794.3 12 1997.9 1990 63 1955.3 21 1565.8 25 5275.7 Yugoslavia 1870 15 409.2 2 106.3 1910 18 499.8 7 485.3 1930 20 601.6 6 382.9 4 653.8 1950 50 1420.9 4 288.6 7 1446.6 1970 62 2008.8 15 1104.9 11 1941.8 2 1501.3 1990 61 1895.0 31 2016.2 18 3012.8 2 1288.3 Total 1870 74 2087.9 15 984.9 9 1930.3 1 846.3 1910 175 5347.2 48 3232.5 15 3692.3 3 2075.1 1930 207 6361.3 63 4240.1 34 5860.8 6 4156.4 1950 277 8464.2 56 3994.0 43 8104.6 4 2691.4 1970 3921 2218.4 111 7859.5 67 12904.1 8 5343.9 1990 4781 4626.8 179 12383.3 122 23378.5 8 5183.7 Note: Berlin figures pre-1950 are for the whole city Sources: Gazeteers, statistical yearbooks and personal communications

1 1 1

1 2 3 4 5 7

23 1285.6 29 2045.3 1041.8 33 2697.6 1475.1 72 5697.7 2127.2 110 10924.0 17 515.5 25 985.1 30 1638.3 61 3156.1 90 6556.8 1168.5 113 9380.8 99 5849.4 2999.2 243 17346.3 6959.2 312 28577.8 4879.2 384 28133.4 7052.5 583 45384.4 10705.1 793 66077.4

Table 3.3 Urban growth by country 1870–1990 Population (,000) Population (,000) Population (,000) 1870 1910 (a)% 1910 1950 (b)% 1950 1970 1990 (c)% (d)% (e)% Albania 47 70 1.5 228 369 5390 4.1 3.9 2.4 Bulgaria 160 251 1.4 321 1210 6.0 18487 2964 40793 3.0 3.0 1.9 Czechoslovakia 737 1756 3.5 2531 3172 0.6 34668 4366 53752 1.3 1.4 1.3 Germany 1884 4032 2.8 5109 8028 1.4 71236 7014 74766 <0.1 0.2 0.4 Hungary 821 1869 3.2 2290 2955 0.7 30733 4160 46983 1.8 1.3 0.7 Poland 964 2893 5.0 4778 5813 0.5 65395 10374 13837 2.9 2.8 1.9 Romania 732 1069 1.2 1286 2460 2.3 26976 4593 7849 3.5 4.8 3.7 Yugoslavia 515 702 0.9 985 208 2.8 31561 5497 7371 3.7 3.3 1.7 Total 5814 12571 2.9 17346 25795 1.2 28133 39388 51225 2.0 2.1 1.7 Notes: Annual average growth rates relate to: 1870–1910 (a); 1910–1950 (b); 1950–1970 (c); 1950–1990 (d); and 1970–1990 (e). The 1970–90 rate is based on a larger number of towns than the calculations for 1950–90: a total of 45.44 million in 1970 rising to 60.70 million in 1990 Sources: Gazeteers, statistical yearbooks and personal communications

Table 3.4 Urban growth rates by population size groups 1870–1990 20,000– 50,000 1970– A B 90 ECE

50,000– 100,000 C A B

100,000– 250,000–1 1 Total 250,000 million million+ C A B C A B C A B C A B

392 13.44 1.6 111 7.93 2.6 53 8.18

2.1 22

C

8.78 1.2 5 7.05 0.8 583 45.38 1.7

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North 250 8.97 1.0 72 5.14 2.6 27 4.10 1.5 16 5.47 0.9 4 5.58 0.6 369 29.25 1.2 South 142 4.48 2.9 39 2.79 2.6 26 4.08 2.6 6 3.31 1.6 1 1.47 2.2 214 16.13 2.5 1950–70 ECE 277 9.35 2.8 56 4.00 2.7 32 4.57 2.5 14 5.33 2.1 4 4.88 0.9 384 28.13 2.0 North 184 6.63 2.5 37 2.54 2.5 22 3.31 2.0 12 3.88 1.7 3 3.84 0.5 258 20.20 1.5 South 93 2.72 3.6 19 1.46 4.2 10 1.26 3.7 2 1.45 3.2 1 1.04 2.1 126 7.93 3.5 1950–90 ECE 277 9.35 2.3 56 4.00 3.0 32 4.57 2.3 14 5.33 1.7 4 4.88 1.0 384 28.13 2.1 North 184 6.63 1.5 37 2.54 0.9 22 3.31 1.7 12 3.88 1.4 3 3.84 0.5 258 20.20 1.4 South 93 2.72 4.1 19 1.46 4.8 10 1.26 3.8 2 1.45 2.7 1 1.04 2.1 126 7.93 3.7 1910–50 ECE 175 5.25 0.9 48 3.32 1.6 12 2.10 1.4 7 3.77 0.8 2 3.00 1.6 243 17.44 1.2 North 135 4.03 0.7 32 2.25 1.1 11 2.00 0.8 6 3.42 0.4 2 3.00 1.6 186 14.71 0.9 South 40 1.23 1.5 16 1.07 2.5 1 0.10 13.0 1 0.34 5.1 58 2.74 2.9 1870–1910 ECE 73 2.05 1.7 15 0.99 3.4 6 1.06 2.7 4 1.71 4.2 98 5.81 2.9 North 41 1.14 2.0 11 0.71 4.6 5 0.84 3.1 4 1.71 4.2 61 4.41 3.5 South 32 0.91 1.3 4 0.28 0.2 1 0.22 1.3 37 1.41 1.1 Key: A=number of towns; B=population (million) at the start of the period; C=average annual growth. Note: Albania not included for 1870–1910, hence the total of 98 towns instead of the 99 listed in Table 3.2 Sources: Gazeteers, statistical yearbooks and personal communications

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Figure 3.5 Urban population 1910 ‘Mietskasernen’ comprised four- or five-storey tenements, with high density and poor sanitation responsible for deteriorating living conditions in the inner city. Public open spaces were restricted to squares at the intersections of wide avenues. Shops and services were provided on the ground floor of buildings in the central area. The main east-west trending boulevard of Unter den Linden was intersected in 1873 by Siegesallee (Victory

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Alley) leading to Humboldt Hafen and endowed with the Siegessaule (Victory Column) and heroic statues celebrating victories against Denmark, Austria and France. Urban transport improved with horse-drawn omnibuses in the 1840s to break a restrictive monopoly over carriage services. Even so ‘the size of the city seems to have been pressing against the limits of technologies of local transportation’ (Tipton 1976 p. 105). As already noted, railways made a crucial contribution through the Berlin Ringbahn of 1867–77. By this time the Dresdener and Nordbahn companies were beginning to encourage commuter traffic by building suburban stations (following the example of Lichterfelde station by the promoter of the surrounding suburb) before a separate system—partly elevated and partly underground—developed from 1903. Transport improvements ensured that the working-class suburbs of the Wilhelminian settlement ring (correlating with the Ringbahn), which made Berlin the world’s largest tenement city, would be complemented by the villa colonies (‘Villenkolonien’) for the wealthy in suburbs like Lichterfelde, Grunewald and the more distant Wannsee. Berlin also had a profitable horse tram system from 1865; and the first electric tram was introduced 1881 with the system then converted almost in its entirety, thanks to the support of the Halske and Siemens firms. But while Berlin had the Nordbahn to bring in cheap labour and raw materials to achieve an almost tenfold growth (from 340,000 in 1859 to 3 million in 1910) it could not achieve the goal of railway visionaries like E.Rathenow and W.von Siemens who saw the east feeding people into a 12 million city with radial suburban lines extending for 40km. For the birth rate was declining and 3 million people emigrated to America during 1873–93. Another weakness lay in planning and administration because although a further town plan was formulated by R.Eberstadt and others (arising out of a competition) there was no unified local government until 1920, and Berlin found itself in the grip of land speculators and blighted by a number of failed construction projects. Hungary and Budapest Budapest was a great achievement of the bourgeoisie who transformed the city into a bustling centre from obscure beginnings in two generations. There was very rapid growth from a low base level while provincial centres grew much more slowly with small commercial cores and wide rural belts. Széchenyi was a committed moderniser, forging a suspension bridge across the Danube in 1849: Adam Clark’s ‘Chain Bridge’ was a symbolic and practical link between Buda and Pest which were joined into one administration in 1873. This gave Hungary a capital in the very heart of the country replacing Pozsony which was much too close to Vienna; it also established a toll regime for all persons (including the nobility) which helped sustain the principle of general taxation. Arguably Budapest was a great asset and was not in any way a parasitic city. Landowners took houses in Pest and invested in industry and banking. For Pest was a great market for wool and tobacco—later agricultural marketing (including fruit from Kecskemét)—and a centre for the brewing, milling and engineering industries. Employment in industry increased from 35,000 to 110,600 between 1890 and 1910. Metallurgy, engineering and chemicals dominated (48.6% in 1890 and 48.9% in 1910) but food processing slipped relatively from 22.9% to 15.5% in favour of leather, textiles, clothing, wood processing, building materials and paper/printing, which increased from 27.9% to 33.9%: still quite low, although the textile, clothing and leather industries were

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particularly open to competition from more established centres in the empire. With 5% of Hungary’s population, Budapest had 23% of the factories, 25% of energy consumed in manufacturing and 28% of the factory workers (Bencze and Tajti 1972 p. 17). Industrial locations highlighted the route to the north (Váci ut.) and the zone between the Danube and the Vác railway including Angyaföld on the horse/electric tram route where old-fashioned factories survived into the communist era. Also Kobánya on the railway line to Cegled (1848) and Ferencváros on the Hatvan/ Szabadka lines (1867–82). Then came a shift from core to the suburbs: engineering at Angyaföld; mills and meatpacking at Ferencváros; railway industries, textiles, building materials and breweries in Kőbánya; Manfréd Weiss in Csepel; textiles and food in South Buda. While Kispest/Kőbánya clearly benefited from the railway, which gave rise to engineering and textile industries, the area was already a major source of clay and limestone: underground caverns subsequently proved valuable for the brewing and canning industries by providing refrigerated warehouses. The food industry was able to obtain its water from artesian sources. Ferencváros profited from the Danube, bringing grain to the mills, but there were also the land routes from the Great Plain used by animals consigned to the packing stations. Particular importance attached to railway crossings of the Danube at Újpest-Óbuda and Ferencváros-Kelenfold which provided riverside wharfs with railway sidings. There was shipbuilding (originating before 1848) in Óbuda along with bricks and textiles; while tanneries and woodyards appeared at Újpest (New Pest) which was readily accessible to the city centre by tram along Váci ut. (and rail and ferry services, too) while delayed incorporation into the city (1950) made for lower rents and taxes attractive to industrialists. From 700 in 1850, the population had exploded to 50,000 by 1909. Southeastern Europe The urban system was rooted in Ottoman administrative arrangements, with Uskub the military and administrative centre for Kosovo vilayet. Caravan traffic was busy and it enjoyed a position on the Selanik-Mitrovica railway of 1874 (linked with Belgrade in 1888). Small provincial centres acquired industries; like Pleven with post-1900 industrial growth covering mills for grain and oil, processing of tobacco and textile plants—and later engineering, chemicals and oil processing. Much attention was lavished on the new capitals because of the rapid growth of each national bureaucracy: national pride required the construction of modern public buildings along spacious boulevards. The capitals were agents of modernisation and national revival, with employment structures tilting progressively towards secondary and tertiary sectors. Between 1887 and 1910 the share of the active population in Bulgarian towns working in agriculture and forestry decreased from 46.3% to 26.6%. There were variations because Bucharest was far larger (310,000 in 1910) than Belgrade (90,000) and Sofia (103,000). Bucharest had a relatively early start as the capital of Wallachia and then the united Romania, whereas Bulgaria’s preference for Sofia over Turnovo was by no means assured. And while Belgrade was situated on the Danube and was perhaps best equipped to be a notional capital of the Balkans, it lay at the northern extremity of Serbia: ‘this precarious location pushed the main railway yards south to Niš and kept the military arsenal with its equally great demand for metal manufacture in Kragujevac’ (Lampe 1979 p. 23).

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Social change There were distinct variations in the rural-urban transfer, for opportunities were greater in the north and the labour market was not entirely cohesive, with ethnicity a significant influence. In 1867 Banat passed to the Hungarian Kingdom under Austro-Hungarian Empire’s dualist regime. Divided into ‘commitates’, it lost its administrative unity and was influenced by an active process of Magyarisation as most positions in the administration during 1867–1918 were filled by Hungarians appointed by Budapest. The Romanian community was neutralised by Hungarian schoolmasters and policemen, Jewish-Hungarian publicans (profiting from debts) and priests who were under the Hungarian or Serb religious authorities. For ‘Illyric privileges’—in ecclesiastical and political matters—were enjoyed by the Serbs through the Diploma of 1690 which had brought in new waves of Serb immigrants (e.g. during 1716–37) while the bishops of Ipek (Peč) and Karlowitz (Srem. Karlovci) gained the official right of political-church leaders for the Orthodox subjects of the Habsburg Empire. Hence the Orthodox Church in Banat was under their control and the Romanians could escape only by building their own places of worship, for example in the Cetate and Fabric districts of Temesvár. However, the political atmosphere in Temesvár was not highly contested by the standards of most provincial cities; perhaps due to the relatively early development of capitalism— showing respect for individual rights—before the emergence of strong nationalist sentiments as an overriding political issue. Cultural convergence enabled Banat to continue assimilating potentially incompatible peoples, for the identities of each ethnic group were preserved and good inter-cultural relations could be maintained through functional complementarity. Magyarisation found particular success in the Jewish communities, which merged with the dominant Hungarians and thereby gained ‘rights of cetate’ in Temesvár after 1870, leading to synagogues in the town’s Cetate quarter as well as the other privileged inner suburbs of Fabric and Josefin. But the movement was checked by the cultural prestige and economic power of the Germans (or Swabians) and by the large number of illiterate Romanians and Serbs. Relationships changed through time. The growth of nationalism in the Balkans strengthened the majority Christian dislike of those in power when there were conspicuous differences in language and religion. The new nationals (and the poor) benefited from the demise of former elite elements, for example Jews and Muslims, when their property was redistributed; so nationalism provided an irresistible path of power blessed by the European powers—with the Greek, Serbian and Bulgarian revolts setting the standard. There was also a power struggle in the Czech lands which was most highly contested in Prague where the Germans fought for ethnic survival. In 1892 the Czech nationalist majority on Prague’s Board of Aldermen decided that purely Czech street signs should replace the bilingual nameplates previously in use—a indication of the extent to which the former German city (where, as Cohen (1981 p. 3) recalled, ‘only the lowest classes of population dared express themselves in Czech’) had been culturally transformed by the end of the century, to the point where the Austrian imperial authorities had no option but to uphold the decision. As a minority both here and in other cities, German speakers had ‘to define a group identity and to establish a separate group life if they were to survive as a distinct segment of the population’ (ibid. p. 9). The Polish Kingdom benefited for centuries from the economic role of the Jewish population—as had much of western Russia (especially the Pale, where Jews were

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confined under Catherine the Great). There were good conditions under Alexander II (1855–81)—following the onerous training and military service demands of former times when male children were taken from families at the age of twelve. Around 1880 there were 5.2 million Jews in Russia, of whom 4.9 million were in the Pale of 1825— including 1.32 million in Poland. But after Alexander’s assassination there was a ban on new settlement with pogroms and expulsions from towns outside the Pale which started an exodus westwards to Western Europe and North America. There were also settlement restrictions and expulsions from rural areas within the Pale (which in practice included Russian Poland after 1868) to reduce tension with the indigenous population. Conditions in the Habsburg Empire were more congenial but difficulties were reported from Bukowina. Jews had full equality in 1857; they knew the languages and facilitated trade between Hutsuls/Ruthenians and Hungarians—indeed they could monopolise all the buying and selling. But after the 1860s ‘the economic situation of the Jews in Galicia became untenable as the agrarian feudal system there was being destroyed and the socioeconomic role of Jews as middlemen between the Polish gentry and their peasants drastically diminished’ (Moskovich 2001 p. 245): there were few openings in industry and pauperisation led to emigration. However, Jews had a good position in Czernowitz (comprising half the population of a town known as ‘Jerusalem am Pruth’ or ‘Klein Wien’) where they controlled trade and owned food processing and oil refining installations, while Poles worked in administration, transport and pig farming, and Germans occupied official and professional positions (ibid. p. 236). The more affluent German-speaking Jews lived in the hills while the poorer Yiddish speakers stayed close to the river. Rural areas At the turn of the century, Hungarian industry produced contrasting rural population responses with decline around Budapest, Győr and Miskolc compared with slow growth elsewhere—or occasionally rapid on the periphery—due to established rural industries (like Bohemian textiles) and the scope for commuting on a regular or seasonal basis to work in factories, forests and mines which could be combined with a home and a small farm in the countryside. Indeed, a little-explored feature of industrial development at this time was the way that it continued to integrate with a rural way of life despite the factory system. Thus the Carso area on the edge of Trieste experienced a transition from farming to industry. The former lifestyle involved much walking to graze cattle and cut hay; not to mention longer expeditions to help relatives, wash clothes in the Timovo River or visit the local fairs and markets—usually Sesana (Sežana)—where mulberry leaves were sold to Friuli silkworm farmers during June-September and limestone slabs were traded with Friuli stonecutters. Now the labourers started walking beside the railway to work in Trieste or the Monfalcone shipyards (saving the train fare) while women carried milk to the city. With industrial jobs there were smaller families and a rise in apartment housing: rubbish thrown into ‘dolinas’ was a sign of village life overcome by suburbanisation. As more open space was consumed children’s games like long-range ‘hide and seek’ were constrained while society became more informal as the discipline of family, church and school was relaxed.

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Around Mährische-Ostrau there was much continuity. While many people took advantage of work in industry, peasants in villages near to mines and factories could remain in agriculture—even after the railway had reduced the need for their carting services—by renting rooms to factory workers and by supplying goods to expanding local markets. For as the population of the industrial centres increased there were stronger local food markets for the farmers to supply: the peasant economy could compete with landowners as well as with traders who brought in rural products over greater distances. However, the scope for agriculture near the industrial settlements was reduced by pollution and by opportunities for a change in land use. Where the land contained limestone, fireclay or gravel the peasant could open a quarry or sell the land to another operator. More generally the growth of factories and their infrastructure increased land prices in the immediate vicinity, thus making sale of land for urban development difficult to resist. So the peasantry became a proletariat, though still not a homogeneous class, for whereas landless peasants became industrial workers ‘rich peasants found their place in new society as independent craftsmen, lower middle-class merchants and tenement-house and restaurant owners’ (Długoborski 1975 p. 131). The peasant producer might survive further from the settlement if he could compete with imported food by turning to dairying or vegetable growing. Throughout the region there are cases of ‘industrial-agricultural regions where farming could still profit [from] being very close to industrial works of small to medium size which would not become a threat to farm existence and where slow progress in [the growth of the] railway system helped to establish the local products’ market’ (ibid. pp. 131–2). Industry expanded in Posen from 31,450 workers in 1875 to 162,000 in 1907. The large factories included farm machinery (H.Ciegelski) and fertiliser production, but there were many rural industries and agriculture was not altogether undermined. Families on smallholdings below 5ha generated most of the labour for industry. Some came from families on larger holdings when not all children stayed on the land. There was little movement before 1870, but mobility increased with elementary schools, societies and press, better roads and railways. ‘It can be assumed that those remaining on the soil who had extra income from without the farm eventually severed their ties with the land’ (Rusinski 1969 p. 518). However, there was return migration: ‘characteristic for an area in which a relatively high standard of agriculture was competitive with the developing non-agricultural industry and the city’ (ibid. pp. 518–20). Large Prussian landowners were against industry because they feared it would reduce agricultural labour and increase wages—so Colonisation Commission funds went on social projects to resist the Polish way of life. But there was hardly a rural shortage because the labour market was overrun by rural migrants, so wages remained low. Cheap labour came from Russian Poland and Galicia for the sugar campaign—as many as 20,000 during 1890–1912— contributing to the growth in farm production. Remoter rural areas These found opportunities through seasonal migration and long-distance peddling. Poor, illiterate, unskilled migrants (‘highlanders’ speaking only Polish dialects) came to Silesia from the east and had to accept the most disadvantageous working conditions, including illegal employment and strike-breaking, for the stringent police regulations of 1890

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meant they could be removed at any time. In 1848 76.5% of workers in the MährischeOstrau coalfield came from an area within 50km, compared with 17% for adjacent regions and 6.5% for other regions of Austria. In 1879 the comparable figures were 38%, 28.5% and 33.5%, respectively. With these greater average distances there would have been migration (weekly, seasonal but also permanent) to the place of work. The longestablished ‘pecalbarstvo’ (seasonal migration to work in the building trade) in Bulgaria and Macedonia helped supplement agricultural incomes compromised by stagnating commodity prices and natural disasters like the phylloxera epidemic. Cserepfalu in northern Hungary was much affected by the ‘summazas’ (traditional seasonal agrarian migration), while some people were moving abroad to North America and Sweden. Slovaks found seasonal work on the Great Plain of Hungary; and they would market linen cloth from their home villages right across the central and southern parts of Hungary and in some cases cross the frontiers to the empire to trade in Romania and Russia. Itinerant Bulgarian market gardeners from the Stara Planina were active in Romania and Serbia while Bulgarian pedlars had good opportunities in the principalities after the Treaty of Adrianople and many crossed the Danube at this time. But it was different in Transylvania, which experienced emigration from 1870 due to lack of good arable land and poor prospects for work outside agriculture. There was some movement to the cities by those who lost their holdings through poverty and reclamatory processes; while others went seasonally to the Banat/Crisana plains to work on the estates. In the east and north holdings were particularly inadequate to support families (at a time of high birth rates). Nevertheless, Aluas (1969) calculates that only during the 1870s did the rural population decline absolutely by 4.1% (compared with increases of 7.8% in the 1880s; 7.7% in the 1890s; and 6.9% in the 1900s). In the 1900s natural increase in rural areas was 378,700, of which 229,100 migrated. Employment in mining, industry and trade increased from 142,500 to 200,800 while work in agriculture and forestry declined from 945,900 to 834,900 because even fewer active family members were available at a time when 40,400 emigrated. Life no doubt improved in various ways. Greater mobility reduced isolation and the barrier to integration that serfdom had imposed was now removed. While money came into the villages through the earnings of migratory workers, agricultural labourers ceased to be paid in kind and hence there was a growing demand for small shops which ‘appeared with resilient promptitude where they were needed by the population which they could then serve regardless of the weather and the time of day’ (Csato 1977 p. 418). Yet integration of the remoter villagers into the mainstream was by no means complete and the glimpses of a wider world enjoyed by the young people rested uneasily on the home base tinged with conservative domestic values and neofeudalism arising from a combination of estate work and the cultivation of smallholdings. The process of change was hardly painless and elderly people perceived an open revolt by the young against old traditions and despaired at their disappearance: particularly traumatic was the breakdown in authority of parents and elders and erosion of the extended household that had previously been the hallmark of the traditional patriarchal family. The father was no longer a symbol of the family group’s economic potential and social importance for seasonal migration for wage labour gave independence to individual members and inevitably introduced new social values. In such a situation government policy wavered between support for the peasantry (through improvement of their smallholdings and

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recognition of their culture as the essence of national identity) and incitement to migrate on an even larger scale in the face of urban-based industrialisation. The dilemma was to become more acute in the inter-war years. Population change and emigration The region sustained a substantial population increase overall: population more than doubled between 1800 and 1910 (after 1860 alone in the Balkans), and more than trebled in the Polish territories. With a little more accuracy it may be claimed that the population of the region increased by 18.2% between 1870 and 1890 and by 26.6% over the following twenty years (Turnock 1989 p. 168). But partly because of the persistence of high birth rates beyond the time for which there was an economic justification, the region was unable to hold its population. While political reasons triggered migrations after Poland’s abortive revolution in 1830 and the subsequent upheavals of 1848, the bulk of the movement in the later half of the century was economically inspired. For both periods the rates of growth in the Balkans were higher than in Germany and the Habsburg Empire, though not by large margins. The fall in mortality resulted in rising rates of natural increase which reached 18.3 per 1,000 in Bulgaria and 15.8 per 1,000 in Serbia between 1900 and 1909. In all countries except Bulgaria the birth rate fell from 1880–9 to 1900–9, but not rapidly enough to match the falling death rate. The faster growth in SEE was unfortunate since this area was less successful in creating new jobs. In much of the north rural-urban migration obviated any need for fertility controls: indeed migration from the Silesian countryside was great enough to induce a rise in agricultural wages until 1900. Yet the growth in SEE could have been higher, for Palairet (1995) refers to high infant mortality in Serbia, to the point where even a slight improvement in public health could have triggered a population explosion, as there was no celibacy to impose restraint and young widows usually remarried—albeit to men older than their deceased first husbands would have been. Ways were found to enhance social security, for example through the Habsburg tradition of municipal, church and union granaries: encouraged by Josef II’s regulations from 1789 that required owners to deposit a third of their crops wherever a union granary was established so that grain could then be supplied on credit to those without enough for sowing. The first granaries in Slovakia were established at Lazy pod Makytou and Lysá near Puchov in 1824 (an area of poverty after the Šaštin cloth factory closed). And in 1835 there was one at Lučivná in the High Tatras arranged with the help of landowner D.Varády-Szatmáry who built the granary at his own expense following a cholera outbreak. Another nobleman built the Zemianske Podhradie granary at his own expense 1847. It was only in 1864 that the Royal Offices asked all local county authorities in Hungary to support the founding of municipal granaries, with cash contributions to help inhabitants in bad years. Church granaries were prominent in Spiš: there was a central granary in Batizov with branches in Gerlachov, Lučisná and Štol. There were complex migration currents even within the periphery as the subdivision of holdings in Galicia pushed some people into the adjacent province of Bukovina. But the principal safety valve was emigration, although knowledge of New World opportunities was quite limited until late in the century. In Hungary J.Puskas (1982) identified a period of ‘full-fledged mass migration’ from 1899 to 1913 developing out of

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preparations made over previous decades. In view of the failure of industrialisation to keep pace with the demographic boom, emigration helped to reduce poverty and the money sent home was of great economic importance. However, emigration rates did not correlate closely with variations in the population-resource balance and even in 1914 some countries in the region were not as ‘emigration saturated’ as some Western countries had been decades earlier. Many people did not go permanently: some twothirds of all Bulgarians, Montenegrins and Serbs in the USA were temporary sojourners (compared with a half for Austria, a third for Hungary and a fifth for Germany). The situation arose partly because of difficulties over cultural identification combined with limited opportunities for seasonal work in Europe which made an Atlantic crossing acceptable. In Hungary emigration fever developed most strongly in peripheral parts of the country, especially Slovakia, followed by Croatia and southern Transylvania. These were areas far removed from the industrial pull of Budapest where there was a desire to retain a country home on the basis of money earned through a temporary stay in the USA with its relatively high wages. There may also have been contact across the frontier with Czechs, Germans and Poles who had been keen to emigrate at an earlier date. However, the peripheral bias could have been strengthened by the greater difficulty in obtaining passports in lowland regions where the estates wanted to hang on to their cheap labour. In fact it was largely because of the fears of the industrialists and landowners over labour supply that politicians were inclined to talk emotively about ‘ghost villages’ and the progressive feminisation of rural communities. However, there was a genuine sense of failure over the volume of emigration (not least for reasons of national security) and more thought was given by political leaders to the problems of the landless proletariat. And, after allowing for return migration (with high overseas wages financing land purchase commensurate with a middle-class farming lifestyle), emigration accounted for a quarter of the natural increase in Hungary and rather more in Austria (Kopanic 2000 p. 256). CONCLUSION There were great achievements yet inequality was perpetuated. The region achieved a remarkable unity with Germany and the Habsburg Empire together extending their economic links and giving some credibility to the notion of ECE as a zone of German influence. The railway contributed greatly since overland transport of raw materials and manufactures increased many times over the level achieved by the ‘Greek’ traders in the course of their weary treks across the Balkans. The Berlin-Baghdad concept reflected a reality which attracted tacit acceptance from the great powers, all of which could find adequate opportunities for colonial expansion in different parts of the world. However, the Balkans were always a sensitive area. Both the Western powers and Russia had strategic interests in the Ottoman Empire, while the cause of nationalism in the region attracted attention from both Western liberalism and Russian pan-Slavism. However, Bairoch’s (1976) GNP estimates for 1860–1913 suggest a rising European share for ECE (excluding the Ottoman Empire and Russian Poland) from 26.9% to 31.5%, although this was entirely due to growth in Germany (14% to 19.4%) which cancelled out the relative decline in the Habsburg Empire, Bulgaria and Serbia—although Romania experienced a slight improvement. The three Balkan states together declined from 1.92% to 1.72%

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despite a surge in exports which demonstrated the role of FDI, although there was a tendency for foreign capital to create enclaves linked more closely with foreign markets than with other components of the Balkan economy. It is also evident that Germany’s success was linked primarily with the strong private sector economy in Westfalen, closely associated with the Belgian-Dutch economy in a situation where the more backward Prussia was not as much of a’drag’ on the whole of Germany as were the Croatian-Hungarian-Galician territories in the Habsburg context. It may be that ‘human capital in entrepreneurship, technology and workmanship in the Habsburg Monarchy was not yet sufficiently seasoned for a serious forward thrust in the economy’ (Freudenberger 1997 p. 268). On the periphery modernisation seemed to be taking place in a ‘defective’ way because it proceeded on the basis of some archaic social and political practices. The SEECs needed education to assert national culture against powerful foreign/imperial Greek and Turkish influences yet literacy levels were obstinately low at 24% in Bulgaria, 17% in Serbia and 15% in Romania (compared with 62% in Austria and 50% in Hungary), with only a tiny fraction of young people proceeding to secondary schools and universities. In Albania education was almost nonexistent before 1908 because instruction in Albanian was prohibited by the Turkish authorities (McCarthy 2000 p. 252). Neo-feudalism on the periphery contrasted with a core that enjoyed a high level of integration with efficient agricultural markets (though with some emigration and decline in local industry) and was experiencing a social revolution with the growth of organised labour and the concept of a welfare state. In 1914 some parts of the region were still protected by relatively poor communications and subsistence agriculture. The post-1815 rebuff for liberal ideas produced a temporary stability but only at the cost of a widening class divide as the elite was required to share power merely with a modest middle-class element which prospered under capitalism. Relatively scant rewards for labour meant deprivation for the millions who comprised the rural peasantry whose bargaining position was for long constrained by overpopulation and reactionary social policies. Even the more successful peasant families in the Balkans found basic agricultural equipment a heavy drain on their resources and were not immune from falling living standards and from diseases like pellagra caused by malnutrition. Handicrafts emerged as ancillary activities to agriculture (as in Bohemia and Saxony) but with little sign of progressing to a factory system: in some branches of textiles it is possible to see a spontaneous transition from the domestic scale to workshops and factories yet with little experience of mechanisation and grave difficulties over power supply it was an uphill task to compete with imported cloth even with the help of tariff protection. The home markets of Balkan countries were not very stimulating because of the small populations and low incomes. Yet there was some progress to be made through import substitution, even if the change was only a shift from imported cotton cloth to imported yarn. There was a lack of resources for regional policies at a time when regional specialisation seemed the natural order of things. But while empire might tolerate peripheries, the Balkan states were finding that strategic considerations necessitated rapid modernisation while commodity price trends offered no guarantee of rising income from exports to buy the manufactures needed. While land hunger was eased by the emigration of Turks from Bulgaria and the movement from Galicia to the New World, governments could not be sanguine about agriculture’s capacity to generate higher incomes. There were few programmes to stimulate the periphery, for example in Posen to make it a more

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attractive city for German settlement. Millward and Saul (1977 p. 456) acknowledge that ‘in the last resort the responsibility for the failure of economic development in the Balkan countries rested not only with their heritage of economic backwardness but with the failure of the major European economies to create in their own interests an international economic system which would have helped such small economies towards economic growth and development’.

Part II 1914–45

4 THE FIRST WORLD WAR, POLITICAL STRUCTURES, AGRICULTURE AND INDUSTRY The second century covered by this book is divided in two because, although both periods are concerned with nation states and their struggles to maintain growth in a challenging global situation, there are fundamental differences in the methods adopted and the international relations forged. The first period covers the two world wars of the twentieth century and the short interlude of two decades between them. This period is being widely re-evaluated as the immediate forerunner to the communist era. While shortcomings and contradictions were overemphasised retrospectively through the ideologically motivated critiques of the communist period, more objective examination of the evidence points to balanced programmes to expand factory industry while seeking a measure of rural diversification. But security was always a great problem which diverted capital into the armed services and defence industries: not only was there a danger of a German and/or Russian resurgence, but the smaller nations of the regions were themselves divided through the opposed interests of the ‘winners’ of 1918 (Albania, Czechoslovakia, Poland, Romania and Yugoslavia) and ‘losers’ like Germany, Hungary and—to a lesser extent—Bulgaria. This chapter will therefore deal with these various contextual issues as well as the changing economic geography. It will also be appropriate to consider alternative development models in the context of growing German influence: the urge for accelerated growth after the depression years through imitation of German methods requiring greater cooperation and cartelisation, underpinned by greater state investment and planning. Tariff systems were very much the order of the day: it was assumed that any reduction in protection would be damaging—given the importance of industry based on import substitution that would not be competitive on a free trade basis—so only bilateral or multilateral reductions could be contemplated. But industrial countries whose exporters were barricaded out of the markets of agrarian countries naturally took measures against the latter’s food exports, thereby keeping food prices low in the region with returns to farmers that were wholly inadequate to sustain peasant proprietorship and moderate rural-urban migration pressure. THE FIRST WORLD WAR The period begins with the First World War: a power struggle between the Central Powers and their neighbours in the east and the west, although the critical issue arose through a deteriorating relationship between the Habsburg Empire and Serbia leading to the assassination of an Austrian archduke in Sarajevo, a Habsburg provincial capital

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exposed to Serb nationalist activity. But this local affair was symptomatic of a wider and deepening tension between imperial and nation systems of territorial organisation. The ensuing war would therefore decide whether imperialism in Central Europe would be confirmed and consolidated or superseded by national states grounded in the Wilsonian principle of self-determination. The outbreak of hostilities saw a hint of compromise when Germany and the Habsburg Empire proclaimed a kingdom of Poland in 1916 in their respective occupation zones in Russian Poland. However, Poles did not believe that any eastward extension would meet their expectations and an offer of limited selfgovernment came too late to prevent the Russian revolutionary government gaining the initiative. This brought recognition of Polish independence, followed by recruitment of Poles in a Polish army corps in 1917–18; but only for Piłsudski and his corps to be taken into internment after a clash with the Central Powers. In the face of the growing crisis facing the Habsburg Empire, Emperor Karl offered autonomy to all Austria’s minorities but—significantly—not for those in Hungary, where the situation has to be seen in the context of implacable nationalist forces in the old empire radicalised by a brutal Magyarisation policy inspired by a notion of racial supremacy, allied with the crown of St Stephen so that ‘territorial integrity was to be sacrosanct and not subject to any kind of bargain or negotiation’ (Vermes 1972 p. 487). Yet the non-Magyar leadership was equally determined and—after backing the antiLiberal coalition in the elections of 1907 to no apparent advantage—they soon realised they had no future in Hungary. For the coalition’s extended ethnic policies of 1907–10 did irreparable damage and were even condemned by I. Tisza’s Liberals. They can be ascribed only to a massive miscalculation of the Magyars’ political strength (Sugar 1981). As premier in 1914, Tisza hardly welcomed the war yet there was a certain inevitability arising from Russian support (since the beginning of the century) for enlargement of Romania and Serbia at Habsburg/Hungarian expense, while Ruthenian Uniates were encouraged to convert to Orthodoxy and so win the tsar’s protection. The key element in the war was a somewhat futile British-German struggle, the outcome of which was by no means clear until the final phase. Germany was convinced of her economic strength, having maintained strong competition from the 1880s, with Britain perceived as a prisoner of her industrial structure and empire trade. But there was much more at stake, since German support for the Habsburg Empire against Russia was a major factor leading to war in the East: a theatre in which the Central Powers were almost totally successful. Here the effort could be seen as a bid to counteract high American protective tariffs through economic associations that would prepare the ground for an economic unification of ECE: a ‘Mitteleuropäischer Wirtschaftsverein’ would extend from the German-Habsburg core to a resource periphery covering the Balkans, Caucasus and Middle East—as well as extensive colonial territories around the world. However, the Central Powers had to fight on two fronts—and cope with a severe food supply crisis—precipitated by Allied blockades—from the winter of 1916–17 (though difficulties within the Habsburg Empire were compounded by hoarding in Hungary and transport problems over imports from Romania). This caused a costly diversion of effort into Ukraine although there were no vast surpluses to be requisitioned and the country was ill prepared for any intensification of its agriculture given the lack of machinery and fertiliser. Although it sustained Austria’s cities until the 1918 harvest could be delivered, the venture could only secure a granary for future years on the presumption that the war

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situation in the West would not deteriorate and hostilities would continue into 1919 and beyond. Through the Treaty of Brest-Litovsk (1918) Germany was able to coerce the Bolsheviks into a humiliating territorial surrender when Lenin accepted independence for the Baltic States and Ukraine. A separate peace with Ukraine at Brest-Litovsk recognised the state’s great importance as a supplier of food and iron, while the Treaty of Bucharest with Romania reflected Berlin’s interest in oil and transport routes by river and railway. It was fortunate for Lenin and the Bolsheviks that although worldwide revolution did not reverse the settlement, Germany’s defeat on the Western Front led to the abrogation of the treaties by both Russia and Ukraine later in 1918 and paved the way for Ukrainian territory to be recovered by the Bolsheviks during civil war in 1919. Meanwhile, it became clear to the USA, already disappointed by German rejection of President Wilson’s ‘Fourteen Points’ (1918), that there was no effective opposition in the German Reich to a policy based purely on power and self-interest. Impending American mobilisation forced Germany to attempt a breakthrough in the West, exploiting the modest advantage arising from the release of troops from the Eastern Front before the American build-up became decisive. But despite mobilisation for total war, Germany lacked the resources to consolidate infantry gains, for the ‘over-extension of the Central Powers was less diminished by the fall of Russia than has been generally assumed’ (Cromwell 1973 p. 278) and Allied containment of General Ludendorff’s final offensive—thanks to an advantage in equipment and transport—was sufficient to bring about the enemy’s exhaustion and ensure that the settlement in the East would be overturned. Threatened by revolution, Kaiser Wilhelm II abdicated and a Social Democratic provisional government signed an armistice. Of course, there is no guarantee that with military victory Germany could have succeeded in her political and economic plans. Even with the assumption that the imperialist enterprise would have had majority support within a democratic Germany, there was great potential for conflict with the Habsburg and Ottoman empires over Poland and the Caucasus, respectively (indeed the Ukrainians were already using grain exports as a lever for territorial gain at Austria’s expense in the Chełm district of eastern Galicia). Equally unrealistic was the expectation that an aggressive economic programme could be reconciled with stable relations with a greatly reduced Russian Empire (or her Soviet successor).

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Figure 4.1 States of East Central Europe after the First World War While Germans could unite against the threat of encirclement they could hardly presume on the acquiescence of others, and progressive interpretations of Mittel-europa resting on

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cultural values were hardly vindicated by the expansionist policies of Ludendorff’s and his fellow annexationists. The Paris Peace Conference of 1919 faced a mammoth task in redrawing the map of ECE while resolving the tension between the French desire to prevent German resurgence and the British view that sought eventual German reintegration (Figure 4.1). The latter view prevailed through accommodations—such as the status of Danzig (Gdansk) as a free city (separate from Poland) along with the plebiscites in Allenstein (Olsztyn) and Marienwerder (Kwidzyn), which Germany won, and the one in Upper Silesia, where there was a compromise. Significantly Hungary was refused plebiscites (except in the Sopron area of Burgenland destined for transfer to Austria), although there were regions where the case for them was just as strong as in Germany. The best that could be said for the Hungarian interest was that the most extreme territorial demands of the Romanians, Czechoslovaks and Yugoslavs were rejected. Clearly, self-determination lay at the heart of the treaties of 1919–20 signed at Neuilly-sur-Seine (with Bulgaria); St Germain (with Austria); and Trianon (with Hungary). But while Western leaders sympathised broadly with ‘nation state’ aspirations—and strategic arguments (like Romania’s claim to the lowland corridor along the eastern edge of the Pannonian Plain) were broadly settled in favour of the new states—a number of issues were determined by local military efforts, for the powers had no direct military presence in the region. Some decisions were quite arbitrary: Tĕšín/Cieszyn—a small area retained by the Habsburg Empire in 1742 when Silesia was lost to Prussia—was initially included in Czechoslovakia but Poland objected and the territory was divided without plebiscite by the Conference of Ambassadors in 1920, with the town passing to Poland while the western coal/industrial areas became part of Czechoslovakia. Banat could not be retained as a unit in the face of grossly overlapping claims between Hungary, Romania and Yugoslavia, but despite inevitable minority problems the compromise proved to be sustainable in a region with a history of peaceful coexistence THE NEW POLITICAL AND ECONOMIC SYSTEM The immediate post-war years were challenging in the extreme. There were enormous problems arising out of war damage and the need for territorial integration, on top of population growth and rising expectations as democratic nation states replaced ‘oppressive’ imperial systems. Grave shortages of food and fuel aroused fears of epidemic and revolutionary upheaval (as in Hungary in 1919). Inflation was rampant not least because of government spending to limit unemployment. Financial stability was needed and adjustments were required to assimilate new industrial installations or compensate for plant and raw materials in lost areas, not to mention a host of infrastructural and administrative measures to integrate new provinces and regulate new frontiers. The entire infrastructure had to be standardised within new frontiers: while wardamaged railways needed repairs (including the rebuilding of many bridges), many new lines were needed to integrate each national territory. Education required standardisation and better performance according to the national culture, as well as the provision of many new school buildings (and improvement to those already existing) and more, betterqualified teachers. For example, the Yugoslav education system had somehow to merge

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with the Serbian system the extremes of Austrian provision in Slovenia and the Turkish legacy in Macedonia (generating literacy levels of 91.8% and 16.2%, respectively). In Albania the entire system had to be built almost from scratch: it was only in 1933 that all schools were nationalised and the Italian schools closed (McCarthy 2000 p. 253). German reparations were another source of instability since Germany could not afford to meet her obligations while the beneficiaries could not accept the goods and services without creating unemployment. Under the Dawes Plan Germany’s payments were financed by American loans which allowed a margin that Germany could use to modernise her own industries and thereby become more competitive than countries to which the reparations were due. Western-style industrialisation seemed the only way forward when pre-1914 grain surpluses returned only occasionally and emigration as an antidote to mass poverty was no longer available. High tariffs were the order of the day—over 40% on textiles in Bulgaria, Poland and Romania; and on metal goods in Hungary. But even so it was necessary to restrict imports—driven by the need for domestic stability, although protection resulted in more expensive inputs and final products. Yet there were alternative ‘agrarian’ ideas of progress drawing reas