A History of Modern Europe - From the Renaissance to the Present

A Variety of National Industrial Experiences 529

many rural areas in response to increased demand, spurred by a modest level

of urban growth. Rural industry, characterized by low capital investment,

remained essential to French economic growth.

French manufacturers benefited from increased state assistance. The July

Monarchy (1830-1848), the constitutional Monarchy brought by the July

Revolution of 1830 (see Chapter 15), encouraged business interests, some­

times maintaining high tariffs that protected special interests—for example,

those of textile manufacturers, who feared outside competition from British

imports. Taxes on commerce and industry remained extraordinarily low. The

government provided a decisive push in the launching of railways in France,

purchasing the land and bridges along which the tracks were to pass and

guaranteeing a minimum return on investments in railway development.

Bankruptcy laws became less onerous, eliminating the humiliation of incar­

ceration as a penalty. New legislation made it easy for investors to join

together to form new companies with people to whom they were not related

or, in some cases, did not even know—hence their name, “anonymous soci­

eties” (societes anonymes). The government also pleased businessmen by

crushing insurrections by republicans and by silkworkers in Lyon in the early

1830s. Furthermore, strikes, legalized in Britain with the repeal of the Com­

bination Acts (1799-1800) in 1824, remained illegal in France until 1864.

Industrialization in the German States

In the German states, industrialization lagged behind that of Britain and
France. Three main factors undercut manufacturing in the German states:
the multiplicity of independent states; the labyrinth of tolls and customs
barriers, a veritable financial gauntlet through which any wagon or boat
carrying merchandise had to pass; and virtual monopolies held by guilds
over the production and distribution of certain products. The German
states remained as a whole overwhelmingly rural, their percentage of rural
population barely declining at all between 1816 and 1872. Furthermore,
the harvest failure and subsequent agricultural depression of 1846, com­
pounded by the Revolutions of 1848 (see Chapter 16), temporarily halted
German economic development, like that of France, in its tracks.
Yet beginning in the mid-1830s, textile manufacturing developed in the
three most demographically dynamic regions—the Rhineland, Saxony, and
Silesia (see Map 14.3). Berlin emerged as a center of machine production.
Coal mining and iron production developed in the Ruhr Basin, which had
half of the coal riches of the entire continent. The Prussian state appointed
directors to serve on the boards of private companies, brought technical
experts from Britain to help develop industries, encouraged technical educa­
tion, and founded associations for the encouragement of industrialization.
In the 1840s, the Bank of Prussia began operating as a joint-stock credit
bank to provide investment capital, the lack of which limited industrial
development in the other German states.