Title: Germany - The 1850s: years of political reaction and economic growth | Britannica
Headings: The 1850s: years of political reaction and economic growth
The 1850s: years of political reaction and economic growth
Content: The German Confederation as a whole, rigid and unyielding, remained during these last years of its existence blind to the need for reform that the revolution had made clear. Yet the 1850s, so politically barren, were economically momentous, for it was during this period that the great breakthrough of industrial capitalism occurred in Germany. The national energies, frustrated in the effort to achieve civic reform, turned to the attainment of material progress. The victory of the reaction was followed by an economic expansion as the business community began to recover from its fear of mob violence and social upheaval. The influx of gold from America and Australia, moreover, generated an inflationary tendency, which in turn encouraged a speculative boom. Not only did the value of industrial production and foreign trade in the Zollverein more than double in the course of the decade, but also new investment banks based on the joint-stock principle were founded to provide venture capital for factories and railroads. The bubble burst in 1857 in a financial crash that affected the entire Continent. For many investors the price of overoptimism and speculation was misfortune and bankruptcy. Yet Germany had now crossed the dividing line between a preindustrial and an industrial economy. Although the rural population still outnumbered the urban, the tendency toward industrialization and urbanization had become irreversible.