Germany Becomes an Industrial Giant

In January 1871, German princes gathered in the glittering Hall of Mirrors at the French palace of Versailles. They had just defeated Napoleon III in the Franco-Prussian War. Once home to French kings, the palace seemed the perfect place to proclaim the new German empire. To the winners as well as to the losers, the symbolism was clear: French domination of Europe had ended. Germany was now the dominant power in Europe.

In the aftermath of unification, the German empire emerged as the industrial giant of the European continent. By the late 1800s, German chemical and electrical industries were setting the standard worldwide. Among the European powers, German shipping was second only to Britain's.

Economic Progress

Germany, like Great Britain, had several factors that helped it industrialize. Germany's spectacular growth was due in part to ample iron and coal resources, the basic ingredients for industrial development. A disciplined and educated workforce also helped the economy. The German middle class and educated professionals helped to create a productive and efficient society that prided itself on its sense of responsibility and deference to authority. Germany's rapidly growing population—from 41 million in 1871 to 67 million by 1914—also provided a huge home market along with a larger supply of industrial workers.

The new nation also benefited from earlier progress. During the 1850s and 1860s, German entrepreneurs had founded large companies and built many railroads. The house of Krupp (kroop) boomed after 1871, becoming an enormous industrial complex that produced steel and weapons for a world market.

Between 1871 and 1914, the business tycoon August Thyssen (TEES un) built a small steel factory of 70 workers into a giant empire with 50,000 employees. Optics was another important industry. German industrialist and inventor Carl Zeiss built a company that became known for its telescopes, microscopes, and other optical equipment.

Promoting Economic Growth

German industrialists were the first to see the value of applied science in developing new products such as synthetic chemicals and dyes. Industrialists, as well as the government, supported research and development in the universities and hired trained scientists to solve technological problems in their factories.

The German government promoted economic development. After 1871, it issued a single currency for Germany, reorganized the banking system, and coordinated railroads built by the various German states. When a worldwide depression hit in the late 1800s, Germany raised tariffs to protect home industries from foreign competition. The leaders of the new German empire were determined to maintain economic strength as well as military power.

Germany became a leader in various industries, including the production of chemicals, electronics, steel, weapons, and optical equipment.

The Iron Chancellor

As chancellor of the new German empire, Bismarck pursued several foreign-policy goals. He wanted to keep France weak and isolated while building strong links with Austria and Russia. He respected British naval power but did not seek to compete in that arena. “Water rats,” he said, “do not fight with land rats.” Later, however, he would take a more aggressive stand against Britain as the two nations competed for overseas colonies.

On the domestic front, Bismarck applied the same ruthless methods he had used to achieve unification. The Iron Chancellor, as he was called, sought to erase local loyalties and crush all opposition to the imperial state.

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