Economy

• Slight inflationary effect of the 1871 currency reform provided easy credit for industrial growth. 762 million marks were injected into the economy.
• Many ironworks and machine manufacturing companies were set up in early 1870s, the economy grew at an annual rate of 5%
• Caprivi introduced trade treaties and subsidies to shipping lines to keep transport costs down.
• The depression did introduce some benefits to Germany. There was greater cooperation than rivalry between business. They put pressure on the government to introduce protection. It led to the formation of cartels, this allowed them greater economic stability, cutting costs of manufacturers and controlling the price of products.
• The German merchant marine grew 3x USA, only 25% of Britain
• Germany led the way in pharmaceuticals, artificial fibres, some photographic material, plastics and new explosives.
• The large Junker estates produced rye and beet.
• 40 million tonnes of potatoes per year by the early 20th century.
• Germany sold things such as chemicals, metal goods, machinery, textiles and coal in return for food and raw material.
• Following the recession, the Central Association of German Manufacturers lobbied for change. Tariffs were introduced as an act of alliance of steel and rye.
• Caprivi slightly ruptured the alliance as he lowered tariffs on countries to reduce their tariffs on German industrial goods.