Rural-based Industry in Eastern Germany before the Great War

"That the Industrial Revolution in 19th-century Germany was mostly a West German affair seems obvious to even the most casual observer. The East, the land of the Junkers, was the home of extensive agriculture only recently emerged from the fetters of the so-called “second serfdom.” This stereotypical picture of an industrial West and an agrarian East ignores the phenomenon of rural-based industry in the East, a subject also largely overlooked in the historical literature. Using directories of large landed properties that contain information on the number and type of industrial establishments located on these properties, this paper provides a picture of rural-based industry in the seven eastern provinces of Prussia – which accounted for more than two-fifths of the entire area of Germany – between about 1882 and 1907. A network of mostly small-scale rural industrial establishments averaged about one unit per nine square miles. More than one-third of all estates of 100 hectares or more had at least one industrial enterprise, but as German industrialization proceeded apace in the late nineteenth century, these enterprises began to disappear; a decline of 15 per cent or more occurred between ca. 1882 and ca. 1907. Comparison with data from tax records for brewing, distilling, and sugar manufacturing shows that the bulk of brewing took place in the cities, but distilling occurred overwhelmingly on the land. Ca. 1882 about 2/3 of sugar mills were found on landed properties of 100 hectares or more, but by ca. 1907 the figure had dropped to little more than 2/5. Comparison with data from the industrial censuses of 1882, 1895, and 1907 for other typical rural-based industries shows rather remarkably high shares of the total number of establishments located on large landed estates, but it also shows great inter-industry and inter-province variety. Further sections of the paper deal with location of industrial enterprises by province, by administrative region, by size of landed property, and by type of owner of the land. Different types of owners tended to specialize in different types of industries: Physical persons concentrated on brickworks and grain mills, the Prussian state and monasteries on distilleries, but land owned by business firms was home to the most diverse group of industries. Owners having 12 or more industrial establishments on their estates were a considerably more varied group – both as to social status and over time – than the largest owners of land per se, with one quarter of their number being non-noble persons. The last section of the paper examines the location of these rural-based industries: Regression analysis, using a simple linear probability model, finds that a property’s status as a knight’s estate (Rittergut); having a military officer, non-noble person, or business firm as owner; along with increasing size, would each increase the probability of finding an industrial establishment on a rural estate. Decreasing the probability were religious groups, the State, or communities as owners. There were also evident both inter-province and intra-province differences in terms of geographic location."