Gründerzeit

Founders’ period (German: Gründerzeit) was the economic phase in 19th-century Germany and Austria before the great stock market crash of 1873. At this time in Central Europe the age of industrialisation was taking place, whose beginnings were found in the 1840s. No precise time for this period can be given, but in Austria the March Revolution of 1848 is generally accepted as the beginning for economic changes, in contrast to political reforms. In Germany, as a consequence of the large influx of capital resulting from French war reparations from the Franco-Prussian War of 1870–1871, and the subsequent German Unification, there followed an economic boom, giving rise to the description of these years as the “founders’ years”.

These years in Central Europe were a time that citizens increasingly influenced cultural development. This was also the epoch of classical liberalism, even if the political demands of the time were only partially met, and then only in the later period. Industrialisation also posed aesthetic challenges, above all in the fields of architecture and craftsmanship, through development of existing forms, rather than innovation as such.

In common parlance the term Gründerzeitstil is often mingled with Historicism, which was the predominant architectural style after 1850 until 1914, leading to a blurring of the terms. In historical context different decades are often also called Gründerzeit. For this reason, the term Gründerzeit is used to refer to several periods; for example 1850–1873, 1871–1890, sometimes 1850–1914 for the architecture, or just 1871–1873.

Classification
Social and economic history
The Wilhelminian era falls into the epoch in which the bourgeoisie in central Europe took over the cultural leadership. It is therefore considered as the marriage of classical liberalism , even if its political demands were only partially implemented and rather at the end of this period. Based on German history, the historian Christian Jansen therefore refers to the period between the revolution of 1848/49 and the founding of the empire in 1866/1871 as the Wilhelminian era. The economist Nikolai Dmitrievich Kondratiev describes the economic recovery of this period in Central Europe as the ascending phase of the second Kondratiev cycle .

Art and cultural history
Industrialization also posed new aesthetic challenges, especially in architecture and handicraft. At the same time, people responded to the fast and big changes in everyday life by turning to tradition and history. This was expressed in an eclectic evolution of existing forms. Therefore, “Gründerzeitstil” means historicism . However, since historicism remained the prevailing style until after 1900, the use of the term differs markedly, especially in colloquial usage. In stylistic contexts, very different periods are referred to, such as 1850-1873, 1871-1890, sometimes even 1850-1914.

Economy
The German term Gründerzeit refers to the great economic upswing in the mid-19th century, when the founders of business (entrepreneurs, Gründer) could apparently become rich overnight. Of particular importance for speedy economic development was the rise of a developed railway system. Not only was it a major factor in its own right on the business scene of the time, but it also permitted further development through improved communication and migration. Rural migration to the cities assisted the development of a proletariat, with an attendant increase in social problems.

Upswing
The term “Gründerzeit” refers to the extensive economic boom of the mid-19th century, in which company founders could become rich in a relatively short time. A decisive factor for the rapid economic development was railway construction . Typical “founders” are therefore railway entrepreneurs like Bethel Henry Strousberg . The railways had a significant impact on other industries, for example through the increased demand for coal and steel , so that even in these areas industrial empires, such as those of Friedrich Krupp , emerged. Most importantly, communication and migration have been greatly facilitated. Rural sub-strata migrated massively to the cities (urbanization), where they became part of the proletariat that emerged there. At that time, the social question (also known as pauperism ) arose , to which new political currents such as socialism , communism and Marxism reacted.

In addition to transportation , sales and distribution have been revolutionized by rail. Mass production has become possible outside of the conventional industrial sector. For example, the brewer Ignaz Mautner and the coffee roaster Julius Meinl I became significant founders of food companies .

An important role among the “founders” also played persons of Jewish faith who knew how to use the emancipation of the Jews and the associated opportunities for social advancement – as an example, the bank Rothschild called, which was of considerable importance as a financier of railway construction.

The following figures show to what extent joint-stock companies in Germany shaped the period of founding: Between 1867 and 1870, 88 joint-stock companies were founded in Prussia, and between 1871 and 1873 there were 928 new foundations.

Reparation payments
In the peace of Frankfurt , France, after it had been defeated in the Franco-Prussian War (1870/1871), committed itself to reparation payments in the amount of five billion francs in gold. In Germany, this gold was melted down and shaped into its own coins (the gold-covered currency Mark ). At the same time, Germany sold its silver holdings and bought more gold on the world market . To counteract a devaluation of silver currencies by the high amount of silver in the market, France limited the coinage of silver coins (see Latin Münzunion ). The currency of many countries was then based on gold ( gold standard ), silver ( silver standard ) or a bimetallic standard .

Founder crisis
The upswing came to an abrupt end in 1873 in the big stock market crash in Vienna, the so-called ” Gründerkrach” , and passed into the twenty-year economic stagnation phase known as the founder crisis .

In this subsequent crisis, the theory of economic liberalism lost ground and control mechanisms were introduced in practice and protective tariffs introduced. The petty-bourgeois and proletarian mass movements that emerged in this period of crisis were declared opponents of economic liberalism.

The most devastating consequence of the big crash was psychological. The promise of wealth and rise for all seemed to have failed for the time being, in circles of small craftsmen and business people was now the fear of social decline by the industrial competition in the foreground, also had been lost by the noise also much saved capital. In these petty-bourgeois circles quickly spread all sorts of conspiracy theories – especially the anti-Semitism gained ground massively and was in the 1880s to a broad political undercurrent.

Design and architecture
The need for housing rose in consequence of industrialisation. Complete housing developments in the so-called Founding Epoch Architecture style arose in previously green fields, and even today in Central European cities large numbers of buildings from this time can be found together along one single road or even in complete districts. These 4- to 6-story buildings, often constructed by private property developers, often sported richly decorated façades in the form of Historicism such as Gothic Revival, Renaissance Revival, German Renaissance and Baroque Revival. The span of construction served not only for magnificent palaces for nouveau-riche citizens, but also the construction of infamous rental ghettos for the expanding urban lower classes.

This phase was important also for the integration of new technologies in architecture and design. A determining factor was the development of new processes in producing steel (Bessemer process) which made possible the construction of steel façades. A classical example of this new form is found in the steel and glass construction of the Crystal Palace, completed in 1851, revolutionary for the time and an inspiration for future decades.

As a period of Wilhelminian style – in contradiction to the temporal delimitation of the epochal term embossed in the history of economic development – the late historicism up to the time around 1900 is often referred to.

“The” Gründerzeit style “that emerged in the bourgeoisie outlasted the period of economic stagnation after 1873 […] It found its way into bourgeois living culture as Old German style, neo-renaissance or neo- baroque and asserted itself alongside the art nouveau emerging around the turn of the century into the 20th century.”
– Katharina Draheim, 2005

The historism preferred in the field of art history summarizes the development of styles from Late Classicism to Neo-Romance , Neo-Gothic and Neo-Renaissance to the neo-Baroque that emerged in the 1880s. In certain aspects, Neoclassicism of the early 20th century is one of them.

In the course of industrialization, the demand for housing grew; entire districts were rebuilt “on the green meadow “. Typical of the so-called Wilhelminian architecture is a three- to six-storey perimeter block development with more or less richly decorated facades. In addition to apartment blocks for the rapidly growing urban population (see also demographics of Germany ) also emerged quarters with villas and palaces for the wealthy ( large ) bourgeoisie . In these buildings were also elaborate interior design and precious furniture in historicist styles. In addition, there were representative buildings for social life (eg theaters), public administration (eg town halls) and the new infrastructure systems (eg train stations).

Significant in the last quarter of the 19th century was also the emergence of new building techniques , however, the new materials did not trigger a departure from the old styles. The further development of steelmaking ( Bessemer process ) promoted the use of this material in construction. Buildings aroused great interest, in particular those that tested new constructive qualities and aesthetic possibilities, such as the steel and glass Crystal Palace of the London World’s Fair of 1851 or the Eiffel Tower (or other striking steel tower ) built for the 1889 Paris World’s Fair . But also for everyday construction tasks increasingly individual structural elements or components made of steel were used. Towards the end of the 19th century, more sophisticated reinforced concrete construction was increasingly used in general building construction.

Gründerzeit in Austria
In Austria the Gründerzeit began after 1840 with the industrialisation of Vienna, as well as the regions of Bohemia and Moravia. Liberalism reached its zenith in Austria in 1867 during the Austro-Hungarian monarchy and remained dominant until the mid-1870s.

Vienna, the capital and residence of Emperor Franz Joseph, after the failed uprising of 1848, became the fourth largest city in the world with the inclusion of suburbs and an influx of new residents from regions of Austria. In the place where the city wall had once stood, a ring road was built, and ambitious civic buildings—including the Opera House, Town Hall, and Parliament—were constructed. In contrast to agricultural workers and urban labourers, an increasingly wealthy upper-middle class built itself monuments and mansions. This occurred on a smaller scale in cities such as Graz, but on the periphery, thereby preserving the old city from destructive redevelopment.

Gründerzeit in Germany
In the mindset of many Germans, the epoch is intrinsically linked with Kaiser Wilhelm I and Chancellor Bismarck, but it did not end with them (in 1888/1890) but continued well into the reign of Kaiser Wilhelm II. It was a Golden Age for Germany, when the disasters of the Thirty Years’ War and the Napoleonic Wars were remedied, and the country competed internationally on a world-class level in the domains of science, technology, industry and commerce. This was the time when particularly the German middle class rapidly increased their standard of living, buying modern furniture, kitchen fittings and household machines.

The social effects of Industrialization were the same as in other European nations: Increased agricultural efficiency and introduction of new agricultural machines led to a polarized distribution of income in the countryside. The landowners won out to the disadvantage of the agrarian unpropertied workforce. Emigration, most of all to America, and urbanization were a consequence.

In the rapidly growing industrial cities, new workers’ dwellings were erected, lacking in comfort by today’s standards but also criticized as unhealthy by physicians of the time: “without light, air and sun”, quite contrary to the then prevailing ideas on town planning. The dark, cramped flats took a large part of the blame for the marked increase in tuberculosis, which spread also to wealthier neighborhoods.

Nevertheless, the working class also saw improvements of living standards and other conditions, for instance social security through laws on workers’ health insurance and accident insurance introduced by Bismarck in 1883/1884, and in the long run also through the foundation of a Social Democracy that would remain the model for the European sister parties until Hitler’s Machtübernahme in 1933. Even today the model of social care developed by Bismarck in 1873 remains the contractual basis for health insurance in Germany.

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