Assess the importance of foreign capital and overseas emigration for Essay

Assess the importance of foreign capital and overseas emigration for the economic development of Germany in the 19th century - Essay Example Following the political and economic restructurings experienced in Germany during the mid-1860s, Berlin developed as Germany’s financial center (Stone 1999, 788). Transfer of commodities, people, capital as well as ideas characterized globalization in 19th century across continents. Germany was well known to be an important financial center after the Deutsche Reich, which was founded in 1871 following the war between Germans and the French. A territory was then established and defined persistently until 1914. Despite the political unification of Germany after the war, most areas of economic life were harmonized afterwards (Clark 2003, 176). In 1873, gold standard was introduced in Germany and a year later followed by creation of central bank, the Reichs bank. The period between 1870 until 1914 was characterized by a great economic expansion in nearly all sectors with a further shift from an agricultural to an industrial economy along with concentration of powers, enterprises and capital. This rapid expansion in economy was primarily the cause and consequence of the fast growing population and with the evolution to an industrialized economy leading to increased urbanization rates. Germany experienced net migration outflows until the mid 1890s when it turned into inflows until 1908. In 1883-1913, Germany invested roughly six hundred and eighty million capitals in British pounds in foreign securities that translated to an average of twenty two million pounds per year. This capital was predominantly invested into European countries but also other regions obtained considerable amounts of capital. In the middle of 19th century, private banks were the main financial intermediaries for foreign securities, but were later displaced by the joint-stock banks. The large majority of foreign securities were bonds and the main issuers were governments and railroad companies to Germany’s neighboring