ABSTRACT
The unification of Germany triggered a short-term speculative boom. The Gründerjahre of 1871–73 witnessed an annual productivity increase of nearly 5%. Because of the growth in railway construction, as many iron and steel works were built between 1870 and 1875 as had been over the preceding seventy years. Expansion was helped both by the generous credit policies of the banks and by the liquid capital injected into the economy by the punctual payment of the French indemnity. This was used to finance public works and military projects and to pay off war loans. The currency reform of 1871 also added some 762,000,000 marks to the amount of free capital in the economy.
Gründerjahre The years when the Second Reich was established, circa 1871–73. These were characterized by rapid economic and a stock boom and subsequent crash.
