ABSTRACT
In the boom years from 1850 to 1857 Germany made a significant step forward towards becoming an industrial state, in spite of the political tendency of the reaction to slow down and to modify this process. The German landscape was changed with the building of new factories, rapid expansion of the railway network, the widespread introduction of steam-driven machinery and the concentration of production in the new factories that were built to meet the increasing demand for industrial goods. Prior to the 1850s, investors in Germany had been extremely cautious. Railway stock with its guaranteed dividends was the only attractive investment to those who were looking for security. Just as the Prussian government was determined to keep a close watch on the joint-stock companies, so were they anxious to keep a close eye on the railway system by building on the state railways rather than allowing private railway companies to challenge their hegemony.
