ABSTRACT
In the euphoric days after the foundation of the Reich there was no talk of depression. Prussia and Germany soon recovered from the effects of the war with France and a period of hectic activity began, stimulated by further liberalisation of the laws governing joint-stock companies, by the enormous boost of morale that the foundation of the new empire gave to almost all Germans, the creation of a unified currency – the German mark – the annexation of Alsace and Lorraine and the five billion gold francs of reparations paid by France. In order to finance the reparations France was obliged to make a bond issue. In spite of some pessimistic forecasts it was a brilliant success, proving that, although defeated, Paris was the world’s greatest money market after London. The boom years were uneven in their effect on different sectors of the economy. The poorest performance was in the textile industry.
