How did the depression after 1873 affect German businesses and workers?

The worldwide depression that began in 1873 brought an abrupt end to the rapid economic expansion of the Gründerjahre (founders' years) in the German Empire.

Impact on Businesses

The economic downturn caused a precipitous drop in the prices of industrial and agricultural goods, leading to a sharp decline in profits and investment opportunities that persisted until the mid-1890s. Approximately 20 percent of corporations founded during the preceding boom went bankrupt. In response, the German economy shifted toward concentration and regulation. State-sanctioned cartels were formed in sectors such as steel, coal, and chemicals to fix prices and apportion markets. Additionally, the government abandoned free trade in 1878–79, implementing protective tariffs on iron and grain to support domestic producers.12

Impact on Workers and the Public

The depression caused significant hardship, particularly in rural areas. Faced with severe competition from foreign grain, many people left depressed provinces in rural Prussia; emigration to the Americas surged, with hundreds of thousands departing during the 1870s and 1880s. Social and economic concerns became the primary focus of the Reichstag, often overshadowing political debates.12