Spain’s Cereal Crisis & Railway Development (1879-1900)
Cereal Crisis in Spain (1879-1884)
Between 1879 and 1882, Spain experienced a significant cereal crisis. Poor harvests and high corn prices meant that domestic production could not meet the market’s needs, leading to the import of wheat and flour in 1884. This imported wheat, primarily from Europe, North America, Russia, and Argentina, was of good quality and lower priced. The influx of foreign grain caused a decline in domestic wheat prices, making it difficult for Spanish farmers to cover their production costs, leading to financial ruin for many.
In response, an institution called the Agrarian League emerged. This organization acted as a union, defending the interests of landowners. The League called for protectionist measures, such as tariffs, and also reduced the wages of laborers. These actions caused unrest in the countryside, leading to peasant protests and the burning of crops. Consequently, cereal cultivation progressively decreased.
Another factor influencing the cereal crisis was the development of the railroad. Spain, being primarily agricultural, found that the agrarian crisis hindered industrialization. People lacked the income to buy industrial products, leading to a general economic crisis.
Conclusion of the Agrarian Crisis: The government, impacted by this situation, returned to protectionist policies, thanks to the pressure from the Agrarian League, which had the support of the Catalan bourgeoisie. In 1871, a tariff was implemented to stimulate internal growth and reserve the mainland market.
General Railway Act (1855)
The General Railway Act of 1855 had two main objectives:
- Encourage internal investment in Spain through the stock market.
- Allow the entry of foreign capital to finance the railway network.
The state carried out a confiscation, led by D. Pascual Madoz, and the proceeds were used for the rail network. The law encouraged investment in railway stocks. Other countries invested in Spain, seeing it as a profitable business. The railway network enjoyed state protection and subsidies.
Deficiencies in the Law
- Radial structure of the network: Centered in Madrid, it connected the capital to different parts of Spain but hindered the most dynamic areas (the periphery).
- Orography: Spain’s pronounced relief (natural barriers) posed challenges. To address this, a wider track gauge than in Europe was adopted, which became a barrier to exports and imports.
- Tariff franchise: While opening doors to foreign investors, it created competition for the Spanish iron and steel industry.
Stages of Railway Network Development
First Stage: Early Railroad
- 1848: First line in Catalonia: Barcelona – Mataró (41km reduced to 21km).
- 1851: Section Madrid – Aranjuez.
Second Stage: Massive Expansion (Up to 1866)
This stage saw a significant push for network consolidation. However, a financial crisis led to the paralysis of construction and caused the stock market to collapse.
Third Stage: New Construction Phase (From 1873)
Construction of the network resumed.
Fourth Stage: (1876-1885)
During the reign of Alfonso XII, there was a renewed impetus for construction, which continued throughout the first decades of the 20th century.