Spain’s Industrial and Social Transformation: 1874-1914
The Progress of the Industry
The accumulation of capital from the export of Basque iron, along with the pre-processing of the Basque economy and the return of physical and human capital from Cuba following independence, resulted in the consolidation of a modern steel industry located in Vizcaya. Between 1879 and 1882, the three major Spanish steel companies of the nineteenth century were founded: San Francisco, Blast Furnaces and Iron and Steel Mills, and La Vizcaya. The benefits of mineral exports and the technological supremacy of the Bessemer converter led to the consolidation of a core sector for the development of the capital equipment industry. Since then, major mechanical engineering companies and shipbuilding were consolidated in Vizcaya.
Apart from Catalonia and the Basque Country, industry spread over wider areas of the territory, while the industrial structure diversified, increasing the weight of those sectors with higher technological content, such as electricity, chemicals, and metal processing. Madrid became the third industrial area, due to the fact that it was the capital and headquarters of the Central Administration, which led many Spanish and foreign companies to locate there.
Another sector that showed signs of modernization since the late 19th century was the canning industry (Galicia). Other regions that industrialized were Aragon (Zaragoza) and Valencia (Valencia and Alicante). Among the industry sectors, milling and cement production are notable.
Communications
A) Roads
The road network was divided into state roads of the first, second, and third order. The first order were those we now call national highways, the second order are equivalent to today’s autonomous regional roads, and the third order are equivalent to the current provincial roads. Quantitatively, during this period, the increase was significant, but qualitatively the same did not happen. The first order barely increased by 27 kilometers per year, and the second order reached 88 miles in the same period. This means that most of those thousands of miles were roads.
The new dual road system reinforced radio communications (with main secondary centers in Madrid and in each of the provincial capitals) that started in the nineteenth century.
B) Railways
Between 1876 and 1900, the number of miles doubled, and in 1914 the network could be considered complete. Although this increase was a dynamic force in the steel industry, it should be noted that until 1891 the construction was basically in the hands of foreign capital.
The railway was profitable until the improvement of the road network, which was more flexible and open, made them less competitive. However, that profitability did not translate into modernization or the remedy of defects in the network. Beginning in 1918 (due to the growth of road transport), it became evident that the network layout was not adequate and that the service and facilities were outdated. The railways entered into losses, which had to be subsidized by the state.
C) Maritime
As was logical, steamships beat sailing ships due to their higher load capacity. To promote trade with the Spanish West Indies and communications with the Balearic and Canary Islands, the Transatlantic Company (1881), de Pinillos Sáez and Co. (1884), and Ibarra (1885) were created.
Financial Development
A) The Bank of Spain
By the Echegaray law of 1874, the Bank of Spain was declared the only bank able to issue currency in Spain. Eleven of the fifteen previous issuing banks joined, becoming shareholders. Since then, the Bank of Spain has regulated the money supply and lent support to the Treasury.
B) The Banking Organization
There was a concentration of banks to make them more competitive. Regional banks continued to expand. Alongside the Bank of Barcelona (1844) and the Bank of Bilbao (1855), both issuers of currency that refused to integrate into the Bank of Spain, and the Bank of Santander (1857), there were other regional banks like the Bank of Castile and the Banco General de Madrid.
Following the repatriation of capital from overseas, the Banco Hispano Americano (1900) and the Banco de Vizcaya (1901) were established, the latter further benefiting from the proceeds from the sale of iron ore to England. The Spanish Credit Bank was founded in 1902, devoted to furniture credit.
In 1880, a law was passed that allowed the transformation of the former Montes de Piedad into Savings Banks, meaning that if they were previously only for-profit banks, they could now also accept deposits.
Society
A) The Nobility
The aristocracy lost its important position in society but retained much influence. Most of the nobility did not become involved in economic growth. Furthermore, the aristocrats came to terms with the new elites who joined the top of the social pyramid: there were frequent cases of noble families in debt who cleaned up their heritage through arranged marriages with members of the elite bourgeoisie.
B) The Bourgeoisie
Economic growth encouraged the emergence of a new bourgeois elite of business and money consisting of bankers, big businessmen and industrialists, landowners of relevant rural and urban properties, owners of government bonds, and stock speculators. They were joined by the most prestigious professionals and senior state and army officials. This group lived in big cities.
The regional and local bourgeoisie of the periphery were more modest and were linked to industrial and commercial activities. These groups were joined by the “Indians” or those who had formed their bourgeois heritage through business in the overseas colonies.
A step below this new bourgeoisie were business owners, landowners, homeowners, and those with modest incomes, who often held a professional or public employment. They composed the affluent middle classes. This social group was very weak compared to other European countries, and their greatest aspiration was to climb the social ladder by acquiring real estate. They controlled much of the public administration, culture, education, information, the military, retail, manufacturing workshops, and the clergy.
Both the bourgeoisie and middle classes in cities spread a way of life based on the nuclear family, in which they attached particular importance to the private and domestic sphere.
C) Farm Workers
They were the largest social group and only possessed property. During this time, most of them were farmers and worked the land. According to their relationship to land, they were distributed into three categories:
- Owners, who owned land.
- Lessees and sharecroppers, who paid rent to cultivate land that was not theirs and, in turn, received all or part of the product obtained.
- Laborers, who sold their labor in exchange for a salary and depended on the frequency of field work.
Although the owners were numerous, most of them had smallholdings, which were abundant in northern Spain. Tenants, meanwhile, were subject to short-term contracts, the price of which could be fixed freely by the owner without the legal constraints imposed by the Ancien Régime. The laborers were the largest group in the Spanish countryside, especially in the southern half of the peninsula and in western Andalusia, where they used to work exclusively in large latifundios.
D) Workers of the City
In the cities, industries, and mines, there were also workers and, despite the low level of Spanish industrialization, their numbers kept increasing. Among them were:
- Workers with a rooted union culture, such as those dedicated to old trades (shoemakers, bakers, tailors, etc.).
- Domestic service, which was very abundant and consisted mainly of women.
- Clerks, delivery drivers, and airline employees.
E) The Proletariat
Its origins are linked to the process of industrialization that occurred in Spain during the nineteenth century. The new factories used wage labor, first known by the name of “operatives” and later as proletarians. Their number is difficult to quantify, although at the end of the century it could range between 145,000 in Barcelona and 20,000 in Asturias, with smaller numbers in Malaga or Valencia.
Female and child labor were very common and very poorly paid. The work schedule was ten or twelve hours, but the worst part was the state’s disinterest in improving working conditions. The first legal reforms took place in 1900, more than a quarter of a century after they had been established in the rest of Europe. The reduction in working hours to nine hours a day occurred in 1914.