Ságvári Ágnes (szerk.): Budapest. The History of a Capital (Budapest, 1975)

From City to Metropolis (1849-1919)

store goods piling up in the city, or in transit. By 1900 railway lines from eleven directions converged on Budapest over two railway bridges across the Danube, and the fares then introduced made access to Budapest easy for even the remotest parts of the country. The construction of the Iron Gate Canal on the lower reaches of the Danube greatly increased the capacity of Danube shipping. The circular railway linking the Budapest passenger and goods railway stations was built and plans were completed for a large port on the Danube. The Budapest Exchange became the central market for produce for the whole of Hungary; at Kőbánya (the tenth district of Budapest) the largest centre for the pig trade for the whole of Eastern Europe was developed.

This concentration of trade and transport continued to further the accumulation of bourgeois capital in Budapest. At a relatively early date the flourishing banks and savings banks in the capital handled the flow of German, Austrian and, in part, French capital into Hungary. By 1900, the five greatest Budapest banks controlled nearly 60 per cent of the banking capital in Hungary, and through the establishment of an affiliated network they also played an increasingly decisive role in banking operations in the countryside as well. The largest banks of Budapest began to penetrate the Balkans, partly on their own initiative and partly as vehicles of Western capital.

From about 1890 onwards, industrial development, temporarily halted by the collapse of the fever of speculation in Europe in 1873, intensified again, however checked by occasional crises. In certain areas trade and commerce had declined after the Balkan states had achieved economic independence, and as a result, the economic and social life of the capital was increasingly dictated by the growth of the manufacturing industries. The banking penetration in the last ten years of the century gave a further impetus to industrial development. (The five great Budapest banks controlled 47 per cent of the foundation capital of Hungarian industry owned by joint-stock companies.)

Budapest, which was traditionally the largest commodity market, and also the largest money-market, maintained its position as the greatest industrial town of Hungary in the course of this industrial development, helped by the growing co-operation between the various branches of industry as well as by the concentration of transport on the capital, which greatly facilitated the supply of raw materials. The Danube offered unlimited water for large-scale industry; the flour mills, however, declined in the eighties, and their dominant position in the industrial structure of the city was taken over by the engineering, chemical and electrical industries.

Following the building of suburban line railways at the turn of the century, more and more suburbs came into existence. A great many of the large-scale industries were sited in these suburbs, since the locations were near Budapest and yet escaped the heavy tax burdens borne in the capital. One of these industries was the huge Iron and Metal Works established on the northern tip of Csepel Island, designed primarily for the production of war material. On the eve of the First World War, the largest industrial complex in Hungary had been developed in Budapest and its immediate surroundings. In 1910, there were 289 factories in what is today’s Budapest, each employing more than a hundred workers and seventeen of them employing over a thousand each.

One of the reasons, and at the same time an effect of this, was that Budapest at this time had the largest labour force in Hungary, constantly alimented by peasants from great country estates, who found no opportunities there to rise in the social scale or better their

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