This paper was prepared with the assistance of grants to Romania in 1974, to Bulgaria in 1972 and to Yugoslavia in 1969–70 from the International Research and Exchanges Board, New York, N.Y. Any comment or criticism will assist the author and Marvin R. Jackson with their book in progress, An Economic History of the Balkan States: The First Developing Nations. Translations of titles of works in the various Balkan languages are omitted only where the meaning is self-evident.

¹ E.g., to isolate the cause or effect of two contrasting situations by discovering that they share every circumstance in common save one. On Mill's six methods of comparison, see Tuma, Elias H., Economic History and the Social Sciences: Problems of Methodology (Berkeley: University of California Press, 1971), pp. 38–9.Google Scholar

² Thrupp, Sylvia, “The Role of Comparison in the Development of Economic Theory,” Journal of Economic History, XVII (December 1957), 555.Google Scholar

³ Lampe, John R., “Financial Structure and the Economic Development of Serbia, 1878–1912” (Unpublished Ph.D. Dissertation, University of Wisconsin, 1971), pp. 68–75Google Scholar; Tucker, Jack, “The Rumanian Peasant Revolt of 1907: Three Regional Studies” (Unpublished Ph.D. Dissertation, University of Chicago, 1972), 1–6Google Scholar; Natan, Zhak et al., Ikonomika na Bulgariia, v. I (Sofia, 1969), pp. 197–207Google Scholar; Korisis, Hariton, Die politischen Parteien Griechenlands, 1821–1910 (Harsbruck/Nümberg, 1966), pp. 112–21.Google Scholar

⁴ Even in the Romanian Principalities, the powerful native boyars were lucky to collect the semi-nomadic, livestock-raising peasantry for the full twelve days of annual demesne labor (clacâ) that they were authorized to impose. On eighteenth-century Romanian agriculture, see Mihordea, V., Relaţiile agrafe din secolul al XVIII în Moldova (Bucharest, 1968)Google Scholar and Constantiniu, F., Relaţiile agrare din Ţara Románească în secolul al XVIII-lea (Bucharest, 1972).Google Scholar

⁵ On these commercial activities, see Stoianovich, Traian, “The Conquering Balkan Orthodox Merchant,” Journal of Economic History, XX (June 1960), 234–313.CrossRefGoogle Scholar On urban economic Me in the Balkans, the definitive work, soon to be published in English, is Todorov, Nikolai, Balkanskiiat grad, XV–XIX vek [The Balkan Town, 15th-19th Centuries] (Sofia, 1972).Google Scholar

⁶ Black, Cyril, The Dynamics of Modernization (New York: Harper, 1967).Google Scholar

⁷ For Greece, comprehensive industrial statistics are not available until 1917. By then the country had almost doubled its prewar territory and prices were badly inflated after five years of mobilization (the Romanian economy did not mobilize fully until 1916). Large-scale industrial production, as defined in Table 1, did match the Romanian total for 1912–13. But when flour output (over 300 million of the 500 million total) is adjusted for a 250 percent inflation since 1912 and textiles (73 million) for an inflation and increased military output that had quadrupled its value, the prewar Greek total reduces to little more than the Serbian and Bulgarian totals. Available Greek data are collected in Tsouderos, E.-J., La relèvement économique de la Grèce (Paris/Nancy, 1919).Google Scholar

⁸ I have considered elsewhere the other question about comparative industrial development that is suggested by Table 1: namely, why was the per capita output of large-scale industry and mining for Serbia about half again the Bulgarian total? See John R. Lampe, “Finance and the Pre-1914 Industrial Stirrings in Bulgaria and Serbia,” forthcoming in Southeastern Europe.

⁹ Spulber, Nicholas, The State and Economic Development in Eastern Europe (New York: Random House, 1966), pp. 61–9.Google Scholar

¹⁰ For evidence that the Romanian economy lost rather than gained ground during the interwar period, see the still standard work by the late Roberts, Henry L., Rumania, Political Problems of an Agrarian State (New Haven: Yale University Press, 1951).Google Scholar On the accomplishments of the interwar Czech economy see the chapter by Pryor, Zora P. in Mamatey, Victor and Luža, Radomir, eds., A. History of the Czechoslovak Republic, 1918–1948 (Princeton: Princeton University Press, 1973), pp. 188–215.Google Scholar

¹¹ Adam, I. and Marcu, M., Studii despre dezvoltarea capitalismului în agricultură Romîniei [Studies Concerning the Development of Capitalism in Romanian Agriculture], v. II (Bucharest, 1959), pp. 204–07;Google Scholar Dresdener Bank, The Economic Forces of the World. (Berlin, 1930), p. 19.Google Scholar

¹² Neither Romanian yields per hectare nor productivity per capita showed significant progess after the increases of the 1870's and 1880's. These were in any case led by a rapid rise in cultivated land, from 2 to 4 million hectares between 1866 and 1891. From that date, only a million new hectares were brought into cultivation by 1914, and no significant increase in cereal productivity is recorded in the index calculated by Tucker, Romanian Peasant Revolt, pp. 75–78.

¹³ Eddie, Scott M., “Agricultural Production and Output Per Worker in Hungary, 1870–1913,” Joubnal of Economic History, XXVIII (June 1968), 197–222.CrossRefGoogle Scholar

¹⁴ In his unpublished paper cited in Table 2, “Quantitative Economic History in the Balkans: Observations on the Pre-1914 Period,” Jackson also calculates that the real value of total crop output rose 2.2 percent a year from 1862–66 to 1896–1900 but only 1.7 percent a year from 1901–05 to 1911–15. The rapidly rising value of total exports after 1900, stressed by Professor Hohenberg in his comment on this paper, were the nearly equal result of rising grain export prices and stiffer sharecropping contracts that extracted a higher percentage of peasant production. (See Adam and Marcu, Studii, 268–69.) That this heavier extraction was more important as a burden for future Romanian development than as an accumulation of new investment capital may be judged from the seriousness of the 1907 peasant revolt. See Tucker, Romanian Peasant Revolt and Eidelberg, Philip G., The Great Romanian Peasant Revolt of 1907: Origins of a Modern Jacquerie (Leiden: E. J. Brill, 1974Google Scholar) for evidence that the Romanian rural economy was not nearly comparable enough to the grain-growing regions of recent European settlement like Canada to permit much inference from comparable statistical trends in export growth.

¹⁵ By the end of the 1906–1911 tariff war with Austria-Hungary, moreover, the Serbian economy had converted over three quarters of its meat export value into processed sales that could anticipate a secure future now immune from the threat of border closings by neighboring Austria-Hungary on veterinary pretexts. See Lampe, “Financial Structure,” 21–29.

¹⁶ During the last two prewar decades a rapidly rising rural population was cancelling out the increase in per capita production that additions to cultivated land would have afforded (see Table 2). Crop lands in turn were rapidly approaching the arable limits, about half of total acreage. In the absence of higher productivity, lower birthrates, or more urban migration, this situation would make interwar Romanian agriculture synonymous with overpopulation and underemployment.

¹⁷ It should be noted that in the Romanian and Bulgarian cases there was a less prominent rise in the price of bread but instead sharp increases in the price of meat and vegetables. We may speculate that the greater Romanian and Bulgarian emphasis on grain production did keep bread prices down but encouraged neglect of other kinds of agricultural activity and thus left these goods in short supply.

¹⁸ The Balkan labor situation may well be comparable to the Italian experience with aggressive trade unionism and developing industry before the First World War, as observed by Gerschenkron, Alexander in “Notes on the Rate of Industrial Growth in Italy, 1881–1913,” in his Economic Backwardness in Historical Perspective (New York: Praeger, 1965), pp. 86–7.Google Scholar

¹⁹ Lines to the Black Sea and the Danube delta soon followed. The rail connection with Austria-Hungary was completed in 1879. Istoria Romîniei, V. IV (Bucharest, 1965), pp. 463–66;Google ScholarDobrovici, G. M., Istoricul dezvoltării economice şi financiare a Romîniei, 1823–1933 (Bucharest, 1934), p. 101.Google Scholar

²⁰ It was placed there on purpose, to guard against Ottoman attack and to strengthen the Bulgarian claim to the Macedonian lands lost in the Treaty of Berlin. Lampe, “Finance,” forthcoming in Southeastern Europe.

²¹ Lampe, “Financial Structure,” 86–88, 260; Industrijska Komora Kr. Srbije, Izveštaj [Report], Tables 9 and 10.

²² Giurescu, C. C., Istoria Bucureştilor (Bucharest, 1966), pp. 159Google Scholar, 172.

²³ Lampe, “Finance,” forthcoming in Southeastern Europe.

²⁴ From an annual emigration, principally to the United States, of 1,000 to 2,000 in the 1890's, the yearly average jumped to 10,700 for 1901–05 and then to 31,500 for 1906–10. British Parliamentary Papers, Sessional Papers, 1909, v. 95, no. 4208; Korisis, Die politischen parteien Griechenlands, p. 119. On the interwar problems of the Greek economy with refugees from Turkish territory, see Pentzopopoulos, Dimitri, The Balkan Exchange of Minorities and Its Impact on Greece (Paris, 1962), pp. 143–67.Google Scholar

²⁵ British Parliamentary Papers, Sessional Papers, 1907, V. 90, no. 3818, p. 6 and 1911, v. 93, no. 4649, p. 9.

²⁶ Literacy among army recruits for the Balkan Wars in 1912, the one common measure available, was 70 percent for Greece and 75 percent for Bulgaria. Lagging behind were Romania with 59 percent and Serbia with 50 percent. Dakin, Douglas, The Unification of Greece, 1770–1923 (London: Ernest Benn, 1972)Google Scholar, Appendix VI; Popoff, La Bulgarie économique, pp. 27, 31; Colescu, L., Statistica ştiutorilor de carte din România din 1912 [Statistics of Literacy for Romania in 1912] (Bucharest, 1915), p. 63.Google Scholar

²⁷ For Serbia, see the statistical sampling of peasant income, consumption and saving in Avramović, M., Naše seljačko gazdinstvo [Our Peasant Economy] (Sarajevo, 1927).Google Scholar The judgment of a Russian scholar on his own country in 1911 probably fits the Balkan states just as well: “The town population … consumes far more than the rural, of some products 10 to 20 times as much … the growth of consumption can to a considerable extent be explained by the growth of town population.” Cited by Olga Crisp, “The Pattern of Russia's Industrialization Up To 1914,” in Leon, Pierre, Crouzet, François, Gascon, Richard et al., Industrialization en Europe en XlXm siècle (Paris, 1972), pp. 370–71.Google Scholar

²⁸ As evidence we may note the location in Bucharest of almost half the Romanian industrial enterprises listed for 1901–02, a much higher fraction than in Belgrade or Sofia. Giurescu, Istoria Bucureştilor, p. 291; Lampe, “Finance,” forthcoming in Southeastern Europe.

²⁹ See Damé, Frederic, Bucharest en 1906 (Paris, 1907),Google ScholarIubileena kniga na grad Sofia, 1878–1928 [Jubilee Book of the City of Sofia, 1878–1928] (Sofia, 1928);Google ScholarIstorija Beograda, 3 vols. (Belgrade, 1974).Google Scholar

³⁰ Arcadian, N. P., Industrializarea României (Bucharest, 1936), pp. 125–26;Google ScholarLampe, John R., “Serbia, 1878–1912,” in Cameron, Rondo, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972), p. 127;Google ScholarStatisticheski godishnik na Tsarstvo Bulgariia, 1911 [Statistical Yearbook of the Kingdom of Bulgaria, 1911] (Sofia, 1912), p. 267.Google Scholar

³¹ Barkai, Haim, “The Macro-Economic Development of Tsarist Russia in the Industrialization Era: Monetary Developments, the Balance of Payments and the Gold Standard,” Journal of Economic History, XXXIII (June 1973), 339–71.CrossRefGoogle Scholar

³² For details, see Slavescu, V., Istoricul Băncii Naţionale a României, 1880–1924 (Bucharest, 1924Google Scholar) and Lampe, “Finance,” forthcoming in Southeastern Europe.

³³ The best secondary source on this complex relationship is Tourpalis, Dimitrios, Das Bankwesen Griechenlands (Würtzberg, 1933), pp. 27–51.Google Scholar

³⁴ British Parliamentary Papers, Sessional Papers, 1911, v. 93, no. 4285, 20–27. A good brief history of the pre-1914 Greek foreign debt is found in Wynne, William H., State Insolvency and Foreign Bondholders, V. II (New Haven: Yale University Press, 1951), pp. 283–348.Google Scholar

³⁵ Lampe, “Finance,” forthcoming in Southeastern Europe.

³⁶ Popescu, A. I., Variaţiile sezonale ale leului [Seasonal Variations of the Leu] (Bucharest, 1927), p. 7.Google Scholar For an extended discussion of Romania's early experience with the gold standard, see Kiriţescu, C. C., Sistemul banesc al leului şi precursorii lui [The Banking System of the Leu and Its Forerunners], V. I (Bucharest, 1964), pp. 327–36.Google Scholar

³⁷ The note issues of the Romanian and Serbian central banks roughly doubled between 1891 and 1911. After a late start the Bulgarska Narodna Banka raised its note issue more rapidly than any Balkan central bank after 1900. Kiriţescu, Sistemul banesc, V. II, Annex III; Lampe, “Financial Structure,” 199; Iubileen sbornik na Bulgarska Narodna Banka, 1879–1929 [Jubilee Book of the Bulgarian National Bank, 1879–1929] (Sofia, 1929), p. 184.Google Scholar

³⁸ Discount rates shot up from 5 to 7–8 percent “during the monetary crises of 1894, 1899–1900, 1904 and 1907, as the bank's preoccupation with protecting its reserves won out every time. Băicoianu, C. I., Istoria politicei noastre monetare şi Băncii Naţionale, V. II (Bucharest, 1932), pp. 392–94, 623–28;Google ScholarEndclopedea României, v. IV (Bucharest, 1941), pp. 683–84, 718Google Scholar. The regular rules of the gold standard would have required contraction of the bank's note issue, an even harsher penalty.

³⁹ Tutuc, I., Studiul valorilor mobilare [The Study of Movable Assets] (Bucharest, 1927), pp. 34–35.Google ScholarAleksić-Pejković, L., Odnosi Srbije ca Francuskom i Engleskom, 1903–1914 [Serbia's Relations With France and England, 1903–1914] (Belgrade 1965), p. 808;Google ScholarDoklad do Ferdinand I … 1887–1912 [Report to Ferdinand I … 1887–1912] (Sofia, 1912), pp. 254–5.Google Scholar

⁴⁰ Romania's pre-1914 railway network consisted of 3,552 kilometers, and 2,491 had been built by 1890. So had twenty bridges across the Danube and other rivers, plus modern harbor facilities at Galaţi and Brăila near the mouth of the Danube. Over half of the pre-1890 railway construction was already in place by 1879, when Serbia and Bulgaria had to start virtually from scratch. Istoria Romîiniei, v. IV, pp. 460–74; Cârtână, I. and Stafteric, D., Dunărea în istoria poporului român [The Danube in the History of the Romanian People] (Bucharest, 1972), p. 102.Google Scholar

⁴¹ These four banks were the Bank of Romania, Ltd., founded in 1865 with English capital and by 1912 having assets exceeding 50 million lei, the Banca Generală Româna, founded in 1895 with German capital from the Disconto-Gesellschaft and Bleichroder banks and by 1912 having assets approaching 150 million lei, the Banca de Credit Român, founded in 1904 with Austrian capital from Vienna's Länderbank and having assets exceeding 100 million lei by 1912, and the Banca Comerciala Româna, founded in 1906 by a long list of European banks and having assets by 1912 approaching 100 million lei. Sitescu, P. M., Die Kreditbanken Rumäniens (Bucharest, 1915), pp. 62–3.Google Scholar

⁴² About a million lei apiece in direct industrial participation came from three of the foreign banks and none from the fourth. Creangă, C. D., Raport asupra activitate Băncii Generale Române (Bucharest, 1919);Google ScholarSlavescu, V., Marile băncii comerciale din România [The Large Commercial Banks of Romania] (Bucharest, 1915), p. 42.Google Scholar An unknown and undoubtedly important fraction of their short-term credit went to help European oil companies. This was the one exceptional case where capital from large European banks flowed into the private sector of the Romanian economy in large amounts. See Pearton, Maurice, Oil and the Romanian State, 1895–1948 (Oxford: Clarendon Press, 1971), pp. 1–69.Google Scholar

⁴³ This was the Länderbank's Banca de Credit Român, with 10.6 of its 87 million lei in short-term credits for 1915 granted to industry. Vijoli, A., Cercetare asupru capitalului financiar in ţare noastre [Research Concerning Finance Capital in Our Country] (Bucharest, 1949), p. 120.Google Scholar

⁴⁴ Constantinescu, N. N., Din istoricul formării şi dezvoltarii claset muncitoare din România [Concerning the Formation and the Development of the Working Class in Romania] (Bucharest, 1959), pp. 318–19;Google ScholarAnuarul statistic al României, 1915–1916 (Bucharest, 1919), pp. 232, 238;Google ScholarToshev, G., in the Bulgarsko Ikonomichesko Druzhestvo [Bulgarian Economics Society journal], XVII (1915), 431Google Scholar; Industrijska Komora Kr. Srbije, Izveštaj, 1910, Table 1; Tsouderos, La relèment économique de la Grèce, p. 175. On the obstacles to joint stock incorporation posed by the Byzantine legal code adopted by the Greek state, see Pepelasis, A. A., “The Legal System and the Economic Development of Greece,” Journal of Economic History, XIX (June 1959), 173–98.CrossRefGoogle Scholar

⁴⁵ Gould, J. D., Economic Growth in History (London: Methuen, 1972), pp. 354–55.Google Scholar

⁴⁶ For timber with joint-stock capital seventy percent foreign, the Goetz company was admittedly set up by Austrian interests in Vienna in 1873 to exploit forests elsewhere in the Dual Monarchy. But the crash of 1873 turned Goetz and his associates away from the Monarchy to accept the proposal of the Banca Marmarosch-Blank to buy timber lands in Romania. By 1883 the firm had incorporated with its head office in Bucharest and only a branch in Vienna. By 1902 Romanian investors, urged on by the Bucharest bank, had bought up over a third of the company's stock, now totaling 15 million lei, and enjoyed equal representation with the Austrians on the board of directors. In the last prewar years the firm's sawmill, the largest and most modern in Romania, employed 3,000 workers, one third of whom were immigrants from Austria-Hungary. Most of the staff and technicians were Austrian.

For metallurgy with joint-stock capital seventy-four percent foreign, all three of the combined iron foundries and machine shops operating in 1912 in Craiova, the country's chief railway head west of Bucharest and an industrial center today, bore Austrian or German names. Only one of seven joint-stock metallurgical firms did not bear such a name. And this was the nail factory of the young Romanian doctor turned industrialist, Emil Costinescu, almost half of whose three million lei in paid-capital was held by a scattering of Austrian investors and one third of whose labor force were non-Romanian immigrants from Austria-Hungary.

For paper with joint-stock shares forty-six percent foreign, the picture is more mixed because the largest firm, the Letea factory, was founded in 1881 on state initiative with King Carol I as the largest stockholder. But typical of the other dozen joint-stock firms in the field was the Schiel Brothers enterprise. They came from Braşov for centuries a center of German, settlement and just across the Romanian border in Austria-Hungary. With them they brought capital and skilled labor. See Banca Marmarosch-Blanc –1923 (Bucharest, 1923), p. 93;Google ScholarUnd, K.Handelsministerium, K., Rumänien: Landes und Wirtschafts Statistische und Topographische Übersichten (Vienna, 1917), pp. 155–60, 171–72;Google ScholarPaianu, N. I., Industrie mare, 1866–1906 [Large-scale Industry, 1866–1906] (Bucharest, 1907), pp. 82, 90;Google ScholarCostache, N., Industria hârtiei în România [The Paper Industry in Romania] (Bucharest, 1929), p. 6.Google Scholar

⁴⁷ The bank contributed one-third of the small founding capital of 1.2 million lei and, more important, the services of board member I. G. Cantacuzino, a trained engineer who had already, set up the country's first Portland cement works in 1890. Banca Marmarosch-Blanc, pp. 28–29. There is a striking parallel between Cantacuzino's career with the bank and that of Miloš Savčić, the Serbian engineer who was director of the Serbian bank most active in industrial promotion. See Lampe in Cameron, ed., Banking and Economic Development, p. 151.

⁴⁸ Although figures are lacking on the total benefits from the Serbian legislation, the fact that parliamentary infighting kept it from being applied to more than one fifth of the qualified enterprises suggests a lesser impact. The Bulgarian legislation applied automatically to all qualified firms from the start, and the Romanian legislation first to 70 percent and then to all of them.

⁴⁹ Anuarul statistic al Romdâniei, 1915–1916, 256; Lampe, “Financial Structure,” 44, 186; Doklad do Ferdinand I, p. 195. The most obvious danger of taking these percentages as conclusive evidence is of course the risk that truly protective tariffs for particular goods would cut off their import entirely. A comprehensive presentation of ad valorem rates must await their calculation from the French-style tariff legislation throughout the Balkans that listed most duties by quantity. A start for converting these specific rates to ad valorem has been made for Romania in Lampe, John R. and Jackson, Marvin R., “The Genesis of the State Sector in the Balkans,” a paper presented to the VIth International Congress on Economic History, Copenhagen, Aug. 19–23, 1974.Google Scholar

⁵⁰ Some 110 industrial firms with a total capital of 30 million lei had received encouragement by 1894, a year when total capital in Serbian and Bulgarian industry combined was less than 20 million dinars and leva. N. N. Constantinescu, Din istoricul formării, p. 192; Lampe, ”Finance,” forthcoming in Southeastern Europe, Table I.

⁵¹ So the Liberal party is consistently identified in postwar Romanian historiography. At the same time, the liberals' championing of balanced industrial growth has won increasing sympathy from scholars in a society pursuing the same strategy, albeit along socialist lines. See the late Constantinescu, Olga, Critica teoriei: România ţara eminamenta agricolă [A Criticism of the Theory of Romania As a Predominantly Agricultural Country] (Bucharest, 1973Google Scholar.)

⁵² The introduction to Hălăceanu, C., Proiectul de lege industriala (Bucharest, 1912), pp. 8–11Google Scholar, is by Vintilă Brătianu, one of the famous brothers who dominated Liberal party leadership before and after the war.

⁵³ Sir John Hicks dates the Administrative Revolution, i.e., the first comprehensive state programs to promote economic growth, even among the major European governments no earlier than the First World War. See his A. Theory of Economic History (New York: Oxford University Press, 1969), pp. 99Google Scholar, 162.

⁵⁴ A Romanian case of this confusion is Cassasovici, C., Trustul zaharului [The Sugar Trust] (Bucharest, 1915Google Scholar). A good antidote to confusion is Eric Maschke, “An Outline of the History of German Cartels from 1875 to 1914,” in Crouzet, François, Chaloner, W. H. and Stern, W. M., eds., Essays in European Economic History, 1789–1914 (New York: St. Martin's Press, 1969), pp. 226–58.Google Scholar

⁵⁵ The less than conclusive evidence on Romanian rates of industrial profit during the last prewar decade may be found in Hălăceanu, Proiectul de lege industriale, pp. 17–18, and Arcadian, Industrializarea României, pp. 125–26. The comprehensive enterprise records needed to pin down this point have been lost during the two world wars.

⁵⁶ The evidence of domestic over-capacity and the inability to develop exports in most branches of Romanian industry has been assembled in an unpublished paper by Professor Marvin R. Jackson, Department of Economics, Arizona State University, Tempe, “Economic Change in Romania, 1862–1914.”