Spanish Railway Development and Industrial Transformation

The Railway in Spain: Catalyzing Economic Change

The railway in Spain was enacted due to the need for faster and lower-cost product transport. The first railway line was inaugurated in 1848 to join Barcelona and Mataró. However, the expansion of railways across the rest of Spain did not occur until 1855 with the General Law of Railways.

Railroad construction was dependent on state protection and subsidies, as well as the entry of foreign capital, especially from France. The Spanish rail tracks had a broad gauge, and installing steam engines meant more capacity to transport goods, but this also hindered trade with the rest of Europe. Nevertheless, the railroad allowed for the movement of people across Spain.

Expansion of Mining and Industry

There was an expansion of mining due to rising production, technical progress, and exploitation driven by the involvement of foreign companies. The major mines extracted lead, mercury, copper, and zinc. However, the two most important resources were coal and iron.

Coal and Iron Resources

• The Spanish coal was of low quality. Competitiveness in the coal sector was hampered by paramilitary activity and the need for state intervention in capital investment.
• Iron had an advantage: the principal mines were close to the sea, which made transport costs cheaper.

Steel production began to develop in Andalusia, with subsequent efforts in Marbella, Asturias, and Bilbao (Vizcaya), with the latter becoming the most important region in Spain. This led to Basque industrial diversification; the resulting profits fueled the development of a major capital equipment industry. Consequently, companies specializing in shipbuilding and mechanical constructions were consolidated.

Foreign Trade and Banking

Exports rose in Spain over the GDP, while imports remained slightly below, with agricultural products being the most prevalent exports. Following the loss of the American colonies, there was a change in foreign trade patterns with America, which were subsequently filled by trade with Britain and France.

The law establishing issuing banks and credit societies allowed for the introduction of modern banking, thanks to investments by foreign banks. The Spanish economy developed quite slowly, primarily because capital was invested in land disentailment and expenditures were not optimally managed.

In the late nineteenth and early twentieth centuries, Spanish banks emerged with capital derived from Cuba and industrial investments.

The Process of Urbanization

Population increase resulted in outward migration to America and internal migration toward urban and industrial centers. This internal migration caused cities to struggle to cover the entire population, leading to problems with housing and food supply.

Urban Renewal and Social Classes

Urbanism was renewed, involving the construction of large widenings in major cities like Barcelona, Madrid, San Sebastián, and Bilbao. Such development necessitated the construction of new housing.

The population became divided into classes:

Upper Class

• The royalty and all their family.

Middle Class

• The bourgeoisie.

Lower Class

• The common people.