The Industrial Revolution in Spain

PIGS - a convenient and sarcastic abbreviation for Portugal, Italy, Greece and Spain, EU’s top economic troublemakers in the early 2000s. Surprisingly, most of these countries also entered industrialization late. While the burgeoning Germany’s industrial output surpassed Great Britain’s by the start of the 1900s. Spain in particular remained reliant on agriculture and ore exports. What did Spain experience during the tumultuous Industrial Revolution of the 1800s?

From Riches to Rags

Rich in culture, but also in minerals since ancient times. From the times of old Hispania to the rule of the Muslims and the age of the empire, Spain enjoyed wealth from its earth. But slippery hands wasted wealth.

Earth blessed Spain with rich mineral resources such as silver, gold, and mercury. From Phoenicians in the ancient times to the Moors of the Medieval age, they all exploited this wealth. The Kingdom of Spain under its Catholic monarchs showered in silver with silver coming from the Americas.

Natives mining in Potosi, a major source of silver
 in the Americas for the Spanish Empire

Slippery hands, though, wasted riches. Unfortunately, a lot of Spanish Kings had such. Morons that spent so much resources on numerous wars, palaces, and bigotry. Adding the nobility, they all dragged Spain down allowing the Dutch, English, and French to surpass them.

Fast forward to the 1830s, an unproductive and stagnant economy straddled Spain, especially its agriculture. Naturally, the Spanish soil cannot sustain large scale grain cultivation. Whatever grain fields existed in the country suffered during the Napoleonic Wars in the 1800s. During the following decades, Spain’s agriculture continued to rely on small farms with vast uncultivated lands due to uninterested owners, mostly, the nobility and religious orders.

While agriculture floundered, industries remained limited in size in Spain. Most industries, especially textile, concentrated in the Catalan region. Toledo and Trubia manufactured weapons. Glass works operated in La Granja. Small iron foundries found in the Basque Region.

These industries relied on trade especially with the vast colonial empire in the Americas, but it collapsed in the 1810s and 1820s. Cuba and Puerto Rico remained the only Spanish colonies in the Americas. Fortunately, its sugar cultivation created a market for the little industries Spain had.

Cubans cutting sugar canes

Much of the archaic institutions that prerequisites industrialization began even before Napoleon’s invasion. Madrid abolished Medieval age privilege of autonomies of cities and regions followed by tax reforms to boost state coffers. They also abolished internal customs aimed at creating a large market for industries. In 1813, Madrid also abolished the guilds. Spain followed the trends of its contemporaries with regards to the major reforms.

By the 1830s, Spain underwent a story of riches to rags. Its agriculture, small and unproductive, while the size of its industries remained concentrated in some regions and cities only. Furthermore, the loss of the colonies deprived Spain a market for its goods. Despite the reforms, it failed to create significant benefits by the time of Queen Isabella II ascension to the throne in 1833.

Queen Isabella II

Isabelline Era Politics and Capital

A recipe for an industrial revolution included political stability. Unfortunately, Isabella II’s saw none of it. As a result, it put her country’s economic progress at risk.

In 1833, a 3-year old Isabella ascended to the throne of Spain, but the dead King’s brother Don Carlos contested ther succession igniting the Carlist War. Don Carlo’s party catered to the conservatives. The Queen’s side represented by her mother Maria Cristina and General Baldomero Espartero formed an alliance of convenience with the liberals

Come time the war ended in 1839, Maria Cristina and General Espartero fought over the regency and after that a merry go round of Premiers took the helm of government. Liberals divided each faction received support from military generals who intervened via coups. Spain turned into a banana republic with few to no Premier reaching 5 years in power.

Amidst the political instability, Madrid made developments in agriculture and land reforms. During the Carlist War, huge lands of the privilege became targets for selling to raise funds. In 1833, Madrid abolished the Maesta, a guild for sheepards, which free up the lands dedicated to the group for selling.

Juan Mendizabal

From 1835 to 1836, Premier Juan Alvarez Mendizabal confiscated lands of religious orders for reselling and income generation. He hoped to build a new powerbase for the monarchy composed of supposed grateful prosperous peasants who would buy the lands. Thinking ahead, he also aimed to improve the productivity of the agricultural sector, expand the national market, and spur industrial growth by catering to them.

Mendizabal’s reforms though failed with the royal family, officials, generals and industrialist buying much of the lands and entrenching an oligarchy. It created, as Raymond Carr wrote:

“The amalgam of speculators, industrialists, landowners, together with the prosperous lawyers and ennobled generals who were its political voice par excellene, constituted what democrats were beginning to call a ruling oligarchy - estimated at five hundred families.”

Land reforms continued after the Carlist War. In 1841, Madrid redistributed lands of secular clerics (priest not belonging to an order and manage parishes and dioceses). In 1855, the Madoz Reforms redistributed municipal common lands. Most of the profits from the sale though, rather than financing investments went into debt. 

After the war, the political instability as well as uncertainty of policies discouraged investments both domestic and foreign. The government also continually ran into budget deficits. In 1845, the Mon-Santillan tax reforms took effect and hoped to manage the deficits, but to no avail. Hence, the state took a back seat in investments in industries.

Local banks provided much needed domestic capital. Manuel Girona founded in 1844 the Bank of Barcelona followed by group of financiers such as Jose de Salamanca and Gaspar Remisa founded the Bank of Isabella II inspired by France’s Credit Mobilier. In 1852, Evaristo Arnus Ferrer established his own bank that specializes in stocks, especially railroads stocks. By 1855, the Basque Region witnessed the creation of the Bank of Bilbao that invested in local heavy industries. Banks became a popular catalyse of domestic capital for investments to industries.

Manuel Girona

Profits from trade with Cuba and Puerto Rico flowed into the country. For instance, the Ferrer’s of Barcelona built their business from profits from the colonies.

Risk tolerant foreign investors also placed bets on Spain. Much of the investments came from France, Britain and some from Belgium. British investment initially dominated in the 1840s, but soon overshadowed by the French.

France’s Credit Mobilier entered the Spanish market, initially providing discount banking and insurance then moved to investments in coal mining, brick manufacturing, and sugar refining. 

Besides financing, France also provided talent with French mine workers sharing their expertise to French clerks administering Spanish railroads. French interest in Spain became so important, Napoleon III later feared a prospect of a German Hohenzollern in the Spanish throne.

Isabelline Industrialization

Railroads benefited from the inflow of investments and credit, mostly French. Companies such as Credito Mobilario Espanol of the Pereire Brothers and Sociedad Española Mercantil e Industrial of the Rothschild provided the funding. Railroad construction started late and slowly beginning in 1848 with the Barcelona-Mataro Line. Railroad expansion picked up pace after the passing of the 1855 Railway Act that provided incentives, such as duty free construction materials.

Barcelona-Mataro Line (From: Info Barcelona)

Textiles, especially that of Catalonia, continued to be a spearhead of Spain’s industry. In 1832, Bonaplata Factory started its operation powered by steam engines. By the 1850s, Catalan hosted the 4th largest textile industry in Spain processing 95% of Spain’s cotton import.

Cotton drove the textile industry since the 18th century, but wool started to take a share in the mid-19th century. With the rise of steam-powered machineries, the industry took its roots. Starting in 1838, the father of the prominent Catalan politician Alfonso Sala Argemi founded the first wool fabricante in Tarrasa. From that point, it expanded and the towns of Tarrasa and Sabadell became the center of the trade.

Spain's mining industry upsurged during Isabella’s reign. In 1854 the Belgian industrialist Jules Hauzeur with the capital from various Belgian investors established the Royal Company of Asturias to exploit a zinc mine. A touch of political favor helped the establishment of the company with the connection being Finance Minister Alejandro Mon holding a board membership. On the other hand, French investments flowed in copper mines of Mines de Cuivre de Huelva from 1835 which began to export its output to Britain. Coal mines also began to be dug in various localities, including Asturias, Leon, and Cordoba.

Felguera Factory in Asturias, 1920s

Other Spanish industries began to improve and expand. In 1832, Spain first blast furnace began operation in Marbella in Málaga in southern Spain, but it used charcoal rather than coke. The first coke power blast furnace started working in 1848 in Leon. Other furnace also began to sprung up mostly in the Basque Region with the likes of Altos Hornos y fabricas de Hierro y Acero de Bilbao.

In 1866, Spain experienced an economic crisis. Banks began to fail, for example, Bank of Isabella II faced hardships and merged with Bank of San Fernando to survive. Unemployment and discontent rose. Exacerbated by scandals of the Queen, and revolution, the Glorious Revolution, erupted that toppled Isabella II.

Glorious Revolution

In 1868, a group of officers led by Juan Prim and Francisco Serrano led the so-called Glorious Revolution that ovethrew Queen Isabella II. Their government, despite turbulence, led to some developments in the economy, most importantly in the sector of mining. Eventually, order and stability returned to the country.

Mining received the biggest boost in this period. The need for revenue forced the government to nationalize all minesthen hand over concessions to investors both local and international. Mercury mining resumed in Almaden and lead mining in Cartagena. Most important of this mines laid in Rio Tinto in Andalusia.

Wharf in Rio Tinto, 1876

The Rio Tinto mines developed into Europe’s largest copper mine. Its developments originated from the establishment of the Rio Tinto Mining Company by the Scottish Hugh Matheson. Through a capital of 3.7 million pounds, the company began operation in 1873 and by the end of the century, it supplied 10% of the world’s copper demand.

Another significant industrialization event under the Revolution happened in the Basque Region. It witnessed an surge in industrial activity, much due to the introduction of the Bessemer Process that allowed the exploitation of the region's low phospherus iron ore. The importation of cheaper Welsh Coal from the 1870s, and lasted until 1900s, supported further the development of heavy industry in the area.

Blast furnace in Nuestra Señora del Carmen, 1870s

Ironworks alongside steelworks began to rise in Vizcaya driven by British demand. The export produced enough revenue to finance the importation of British coal. Moreover, it also allowed the development of the local financial market, such as the establishment of the Banco de Bilbao in 1857 and later a stock market by 1890.

Several men took the opportunity to become captains of industry. Jose Maria Martinez de las rias and Ramon de la Sota rose to prominence in the business landscape of the Basque Region. Men like them invested in other industries precipitating diversification.

With profits from heavy industries, Basque industrialists invested in railroads. Lines such as the Bilbao-Tudela Line came into being. Shipbuilding also began to rise in the region later becoming a highly regarded in the continent.

By 1873, Spain descended into complete anarchy. The monarchy, replaced by an unstable republic that faced widespread revolts, especially the renewed conservative Carlist push in the north. The only political achievement the period attained laid with universal male suffrage. By 1874, a military coup declared Isabella II's son Alfonso XII as the new King, restoring the Bourbon Kings in Madrid.

Alfonso XII

Restoration Industrialization

Following the coup that restored the Bourbon monarchy, the period saw a stable democratic, albeit oligarchic, government. Masterminded by Antonio Canovas del Castillo, the so-called Turno Pacifico or switching of leadership between 2 parties from time to time brought much needed stability. Under the restored monarchy and Canovas, Spain continued to industrialize.

The Restoration era witnessed a boom in wine and cash crops for a while. When in the late 1860s France suffered from a phylloxera epidemic in its vineyard, their wine output catastrophically dropped and Spain swooped in. By 1868, France imported Spanish wines and by 1882 up to 1892, 30 steamers per week transported wine from Tarragona to France. This gave wheat growers in regions of La Mancha and Rioja to profit as well by shifting cultivation. Hey day failed to last though when in 1885 the same phylloxera hit Spanish vineyards.

A cartoon of phylloxera enjoying wine, 1890

Besides wine, Spain offered other produce to the world. For instance, the Iberian country took a leading spot as an exporter of olive oil with its demand driven by Spanish migrants in the Americas. Citrus also became a valuable cash crop that sustained Spanish agricultural export until the 1900s.

In parallel to the boom of cash crop, Catalonia continued to be a leading industrial powerhouse within Spain. Wool and cotton continued to bring wealth, so much so they began to invest in new industries. Men like Juan Guell and Valentin Esparo made contributions in this effort. Catalans invested in railroads such as the Saragossa-Barcelona Line and the Madrid-Zaragoza-Alicante Line. 

In heavy industries, 3 big flrms and 60 minor companies made the push. The largest being the La Maquinista Terrestre y Maritima, which focused on textile machinery, small ship building, and marine engines. The region faced competition from the Basques in Northern Spain.

Fate frowned on Spain at the end of the 19th century. It lost a war against the United States, letting go in the process the colonies of Cuba, Puerto Rico, and the Philippines. Moreover, the country’s politics pointed towards chaos once again with the death of Antonio Canovas del Castillo in 1897. Equivalently looking dire also was the state of Spain’s industrialization.

End of the Century Results

Spain underwent a turbulent chapter in the 19th century. While politics reflected a situation of a banana republic with, fortunately, the last 30 years saw an oligarchic democracy, the economy transformed. Though the results lagged behind its contemporaries for different reasons.

By 1900, results of Spain’s industrialization became apparently weak. Bilbao boasted as one of Europe’s center of shipbuilding. Iron and Steel took 25% of Spain’s exports. But despite this developments, Spain remained an agricultural country. In 1797, Spain’s total population worked in the following sectors, 65% in agriculture and mining, 13% in industries, and 22% in the service sector. Fast forward around 1900, about 75% still worked in agriculture, a sector that took ⅓ of Spain’s GDP.

Despite agriculture dominating the economy, its productivity remained poor. Indeed, cash crops gave Spain badly needed foreign revenue. Furthermore, the area of cultivation expanded fro 26 million acres in the 1830s to 46.5 million acres during the 1880s. But, the output from this failed to outpace the rising population resulting to the same per capita result, hence, a stagnant situation.

On the other hand, industrialization occurred but failed to catch up with Spain’s neighbors due to multiple reasons. These reasons included the domination of foreign credit and investment, low domestic capital, expensive power cost, inefficient transportation, and finally addiction to protectionism. All of these contributed in the performance of Spain’s industrialization.

19th century investment posted national security as today. Foreign ownership brought prospects of profits being repatriated to hoe countries. For Spain, France controlled much of this investment so much so Paris turned livid of a prospect of a Hohenzollern in the Spanish throne caused the 1971 Franco-Prussian War. French domination for instance appeared in railroads when in 1914, Paris controlled 85% of Spain's railroad. 

Spain’s reliance on foreign investment laid also in its incapacity to provide the needed capital. Many mines went to foreign consortium due to the lack of local money to finance such endeavours. More over, the oligarchs who took the lands from the reforms satisfied themselves with rent from tenant farmers rather than venturing to risky businesses; hence, the lack of local ownership on vital enterprises.

Another reason laid with mother earth’s endowment of resources. Indeed, Spain held numerous rich deposits of minerals but it lacked the main source of power for an industrial revolution, high quality coal. Coals in Asturias failed to produce the same amount of power as those in England and Germany. Either charcoal or imported coal then became a primary fuel for the steam engines raising prices and dampening profits.

Adding to the high energy cost, Spain also suffered from an inefficient transportation network. Constructed railroads failed to efficiently cover much of the country hampering distribution. For instance Galicia had scanty lines while Almeria had none. This made distribution or transportation of goods within the country expensive. This caused the concentration of much of the industries in the coast, leaving the interior in the hands of an unproductive agriculture.

Mountain Mining Inclined
Plane in Asturias

The most important of all, Spain, especially the business sector, addicted themselves to protectionism or high tariffs on imports. A cabal of Catalan, Basque, and Asturian businessmen who influenced Spain's politics to suit their needs, led the charge. The high price of energy and transportation made local product expensive compared to the cheaper British and even French versions. To protect themselves, they requested for tarrifs which by the early 1900s, Spain imposed the highest tariffs in the continent.

The addiction to protectionism made Spanish products uncompetitive. The umbrella of tariffs shielded industry from competition but it also siffled their sense of innovation. Furthermore, it prevented Spain from finding out its comparative advantage that would potentially drive their economic growth.

Due to the weakness of the Spanish industrial complex, Spain relied for its source of foreign currency the export of primary goods, cash crops and minerals. Unfortunately for mining, much of the needed foreign earnings went to foreign investors, leaving Spain relying on special crops for survival. The lack of development turned Spain into one of the poorest countries in Europe. Thus, when faced with the industrial might of the United States in late 1890s, it lose.

Summing Up

Because of Spain’s turbulent politics adding natural and cultural characteristics, Spain failed to take advantage of the industrial revolution. Its reforms and policies created a highly entrenched oligarchy that stifled innovation and rule of law that a successful industrialization needed. Hence, a stagnant agriculture, foreign dominated economy, and isolated pockets of industrialization, with a heavy dose of addiction to protectionism spelled Spain’s industrial revolution narrative.

Bibliography:

Website:

“On the Industrial History of Spain.” European Route of Industrial Heritage. Accessed on December 30, 2024. URL: https://www.erih.net/how-it-started/industrial-history-of-european-countries/spain

Gomez-Diaz, Donato. "Industrial Revolution in Spain.” ResearchGate. Accessed on December 30, 2024. URL: https://www.researchgate.net/publication/327350646_Industrial_Revolution_in_Spain/reference

“Industrial Tradition.” GPAINNOVA. Accessed on December 30, 2024. URL: https://www.gpainnova.com/culture/barcelonas-industry-tradition/

Books:

Carr, Raymond. Spain: 1808 - 1975. New York, New York: Oxford University Press, 1982.

Tortella, Gabriel. Catalonia in Spain: History and Myth. Cham, Switzerland: Palgrave Macmillan, 2017.