Power failure: the electrification of Central-Eastern Europe, 1918–39

Abstract

The authors argue that the new states of Central-Eastern Europe after 1918 faced a tension between investing in emerging network technologies (such as electricity) and safeguarding their newly gained national sovereignty against foreign influence. This can be seen as a dilemma between energy equity and energy security, which was present elsewhere as well, but particularly important in the region for three reasons. First, the new borders increased the need for new infrastructure to connect locations with energy resources (especially coal and water) to the centres of demand. Second, the region faced a shortage of capital and relied more than other parts of Europe on foreign direct investment. Third, the region was dependent on foreign technology and affected by cartel agreements between the leading foreign companies. Based on new data on the production and consumption of electrical energy across the region, the authors argue that this dilemma impeded the electrification of the region.

Keywords:

• Electrification
• security
• equity
• Central-Eastern Europe
• interwar period

Acknowledgements

We wish to thank Mark Harrison, Alex Klein and Tamas Vonyo and seminar participants from Humboldt University, Stellenbosch University and the University of Warwick for discussion and comments. We are also grateful to the editor and two anonymous referees for their helpful comments.

Notes

1. Wolf, "1918 als Zäsur?”

2. Hoffmann, “Democracy and Associations.”

3. Crayen and Baten, “Global Trends in Numeracy;” Roses and Wolf, “Aggregate Growth, 1913–1950.”

4. van Leeuwen and Földvári, “Capital Accumulation and Growth.”

5. Wandschneider, “Central Bank Independence.”

6. van der Vleuten and Kaijser, Networking Europe. Transnational Infrastructure; Lagendijk, Electrifying Europe; Hausmann, Global Electrification.

7. Bordo, Edelstein, and Rockoff, “Was Adherence to the Gold Standard.”

8. Wolf, Heinemeyer, and Schulze, “On the Economic Consequences of the Peace.”

9. Veblen, “The Passing of National Frontiers,” 387.

10. Devine, “From Shafts to Wires;” Ristuccia and Solomou, “Electrical Power as a Case Study.”

11. Carlton, “The Location and Empolyment Choices of News Firms.”

12. Lewis and Severnini, “The Value of Rural Electricity”.

13. Kander and Stern, “Economic Growth and the Transition.”

14. Kline and Moretti, “Local Economic Development.”

15. Eloranta and Harrison, “War and Disintegration, 1914–1950.”

16. Ausschuß zur Untersuchung der Erzeugungs- und Absatzbedingungen der Deutschen Wirtschaft, Die deutsche Elektrizitätswirtschaft, 16; Petersen, “Technische und wirtschaftliche Entwicklung der Elektrizitätserzeugung und –verteilung,” 182–3.

17. Hausmann, Hertner, and Wilkins, Global Electrification.

18. Hausmann, Hertner, and Wilkins, Global Electrification, 59–62.

19. Svennilson, Growth and Stagnation, 102–3.

20. Van Leeuwen and Földvári, “Capital Accumulation and Growth.”

21. Hallon, “Die Konzeption einer systematischen Elektrifizierung,” 62–3.

22. Tománek, Elektrisace Ceskoslovenska 1918–1928, 131; see the Law about the electricity fund, 22.03.1929 § 7 in Siegel, Die Elektrizitätsgesetzgebung der Kulturländer der Erde, 505.

23. Kubín, Rozvoj energetiky v Československu, 83.

24. Krecke, Die Energiewirtschaft der Welt, 142–3; Hallon, “Die Konzeption einer systematischen Elektrifizierung,” 58–74; Hallon, “Systematic Electrification in Germany and Four Central Europe States,” 141.

25. Rocznik Statystyki Rzeczypolitej Polskiej, 123.

26. Jezierski and Leszczynska, Historia gospodarcza Polski, 280–2; Krecke, Die Energiewirtschaft der Welt, 181.

27. Kraus, Weiße Kohle für Österreichs Bahnen, 24; Rotschild, “Size and Viability,” 168–70.

28. Siegel, Die Elektrizitätsgesetzgebung der Kulturländer der Erde, 314; Sandgruber, “The Electrical Century,” 236; Hinterbuchner, Die Entwicklung der oberösterreichischen Elektrizitätswirtschaft, 5.

29. Kittler, Der international elektrische Energieverkehr, 48.

30. Szterényi and Ladányi, A magyar ipar a világháborúban, 246–7; Hajdú, “A magyarországi vízi energia hasznosításának száz éve’,” 946–8; Jakobovits, A villamos energia törvényjavaslat-tervezetröl, 473–4.

31. Haidegger and Nagy, “Staatliche Förderung der allgemeinen Energieversorgung in Ungarn,” 226–7.

32. Hoór-Tempis, Az európai államok, 5.

33. See MOL Z425_3_23 Erősáramú kartellegyezmény [Cartel agreement of the producers of high-current electro-technical machinery], sent to the Department of Trade on 3 November 1931, actually a prolonged agreement from 1908); MOL Z248_4_85 Direktion, Hungaria Electrical Ltd., A villamosítás problémája [The electrification problem] Budapest, 9 March 1929.

34. See Siegel, Die Elektrizitätsgesetzgebung der Kulturländer der Erde, 54; Haidegger and Nagy, “Staatliche Förderung der allgemeinen Energieversorgung in Ungarn” or the respective parliamentary debates in Hungary 1927–31.

35. Verebély, Tanulmány Csonkamagyarország villamosításának tervszerű fejlesztésére [Study for the systematic electrification of Hungary], 10–12.

36. Siemens Corporate Archives 9345 Siemens, Wirtschaftspolitische Abteilung: Ungarn [Report, Siemens economic policy department, Berlin, 1938], 24–6.

37. Zipernovszky, Report of the Year 1931; Dembitz, A villamos energia törvényjavaslathoz.

38. Pétery, Magyarország villamosításának fejlödése az 1930–1933, 59.

39. Hallon, “Die Konzeption einer systematischen Elektrifizierung,” 70–1.

40. Ránki, “Hitel vagy piac.”

41. Davenport-Hines, “Vickers and Schneider.”

42. Landau, “Poland and America.”

43. Madajczyk, “Spory wokol sprawy elektryfikacji,” 154.

44. Ibid., 174.

45. Popkiewicz and Ryszka, Przemysl Ciezki Gornego Slaska, 210–12.

46. Madajczyk, “Spory wokol sprawy elektryfikacji,” 175f.

47. Landau, “Poland and America,” 44.

48. Verebély, A New System for Main Line Electrification, 923.

49. Kittler, Der internationale elektrische Energieverkehr, 142–6.

50. One such company was the Donau-Wasserkräfte AG (Danube Water Power Ltd.), founded in 1920 (K 10,000.000) for the sake of generating water power on the Danube (Moson-Danube-stream), by Electric and Transport Undertakings Co. Ltd, called Trust for short, uniting mostly Hungarian and German capital. The legal person of the Danube Water Power Ltd. was maintained, obviously in the hope of finally having the chance to build the proposed water-power centre; however, these hopes vanished, the capital of the company diminished and no dividends were paid during the whole interwar era. Compass Pénzügyi Évkönyv/ Finanzielles Jahrbuch, 682, 696.

51. Verebély, A New System for Main Line Electrification, 924, 929.

52. Haidegger, “Die Energiebilanz und ihre Gestaltung;” Haidegger, “Die systematische Untersuchung der Energiewirtschaft Ungarns,” 11–25, 47–9.

53. Hidvégi, “A Ganz-Jendrassik dízel motorkocsik Argentínában;” Hidvégi, Anschluss an den Weltmarkt: Ungarns elektrotechnische Leitunternehmen 1867–1949.

54. See the parliamentary debates about the law on systematic electrification of 1931, such as the speech of Prof. Söpkéz on 26 September 1930 or a memorandum on one of the largest Hungarian power-supply holding companies, the Hungaria Electrical Ltd., MOL Z248_4_85 A villamosítás problémája [The electrification problem], 1929, Budapest, 9.03.1929.

55. Éber, “A magyar nemzeti tőke alakulása,” 203.

56. MNL Z51_221 Agreement. Government, Kingdom of Hungary ‘acting on behalf of certain Hungarian Cities’/Speyer & Co., New York. Hung. Cons[olidated] Municipal Loan, 11 July 1925.

57. “Magyar Gazdaságkutató Intézet 1937,” 99.

58. Ránki, “Hungarian General Credit Bank,” 359; Ránki, “Hitel vagy piac.” .

59. This is reflected in several parliamentary debates, for example, Minutes of the National Assembly 1922–1925, vol. XXII, Sessions 26 March–10 April 1924, Session 10 April 1924, p. 314, Minutes of the House of Representatives 1927–1931, Vol. XIII, Sessions 21 May –12 June 1928, Session 25 May 1928, p. 164, Minutes of the Upper House, 1927–1931, Vol. IV, Sessions 20 December 1928 – 28 June 1929, Session 28 June 1929, p. 358, Speech by János Hadik, to the issue of mortgage loans for agriculture and water-regulating companies, Minutes of the National Assembly 1922–1925, Vol. XXIX, sessions 30 January– 13 February 1925. Session 374, 11 February 1925, p. 307.

60. Kuzmicki, “Governmental Control,” 594.

61. Bodócsi and Haidegger, “Organization of Private Electric and Gas Utilities,” 548.

62. Etemad and Luciani, World Energy Production (1800–1985); Mitchell, International Historical Statistics: Europe 1750–2005; Svennilson, Growth and Stagnation in the European Economy, 114–15.

63. For Poland, we rely on the data in Pilatowicz (“Rozwoj elektryfikacji w Polsce Miedzywojennej”), for Czechoslovakia we complement Mitchell (International Historical Statistics) using data from the Czechoslovak National Committee (“Energy Resources and Power Development in Czechoslovakia Since 1924”) and Annuaire statistique de la république Tchécoslovaque (Office de la Statistique de la République Tchécoslovaque/Orbis: Prague, 1938). Hungarian sources include Szilvásy, “Budapest székesfőváros Elektromos Művei,” 19–20, 75–6; Pétery (Magyarország villamosításának fejlödése az 1930-1933. években), Kerényi, Villamosenergia-ipari visszatekintő adatok 1925–1994; a description of the early development of electrification in Austria Die Elektrifizierung Österreichs/Austria Electrified (1925), for later development: Statistisches Handbuch für den Bundesstaat Österreich Vol. XV (Bundesamt für Statistik: Vienna, 1935).

64. Verebély, A New System for Main Line Electrification; Jezierski and Leszczynska, Historia gospodarcza Polski.

65. Miksa, "Kereskedelmi miniszter a villamosításról,” 1.

66. Pilatowicz, “Rozwoj elektryfikacji w Polsce Miedzywojennej.”

67. Rocznik Statystyki Rzeczypolitej Polskiej, 212–13.

68. Kubín, Rozvoj energetiky v Československu, 83.