AN INDUSTRIAL- GEOGRAPHICAL APPROACH

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BUDAPEST

AN INDUSTRIAL- GEOGRAPHICAL APPROACH

AKADÉMIAI KIADÓ, B U D A P E S T

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I m r e B e n c z e —E r z s é b e t T á j t i B U D A PE S T • A N IN D U S T R IA L - G E O G R A P H IC A L A PP R O A C H Studies in Geography in H ungary, 10

B u d a p est occupies a r a th e r unique position am ong th e E u ro p e an Capitals:

it h as a ttra c te d o v er on e-th ird o f H u n g a ry ’s in d u stria l p opulation. This peculiar situ atio n ce rtain ly a rrests th e in te re st o f econom ic geographers who m ake serious a tte m p ts to investigate w ith th e special m e th o d s o f th e ir dis

cipline th e questions rela tin g to th e historical developm ent o f th e H u n g aria n C apital’s in d u stry , its stru c tu re an d its im p a ct on th e econom ic grow th o f th e re s t o f th e co u n try .

Part One o f th e p re se n t book tre a ts sta tistic a l d a ta w ith a view to eluci

d a tin g th e areal d istrib u tio n o f B u d a p e st in d u stry , b rea k in g dow n th e fo u r m ain bran ch es (m achine-, te x tile-, chemical- a n d food industry) b y d istricts. Part T w o exam ines th e role th e rap id p o p u la tio n grow th plays in th e changing p a tte r n o f this new in d u strial agglom eration. I t a t ta ck s such in te restin g questions, am ong others, as th e d istrib u tio n o f populatio n according to w orking place an d place o f residence, o r th e ex

pansion o f labour-force a ttra c tio n , its velocity an d te rrito ria l segm enta

tion.

A K A D É M IA I K IA D Ó

Publishing H ouse o f th e H u n g arian A cadem y o f Sciences

B ud ap est

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BUDAPEST

A N I N D U S T R I A L - G E O G R A P H I C A L A P P R O A C H

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S T U D I E S I N G E O G R A P H Y I N H U N G A R Y , 10

G eographical R esearch In s titu te ,

H u n g a ria n A cadem y o f Sciences B u d a p e s t C hief editor:

M. PÉCSI E d ito ria l board:

Á . B O RA I, GY. E N Y E D I S. M AROSI, J . S Z IL Á R D

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BUDAPEST

AN

INDUSTRIAL-GEOGRAPHICAL APPROACH

by

IM R E B EN CZE an d

E R Z S É B E T V. TÁ JT I

A K A D É M I A I K I A D Ó , B U D A P E S T 1 9 7 2

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E d ite d by

BÉLA SÁ R FA L V I T ranslation e d ited b y

P. A. COM PTON

The Q ueen’s U n iv ersity of B elfast N orthern Irelan d

P rin te d in H u n g a ry

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I I I . P o p u la tio n c o n c e n tra tio n as a result of th e a ttra c tio n of la b o u r to G reater B u d ap est 116 1. M igration to B u d a p e s t ... 116 2. T h e grow th a n d te r rito ria l d is trib u tio n of population in B u d a p e s t ... 117 3. S h are of B u d a p e st a n d its a ttr a c tio n zone in th e p o p u lá tio n of th e c o u n try 128 4. S p a tia l disparities in th e o ccupational stru c tu re of th e p o p u la t io n ... 129 IV. T h e p a tte rn of ag g lo m eratio n in B u d a p e s t ... 132 1. B u d ap est and th e a re a l ex ten t of its la b o u r h i n t e r l a n d ... .. 132 2. C haracteristics a n d d istrib u tio n of p o p u la tio n agglom eration according to fu n c

tio n a l b e l t s ... 133 S u m m a r y ... 163 B ib lio g r a p h y ... 167"

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PART ONE

THE INDUSTRIAL ROLE OF BUDAPEST

by

IM R E BEN CZE

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PREFACE

N o tw ith stan d in g th e fact t h a t th e ca p ita l of H u n g a ry occupies an o u tsta n d ing place in th e political, econom ic an d c u ltu ra l life of th e c o u n try , th e city itself, and its in d u stry has received little a tte n tio n b y econom ic geograph

ers a fte r th e Second W orld W ar.

The stu d y of th e economic geography of B u d ap est is an ex a ctin g and m ultifaceted task . As an ex h a u stiv e discussion of th e su b ject is im possible w ith in a relativ ely re stric ted scope, presen t-d ay problem s are stresse d in this book. Therefore a detailed descrip tio n of th e d evelopm ent of in d u s try in B u d ap est is n o t given alth o u g h ce rtain phases of th e econom ic history necessary for an u n d ersta n d in g of th e actual situ a tio n are highlighted.

A dditionally, th e m edium an d long-term prospects for in d u s tria l develop

m ent in B udapest are touched upon.*

* S u b ject discussed b y E . V. T a jti in “ The L ab o u r A ttra c tio n of B u d a p e st” , in th e presen t w ork.

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I. A HISTORICAL SURVEY

1. B E F O R E T H E F IR S T W O R L D W A R

T he h a n d ic ra ft in d u stry developed relatively early in H u n g a ry . D uring th e in itial period of th e foundation of th e H u n g arian S ta te in th e 1 0 th and 11th centuries, craftsm en settled in th e present te rrito ry of B u d a p e st. From th e 14th ce n tu ry on th e craftsm en of B uda placed them selves d irec tly under th e K in g ’s p atro n a g e and form ed guilds w hich becam e m ost pow erful during th e reign of K ing M atthias in th e second half of th e 15th c e n tu ry . B y th a t tim e th e goldsm iths, gunsm iths, le a th e r- and w ood-w orking a rtisa n s of B uda h ad been fam ous all over Europe. S u b seq u en t developm ent was ch eck ed , however, b y T urkish ra id s, and both B u d a and P est w ere occupied b y th e Turks in

1541.

B y th e end of th e 17th c e n tu ry th e reconstruction of B u d a and P est, lib era te d a fte r 150 years T u rk ish occupation, h ad begun. In 1720 th e in h ab ita n ts of th e to w n num bered a b o u t 12,000, an d although g row ing to 95,000 b y th e end of th e 18th ce n tu ry , w as nearly fo u r tim es sm aller t h a n Vienna.*

In th is period B u d a played an a d m in istra tiv e role, as containing th e residence of th e P alatin e a n d housing th e com m issioner’s council. P ara lle lin g this was th e expansion of th e ag ric u ltu ral p roduction in th e Low lands a n d w ith it th e com m ercial a c tiv ity of P e st-B u d a , proof of th e growing econom ic sig

nificance of th e city . Despite a policy of econom ic d iscrim ination on th e p a rt of th e C ourt in V ienna, th e firs t te x tile mills an d finishing estab lish m en ts n eed in g large q u a n titie s of w a te r appeared in O-Buda** d u rin g th is period.

N evertheless, th e m ain im p o rta n c e of B u d a and P est c o n tin u e d as the a d m in istra tiv e a n d m ilitary c e n tre of H un g ary , an in d u stria lly extrem ely b a c k w a rd p a rt of th e H apsburg E m pire. The econom ic function of th e town w as prim arily a com m ercial one, w ith in d u stry still in its in itia l stages of developm ent.

In th e unfolding of th e econom ic life of th e co u n try and of th e in d u stry of P est-B u d a, th e “ reform -era” b etw een 1825 an d 1848 was to p la y a decisive role, w ith Lajos K ossuth and Is tv á n Széchenyi, th e two g re a t H ungarian sta te sm e n of th e 19th century, in th e lead. The form er excelled b y claim ing p o litica l independence for H u n g a ry and also th ro u g h his cam paign for boost

ing th e products of H ungarian in d u s try . Széchenyi, on th e o th e r h a n d , not o n ly gained fam e b y fostering H u n g a ria n science an d fine a rts, th ro u g h the

* Cf. M agyar S ta tis z tik a i Szemle (H u n g arian S tatistical Review). B u d ap est 1941. p. 411.

** Olcl-Buda (Ofen), a n ancient s e ttle m e n t n o rth of B u d a.

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fo u n d a tio n of th e H u n g a ria n A cadem y of Sciences, a n d su p p o rt of th e a tr e in th e H u n g a rian lan g u ag e , b u t also b y prom oting in d u s tria l establishm ents for ship-building and flour-m illing and b y urging th e o rg an izatio n of in d u stria l exhibitions on a n a tio n a l scale.

The d e fe a t of the 1848—1849 reform m ovem ent p a ra ly se d fu rth e r in d u stria l developm ent. The g o v e rn m e n t in A u stria , looking fo r ra p id industrialization, regarded H ungary m ere ly as a source of ra w m aterials a n d a m arket for fin

ished goods, and in consequence d elib erately h am p ered th e developm ent of an indigenous in d u stry an d o b stru c te d th e business of existing in d u stria l estab lish m en ts. Som e stim u lu s to d evelopm ent in P e s t-B u d a was b ro u g h t ab o u t b y railw ay c o n stru c tio n which s ta r te d a t th e e n d of th e fifties. B y 1870, how ever, fewer th a n 16 p e r cent of th e steam -engines in use were m ad e in H u n g a ry , th e others b ein g im ported p a rtic u la rly fro m A ustria.*

The g re a te st d ra w b a c k in this a rra n g e m e n t was th e forced dependence of H u n g a ry on A ustria. P o litical and econom ic le a d e rsh ip in th e H a p sb u rg E m p ire was c o n c e n tra te d in th e h a n d s of th e A u s tria n bourgeoisie, w hich in 1867 was com pelled— for in tern a l an d foreign re a so n s—to m ake a com prom ise deal w ith th e rep resen ta tiv e s of feudal H u n g a ry .

F ro m th e n on, th e developm ent of H ungary ca n b e regarded as being synonym ous w ith t h a t of B udapest. T he central p o s itio n of the ca p ita l was en h an ced b y th e w id esp read co n stru c tio n of ra ilw a y s, m ore th a n 4000 km being b u ilt betw een 1867 and 1873 alone. H eavy in d u s tria l plants connected w ith railw ay co n stru c tio n were estab lish ed in B u d a p e s t, while p a rt of th e food in d u stry , an d t h e processing of ag ricu ltu ral p ro d u c ts was likewise con

c e n tra te d there. B u d a p e s t also b ecam e th e b a n k in g cen tre of th e co u n try , w hile governm ent sponsored b u ild in g schemes w e re located p rim arily in th e cap ital.

A t th e tim e of th e 1869 census, w ith an e n u m e ra te d population of 280,000, th e H u n g a rian c a p ita l ra n k ed sev e n te e n th am ong th e g re a t cities of E urope.

The P est-side w ith its 200,000 in h a b ita n ts was th re e tim e s larger th a n B uda, w hile th e to ta l p o p u la tio n w ith in th e area la te r to becom e “ G re ater B u d a

p e s t” am ounted to a b o u t 300,000.

In th e years follow ing th e “ C om prom ise” , the m a jo rity of the in d u strially occupied p o p u latio n w as engaged in th e h a n d ic ra ft in d u stry —th e n u m b er of p la n ts th a t m ig h t b e regarded as factories b eing r a th e r low. N evertheless, th e p resen t d ay geographical p a tte r n of in d u s tria l establishm ents in th e c a p ita l, along th e D a n u b e and in th e vicinity of th e railw ay lines u n d e r con

stru c tio n was b eg in n in g to ta k e shape.

A pseudo-independence won w ith in th e fram ew o rk of th e A u stro -H u n g a ria n M onarchy fa v o u re d th e in te re sts of th e la n d lo rd s who could now sell th e ir agricultural p ro d u c ts, above all w heat, in a n y of th e m arkets w ith in th e em p ire free of cu sto m s levies. S om e branches of m anu factu rin g in d u stry th u s enjoyed a fa v o u ra b le p osition, p artic u la rly flour-m illing, w hich devel

oped on a large scale. The flour-m ills of B u d a p e st, w ith th e m ost m odern tech n ical eq u ip m en t in th e w orld, ground five tim e s as much w h e at in 1870

* P ach , Zs.: M a g y a r gazd aság tö rtén et (H ungarian econom ic history), B u d ap est 1954, p. 157.

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as in 1866. Iro n rollers w ere first used in B udapest, a n d for a short tim e H u n g a ry becam e th e w orld centre for flour-m illing on ac co u n t of this. T he 11 com m ercial steam -m ills along th e D a n u b e were able to process one th ird of all th e cereals produced in th e coun try , th e ir com bined c a p a c ity in 1870 being equal to th a t of th e 760 steam -m ills in A ustria. Y e t ev en so, th ey of

fered em ploym ent to n o t m ore th a n 2900 w orkers.

One q u a rte r to one th ird of the c o u n try ’s exports consisted of flour.

Owing to a q uickly developing technology, th e roller m illing of B udapest w as able to m a in ta in its position in E u ro p e, while the q u a lity of flour h ad im proved from y e a r to year.

Side b y side w ith m illing th e engineering in d u stry , w h ich was aided b y A u strian , G erm an and p a rtly French ca p ita l, grew into a d o m in an t sector.

T he m an u fa c tu re of rolling-stock becam e pro m in en t in B u d a p e st focussing th e public ro a d system and railw ay n e tw o rk of th e c o u n try on B udapest an d was m ainly responsible for th e corresponding co n c en tratio n of ind u stry , w hich in tu rn resulted in B u d ap est becom ing, by th e end of th e century, th e largest railw ay ju n ctio n in H ungary, and indeed in S o u th -E a ste rn Europe.

In th e ea ste rn half of H u n g a ry th e m ost im p o rta n t railw ay lines were b u ilt w ith a view to tra n sp o rtin g ag ricu ltu ral p ro d u c ts—in the first place of cereals

— to th e c a p ita l for processing. The rap id ly developing ra ilw a y netw ork d e

m an d ed large q u a n titie s of rails, rolling-stock, an d locom otives, an d to satisfy th e se requ irem en ts a num ber of plants w ere established. In th e long term th e “ G anz” a n d “ M ávag” com panies proved to be m ost co m p etitiv e and ste a d ily absorbed o th er less economic p lan ts. “ M ávag” w as subsidized to a considerable degree by th e G overnm ent b eing expected to m e e t th e steadily increasing re q u irem en ts of th e H ungarian S ta te Railways.

T he co n stru c tio n of locom otives and rolling-stock proved th e m o st success

ful sector of th e engineering in d u s try in B u d ap est. In spite of th e fact th a t th e first H u n g a rian steam -engines were n o t pro d u ced until 1873, 500 locomo

tiv e s h ad left th e p la n t b y 1893 and th e one th o u sa n d th w as produced in 1896. “ G an z” established in 1853 h ad hv 1866 exported 66,000 railway- w heel sets, m ain ly to A ustria, G erm any an d S w itzerland. In th e eighteen- eighties “G anz” w as th e sole com pany engaged in building ra ilw a y carriages.

B y 1898, how ever, owing to favourable m a rk e t conditions, five add itio n al factories in th e ca p ita l m ade arrangem ents fo r constructing rolling-stocks, an d as a result th e n u m b er of railw ay tru ck s pro d u ced in B u d ap est increased from 14,500 betw een 1881 and 1890 to 28,100 betw een 1891 an d 1900.’

B u d a p e st was also engaged in th e co n stru ctio n of m achinery fo r agricul

tu re an d flour-m illing. Among th ese th e roller-m ill (w o rld -p aten t applied for b y th e engineer A ndrás M echw art of “ G a n z ” ) acquired world-wide re p u ta tio n and becam e th e s ta rtin g point for advanced flour-m illing tech nology.

A c h a rac te ristic fe a tu re of th e period was t h a t factories did n o t specialize b u t w orked to m eet orders of an y kind. H u n g a ry being a c o u n try of agri

c u ltu ra l character, th e engineering plants in th e capital trie d to m eet the req u irem en ts of ag ricu ltu re, above all of th e large estates. A m ong th ese the *

* S ource: M agyar S ta tis z tik a i É v k ö n y v (H ungarian Y earb o o k for Statistics). 1898, p. 90.

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“ M ávag” , “ H o fh e rr-S c h ra n tz ” an d “ W eiss M anfred” w orks should be m entioned. The last-m en tio n ed fa c to ry , th ro u g h orders fo r m ilitary e q u ip m en t a t th e tu rn of th e c e n tu ry , b ecam e one of th e largest engineering- w orks of th e country. T he “ R o ck ” engineering fa c to ry where th e first H u n g a ria n steam -engine for pow ering th reshing-m achines was co n stru cted in 1861 should be also m entioned.

O th e r in d u strial p ro d u c tio n lagged fa r behind th e food- and engineering- industries. The p ro d u c tio n of le a th e r, te x tile , paper, glass, etc. goods was b arely sufficient to m eet in tern a l requ irem en ts. P ro gress in B udapest was g re a tly ham p ered b y k een co m p etitio n from more a d v a n c e d industrial c e n tres such as V ienna, B rno, P ra g u e and L iberec in th e A u strian p a r t of the M onarchy.

She w as able to com pete successfully, how ever, in th o se branches w here local ra w m ateria ls were used , w here a new m an u fa ctu rin g technology w as em ployed as in th e flour-m illing an d w here G overnm ent subsidies an d s ta te orders w ere g u a ra n te e d , e.g. rolling-stock production.*

O ne of th e m ost im p o rta n t fa cto rs in th e econom ic gro w th of B u d a p e st w as th e D anube, an d a t first, alm o st all th e plants a n d factories w ere built on its banks. The ra ilw a y co n stru c tio n , th a t becam e w idespread d u rin g th e la st 30 years of th e 1 9 th ce n tu ry , also increased th e regional co n c en tratio n of m an u fa ctu rin g in d u s try . B u d a p e st soon becam e th e com m ercial cen tre of th e co u n try , as th e railw ay n e tw o rk spread in a ra d ia l fashion fro m th e ca p ita l. A dditionally th e geographical proxim ity of th e country coal field fa v o u red th e d evelopm ent of m an u fa c tu rin g in d u s try , while th e vigorous increase of th e p o p u latio n offered an excellent co n su m er m arket.

The location of th e leading o rg anizations an d in stitu tio n s of econom ic life in B udapest p ro v ed to be a n o th e r a ttra c tio n fo r industry, a n d after th e Compromise of 1867, a considerable inflow of foreign capital im p o rte d a new im pulse to th e m an u fa c tu rin g in d u stry of th e country. E conom ic developm ent a c tu a te d th e m o n ey -m a rk et, the n u m b e r of credit op eratio n s grew , an d B u d ap est becam e th e s e a t of several m o nopoly organizations and share com panies.

O ne of th e m ost effective fa c to rs of location w as governm ent econom ic policy. In c o n tra st to th e provincial tow ns, B u d ap est enjoyed ta x ad v a n ta g es an d preferential tra n s p o r t ra te s fo r h e r products. I n addition, th e p a rtic u la r politico-econom ic conditions afflictin g th e rural a reas, i.e. th eir ag ric u ltu ra l c h a ra c te r and u n d erd ev elo p m en t, an d th e late d evelopm ent of cap italism , checked th e e stab lish m en t of a n y significant in d u s tria l centres o th e r th an B udapest.

The pro x im ity of V ienna an d P ozsony (B ratislava) also had a beneficial influence on th e d evelopm ent of th e H u n g arian cap ital. E arlier relations w ere intensified along th e D a n u b e as a n atu ra l a n d cheap line of com m uni

cation. Processed an d u n p rocessed ag ricultural p ro ducts w ere exported b y th e food p la n ts of B u d ap est, u p th e D anube to V ienna.

The last decade of th e 19th c e n tu ry was a perio d of rapid progress in B u d ap est, w hen m ore new in d u s tria l plants w ere established th a n in th e *

* Source: A Székesfőváros m ú ltja és jelene szám okban (B udapest, p a st a n d presen t in figures), B udapest 1932, p. 117.

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p revious 80 years. T hese ranged fro m m etal p la n ts , fu rn itu re factories, p rin t

ing w orks and fo o d -in d u stry en terp rises to th re e electricity pow er stations a n d several large b ric k vards. In th e first d ecade of th e 20th c e n tu ry a fu rth e r 222 new industrial p lan ts were established.

T he rapid d ev elo p m en t up to th e beginning of th e F irst W o rld W ar was assisted by the s te a d y rise in th e num ber of th e in h a b ita n ts, b y effective b u ild in g schemes, a n d by a pow erful upsw ing in th e political, scientific and c u ltu ra l life in th e c a p ita l. At th e sam e tim e, in d u s try h ad becom e a particu lar fa c to r w ith regard to th e areal g ro w th of B u d a p e st and th e rise in th e num ber of its in h ab itan ts. T h u s the p o p u latio n of B u d ap est, using th e present ad m in istra tiv e area as th e basis fo r com parison, rose from 297,000 in 1869 to 1,098,000 by 1910, w ith some 200,000 living in th e suburbs.*

T he rapid d ev elo p m en t of B u d a p e st is also confirm ed b y th e increase in its sh are of the to ta l population of th e c o u n try from only 1-8 p e r cent in 1869 to 3-8 per c e n t b y the tu rn of the c e n tu ry , a t w hich tim e it ranked se v e n th am ongst th e great E u ro p e an cities preceded only b y th e great c a p ita ls of London, P a ris, Berlin, V ienna, S t. P etersb o u rg a n d Moscow and G lasgow .

T h u s, for exam ple, 47 per cent of th e in d u stria l w orkers of th e city were m e ta l workers in 1900 (m achinery steel an d m etal p ro d u c tio n ), while 20 per c e n t had been em p lo y ed in th e food in d u stry . These rem ain ed th e leading b ra n ch es until th e F ir s t World W a r, although betw een 1900 a n d 1913 th e ra te of developm ent w as higher in th e fu rn itu re , leath er, footw are and pharm aceu tical in d u strie s , th an in th e m achine an d food sectors. A t this tim e a num ber of im p o rta n t te x tile and chem ical plants w ere also estab

lished, th e form er to a large e x te n tre d ressing backw ardness of th e textile sector.

T he m anufacture of machines fo r wood- a n d m etal-w orking, for sugar refin ery , and for th e distilling an d te x tile in d u strie s was begun on a small scale in th e last decade of th e 19th c e n tu ry . The n u m b e r of m achines produced was sm all, however, as is clearly seen from th e fa c t th a t in 1912 only 30 per cent of th e relativ ely low national dem and w as m et on th e h o m e m arket.

M achine-tool m a n u fa c tu re was m inuscule. As re g ard s equip m en t fo r th e paper, le a th e r and sugar tra d e s b arely 2 per c e n t of the d em an d was covered b y domes

tic m anufacture. E q u ip m e n t for flour-m illing c o n stitu te d th e o n ly exception, com prising 40 per c e n t of machine o u tp u t in 1898 an d still 30 p er c e n t of the to ta l te n years later.

The general tech n ic al standard of in d u strial m achines was low. Those produced in the elec trical sector bein g the one exception. The lead in g plant for th e production of electrical m ach in ery was “ G a n z ” . In th e la te 1890s, th e predecessor of th e present “ E g y esü lt Izzó” (U nited In c an d esc en t, also know n as “ T ungsram ” ) w as founded and s ta rte d w ith th e m a n u fa c tu re of cables an d electric b u lb s. About fo u r fifths of all electrotechnical products were ex p o rte d , m ainly to A ustria, G e rm an y and R ussia.

In B u d ap est in 1900 th o se gainfully em ployed in m a n u fa ctu rin g in d u stry n u m b ered 04,000, i.e. 27* 7 per cent of th e to ta l th u s engaged in th e country.

* S ource: S tatisztikai É v k ö n y v (S tatistical Y earbook), B u d ap est 1913, p . 65.

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In th e ca p ita l only 25 p lan ts em p lo y ed over 500 w o rk ers, and 10 m ore th a n 1000* (Tahié I).

B y th e tu rn of th e c e n tu ry B u d a p e s t had d eveloped into an im p o rta n t in d u s tria l centre, th o u g h th e p ro p o rtio n of sm all-scale p lan ts and h an d icraft w o rk sh o p s was still considerable. T h u s in 1900 th e n um ber of in d u stria l w ork ers was a p p ro x im a te ly 178 p e r 1000 in h a b ita n ts of B udapest, ju s t over 55 p e r cent of w hom w here em p lo y ed in factories, t h e rem ainder in w ork

shops.

Ta b l e I

T h e p a rtic ip a tio n of in d u s tria l branches in th e em ploym ent stru c tu re , 1890-1910*

1890 1900 1910

B ran ch es of in d u stry

in

thousands p e r c e n t in

thousands p e r c en t in

thousands p e r cent

1. S teel a n d m etal

pro d u ctio n 2 5-7 5 7-8 12 10-8

2. M achines 13 37-2 25 39-2 36 32-6

3. B uilding m aterials 2 5-7 2*5 3-9 8 7-2

4. W ood processing 1 2-8 2 3-1 6 5-4

5. L e a th e r and le a th e r

p ro d u cts 0-3 0-8 0-7 1-1 1-6 1-5

6. T extiles 1-5 4-2 2 3-1 4 3-6

7. C lothing 2 5-7 2 3-1 9 8-1

8. P a p e r 0-2 0-6 1-6 2-5 2 1-8

9. Food 8 22-9 13 20-4 17 15-5

10. Chemicals 2 5-7 4 6-3 6 5-4

11. P rin tin g 3 8-7 6 9-5 9 8-1

T o ta l 35-0 100-0 63-8 100-0 110-6 100-0

* T he d a ta do n o t include those engaged in mining, in th e electricity generating industry, h a n d ic ra fts and ho m ecrafts, and m iscellaneous industries

I t can be seen from th e above ta b le th a t th e n u m b e r of in d u stria l workers in B u d ap est grew th reefo ld in 20 y e a rs and th a t in 1910 th e m ach in e sector alone em ployed m ore th a n th e w hole m an u fa ctu rin g ind u strv in B udapest in 1890.

A fte r th e tu r n of th e c e n tu ry , large-scale co n c en tratio n was one of the c h a ra c te ristic fe a tu re s of in d u s tria l production in B udapest. B etw een 1890 a n d 1910 th e n u m b e r of p la n ts em ploying m ore th a n 1000 w orkers had increased threefold (and th e n u m b e r of w orkers em ployed in th e se grew from 6-5 th o u sa n d to 25-3 th o u sa n d ). On the o th e r h a n d , it should be em pha

sized th a t in d u stria l plan ts em p lo y in g less th a n 50 workers still existed in larg e num bers.

* Source: B u d ap est félévszázados fejlődése, 1873-1923 (50 years of developm ent of B uda

p e st), B udapest 1923, p . 99.

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T h e percen tu al p ro p o rtio n of B udapest processing in d u stry in n atio n al total, 1910

Budapest B u d ap est^{O utside}

In d u s tria l p lan t 22-7 77-3

C ap acity of m otors a n d

pow er machines in H P 25-4 74-6

T o ta l w orkers 27-7 72-3

T o ta l in h a b ita n ts 5-1 94-9

O ne of th e chief characteristics of m an u factu rin g in d u s try in H u n g a ry b efo re th e F irst W o rld W ar proved to be a very h ig h degree of te rrito ria l co n cen tratio n . W hile 5 p er cent of th e co u n try ’s p o p u la tio n lived in th e capi

ta l c ity and in its in d u s tria l suburbs, 23 per cent of all factories, 28 p e r cent of all fa cto ry w orkers, a n d 25 per c e n t of th e to ta l en e rg y used in th e m a n u fa c tu rin g in d u stry w ere co n centrated in B udapest. I n th e early 20th ce n tu ry th e in d u strializ atio n of th e outskirts of B udapest w as b eg u n and soon a pe

rip h e ra l industrial zone developed. As a result, th e te rr ito r ia l co n c en tratio n of th e in d u stry co n tin u e d to grow. Besides B u d ap est it was only on th e fringe of th e co u n try t h a t a few sm all scale in d u strial cen tres were created.

The following ta b le dem onstrates t h a t large-scale p ro d u c tio n in th e m odern sense w as even m ore hig h ly co n c en trate d in B udapest.*

T h e proportion of B u d ap est proces

sing in d u stry in n a tio n a l total, 1910

Size of th e p la n t (acco rd in g to n u m b er of

workers)

P er cent

21 to 100 22-3

101 to 500 27-2

501 to 2000 28-6

2001 to 3000 28-6

above 3000 33-3

As can be seen, n e a rly 30 per cent of all plants of m e d iu m size, and one- t h i r d of th e to ta l n u m b e r of large-scale enterprises w ere co n c en trate d in B u dap est. A t the sam e tim e only a b o u t one-fifth of th e p la n ts em ploying le ss th a n 100 workers w ere so located.

I t is ch aracteristic t h a t th is rapid gro w th was followed b y a sim ilar process i n th e sub u rb s and villages of th e su b u rb a n fringe. The re a so n for this m a y

* In 1890 fo u r m achine facto ries in B udapest em ployed more th a n 1000 workers. T his n u m b e r had risen to seven b y 1900 an d eight b y 1910. A dditionally, b y 1900 tw o food p ro cessing p la n ts an d one chem ical fa c to ry fell into th is category as d id one textile fa c to ry a n d brickw orks hv 1910.

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be a tt r ib u te d to th e fa c t t h a t it w as only afte r a d e q u a te com m unications had b ec o m e available t h a t th e su b u rb s could share th e ad v a n ta g es created by th e c a p ita l’s favourable g eo graphical and econom ic position. T h u s th e last q u a r te r of the 19th c e n tu ry saw th e beginnings of developm ent on th e urban frin g e, characterized b y th e large-scale se ttle m e n t of w orkers engaged in fa c to rie s in B udapest. I n d u s tr y in th is b elt w as relativ ely sIo a v to develop, a n d in th e 1890’s n o t m o re th a n 2000 w orkers w ere em ployed in suburban p la n ts ; of these, th e n u m b e r of w orkers exceeded one h u n d re d in five plants o n ly . B y the first d ecad e of th e c e n tu ry , how ever, th e o u tsk irts of B udapest h a d developed into an a re a of considerable in d u stria l a ttra c tio n . T hus against an av erag e of 11,000 w ork ers in 1900, b y 1910 m ore th a n 41,000 were em p lo y e d in the factories lo cate d in th e m ajo r su b u rb a n se ttle m e n ts of Ú jpest, B á k o sp a lo ta , K isp est, P esterz séb et, S oroksár, Pestlőrinc, B udafok and C sepel.

O w ing to th e ch an g e-o v er to w a r p ro d u ctio n of th e e x istin g industrial p l a n t during W orld W a r I, th e n u m b e r of w orkers em ployed in th e suburban fa c to rie s was 50 p e r c e n t h ig h er in 1920 th a n in 1910, w hile th e num ber of in d u s tria l w orkers in B u d a p e st p roper declined considerably. According to statistica l d a ta , fa c to ry w orkers in B u d ap est and in th e su b u rb s com bined n u m b e re d 68,502 in 1900, 123,693 in 1910 an d 88,952 in 1920. For th e su b u rb s only th e re sp e c tiv e figures were 3888, 17,166 and 25,174.

Those industrial d istric ts t h a t a t p re sen t contain th e b u lk of industrial lab o u re rs in B u d a p e s t cam e in to being d u rin g th e first tw e n ty years of th is century. A ccordingly, tan n eries, and joineries w ere estab lish ed in Ú j

p e s t, mills and m ac h in e factories in A ngyalföld, mills and sla u g h te rs in F erenc

v á ro s, railway w o rk s, te x tile factories, th e building m ateria ls in d u stry an d brew eries were lo c a te d in K ő b á n y a, an d th e “ Weiss M an fred ” m achine- w orks on Csepel isla n d developed in th e course of 20 y e a rs in to the largest p la n t in B u d ap est. Ó b u d a distinguished itself b y its shipbuilding, te x tile factories and b rick w o rk s, w hile S o u th -B u d a develojsed its te x tile and food industries.

Sum m arizing th e period from th e C om prom ise of 1867 to th e o u tb rea k of th e F irst W o rld W ar, it can be s ta te d t h a t th e in d u s tria l developm ent of B udapest was influ en ced p rim arily b y th e following facto rs:

(1) The ex isten c e of th e v a s t te rrito ry t h a t com prised “ historical” H u n gary. The m a rk e t for th e p ro d u c ts of B u d ap est in d u s try was artificially widened owing to a d iscrim in atin g policy t h a t m anifested itself in resp ect of certain n atio n a litie s.

(2) The b u ild in g of a centralized road an d railw ay n e tw o rk increased th e advantages d e riv e d from th e n a tu ra l geographical p o sitio n of B u d ap est.

The expansion of econom ic relations b o th w ith o th er regions of the c o u n try and w ith foreign coun tries w as an im p o rta n t condition fo r th e evolution of B udapest in to th e “ im p o rt an d ex p o rt g atew ay ” of th e c o u n try ’s in d u stry .

(3) A large-scale b uilding policy a t th e close of th e c e n tu ry converted B u d a pest into an im pressive c a p ita l for th e H ung arian p a r t of th e M onarchy.

(4) The ra p id increase in population tran sfo rm ed B u d a p e s t into th e larg e st consum ers’ c e n tre w ith in th e co u n try , a n d ensured a p erm an en t source of labour for its grow ing in d u stry .

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(5) R egarding sp atial d istrib u tio n , m an u fa ctu rin g in d u stry w as initially estab lish ed on th e periphery of th e city-core of B udapest. F rom the tu r n of th e c e n tu ry , however, th e role and w eight of m an u fa c tu rin g in d u stry in th e suburbs an d com m unities on th e u rb a n fringe, which a d m in istra tiv e ly w ere only in co rp o rated w ithin B u d ap est in 1950, increased from y e a r to year.

2. T H E IN T E R W A R P E R IO D

W ith th e object of extending its dom ination an d controlling n ew m ark ets, H u n g a ry in alliance w ith A u stria plunged in to w ar. The w ar-econom y em phasized th e o u tp u t of arm a m en ts p artic u la rly from th e m ach in e plants in B u d a p e st reducing a t th e sam e tim e th e m a n u fa ctu re of p ro d u c tio n tools and consum er goods. A nother deleterious consequence was t h a t th e raw m a te ria l and lab o u r reserves of th e c o u n try were alm ost com pletely ex h a u ste d .

W ith th e d isin teg ratio n of th e D ual M onarchy, H u n g ary legally becam e an in d ep en d e n t sta te . B udapest found itself th e c a p ita l of a sm aller co u n try (92,000 square kilom etres) h u t one v irtu a lly hom ogeneous eth n ically .

The redraw ing of th e m ap of E a st-C en tral E u rope altered th e conditions for in d u s tria l grow th. Now as an in d ep en d e n t s ta te H u n g a ry no lo n g er faced co m petition from th e m ore developed A ustrian and Czech m a n u fa c tu rin g in d u stry . Now H u n g a ry was able to p u rsu e an in d ep en d e n t econom ic policy and to develop those branches of in d u s try which it was im possible to do u n d er th e A u stro -H u n g a ria n M onarchy.

A ra p id upsw ing w as registered first of all in ce rtain branches of light in d u stry such as clothing, wood-w orking and paper, w hile flour m illing and sugar refining, tra d itio n a l sectors of th e food in d u stry , co n tra cted . The

“ underd ev elo p ed ” m achine-building in d u s try also p resented problem s. I t has becom e extrem ely unbalanced because such branches as vehicle-building and farm -m achine co nstruction h a d becom e d o m in an t, a t th e expen se of, for exam ple, th e m a n u fa ctu re of m ach in e tools. Im p o rts in this se c to r th u s continued a t a high level.

One of th e anom alous consequences of th e te rrito ria l changes w as t h a t post-w ar H u n g a ry w as m ore in d u strialized th a n its predecessor b ec au se th e m ajo rity of developm ent of th e factories h a d occurred in th e central a reas of th e c o u n try , especially in B udapest. T he form er economic relations govern in g in d u stria l p roduction, tra d e and econom ic cooperation in H u n g ary a b r u p tly changed. A shortage of raw m aterials, consequent u p o n th e old p ro d u c in g districts b eing outside th e new fro n tiers of th e c o u n try , had c re a te d a serious situ a tio n , in w hich it proved im possible to ex p lo it properly th e co n siderable p a r t of th e processing industries of th e co u n try located in B u d a p e st.

The g ro w th of th e m an u fa ctu rin g in d u s try in th e c a p ita l as a consequence slowed dow n. Progress w as also h am pered b y disorganization and th e c h a n g e over to peaceful produ ctio n . From th e m iddle of th e 1920’s economic a c tiv ity accelerated b u t this did n o t extend to all branches. As a result p ro d u c tio n in 1929 w as ju s t over te n p er cent hig h er th a n in 1913. Owing to in d e p e n d en t ta riff b arriers, some branches no longer suffered from A ustrian co m p e

titio n an d slow h u t ste a d y progress becam e a p p a ren t in th e te x tile , glass,

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shoe, p ap e r and ch e m ic al industries, as well as in th e m an u factu re of electri

cal m achines.

W ith in a short p e rio d th e te x tile in d u s try cam e to occupy a position in B u d a p e st, very s im ila r to th a t of flo u r m illing p rev io u s to the F irs t W orld W a r. A fu n d a m e n tal difference w as to be observed, how ever, in t h a t th e food in d u s tr y had processed home p ro d u c e m ainly fo r e x p o rt, while th e textile in d u s tr y utilized im p o rte d raw m a te ria ls and satisfied hom e dem and. A nother e ss e n tia l difference w as th a t th e food in d u stry h a d utilized eq u ip m en t p ro d u c e d internally w h e reas th e te x tile in d u s try in th e tw enties acquired its looms a n d spinning m ills fro m A ustria a n d C zechoslovakia, where light in d u stry in lik e fashion to th e export sec to rs of th e H u n g a ria n food in d u s try had lo s t th e ir form erly extensive m a rk e ts , owing to th e d isin te g ratio n of th e H a b sb u rg E m p ire, a n d struggled w ith m a rk e tin g difficulties. As a result, t h e relatively v ig o ro u s light in d u s tr y of th e p erio d h ad to co n te n t, in th e m a jo rity of cases, w ith tech n ic ally obsolete e q u ip m e n t im p o rted from these tw o countries.

T h e world econom ic crisis of 1929 h ad a d ra m a tic im pact on H ungary.

T o ta l p roduction overall fell b y one q u a rte r, w hile in some of th e sectors of h e a v y in d u s try o u tp u t was re d u c e d by one h alf. In 1935 th e volum e of p ro d u c tio n w as s till lower th a n in 1929, and i t w as only in th e second half of th e 1930’s t h a t som e im p ro v em en t was to b e seen, owing m ainly to w ar p re p ara tio n s.

As a consequence of th e re d u c tio n of th e c o u n try ’s te rrito ry to one q u a rte r of its former e x te n t, th e w eight a n d significance of B u d ap est in in d u stry h a d greatly in cre ased . Since fu r th e r in d u stria l expansion w as re stric ted to B u d ap est, th e in d u s tria l back w ard n ess of th e provinces rem ained unchanged, a n d th e a n ta g o n ism and c o m p etitio n betw een B u d ap est an d th e co u n try sid e becam e k e e n e r on account of th e dim inished in tern a l m ark e ts. N a tu rally t h e stronger a n d technically b e tte r equipped B u d a p e st was th e w inner of th e co n test.

A high degree of co n c en tratio n w as th e c h a ra c te ristic fe a tu re of H ungarian in d u stry b etw e en th e two w ars. P rio r to th e F ir s t W orld W ar, w ith in th e fro n tie rs of h isto ric a l H ungary o n ly ab o u t o n e -q u a rte r of th e in d u stria l w orkers of th e c o u n try h a d w orked in th e in d u stria l p la n ts of B u d ap est. In 1920, b y com parison, 65-3 per cent of th o se g ainfully occupied in m an u factu rin g in d u stry w ere to be found in G re a te r B u d a p e st, i.e. w ithin th e present a d m in istra tiv e b o u n d a rie s of th e c a p ita l, even th o u g h th e change over from w a r m an u factu re to peaceful p ro d u c tio n h ad affec te d th e in d u s tria l estab lish m ents of B u d a p e s t more th a n th o se of th e provinces.

Changes also occurred in th e p roportions of in d u strial w orkers betw een B udapest a n d th e suburbs, b e c au se of th e p o s t-F irs t W orld W a r developm ent th e lab o u r-in te n siv e light m an u fa c tu rin g in d u s try in th e u rb a n fringe. T he in d u strial g ro w th of G re ater B u d ap est w as m ain ly ensured b y this process, th e consolidation of w hich w as one of th e m o st characteristic features of th e interw ar p erio d . The above is clearly d e m o n stra te d b y th e following d ata:

From 1920 to 1930 th e a re a l co n c en tratio n of in d u strial w orkers increased slightly. T h e sh a re of B u d a p e st and its su b u rb s was not only high in relatio n to w orkers in m a n u fa ctu rin g in d u s try w hich rose from 65-3 per cent in 1920 20

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to 66-6 per ce n t in 1930 b u t also as reg ard s th e p roportion of all w orkers.*

C oncentration was m ost conspicuous in th e sphere of m a c h in e p roduction, alth o u g h th is sector as a w hole ex h ib ited a ta rd y ra te of g ro w th betw een th e tw o w ars. O nly th e G anz, E gyesült Izzó and Láng com panies ex p o rted in considerable q u an titie s, m ainly due to a high technological sta n d a rd . T hus

“ G a n z” co n stru cted excellent tu rb o -g e n era to rs, tra n sfo rm e rs and u p -to - d a te electrical engines, while “ E g y esü lt Iz zó ” held the lead in telecom m uni

ca tio n engineering and v acu u m e q u ip m en t and appliances.

T he chronic sta g n a tio n of H u n g a rian ag riculture forced th e ag ricu ltu ral m achine in d u stry of B u d ap est e ith e r to com pletely d iscontinue its m anufac

tu re or to utilize only p a rtia lly th e ir ex istin g capacity, p ro d u c in g for th e e x p o rt m arket.

In view of th e lim ited ca p acity of th e in te rn a l m arket o th e r m achine fa cto ries in B udapest trie d eith er to ex p o rt th e ir products, or to c h a n g e freq u en tly th e ir production program m e. T hus “ M ávag” and “ Weiss M a n fre d ” experi

m en ted w ith th e produ ctio n of sm all q u a n titie s of trac to rs, tre s h in g m achines, lorries, m otor-buses, m achine-tools and even w ith passenger cars in sm all q u a n titie s.

T he electrical m achine in d u s try has since rem ained th e lead in g exp o rt b ra n c h , being co m p etitiv e w ith foreign firm s, an d possessing its ow n p a te n ts, skilled and tra in e d w orkers an d qualified an d experienced te c h n ic a l staff.

A b o u t tw o -th ird s of th e engineering in d u stry exp o rts of B u d a p e st w ere m ade u p of electrical com m odities, princip ally th e products, such as electric light b u lb s of “ E g y esü lt Izzó” . This com pany ex p o rte d on average th re e -q u a rte rs of its products an d also sta rte d th e m a n u fa c tu re and export of radios.

T he engineering in d u stry of B u d ap est in general exported a considerable p a r t of its products,** which besides electrical products, com prised rolling- stock, ag ricu ltu ral m achinery an d electric locom otives. I t w as th u s ra th e r anom alous th a t a t th e sam e tim e th e re w ere m an y products fo r w hich th e in d u s try had d ifficulty to m eet even the m odest hom e dem and. M an y branches of th e m achine in d u s try did n o t ex ist a t all or rem ained in th e in itia l stages of developm ent. M achine-tools, in stru m en ts an d m otor-car p ro d u c tio n were b ac k w ard , while b a ll bearings an d m ining eq u ip m en t were n o t produced a t all.

To m eet th e req u irem en ts of th e vario u s in d u stria l sectors in th e co u n try , m ach in ery and p ro d u c tio n eq u ip m en t th erefo re h ad to be im p o rte d . The m ost freq u en t im p o rt item s were m achinery for light ind u stry fro m A u stria, G erm an y and G re at B ritain, m achine-tools from G erm any an d in s tru m e n ts from S w itzerland. In these fields H u n g a rian firm s could no t co m p ete w ith th e ir W e st-E u ro p ea n co u n terp arts, because of an inadequate h o m e m ark e t.

F ro m th e point of view of in d u stry as a whole, leaving aside th e p o st-w a r developm ent of te x tile s little h ea d w ay was m ade. W orkshops em p lo y in g less th a n 20 w orkers co n tin u ed to ex ist in ab u n d a n ce in B udapest a n d acco rd in g

* L ackó M.: A d ato k a főváros m u n k áso sztály án ak összetételéről a X X . század 20-as éveiben (D ata concerning th e com position of th e w orking class of B udapest in th e tw enties of th is cen tu ry ), B u d ap est 1958.

* * O n th e average one-fifth of th e m achinery produced in B udapest was e x p o rte d in the th irties, a lth o u g h figures as high as 60 o r even 80 p er c e n t were not rare.

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to th e 1930 census em p lo y ed 74,000 persons or 32 p e r c e n t of all in d u stria l w orkers in th e ca p ita l, a n increase of 12,000 over th e fig u re for 1920. No sig

n ifica n t technological im provem ent o r rise in lab o u r p ro d u c tiv ity could be realized u n d er such w o rk in g conditions. T he h an d icraft in d u s try also rem ained a characteristic fe a tu re of B udapest, as well as th e re s t of th e country.

C om pared w ith th e situ a tio n prio r to th e F irst W o rld W ar, th e c h a ra c te r of p roduction u n d e rw e n t a nu m b er of changes. B efore th e w ar each fa c to ry h a d endeavoured to m a n u fa ctu re a v a rie ty of p ro d u c ts. A fter 1918, on th e o th e r h an d , v a rie ty w as reduced as a consequence of th e smaller in te rn a l m a rk e t. A t th e sam e tim e th e ex istin g cap acity a n d pro d u ctiv e skill of th e w orkers provided possibilities for increased specialization, while, as a re su lt of th e g reater dep en d en ce upon foreign m ark ets, p ro d u c tio n schedules w ere m odified in a n u m b e r of in d u strial p lan ts. The processing of ag ric u ltu ral p ro d u c ts rem ained p ro m in en t. I t should he em phasized t h a t th e co n trib u tio n of th e food in d u s try in B udapest to to ta l pro d u ctiv e v alu e in 1938 was still som ew hat higher th a n t h a t of all lig h t in d u stry com bined, even th o u g h it em ployed less th a n 12 p er cent of th e to ta l n u m b er of industrial w orkers in

th e capital.

T he low level of in d u s tria l o u tp u t a n d th e n arro w ly b ase d dom estic m a rk e t did n o t perm it th e g ro w th of in d u s tria l centres o u tsid e B udapest. Therefore, th e m ajo r p a rt of th e m an u fa ctu rin g in d u stry c o n tin u e d to be co n cen trated in th e capital w hich offered fa v o u rab le geographical, economic and cu ltu ra l conditions for fu r th e r in d u strial g ro w th . Thus in s p ite of grow th during th e in te rw a r period th e degree of co n c en tratio n in m an u fa c tu rin g rem ained very high, and in 1938 th e re were in B u d a p e st 1553 p la n ts a n d factories em ploying 126 th o u san d w orkers.

T h e share of B u d ap est in th e n atio n al in d u stria l production* (in p er cent)

Y e a r Value of

p ro d u ctio n N um ber of w orkers

N u m b e r of p la n ts

1929 44-2 43-5 33-3

1933 43-3 46-1 35-6

1938 44-0 43-8 38-9

* T h e above d a ta do n o t refer to th e 6 to w n s an d 18 com m unities an n e x e d to th e c a p ita l in 1950.

The degree of co n c en tratio n w as even higher th a n shown by th e above figures because th e y do no t inclu d e th e in d u s tria l zone around B u d ap est, w here 306 p la n ts w ere in o p eratio n , em ploying a b o u t 60 th ousand w orkers, i.e. nearly one fifth of to ta l fa c to ry w orkers in th e country as a whole. In o th e r w ords, Greater Budapest co n tain e d ab o u t 47 p er cent of all factories an d 62 per c e n t of to ta l fa cto ry w orkers. O u tsid e th e capital and its urb an fringe a few in d u s tria l foci of seco n d ary im p o rta n c e existed in general close to th e occurrence of n a tu ra l resources.

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The share of B u d a p e st in th e various b ranches was n a tu ra lly different;

in th e clothing a n d p rin tin g tra d e s, for in stan ce th e location of additional p la n ts in th e u rb a n fringe, altered th e situ atio n v e ry little owing to th e ir preponderance in th e cen tral d istricts of th e ca p ita l. The situ a tio n was different, how ever, in th e case of th e m achine a n d te x tile industries. Im p o r

t a n t new tex tile w orks a ttra c te d b y th e av a ila b ility of labour, w ere e sta blished in Ú jpest a n d K ispest, and m achine factories in Csepel, Ú jpest, B u d a

fok an d K ispest, a n d as a consequence th e p ro p o rtio n of these tw o branches to be found in G re a te r B udapest was considerably h ig h er th a n th e value in d i

c a te d in Table II. S im ilar com m ents m ay be m ade a b o u t th e wood processing, p a p e r and le a th e r industries.

Ta b l e II

T he p articipation of B udapest in th e national m a n u fa c tu rin g in d u stry , 1938

In d u s tria l b ra n c h

P roduction value (in millions

of pengő)

S h a re of th e c a p ita l’s

p la n ts (per cent)

E x p o rts (per cent)

(A) Heavy industry

1. Steel and m e ta l 118 27-4 4-4

2. Machines 195 62-1 20-9

3. E lectricity g eneration 53 38-7 ^—

4. Building m aterials 23 20-5 3-3

5. Chemical in d u s trv 141 48-3 5*5

T otal 530 45-2 —

(B) Light industry

1. T extile 184 39-4 7*7

2. Clothing 58 73-4 16-6

3. L eath er an d le a th e r products 33 28-1 20-6

4. W ood processing 28 35-3 1-2

5. P aper 26 46-8 1-1

6. P rin tin g 46 90-6 1-6

T otal 375 44-1 —

(C) Food industry 377 40-8 14-1

G rand to ta l (A -{- B -)- C) 1282 44-0 10-5

On th e basis of th e p ro p o rtio n of to ta l in d u stry lo cated th ere , th e in d u stria l b ranches of B udapest m ay be divided in to th ree groups, n am ely (a) in d u stria l sectors located p re d o m in a n tly in B u d ap est m ore th a n 60 per cent of to ta l p lan t, (b) those in d u strial sectors w here betw een 38 a n d 46 p er cent of to ta l p la n t w as located in B u d a p e st and (c) in d u strial sectors co m p arativ ely poorly re p resen te d in th e c a p ita l—less th a n 35 per cent of to ta l p lan t.

The p rin tin g , clothing an d engineering industries belong to g roup (a).

A high degree of co n c en tratio n in large cities is c h a rac te ristic of th e first 23

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tw o secto rs, while t h a t of th e engineering in d u stry w as due m ain ly to h isto ric a l, economic and geographical fa cto rs.

T h e printing an d clo th in g in d u strie s of B u d ap est each em ploying 7000 w o rk e rs differed m a in ly in th e sale of th e ir p ro d u cts in t h a t th e fo rm er pro

d u c e d alm ost exclusively for th e h o m e m a rk e t, w hile th e la tte r figured m ore p ro m in e n tly in e x p o rts. On th e o th e r h a n d , th e m achine in d u s try absorbed b e tw e e n 27 and 28 p e r cent of th e to ta l labour force of th e c a p ita l.

T h e chemical, p a p e r, food a n d te x tile industries belonged to g roup (b) a lth o u g h th e last w o u ld fall into ca te g o ry (a) if the te x tile mills of th e suburbs w e re to be added.

T ra n sp o rta tio n p la y e d different roles in th e developm ent of th ese industries.

In t h e textile, chem ical and p a p e r in d u strie s th e delivery of foreign raw m a

te ria ls was most fa v o u ra b le in B u d a p e st; th e sam e applied to ex p o rts m ade b y t h e food in d u s try an d th e p u rc h a se of hom e-produced raw m aterials.

F o r th e paper m ills d ire c t connection w ith p rin tin g firm s in th e cap ital con

c e rn in g production a n d supply m a tte rs was of p rim ary im p o rtan ce . I t should also be em phasized t h a t from a technological p o in t of view th e industries in t h e second group su b sist on a p le n tifu l supply of in d u stria l w a te r an d a loca

tio n beside th e D a n u b e proved a n a tu ra l ad v an tag e.

T h e param ount significance of t h e food in d u s try is shown b y th e fact th a t in 1939 38 per c e n t of to ta l p ro d u c tio n exported from B u d ap est w as derived fro m this sector.

T h e iron and ste e l, building m a te ria ls, le a th e r and shoe an d th e w ood

processing sectors belonged to g ro u p (c). The re la tiv e ly low co n c en tratio n of th e s e sectors in B u d a p e s t m ay b e explained b y th e need for th e first tw o to b e close to raw m a te ria ls and fuel supply. T hey preferred locations in th e s u b u rb s especially in Ú jpest. I t is also w orth rem em bering t h a t th e leath e r a n d shoe tra d e pro d u ced larg ely fo r exports, th e bulk of w hich, and th is ap p lies to wrood processing as w ell, wrere exquisite item s pro d u ced b y in d i

v id u a l craftsm en.

F rom 1938 o n w a rd s, th e in te n sific a tio n of w a r p re p a ra tio n s m eant th e rise to prom inence of th e a rm a m e n ts in d u stry and re la ted branches. The effect was felt m a in ly b y th e engineering in d u stry w'hich in B u d a p e st doubled in m anpow er b etw e en ±937 a n d 1939 and increased threefold betw een 1937 a n d 1943. “ W eiss M anfred” W o rk s was th e first to be affected b y w ar p rep aratio n s, and as e a rly as 1938 30 p e r cent of its p ro ducts com prised m ilitary eq u ip m en t—a rm y lorries a n d la te r m ilitary air-craft.

I t has been p o in te d ou t t h a t a t th e beginning of th e 2 0 th c e n tu ry poorly developed light in d u stry , especially tex tile s, an d a predom inance of food processing c h a rac te rized m an u fa c tu rin g in H un g ary . A lth o u g h during th e inter-w ar period th e co m p arativ ely rapid expansion of te x tile s, paper and wood-w orking p ro d u c ed a sig n ifican t change in th e s tru c tu re of m a n u fa c tu r

ing, this was still insufficient to displace th e food in d u s try as th e leading sector on th e ev e of th e o u tb re a k of th e Second W orld W ar. The p a rt played b y heavy in d u s tr y was c o m p arativ ely sm all, th e m achine-tools in d u stry being on an e x tre m e ly low level.

The a g ric u ltu ra l c h a ra c te r a n d economic backw ardness of th e co u n try were also reflected in th e s tru c tu re of in d u stry in B u d ap est. Food processing 24

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contin u ed to be a prom inent b ra n c h . I t should be em phasized t h a t th e share of th e food in d u stry of B udapest in th e produ ctio n value of 1938 was still som ew hat higher th a n th e com bined ra tio of all light in d u stria l branches of th e capital, w hile less th a n 12 to 13 per cent of th e to ta l n u m b e r of in d u strial w orkers of B u d ap est had been em ployed in th e food in d u stry .

In sum m ary, th e period b etw een 1890 and th e outbreak of t h e F irs t W orld W a r was one of large-scale in d u stria liz a tio n . As a result, a t t h e beginning of th e 20th c e n tu ry about one q u a r te r of th e in d u strial o u tp u t of th e A ustro- H u n g a rian M onarchy was deriv ed from “h isto rical” H u n g a ry , i.e. 1*5 per c e n t of E u ro p e’s to ta l in d u stria l production. Ind u strial d ev e lo p m e n t w as su p p o rted by th e economic policy of successive H ungarian governm ents, w hich m anifested itself in g o v ern m e n tal subsidies and also in ta x , tariff, a n d custom s policy. However, d esp ite rapid gro w th th e s tru c tu re of H u n g a ry ’s m a n u fa c tu rin g rem ained underdeveloped being m ainly concerned w ith th e food in d u stry . M achine-building b y com parison developed a t a slow er ra te th a n any o th er in d u strial sector.

3. A F T E R T H E SECOND W O R L D W A R

As a re sid t of th e G erm an o ccupation, and th e dism antling a n d rem oval of fa c to ry equ ip m en t by force, m a n u fa c tu rin g in d u stry in B u d a p e s t suffered m ore seriously th a n th a t of th e c o u n try as a whole. 16 per cent of t o ta l indus

tr i a l p lan t in B u d ap est was d estro y ed , com pared w ith a n a tio n a l average of 12 p e r cent. In sp ite of all efforts, in d u strial production reach ed b u t 30 per c e n t of th a t in th e y ea r im m ediately before th e outbreak of w ar.

A fte r 1945 th e m ain task was th e re co n stru ctio n of w ar-tim e d am ag e , and th e re sto ratio n of th e productive cap acity of m an u factu rin g in d u s try . F or th is reason the disparities betw een th e level of developm ent in B u d a p e s t and th e provinces, w hich had been intensified by th e w ar, could n o t be lessened.

T hus in 1949 th e c a p ita l still em ployed 5 F 4 p er cent of all in d u s tria l w orkers in th e country.

B o th th e natio n alizatio n of factories betw een 1946 and 1948, a n d th e elab

o ra tio n and realization of th e T hree Y ear P lan (1947—1950) p la y e d an im p o r ta n t role in th e ra p id and efficient reorganization of industrial p roduction.

N a tio n alizatio n p e rm itte d of th e closure of sm all uneconom ic factories, increased specialization in p ro d u c tio n and th e rationalization of sm all- and m edium -sized p la n t.

T he first F ive-Y ear P lan, 1950—1954, aim ed to change th e re g io n a l pro

portio n s of p ro ductive forces. F or th is purpose, som e four-fifths of all in d u strial in v e stm e n t was d irected tow ards th e provinces, an d 59 out of 75 n ew ly e s ta b lished p lan ts were lo cated there. As a consequence th e p roportion in m a n u fa c tu rin g in d u stry in B udapest decreased from 51-4 per cent in 1949 to 44-1 p e r cent in 1955. D espite this th e absolute n u m b e r of in d u strial labourers in B u d a p e st increased a t an a n n u a l ra te of som e 20 thousand.

T he changes in econom ic policy in 1953 and th e cou n ter-rev o lu tio n of 1956 te m p o ra rily increased th e ca p ital’s p ro p o rtio n again b u t from th e beginning of 1958 a slow b u t perm an en t decrease in th e percentage of m a n u fa c tu rin g

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AN INDUSTRIAL- GEOGRAPHICAL APPROACH

BUDAPEST