Continuity and change in a transnational economic core region, Rhine, Ruhr and Rotterdam Hein A.M. Klemann Ben Wubs

Economic geography and political borders In periods of free trade and monetary stability: –No reason to believe that an economic region will remain within political borders –From the late 19 th century on: close relations between Port of Rotterdam and the German Ruhr-Rhine region Substantial parts of the Dutch economy integrated with foreign regions Research Nikolaus Wolf: Until 1914 no German national economy Economic contacts between German regions among each other no closer than contacts with neighbouring foreign regions

Industrialization Ruhr, the Rhine and Rotterdam Ruhr industrialized quickly from1850 –Coal, iron, steel –1877: Mine owners agreed to export to keep German prices profitable –1878: Westphalian Coal Export Union decided that Antwerp should become their export port –Reason: Antwerp had a good rail connection with the German hinterland –Dutch ports had not: s Rail became dominant mode of transport Connected the west German industrial areas with Antwerp and the German ports –Rhine connection: old-fashion –Rhine shipping slow and small scale

Rhine shipping Since Roman times traction by wind, current and muscle power (horses) –Down stream: Sailing –Upstream: Towing –In 1850 still 3000 horses active along the Rhine Slow Limited scale: one horse could draw 50 ton Teams up to 5 horses 1816: First steamer –Problem: For steam transport quite another river was needed: –No link with the strength of horses anymore: bigger ships Channel should be deeper and less wide Efficient when enormous trains of ships were pulled by a steamer For that the river should be straightened Almost anywhere else inland water transport destroyed by railways

Rhine shipping vs. Railways Canalization necessary: expensive and technically complex –Mid-nineteenth century: Industry used railways –Rhine shipping of major importance nonetheless –Kept freight rates low Railways: Monopolistic price setting Inland shipping: more competitive –Since 1815: transnational organization regulated Rhine transport CCNR –Since 1831: agreement on relatively liberal principals among Rhine states –1849: Prussian demanded canalization after railway destroyed Rhine traffic between Strasbourg and Basel. –Rhine should be adapted to modern large-scale steam traffic In 1840: trains of ships with a total capacity of 400 tons Ca. 1900: 6000 tons

From the 1850s Prussia dominant in Germany and continental EuropeFrom the 1850s Prussia dominant in Germany and continental Europe –Demanded canalization –1866: Peace of Prague Liberalization and canalization of the RhineLiberalization and canalization of the Rhine 1868: France and Netherlands pressed to accept this: Convention of Mannheim1868: France and Netherlands pressed to accept this: Convention of Mannheim –1890s: Canalization completed From the 1880s: fast growth of Port of RotterdamFrom the 1880s: fast growth of Port of Rotterdam –Large scale Rhine transport: freight rates Rhine shipping fell dramatically Now much cheaper than Rail transportNow much cheaper than Rail transport Close relation between the share of German imports sailing the Rhine and the costs of Rhine shipping in per cents of railway freight ratesClose relation between the share of German imports sailing the Rhine and the costs of Rhine shipping in per cents of railway freight rates –German bulk transport more and more via the Rhine and Rotterdam Upstream: Iron ore, wood, cerealsUpstream: Iron ore, wood, cereals Downstream: CoalDownstream: Coal –Highly specialized and vulnerable port Rotterdam as port of the Ruhrgebiet

Importance of Germany for the Dutch economy Dutch Trade extremely high already during the first globalization period Before 1914 Germany was more important for the Dutch economy than the EU is nowadays –In this period Rotterdam developed into a major German port: 75 % of all transport in this port related to Germany – 25 % of all German exports crossed the Dutch border in Rhine barges.

Until the early 1960s: bulk transport like coal, ore, oil, fertilizers and cereals by barge Consequently: Rotterdam became Europe’s major seaport After 1945, enormous changes: –Coal lost most of its importance: In 1950s: most energy use within Europe still came from coal ; Most of the enormously increased demand for energy came from oil –Balance in upstream and downstream transport lost –New transport: when quantities were large enough for oil pipelines a better solution Trucks became a new alternative –Rotterdam had an advantage because of the Rhine –Now its position as the only port that could guarantee cheap bulk transport to the hinterland undermined –Trucks and pipelines were footloose and could come and go everywhere Continuity in transport streams

Three major findings project Low costs Rhine transport essential for connection Rotterdam-Ruhr –Efficiency of transport in the region contributed to the agglomeration effect Notwithstanding the enormous continuity, port hinterland relations underwent significant changes: –Political and institutional causes –Technological shifts Changes in demand in the hinterland resulted in change in the Rotterdam port –Notwithstanding two world wars and an unprecedented depression: relations between the port and the Ruhr recovered each time –Tension between path dependence and increasing returns to scale