In the 1870’s – 80’s Germany was the most important money market for the placement of Russian state funds and loans of Russian railway companies.
Until the beginning of the twentieth century, the railway loans were placed mainly in Germany. The well-known words of the Russian politician of those periods S. Witte that “Russian railways are built for the money of German housewives” date back exactly to this epoch.
German bankers have repeatedly rescued the Russian monarchy government during the acute economic crisis, the war and the revolution of 1900–1907. The loans had prepared the basis for the direct introduction of investment capital into the economy of the empire.
The beginning of the penetration of German industrial investment capital into Ukraine was witnessed through the last decade of the nineteenth century – in the 1890’s. According to statistics at the beginning of the twentieth century, the German joint-stock companies ranked fourth in number of enterprises (after Belgium, France and the United Kingdom) and third in terms of the amount of the invested capital (after France and Belgium).
German companies provided their activity mostly at the electrical and gas industries, at metalworking and machine building, at mining and smelting, at the chemical industry and at coal mining. In the amount of money deposits among the joint-stock companies the first place belonged to the electric and gas enterprises with 10 592 thousand rubles, the second one – to coal companies with 6 002 thousand rubles, and the third one – to metal processing and mechanical engineering companies with 4 337 thousand rubles.
In Katerynoslav province (Donbas and Dnipro Region), by the German statute, the JSC Russian Mining Industry (1898, Berlin) and the JSC Russian Steel Industry (1900, Berlin) used to operate. The share capital of the companies, respectively, constituted 2 million marks and 11 million marks (1913). These were large enterprises, employing up to 1,000 workers.
The characteristic feature of the German societies that had been created in the empire was the following one – they were the branches of the large German industrial firms or subsidiaries. Some of them were created in 1897 by Katerynoslav Tube and Ironworks Pavlo Lange and Co., (branch of the company in Cologne on the Rhine) and “Katerynoslav Machine-Building ATD” (Duisburg-on-Rhine). The board of the Pavlo Lange plant was located at the plant in the village of Manuilivka, in Novomoskovsk district of Katerynoslav province, but its chairman, Louis Gagen, and its members resided abroad. There were 935 employees and a dining room, a library and a hospital were organaized for them.
Katerynoslav Machine-Building Plant was built on the left bank of the Dnipro, in the village of Amur. The Board of JSC was located in Katerynoslav. Wilhelm Teodorovich Keetman, its director was probably the son of Theodore Keetman, the founder of the corporation in Duisburg. Shares of the company in amount of 500 rubles used to be quoted at the Warsaw Stock Exchange in 1898 and their cost was from 525 to 615 rubles. (Now this plant is named as PJSC Dnipropetrovsk Rolling Mill).
German capital mostly acted in the Russian, Belgian and French JSC at the mining and metallurgy industries that worked in Ukraine – at the South Russian Dnipro and Russian-Belgian Metallurgical Societies, at the Nikopol – Mariupol Mining and Industrial, and at the Kramatorsk Metallurgical Societies.
German industrialist and financier Gustav Hartmann founded the “Russian Society of Hartmann Machine-Building Plant” in 1896 with a share capital of 4 million rubles that later grew up to 9 million. At the Hartmann Plant in Luhansk, there were 3,120 employees. The plant was a major land owner, creating a large industrial town with production and service spaces. In the twentieth century it was known as the Luhansk Diesel Locomotive Plant. In the city there is a monument to the founder of the plant – to Gustav Gartman.
Basing upon scientific and technical discoveries in the industrial production and in the use of electricity, Germany, by the end of the nineteenth century, produced more electrical equipment than England and France together.
Therefore there is no wonder that from the very beginning of the emergence and formation of the electrical industry and electric transport, the decisive positions in these branches belonged to German capital in the Russian Empire. The German electric companies were the famous German firms and their affiliates in the empire – “Siemens-Halsky”, “Shukkert and Co”, “Union”, “Helios” that owned electrical plants, and supportive electrical equipment for tram and lighting companies in Ukraine.
The permanent clients of the companies were the large metallurgical and machine-building enterprises of Ukraine, including the Hartmann machine-building plant, Donetsk-Yurievsky metallurgical plant, and others. The equipment had been supplied for electric stations and cranes manufactured at German electrical engineering plants and their subsidiaries in Russia.
The German Empire (Germany and Prussia) ranked first in the number of foreign citizens in the Southeastern region of Ukraine – in the Azov Sea Region, in the Dnipro Region and in the Donbas and constituted 10,202 people.
The following cities, towns and villages of Ukraine are connected with the German investments – Dnipro (former Katerynoslav), Kramatorsk, Luhansk, Kamianske, Yenakiieve, Nikopol, Mariupol, Druzhkivka, Nizhnya Krynka, and Nizhnedneprovsk.
Dmitry Pirkl, co-author of the project “Foreign investment in Ukraine.
The end of XIX – the beginning of XX century”. Valentyna Lazebnyk, the Head of the Department of the Dnipropetrovsk national historical museum named after D.I. Yavornytsky