Financial Markets and Land Redistribution in 19th Century East Prussia

How did the emerging market for land in the 19th century influence land distribution in East Prussia? And how did land markets respond to the emergence of financial institutions that relied on land as collateral but also affected the ease and speed of land transfer? Focusing on the example of a specific financial institution – the East Prussian Landschaft – this paper empirically tests the hypothesis that the Landschaft credit institutes, through their provision of privileged credit, enabled noble estates to expand their landholdings. It also tests whether the existence of Landschaft-credit helped noble estates to remain in the hands of nobles and halted estate sales to the emerging bourgeoisie. The analysis combines several datasets on East Prussian landed estates in 1796, 1834 and 1882 and matches these with borrowing records of the East Prussian Landschaft from 1823 and 1829. The study finds that access to Landschaft-credit correlates positively with estate size over the 19th century, suggesting that the Landschaft credit institutes did play a role in ownership concentration. The results regarding the transfer of estates from the nobility to the bourgeoisie show a weaker link between Landschaft-credit and ownership status of estate holders.