Fostering the National Interest: Utilizing Hungarian State Property in the Jiu Valley to Build a Modern Coal Industry

Abstract

Abstract After the 1867 Ausgleich, the Kingdom of Hungary sought to foster coal extraction to fuel the growing needs of transport and industrialization. In developing the rich deposits of the Jiu Valley in Transylvania, the state did not wait for private, profit-driven development. Instead, the ministries in Budapest both developed state-operated mines in the region and supported private companies’ efforts, shifting the relative importance of each over the following four decades as the situation required. The ministries worked with private corporations to design model “company towns” and provided consistent support for their upkeep—demonstrating the extensive nature of state influence at the local level. The Jiu coal mines as a case study reflect that the Hungarian state saw property not simply in economic terms but as part of a wider framework of the modernization of the country, including its society. Royal Hungary’s property regime was one that provided legal recognition of the right to private property, but at the same time one in which the state frequently intervened to ensure economic development that served its perceived interests.