Emil Lederer: Review of Reinhard Dönges on Munich’s Development (1910)

Emil Lederer’s review examines Dönges’s empirical study of Munich’s growth and property market, particularly its twenty-one joint-stock land-development companies. Published in 1910, the review moves from their demographic origins and financial performance to their contribution to urban development, concluding with a qualified endorsement of the study’s relevance to the urban land question.

Lederer emphasizes the book’s documentary character:

Das Buch enthält hauptsächlich Daten: solche über die Entwicklung Münchens, deren Zusammenstellung ein anschauliches Bild von dem raschen Wachstum der bayerischen Hauptstadt bietet und im Anschlusse daran Mitteilungen über die Wirksamkeit der Münchener Terraingesellschaften.

English translation: The book contains chiefly data: data on the development of Munich, the compilation of which offers a vivid picture of the rapid growth of the Bavarian capital, and, in connection with these, reports on the activity of the Munich land companies.

Dönges links the companies’ emergence to exceptionally rapid population growth in 1895–1900, when Munich gained approximately 17,000–18,000 inhabitants annually. Rising construction activity made the provision of urban land appear both necessary and profitable; most companies were founded in 1897–1900. Their subsequent results disappointed these expectations. Of twenty-one companies with aggregate share capital of 62.29 million marks, only eight paid dividends or returned capital during 1897–1903; the average dividend relative to share capital was 1.3 percent.

Lederer distinguishes these reported figures from what the evidence cannot establish: Dönges does not specify whether the capital was paid in or represented shares issued for contributed land. Nevertheless, poor returns, falling share prices, and leading companies’ withdrawal from further acquisitions indicate the effects of slower urban growth. The review thus interprets profitability through the relation between demographic expectations and the pace of development.

Turning to the companies’ practical role, Lederer reports Dönges’s strong appraisal of their contribution to Munich’s expansion and beautification. Obligations to construct streets could impose costs exceeding three times the original land price. Such burdens give substance to the discussion of development costs. Lederer also provisionally endorses Dönges’s rejection of the claim that the companies increased profits by withholding land:

Endlich tritt der Verfasser der Ansicht entgegen, als ob die Terraingesellschaften ihren Gewinn durch Aussperrung des Terrains zu erhöhen trachten und hat speziell für München damit wohl Recht, daß niemand so sehr als die Terraingesellschaften eine rasche und flotte Bebauung des ihnen gehörigen Grund und Bodens wünscht (S. 111).

English translation: Finally the author opposes the view that the land companies seek to increase their profit by withholding land, and in this he is probably right for Munich in particular, in that no one desires a rapid and brisk building-up of the ground and soil belonging to them so much as the land companies do (p. 111).

The qualification “speziell für München” limits this judgment to the case examined. Lederer values the study’s factual presentation and authentic material, but treats its findings as historically contingent. Eight years of observed company activity cannot settle the longer-term assessment: renewed expansion might substantially improve their position. The review’s central methodological move is therefore to combine recognition of an illuminating empirical contribution with caution about turning a short period of disappointing returns into a durable verdict on land-development companies.