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Reconstruction under Britain
During the latter days of the Second World War the city of Hamburg had come under the control of British troops. The city had been devastated through numerous bombing raids, most notably Operation Gomorrah, which left 50% of residences, 40% of its industry and 80% of its harbour area in ruins. With no economic relief in sight many in the city felt that it was a lost cause and attempted to leave the city.
However, Britain was determined to keep a small slice of Germany under its control. Hamburg, prior to the war, had been a major part of the German economy; even with the nation destroyed the port of Hamburg could provide a lucrative business opportunity and assist the British economy. Though much of the UK's economy was focused on reconstructing its own ruined cities, it attempted to package off a number of stimulants to Hamburger businessmen to rebuild their city. Along with indirect rule and mass immigration to one of the last stable areas in Germany (caused by rampaging Soviet forces) Hamburg slowly rose back out of the ashes. Beginning with its critical ports, the business of Hamburg rebuilt and reopened. Bombed-out residential blocks were patched up and reopened to immigrant families. Subsidies for farmers combined with careful rationing managed to preserve the city through the winter of 1945, with only a handful of cases of starvation.
In 1946 problems soon began to emerge. Though most basic amenities had been restored they could barely handle the huge influx of refugees, drawn by the prospect of jobs in the new industrial districts and the chance of immigration to far-western Europe and America. Dozens of families were crammed into barely-livable houses. Huge tent cities and slums began to develop around Hamburg. Well over a million people were stuffed into an area that was barely habitable.
Despite this, there was no shortage of jobs, initially in construction and later in the manufacturing districts. Companies such as Blohm + Voss which had been pushed to the brink in the war suddenly experienced huge booms of employees. By the end of the year Blohm + Voss was returning to profit, primarily working on hundreds of small vessels built to carry refugees across the Atlantic. It also had a lucrative contract with the city's government, supplying several stopgap instruments of war to deter Soviet presence. Companies that were quick to rebuild after the war soon found themselves in command of large portions of the city's wealth, establishing an oligarchy over the industrial and shipyards precincts.
In 1947 the city numbered an astonishing 1.4 million people, most of whom were packed into the huge slums encroaching upon the industrial areas and shipyards. On average some twenty thousand immigrants arrived in the city each month, with an estimated eight thousand people managing to leave the city on refugee vessels. With overcrowding rapidly growing it was only a matter of time before conflict erupted - which it did in May. British troops breaking up a Nazi rally in Harburg encountered aggressive behaviour from the bar they were in; within minutes a riot had developed. This soon spilled out into the streets and spread like wildfire across the slums on the southern bank of the River Elbe. Troops and police called in to subdue the unrest were beaten back and assaulted in the maze-like slums. The conflict lasted two days before the local military government elected to use live fire to actively suppress the crowds in the slums. Thirteen rioters were killed on the night of the 23rd of May, with hundreds more wounded. An estimated seven million marks of damage was caused. The disaster was covered up by the occupying forces and led to the implementation of careful zoning laws and a determined effort to build decent residential areas to alleviate overcrowding issues. Throughout the remainder of the year people were reorganized into various new council estates, defusing some of the tension but by no means destroying it.
1947 also saw the creation of an identity for the city. Following the Rape of Osnabruck there came increasing desparation from the remaining areas free of Soviet oppression to band together. Hamburg, the strongest economy left in northwest Germany, was the natural leader of this confederation, and by the virtue of British presence also possessed the military and political strength to intimidate the Red Army. The latter fact, however, was generally ignored by the average Hamburger, who chose to focus upon the growing strength of their city. As a result the city began to grow increasingly self-confident and towards the end of the year there were strong overtures in the Rathaus towards establishing Hamburg and its hinterlands as an independent state. This idea was understandably controversial from all points of view. The oligarchs saw it as a chance to further increase their power over the economy of the city. The Nazis were torn over whether it was a rejection of German nationalism or staunch defiance of the Soviet 'plague'. The British saw a chance to establish a puppet state on the continent.
A formal constitution was drawn up at the beginning of 1948, pledging to create a free and democratic state for all former citizens of Germany to be granted asylum.