The founding of the Swiss federal state ushered in a period of greater stability as regards both domestic and foreign affairs. The revised Constitution of 1874 extended the powers of the federal government and introduced the optional legislative referendum. Switzerland developed its system of direct democracy further and in 1891 granted the people the right of initiative on the partial revision of the Federal Constitution. That same year the Catholic conservatives – the losers of the Sonderbund war – celebrated, for the first time, the election of one of its representatives to the federal government.
The federal state used its new powers to create favourable conditions for the development of a number of industries and service sectors (railways, machine construction and metalworking, chemicals, food industry and banking). These would become the mainstays of the Swiss economy.
Not everyone in Switzerland reaped the benefits of the economic upturn. In the 19th century poverty, hunger and a lack of job prospects drove many Swiss people to seek their fortunes elsewhere, particularly in North and South America. At home, industrial towns and cities saw an influx of rural and, increasingly, foreign migrants. Living conditions for many members of this new urban working class were often precarious.