Was Berlin in a better financial state as the Imperial capital from 1871-1945 than it is today? Up to now, hardly any historical studies of the capital have dealt intensively with its financing. The present study is the first to use a model calculation with concrete data to analyze how Berlin was funded as a capital, and how its function as a capital affected the overall economic performance of the city. Following a definition of monetary transfers relevant to the capital and a description of the expansion of the capital city (administrative buildings and staff), the budgets of Prussia and the German Reich are examined for all payments relevant to the budgets and are compared with the urban development of Berlin. The study reveals that prior to 1945 exorbitant sums of money flowed into the city's economy from the Reich and from Prussia.