Before the Protestant Reformation, the states that made up the Holy Roman Empire, namely Prussia, were desperate for social and cultural reform. Frederick III and his son Maximilian I, members of the Habsburg family, saw that the reform in Prussia was needed to strengthen their power and even encouraged the local leaders to carry out such reforms. However, problems arose when the goals of the imperialistic Habsburgs inevitably conflicted with those of the local Prussian rulers. The Habsburgs, obviously wanting to gain as much power as possible, wanted to increase the power of the government over the lives of the people. The local rulers, however, wanted to secure their self-government and stabilize their independence by formally documenting the rights of the states and their people while regulating standard measures of action to ensure the flow of business in each separate state. These conflicts between the local government and the noble power of the Habsburgs over the entire Holy Roman Empire led to a diet, the Reichstag, in 1489. At the Reichstag, leaders from all states of the Holy Roman Empire, including Prussia met, in order to come to a compromise on the necessary reforms. A compromise was met in hopes of a balance between local and empire-wide control. In 1495 Maximilian Habsburg called for peace across the Empire, and even tried to diminish the brutality and violence between the rulers of each individual states. However, Maximilian's reforms did not do much to ease the tensions between the local rulers.
With these social and political changes inevitably came a change in the economy. Tensions continued to rise as it became increasingly more difficult for many people to make money, and increasingly easier for families such as the Fugger family of Augsburg to hold most of the country’s wealth. While the Fuggers and Habsburgs were prospering greatly, the vast majority of Prussia was struggling tremendously. The impoverished farmers and their families were starving, and as a result the peasant population gravitated towards the towns to make more money. Because of this migration from the farmers to the towns, the local governments limited, and even banned, the farmers from the countryside coming into the towns. Just as the local and large governments were arguing, the gap between the classes in the struggling towns became much larger as it was becoming more and more difficult for one to earn a substantial living and climb the social ladder. However, despite the uneven distribution of wealth, the Fuggers’ management of the Habsburgs’ finances, as well as a boom in the trade between the north and south caused Germany, or Prussia, to become the financial center of Europe for many years.
