Following the signing of partition treaties by Austria, Prussia and Russia, the territory of Oświęcim and Zator were included in the Habsburg Empire. The area of Poland that Austria acquired was to be called “the Kingdom of Galicia and Lodomeria with duchies of Oświęcim and Zator” (with the exception to 1820-1850 when the area belonged to the German Confederation).
The partitions marked the beginning of a new era also for the Jews in Oświęcim and the changes in their legal, social, and financial status. In 1793, Emperor Franz II confirmed all previous royal privileges and granted Oświęcim permission to hold 12 markets a year. However the economic situation of the town and its Jewish community remained unfavorable. With new taxes imposed upon the Jewish community, many of its members left Oświęcim. As a result, Jews only made up 0.7% of the total population of the Oświęcim and Zator areas and the local Jewish community was heavily in debt. The Jews in Oświęcim signed a petition asking the emperor to forgive the debt, but to no avail. In 1803 there were 100 Jewish families in the town.
While nearby towns including Biała, Kęty, Żywiec, and Andrychów experienced development of industry, Oświęcim remained stagnant. Burghers were mostly employed in production of vodka, crafts, and trade of salt. Napoleonic wars brought further destruction and in 1811 there were only 295 wooden houses in the town. In his record of visiting Oświęcim in 1847, Józef Łepkowski recalled a couple old houses in the town, lots of Jewish stores, a town hall from 18th century, and around 3,000 residents.
The turning point for the local economy came in the second half of the 19th century when the town became connected to the railway system. Oświęcim found itself in the nexus of three important railway lines and the vicinity of the railway station was filled with factories and warehouses. Thanks to its location on the border of Austrian, Prussian and Russian partitions, Oświęcim became an important immigration stopover. The town’s income raised with merchants from Vienna, Bohemia, and Moravia visiting nearby town of Pławy for famous weekly ox fair. Other incomes included production of alcohol, road, and bridge taxes as well as land, and fishing rents. Residents of Oświęcim became involved in weaving and pottery industries and the local fair took place twice a month. This was the beginning of prosperity in Oświęcim.
Factories that opened near the railway station were in large part established by Jewish merchants and entrepreneurs. Jakób Haberfeld was the pioneer of the industrial revolution in Oświęcim with his Steam Factory of Vodkas and Liquors established in 1804. Other major factories included Arnold Haber’s Shipping and Customs Agency (1868), Emil Kuźnicki’s Cardboard and Roofing Paper Factory (1888), Abraham Gross’ Printing House and Paper Depot (1889), Benjamin and Wolf Landau’s Roofing and Asphalt Factory (1890), Hersch Enoch and Sons Tannery (1897), A.E. Schönker Artificial Fertilizer Factory (1905, later renamed Agrochemia), and Nathanson and Melcer Roofing Factory (1907). According to official data, there were 247 companies in Oświęcim in 1899, many of which were small businesses. Much like other towns, many Jewish citizens held professions such as lawyers, doctors, and insurance agents.
Oświęcim’s Jews were are pioneers of public transportation; in 1910 Samuel Józef Silberspitz and Abraham Moshe Huterer received a transportation license for the route from Oświęcim to the train station. The blooming of economy in Oświęcim was followed by population growth. An 1861 census lists 2,792 residents of whom 1,447 (52%) were Jews. The Jewish community grew with the town and in 1910 of the total 10,126 people living in Oświęcim, 5,358 (52.9%) were Jews. Important changes in the legal status of Jews in Oświęcim’s came in 1867. Their century-long emancipation was completed with the decision of Austrian emperor Franz Josef to introduce a new liberal constitution. The newly born Austro-Hungarian state lifted public and private legal restrictions, which weighed heavily on its Jewish residents. Some of them took the chance and made a step towards modernization. In Galicia and Oświęcim the legal changes were reinforced by introduction of the autonomy. Polish became the official language in the administration, courts, and schools. In 1871, German names of streets in Oświęcim were replaced with Polish ones.
The Jewish community itself also underwent an organizational change. In the second half of the 19th century the Jewish community in Oświęcim saw major tension between its progressive and traditional members. Initially the progressives took over and their candidates were elected president and rabbi of the community. The progressive rabbis in Oświęcim were people with degrees in secular education: Dr. Ephraim Israel Blücher (1813-1882), Dr. Gershon Kranz, and Dr. Lazar Münz (1837-1921). From the 1880s the traditional members of the Jewish community, both Orthodox and Hasidic, joined to regain power. These members succeeded and from the end of the 19th century through 1939, traditionalists were the major force in the Jewish community in the town.
Due to its geographical location, at the farthest western edge of Hasidism in Galicia, Oświęcim was a borderland between the influence of Orthodox and Hasidic Jews and the followers of Haskalah, or Jewish Enlightenment. Before he became founder of the Bobover Hasidism, Shlomo Halberstam was the chief rabbi of Oświęcim c. 1874-1879.
At the beginning of the 20th century the Jewish community in Oświęcim included 45 nearby towns and villages and a total of 15 synagogues and houses of prayer, 10 of which were located in Oświęcim itself. Osias Pinkas Bombach from Drohobycz replaced Abraham Schnur as the town’s chief rabbi from 1901 to 1921.
Thanks to the new constitution, the Jewish residents of Oświęcim could get involved in local politics. It was the maskilim who were largely represented in the town council of Oświęcim and in 1867 of the total 24 members of the council 10 (42%) were Jewish. The deputy mayor, Jan Kanty Kohn, was the town’s doctor awarded with the Golden Cross by Emperor Franz Josef I for his service in the battle of Oświęcim on June 17, 1866 during the Austro-Prussian war. Szymon Haberferd was the town council’s asesor, member of the board.
With every election the Jewish representation in the town council increased and Jewish citizens
were at times elected deputy mayors of Oświęcim (eg. Szymon Haberfeld in 1869 and Juliusz Haberfeld in 1871). In 1870 half of the town council consisted of Jewish members. This trend continued into the early 20th century and in 1906, 18 of the 36-member council were Jewish. Distinguished Jewish town council members included Markus Lieberman, Jakób Schneider, Rudolf Haberfeld, and Józef Thieberg, who was also president of the Israelite Religious Community, as it was called.