With the Berlin Congress Bosnia was placed under the administration of Austria-Hungary.
During this time significant investment and economic changes were made in Pale and the surrounding areas.

The new overlords were favoring the exploitation of the natural resources, primarily mineral and wood products.
 The town of Pale at this point becomes an important logging and wood products center in the region.
According to the 1895 census, Pale with the adjacent villages had 483 inhabitants.
440 inhabitants were engaged in agricultural and logging activities while 27 were engaged in clerical work.
Industrial development spurs on supporting activities.
New trade shops, hotels and other service activities are brought to the town.

In February 1907 Pale receives the first Elementary School.
The school was administered by the school-church board of the Serbian Orthodox Church in Pale.
The school admitted students regardless of their faith.
Along with Orthodox Christians, Catholic and Jewish students also attended the school.
These were mostly the children of people who were involved in the town log mill.

According to administrative records of the Austro-Hungarian administration, by 1879 in Pale there were already two modern log mills, and their products were transported to Sarajevo.
 With the construction of the rail line connecting the Bosnian capital of Sarajevo with its eastern border town Višegrad the town of Pale received its first railway station.
The railway link enabled Pale to continue to grow and prosper with foreign investment making it possible to open several additional mills in the town.
Construction of the Bosnian Eastern Railway from Sarajevo to Uvac and Vardište started in 1903.
It was completed in 1906, using the 760 mm (2 ft 5 ¹⁵⁄₁₆ in) track gauge.
With the cost of 75 million gold crowns, which approximately translates to 450 thousand gold crowns per kilometer, it was one of the most expensive railways in the world built by that time.
The line was closed down in 1978, and dismantled afterwards.
With the Berlin Congress Bosnia was placed under the administration of Austria-Hungary. During this time significant investment and economic changes were made in Pale and the surrounding areas.
The new overlords were favoring the exploitation of the natural resources, primarily mineral and wood products.  The town of Pale at this point becomes an important logging and wood products center in the region. According to the 1895 census, Pale with the adjacent villages had 483 inhabitants. 440 inhabitants were engaged in agricultural and logging activities while 27 were engaged in clerical work. Industrial development spurs on supporting activities. New trade shops, hotels and other service activities are brought to the town.
In February 1907 Pale receives the first Elementary School. The school was administered by the school-church board of the Serbian Orthodox Church in Pale. The school admitted students regardless of their faith. Along with Orthodox Christians, Catholic and Jewish students also attended the school. These were mostly the children of people who were involved in the town log mill.
According to administrative records of the Austro-Hungarian administration, by 1879 in Pale there were already two modern log mills, and their products were transported to Sarajevo.  With the construction of the rail line connecting the Bosnian capital of Sarajevo with its eastern border town Višegrad the town of Pale received its first railway station. The railway link enabled Pale to continue to grow and prosper with foreign investment making it possible to open several additional mills in the town. Construction of the Bosnian Eastern Railway from Sarajevo to Uvac and Vardište started in 1903. It was completed in 1906, using the 760 mm (2 ft 5 ¹⁵⁄₁₆ in) track gauge. With the cost of 75 million gold crowns, which approximately translates to 450 thousand gold crowns per kilometer, it was one of the most expensive railways in the world built by that time. The line was closed down in 1978, and dismantled afterwards.
Pale, Bosnia and Herzegovina