Zollverein

   A customs union formed by Prussia and neighboring German states in 1834 to stimulate trade. In retrospect, the German Zollverein can be considered as a predecessor of the German Empire, as it encompassed, already in the 1850s, most of the states that were to found the Reich in 1871. At its inception, however, the Zollverein was not intentionally designed to accelerate German political unity but rather to improve commerce and economic development. In this aspect the customs union proved an unqualified success, while it cannot be denied that the exclusion of Austria from the Zollverein paved the way for the kleindeutsch— a “lesser” Germany, excluding Austria—solution of the question of Austro-Prussian dualism.

   At the beginning of the nineteenth century, trade in Germany was severely hampered by the existence of a kaleidoscope of 39 different states and free cities, many of them imposing their own tariffs and issuing their own currencies. This posed a problem especially in northern Germany where Prussia’s western provinces were separated from the main body of the kingdom. To overcome these difficulties, the Prussian government passed a law in May 1818 that created a unified internal market by abolishing all custom dues within the scattered territories of the kingdom. In addition, the government announced its intention to conclude free trade agreements with her neighbors. Prussia imposed comparably low tariffs on imports and abolished all export tariffs.

   It is wrong to say that with the formation of the Zollverein on January 1, 1834, German unification under Prussian leadership was a foregone conclusion. Before Bismarck finally achieved unity in 1871, another generation elapsed and several wars had been fought. On the contrary, several of the Zollverein ’s members had been outright opposed to unification, especially to a kleindeutsch solution under Prussian leadership. As nearly all participating governments were jealously guarding their sovereignty, the customs union was forged primarily out of economic considerations and was an unmitigated success right from its inception. With the Zollverein a huge common market came into existence; both the agricultural and the industrial sectors were protected by tariffs; and a uniform system of measures and weights was adopted. Although payment transactions were eased by the mounting dominance of the Prussian Taler, every new member gave the Zollverein more power and thus it became easier to conclude more advantageous trade agreements with foreign states. Also, the Zollverein made it less difficult to coordinate the building of roads and railways, which soon expanded with breathtaking speed. On the other hand, between 1834 and 1844, administrative costs of tariff collection decreased by 50 percent and net income through custom dues grew by 90 percent. All these factors combined to stimulate growth and tied the participating states closer together. In turn, because of the success of the Zollverein , its economies became increasingly competitive internationally. Public opinion, which used to view the project rather skeptically, now emphatically embraced it.

   Driving forces behind the propagation of the Zollverein were visionaries like the Prussian minister of finance, Friedrich von Motz, and the economist Friedrich List. List, initially a supporter of free trade, turned increasingly into an advocate of protectionism because of the growing import of cheap British commodities. British export industry was in fact less of a threat to the Zollverein than List thought. While Great Britain exported mostly manufactured goods to, and imported mainly agrarian products from, Germany, the Zollverein nonetheless enjoyed a favorable trade balance. Indeed, Prussia had been exporting more than it was importing since the early 1820s.

   The apparent triumph made the customs union more and more attractive to other German states. Before long, Baden, Nassau, and the free city of Frankfurt joined, although Hanover, Oldenburg, and most of the smaller northern states enclaved by Prussia stood aloof until the 1850s. Austria remained voluntarily outside the Zollverein . Although Prince Metternich saw the success of the customs union with growing unease, he stubbornly refused to take part in it because of the consequences this would have for the Habsburg Empire ’s economy. Until 1848, Austria pursued a policy of mercantilist protectionism, and her industry was hardly in a position to compete with the Zollverein ’s. Yet when Austria changed its mind after the aborted German Revolution, Prussia would no longer accept it as a member. After the humiliation of the Punctuation of Olmütz on November 29, 1850, when Prussia was forced to renounce its plans of German political unity, its was not prepared to give way to Austria in the economic sphere, too. By now Prussia fully realized the potential of the Zollverein as a weapon in the struggle for German supremacy. As a result initial hopes of the smaller German states to establish a counterweight to dominant Prussia by inviting Austria into the Zollverein soon disintegrated. Prussia’s economic potential was superior to Austria’s as early as 1834, and the Zollverein enhanced this advantage.

   In spite of several serious crises, the Zollverein also proved resilient. Neither the question of admittance of Austria nor the secular conflict between advocates of free trade and proponents of protectionism were able to destroy it. The customs union even survived the military confrontations between several of its members in the Austro-Prussian War. By 1867, most of the states of the future Empire adhered. The Zollverein lasted until 1918.

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   FURTHER READING:

    Burg, Peter. Die deutsche Trias in Idee und Wirklichkeit. Vom alten Reich zum Deutschen Zollverein . Stuttgart: Steiner Verlag, 1989;

    Doeberl, Michael. Bayern und die wirtschaftliche Einigung Deutschlands . Munich: Verlag der Bayerischen Akademie der Wissenschaften, 1915;

    Hahn, Hans-Werner. Wirtschaftliche Integration im 19. Jahrhundert. Die hessischen Staaten und der Deutsche Zollverein . Göttingen: Vandenhoeck und Ruprecht, 1982;

    Henderson, William Otto. The Zollverein . London: Cass, 1959.

   ULRICH SCHNAKENBURG