ZOLLVEREINfoundation of the zollverein and its economic importance
trade policy and nation building
The image of the German Zollverein (customs union, formed in 1834 between the members of the German Confederation) has been heavily influenced by two nineteenth century authors. The famous economist Friedrich List (1789–1846) as early as the 1830s spoke of the Zollverein and the railways as the Siamese twins of German economic modernization, thus stressing the importance of market integration for the Industrial Revolution. The famous historian Heinrich von Treitschke (1834–1896) a half a century later linked the foundation of the German Zollverein in 1834 to the battle of Königgrätz (1866), drawing a direct line from the beginnings of the customs union to national unification under Otto von Bismarck (1815–1898). While more recent authors are quite skeptical about either claim, the economic consequences of market integration and nation building still dominate the literature on the German Zollverein.
While the post-Napoleonic German Confederation proved unable to agree upon a common trade policy, the still more than forty German states after 1815 at least began to abandon the internal tariff borders running through their territories. In the following years—and after difficult negotiations—agreements between some German states were reached so that by the late 1820s three customs unions transcending the borders of single German states had been founded. In the south Bavaria and Württemberg had formed an alliance, while in the north Hesse-Darmstadt had joined Prussia. Partly as a reaction to the latter, and with support from the Austrian government, Hanover, Hesse-Cassel, Saxony, and a number of smaller states formed a Middle German Commercial Union later that year (1828). The tension between its character as an anti-Prussian bulwark and its conception as a tariff union clearly diminished its economic attractiveness. The initiative thus fell to the customs union dominated by Prussia, which as early as 1829 reached a first agreement with the southern customs union of Bavaria and Württemberg. A further decisive step on the way to the German Zollverein was taken when Hesse-Cassel joined the customs union dominated by Prussia in 1833, thus bridging the territorial gap between the eastern and western provinces of Prussia. The same year saw Bavaria and Württemberg as well as Saxony and a number of smaller states joining, so that the name of a German Zollverein, which quickly gained currency, was justified for the system of tariff contracts coming into force on 1 January 1834. While most German states in the south that had remained outside the Zollverein in 1834 joined during the following years, the refusal of Hanover, Hamburg, and Bremen to do so deprived the Zollverein of direct access to the North Sea for several decades to come.
Why was the Prussian-dominated customs union so successful, and what were the motives of those who joined it? For one, already Prussia's tariff law of 1818 had served as a model for a compromise between divergent economic interests. Immediate neighbors often had no choice but to join because they depended on Prussia for their exports. Others profited from the enormous rise in the efficiency of the new system. The costs of securing the tariff borders and of tariff administration—which had eaten up about 100 percent of tariff incomes in Hesse-Darmstadt and Hesse-Cassel before 1830—were drastically reduced. The importance of tariff income for the budgets, especially of many smaller states, grew accordingly. This was more than merely a fiscal question because income raised through tariffs was not subject to the parliamentary control that had been established in the mostly constitutional German states after 1815. The motives for joining thus were manifold, and by no means exclusively economic. But although economic interests differed from one state to the next, economic interest groups often lobbied for joining the Zollverein. Saxony for example, certainly the most developed industrial region in the 1830s, could hardly do without the Prussian market. But many other states such as Württemberg realized as well that their commercial activity was oriented toward the north and the west rather than the south. This had, among other things, to do with the construction of the railway system since the mid-1830s that strengthened the ties between Baden, Württemberg, and Bavaria and the northern parts of Germany.
The Zollverein thus fostered the economic integration of its territory without being the sole driving force behind this process. But while market integration was certainly advantageous for the industrial development that gained considerable pace from the mid-1840s onward, the Zollverein can hardly be credited with causing the German Industrial Revolution. Economic historians tend to agree that it was not even a necessary prerequisite of industrial development. With the Industrial Revolution under way, however, the renewable contracts constituting the Zollverein increasingly reflected the more and more industrial character of its member states. Thereby the gap between the Zollverein and Austria widened. It was not only that the Habsburg Monarchy as a whole retained a far more agrarian character, but even its more industrial regions fell behind during the 1850s and 1860s. Thus while the economic integration fostered by the Zollverein did not cause the German Industrial Revolution, it intensified enormously the economic integration of its territory, turning the Zollverein into an ever sharper weapon within the Austro-Prussian struggle over supremacy within the German Confederation.
Thus, while the Zollverein originally was not designed to be a means of isolating Austria within the German Confederation, it increasingly became one. The political public of the 1840s discussed intensely the Zollverein's unifying potential, which became more and more obvious from the 1850s onward. While the economic and administrative integration of the Zollverein progressed, a commercial treaty between Austria and Prussia in February 1853 seemed to open up the possibility of Austrian membership in the future. The treaty stipulated that negotiations were to begin no later than 1860. Thus by 1865, when the renewed Zollverein contracts were due to run out, a central European customs union including Austria would have been possible. That this possibility remained a mere chimera had to do with Prussian policy as well as with different economic structures and interests. It proved all too easy for Rudolph Delbrück (1817–1903), who directed Prussian trade policies, to advocate a free trade course that was unacceptable to the protectionist Austrian economy. Politically the Prussian quest for hegemony thus was hardly concealed. And while this provoked considerable opposition in many member states of the Zollverein, it soon turned out that these states could hardly afford economically to leave the Zollverein behind. Petitions by chambers of commerce and political campaigns made that abundantly clear.
Thus in 1861, rather than working toward the integration of Austria into the Zollverein, Prussia was negotiating a commercial treaty with France that aimed at the equal treatment of Prussian imports to France with those from Britain or Belgium, and which meant a considerable lowering of tariffs. Against considerable opposition from the non-Prussian members of the Zollverein, Prussia not only signed the treaty on 2 August 1862, but in December 1863 terminated the Zollverein contracts that were running out in 1865. Prussian officials knew only too well that this put its Zollverein partners in an extremely difficult spot. While most of them objected to the hegemonic role claimed by Prussia, they needed the Prussian market and were attracted by the enlarged trade zone opened up by the French-Prussian treaty. Ultimately they had to pay the price of accepting Prussia's arbitrary behavior for a renewal of the Zollverein.
Economic interests thus weighed heavily. This is not to say, however, that they determined the political outcome (i.e., German unification). After all, Austria in 1866 successfully called for the mobilization of the non-Prussian troops of the German Confederation after Prussia had invaded Holstein. The following war thus saw Prussia fighting not only against Austria but against non-Prussian members of the Zollverein as well. Since its outcome was by no means a foregone conclusion, it would be farfetched to regard the economic integration of the Zollverein as the anticipation of the German nation state. But if it was not determinative, it was nevertheless crucially important, which can be gauged from its continued operation during the war. Neither the Austro-Prussian War of 1866 nor the Franco-Prussian War of 1870–1871 meant the end of the economic integration of Germany fostered by the Zollverein, however. Hamburg and Bremen did not become part of the German tariff area until 1888.
Böhme, Helmut. Deutschlands Weg zur Großmacht. Studien zum Verhältnis von Wirtschaft und Staat während der Reichsgründungszeit 1848–1881. Cologne, 1966.
Hahn, Hans-Werner. Geschichte des Deutschen Zollvereins. Göttingen, 1984.
Henderson, W. O. The Rise of German Industrial Power, 1834–1914. Berkeley, Calif., 1975.
Lenger, Friedrich. Industrielle Revolution und National-staatsgründung. Stuttgart, 2003.
Zollverein (tsôl´fərīn´) [Ger.,=customs union], in German history, a customs union established to eliminate tariff barriers. Friedrich List first popularized the idea of a combination to abolish the customs barriers that were inhibiting trade among the numerous states of the German Confederation. In 1818, Prussia abolished internal customs and formed a North German Zollverein, which in 1834 became the German Zollverein after merging with two similar unions, the South German Zollverein and the Central German Trade Union, both founded in 1828. Customs barriers of member states were leveled, and a uniform tariff was instituted against non-members. The customs at foreign frontiers were collected on joint account, and the proceeds were distributed in proportion to the population and resources of the member states. A rival customs union, the Steuerverein of central Germany, was also organized in 1834. A series of treaties (1851–54) joined it to the Zollverein, which then comprised nearly all the German states except Austria, the two Mecklenburgs, and the Hanseatic towns. Prussia, despite the insistence of several states, was unwilling to admit Austria to the union, but the two countries negotiated a separate tariff treaty. After the Austro-Prussian War (1866) a new agreement was reached by the members of the union. The newly formed North German Confederation entered the Zollverein in a body, and the other German states also negotiated customs treaties with victorious Prussia. The constitution (1867) of the new Zollverein provided for a federal council of customs (Zollbundesrat), comprised of personal representatives of the several rulers, and for an elected customs parliament (Zollparlament). In both bodies Prussia exercised predominant influence. In 1871 the laws and regulations of the Zollverein passed into the legislation of the newly created German Empire. Alsace-Lorraine entered the imperial customs area in 1872, and the Hanseatic cities joined in 1888. The Zollverein promoted the economic unification of Germany.
See studies by J. R. MacDonald (1903, repr. 1972), W. O. Henderson (2d ed. 1959), and E. N. Roussakis (1968).