German Zollverein

The establishment of the Deutscher Zollverein (German Customs Union) was an important step toward the goals of industrializing and unifying Germany. The German states, numbering more than 300 principalities, were bound together in the loosely federated Holy Roman Empire.

After the 1815 Congress of Vienna, the Federated League of States, consisting of 39 states with different systems, made German unification difficult. The eventual rise of Pan-Germanism, along with the Zollverein, facilitated progress toward unity.

Even Prussia, Germany’s most powerful state, had 67 tariff systems. In all of Germany, there were three currency systems. There were many border checkpoints, numerous units of measurement, and different customs laws.

The pioneering idea of economic unification came from Prussia, which did away with internal tariffs and established free trade throughout its scattered territories in 1818. The internal customs boundaries of different Prussian provinces became a thing of the past, with one uniform tariff against nonPrussian countries.

Prussian efforts at economic integration were such a success that they were replicated by other German states. Moreover, the Customs Union of Prussia could protect local industries against a flood of imported British goods.

The two main Prussian export items, corn and linen, had been affected by British policy, and the 1818 union made these easier to sell. Anhalt, Schwarzburg Sondershausen, and Hessen-Darmstadt joined the Prussian Union in 1828.

Two other units joined up independently of the Prussian Union, as they did not want to be under Prussian authority. Saxony, the Thuringian statelets, Hessen-Kassel, Nassau, Frankfurt, Hannover, Braunschweig, and Oldenburg established the Central German Customs Union in 1828, and after five years in the south, the Bavarian-Wuerttembergian Customs Union was founded.

All three unions integrated themselves into a Zollverein in 1834 to reap the obvious economic benefits. The custom barriers were no longer in place, and a uniform tariff was applied to states outside the Zollverein.

Goods coming from outside were taxed on a joint account of the member states and the proceeds were divided. The introduction of a uniform currency, the Vereinsthaler, standardized the different currencies.

The Zollverein consisted of 17 states and represented a population of about 26 million people. Its considerable size resulted in the growth of industries with the application of a free-trade policy.

The Customs Union also witnessed the lessening of Austrian influence and the gradual dominance of Prussia, facilitating the task of unification afterward. Economic leadership of Prussia would soon challenge Austria’s presidency in the German Confederation.

Austria, along with the two Mecklenburgs and Hanseatic towns, had remained outside the Zollverein, but Baden and Nassau joined in 1836. After six years, Braunschweig and Luxemburg also became members of the Customs Union.

In 1835 the German railroads opened in Bavaria, and economist Georg Friedrich List planned railways across the whole of Germany. He had rejected the idea of diplomatic missions or bilateral treaties with European countries. Prussia signed commercial treaties with Britain, France, and Belgium, making the Zollverein even more powerful.

The railroads connecting Cologne in Prussia with Antwerp in Belgium were completed in 1843, and the next year the two states signed a trade agreement. By 1848–49 there were 3,000 miles of railway lines in Prussia. In 1851 Hanover and Oldenburg joined the Customs Union.

The Deutscher Handlestag (the national chamber of commerce) was established in 1861 at the request of German economists, who were clamoring for greater economic unification. The Zollverein was dissolved as the southern German states supported Austria in the Austro-Prussian War of 1866.

The next year it was established again with no individual state having veto power. The constitution of the renewed Zollverein established the Zollbundesrat (the Federal Council of Customs) consisting of emissaries of individual rulers and an elected Zollparlament (Customs Parliament). Prussian dominance was significant, and other German states wanted to join. Schleswig-Holstein, Kausenburg, and Mecklenburg became members in 1868.

The regulations of Zollverein became part of the laws of the newly created German nation. AlsaceLorraine, taken from France after the victory in 1870s Franco-Prussian War, joined the Customs Union in 1872. The Hanseatic cities followed suit in 1888.

The dominance of Prussia made German unification inevitable. Liberating the German states from the oppressive burden of numerous tariffs and taxes, the Zollverein paved the way for economic transformation of the German Empire.