Zollverein

[G., from zoll duty + verein union.]
Literally, a customs union; specifically, applied to the several customs unions successively formed under the leadership of Prussia among certain German states for establishing liberty of commerce among themselves and common tariff on imports, exports, and transit.

Note: In 1834 a zollverein was established which included most of the principal German states except Austria. This was terminated by the events of 1866, and in 1867 a more closely organized union was formed, the administration of which was ultimately merged in that of the new German empire, with which it nearly corresponds territorially.

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Zollverein, the Customs Union which promoted German national unity under Prussian hegemony. The idea that Prussia rather than the German Confederation (see Deutscher Bund) should introduce economic reforms, such as the reorganization of fiscal barriers and other sources of revenue, was promoted by Karl Georg Maaßen (1769-1834) and Friedrich von Motz (1775-1830, from 1825 Prussian minister of finance). Maaßen was a follower of Adam Smith (1723-90), whose anti-mercantile views combining social welfare with liberal principles of productivity in the new industrial age coincided with those of F. List.

The Tariff Reform Act of 28 May 1818 established safeguards for the commercial and economic unity of Prussia, among them above all the abolition of internal custom duties. Between 1819 and 1822 Prussia persuaded seven small states to join in a customs union by tariff treaties. For a time Bavaria and Württemberg maintained a separate union in which each member (including also smaller states) had equal fiscal rights. A third union between Saxony, Hesse-Kassel, Hanover, Brunswick, and the Free Cities broke up for lack of funds. But Prussia succeeded in 1828 in coming to an arrangement with Hesse-Darmstadt, modelled on the southern pattern, with the result that the southern union joined the Prussian union in the following year. Thus by 1829 there existed a formidable Customs Union from which Austria, miscalculating its political import, remained excluded. Baden joined in 1835 and Frankfurt in 1836. During the 1840s the teachings of List inspired the Union with a new national fervour which boosted its protectionist policy. To fortify itself against Austria, Prussia admitted Hanover and Oldenburg on preferential terms (1852) and came to an arrangement with Austria by which it offered Austria some tariff concessions and the promise to review its admission into the Union in 1860.

The Zollverein was thus instrumental in preparing the political unification of Germany which, after the Austro-Prussian War (1866, see Deutscher Krieg), excluded Austria and commenced under Bismarck the formation of the North German Confederation (see Norddeutscher Bund). Its terms were revised for its members, while the Confederation established with the South German states a Customs Parliament (Zollparlament) which met in Berlin (1868-70). After the foundation of the Empire in 1871 few remained outside (in 1888 Bismarck succeeded in coercing Hamburg and Bremen into joining; Luxemburg, the only non-German member, on the other hand, stayed in the Union until 1919).

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The Zollverein (German for "customs union") or German Customs Union was formed among the majority of the states of the German Confederation in 1834 during the Industrial Revolution to remove internal customs barriers, although upholding a protectionist tariff system with foreign trade partners. The main ideological contributor behind the customs union was Friedrich List, an economist holding mercantilist and protectionist views. The Zollverein totally excluded Austria because of its highly protected industry; this would later intensify Austro-Prussian conflict. The Zollverein was effectively ended in 1866 with the advent of the Austro-Prussian War; a new organization with the same name was brought about in 1867 when peace was restored.^[1][2] The new Zollverein was stronger, in that no individual state had a veto.

The Zollverein had been originally established by Prussia early in the 19th century. At first it included only the close neighbours of Prussia, and was seen as a way to transport goods between the two non-contiguous parts of Prussia: Eastern Prussia and Western Prussia. The greater customs union of 38 states was the fruit of a continuous effort by Prussian bureaucrats over several decades. Its gradual inception was made against the more modest efforts of the Austrian bureaucracy to establish their own customs union with neighbouring states.

Some economic historians such as Helmut Böhme use the Zollverein to dispute the general view of Bismarck as the unifier of Germany. They point out that, firstly, Prussia's economic dominance made unification inevitable. Economic dominance led to political and military control and once that was achieved unification was only a matter of time. Secondly, the Zollverein established an anti-Austrian tradition among the Prussians. Bismarck cannot be said to have revolutionized Prussian politics when the Zollverein had been working actively against Austria for about 30 years before he came along.

Content

(1) The custom associations… form one confederation, united by a common system of trade and customs.

(4) Similar laws relative to imports, exports and transit duties shall prevail.

(6) The Customs Union guarantees freedom of trade and commerce.

(22) The amount of duties which are to become common property shall be divided among the contracting states according to the population of each state.

(33) A congress (Zollparlament), at which each of the governments of the union shall appoint a person, shall be held annualy… for the purpose of general discussion.

Timeline

Zollverein and German Unification

1818 Prussia establishes an internal customs union throughout their state.

1821 Anhalt joined.

1826 Mecklenburg-Schwerin joined.

1828 Original customs convention between Prussia and the Grand Duchy of Hesse. Hesse-Darmstadt joined.

1831 Hesse-Cassel, Saxony joined.

1833 Thuringian States, Bavarian Palatinate joined.

1835 Nassau joined.

1834 Bavaria, Württemberg joined.

1835 Baden joined.

1841 Brunswick joined.

1842 Luxembourg joined

1851 Hanover joined.

1852 Oldenburg joined.

1865 Sweden signs free trade agreement with the union

1868 Schleswig-Holstein, Kausenburg, Mecklenburg.

1871 Alsace-Lorraine joined (after being acquired by Germany following the Franco-Prussian war).

References

1. ^ EconLib.
2. ^ Columbia.

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