ZOLLVEREIN

Jake Sickich

Demand for Integration- In the early nineteenth century, interstate commerce in Germany was devastated by “poor communications and a multitude of antiquated trade restrictions”. Roads were “notoriously poor” and duties were collected at town gates, markets, and on the roads and rivers. “Some eighteen hundred customs frontiers existed in Germany”. New technologies added to the demand.

New Technologies- 1. River transport: steamboat

2. Railway: “provided the single most powerful stimulus to Germany’s industrial development and growth”.

Enlargement Issue- The kingdoms, electorates and duchies that eventually made up the Zollverein did not want to give up their sovereign rights and refused to join the Zollverein until they fell on economic hardships. Prussia’s external tariff weakened neighboring territories through raised price of Prussian exported manufactured goods and limited access of imports to the Prussian market.

Sequence of events leading to accession: 1. Loss of easy access to the large market, 2. Economic deterioration, 3. Economic merger with Prussia

3 other customs unions: 1. Bavaria and Württemberg, 2. Middles German Commercial Union, 3. The Tax Union

Why did Prussia create the customs union? Post-Napoleon, Prussia’s neighbors reverted to “narrow economic nationalism”. Prussia needed to create the customs union in order to gain international bargaining position.

-Prussia eventually gained enough power to where it forced neighboring states into concessions in commercial and navigation treaties.

Failed European integration schemes: Projects for European customs union in 1890s

Triggered by negative externalities: 1. U.S. protectionism, 2. competitive pressure from American industrial conglomerates, trusts

McKinley Tariff Act of 1890: 1. Imposed duties on U.S. products, 2. freely admitted sugar, molasses, tea, coffee, and raw hide from Latin America in exchange for preferential duties on specific American goods. This redirected trade of Latin American countries from Europe to the U.S.

American Trusts: became powerful, gained ability to undersell competitors abroad

European Response: Several attempts to create a “European Zollverein” failed due to lack of an undisputed leader and the absence of demand to integrate by business. European countries were left to fight for themselves against the “American Menace”.