Zollverein - The Customs Union 1820s and 1830s

The Customs Union 1820s and 1830s

Surmounting the domestic customs, and the individual states' dependence on those customs as their primary source of income, proved to be a difficult problem. The myriad of customs barriers restricted trade and hampered the industrial development, but the rulers of the states were reluctant to forgo their income from the customs. The impasse was overcome through external forces. With the repeal of the Continental System, the German tradesmen stood in direct conflict with the English industry. A united German Trade and Tradesmens Union demanded protection from English exports. Their spokesman, the economist Friedrich List, feared that the German people would end up as "drawers of water and hewers of wood for Britain." Similarly, Karl Friedrich Nebenius, later president of the Ducal Ministry in the Grand Duchy of Baden and the author of Baden's 1819 proposed customs initiative with the German Confederation, offered a widely publicized description about the difficulties of surmounting such protections:

The 830 toll barriers in Germany cripple domestic traffic and bring more or less the same results: how if every limb of the human body were bound together, so that blood could not flow from one limb to the other? In order to trade from Hamburg to Austria, from Berlin to the Swiss Cantons, one must cut through the statutes of ten states, study ten tolls and toll barriers, ten times go through the toll barriers, and ten times pay the tolls. Who but the unfortunate has to negotiate such borders? To live with such borders? Where three or four states collide, there one must live his whole life under evil, senseless tolls and toll restrictions. That is no Fatherland!

In 1820, Württemberg planned to start a Customs Union among the so-called Third Germany; the middle sized German states, including itself, Baden, Bavaria, and the two Hessian states. This Customs Union excluded both Austria and Prussia, primarily because the two major German powers were considered too overbearing. Plans foundered on the differing interests of the affected states. While the economic development in Baden proceeded relatively well, with its long borders and well entrenched infrastructure for trade, economic development in Bavaria lagged well behind it, and the Bavarian regime enacted a protective tariff on goods produced outside its border. The result was a short lived trade agreement between Baden and Hessen-Darmstadt. Nevertheless, a second agreement, reached in Stuttgart in 1825, established rapport between Württemberg and Bavaria, with the foundation of the South German Customs Union. In opposition to the Prussian activities, Hannover, Saxony, Hesse, and other states (Austria, France, Great Britain, and the Netherlands), developed their own economic agreements. While they promised one another not to join the Prussian union, they did develop trade agreements of their own. The Union remained unsuccessful, because it only sought to maintain the status quo, not to fix the problems created by toll barriers. In 1834, Baden and Württemberg joined the Prussian union, which was renamed the German Customs Union.

By 1835, the German Customs Union had expanded to include the majority of the states of the German Confederation, even Saxony, Thuringia, Württemberg and Baden, Bavaria, and the Hessen states. Functionally, it removed many internal customs barriers, while upholding a protectionist tariff system with foreign trade partners.