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Spectre of steel


Elijah Lim

By

April 29th, 2015


Elijah discusses how the Zollverein – a customs union and free trade area – played a pivotal role in the economic and political evolution of German-speaking states in the 19th century, eventually leading to the creation of the German Empire.


It’s a stretch of steel that completely overbears its surroundings. My train is keeping pace in its advance towards this bulking metallic mass, travelling up a tremendous loop of spiraling railway, a course set along escalating iron stilts. I watch the town shrink below. The train lurches forward, as if nervous at the prospect of traversing this colossal edifice.

The Rendsburg High Bridge remains to this day a tyrannical presence, a harsh unyielding framework commanding by its elevation over everything else, its conspicuousness amplified by the characteristic flatness of the North German landscape. Built early in the 20th century, this structure was a spectre of an emerging empire and an unambiguous symbol of industrial and military might.

It is a bridge that spans a canal that was built to connect the Baltic and North Seas across the top end of Germany, an engineering marvel in its day. Today it is a relic from a bygone era but a patent reminder of the rumblings of a rising German Empire, newly united under the formidable Bismarck, and continuing to undergo her somewhat belated industrialisation under the dictates of its young and ruthless Kaiser.

The story of German industrialisation is in fact long and drawn out. Germany united only in 1871 as a merging of the many German-speaking kingdoms that had existed for centuries constantly warring with each other. The de facto leader of this amalgamation of realms was the militant Prussian Empire, which led the political and economic change that was to sweep across the German-speaking territories in the 19th century.

An important piece of interstate economic architecture was the establishment of the Zollverein, a.k.a. the German Customs Union. The Zollverein drew together these hostile kingdoms of centuries to form closer economic ties. The formation of this customs union is now regarded as an important factor in the eventual unification of the German Empire. Its role in propelling industrialisation is unequivocal.

The Zollverein was implemented officially in 1834 under the auspices of Prussian leadership, and stayed in place until the end of the Weimar Republic in 1919. It set in place a single-toll system, i.e. a common external tariff, and formed a free trade area within the union. This is much like what the European Union is today.

The way the common external tariff worked was straightforward. There was an alphabetical list of commodities which customs officers were provided with, which gave the rate of duty that was to be levied according to weight. Raw materials and basic foodstuffs were mostly duty-free. In practice, the bulk of the income generated from the duty were from semi luxury goods, like alcoholic beverages, coffees and teas. By 1871, a third of the income came from coffee alone!

The income that had come from the Zollverein was then divided up amongst the member states on a per capita basis. It gradually became an important source of revenue for the states.

Interestingly, fixed exchange rates were also agreed upon between the Zollverein states, though the Prussian Thaler was more widely used given Prussia’s dominance in the Union. A new south German Florin was created for the south German states, however, and customs duties could only be paid for in thaler or florins, lowering transaction costs and thus spurring investment. It seems that the Zollverein states were urging towards a monetary union as well, taking the level of economic integration a notch higher.

The benefits of the Zollverein are well documented. Institutional economist and sociologist Thorstein Veblen said, ‘…with much reserve and by tardy expedients, the (German) States that got their material means of life from the industry of the German people drew together into the Customs Union… The good effects of this move, in the way of heightened efficiency and therefore of material prosperity, are well enough known… The most striking item in the reform so wrought is the removal of tariff frontiers and similar interstitial obstacles to trade and communication.’[1]

The German economy became a force to be reckoned with, and by the turn of the century it had drastically shifted the balance of power in Europe. The Kiel canal that joins two seas is a lasting legacy of the economic ambitions of a former Empire, forever etched into the North German landscape. In Rendsburg, a monolithic railway bridge similarly exists as a constant reminder of this past. Yet ships still pass under it and trains still ride on top of it. A living piece of history.

My train slows down just before crossing the high bridge. Then it comes to a stop. Someone starts speaking rapid German through the speakers, their weary voice ringing throughout the train. I can’t understand what is being said, so I ask the only other person in my carriage if they could translate it. He tells me that the bridge is not safe to cross, and that this train will go back and wait at Rendsburg station until the tracks have undergone maintenance. It is because of the hot weather and the heat’s stress on the tracks. And so the train slowly retreats from the bridge. It will not cross until it is safe to do so.

[1] T. Veblen, Imperial Germany and the Industrial Revolution, 1915, Batoche Book, Kitchener 2003, p. 70.

 

References

P. Bairoch, ‘European trade policy, 1815 ­ 1914, II The movement towards liberalism in the Uni’ trans. S. Burke, The Cambridge Economics History or Europe, Cambridge University Press 1989, pp. 15­17

G. Barraclough, ‘The Empire, the Principalities and the People’, The Origins of Modern Germany, Oxford, B. Blackwell, 1946, pp. 420­421

E.D. Brose, The Political Economy of Early Industrialization in German Europe, 1800­1840, Reconceptualizing the Industrial Revolution, ed. Jeff Horn, Leonard N. Rosenband, and Merritt Roe Smith, Cambridge, Mass. : MIT Press, c2010, pp. 113­117

J.H. Clapham, ‘The Zollverein’, The Economics Development of France and Germany 1815­1914, Cambridge University Press 1921, pp. 96 ­ 101, accessed from: https://archive.org/details/cu31924013709641

M. Fulbrook, ‘The age of industrialization, 1815­1918’, A Concise History of Germany, Cambridge [England] ; New York : Cambridge University Press, 1990 pp.114­116

J. Gray, ‘The First European Union’, Germany, Lonely Planet Publication 1st Ed, 2007, p. 683

W.O. Henderson, The Zollverein, Cambridge [Eng.] University Press, 1939

W. Keller & C.H. Shiue, ‘The Trade Impact of the Zollverein’, Centre for Economic Policy Research, 2013. Accessed from: http://spot.colorado.edu/~shiue/Zoll.pdf

M. Kitchen, The Political Economy of Germany 1815 ­ 1914, London: Croom Helm, 1978, pp. 34­44, 118­121

T. Veblen, Imperial Germany and the Industrial Revolution, 1915, Batoche Book, Kitchener 2003

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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