Purssia took the lead to promote free trade movement in the German Confederation. By the 1818 Tariff Reform Act, Prussia removed all customs barriers on trade within her boundaries, making the country for the first time an economic and commercial unit. At the same time, she imposed a uniform tariff on goods from other states which entered her territory.
From 1819 onwards, certain little states entirely surrounded by Prussian territory allowed themselves to be absorbed into the Prussian tariff system. Other German states formed rival schemes of their own in the 1820s, but as the resources of the Prussian union was greater, they were too forced into the Prussian system.
On January 1, 1834, the Zollverein came into being. It included 18 states with a total population of 26 million people. Its constitution was elaborate. There was to be a customs-parliament, representing all the constituent states, and no changes could be made without the unanimous consent of the members. Between state and state there was to be complete free trade; the tariff was to be uniform on all the frontiers; and the net proceeds were to be divided in proportion to population. It also adopted a common system of weights and measures, and reduced the numerous currency systems to two. More and more German states joined the Zollverein in the following years. By 1844, practically all Germany was in the Zollverein, except Austria and three other states.
Not content with internal free trade, the Zollverein attempted to negotiate commercial treaties with foreign powers. In 1831, Holland concluded a commercial treaty with the Zollverein. In 1841 a mutually advantageous treaty was made with Britain, and in 1844 a similar one with Belgium The creation and development of the Zollverein had significant effects on the German unification movement.
Economic unity and progress - economic unity and progress formed the basis for later political unity. The unification of customs tariff was very quickly recognized as the necessary condition of the rapid economic development of the German states. It allowed for increased commercial cooperation, improved means of communications and transportation, better banking facilities, and the rise of industries.
Foreign trade showed a remarkable expansion between 1832 and 1842. The imports and exports increased one hundred per cent, and the customs duties rose from 12 million to 21 million thalers. Capital began to accumulate. Between 1853 and 1857, no less than $20 million were raised for railway construction, while, in the same years, new banks were established with a capital of $30 million. The bank system began to grow as trade increased.
The Zollverein stimulated trade generally, and with it industry. In 1839, the first important German railway was built, from Dresden to Leipzig. In 1850, Germany (including Austria) possessed some 4,000 miles of tracks, and in 1847 the Union of German Railways was established at Hamburg. The railways had a great importance for economic growth and unity because German roads were backward and she had only a small sea coast.
At the same time, German industrialization was beginning. There were domestic textile industries. There were also commercial mines in Upper Silesia in 1840s. There were metal industries as well. To attribute the whole of these developments to the Zollverein would of course be grossly inaccurate, but that it contributed- an exceedingly important factor is undeniable.
These developments in turn fostered a common sense of German unity, first...