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IMPACT OF ZOLVELVEREIN - Coggle Diagram
IMPACT OF ZOLVELVEREIN
Opportunities and obstacles to the German economic growth
Economic progress in the former half of the 19th century was one of the most important factors in long term development
Trade in Germany was made easy by the fact the country lay at the heart of Europe
However 70% of the population still made their living from agriculture
Manufacturing was the main economic activity only in areas like Rhineland and Saxony
Economic growth was held back by the existence of customs barriers between the members of the German confederation
Slowed down trade because all products entering the country were likely to be taxed
Larger states had their own boundaries and imposed tolll upon the traders
Time consuming paperwork at each stop was required which slowed down trade
Competition from foreign products the did not face the same tax and duty as German products turned out to be a problem
Rapid development of railways in Prussia attracted capital investment and simulated coal and iron industries
Prussia led the way in promoting change in 1818
Abolished 67 internal customs borders
Charged a tariff on imports , effectively protecting its own industries from foreign competetion
Worked to remove barriers to trade within the German confederation
The Zollverein and the rise of Prussia
By 1834 Prussia had formed the Zollverein which was a customs union of 18 German states
Largest free trade area in Europe comprising of 25 states and combining a population of 26 million
Income from tariffs was divided between the member states in proportion to their population
Linked by a rapidly growing railway network that was centered in Berlin
Adopted a common currency and a system of weights and measures
Austria refused to join the Zollverein which cost it greatly
Austria preferred to rely on trade within its empire and did not wish to lower it as tariffs
In the long run this was one of the important factor as that contributed to them losing Germany to Prussia
Meant that German economic growth was centered at the ports of the North Sea rather than directed southwards to the valley of the river Danube
Helped Prussia presume a predominant economic position within Germany
However did not take on its political leadership
Nationalists who hoped that the Zollverein might provide a basis for political union were disappointed
The states that joined the customs union insisted that decisions in governing the body be unanimous
The nationalist could not however decide where the frontiers of the German state should be be
Some favored a large Germany which would include the German speaking areas of Austria and be dominated by Austria
Some preferred a small Germany which would be dominated by Prussia
These preferences somewhat reflected the differences between Protestant northern Germany and the catholic southern states