ZOL THE BUSINESS ENCYCLOPAEDIA 265 therefore, in connection with the tolls applied to imports and exports, a customs union. The term was originally applied to au association formed between certain German states with the object of suppressing the customs duties levied at their respective frontiers, and establishing, on the one frontier of the associate terri tory, a single line of customs barriers with uniform tariffs. The association was first projected by List, the apostle of political and economic nationalism, in the year 1819 ; but it was not until 1828 that the stage of realisation was entered upon. In that year three rival zollvereins were formed : the first, a mid-German confederation of Bavaria and Wurtemburg ; the second, the North-German con federation between Prussia and the duchies of Hesse and Anhalt ; and the third, an association of Saxony, Hanover, Brunswick, and electorate Hesse. Eventually, however, these rival associations were merged, in the year 1833, in one which, under the influence of Prussia, comprised the majority of the German states, ex cluding particularly, however, Austria and some of the unimportant states. This establishment of a zollverein—which consisted of a union of independent states with free trade between themselves, one customs tariff for the whole against the rest of the world, a common fund for the receipt and distribution of the duties, and a common council to regulate the tariff—was a turning-point in German commercial policy. It was, moreover, the preliminary realisation of a national political policy which found its final and definitive realisation in the formation, in 1872, of the German Empire. To-day the German Empire presents a solid front to the outside commercial world, and though protective tariffs are raised as some obstacle to the entrance of foreign commodities, yet within there remains a complete system of free-trade between the constituent states. The zollverein, as a distinct institution, has accordingly been superseded by the German Empire, its particular place being now occupied by the Imperial Federal Council. The principle of a zollverein, ever since the establishment of the German precedent, has been an increasingly attrac tive ideal in commercial politics, even though there may be no desire to apply it with a rigid observance of every detail. " Looked at generally," writes Professor Bastable in Commerce of Nations, " commercial union is a mode of remedying the inconveni ences of protection, or even of customs boundaries. The German zollverein was a remarkable example of the benefits that a federation of the kind may produce, and it is highly probable that larger commercial aggregates will be established in the future. As it is, very many of the smaller units have disappeared, and the tendencies are all in favour of further amalgamations. Plans for a league of Central Europe
seem just now chimerical, but the commercial treaties of 1860-70 would have appeared just as unlikely a few years before their negotiation." In 1892 two customs groups of states were formed in Europe. The first, comprising France, Spain, Russia, and several smaller states, placed great stress on possessing absolute freedom of action in regard to tariffs, and gave notice that they would consider commercial treaties. A few years later, Russia left this group and joined the second group, known as the Middle-European Commercial Treaty System, which finally comprised Germany, Austria, Russia, Italy, Switzer land, Roumania, Servia, and Bulgaria. The object of the Middle European System was to unite by means of tariff concessions, but not by a zollverein or customs union, the interests of its component countries, and to make their commercial relations stable for at least twelve years from 1892. Small states have also, so far as regards the fiscal incidents of international trade, attached them selves to their more powerful neighbours, as for example Monaco, which has so joined France. On the American continent there has been in existence for very many years a strong movement in the United States towards a customs union, as against the rest of the world, of all states of the American continent. At present, how ever, there seems to be little possibility of success in that direction. Whatever possibility does exist may, most probably, be attributed to the peculiar commercial, geographical, and racial relationship of the United States and Canada, Were there to be a reversion on the part of Great Britain to that now discarded colonial policy of laissez, faire, which was introduced with the free-trade policy of 1846, a customs union between the United States and Canada would be only a question of time and detail. Even now Canada, unless she can obtain admission to a customs union of the British Empire, is in danger, by mere force of circumstances, of being drawn into some form of customs union with the United States. The German zollverein should here be a warning to England. The zollverein led to a political confederation and the establishment of the German Empire, with Prussia as pre dominant partner ; and since then repeated efforts have been made to establish a zollverein to include Austria-Hungary and Italy as well as thc Gerinan Empire. A United States-Canadian customs union would probably end in like manner, with the United States as the predominating element in the new republic-empire, and with the possibility of extension among the other American States.