GERMAN COMMERCE. Until the beginning of the 19th century the smaller German states and the different prov inces of the larger German states were sepa rated from each other by customs boundaries. Not only the states but the provinces being semi-independent the organization of national production was inefficient, commerce small and, over those economic boundaries, restricted to a few articles of high quality or to monopoly products, the standard of living low and con sumption limited to what we think now to be almost the necessities of life. But in this way a diversity of production and accordingly a diversity of human interests were kept alive.
Prussia in 1805, under Freiherr von Stein, was leading in breaking up these local economic units by abolishing• the customs boundaries which separated her different provinces. By that measure in connection with the develop ment of the means of transportation (build ing of roads, canals, somewhat later railroads and the introduction of steam power) and the favorable geographic position of Prussia to the most important navigable rivers of Ger many, Prussia's economic preponderance amongst the states of the German Federation, as founded by the Congress of Vienna, was secured. In 1833 the economic union between Prussia and the most important South German states was established by the famous Customs Union (Zollverein), which was extended during the '40s and '50s over almost the whole of modern Germany and became more and more centralized under Prussian leadership.
In fact, the economic union of Germany was well-established before the political union was won, simply by economic necessity and of course sometimes against the sentiments of the statesmen of the middle states. The economic meaning of the foundation of the German Empire was the stabilization of peace. The German question was settled satisfactorily to the German states and the German people, stabilizing the European equilibrium by creat ing a strong and essentially peaceful state and replacing the European battlefield of fore going centuries, under the leadership of Bis marck, who was a European no less than a German statesman.
From 1840-1910, while the population has increased about 100 per cent, the value of the total foreign trade (imports and exports) has increased 1540 per cent. Since the foundation of the empire, while the population has in creased by more than one-half, the tonnage of imports has risen above four and one-half times, that of exports almost six times, and the value of imports has increased almost three times and the value of exports nearly four times. In absolute figures, the value of the trade
in the three main divisions of trade statistics, in raw materials, in manufactures and in foodstuffs and animals, has risen as well in exports as in imports from 1874 to 1913. But the relative importance of these three headings has changed considerably. Both exports and imports of manufactures have increased relatively, both exports and imports of foodstuffs and animals have decreased relatively. But while from 1874-75 to 1913, exports of manufactures have risen from 39 to 75 per cent of the total ex ports, imports of manufactures have only risen from 20 per cent to 25 per cent of the total imports; and while exports of foodstuffs and animals have decreased from 27 per cent to 10 per cent of the total exports, imports of food stuffs and animals have decreased from 33 to 29 per cent of the total imports. Per head of population the export of manufactures amounted to $62 in 1872 and to t323.9 in 1913. While in 1874-75 the excess of Imports over exports in raw materials was (in billion dollars) 0.42, it was 1.73 in 1912-13. One thou sand marks ($250) would buy on the average in 1912-13 69 tons of the imports, but 75 tons of the exports; in 1874-75, it would buy 45 and 48, respectively.
Internal and Foreign Com merce may be internal or foreign. Foreign commerce is of course only a small part of the whole commerce transacted, but a very important one. a rule every article of commerce in the process of production, distri bution and consumption will be the object of commercial transactions several times. Some idea of the extent of the internal commerce will be gathered from the figures of the ex ports and imports, of the agricultural and in dustrial production, of the traffic on railroads and waterways and on the banking transactions (of articles under these headings). To give a correct interpretation to these figures it must be kept in mind that production and especially distribution are more decentralized in Germany than in the United States and a larger part of the local production is consumed locally and that commerce is largely dependent on the density of population; the quantity of produc tion being increased with the increase of pop ulation but generally not in the same but in a smaller ratio.