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some of the German states and Prussia； then a union between the
middle German states； lastly； and chiefly in consequence of the
exertions of Freiherr von Cotta to fuse the above…named three
unions into a general customs confederation； so that at this
present time； with the exception of Austria； the two Mecklenburgs；
Hanover； and the Hanse Towns； the whole of Germany is associated in
a single customs union； which has abolished the separate customs
lines amongst its members； and has established a uniform tariff in
common against the foreigner； the revenue derived from which is
distributed pro rata amongst the several states according to their
populations。
The tariff of this union is substantially the same as that
established by Prussia in 1818； that is to say； it is a moderate
protectionist tariff。
In consequence of this unification of customs； the industry；
trade； and agriculture of the German states forming the union have
already made enormous strides。
NOTES：
1。 The system must necessarily have affected France in a different
manner than Germany； because Germany was mostly shut out from the
French markets； while the German markets were all open to the
French manufacturer。
2。 Report of the Committee of Commerce and Manufactures to the
House of Representatives of the Congress of the United States； Feb。
13； 1816。
3。 Organ of the German Commercial and Manufacturing Interests。
Chapter 8
The Russians
Russia owes her first progress in civilisation and industry to
her intercourse with Greece； to the trade of the Hanseatic Towns
with Novgorod and （after the destruction of that town by Ivan
Wassiljewitsch） to the trade which arose with the English and
Dutch； in consequence of the discovery of the water communication
with the coasts of the White Sea。
But the great increase of her industry； and especially of her
civilisation； dates from the reign of Peter the Great。 The history
of Russia during the last hundred and forty years offers a most
striking proof of the great influence of national unity and
political circumstances on the economic welfare of a nation。
To the imperial power which established and maintained this
union of innumerable Barbaric hordes； Russia owes the foundations
of her manufactures； her vast progress in agriculture and
population； the facilities offered to her interior traffic by the
construction of canals and roads； a very large foreign trade； and
her standing as a commercial power。
Russia's independent system of trade dates； however； only from
the year 1821。
Under Catherine II。 trade and manufactures had certainly made
some progress； on account of the privileges she offered to foreign
artisans and manufacturers； but the culture of the nation was still
too imperfect to allow of its getting beyond the first stages in
the manufacture of iron； glass； linen； &c。； and especially in those
branches of industry in which the country was specially favoured by
its agricultural and mineral wealth。
Besides this； further progress in manufactures would not； at
that time； have been conducive to the economic interests of the
nation。 If foreign countries had taken in payment the provisions；
raw material； and rude manufactures which Russia was able to
furnish if； further； no wars and exterior events had intervened；
Russia by means of intercourse with nations more advanced than
herself would have been much more prosperous； and her culture in
general would in consequence of this intercourse have made greater
progress than under the manufacturing system。 But wars and the
Continental blockade； and the commercial regulations of foreign
nations； compelled her to seek prosperity in other ways than by the
export of raw materials and the import of manufactures。 In
consequence of these； the previous commercial relations of Russia
by sea were disturbed。 Her overland trade with the western
continent could not make up for these losses； and she found it
necessary； therefore； to work up her raw materials herself。 After
the establishiment of the general peace； a desire arose to return
to the old system。 The Government； and even the Emperor； were
inclined to favour free trade。 In Russia； the writings of Herr
Storch enjoyed as high a reputation as those of Mons Say in
Germany。 People were not alarmed by the first shocks which the home
manufactories； which had arisen during the Continental Blockade；
suffered owing to English competition。 The theorists maintained
that if these shocks could only be endured once for all； the
blessings of free trade would follow。 And indeed the circumstances
of the commercial world at the time were uncommonly favourable to
this transition。 The failure of crops in Western Europe caused a
great export of agricultural produce； by which Russia for a long
time gained ample means to balance her large importation of
manufactured goods。
But when this extraordinary demand for Russian agricultural
produce had ceased； when； on the other hand； England had imposed
restrictions on the import of corn for the benefit of her
aristocracy； and on that of foreign timber for the benefit of
Canada； the ruin of Russia's home manufactories and the excessive
import of foreign manufactures made itself doubly felt。 Although
people had formerly； with Herr Storch； considered the balance of
trade as a chimera； to believe in the existence of which was； for
a reasonable and enlightened man； no less outrageous and ridiculous
than the belief in witchcraft in the seventeenth century had been；
it was now seen with alarm that there must be something of the
nature of a balance of trade as between independent nations。 The
most enlightened and discerning statesman of Russia； Count
Nesselrode； did not hesitate to confess to this belief。 He declared
in an official circular of 1821： 'Russia finds herself compelled by
circumstances to take up an independent system of trade； the
products of the empire have found no foreign market； the home
manufactures are ruined or on the point of being so； all the ready
money of the country flows towards foreign lands； and the most
substantial trading firms are nearly ruined。' The beneficial
effects of the Russian protective system contributed no less than
the injurious consequences of the re…establishment of free trade
had done to bring into discredit the principles and assertions of
the theorists。 Foreign capital； talent； and labour flowed into the
country from all civilised lands； especially from England and
Germany； in order to share in the advantages offered by the home
manufactories。
The nobility imitated the policy of the Empire at large。 As
they could obtain no foreign market for their produce； they
attempted to solve the problem inversely by bringing the market
into proximity with the produce they established manufactories
on their estates。 In consequence of the demand for fine wool
produced by the newly created woollen manufactories； the breed of
sheep was rapidly improved。 Foreign trade increased； instead of
declining； particularly that with China； Persia； and other
neighbouring countries of Asia。 The commercial crises entirely
ceased； and one need only read the latest reports of the Russian
Minister of Commerce to be convinced that Russia owes a large
measure of prosperity to this system； and that she is increasing
her national wealth and power by enormous strides。
It is foolish for Germans to try to make little of this
progress and to complain of the injury which it has caused to the
north…eastern provinces of Germany。 Each nation； like each
individual； has its own interests nearest at heart。 Russia is not
called upon to care for the welfare of Germany； Germany must care
for Germany； and Russia for Russia。 It would be much better；
instead of complaining； instead of hoping and waiting and expecting
the Messiah of a future free trade； to throw the cosmopolitan
system into the fire and take a lesson from the example of Russia。
That England should look with jealousy on this commercial
policy of Russia is very natural。 By its means Russia has
emancipated herself from England； and has qualified herself to
enter into competition with her in Asia。 Even if England
manufactures more cheaply； this advantage will in the trade with
Central Asia be outweighed by the proximity