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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