The National System of Political Economy

Book IV, Chapter XXXIV
THE INSULAR SUPREMACY AND THE GERMAN COMMERCIAL UNION.

WHAT a great nation is at the present day without a vigorous commercial policy, and what she may become by the adoption of a vigorous commercial policy, Germany has learnt for herself during the last twenty years. Germany was that which Franklin once said of the State of New Jersey, 'a cask which was tapped and drained by its neighbours on every side.' England, not contented with having ruined for the Germans the greater part of their own manufactories and supplied them with enormous quantities of cotton and woollen fabrics, excluded from her ports German grain and timber, nay from time to time also even German wool. There was a time when the export of manufactured goods from England to Germany was ten times greater than that to her highly extolled East Indian Empire. Nevertheless the all-monopolising islanders would not even grant to the poor Germans what they conceded to the conquered Hindoos, viz. to pay for the manufactured goods which they required by agricultural produce. In vain did the Germans humble themselves to the position of hewers of wood and drawers of water for the Britons. The latter treated them worse than a subject people. Nations, like individuals, if they at first only permit themselves to be ill-treated by one, soon become scorned by all, and finally become an object of derision to the very children. France, not contented with exporting to Germany enormous quantities of wine, oil, silk, and millinery, grudged the Germans their exports of cattle, grain, and flax; yes, even a small maritime province formerly possessed by Germany and inhabited by Germans, which having become wealthy and powerful by means of Germany, at all times was only able to maintain itself with and by means of Germany, barred for half a generation Germany's greatest river by means of contemptible verbal quibbles. To fill up the measure of this contempt, the doctrine was taught from a hundred professorial chairs, that nations could only attain to wealth and power by means of universal free trade. Thus it was; but how is it now? Germany has advanced in prosperity and industry, in national self-respect and in national power, in the course of ten years as much as in a century. And how has this result been achieved? It was certainly good and beneficial that the internal tariffs were abolished which separated Germans from Germans; but the nation would have derived small comfort from that if her home industry had thenceforth remained freely exposed to foreign competition. It was especially the protection which the tariff of the Zollverein secured to manufactured articles of common use, which has wrought this miracle. Let us freely confess it, for Dr. Bowring*105 has incontrovertibly shown it, that the Zollverein tariff has not, as was before asserted, imposed merely duties for revenue—that it has not confined itself to duties of ten to fifteen per cent. as Huskisson believed—let us freely admit that it has imposed protective duties of from twenty to sixty per cent. as respects the manufactured articles of common use.

But what has been the operation of these protective duties? Are the consumers paying for their German manufactured goods twenty to sixty per cent. more than they formerly paid for foreign ones (as must be the case if the popular theory is correct), or are these goods at all worse than the foreign ones? Nothing of the sort. Dr. Bowring himself adduces testimony that the manufactured goods produced under the high customs tariff are both better and cheaper than the foreign ones.*106 The internal competition and the security from destructive competition by the foreigner has wrought this miracle, of which the popular school knows nothing and is determined to know nothing. Thus, that is not true, which the popular school maintains, that a protective duty increases the price of the goods of home production by the amount of the protective duty. For a short time the duty may increase the price, but in every nation which is qualified to carry on manufacturing industry the consequence of the protection will be, that the internal competition will soon reduce the prices lower than they had stood at when the importation was free.

But has agriculture at all suffered under these high duties? Not in the least; it has gained—gained tenfold during the last ten years. The demand for agricultural produce has increased. The prices of it everywhere are higher. It is notorious that solely in consequence of the growth of the home manufactories the value of land has everywhere risen from fifty to a hundred per cent., that everywhere higher wages are being paid, and that in all directions improvements in the means of transport are either being effected or projected.

Such brilliant results as these must necessarily encourage us to proceed farther on the system which we have commenced to follow. Other States of the Union have also proposed to take similar steps, but have not yet carried them into effect; while, as it would appear, some other States of the Union only expect to attain prosperity solely by the abolition of the English duties on grain and timber, and while (as it is alleged) there are still to be found influential men who believe in the cosmopolitical system and distrust their own experience. Dr. Bowring's report gives us most important explanations on these points as well as on the circumstances of the German Commercial Union and the tactics of the English Government. Let us endeavour to throw a little light on this report.

First of all, we have to consider the point of view from which it was written. Mr. Labouchere, President of the Board of Trade under the Melbourne Ministry, had sent Dr. Bowring to Germany for the same purpose as that for which Mr. Poulett Thompson had sent him to France in the year 1834. Just as it was intended to mislead the French by concessions in respect of wines and brandies to open their home market to English manufactured goods, so it was intended to mislead the Germans to do the same by concessions in respect of grain and timber; only there was a great difference between the two missions in this respect, that the concession which was to be offered to the French had to fear no opposition in England, while that which had to be offered to the Germans had first to be fought for in England herself.

Hence the tendency of these two reports was of necessity of quite a different character. The report on the commercial relations between France and England was written exclusively for the French; to them it was necessary to represent that Colbert had accomplished nothing satisfactory through his protective regulations; it was necessary to make people believe that the Eden Treaty was beneficial to France, and that Napoleon's Continental system, as well as the then existing French prohibitive system, had been extremely injurious to her. In short, in this case it was necessary to stick closely to the theory of Adam Smith; and the good results of the protective system must be completely and unequivocally denied. The task was not quite so simple with the other report, for in this, one had to address the English landowners and the German Governments at one and the same time. To the former it was necessary to say: See, there is a nation which has already in consequence of protective regulations made enormous advances in her industry, and which, in possession of all necessary means for doing so, is making rapid steps to monopolise her own home market and to compete with England in foreign markets. This, you Tories in the House of Lords—this, you country squires in the House of Commons, is your wicked doing. This has been brought about by your unwise corn laws; for by them the prices of provisions and raw materials and the wages of labour have been kept low in Germany. By them the German manufactories have been placed in an advantageous position compared to the English ones. Make haste, therefore, you fools, to abolish these corn laws. By that means you will doubly and trebly damage the German manufactories: firstly, because the prices of provisions and raw materials and the wages of labour will be raised in Germany and lowered in England; secondly, because by the export of German grain to England the export of English manufactured goods to Germany will be promoted; thirdly, because the German Commercial Union has declared that it is disposed to reduce their duties on common cotton and woollen goods in the same proportion in which England facilitates the import of German grain and timber. Thus we Britons cannot fail once more to crush the German manufactories. But the question cannot wait. Every year the manufacturing interests are gaining greater influence in the German Union; and if you delay, then your corn-law abolition will come too late. It will not be long before the balance will turn. Very soon the German manufactories will create such a great demand for agricultural produce that Germany will have no more surplus corn to sell to foreign countries. What concessions, then, are you willing to offer to the German Governments to induce them to lay hands on their own manufactories in order to hinder them from spinning cotton for themselves, and from encroaching upon your foreign markets in addition?

All this the writer of the report was compelled to make clear to the landowners in Parliament. The forms of the British State administration permit no secret Government reports. Dr. Bowring's report must be published, must therefore be seen by the Germans in translations and extracts. Hence one must use no expressions which might lead the Germans to a perception of theirtrue interests. Therefore to every method which was adapted to influence Parliament, an antidote must be added for the use of the German Governments. It must be alleged, that in consequence of the protective system much German capital had been diverted into improper channels. The agricultural interests of Germany would be damaged by the protective system. That interest for its part ought only to turn its attention to foreign markets; agriculture was in Germany by far the most important productive industry, for three-fourths of the inhabitants of Germany were engaged in it. It was mere nonsense to talk about protection for the producers; the manufacturing interest itself could only thrive under foreign competition: public opinion in Germany desired freedom of trade. Intelligence in Germany was too universal for a desire for high duties to be entertained. The most enlightened men in the country were in favour of a reduction of duties on common woollen and cotton fabrics, in case the English duties on corn and timber were reduced.

In short, in this report two entirely different voices speak, which contradict one another like two opponents. Which of the two must be deemed the true one—that which speaks to the Parliament, or that which speaks to the German Governments? There is no difficulty in deciding this point, for everything which Dr. Bowring adduces in order to induce Parliament to lower the import duties on grain and timber is supported by statistical facts, calculations, and evidence; while everything that he adduces to dissuade the German Governments from the protective system is confined to mere superficial assertions.

Let us consider in detail the arguments by which Dr. Bowring proves to the Parliament that in case a check is not put to the progress of the German protective system in the way which he pointed out, the German market for manufactured goods must become irrecoverably lost to England.

The German people is remarkable, says Dr. Bowring, for temperance, thrift, industry, and intelligence, and enjoys a system of universal education. Excellent polytechnic schools diffuse technical instruction throughout the entire country.

The art of design is especially much more cultivated there than in England. The great annual increase of its population, of its head of cattle, and especially of sheep, proves what progress agriculture there has achieved. (The report makes no mention of the improvement in the value of property, though that is an important feature, nor of the increase in the value of produce.) The wages of labour have risen thirty per cent. in the manufacturing districts. The country possesses a great amount of water power,as yet unused, which is the cheapest of all motive powers. Its mining industry is everywhere flourishing, more than at any previous time. From 1832 up to 1837 the imports of raw cotton have increased from 118,000 centners to 240,000 centners; the imports of cotton yarn from 172,000 centners to 322,000 centners; the exports of cotton fabrics from 26,000 centners to 75,000 centners; the number of cotton-weaving looms in Prussia from 22,000 in 1825 to 32,000 in 1834; the imports of raw wool from 99,000 centners to 195,000 centners; the exports of the same from 100,000 centners to 122,000 centners; the imports of woollen articles from 15,000 centners to 18,000 centners; the exports of the same from 49,000 centners to 69,000 centners.

The manufacture of linen cloths contends with difficulty against the high duties in England, France, and Italy, and has not increased. On the other hand, the imports of linen yarn have increased from 30,000 centners in 1832 to 86,000 centners in 1835, chiefly through the imports from England, which are still increasing. The consumption of indigo increased from 12,000 centners in 1831 to 24,000 centners in 1837; a striking proof of the progress of German industry. The exports of pottery have been more than doubled from 1832 to 1836. The imports of stoneware have diminished from 5,000 centners to 2,000 centners, and the exports of it increased from 4,000 centners to 18,000 centners. The imports of porcelain have diminished from 4,000 centners to 1,000 centners, and the exports of it have increased from 700 centners to 4,000 centners. The output of coal has increased from 6,000,000 Prussian tons in 1832 to 9,000,000 in 1836. In 1816 there were 8,000,000 sheep in Prussia; and in 1837, 15,000,000.

In Saxony in 1831 there were 14,000 stocking-weaving machines; in 1836, 20,000. From 1831 to 1837, the number of manufactories for spinning woollen yarn and of spindles had increased in Saxony to more than double their previous number. Everywhere machine manufactories had arisen, and many of these were in the most flourishing condition.

In short, in all branches of industry, in proportion as they have been protected, Germany has made enormous advances, especially in woollen and cotton goods for common use, the importation of which from England had entirely ceased. At the same time Dr. Bowring admits, in consequence of a trustworthy opinion which had been expressed to him, 'that the price of the Prussian stuffs was decidedly lower than that of the English; that certainly in respect of some of the colours they were inferior to the best English tints, but that others were perfect and could not be surpassed; that in spinning, weaving, and all preparatory processes, the German goods were fully equal to the British, but only in the finish a distinct inferiority might be observed, but that the want of this would disappear after a little time.'

It is very easy to understand how by means of such representations as these the English Parliament may at length be induced to abandon its corn laws, which have hitherto operated as a protective system to Germany. But it appears to us utterly incomprehensible how the German Union, which has made such enormous advances in consequence of the protective system, should be induced by this report to depart from a system which has yielded them such excellent results.

It is very well for Dr. Bowring to assure us that the home industry of Germany is being protected at the expense of the agriculturists. But how can we attach any credence to his assurance, when we see, on the contrary, that the demand for agricultural produce, prices of produce, the wages of labour, the rents, the value of property, have everywhere considerably risen, without the agriculturist having to pay more than he did before for the manufactured goods which he requires?

It is very well for Dr. Bowring to give us an estimate showing that in Germany three persons are engaged in agriculture to every one in manufactures, but that statement convinces us that the number of Germans engaged in manufacturing is not yet in proper proportion to the number of German agriculturists. And we cannot see by what other means this disproportion can be equalised, than by increasing the protection on those branches of manufacture which are still carried on in England for the supply of the German market by persons who consume English instead of German agricultural produce. It is all very well for Dr. Bowring to assert that German agriculture must only direct its attention to foreign countries if it desires to increase its sale of produce; but that a great demand for agricultural produce can only be attained by a flourishing home manufacturing Power is taught us not alone by the experience of England, but Dr. Bowring himself implicitly admits this, by the apprehension which he expresses in his report, that if England delays for some time to abolish her corn laws, Germany will then have no surplus of either corn or timber to sell to foreign countries.

Dr. Bowring is certainly right when he asserts that the agricultural interest in Germany is still the predominant one, but just for the very reason that it is predominant it must (as we have shown in former chapters), by promoting the manufacturing interests, seek to place itself in a just proportion with them, because the prosperity of agriculture depends on its being in equal proportion with the manufacturing interest, but not on its own preponderance over it.

Further, the author of the report appears to be utterly steeped in error when he maintains that foreign competition in German markets is necessary for the German manufacturing interest itself, because the German manufacturers, as soon as they are in a position to supply the German markets, must compete with the manufacturers of other countries for the disposal of their surplus produce, which competition they can only sustain by means of cheap production. But cheap production will not consist with the existence of the protective system, inasmuch as the object of that system is to secure higher prices to the manufacturers.

This argument contains as many errors and falsehoods as words. Dr. Bowring cannot deny that the manufacturer can offer his products at cheaper prices, the more he is enabled to manufacture—that, therefore, a manufacturing Power which exclusively possesses its home market can work so much the cheaper for foreign trade. The proof of this he can find in the same tables which he has published on the advances made by German industry; for in the same proportion in which the German manufactories have acquired possession of their own home market, their export of manufactured goods has also increased. Thus the recent experience of Germany, like the ancient experience of England, shows us that high prices of manufactured goods are by no means a necessary consequence of protection.

Finally, German industry is still very far from entirely supplying her home market. In order to do that, she must first manufacture for herself the 13,000 centners of cotton fabrics, the 18,000 centners of woollen fabrics, the 500,000 centners of cotton yarn, thread, and linen yarn, which at present are imported from England. If, however, she accomplishes that, she will then import 500,000 centners more raw cotton than before, by which she will carry on so much the more direct exchange trade with tropical countries, and be able to pay for the greater part if not the whole of that requirement with her own manufactured goods.

We must correct the view of the author of the report, that public opinion in Germany is in favour of free trade, by stating that since the establishment of the Commercial Union people have acquired a clearer perception of what it is that England usually understands by the term 'free trade,' for, as he himself says, 'Since that period the sentiments of the German people have been diverted from the region of hope and of fantasy to that of their actual and material interests.' The author of the report is quite right when he says that intelligence is very greatly diffused amongst the German people, but for that very reason people in Germany have ceased to indulge in cosmopolitical dreams. People here now think for themselves—they trust their own conclusions, their own experience, their own sound common sense, more than one-sided systems which are opposed to all experience. They begin to comprehend why it was that Burke declared in confidence to Adam Smith 'that a nation must not be governed according to cosmopolitical systems, but according to knowledge of their special national interests acquired by deep research.' People in Germany distrust counsellors who blow both cold and hot out of the same mouth. People know also how to estimate at their proper value the interests and the advice of those who are our industrial competitors. Finally, people in Germany bear in mind as often as English offers are under discussion the well-known proverb of the presents offered by the Danaidæ.

For these very reasons we may doubt that influential German statesmen have seriously given grounds for hope to the author of the report, that Germany is willing to abandon her protective policy for the benefit of England, in exchange for the pitiful concession of permission to export to England a little grain and timber. At any rate public opinion in Germany would greatly hesitate to consider such statesmen to be thoughtful ones. In order to merit that title in Germany in the present day, it is not enough that a man should have thoroughly learned superficial phrases and arguments of the cosmopolitical school. People require that a statesman should be well acquainted with the powers and the requirements of the nation, and, without troubling himself with scholastic systems, should develop the former and satisfy the latter. But that man would betray an unfathomable ignorance of those powers and wants, who did not know what enormous exertions are requisite to raise a national industry to that stage to which the German industry has already attained; who cannot in spirit foresee the greatness of its future; who could so grievously disappoint the confidence which the German industrial classes have reposed in their Governments, and so deeply wound the spirit of enterprise in the nation; who was incapable of distinguishing between the lofty position which is occupied by a manufacturing nation of the first rank, and the inferior position of a country which merely exports corn and timber; who is not intelligent enough to estimate how precarious a foreign market for grain and timber is even in ordinary times, how easily concessions of this kind can be again revoked, and what convulsions are involved in an interruption of such a trade, occasioned by wars or hostile commercial regulations; who, finally, has not learned from the example of other great states how greatly the existence, the independence, and the power of the nation depends on its possession of a manufacturing power of its own, developed in all its branches.

Truly one must greatly under-estimate the spirit of nationality and of unity which has arisen in Germany since 1830, if one believed, as the author of the report does (p. 26), that the policy of the Commercial Union will follow the separate interests of Prussia, because two-thirds of the population of the Union are Prussian. But Prussia's interests demand the export of grain and timber to England; the amount of her capital devoted to manufactures is unimportant; Prussia will therefore oppose every system which impedes the import of foreign manufactures, and all the heads of departments in Prussia are of that opinion. Nevertheless the author of the report says at the beginning of his report: 'The German Customs Union is an incarnation of the idea of national unity which widely pervades this country. If this Union is well led, it must bring about the fusion of all German interests in one common league. The experience of its benefits has made it popular. It is the first step towards the nationalisation of the German people. By means of the common interest in commercial questions, it has paved the way for political nationality, and in place of narrow-minded views, prejudices, and customs, it has laid down a broader and stronger element of German national existence.' Now, how does the opinion agree with these perfectly true prefatory observations, that Prussia will sacrifice the independence and the future greatness of the nation to a narrow regard to her own supposed (but in any case only momentary) private interest—that Prussia will not comprehend that Germany must either rise or fall with her national commercial policy, as Prussia herself must rise or fall with Germany? How does the assertion that the Prussian heads of departments are opposed to the protective system, agree with the fact that the high duties on ordinary woollen and cotton fabrics emanated from Prussia herself? And must we not be compelled to conjecture from these contradictions, and from the fact that the author of the report paints in such glowing colours the condition and the progress of the industry of Saxony, that he himself is desirous of exciting the private jealousy of Prussia?

Be that as it may, it is very strange that Dr. Bowring attaches such great importance to the private statements of heads of departments, he an English author who ought to be well aware of the power of public opinion—who ought to know that in our days the private views of heads of departments even in unconstitutional states count for very little if they are opposed to public opinion, and especially to the material interests of the whole nation, and if they favour retrograde steps which endanger the whole nationality. The author of the report also feels this well enough himself, when he states at page 98 that the Prussian Government has sufficiently experienced, as the English Government has done in connection with the abolition of the English corn laws, that the views of public officials cannot everywhere be carried into effect, that hence it might be necessary to consider whether German grain and timber should not be admitted to the English markets even without previous concessions on the part of the German Union, because by that very means the way might be paved for the admission of the English manufactured goods into the German market. This view is in any case a correct one. Dr. Bowring sees clearly that the German industry would never have been strengthened but for those laws; that consequently the abolition of the corn laws would not only check the further advances of German industry, but must cause it again to retrograde greatly, provided always that in that case the German customs legislation remains unchanged. It is only a pity that the British did not perceive the soundness of this argument twenty years ago; but now, after that the legislation of England has itself undertaken the divorce of German agriculture from English manufactures, after that Germany has pursued the path of perfecting her industry for twenty years, and has made enormous sacrifices for this object, it would betoken political blindness if Germany were now, owing to the abolition of the English corn laws, to abstain in any degree from pursuing her great national career. Indeed, we are firmly convinced that in such a case it would be necessary for Germany to increase her protective duties in the same proportion in which the English manufactories would derive advantage from the abolition of the corn laws as compared with those of Germany. Germany can for a long time follow no other policy in respect to England than that of a less advanced manufacturing nation which is striving with all her power to raise herself to an equal position with the most advanced manufacturing nation. Every other policy or measure than that, involves the imperilling of the German nationality. If the English are in want of foreign corn or timber, then they may get it in Germany or where else they please. Germany will not on that account any the less protect the advances in industry which she has made up to this time, or strive any the less to make future advances. If the British will have nothing to do with German grain and timber, so much the better. In that case the industry, the navigation, the foreign trade of Germany will raise their heads so much the quicker, the German internal means of transport will be so much the sooner completed, the German nationality will so much the more certainly rest on its natural foundation. Perhaps Prussia may not in this way so soon be able to sell the corn and timber of her Baltic provinces at high prices as if the English markets were suddenly opened to her. But through the completion of the internal means of transport, and through the internal demand for agricultural produce created by the manufactories, the sales of those provinces to the interior of Germany will increase fast enough, and every benefit to these provinces which is founded on the home demand for agricultural produce will be gained by them for all future time. They will never more have to oscillate as heretofore between calamity and prosperity from one decade to another. But further, as a political power Prussia will gain a hundred-fold more in concentrated strength in the interior of Germany by this policy than the material values which she sacrifices for the moment in her maritime provinces, or rather invests for repayment in the future.

The object of the English ministry in this report is clearly to obtain the admission into Germany of ordinary English woollen and cotton fabrics, partly through the abolition or at least modification of charging duties by weight, partly through the lowering of the tariff, and partly by the admission of the German grain and timber into the English market. By these means the first breach can be made in the German protective system. These articles of ordinary use (as we have already shown in a former chapter) are by far the most important, they are the fundamental element of the national industry. Duties of ten per cent. ad valorem, which are clearly aimed at by England, would, with the assistance of the usual tricks of under declaration of value, sacrifice the greater part of the German industry to English competition, especially if in consequence of commercial crises the English manufacturers were sometimes induced to throw on the market their stocks of goods at any price. It is therefore no exaggeration if we maintain that the tendency of the English proposals aims at nothing less than the overthrow of the entire German protective system, in order to reduce Germany to the position of an English agricultural colony. With this object in view, it is impressed on the notice of Prussia how greatly her agriculture might gain by the reduction of the English corn and timber duties, and how unimportant her manufacturing interest is. With the same view, the prospect is offered to Prussia of a reduction of the duties on brandy. And in order that the other states may not go quite empty away, a five per cent. reduction of the duties on Nüremberg wares, children's toys, eau de Cologne, and other trifles, is promised. That gives satisfaction to the small German states, and also does not cost much.

The next attempt will be to convince the German governments, by means of this report, how advantageous to them it would be to let England spin cotton and linen yarns for them. It cannot be doubted that hitherto the policy adopted by the Union, first of all to encourage and protect the printing of cloths and then weaving, and to import the medium and finer yarns, has been the right one. But from that it in nowise follows that it would continue to be the right one for all time. The tariff legislation must advance as the national industry advances if it is rightly to fulfil its purpose. We have already shown that the spinning factories, quite apart from their importance in themselves, yet are the source of further incalculable benefits, inasmuch as they place us in direct commercial communication with the countries of warm climate, and hence that they exercise an incalculable influence on our navigation and on our export of manufactures, and that they benefit our manufactories of machinery more than any other branch of manufacture. Inasmuch as it cannot be doubted that Germany cannot be hindered either by want of water power and of capable workmen, or by lack of material capital or intelligence, from carrying on for herself this great and fruitful industry, so we cannot see why we should not gradually protect the spinning of yarns from one number to another, in such a way that in the course of five to ten years we may be able to spin for ourselves the greater part of what we require. However highly one may estimate the advantages of the export of grain and timber, they cannot nearly equal the benefits which must accrue to us from the spinning manufacture. Indeed, we have no hesitation in expressing the belief that it could be incontestably proved, by a calculation of the consumption of agricultural products and timber which would be created by the spinning industry, that from this branch of manufacture alone far greater benefits must accrue to the German landowners than the foreign market will ever or can ever offer them.

Dr. Bowring doubts that Hanover, Brunswick, the two Mecklenburgs, Oldenburg, and the Hanse Towns will join the Union, unless the latter is willing to make a radical reduction in its import duties. The latter proposal, however, cannot be seriously considered, because it would be immeasurably worse than the evil which by it, it is desired to remedy.

Our confidence in the prosperity of the future of Germany is, however, by no means so weak as that of the author of the report. Just as the Revolution of July has proved beneficial to the German Commercial Union, so must the next great general convulsion make an end of all the minor hesitations by which these small states have hitherto been withheld from yielding to the greater requirements of the German nationality. Of what value the commercial unity has been to the nationality, and of what value it is to German governments, quite apart from mere material interests, has been recently for the first time very strongly demonstrated, when the desire to acquire the Rhine frontier has been loudly expressed in France.

From day to day it is necessary that the governments and peoples of Germany should be more convinced that national unity is the rock on which the edifice of their welfare, their honour, their power, their present security and existence, and their future greatness, must be founded. Thus from day to day the apostasy of these small maritime states will appear more and more, not only to the states in the Union, but to these small states themselves, in the light of a national scandal which must be got rid of at any price. Also, if the matter is intelligently considered, the material advantages of joining the Union are much greater for those states themselves than the sacrifice which it requires. The more that manufacturing industry, that the internal means of transport, the navigation, and the foreign trade of Germany, develop themselves, in that degree in which under a wise commercial policy they can and must be developed in accordance with the resources of the nation, so much the more will the desire become more vigorous on the part of those small states directly to participate in these advantages, and so much the more will they leave off the bad habit of looking to foreign countries for blessings and prosperity.

In reference to the Hanse Towns especially, the spirit of imperial citizenship of the sovereign parish of Hamburg in no way deters us from our hopes. In those cities, according to the testimony of the author of the report himself, dwell a great number of men who comprehend that Hamburg, Bremen, and Lubeck are and must be to the German nation that which London and Liverpool are to the English, that which New York, Boston, and Philadelphia are to the Americans—men who clearly see that the Commercial Union can offer advantages to their commerce with the world which far exceed the disadvantages of subjection to the regulations of the Union, and that a prosperity without any guarantee for its continuance is fundamentally a delusion.

What sensible inhabitant of those seaports could heartily congratulate himself on the continual increase of their tonnage, on the continual extension of their commercial relations, if he reflected that two frigates, which coming from Heligoland could be stationed at the mouths of the Weser and the Elbe, would be in a position to destroy in twenty-four hours this work of a quarter of a century? But the Union will guarantee to these seaports their prosperity and their progress for all future time, partly by the creation of a fleet of its own and partly by alliances. It will foster their fisheries, secure special advantages to their shipping, protect and promote their foreign commercial relations, by effective consular establishments and by treaties. Partly by their means it will found new colonies, and by their means carry on its own colonial trade. For a union of States comprising thirty-five millions of inhabitants (for the Union will comprise that number at least when it is fully completed), which owing to an annual increase of population of one and a half per cent. can easily spare annually two or three hundred thousand persons, whose provinces abound with well-informed and cultivated inhabitants who have a peculiar propensity to seek their fortune in distant countries, people who can take root anywhere and make themselves at home wherever unoccupied land is to be cultivated, are called upon by Nature herself to place themselves in the first rank of nations who colonise and diffuse civilisation.

The feeling of the necessity for such a perfect completion of the Commercial Union is so universally entertained in Germany, that hence the author of the report could not help remarking, 'More coasts, more harbours, more navigation, a Union flag, the possession of a navy and of a mercantile marine, are wishes very generally entertained by the supporters of the Commercial Union, but there is little prospect at present of the Union making head against the increasing fleet of Russia and the commercial marine of Holland and the Hanse Towns.' Against them certainly not, but so much the more with them and by means of them. It lies in the very nature of every power to seek to divide in order to rule. After the author of the report has shown why it would be foolish on the part of the maritime states to join the Union, he desires also to separate the great seaports from the German national body for all time, inasmuch as he speaks to us of the warehouses of Altona which must become dangerous to the warehouses of Hamburg, as though such a great commercial empire could not find the means of making the warehouses of Altona serviceable to its objects. We will not follow the author through his acute inferences from this point; we will only say, that if they were applied to England, they would prove that London and Liverpool would increase their commercial prosperity in an extraordinary degree if they were separated from the body of the English nation. The spirit which underlies these arguments is unmistakably expressed in the report of the English consul at Rotterdam. 'For the commercial interests of Great Britain,' says Mr. Alexander Ferrier at the end of his report, 'it appears of the greatest possible importance that no means should be left untried to prevent the aforesaid states, and also Belgium, from entering the Zollverein, for reasons which are too clear to need any exposition.' Who could possibly blame Mr. Ferrier for speaking thus, or Dr. Bowring for speaking thus, or the English ministers for acting as the others speak? The national instinct of England speaks and acts through them. But to expect prosperity and blessing to Germany from proposals which proceed from such a source as that, would appear to exceed even a decent degree of national good nature. 'Whatever may happen,' adds Mr. Ferrier to the words above quoted, 'Holland must at all times be considered as the main channel for the commercial relations of South Germany with other countries.' Clearly Mr. Ferrier understands by the term 'other countries, merely England; clearly he means to say that if the English manufacturing supremacy should lose its means of access to Germany or the North Sea and the Baltic, Holland would still remain to it as the great means of access by which it could predominate over the markets for manufactured goods and colonial produce of the south of Germany.

But we from a national point of view say and maintain that Holland is in reference to its geographical position, as well as in respect to its commercial and industrial circumstances, and to the origin and language of its inhabitants, a German province, which has been separated from Germany at a period of German national disunion, without whose reincorporation in the German Union Germany may be compared to a house the door of which belongs to a stranger: Holland belongs as much to Germany as Brittany and Normandy belong to France, and so long as Holland is determined to constitute an independent kingdom of her own, Germany can as little attain independence and power as France would have been enabled to attain these if those provinces had remained in the hands of the English. That the commercial power of Holland has declined, is owing to the unimportance of the country. Holland will and must also, notwithstanding the prosperity of her colonies, continue to decline, because the nation is too weak to support the enormous expense of a considerable military and naval power. Through her exertions to maintain her nationality Holland must become more and more deeply involved in debt. Notwithstanding her great colonial prosperity, she is and remains all the same a country dependent on England, and by her seeming independence she only strengthens the English supremacy. This is also the secret reason why England at the congress of Vienna took under her protection the restoration of the Dutch seeming independence. The case is exactly the same as with the Hanse Towns. On the side of England, Holland is a satellite for the English fleet—unite it with Germany, she is the leader of the German naval power. In her present position Holland cannot nearly so well derive profit from her colonial possessions as if they became a constituent part of the German Union, especially because she is too weak in the elements which are necessary for colonisation—in population and in mental powers. Further than this, the profitable development of her colonies, so far as that has hitherto been effected, depends for the most part on German good nature, or rather on the nonacquaintance of the Germans with their own national commercial interests; for while all other nations reserve their market for colonial produce for their own colonies and for the countries subject to them, the German market is the only one which remains open to the Dutch for the disposal of their surplus colonial produce. As soon as the Germans clearly comprehend that those from whom they purchase colonial produce must be made to understand that they on their part must purchase manufactured goods from Germany under differentially favourable treatment, then the Germans will also clearly see that they have it in their power to compel Holland to join the Zollverein. That union would be of the greatest advantage to both countries. Germany would give Holland the means not only of deriving profit from her colonies far better than at present, but also to found and to acquire new colonies. Germany would grant special perferential privileges to the Dutch and Hanseatic shipping, and grant special preferential privileges to Dutch colonial produce in the German markets. Holland and the Hanse Towns, in return, would preferentially export German manufactures, and preferentially employ their surplus capital in the manufactories and the agriculture of the interior of Germany.

Holland, as she has sunk from her eminence as a commercial power because she, the mere fraction of a nation, wanted to make herself pass as an entire nation; because she sought her advantage in the oppression and the weakening of the productive powers of Germany, instead of basing her greatness on the prosperity of the countries which lie behind her, with which every maritime state must stand or fall; because she sought to become great by her separation from the German nation instead of by her union with it; Holland can only again attain to her ancient state of prosperity by means of the German Union and in the closest connection with it. Only by this union is it possible to constitute an agricultural manufacturing commercial nationality of the first magnitude.

Dr. Bowring groups in his tables the imports and exports of the German Customs Union with the Hanse Towns and Holland and Belgium all together, and from this grouping it clearly appears how greatly all these countries are dependent on the English manufacturing industry, and how immeasurably they might gain in their entire productive power by union. He estimates the imports of these countries from England at 19,842,121l. sterling of official value, or 8,550,347l. of declared value, but the exports of those countries to England (on the other hand) at only 4,804,491l. sterling; in which, by the way, are included the great quantities of Java coffee, cheese, butter, &c. which England imports from Holland. These totals speak volumes. We thank the Doctor for his statistical grouping together—would that it might betoken a speedy political grouping.