of the necessaries of life from one little State to its Lilliputian neighbours.  The rise of the national idea in Germany during the wars against the great Napoleon led to a more enlightened system, especially for Prussia.  The Prussian law of 1818 asserted the principle of imposing customs dues for revenue purposes, but taxed foreign products to a moderate extent.  On this basis she induced neighbouring small German States to join her in a Customs Union (Zollverein), which gradually extended, until by 1836 it included all the States of the present Empire except the two Mecklenburgs, the Elbe Duchies, and the three Free Cities of Hamburg, Bremen, and Luebeck.  That is to say, the attractive force of the highly developed Prussian State practically unified Germany for purposes of trade and commerce, and that, too, thirty-eight years before political union was achieved.

This, be it observed, was on condition of internal Free Trade, but of moderate duties being levied on foreign products.  Up to 1840 these import duties were on the whole reduced; after that date a protectionist reaction set in; it was checked, however, by the strong wave of Free Trade feeling which swept over Europe after the victory of that principle in England in 1846-49.  Of the new champions of Free Trade on the Continent, the foremost in point of time was Cavour, for that kingdom of Sardinia on which he built the foundations of a regenerated and united Italy.  Far more important, however, was the victory which Cobden won in 1859-60 by inducing Napoleon III. to depart from the almost prohibitive system then in vogue in France.  The Anglo-French Commercial Treaty of January 1860 seemed to betoken the speedy conversion of the world to the enlightened policy of unfettered exchange of all its products.  In 1862 and 1865 the German Zollverein followed suit, relaxing duties on imported articles and manufactured goods—­a process which was continued in its commercial treaties and tariff changes of the years 1868 and 1869.

At this time Bismarck’s opinions on fiscal matters were somewhat vague.  He afterwards declared that he held Free Trade to be altogether false.  But in this as in other matters he certainly let his convictions be shaped by expediency.  Just before the conclusion of peace with France he so far approximated to Free Trade as to insist that the Franco-German Commercial Treaty of 1862, which the war had of course abrogated—–­ war puts an end to all treaties between the States directly engaged—­should now be again regarded as in force and as holding good up to the year 1887[81].  He even stated that he “would rather begin again the war of cannon-balls than expose himself to a war of tariffs.”  France and Germany, therefore, agreed to place one another permanently on “the most favoured nation” footing.  Yet this same man, who so much desired to keep down the Franco-German tariff, was destined eight years later to initiate a protectionist policy which set back the cause of Free Trade for at least a generation.