![]() The protectionist Centrist and conservative parties are coloured grey and blue respectively. German manufacturers renewed their demand for protection, with the textile and iron industries the most strongly in favour. Although prices began to rise with the subsequent economic recovery, this recovery was hampered by British manufacturers dumping their goods on the German market. The Panic of 1873, however, led to a depression, with low prices in Germany temporarily shielding it from foreign competition. This gave impetus to industry but it also led to over-production: the number of joint-stock companies in Prussia in 1870 was 410, with total capital of three milliard marks by the end of 1874 there were 2,267 companies with capital amounting to seven and one-third milliards. A considerable portion of the indemnity was paid in bills of exchange and in gold. Īfter the Franco-Prussian War of 1871, France had to pay an indemnity to Germany. However, industrialists favoured tariffs against British goods to safeguard their infant industries and they therefore came to believe that winning over the farmers to protectionism was crucial. During the 1850s and 1860s Germany was a net exporter of grain and its farmers opposed tariffs for industry as this might have led to reprisals by Britain against German grain. In 1850 two-thirds of Germany was employed in agriculture and this proportion declined slowly until 1870. Tariffs were now for raising revenue and not for protective purposes, with the German Empire therefore almost a completely free-trading state. #FREE42 IMPORT EXPORT FREE#In 1873 free trade won its last victory in Germany with the abolition of the duty on iron. The Treaty of Frankfurt of 1871 established most favoured nation status between Germany and France. In 1853 the duties on grain were abolished and in 1862 the commercial treaty with France (along with similar treaties with other states) substantially reduced the duties for manufactured goods. Following the end of the Napoleonic Wars in 1815, Prussia had adopted low tariffs (including for grain) and these became the basis of the Zollverein tariff of 1834. ![]()
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