Customs war between Russia and Germany at the turn of the XIX-XX
centuries: periodization problem

Kulakov Aleksei Aleksandrovich Head of the Center, National Research University Higher School of Economics 109028, Russia, Moscow, Moscow, blvd. Pokrovsky, 11, of. L-302 alexey_kulakov@inbox.ru

Describing the spirit of trade, the famous French writer, jurist and philosopher of the Enlightenment, S.L. Montesquieu, pointed out that "the natural effect of trade is to incline people to peace" ^{[1, p. 117]}. He explained this by the need to establish long-term mutually beneficial ties between trading nations.

However, as history shows, this is not always the case. Moreover, at a certain stage of the development of market relations, trade interests not only do not contribute to the achievement of peace, but, on the contrary, push them to resolve through active hostilities. This, in particular, is evidenced by the second half of the XIX century, marked by numerous customs wars between the "great powers" for the redistribution of spheres of influence and markets. A special place in the series of such conflicts is occupied by the customs war between Russia and Germany.

Although many researchers recognize the significance of this event for world history, it still remains poorly understood. This is partly due to the need for a comprehensive analysis using different research methods. In addition, one of the main problems of studying the customs war between the Russian and German Empires is to determine its chronological framework. Unlike international armed conflicts unfolding on the battlefield, the customs war is not accompanied by an official announcement of the beginning, and the tariff and non-tariff restrictions imposed cannot always be defined as "hostilities". The difficulty also lies in the fact that the customs war is difficult to identify: for a long time in a number of sources of the XIX century ^{[2, l. 10-22]} it was noted that the uniqueness of such conflicts lies in the fact that the beginning of a customs war can be said only when the second state applied reprisals (retaliatory measures) to unfriendly unilateral measures of an economic nature on the part of the trading partner. In our opinion, this approach cannot be considered correct, since in this case it is not possible to objectively determine the chronological framework of the conflict – they entirely depend on the perception of the "victim of the attack". With this approach, the burden of blame for unleashing a customs war is shifted from the aggressor to the defending state, and the very stage of the "attack" is beyond the conflict.

In Russian and foreign historiography , there are several approaches to determining the periodization of the customs war between Russia and Germany:

1) 1879-1894;

2) 1887-1894.;

3) 1892-1894.;

4) 1893-1894.

In Russian historiography, most researchers ^{[3, p. 200; 4, p. 125-129]} tend to the point of view that the Russian-German customs war began in 1892 and ended in 1894. The first mention of the customs war in the Russian periodical press is dated 1892, for example, in one of the January issues of the "Northern Bulletin" there are reflections that German policy can lead to a customs war, which, in the words of Kaiser Wilhelm II, is capable of "ruining peoples" ^{[5, p. 150]}, and the author of an article in the Historical Bulletin for March 1892 expresses confidence that "from the customs war declared to us by Germany, it will suffer mainly itself, because German manufactured goods, having lost our markets, will not easily find sales in Europe" ^{[6, p. 777]}.

 The fact that the customs war began in 1892 is also indicated by statistical data: in 1892, the volume of grain exports to Germany decreased by almost 36% compared to 1891 ^{[7, l. 17]} Another indicator is the adoption in the Russian Empire of the Customs Charter of 1892, which tightened criminal liability for smuggling. A sharp drop in exports and the strengthening of repressive customs legislation indicate the beginning of a customs war.

Researchers who adhere to this approach mainly associate the starting point of the customs war with the actions of the German side to switch to a system of conventional tariffs in trade. Less often, the aggravation of Russian-German relations is caused by the appointment of S.Y. Witte to the post of Finance Minister ^{[8, p. 105; 9]}. According to supporters of this approach, S.Y. Witte, patronizing domestic industry and French financial capital, turned out to be an inconvenient negotiator for the German side and nullified the previously reached agreements on the conclusion of a trade agreement between Russia and Germany. However, this point of view is refuted by the German side. In particular, German Chancellor B. Bulov notes in his memoirs that "Witte was a staunch supporter of good relations between his fatherland and Germany. Not because he felt any special sympathy for us. He preferred Paris as a city to Berlin. ... But he was convinced that the fate of the Russian reigning house depended on the preservation of peace and good relations between Germany and Russia, and he ... was an unconditional monarchist" ^{[10, p. 273]}.

The meaning of the system of conventional tariffs was that it assumed the establishment of reduced rates of customs duties in comparison with the general tariff. This system was applied to individual commodity items and only to those countries that had concluded trade agreements with Germany. For those who did not conclude such agreements, maximum duties were applied, the amount of which reached from 30 to 50% of the rate of the conventional tariff. The reduction of duties in this case was carried out on the terms of reciprocity. It was the selective lowering of tariff rates that was regarded in Russia as a declaration of customs war.

Even at the stage of negotiations, from the report of the official of the special instructions of the Ministry of Finance of the Russian Empire, D.S. Kumanin, dated 25.10/06.11.1890 No. 318, it followed for the first time that if an agreement between Germany and Austria was still reached, there was a high probability of a customs war with Russia. "The only state with which Germany is not bound by a trade treaty," he writes, "Russia, under these conditions, would have to bear the whole burden of high grain duties alone... the establishment of differential duties may cause Russia to take new repressive measures against the import of German products" ^{[2, l. 10-11]}. In 1891 already Russian Ambassador in Berlin P. Shuvalov in correspondence with the Ministry of Finance noted that "if the two countries (Germany and Austro-Hungary) impose differential duties – this will push Russia to the introduction of repressione measures" ^{[2, n. 19]}.

In December 1891 The Second Reich concluded a number of trade agreements providing for conventional tariffs with Austria-Hungary, Italy, Switzerland and Belgium. They came into force after their ratification on February 01, 1892. In addition to the Contracting Parties, the reduction of customs tariffs automatically extended to third countries, which, in accordance with previously concluded trade treaties, were granted the most favored nation treatment. As a result, the benefits of Germany's conventional tariffs with Central European countries were also enjoyed by the United States, South American states, Balkan countries, etc., which were Russia's main trade competitors. At the same time, Russian exports did not use tariff preferences due to the fact that there were no written agreements with the Reich. "Russia did not have a trade agreement with Germany, and according to traditional friendship, based mainly on dynastic kinship, they have always treated each other according to the principle of the most favored nation. But by that time, Russia's relations with Germany had changed significantly," writes S.Y. Witte in his memoirs ^{[11, pp. 435-436]}. It is noteworthy that the Finance Minister himself also linked the beginning, however, not of a customs, but of a trade war with 1892 ^{[11, p. 435]}

In German historiography, the prevailing view is that the beginning of the conflict was the introduction by Russia of retaliatory measures to deprive its regime of the most favored nation in mutual trade. In particular, this point of view is held by A. List, R. Hauf, Y. Kuchinsky, G. Vitkovsky ^{[12, s. 26; 13, s. 18; 14, s. 29-30]}. This position is shared by some domestic researchers, for example, V. Witchevsky ^{[15, p. 142]}. In their opinion, the customs war began on July 01, 1893, when the law on double customs tariff came into force in Russia. The above-mentioned law provided for a selective increase in import customs duties on German goods from 50 to 100% at first. The difference between such a tariff and the conventional one was that the change in the rates of customs duties was carried out unilaterally.

According to G. Halgarten, the customs war also began in 1893, but he blames the German agrarians for its unleashing, who forced Chancellor L. F. Caprivi to unilaterally withdraw from tariff negotiations with the Russian government ^{[16, p. 136]}.

The third approach to the periodization of the customs war has also become widespread in foreign historiography. According to L. Lerfreund, by 1893 both countries had been in a state of "latent customs war" for 13 years ^[17]. The author connects its beginning with the adoption of a protective customs tariff in Germany. However, it should be noted that, although this measure had negative consequences for Russian exports, the new rates of customs duties were applied to other countries as well.

According to A.O. Chubaryan, the customs war broke out in 1887 after the Russian obstruction of the German attack on France. The author connects its beginning with the actions of Chancellor O. F. Bismarck, who applied, among economic sanctions against St. Petersburg, an increase in customs duties on Russian bread ^[18]. In our opinion, the position according to which Bismarck's decisions laid only the prerequisites for a future customs war ^[19] seems more balanced, especially if we take into account that the increase in import duties on Russian bread was allowed earlier.

The end of the customs war is traditionally associated with the conclusion of a trade agreement between Russia and Germany on January 29 / February 10, 1894 ^[20], which fixed the conventional tariff for goods of both sides. However, this position seems controversial. According to article 20 of the treaty, its validity was limited in time – until December 18 (31), 1903 (subsequently, the treaty was extended in 1904 for a period of 10 years and ceased to be valid with the outbreak of the First World War in 1914). In this case, it is appropriate to draw an analogy with international law, according to which an armed conflict is considered completed in the event of the conclusion of a peace treaty having an indefinite nature. Since the trade agreement provided for a period of validity, it cannot be considered a document that put an end to the customs war; it only suspended "hostilities" and limited the side in the "tools and means" used. This point of view is confirmed by the words of the German economist and historian V. Sombart that "trade agreements meant a kind of truce during a long struggle that became increasingly fierce, a respite, giving each other time to gather and concentrate forces after a period of anxiety and unrest in the field of trade policy" ^{[21, p. 269]}. According to Yu.G. Kislovsky, the trade agreement itself became "the cause of a new customs war" ^{[3, p. 208]}, although it is more correct, in our opinion, in this case to talk about the resumption of "combat" actions.

Archival documents also indicate the continuation of the customs war after 1894, but mainly by non-tariff methods. Thus, the Commercial Agency in Berlin, by report No. 301 dated July 20, 1894, informed the Ministry of Finance of numerous complaints from bran exporters, the essence of which was that, contrary to the provisions of the German conventional tariff (Annex B to the trade agreement of 1894), the transportation of bran was not taxed; in fact, the German customs applied the rate to them provided for flour products – 7.30 marks per 100 kg . In addition to arbitrariness in the charging of bran, exporters complained about the complication of customs inspection procedures, since before crossing the border, bran was subject to expert analysis and, in the case of an increased content of flour in the composition, naturalization. As a result, the costs of suppliers increased so much that they often exceeded the cost of the goods ^{[22, L. 1-2, 28]}.

The bran case is not an isolated one. The retaliatory measure was the imposition of duties on German bimetallic products in 1894. Thus, the transported sheet iron coated with simple metals such as tin or zinc was subject to customs taxation; at the same time, sheet iron was transported duty-free according to the Russian conventional tariff ^{[23, l. 106-107]}.

Arbitrary interpretation of the commodity nomenclature was one of the main causes of customs incidents (misunderstandings). Since the trade agreement severely limited the parties in the possibilities of preventing the transportation of goods, both Russia and Germany, while maintaining the need in some cases to protect the national market, often resorted to changing the rules of classification of goods, thereby artificially creating reasons for the use of restrictive measures.

Another common reason for the aggravation of Russian-German trade relations was veterinary and sanitary supervision. Such supervision was one of the few measures of non-tariff regulation, the use of which was permitted by a trade agreement. However, in some cases, resorting to it was in the nature of abuse.

So, in one of the reports addressed to the Director of the Department of Trade and Manufactures of the Ministry of Finance, V.I. Kovalevsky, it was said that "the main gap in the treatise is in the absence of positive rules of border sanitary supervision over cattle, so that the German efforts to protect themselves from infection were conscientious and did not mask another goal, namely: sanitary difficulties to provide indirect protection of their own cattle breeding" ^{[24, l. 1-2]}. To move livestock across the German border, a mandatory examination by a veterinarian was required, which had to wait for several days until the number of animals exceeded at least a dozen. The Russian exporter was obliged to pay for the services of a veterinarian and feed the cattle during this period. As a result, Germany earned 12 thousand marks from veterinary and sanitary supervision only at one border checkpoint (not counting the amount of customs duties), which, according to commercial agents, testified to the fiscal nature of restrictions not caused by objective necessity ^{[24, L. 4]}.

Abuse of veterinary and sanitary supervision has repeatedly given Russia a reason to declare a violation of the principles of international trade and the grounds for applying a similar treatment to Germany ^{[24, l. 6-7]}. G. Halgarten called such actions of the customs authorities of the Second Reich nothing but "veterinary-police customs quibbles" ^{[16, p. 203]}. At the same time, it is noteworthy that numerous violations and incidents caused by these actions are practically not investigated in Russian historiography and are mentioned mainly in German literature.

The most serious crisis on the basis of veterinary and sanitary restrictions broke out in 1896-1897. The reason for the conflict was the introduction by the German side of unilateral restrictions on the customs border, which affected the supply of Russian grain, and a complete ban on the export of pork and geese in Upper Silesia. "K?nigsberg Zeitung", defending the actions of the German authorities, reported that the restrictions imposed are directed against the import of epizootics and grain bacilli from Russia, as well as that such measures fit into the framework of the provisions of the Russian-German trade treaty ^{[25, l. 219-220]}. However, the Russian side held a different opinion, seeing discrimination and unfair fulfillment of contractual obligations in the behavior of the trading partner, especially considering that the measures taken affected only Russian imports and did not affect the supply of livestock and grain products from third countries Through diplomatic channels, the German government was informed that Russia did not dispute the right to introduce veterinary and sanitary measures, and only "the correctness of their application, so that measures of an exclusively economic nature are not taken under the guise of sanitary measures" ^{[25, l. 188]}.

A veterinary commission specially created in the Kingdom of Poland by order of the Ministry of Internal Affairs of the Russian Empire established the absence of morbidity of farm animals, and saw in the measures introduced deliberate restriction of Russian exports. The commission's conclusion stated that "the Prussian provinces adjacent to the Russian provinces are the least exposed to epizootics" and that the diseases are spread mainly in West Germany – this, according to experts, testified to the far-fetched reasons for a total ban on the import of pigs and geese from Russia ^{[25, l. 105-109]}.

Unreasonable veterinary and sanitary restrictions, coupled with other "hostile" measures against Russian exports, namely, the closure of transit warehouses without the consent of the tsarist government and the cancellation of a six-month loan for the payment of customs duties for bread ^{[25, l. 2-3]}, served as the basis for the introduction of S.Y. Witte retaliatory reprisals and the initiation of the convocation of a new Berlin conferences. Special circulars of the Ministry of Finance dated 08/22/1896 canceled previously adopted classification commodity decisions, which were legal fictions and thus served as the basis for the application of customs privileges to German goods. For example, pins with glass heads for the purposes of applying the Russian customs tariff, at the request of the German side, were equated not to haberdashery products, but wire, glass buttons – to porcelain, as a result of which they were not subject to customs duties. In addition to pins and buttons, retaliatory measures affected the import of copper water meters, leather goods and linen made of cellulose ^{[25, L. 39]}. According to a note in the "National Zeitung" dated 09/20/1986 No. 502, a change in approaches to the classification of leather bags led to their customs taxation in the amount of 60% of the cost of the product ^{[25, L. 223]}. In addition, a mandatory veterinary examination was introduced for horses imported from Germany ^{[25, L. 43-44]}.  The Ministry of Finance motivated its reaction by the unfriendly actions of the German side, which "cannot be interpreted ... otherwise as the result of the harassment of the Prussian agrarian Party in order to restrict the import of vital products from Russia" ^{[25, l. 3]}. G. Halgarten agreed with this assessment of events, who believed that the cause of the aggravation of Russian-German relations was the actions of the German Ministry of Agriculture, which implemented the ideas of the Union of Rural Owners and received an extremely negative assessment from the Department of Foreign Affairs ^{[16, p. 203]}.

The introduction of reprisals gave grounds to the German press to talk about a customs war between the two empires. "Freisinnige Zeitung" devoted several issues – from 09/19/1896 and 09/20-1986 for Nos. 222 and 226, respectively – to the aggravation of Russian-German trade relations under the heading "German-Russian customs struggle" ^{[25, l. 220-222]}. "Berliner Tagelblatt" from 09/19/1896 placed personal responsibility for what was happening on S.Y. Witte, who caused his actions "gloomy pictures of a new customs war" ^{[25, l. 224]}. The modern German historian D. Wolf also calls the events of 1896-1897 "der "kleine" Zollkrieg" ^[26] about – "a small customs war", although, as noted earlier, it would be more correct to talk about the resumption of "combat" actions.

Tensions in trade relations between the two empires persisted until the outbreak of the First World War. The additional Convention to the trade agreement, signed by Russia on extremely unfavorable terms and, in fact, imposed by the German Empire, not only did not contribute to their normalization, but, on the contrary, caused only an even greater round of struggle.

The new conventional tariff had not yet come into force when a major diplomatic scandal broke out. According to the telegram of the State Secretary of the Ministry of Foreign Affairs of Germany Chirsky dated February 19, 1906, addressed to the ambassador in St. Petersburg, numerous complaints and requests were received from the German merchants about the reasons for the closure of movement on the Russian border. The telegram indicated that several border routes were paralyzed at once, the flow of goods was stopped, cargo transportation was not carried out. According to the State Secretary, the delay was deliberately inspired in order to ensure that the goods were transported in accordance with the higher rates of the Russian conventional tariff after March 01, 1906, since duties are calculated on the day of crossing the customs border ^{[27, pp. 33-34]}. Throughout the year, the German embassy tried to obtain compensation for the damage caused, but the Russian side agreed to compensate only 50% of the losses. According to the estimates of the German Government, and this amount was not paid, the amount of compensation amounted to only 47.7% of the losses incurred by German importers due to the application of increased rates of customs duties ^{[27, s. 92]}.

Other reports spoke of existing abuses that significantly restrict mutual trade, for example, that the Russian government actively uses export duties to prevent the supply of raw materials needed by German industry. Thus, in 1907, the German government put under special control the question of the prospects for the introduction of export duties for manganese ores mined in the Caucasus ^{[27, s. 95]}. The firm "Henschel und Sohn", in 1908, sent a letter to the Treasury accusing Russia of violating article 5 of the trade treaty. In addition to the rise in the cost of imported material (obviously, we are also talking about export duties), in substantiating the complaint, the firm, in particular, referred to the fact that the introduction of a licensing system by the Russian government for the production of locomotives in a foreign company – the consent of the Ministry of Trade and Industry was required – did not comply with existing agreements and made it impossible to place an order in Germany ^{[27, s. 169-170]}.

The German Empire also took retaliatory measures. In 1911, the Bundesrat reviewed and adopted a new law on customs clearance, which tightened the turnover of rye and wheat bran. The German Parliament justified the adoption of a restrictive measure by the fact that for many years, under the guise of bran, flour and crushed grain were imported duty-free by Russia, subject to customs taxation, which caused irreparable damage to the treasury of the Reich ^{[27, s. 280-281]}. In 1912-1913, at the initiative of the Bremen and Hamburg grain merchants unions, mandatory guarantees were introduced for Russian grain supplies. The guarantee was issued for the amount of imported grain, it was necessary to receive it from one of the large foreign bread control firms. Such a measure was recognized as equivalent to "the establishment in Russia of compulsory control over grain exported abroad and the surrender of all Russian exporters to some foreign control firm" ^{[28, p. 401]}.

In fact, the end of the customs war occurred only on August 01, 1914, after the entry of Germany and Russia into the First World War. The outbreak of an armed conflict automatically led to the rupture of trade relations, and, consequently, in the absence of trade, customs taxation was not carried out.

Based on the approaches existing in domestic and foreign historiography, as well as the studied archival documents, we believe that it is necessary to formulate a new chronological framework of the customs war between Russia and Germany (February 01, 1892 – August 01, 1914). The starting point of the conflict is proposed to consider the date of entry into force of the conventional tariff between Germany and Russia's main competitors – Austria-Hungary and Romania. With the beginning of this tariff, the Russian Empire lost the most favored nation regime, found itself in conditions of trade isolation, and the rates of maximum customs duties were applied to Russian exports.  The upper limit of the chronological framework is due to the beginning of the First World War, which led to the rupture of trade relations, tariff agreements and, accordingly, the end of the customs war.