§ 261. The discussion under the last preceding head has dealt with that class of taxes which have, on account of their simplicity, lasted through from the beginning to the end, and combine the earliest tentative efforts and the ideal of developed taxation. Under the head of tolls (duties) we shall have to do with a kind of taxes which are of a diametrically opposite char acter, and reflect all the changes of the political system and of the public economy.
In the first place the tolls are, in their origin, to quite as great an extent as any other kind of payment towards the primitive public economy, an individual payment for individual benefits.' They are payments due from the individual to the lord of the land for the establishment and security of roads, rivers, bridges, harbors,' markets. Whether, with Gneist, we derive them from the police power (preservation of the peace), or lay special stress on the service rendered as an equivalent, —in any case it is a fact of great significance for the nature of these imposts that they constantly tend to develop into rights, in that everybody asserts the right to collect tolls who feels himself strong enough to enforce the claim. This usurious exploitation for private gain of what is properly a public right, and the further development of a well-founded right into an abuse, was a subject for magisterial prohibition from very early times.
The capitularies of the Frankish kingdom mention a variety of tolls : bridge-toll, river-toll, harbor-toll, road-toll, wheel-toll, pack-horse-toll, foot-passenger-toll, market-toll, and the That these and other tolls had, even at that time, been carried to excess, and were frequently abusively collected by great lords and small, is evident from the ordinance enacting that in general, no toll is to be collected on the open road where there is neither bridge, nor ford, nor ferry similarly this other provision that no toll was to be levied except what had been levied since ancient times. While it here appears that the rulers of the Frankish kingdom sought to protect their subjects against the oppressive collection of tolls by the powerful, and their constantly renewed prohibitions bear witness to the futility of their ordinances, in England, under the Norman kings, this same subject is a matter of complaint against the kings. An integral part of the rights of the English people, confirmed by John in the Magna is the right of all tradesmen to a safe-conduct to go out of England and to come into England, to sojourn in and to pass through England, both by land and water, to buy and to sell "without all malls toltis per antiquas et rectas consuetudines," that is to say, in violation of the ancient and law ful tolls. The restriction of tolls to what has been established by ancient customs (consuetudines) is so firmly bound up with the idea, that the prevalent name for tolls in English is derived from the term for a customary right (coutume,. custuma, custom). The revenue from customs tolls was still quite inconsiderable at the time of King John ; the customs being farmed out in the fourth year of his reign for 50 silver.
§ 262. We are now in a position to discuss the English development 2 as contrasted with the German, and to follow up the development of tolls under the influence of an orderly and consolidated government, until it becomes what it is today for the purposes of the modern state, namely, a payment of a gen eral character into the public treasury. It is therefore a form of taxation, usually levied on articles of consumption on their cross ing the national boundaries, especially on their import. It is a form of taxation which does not exclude other than financial considerations, and which may even, under given circumstances, give such considerations the chief place.
A significant contrast appears in the fact of a much earlier development in England than in Germany. It is shown even in the fact that the differentiation of the name took place earlier in England. The Low-German-Saxon term " toll " began to be used quite early, and has continued until the present to denote the payments by individuals, and in part to private individuals, such as bridge-tolls, road-tolls, canal-tolls, and the like ; while the term " customs " is used to designate import and export duties as known to modern political administration. In Germany, on the contrary, these different classes of payments are designated indiscriminately by the single term Zoll, a usage which connotes centuries of confusion in the public administration and public law. It is not that England simplified the practice of import and export duties. They were, in England as elsewhere, devel oped into an extremely complex and variegated structure, so much so that even Pitt's Customs-Consolidation Act (1787) contained twelve hundred dutiable articles of import, besides fifty dutiable articles of export. But the idea of the duty had long been clearly and distinctly conceived, while in Germany a similar clear conception had been sought in vain for centuries. This clear conception had been reached eary because a consolidated political organization had developed a uniform organization of the revenue system ; the public [offentlich-rechtliche] nature of the national government brought out the public nature of the tax which had originated in these individual payments. In Germany the course of development was much slower.
As is the case in the Capitularies of the Frankish kingdom, so we find it also happens that the German Emperor, in his struggle for the establishment of the imperial sovereignty, attacks the abuses that occur in the collection of tolls. Very significant' is the edict promulgated by Frederick II. at the Reichstag in Regensburg (1235). This edict provides that all tolls on land and water, whose collection was begun after Henry's death, wherever and by whomsoever levied, are to be abolished, except the taker of the toll could prove to the Emperor that he had a right to levy it. Persons violating this provision were to be punished as robbers and highwaymen. Moreover, those entitled to levy tolls were required to improve bridges and roads and to provide for the peace and security of travelers.
The imperial edicts of the following century show how the abusive collection of tolls increased as the imperial authority declined. The imperial edict of the Emperor Sigismund (1430) reasserts the principle that the right to levy a toll is based on the rendering of an equivalent. Finally, in the midst of the decline of the Empire, a notable attempt was made to establish an imperial toll system, which was intended to further the realiza tion of the imperial idea, but for this very reason was impossible of realization under the circumstances then existing. This was the scheme of Charles V.' to establish a system of toll collection at the frontiers of the Empire ; duties at the rate of four per cent. to be collected on all goods imported or exported, with the exception of all food products indispensable for daily use, but including all members of the Empire,' even the Emperor and the Electors (1522). The scheme failed, both on account of the difficulties besetting the Empire at the time, and especially on account of the opposition of the imperial cities, which pointed out that the German Empire, beyond all other nations, was bur dened with a multitude of heavy internal tolls and that trade would be unable to bear such an additional burden.
In point of fact, this reform could be achieved in Germany only by passing through an intermediate stage. The power of the territorial princes had grown so great through the feebleness of the imperial authority, that the reform would first have to work its way through this intermediate structure, and from that point gradually penetrate the imperial commonweal.
§ 263. The German Empire had not succeeded in transform ing the mediaeval toll system into a national system of frontier duties, after the manner of the other European states. This service had to be performed for Germany by the territorial princes. We shall briefly review the policy of the principality which has, more than any other, been instrumental in resuscita ting the imperial idea, and substituting it for the inherited scheme of independent states ; this principality was Brandenburg-Prussia.' All historical development proceeds by degrees. The great end of the movement is reached by first compassing the lesser intermediate ends which mark the stages along the way. The
consolidation of the imperial territory into an economic whole is the concluding act of a movement towards which the political unification of the territory, centuries earlier, served as an intro ductory measure. The unified territory itself had for its model the unified economic domain of the mediaeval city. The system of tolls was, for this evolution, both a hindrance and a help. The advance which it promoted consisted in this, that the eco nomic domain which was at any given time united in a single political organization—the city, later the territory, finally the Empire —drew the line of prohibition and hindrance along its frontier, and thereby furthered its own internal economic unity. An attitude of forbidding egoism towards outsiders leads to the strengthening of the city, then of the principality, or in England, France and the like, of the realm. The toll system, and its employment in the interest of the country and against all out siders, is an effective means to this end. The economic policy of the mediaeval city, therefore, furnishes the model for the toll policy of the large states, or, more immediately, of the principal ities. The so-called mercantile system is not simply a enon of the seventeenth and eighteenth centuries ; the deeper meaning of the system is this tendency which has been working itself out gradually from the Middle Ages down to the latest times. It is not an ephemeral doctrine belonging to a single generation, but it is the expression of an immutable bent towards a conscious shaping of the national economy into a unified organic whole.
The lever which served the Hohenzollern princes in the development of the toll system within their principality was the privilege granted by Emperor Frederick III., in 1456, to apply to their Brandenburg and Franconian territory, of increasing or changing existing tolls according to their pleasure, of levying new tolls, of taxing wine, beer and other articles consumed in their territory or transported through it. The first attempt to use this privilege on a large scale was made by Albert Achilles in 1472. His scheme was thought out with equal care both in its political and its financial bearings. The new tunnage was to be collected by royal officials in the cities, entirely independent of all previously existing tolls ; only a small number of articles in extensive use, viz., fish, herrings, wine, honey, lard, tallow, meat, tar, and other goods in barrels were to pay three groschen per tun. Beer was left untaxed because it was the most impor tant article of manufacture and export in the cities of Branden burg. The toll was to be of the nature of a frontier duty, in that it was paid only at a custom house and that the dutiable goods were thenceforth free. The cities opposed this plan in much the same way as they afterwards opposed the project of the Emperor Charles V. for an imperial toll system. But the sixteenth cen tury is taken up with a long series of efforts of the same kind, this time successful, by the Electors of Brandenburg. In particular, the Lenten corn duty was developed (1569) into a general export duty on corn and remained the chief source of the reve nues of the Electorate throughout the sixteenth and seventeenth centuries. It was farmed out to Denmark for a time at 200,000 reichsthalers.
In the Marches the course of events was the same as in Pomerania and in all the other larger territories. The dominant motive was furnished by the interests and fiscal needs of the state, which necessarily traversed the interests of neighboring states, as, in detail, they also traversed the interests of the cities and of domestic commerce. It was a toll system which com bined fiscal considerations with considerations of industrial policy, and in both of these respects served as an instrument in the hard work which it has cost to build up the modern national organization.
§ 264. The era of the territorial toll policy of the princes in Germany closed with the development of the Zollverein, which prepared the way for the unified toll system of the newly created Empire. The tariff wars of the seventeenth and eighteenth centuries' were replaced by a common toll policy and common toll frontiers among the individual territorial states of Germany' In Prussia, which afterwards became the centre of the Zoll verein, the preparatory steps (1816) towards a reform of the toll and tax administration began immediately after the Wars of the Liberation. On July II, 1816, the water-tolls, the internal-tolls, the provincial-tolls were abolished (first in the older provinces), and the government on the same occasion for the first time declared its intention to introduce "a general and uniform system of frontier duties instead of the complicated system of tolls, transit duties and commercial duties which had grown up in earlier times." The intentions of the government coincided with the wishes of the business population, as is shown in an address by manufacturers of the Lower Rhine provinces, of April 27, 1818, where the complaint occurs : " Our products are exclu ded from all the markets of Europe by tariff boundaries, while all the products of Europe find an open market in Germany." The new tariff law went into effect May 28, 1818.
This had, in the first place, to solve the problem of a uniform tariff frontier+ for the scattered territory of the Prussian state, and the difficulty of this problem drove the government to a Zollverein with the neighboring German states. The tariff frontier which Prussia had to guard in 1819 stretched over 1073 miles ; by the end of the year 1837 the Zollverein, with a popu lation of 25,500,000, of which little more than half belonged to Prussia, had a tariff frontier of only 1064 miles in all.
The tariff of 1818 originally made a distinction between a duty (on the gross weight of the goods), and a consumption tax on the net weight. The duty amounted to a uniform tax of one half thaler per cwt.; the consumption tax was for the most part levied at a rate of about 10 per cent. ad valorem. (Exports were free of duty, with a few exceptions.) By 1821 the duty and the consumption tax were consolidated into an "import tax" .
This tariff, as well as its successors in the united tariff territory of the German states, has the qualities both of a fiscal tariff and a moderate protective tariff. The import duty is well adapted to serve the purposes, on the one hand, of levying a consumption tax on articles the use of which is taken to indicate the degree of ability to pay taxes, and on the other hand, of erecting these same taxes into a barrier against the free com petition by foreign products in the domestic market. A blend ing of these two purposes, both of which are readily served by the tariff frontier, arises even unintentionally in the case of all articles which are produced at home as well as abroad ; a pro tective tariff will afford some revenue from the foreign imports, while a tariff for revenue acts to some extent as a measure of protection for domestic production. The purely fiscal duty its logical consequence only in cases where every measure of protection for domestic production is avoided, and the import duty is confined to such goods as are not produced at home. Most of our modern states, Great Britain excepted, have never yet reached this stage in their tariff policy, however near to it they may often have believed themselves to stand ; they have rather, in point of fact, departed farther from it dur ing the last ten or fifteen years, and are in possession of a tariff system which, on account of its blending of the two purposes of a tariff, has lately been well named the "mixed" tariff.
But whether taken together or separately, these two objects represent the public function of the tariff system which, in our most mature state organizations, has replaced the primitive market, river and road toll, at the same time that the frontier of the consolidated industrial territory has taken the place of the mediaeval subdivision and diversity.