Heart of Europe: A History of the Roman Empire (83 page)

The proliferation of mints during the high Middle Ages hindered control. The Reichstag tried in 1603 to limit their number to three or four per Kreis, but in Lower Saxony alone there were 30 in 1617, 12 of which were condemned by the Kreis currency meeting that year for breaching official rules.
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Debasement, or lowering the value of currency, appeared a quick fix to the pressing need to pay soldiers after 1618. The economically weaker belligerents resorted to this in 1619, followed by the Habsburgs two years later. The most notorious operator was the Prague Mint Consortium, composed of politically influential Habsburg officials, including Wallenstein, which issued 40 million florins of largely nominal coin in an operation considered by modern economists to be far worse than the quantitative easing by the European Central Bank in response to the 2008 Eurozone crisis, and precipitating what has been termed the Western world’s first financial crash.
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Bread prices rose 400 per cent in 1621–2, triggering riots and military mutinies.

Like the wider Thirty Years War of which it was part, the financial crisis had been caused in part by deficiencies in the Empire, yet that same structure helped resolve it. Imperial currency regulations provided a recognized framework for concerted action that worked, because most of those involved recognized that debasement was counter-productive. Imperial cities already acted in 1620, followed by more coordinated efforts through the Kreise in 1622–3 that prompted territorial authorities to devalue their currencies by up to 90 per cent whilst recalling debased coins and reminting them at official rates. Most territories had returned to the silver standard by 1623, including for their small change, while copper coins were largely driven from the Empire.

The relatively successful outcome discouraged innovation and the pre-war system remained in place, with territories issuing their own coinage and monitoring entrusted to the Kreise, guided by the existing imperial currency ordinances. Some lessons had been learned, and the resumption of prolonged warfare after 1672 saw swift action from the Kreise against the few territories attempting debasement.
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The
Reichstag last adjusted exchange rates in 1738, but again official values did not match market rates, prompting Austria to devalue its own currency. Thereafter, Austro-Prussian rivalry hindered coordination, especially once Prussia followed Austria’s example and devalued below the official rate in 1750. It then issued large quantities of debased coins to subsidize the cost of the Seven Years War (1756–63), while Austria resorted to central Europe’s first paper money by issuing 12 million florins in ‘coupons’ in 1761. Prussia revalued in 1764, but not to the official rate. With both German great powers outside the official exchange-rate mechanism, Bavaria and others left after 1765, leading to the breakdown of cross-regional cooperation through the Kreise. The overall consequences were not too grave. The outcome was the end of efforts to fix rates permanently through imperial law, allowing currencies to fluctuate according to market values. The official legislation continued to offer opportunities to cooperate and to prosecute fraudsters.
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Toll and tariff regulation followed a similar course. Like mints, tolls and tariffs proliferated through royal charters to individual lords and towns, most of whom interpreted the terms fairly broadly to develop a range of income streams. Richard of Cornwall tried to reduce their number in 1269, while Rudolf I banned all ‘unjust tolls’ five years later.
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By that point, numerous authorities possessed such rights without anyone, the emperor included, having universally recognized powers to revoke them. Tolls and tariffs continued to develop in response to locally changing circumstances and the growing need to raise cash rather than just labour and produce from inhabitants. The emergence of the Reichstag and Kreise provided a framework for more effective management at a time when many believed tolls were strangling trade. As part of his election agreement, Charles V promised not to grant further toll rights without the electors’ consent, while the Reichstag added in 1576 that territories required their neighbours’ consent before establishing new toll posts. Financial imperatives led to this being ignored, especially after 1618. Wartime tolls were formally abolished by the Peace of Westphalia, and the peace implementation congress in Nuremberg charged the Kreise with enforcing this. Action failed in some regions, like Lower Saxony and the Electoral Rhine, because no one wanted to be the first to lower tariffs. Elsewhere, leading territories set an example, because they realized tolls were harming
lucrative transit trade. Total abolition of internal tolls was rejected, and in 1658 Leopold confirmed the 1576 arrangements. Thereafter, central coordination was limited to official trade embargoes against France during the wars after 1672.

A common toll and tariff policy was hindered throughout by the complexity of the Empire’s internal structure, not only within Germany but between it and Burgundy and Italy. However, later imperial Germany also lacked a uniform customs system before 1904, while internal tariffs were scarcely uncommon in pre-modern Europe. England’s unified system was exceptional. France’s internal toll stations employed 20,000 revenue officers, who still treated Lorraine as a separate country after its formal annexation in 1766.
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The real problem lay not with imperial institutions, but how the larger territories embraced fashionable economic thought known as ‘cameralism’, which encouraged economic autarky. Local producers were to be protected by tariffs and promoted by state subsidies, while other measures attempted to shape social behaviour and encourage greater thrift, piety and obedience. Some aspects of cameralism advocated greater centralization at the territorial level. However, a major goal remained to preserve the corporate social order and resolve its problems. Thus, toll policy also reflected this. For example, only five of the nine toll posts on the Elbe river in Bohemia were state operated, with three run by municipalities and one controlled by nobles.

Cameralist measures were frequently counter-productive, but they appeared to work better in larger territories, raising anxiety amongst their smaller neighbours that they were economically as well as politically disadvantaged. The Kreis structure offered opportunities for micro-territories to coordinate activities, especially because many economic issues directly affected public order. For example, the Swabian Kreis organized police sweeps against vagrants, control measures during epidemics, and price regulation in times of dearth. Its 1749 road ordinance allowed it to compel cooperation from landowners who were not Kreis members to help maintain highways across the region.
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Overall, imperial and Kreis coordination remained only partially effective, while the positive aspects of political diversity did not apply to all economic sectors. For example, cameralism intensified competition where territories in close proximity produced and sold similar goods. This could stimulate innovation, while fear of losing business
might curb the desire to raise tariffs. However, many activities were largely fixed, like water transport, forestry, mining and their associated capital equipment. For example, barges developed for one river trade could not necessarily be used to transport goods on another waterway. Much of the Rhine and Elbe trade relied on transporting heavy bulk goods, especially timber, which remained the main item in both quantity and value into the 1820s, but also iron ore, stone and agricultural produce like grain, wine, fruit, hemp and wool. All these items were unsuited for road transport, making it hard to use alternative routes to waterways.

Consequently, by the eighteenth century there were 32 toll stations on the Rhine and 35 on the Elbe, most of which were operated by different lords. Their owners had little incentive to reduce rates to boost trade, because they already enjoyed a captive market. Tolls added nearly 60 per cent to the cost of salt just travelling between Cologne and Frankfurt, while it was cheaper to take wine up the Main to Frankfurt and overland to Kassel for shipment down the Weser instead.
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It was precisely these kinds of problems that the imperial framework should have resolved by providing the forum to reach a mutually beneficial solution, yet all talks failed, because too few authorities were prepared to forgo local advantages, and there was no mechanism to compel them. Only thanks to French pressure after 1795 were the Rhine toll stations reduced to 12 with published rates within a common system called the
Octroi
under Franco-German administration. Simultaneously, a start was at last made on dredging and straightening the river. The successor states retained the Octroi after 1815 until the last Rhine toll was abolished in 1868.

NEW CHALLENGES AFTER 1705

A Second Habsburg Empire

The Empire’s last century is often written of as a prelude to the ‘struggle for mastery in Germany’ between Austria and Prussia.
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This story of rivalry often marginalizes the other German territories as bystanders or victims. Imperial institutions seem powerless or irrelevant. Yet the century began with unprecedented imperial power.
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By the time of
Leopold I’s death in 1705, the Habsburgs had surmounted the financial and military crisis triggered by Bavaria’s and Cologne’s defection to France in 1703 during the opening stages of the War of the Spanish Succession. Imperial authority had been reasserted through the sequestration of Bavaria and Cologne, as well as Mantua, Mirandola and various other Italian fiefs that had also ill-advisedly sided with the French candidate for the Spanish throne, Philip V. The electors not only confirmed this, but readmitted the suspended Bohemian electoral vote in 1708. The new emperor, Joseph I, pursued a separate war against the papacy in 1708–9, ignoring the electors’ protests.
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More significantly, the Habsburgs seemed on the cusp of securing the entire Spanish inheritance as Leopold’s younger son was installed as Charles III in July 1705 with British, Dutch and Portuguese backing.

The situation began to unravel as the allied powers wrecked the opportunity of a negotiated settlement by insisting France help them evict Philip V from the part of Spain he still controlled. Joseph I’s premature death in April 1711 raised the prospect of the reunification of Spanish and Austrian lands under a single Habsburg once his younger brother was elected Emperor Charles VI. Britain and the Dutch Republic opposed this, cutting a separate deal with France at Utrecht in 1713 to abandon the costly war on compromise terms. Philip V received Spain and its overseas possessions, but surrendered Burgundy and most of its Italian lands to Austria. Although Charles received Reichstag backing for another campaign, he was compelled to accept these conditions at the Peace of Rastatt in 1714.

The outcome was a deep personal disappointment for Charles, but in fact completed the dramatic transformation of Habsburg power under way since the successful relief of the Turkish siege of Vienna in 1683. Sensing a chance to recover all of Hungary, Leopold had continued fighting the Ottomans despite the opening of a separate western front with the outbreak of the Nine Years War (1688–97). By 1699, he had captured Transylvania as well as Hungary, while Serbia was also conquered during a further Turkish War (1716–18). Habsburg control was also now more secure, as Joseph’s forces crushed the extensive Hungarian revolt of 1703–11 at the extraordinary cost of 500,000 dead.
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Total Habsburg hereditary possessions more than doubled by 1720 to reach 739,500 square kilometres, shifting political gravity as two-thirds of this lay outside the Empire. The Habsburgs
now had two and a half times as many subjects as in 1648, with their Italian lands populated by twice as many people as in Austria. Overall, Habsburg possessions equalled the Empire’s entire extent, making them a European great power in their own right.
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As with the earlier expansion of 1477–1526, the new acquisitions were not incorporated within the Empire, heightening the dualist character of Habsburg rule and reflected in a sharper separation in 1709 of the imperial chancellery from its Austrian counterpart, which was now clearly the superior institution. It took several decades for the implications of this to become fully apparent. The Habsburgs were already the imperial family, so their territorial acquisitions did not immediately challenge the Empire’s status hierarchy. Their additional resources allowed them to expand patronage of princely and aristocratic houses in the Empire. The career of Carl Alexander of Württemberg provides a good example. From a junior branch of the Lutheran family ruling Württemberg, Carl Alexander had little chance of inheriting the ducal title. He converted to Catholicism in 1712 whilst in Habsburg military service, thereby firmly identifying himself with the dynasty, which appointed him governor of newly conquered Serbia seven years later. Having unexpectedly inherited Württemberg in 1733, he repaid Habsburg patronage by providing substantial military support during the War of the Polish Succession. However, Carl Alexander also expected to be rewarded with minor territorial concessions and the long-standing Württemberg goal of elevation to electoral status.
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His demands reflected the growing competition amongst the princes stoked by Leopold’s distribution of favours in return for support over the Spanish succession. By 1720, the Empire contained four royal families alongside the Habsburgs: the Saxon Wettins (Poland), Hanoverian Welfs (Britain), Brandenburg Hohenzollerns (Prussia) and Savoy (Sardinia). Although French pressure obliged Charles VI to restore the Wittelsbachs in Bavaria, none of that family’s branches acquired a crown despite their heavy involvement in the War of the Spanish Succession. The Utrecht conference completed the trend initiated at Westphalia in the 1640s of excluding non-sovereign entities from international diplomacy. Of the imperial Estates, only Prussia and Savoy were allowed to participate. Post-1713 Europe consisted primarily of the winners who mutually recognized the sovereign status of one another.