Here is the opening passage of a pamphlet published by the German central bank in 1900, on the 25th anniversary of its founding:
The newly established German Empire found in the organization of the coinage, paper money, and bank-note systems, an urgent and difficult task. Probably in no department of the entire national economic system were the disadvantages of the political disunion of Germany so clear…; in no economic department were greater advantages to be expected from a political union.
Although the customs union (Zollverein) had happily united the greater part of Germany in a commercial union, similar attempts in monetary affairs had met with but modest success, and were absolutely fruitless in banking.
The inconvenience most complained of was the multiplicity and variety of the different coinage systems (seven in all) in the different states, also the want of an adequate, regulated circulation of gold coins.
This is quoted in Goodhart’s Evolution of Central Banks. An additional motivation for establishing a German central bank, Goodhart notes, was to organize the national payment system. Before then, there had ben no Germany-wide clearinghouse for interbank settlement. When the Reichsbank (as it then was) opened branches throughout Germany, the purpose was not only to manage the money supply but to offer a new facility for long-distance payments.
(Goodhart’s larger themes are first, that central bank-like institutions develop organically within banking systems, whether or not they are established by law. And second, that the fusion of payment and intermediation functions that defines banks is a historical accident; banks as we know them needn’t, and he probably shouldn’t, be features of future financial systems. I am convinced on the first point, not so much on the second.)
What this passage makes me wonder is: Has anyone ever written about European integration in the light of German unification in the late 19th century? The claim in the Reichsbank pamphlet that customs union was the easy first step, and that monetary union followed only later and with difficulty, certainly suggests some parallels. So does the suggestion that monetary union was the biggest economic benefit of political union. It would be interesting to ask, what were the concrete problems that monetary union was understood to be solving? And how did it fit into the larger political agenda of German unification?
Of course there are fundamental differences — most importantly that German unification took place under the aegis of a sovereign political authority, whereas the central political-economic fact about Europe is that the monetary authority stands above the various national governments. But it still seems like the comparison could be illuminating.