Foreign Entanglements: 1806–12

After taking office in 1801, President Thomas Jefferson (1743–1826; served 1801–9) continued to promote the idea of a small national government. He wanted most political power to rest with state governments. The federal government was already quite small—tiny when compared with the massive federal government of the United States in the early twenty-first century. But Jefferson wanted to make the various departments of government, including the military, even smaller. As he saw it, the United States did not need a large military during peacetime. A small government also suited Jefferson's economic plan, which relied almost solely on tariffs (taxes on imported goods) for government funding. This plan would work well for the United States as long as trade was healthy. Fortunately for Jefferson, the country experienced a time of peace and prosperity during the first several years of his presidency (see Chapter 7). However, when war between Britain and France erupted again after several years of peace, Jefferson's economic and military policies proved to be shortsighted.

Jefferson and Secretary of State James Madison (1751–1836), who succeeded Jefferson as president in 1809, discovered that a nation with a weak military could exert little influence on international issues. Both Britain and France could seize hundreds of U.S. merchant ships with relative ease. Britain also continued its longtime tradition of impressments, seizing American sailors off merchant ships and forcing them into British military service. Impressments were a particularly major source of agitation among Americans. After America won its independence in 1783, Britain refused to recognize U.S. naturalization laws, which allowed British subjects to obtain U.S. citizenship after five years of residence in America. Therefore, Britain felt entitled to take British-born sailors off U.S. merchant ships and treat them as if they were still British citizens, even if the sailors had been granted U.S. citizenship. Jefferson and Madison also discovered that having tariffs as the main source of revenue made the nation vulnerable to international events and trade policies. Funding for government operations, including a military, could quickly disappear if foreign countries suffered economic problems or became hostile toward the United States. Such events did, in fact, occur, and they led to a near national disaster during Madison's presidency.

Words to Know

blockade: A barrier positioned at a seaport entrance to prevent ships from entering or leaving.

embargo: A government order prohibiting merchant ships from leaving ports with goods.

import: To bring goods into the country from another country.

impressment: A long-standing British practice of seizing sailors from foreign ships and forcing them into military service on British warships.

industrial revolution: A major change in the economy, caused by the introduction of power-driven machines and factories that produce goods in large quantities.

naturalization: The process by which immigrants become citizens of the country in which they reside.

neutrality: A political policy of not taking sides in a war between other nations.

tariff: A tax on imported goods (goods from another country).

Tensions grow

In 1806, French leader Napoléon Bonaparte (1769–1821) controlled much of Europe, while Britain ruled the high seas. With its vastly superior navy, Britain imposed a naval blockade (a barrier at the entrance to a seaport to prevent ships from entering or leaving) on northern Europe in May 1806, shutting off supply routes to that region. In November, Napoléon responded with the Berlin Decree, declaring that foreign merchant ships trading with Britain would be fair game for French warships. He also banned traders on the European continent from importing British goods. President Jefferson maintained a policy of not favoring either of the warring parties, a policy called neutrality. The U.S. government claimed that taking a position of neutrality gave the United States the right to continue freely trading with foreign countries as long as the trade did not involve war materials. Despite the U.S. position of neutrality, American ships and sailors continued to be seized by British and French warships.

In June 1807, relations between the United States and Britain declined further. A British warship stopped the American frigate (large warship) Chesapeake. The British commander demanded to search for recent British deserters (those who leave the military without permission). Normally, the British stopped American merchant ships, not military vessels, to seize sailors they considered British subjects. When the Chesapeake resisted, the British opened fire, killing three American sailors and wounding eighteen. They then boarded the Chesapeake and took four crewmen who they claimed were British deserters. Three of these captured men were actually American citizens, including two free African Americans (non-slaves). The incident infuriated the American public. However, Jefferson chose not to go to war. Instead, he sought to influence the British through peaceful negotiations.

An economic war begins

In October 1807, ignoring U.S. complaints, Britain issued an order strengthening its policy of impressing British-born seamen serving on foreign merchant ships. The next month, Britain ordered the blockade of all French-controlled ports in Europe and banned the trading of French products. Any American merchant ship caught trading at these ports would be seized.

Napoléon responded by blockading all British-controlled ports and allowing seizure of neutral ships trading with Britain. An economic war between Britain and France was in full swing. Now the United States could only safely trade with countries not controlled by Britain and France. However, the blockades caused the price of goods to rise, because goods were increasingly in short supply in Britain, continental Europe, and the British and French colonies in the West Indies. Therefore, American merchants saw greater profits as well as greater risks in continuing to trade with Britain and France and their possessions.

Jefferson's embargo

By late 1807, a national crisis had developed over trade with Britain and France. U.S. merchant ships could not trade at any European port controlled by Britain or France or at any port in their colonies. The nation's ability to carry on prosperous trade under its claim of neutrality was severely challenged. The U.S. government had claimed that neutrality gave the United States a right to trade freely in international markets. However, neither Britain nor France recognized this claim. Both countries increasingly seized American merchant ships and, in the case of Britain, crew members as well.

Jefferson decided to try economic coercion (restricting trade to force a change). He proposed stopping all trade from the United States, hoping that this would force Britain and France to change their seizure policies and respect U.S. neutrality trade rights. Farm production was down in Britain and France because of the war, and Jefferson thought both countries needed U.S. trade to continue. He believed an embargo (a government order prohibiting merchant ships from leaving ports with goods) would particularly hurt the British and French colonies in the West Indies. Congress passed the Embargo Act on December 22, 1807. The act banned all U.S. merchant ships from sailing to foreign ports. It also prohibited foreign ships from carrying American goods away from U.S. ports. Only coastal trade would continue from U.S. ports. Though imports were not restricted, it was no longer profitable for ships to arrive with foreign goods but leave empty. Therefore, Americans could no longer get such favorite items as molasses, sugar, and tea.

Unfortunately for U.S. merchants, the main effect of the embargo was to cripple American commerce. It did not force France and Britain to change their policies. The Northeast ports that had been bustling since the mid-1790s grew quiet. The South could not ship tobacco and cotton to Britain, the main market for these crops. Unemployment grew in U.S. coastal areas. Because the embargo blocked all international trade, it also affected farmers in northern New York and northern New England who relied on trade across the border with British-controlled Canada.

The trade embargo caused greater harm to the U.S. economy than the seizure of U.S. ships by France and Britain. Exports quickly fell from over $108 million in 1807 to less than $23 million in 1808. Imports similarly fell from $138 million to less than $57 million. Mid-Atlantic farmers in the Chesapeake Bay region saw wheat prices fall from $2 to 75 cents a bushel. Southern farmers saw tobacco become worthless and cotton stack up on wharves. New Englanders, who relied most heavily on international shipping and trade across the Canadian border, grew especially resentful of Jefferson's trade policies.

As imports dramatically decreased, revenue collected from tariffs on these goods also plummeted. Government revenue from trade dropped from $17 million in 1808 to less than $8 million in 1809. Secretary of the Treasury Albert Gallatin (1761–1849) pleaded for new internal taxes to replace the lost tariff revenue. However, Jefferson's party, the Democratic-Republicans, controlled Congress, and they strongly opposed increased taxes on American citizens. The Democratic-Republicans had long opposed strong central governments with taxing powers and would not budge from that perspective, even in times of national economic crisis. Congress refused to pass a new tax.

Trade war continues

The economic war continued to build between France and Britain, and U.S. merchants were caught in the middle. In 1808, Napoléon increased his efforts to conquer Europe by invading Spain. Both Britain and France expanded their blockades to more European ports, from Holland to Italy.

Smuggling became a major part of U.S. commerce. U.S. ships continued to sail to foreign ports. Farmers from New England and upper New York illegally exported corn, beef, and timber across the Canadian border. Jefferson attempted to enforce the embargo using state militia. Though isolated conflicts resulted with merchants and farmers, illegal trade flourished. Jefferson also required shippers to deposit huge bonds (money placed in an account) before leaving port. They would forfeit this money if caught illegally trading. Smuggling even spread to the border with Spanish Florida as the Southern planters desperately sought markets for their produce that would waste in warehouses otherwise. The embargo also spurred industrial growth in New England as profits were reinvested into new manufacturing and construction to replace products that could no longer be imported because of the embargo.

Election of 1808

As political leaders began looking to the presidential election of 1808, Jefferson was eagerly anticipating his retirement and return to Monticello, his home in Virginia. Democratic-Republicans chose Secretary of State Madison as their presidential candidate and New York governor George Clinton (1739–1812) as their vice presidential candidate. The Embargo Act had increased public support for the Federalist Party, but the party's main base remained in New England. Federalist Party supporters were primarily merchants who favored good relations with Britain for trade purposes. Looking to expand their base, the Federalists selected former U.S. minister to France Charles Cotesworth Pinckney (1746–1825) of South Carolina as their presidential candidate and former U.S. minister to Britain Rufus King (1755–1827) of New York for vice president.

Although these were economically difficult times, Democratic-Republicans still easily won. Madison received 122 electoral votes to Pinckney's 47. Upon his inauguration on March 4, Madison inherited from Jefferson a country that was struggling economically and creeping toward war. Jefferson's policies of relying solely on foreign trade to fund the government and maintaining a far too small military eventually led to a demoralized nation in early 1809. Despite these major problems, Jefferson left office still the most popular politician of early America. His exceptional ability to relate to the common person outweighed the problems of his presidency.

Last efforts to revive trade

The 1807 trade embargo did not achieve its goals and crippled U.S. commerce. In early 1809, just before Madison took office, Congress replaced the embargo with the Non-Intercourse Act. The act restricted trade with Britain and France. In response to the act, Britain further expanded its existing trade restrictions with the United States to include more European ports.

Jefferson, Madison, and other U.S. leaders were utterly frustrated by the nation's inability to influence European foreign policies. Madison renewed negotiations with Britain concerning the United States' neutrality trade rights, but like Jefferson, he made no progress. Negotiations were finally abandoned in November 1809 as talk of war increased in Congress.

Through 1810, British and French blockade restrictions against American shipping grew tighter. For example, in March, Napoléon issued the Rambouillet Decree, ordering a broader confiscation of U.S. ships and cargoes. Under its various decrees, France seized U.S. property totaling $10 million in value.

In a desperate last effort at a peaceful settlement of Britain and France's blockade policies, Congress passed Macon's Bill No. 2 in May 1810. The bill temporarily lifted all trade restrictions against the two countries but promised to keep the restrictions lifted against the first country, France or Britain, that lifted their restrictions against the United States while reimposing restrictions against the other country. In this way, the United States would economically assist whichever country quit harassing U.S. ships first. Napoléon soon announced he would repeal the French restrictions. In November 1810, eager for any kind of resolution, Madison announced that France had complied with the bill and that restrictions would be placed on British trade once again. Trade with France resumed, while the United States and Britain grew further apart.

A new Congress

The midterm congressional elections in fall 1810 brought major changes to Congress. The American public had been disgusted by the government's failure to stop foreign seizures of American merchant ships and sailors, and they expressed their displeasure by voting many representatives out of office. Among the newly elected were twenty to thirty congressmen who were eager to fight Britain to reclaim American honor. They were all Democratic-Republicans, primarily from the South and the western United States, and they would become known as war hawks. Two prominent war hawks were Henry Clay (1777–1852) from Kentucky and John C. Calhoun (1782–1850) of South Carolina. Both were elected in 1810 to the U.S. House of Representatives (Clay was nearing the end of his term as a U.S. senator).

The conflict with Britain over seizures of American ships and sailors continued into the spring of 1811. The war hawks pressed for the U.S. Navy to begin escorting American merchant ships. It was not long before an incident on the high seas took place. In May, a British warship approached a U.S. merchant ship. The U.S. frigate President, escorting the merchant ship, fired on the British ship, killing several crewmen. America was edging closer to war.

Still largely cut off from markets in the West Indies and Europe, American merchants tried to sell their goods in other markets. Trade with China had opened in 1784 and steadily increased through the 1790s. In 1810, Boston merchant John Jacob Astor (1763–1848) attempted to establish a fur-trading post at the mouth of the Columbia River in the Pacific Northwest for his American Fur Company. Ships from Northeast ports would journey around Cape Horn at the tip of South America, pick up furs in the Pacific Northwest, and sail to China for trade. However, war would soon interrupt this new business venture.

The Democratic-Republican-led Congress let the charter (a government-issued document establishing the legal existence of the company) of the First Bank of the United States expire in 1811 (see Chapter 4). The First Bank had been the cornerstone of the U.S. economy for the previous twenty years. However, many Democratic-Republicans had always disliked the national bank. They distrusted both the federal government and the wealthy financiers of the Northeast who invested money in the bank. The First Bank charter failed by one vote in both the House of Representatives and the Senate. The government sold the main bank building in Philadelphia to a private bank, and the various branches of First Bank were converted to state banks.

Growth of industry

Despite the overall decline in the U.S. economy since 1807, one part of the economy actually benefited from the restrictions on international trade—the nation's infant manufacturing industry. Prior to 1800, little manufacturing existed in the United States. However, manufacturing had been growing in Britain since the mid-1700s. This growth trend was part of the industrial revolution, a major change in how goods were produced that began in Britain's textile industry. With the industrial revolution, goods were produced by machines located in factories, as opposed to craftspeople in home shops. The machines were powered by steam or moving water rather than human or animal power. They could produce large quantities of goods in a short time, while a craftsperson could create only one item at a time. By the early 1800s, the stage was set for this new technology to transform America's economy.

When the industrial revolution reached America, it led to the growth of factories and towns along many waterways. Around the same time, an American inventor named Eli Whitney (1765–1825) made a major technological breakthrough by introducing a manufacturing process that allowed factories to produce products with interchangeable parts. Whitney introduced interchangeable parts in the manufacture of guns in 1801. (In 1793, Whitney had invented the cotton gin, revolutionizing cotton production in the South.) Soon after that, other products ranging from clocks to plows were being made with interchangeable parts.

The new technologies of interchangeable parts and mass production meant major changes for U.S. society. Master craftspeople were no longer needed to make products by hand. Previously, a gunsmith would take days to make a barrel, stock, and trigger for a single musket. But now, factories could mass-produce muskets. Factories under government contract began producing firearms for the military at an increased rate. Whitney himself employed about fifty workers at his factory near New Haven, Connecticut. Craftspeople who made one product at a time could not compete with the factories. Mass-produced goods could be sold at much lower prices because they cost less to produce. Some craftspeople such as shoemakers, cabinetmakers, and tailors expanded production by enlarging their shops and hiring workers.

Other technological changes came along at this time too. Since colonial times, numerous small sawmills had been built on streams across the country. The moving water provided power for the mill. The mills supplied lumber for the rapid spread of settlements and the modest growth of cities. After 1800, sawmills began using steam engines for power, so the mills could now be established at locations away from moving water. A similar change occurred with flour mills. By 1810, a factory in Philadelphia was producing the steam engines for the growing demand.

Despite these technological advances, Americans still relied on trade with Europe for the more refined manufactured items. Americans found it difficult to start up a new factory and compete with existing European factories. The start-up costs were often too steep. However, U.S. manufacturing received a financial boost after Congress passed the Embargo Act in 1807. This act significantly reduced the availability of imported goods, so Americans began investing in manufacturing, primarily in the Northeast. As a result, U.S. production expanded.

By 1810, the United States had become fully self-supporting in certain industries. These industries involved production of wooden items, leather, soap, candles, refined sugar, coarse earthenware, and flaxseed oil. American industries provided most of the nation's iron, wool, hats, gunpowder, hemp for ropes, liquor, paper, window glass, jewelry, lead, and clocks. Many furnaces and forges were established, most of them in the Northeast. They produced various crude-iron products, including farm implements, construction materials, and cooking utensils. Finer-metal products still had to be obtained from Great Britain.

The growth of manufacturing was reflected by the number of new corporations chartered by the states. New York chartered over 160 manufacturing companies between 1809 and 1815. A surge of privately chartered banks followed, providing money for investment in these companies. By 1811, ninety banks existed. The rapid growth of private banks shifted the financial center of the nation from Philadelphia to New York City where industrial growth and shipping was growing at a faster pace. Philadelphia was the home of the First Bank and the U.S. Mint. However, New York City soon became a favorite location for private banks.

Native American resistance

While conflicts continued at sea, other problems were growing on the frontier. In 1794, under the terms of the Jay Treaty (see Chapter 5), the British had agreed to leave the Northwest Territory and stop encouraging Native American tribes to resist American expansion west of the Appalachians. The Northwest Territory included land that makes up the present-day states of Ohio, Indiana, Illinois, Michigan, and Wisconsin, and parts of Minnesota. However, British troops stationed along the northern border of the Northwest Territory were once again encouraging tribes to fight American settlers. In 1811, Native American leader Tecumseh (1768–1813) and his brother Elskwatawa (c. 1768–1834; also referred to as Tenskwatawa), known as "the Prophet," began organizing an alliance of Native Americans from Ohio to the Gulf Coast to resist further U.S. expansion toward the Mississippi River. They saw that the U.S. government was not preventing settlers from pushing beyond the boundaries set by the 1795 Treaty of Greenville, which established a boundary between American and Native American settlements in the Northwest Territory north of the Ohio River.

In the fall of 1811, while Tecumseh was away from a village he established on the Tippecanoe River in northern Indiana, Governor William Henry Harrison (1773–1841) of the Indiana Territory took advantage of the opportunity to lead a force against the village. The occupants abandoned the village as Harrison burned it to the ground. This attack spawned still greater unrest among the tribes in the Native American alliance and their British supporters.

Preparing for war

President Madison and the House Foreign Relations Committee called for war preparations, including beefing up the regular army to thirty thousand soldiers. (The army had been reduced to just twenty-five hundred men in 1805 and had risen to only fifty-five hundred by 1811.) In addition, Madison proposed building up the navy, which had only a few aging frigates.

However, the decline in trade since 1807 as a result of the trade embargo had left the country little money to support war preparations. Congress rejected funding proposals for increasing the navy and decided to rely on state militias for an army. State militias consisted of adult white males between 18 and 45 years of age.

Peaceful efforts to stop the seizure of American ships were unsuccessful, and by 1812 many in Congress had decided that war was the only way left to salvage American honor. Members of Congress believed the United States should be able to conduct trade as a neutral nation without losing ships and men, and they were willing to go to war to defend this principle. They had other war goals, too: They wanted to stop Britain from assisting Native Americans in their resistance to western American settlements. They also hoped to gain possession of British-controlled Canada and Spanish-controlled Florida. (Spain was Britain's ally in the European war against France led by Napoléon Bonaparte.)

A New State on the Eve of War

The United States acquired the future state of Louisiana as part of the Louisiana Purchase in 1803. In 1804, Congress divided the Louisiana Purchase so it would be easier to govern. The southern portion, including the port of New Orleans, was named the Territory of Orleans. Only thirty-four thousand whites lived in the territory in 1810. Less than 20 percent had been born in the United States. Many were citizens of Spain, France, and various other countries. Therefore, not only were there fewer residents than usually required for statehood, but most of the inhabitants that were counted to qualify for statehood were actually not American citizens. Nonetheless statehood was granted.

Congress was eager to grant statehood to the Territory of Orleans for two reasons. First, the port of New Orleans was essential to all American settlement west of the Appalachians. American farmers in the region could not transport their produce over the primitive mountain roads to the East Coast markets. The only reasonable transportation was by water down the Ohio and Mississippi Rivers, through the port of New Orleans, and then around Florida to the eastern seaports. Second, U.S. government leaders knew that New Orleans would play a key role in America's upcoming war with Britain because control of the port would greatly affect the American economy. Statehood would give the United States greater legal claim to a region that had seen several political changes between France, Spain, and the United States in recent years. Congress granted statehood on April 30, 1812, just six weeks before the United States declared war on Britain. The territory was renamed Louisiana and became the nation's eighteenth state.

Across the Atlantic, while the United States was preparing for war, Britain was suffering an economic depression (down-turn). The value of British exports to the United States had dropped by over 80 percent from 1810 to 1811. Financially strapped business leaders and workers put pressure on the British government to restore trade with the United States and cancel the 1807 blockade of all French-controlled ports in Europe (which banned the Americans from trading there). Riots broke out in industrial centers as British workers protested the poor economic conditions and Britain's trade policies. After initially resisting, the British government finally responded by removing the trade restrictions with the United States in June 1812. However, at that time it usually took a few weeks for news to travel across the Atlantic Ocean. Unaware of British political developments, Congress declared war on Britain on June 18. All the Federalists in Congress voted against the war declaration. Most Democratic-Republicans voted in favor of it, except for fourteen party members from the North. Federalists were greatly disappointed with the rush to war; they had no desire to pick a fight with America's top trade partner. The war hawks had prevailed, however, and the next several years of Madison's presidency would be plagued by war with Britain.

For More Information

Books

Clark, Christopher, and Nancy A. Hewitt. Who Built America? Working People and the Nation's Economy, Politics, Culture, and Society. 2nd ed. New York: Worth Publishers, 2000.

Gilje, Paul A., ed. Wages of Independence: Capitalism in the Early American Republic. Madison, WI: Madison House, 1997.

Horsman, Reginald. The New Republic: The United States of America, 1789–1815. New York: Longman, 2000.

Ketcham, Ralph L. James Madison: A Biography. New York: Macmillan, 1971.

Zinn, Howard. A People's History of the United States: 1492–Present. New ed. New York: HarperCollins, 2003.

Web Sites

"Louisiana History." Louisiana Department of Economic Development. http://www.crt.state.la.us/crt/profiles/history.htm (accessed on August 8, 2005).

"Thomas Jefferson Digital Archive." University of Virginia Library.http://etext.lib.virginia.edu/jefferson/ (accessed on August 2, 2005).