The Continental System

Marvin R. Zahniser

The continental system was the name given to those measures of Napoleon Bonaparte taken between 1806 and 1812 that were designed to disrupt the export trade of Great Britain and ultimately to bring that country financial ruin and social breakdown. This term likewise refers to Bonaparte's plan to develop the economy of continental Europe, with France to be the main beneficiary.

Although the continental system was formally inaugurated with publication of Napoleon's Berlin Decree in November 1806, its historical antecedents can be traced as far back as the Anglo-French commercial wars that began late in the seventeenth century. The maxims of mercantilist thought nourished the propensity of France and Britain to inaugurate blockades and carry on commercial war. A common argument of the mercantilists stated that trade, shipping, industry, and the world's bullion resources were fixed quantities that could not be significantly increased or decreased by human effort. This concept led inexorably to the conclusion that nations could increase their wealth and power only by depriving other nations of their sources of wealth, such as trade. Commercial wars, therefore, if successfully prosecuted, promised a meaningful augmentation to a nation's wealth and diminution of an enemy's.

Profit was generated, in part, by increasing the volume and value of a nation's exports and in compelling competitors to purchase one's exports on disadvantageous terms while purchasing the least possible amount of the competitor's goods. A favorable balance of trade indicated that a nation's profits and wealth were increasing; this could be gauged by the flow of bullion into the country.

With every nation perceiving that its own advancement could be made only at the expense of others, each country began to pursue trade and tariff policies that differed little in war or peace. War simply stimulated nations such as France and Britain to accept even fewer goods from the enemy while pressing their own exports upon the other by every conceivable device. In addition, it was presumed sound economic policy both in war and peace to protect native industries by appropriately stringent tariff legislation.

A new intensity in these policies shortly followed negotiation of the Anglo-French Commercial Treaty of 1786 (Eden's Treaty). Britain was largely satisfied with the treaty, but it provoked bitter criticism in France. Revolutionary France soon began to drift back to the pre-1786 commercial policies. In 1791 the Constituent Assembly adopted a tariff with rates high enough to indicate the new trend. France finally denounced Eden's Treaty early in 1793, an indication of the growing strain in French-British relations and of French determination to protect their industries against British competition. With the execution of Louis XVI in mid-January and the outbreak of war on 1 February 1793, Britain and France resumed their long-standing attempts to strangle each other economically.

Rigid exclusionist policies of early revolutionary France were slightly eased during the ascendancy of Robespierre; they were, however, adopted and strengthened by the government of the Directory (1795–1799). The notorious decree of 18 January 1798 (29 Nivose, Year VI) laid down the principle that the cargo of a ship would determine its nationality; thus, any vessel carrying goods from Britain or its possessions became subject to confiscation, both ship and cargo. Ships stopping at British ports could not enter French ports. The severity of this measure produced a virtual French self-blockade. Likewise, the Directory supported the Navigation Act, passed by the Convention on 21 September 1793. This act prohibited foreign vessels from importing into France products other than those of their own nation or engaging in the French coastal trade. It is clear that these laws of the revolutionary regimes had essentially the same purpose as their predecessors of the past two hundred years—to damage Britain by excluding British goods and ships and to foster French industry, agriculture, and the merchant marine by protecting them from British, and other, competition.

The harshness of French measures, prompted in part by the disturbing reality that British sea power was annihilating the French merchant marine, was bottling up the French fighting navy, taking possession of French colonies one by one, building an enormous carrying trade, and threatening to control neutral trade to its own advantage. Before 1789 there had been 2,000 French merchantmen; by January 1799 the Directory admitted that not a single merchant ship on the high seas flew the French flag. On the other hand, Britain's merchant marine prospered handsomely during these war years. Between 1793 and 1800 the number of ships under British registry rose from 15,000 to nearly 18,000.

British naval power appeared much less decisive than British mercantile superiority, overmatching the French fighting navy by only a two-to-one ratio. France believed it possible to reduce Britain's naval superiority by rapid shipbuilding and under Bonaparte launched major attempts to do so. French naval expenditures between 1803 and 1806 leaped from a projected triennium total of 240 million francs to more than 400 million francs.

NAPOLEON AND BRITAIN INAUGURATE WARTIME MEASURES

Coming to power through the coup d'état of 18 Brumaire, Year VIII (9 November 1799), First Consul Bonaparte, himself a mercantilist, became heir to French commercial traditions and current practices. He also inherited an unpalatable oceanic situation in which the French merchant marine had been driven from the high seas and the fighting navy had been destroyed or remained in port, fearful of the British navy. Bonaparte soon turned his enormous energies toward remedying these situations, but he wished for a period of internal consolidation before proceeding with his larger plans. Fortunately for him, the Second Coalition of 1799 soon dissolved. Russia, coming to fear British power in the eastern Mediterranean more than French ambitions, in effect withdrew from the coalition. When Austria was forced to sign the Peace of Lunéville in 1801, the Second Coalition disappeared. In March 1802, peace was concluded with Great Britain at Amiens. For the first time since 1792 no great European power warred with another.

Peace proved to be only an interlude. Britain viewed with great anxiety Napoleon's activities during the months of peace: reorganizing the Cisalpine Republic with himself named president and reorganizing the Helvetic Republic as the Confederation of Switzerland with himself as mediator. Bonaparte also supervised the reorganization of Germany, resulting in consolidated and enlarged German states that now relied on Bonaparte to maintain their position. Britain proved unwilling to countenance this continuing expansion of French influence. Picking a fight over Malta, Britain declared war in May 1803 and began the search for coalition partners. After Austria signed an alliance with Britain in 1805, Alexander I brought Russia into the alliance, completing the Third Coalition.

Britain did not wait for the Third Coalition to coalesce before inaugurating its own measures in response to Napoleon's. In June and July of 1803, Britain declared that the mouths of the Elbe and Weser rivers were under blockade, thus cutting off the entire trade of Hamburg and Bremen. On 9 August 1804 Britain also declared all French ports on the English Channel and the North Sea under blockade. In the spring of 1805 Britain placed major restrictions on the carrying trade of the United States (in the Essex decision), a response to increasing American attempts to trade directly between the Continent and the enemy's colonies. In June 1805 and July 1806, Britain also took additional measures that underlined its determination to see American trade with enemy colonies carried on only in ways supportive of British interests.

Between 1803 and 1805 Napoleon expended enormous energy in planning means to gain temporary naval superiority in the English Channel and thus be able to ferry a formidable army to the British Isles. Warships and troop-carrying barges were certainly being built in numbers sufficient to alarm Britain. After two years of frustration and lost hopes, Napoleon temporarily abandoned his invasion plans in August 1805 in order to meet the continental challenge of the Third Coalition. As part of his strategy, he ordered the Cádiz squadron to attack Naples. Admiral Pierre de Villeneuve, under a cloud and fearful that he was going to be recalled in disgrace, put to sea on 19 October with a combined Franco-Spanish fleet of thirty-three vessels. Two days later the blockading force of twenty-seven British ships, commanded by Horatio Nelson, engaged the French fleet off Cape Trafalgar. When the battle of Trafalgar had ended, only one third of the Franco-Spanish squadron regained harbor whereas Britain did not lose a single ship. Any lingering hopes of Napoleon that England could be invaded and subdued by land armies had now to be abandoned. More indirect, subtle methods had to be devised to erode and eventually to destroy British power.

As Napoleon analyzed England, he perceived certain weaknesses that, if shrewdly exploited, could serve to disrupt its economy, provoke social unrest, and bring England to the conference table in a compliant mood. Napoleon believed the British economy vulnerable because he thought its prosperity was founded primarily on trade, rather than on its productive agriculture and industry. He also believed that by disrupting British export trade to the Continent and by forcing England into trade channels on disadvantageous terms, there would be a drain on Britain's bullion reserves. Dislocation of industry, banking, and the mercantile communities must occur as well as destruction of its overextended credit system. Strikes and other forms of social unrest must surely follow, placing the British government in a significantly weakened position. Since his own measures could be framed in such a way that French industry and agriculture would be protected, Napoleon felt certain of domestic support in pursuing a regulated blockade. Napoleon gradually persuaded himself that only a coordinated, Continent-wide refusal to accept British goods could produce the intended effects.

Napoleon was also propelled toward a trade war by Britain's blockading measures and by a series of his own military victories. While the British actions infuriated and challenged him, victories at Ulm and Austerlitz (October and December 1805) and the crushing defeat of Prussia at Jena (October 1806) led him to believe that he could compel, if not persuade, other continental nations to support him in enforcing anti-British trade measures. Napoleon himself later pointed to Jena as the antecedent to inauguration of the continental system, for that battle placed him in control of the Weser, Elbe, Trave, and Oder Rivers, and the northern coastline as far as the Vistula.

On 21 November 1806, some three weeks after his triumphal entry into Berlin, Napoleon issued his Berlin Decree. Announcing the decree as a measure of retaliation against Great Britain's blockade declaration of 16 May (Fox's blockade), Napoleon proclaimed the British Isles to be blockaded and all trade or communication with them prohibited. He likewise declared war on all British goods, prohibiting trade in British goods and all goods coming from Britain or its colonies. Further, every port on the Continent had orders to refuse entrance to every vessel sailing directly from any port of Britain or its colonies. A peculiarly brutal provision declared all British citizens in territory occupied by France to be prisoners of war and their property to be confiscated.

Contemporaries and some historians questioned the effectiveness of the Berlin Decree because Napoleon had no ships to blockade the British Isles or Britain's colonies. Ineffective (paper) blockades were declared by both powers, of course, but Napoleon believed France would stand on firmer legal ground in dealing harshly with foreign merchantmen, both neutrals and allies, if he could demonstrate they had violated his duly proclaimed blockade.

Others, following the arguments of the naval historian Alfred T. Mahan, have expressed surprise that the Berlin Decree, and subsequent decrees designed to strengthen the system, fell so harshly upon neutrals like the United States. Since France and its colonies were dependent on the merchant carriers of neutral nations to supply their needs, Napoleon, some claimed, should have wooed neutral trade rather than have treated it in a preemptive, cynical fashion. Such an argument does not properly weigh several factors in Napoleon's thinking. He reasoned that since Britain's navy controlled the high seas, neutral commerce could only come to the Continent on its terms. As Napoleon saw it, neutral trade was therefore ultimately British trade. Also, Napoleon was anxious to encourage hostility between Britain and the neutrals, hoping that the neutrals would, as his foreign minister said in 1810, "cause their rights to be respected." Neutrals who refused to trade with Britain must inevitably become part of France's continental system. Last, Napoleon believed the continental economy much more self-sufficient than Britain's. While the Continent might suffer some losses through denying itself neutral or British goods, the vulnerable British economy must experience catastrophe and ruin. If the French colonies suffered because of neutral trade denied them, one must remember that they survived only through British tolerance.

Napoleon's Berlin Decree gave Britain the excuse it needed to strengthen those measures designed to force neutral, that is, primarily American, trade into British ports. England had already blockaded all French ports on the English Channel and the North Sea. By a series of orders in council in 1807, the most significant being that of 11 November, England prohibited intercourse between enemy colonies and the northern countries. Further, England forbade direct trade between enemy ports and other ports except when those "other ports" were either European British ports (such as Malta) or ports of the vessel's own nation. Thus, trade was prohibited between enemy and neutral ports other than in the ports native to the neutral ships. Britain planned to enforce these regulations by compelling neutral vessels into British ports for inspection, by demanding payment of customs duties, and by issuing licenses authorizing the vessel's journey. Finally, mere possession of the required French "certificate of origin," showing that the vessel's goods were of non-British origin, brought British confiscation of ship and cargo.

Napoleon retaliated in his two Milan decrees (23 November and 17 December 1807) by announcing that vessels submitting to any of the three basic British regulations (examination of cargo and papers, call at a British port, or payment of duty on the cargo) was thereby denationalized, becoming a proper lawful prize. French privateers became the chief enforcers of these decrees. Napoleon again demonstrated his cavalier attitude toward neutral trade some four months later when in the Bayonne Decree (17 April 1808) he ordered confiscation of all ships flying the American flag and entering the ports of France, Holland, Italy, and the Hanse towns. Since the United States had declared an embargo, Napoleon reasoned, ships flying the American flag must be British vessels in disguise. Under the Rambouillet Decree of March 1810, he seized scores of American ships and imprisoned hundreds of the captured crewmen.

THE UNITED STATES CONFRONTS ECONOMIC WARFARE

The Rambouillet Decree underscored the cruel position in which the wars of the French Revolution and the continental system placed the United States. Articulation of the continental system, however, merely sharpened a major question confronting the United States since 1793: Would Britain or France become the primary benefactor of American trade? Federalist administrations essentially had answered that question through negotiating Jay's Treaty (1794) with Britain, but American ratification of this treaty contributed to the Quasi-War with France between 1798 and 1800. The war led to internal unrest, the eclipse of the Federalist Party, a widespread assault upon the civil liberties of dissenters, and a national hope that such a war would not again be necessary.

During the four years prior to enunciation of the continental system, and the responsive British measures, American commerce prospered remarkably. British, continental, West Indian, and South American markets all contributed their share to this era of great commercial prosperity. It was President Thomas Jefferson's and Secretary of State James Madison's mistake to believe that this lucrative interlude could and should continue. Nor did many American merchants seem to grasp fully that the continuing flow of trade and relatively open markets remained entirely at the discretion of the belligerents. When the belligerents began to announce their regulations concerning neutral trade, many Americans reacted with shock, indignation, and a determination that the measures be repealed or modified.

Jefferson and Madison's perspective on how to resist the continental system and related British measures is complex and interesting. Both were sympathetic to the larger purposes of the French Revolution yet distressed by the rise of Napoleon Bonaparte and his bold aggressions against those nations resisting his program of conquest. However, both wished to keep their indignation within bounds, partly because they fervently hoped to persuade Bonaparte to help the United States deprive Spain of the Floridas at some opportune moment. Also, they struggled to keep some perspective on Napoleon; in essence, they viewed him as scum temporarily floating on the beneficial and permanent wave of the French Revolution. They believed that such a person should not be allowed to disrupt permanently the spirit of American and French comradeship arising out of their revolutions, so close in time and in their larger purposes.

In addition, Jefferson and Madison shared with Bonaparte the view that Britain was the greatest enemy of their respective nations. After all, they reasoned, Britain seized American sailors and forced them into naval service (impressment), in effect denying many Americans their right to life and liberty. Quite clearly, Britain remained the major culprit on the maritime trade issues, because it exercised effective naval power in regulating American trade while Bonaparte had power only to harass the trade lanes with commerce destroyers or to close continental ports to American trade. Finally, Britain continued to demonstrate contempt for the U.S. government by its ongoing intrigue with Native Americans in the Northwest Territory.

The historian Paul Varg has emphasized Jefferson and Madison's conviction that their infant nation should do its best to establish the rights of small naval powers. Since 1776, in fact, Americans had worked to expand the rights of neutral powers. Terms of the model treaty of 1776, the Treaty of Amity and Commerce with France in 1778, a commercial treaty with the Netherlands in 1780, Jay's Treaty in 1794, Pinckney's Treaty of 1795, and the Convention of 1800 with France all reflected America's intense concern to defend or expand neutral rights. Although Napoleon's trade restrictions were painful, the most bitter disappointments in defending neutral rights had occurred with the British, particularly with Jay's Treaty. A certain principled rigidity therefore operated in American-British diplomacy that was not active in defining the American-French relationship.

As they contemplated measures to counter the economic systems established by France's continental system and a series of British orders in council, Jefferson and Madison, his successor, were confronted by a puzzling domestic situation. Jefferson in particular was regarded by fanatical New England Federalists as a devotee of everything French and a tool of Napoleon. Federalist merchants presumed his persistent hostility to Britain and to the advancement of American trade, though on the latter point they were very mistaken. The belief that Jefferson and Madison acted from partisan motives when dealing with both Britain and France became especially troubling when such views were held precisely by those who would be severely affected if the United States pursued a course of economic retaliation. Another complicating factor arose because these same Federalist merchants expressed willingness to endure most maritime hardships imposed by Britain, including a system of licensed trade, mainly because such conformance guaranteed the continuance of their trade and profits. They also shared Britain's horror of Napoleon and the French Revolution that had spawned him. The fact that these merchant-Federalists were largely located in New England also raised Jeffersonian anxiety that coercive commercial measures might be interpreted as politically inspired punishment for the one geographical section having continuing Federalist strength.

Thus, whatever policy or series of policies Jefferson and Congress adopted in reaction to the continental system or to British measures, certain difficulties lay ahead. Submission to foreign commercial regulations would disturb militant patriots and those who believed neutral rights should be defended on principle; resistance promised to alienate both merchants and agriculturalists with a vested economic or political interest in continued trade. It is therefore interesting to note how decisively Jefferson eventually pressed for an embargo, a measure certain to have profound internal consequences. Jefferson and Madison, however, were intellectual cousins to Bonaparte and to British statesmen in believing that severe economic measures were likely to bring offending nations to reason. In this sense the continental system, the British orders in council, and the embargo (with subsequent American commercial laws) were all grounded in common postulates about the persuasive power of protective economic measures. As events turned out, only the American economic measures had their desired impact, but even repeal of the offending British orders in council came too late to prevent war between the United States and Britain in 1812.

Neither Britain nor France fully grasped Republican anger concerning their economic measures because they did not fully understand the principled, lengthy stand of Republicans for unfettered free trade. As Drew R. McCoy has shown, Republicans committed early to expanding America's commerce as a means to develop a citizenry that would be industriously and usefully employed. In such conditions, a virtuous citizenry would develop, equipped to support the ideals of republican government. At the same time, free markets must contribute to happiness and prosperity abroad and thus lead to a more humane and peaceful world. Clearly, when France and Britain destroyed the free exchange of trade, causing unemployment and disruption, they were attacking not only America's direct economic interests but sabotaging one basis of building a sound republic and an enlightened world.

Jefferson's embargo policy provoked consternation in Britain and New England, primarily because of the hardships it imposed on Anglo-American trade. But it also aroused deep anger because it appeared intended to complement Napoleon's continental system. Since the United States was not free to trade with France, given British control of the high seas, an American self-blockade seemed obviously designed to injure Britain. Jefferson's immediate objective, however, was not to aid Napoleon but through withdrawal of American trade to avoid war and to persuade Britain to modify its offensive trade regulations. If the chief culprit, Britain, modified its regulations, Jefferson and Madison felt confident that Napoleon would likewise be forced to ameliorate the continental system. Such a modification must in turn attract American trade to the Continent and to French colonies in the Caribbean. Jefferson, not a pacifist, continued to consider the possibility of war, though he met resistance to that idea within his own cabinet and circle of supporters.

American domestic pressures against the embargo eventually became so severe that Congress moved toward repeal in the last days of Jefferson's presidency. Pressures came from many directions, some anticipated and some not. Jefferson's support began to erode within his own party; this circumstance reflected the difficulties of enforcing embargo measures at the state level, even where the governors were Republicans and supporters of the administration. Madison's succeeding administration, together with a wavering and troubled Congress, never subsequently crafted a series of measures to persuade France and Britain to ameliorate significantly their virtual warfare on neutral trade. The Non-Intercourse Act (1809), which became effective three days before Madison entered office, proved to be an embargo measure with a difference: commerce was restored with every nation except France and Britain, but provision was made that trade with those nations would be resumed as soon as they repealed their noxious decrees and orders.

When this measure proved unavailing, Macon's Bill Number 2 was enacted in May 1810. This mischievous law reopened trade with France and Britain but provided that should either nation repeal its restrictive commercial measures, trade with the other power would be interdicted. Napoleon, who had learned about repeal of the embargo, saw an opportunity to stop American trade with Britain once again. He therefore informed Madison that as of 1 November 1810, he was conditionally revoking his Berlin and Milan decrees pertinent to American trade and called upon the United States to invoke noninter-course against Britain. Madison understood Napoleon's action to be conditional upon Britain's revocation of certain orders in council.

With his eyes open, Madison decided to take the biggest gamble of his political life and presume that Napoleon intended to revoke his decrees before his precondition had been met. With questionable haste, Madison issued a proclamation in November stopping trade with Britain within three months if it had not canceled its orders in council. Britain refused to do so pending evidence that Napoleon had repealed his decrees. Since Madison could not prove Napoleon had acted, Britain refused to alter its measures. Bitter and embarrassed, Madison nevertheless encouraged Congress to renew nonintercourse against Britain, which Congress voted to do in March 1811.

Through Napoleon's shrewd diplomatic tactic and through Madison's untimely willingness to gamble, the United States once again became a reluctant partner in strengthening the continental system. The results of this episode, and the bitterness engendered by it, helped to pave the way for the War of 1812, for many Americans believed Britain had been inflexible and petty when there had been a chance to be constructive and conciliatory. Britain, angry because the United States seemed willing to help an aggressive conqueror such as Napoleon, found American actions to assist Napoleon further evidence of the Madison administration's fundamental ill will toward Britain.

It seems fair to say that the continental system, as manipulated by Bonaparte, played a crucial role in bringing about the War of 1812. The acts committed by Napoleon under the mantle of the continental system were serious enough to have provoked war with the United States; indeed, between 1806 and 1812, France and its allies had seized over four hundred American ships. But after considerable reflection, Madison and the Congress backed away from declaring war on France, believing Britain to be enemy enough.

The whole complex of maritime belligerent measures, of which the continental system was the centerpiece, had significant consequences for the United States other than the War of 1812. Because of trade interruptions of varying length, the enormous American carrying trade was hurt, as were American hopes to nourish a promising trade with Latin America and possibly East Asia. Also, domestic objections to Jefferson and Madison's seemingly pro-French policies were sizable and significant enough to provoke New England's Hartford Convention of 1814–1815, though reforms requested by the twenty-six delegates were moderate in tone. Aggressive federal enforcement of trade measures in the ports and states raised questions about the Republican Party's commitment to the primacy of local governance. On the positive side, some argue that American exclusion from continental markets proved to be a healthy stimulus to American invention and to manufacturing enterprises even though other sectors of the economy suffered unduly.

America's struggle with both French and British economic measures had a decided effect upon Republican concepts of political economy. The older ideals of full employment producing an industrious and virtuous citizenry could not be guaranteed by increasing foreign markets; other powers had the ability and will to close markets or restrict the American carrying trade. Gradually, Republicans became better disposed toward major manufacturing enterprise as a way to produce full employment and a balanced economy. Also, developing the American market itself became an attractive alternative to relying upon overseas markets controlled by Europeans. With the vast Louisiana Purchase territory waiting to be settled, Americans turned away from Europe and focused on other endeavors, an option not available to them since 1775.

Imposition of the continental system demonstrated the cruel situation in which small, neutral powers are placed when great belligerent powers determine to direct neutral resources to their enemies only upon disadvantageous terms or not at all. Jefferson and Madison's unsuccessful attempts to bluff or to pressure France and Britain underlined that truism of statecraft. Also, the experiences with Napoleon and the continental system reinforced the American belief that Europe remained the home of politically and morally corrupt politicians. George Washington's farewell advice on avoiding unnecessary entanglements with foreign powers received added emphasis through American experiences with Napoleon's economic system and Britain's cynical manipulation of American trade.

THE CONTINENTAL SYSTEM UNDERMINED

While Napoleon had substantial success in disrupting American-British trade, he found it difficult to achieve the larger objective: excluding British and British-controlled neutral trade from the Continent except on terms disadvantageous to Britain. The continental system continued to spring leaks. Portugal and Spain—particularly following the insurrection in Spain in 1808—served as ports of entry for goods from Britain and its colonies. In addition, Britain used depots along the coast of Europe as smuggling centers. British merchants crowded into these centers in great numbers in order to conduct business. From Helgoland in the North Sea, smuggled British and neutral goods made their way to Leipzig, Basel, Strasbourg, and Frankfurt. In the Baltic, Göteborg became the center for goods forwarded to Prussia, Poland, and Russia. Gibraltar, Sardinia, Sicily, the Dalmatian and Ionian Islands, and Malta most of all served as the depots for British goods in the Mediterranean. After Britain gained a foothold in Turkey in 1809, Belgrade and Hungary received British goods forwarded from Salonika and Constantinople. As late as 1810, Britain bought over 80 percent of its wheat from France or its allies.

Napoleon's need for money likewise under-mined the continental system. Growth of an enormous smuggling trade deprived Napoleon's empire of desperately needed tax revenues. Searching for monies to pursue his campaign against Austria in 1809, Napoleon recognized the necessity to stem this tax loss and accordingly established a system of licensed trade in 1809 and 1810. For a time, Napoleon directly supervised granting these licenses. At first a secret operation, the license system was formalized through the Decree of St. Cloud on 5 July 1810. Licenses were sold for substantial, varying fees but often costing £14. In providing trading licenses, Napoleon virtually negated the rationale of his system. He angered his continental allies and associates by granting licenses in such a way that French economic needs and promotion of the French merchant marine were given first consideration. Needed British goods now flowed freely and legally into French ports. Coupled with the license system came the Trianon Decree of 5 August 1810, which raised tariffs on colonial goods to an exorbitant degree, so high in fact that smugglers saw nothing but good in the measure. Napoleon's need to build his war chest thus led him to abandon the continental self-blockade, but he did so in such a way that he made it appear the French empire had no higher purpose than the enhancement of French interests. He also confused both allies and enemies, for while the license system seemed designed to negate the smuggling trade, the new tariff rates furnished considerable incentive for the smuggling to continue.

Napoleon never formally ended the continental system, but inauguration of the license system in 1809 and adoption of the Trianon tariff rates in 1810 marked its virtual abandonment. The defection of Russia in 1810 proved the single greatest blow to the continental system, one that made further enforcement efforts ludicrous. Following Napoleon's downfall, the restored Bourbon regime quickly swept away the various edicts of the continental system. All that remained were the milder enactments of the commercial legislation passed between 1791 and 1793 and the continuing firm conviction that French trade and industry must be sheltered from foreign competition.

The continental system revealed the scope and some of the limitations of Napoleon's thinking and planning. It was Eurocentric in its focus, was dependent upon the Grand Army for its success, was nationalistic and traditional in its emphasis upon the promotion of French interests, and was parochial in assessing how far sea power could assist England in escaping Napoleon's net. He pursued his plan with method and a certain cunning but had to modify it drastically when resistance grew too great. Unfortunately for Napoleon the continental system proved politically counterproductive in that it fostered increasing hostility to French hegemony within Europe. Napoleon even had to dismiss his own brother, Louis, as king of Holland when he refused to prevent Dutch smuggling with England. Russia's failure to enforce the system after 1810 played a part in turning Napoleon toward his fateful venture to conquer Russia.

In terms of its primary goal, the continental system proved a failure. Britain suffered severely but devised a successful smuggling system to satisfy continental markets, developed new markets in Latin America and East Asia, and traded freely with the colonies of France. The war that Napoleon helped to provoke between Britain and the United States played no part in determining his larger destinies.

BIBLIOGRAPHY

Bonnel, Ulane. La France, les États-Unis, et la guerre de course, 1797–1815. Paris, 1961. Describes in lucid fashion the effects of the continental system upon the United States.

Clauder, Anna C. American Commerce as Affected by the Wars of the French Revolution and Napoleon, 1793–1812. Philadelphia, 1932. An old but useful analysis of trade statistics and maritime regulations.

Crosby, Alfred W. America, Russia, Hemp, and Napoleon: American Trade with Russia and the Baltics, 1783–1812. Columbus, Ohio, 1965. An important study for understanding why the continental system never effectively excluded neutral and British commerce from Europe.

Heckscher, Eli F. The Continental System: An Economic Interpretation. Oxford and New York, 1922. Especially useful in understanding the historical background to the continental system and provides a detailed analysis of the continental response to the blockade.

Hickey, Donald R. The War of 1812: A Forgotten Conflict. Urbana and Chicago, 1990. The account of the Hartford Convention of 1814–1815 emphasizes that the twenty-six New England delegates, led by Harrison Gray Otis, were never secession-minded.

McCoy, Drew R. The Elusive Republic: Political Economy in Jeffersonian America. Chapel Hill, N.C., 1980. Places Republican foreign policy within the goals they sought for establishing a domestic society, emphasizing land and trade expansion, creation of virtuous individual citizens, and a better, more humane world.

Mahan, Alfred Thayer. The Influence of Sea Power upon the French Revolution and Empire, 1793–1812. 2 vols. London, 1892. Demonstrates the difficulties Napoleon experienced in effectively countering the naval power of Britain.

Perkins, Bradford. Prologue to War: England and the United States, 1805–1812. Berkeley; Calif., 1961. Critical of Jeffersonian policies, the book is especially strong on the domestic political factors both in America and England that shaped policies leading to war.

Schon, Alan. Napoleon Bonaparte. New York, 1997. This single-volume biography, covering all of Napoleon's major activities, places his economic policies in the context of his larger ambitions.

Sears, Louis Martin. Jefferson and the Embargo. Durham, N.C., 1927. Supports Jefferson's positions on several disputed issues.

Spivak, Burton. Jefferson's English Crisis: Commerce, Embargo, and the Republican Revolution. Charlottesville, Va., 1979. Tells how English countermeasures to French policies brought both political and ideological crises upon Jefferson.

Tucker, Robert W., and David C. Hendrickson. Empire of Liberty: The Statecraft of Thomas Jefferson. New York, 1990. The authors are critical of Jefferson's failure to understand that America's future, and the creation of a better world, remained closely tied to the survival of England. They believe Jefferson virtually sided with Napoleon and the continental system.

Varg, Paul A. Foreign Policies of the Founding Fathers. East Lansing, Mich., 1963. Provides an astute analysis of the practical and ideological components in the thinking of Jefferson and Madison concerning foreign affairs.

See also Blockades; Economic Policy and Theory; Naval Diplomacy; Neutrality .

WAR IN DISGUISE

James Stephen (1758–1832), a crusty and argumentative British Admiralty lawyer, felt anger for years when he considered how the Americans were injuring Britain with their commercial carrying trade. Ever since 1800, those crafty Americans had been engaged in an enormous trade with the Continent because the British had allowed Americans to "neutralize" their cargoes from the French Caribbean by first landing them in America and paying a small duty. Even those minor British requirements were massively evaded by Americans; too few cargoes were landed and even small duties were quickly refunded by port authorities. From London, it appeared that Americans were growing rich while the British struggled to contain Napoleon, would-be dictator of the Western world. Ungrateful Americans, supposed lovers of liberty, assisted Napoleon and counted their coins while Britain defended America from Napoleonic incursions into the New World with great sacrifice.

Stephen, who hated Napoleon and Jefferson in equal measure, decided to urge his fellow citizens to crack down on the Americans. In October 1805 he published War in Disguise; or, The Frauds of the Neutral Flags, a pamphlet that appeared on the same day Admiral Nelson smashed the combined French and Spanish fleets at Trafalgar. Do not, Stephen warned, allow American neutral ships to continue trading freely with France; such trade "sustains the ambitions of France and prolongs the miseries of Europe." Since Britain ruled the oceans, why concede extensive rights to greedy neutrals, as Britain had in 1800? Why should Americans be allowed to prosper while Britain bled for freedom and the precious right of self-governance? When news of the Trafalgar triumph reached London, Stephen's arguments seemed even more convincing; Britain controlled the high seas and could enforce its will without contradiction. His powerful pamphlet became a best-seller in England for several months. Even those who favored leniency toward the American trade found his arguments difficult to refute.

British orders in council regulating American shipping soon followed. To a striking degree, they enacted policies suggested by Stephen. No longer could Americans neutralize their cargoes by landing them in an American port and paying a small duty. Britain was thus preparing in 1805 to reinforce Napoleon's coming continental system in making life miserable for the heretofore prosperous American commercial carriers.