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CHAPTER II. - Eli F. Heckscher, The Continental System: An Economic Interpretation 
The Continental System: An Economic Interpretation, ed. Harald Westergaard (Oxford: Clarendon Press, 1922).
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THE BERLIN DECREE
THE years 1803-6 were notoriously full of world-overturning events: Napoleon's preparation for a descent on England (1803-5); the foundation of the French Empire (May-December 1804); the formation of the Third Coalition against France and its defeat at Ulm and Austerlitz (October and December 1805); as an immediate sequel to this, the Peace of Pressburg, with the extension of the 'coast system' to the eastern shore of the Adriatic, but also the definitive overthrow of the French fleet at Trafalgar (October 21, 1805); and finally the formation of the Fourth Coalition and the crushing of Prussia at Jena and Auerstadt (October 14, 1806).
In the autumn of 1806, therefore, Napoleon's victory on the Continent was as complete as his defeat at sea. Consequently he was so far perfectly right when in later years he pointed to the battle of Jena as the natural antecedent to the execution of the Continental System, inasmuch as that battle placed into his hands the control of the Weser, Elbe, Trave, Oder, and all the coastline as far as the Vistula, although, naturally enough, he omitted to point to the battle of Trafalgar as a negatively operating factor.7 The great manifestation consisted in the Berlin decree, issued November 21, 1806, from the capital of the power that had been last and most thoroughly vanquished. The external occasion was Great Britain's recently mentioned blockade declaration of May 16 of the same year; but that was nothing more than a pretext. Sorel has brought to light some documents of July 1805, and February 1806, written by a certain Montgaillard, in which the Berlin decree is portended. In these documents there is the usual talk of how England is lost if it is only possible to enforce a prohibition of her industrial products in Europe, for to destroy her trade is to deal her a blow in the heart and to attack her alliances at the same time as her continental intrigues. But the idea that peace with the different powers would have as a necessary pre-condition the closing of all the ports of the mainland to the British was evidently very widespread, as can be seen from a contemporary utterance of French industrialists. And, indeed, even before the issue of the decree we find Napoleon, both in one of his army bulletins (October 23) and in a letter to his brother Joseph (November 16), speaking of the continental blockade as a matter of course. At the same time as this last letter, another letter was addressed to the commander of North Germany, Marshal Mortier, instructing him to close the Elbe 'hermetically', to confiscate all English goods, and even to arrest the English and Russian consuls at Hamburg.8 In every respect, therefore, the Berlin decree stands out as a culmination of earlier thoughts and measures, although, despite all this, it had the effect of a bomb, thanks to Napoleon's masterly capacity as a stage manager.
Like most of the measures of both parties, the Berlin decree purported to be a measure of reprisal rendered necessary by numerous aggressions of the adversary; but its regulations were nevertheless solemnly proclaimed as embodying 'the fundamental principles of the Empire', until England disavowed her false pretensions. In content the regulations, as is usual in French ordinances, are very clear, at least at first sight, although they were gradually to prove, intentionally or unintentionally, rather ambiguous. The preamble states: (1) that England does not acknowledge international law; (2) that she treats all enemy subjects as enemies (this is directed against her legislation against alien enemies); (3) that she extends the right of capture to merchant vessels and merchandise and private property; (4) that she extends the blockade to unfortified places (a reproach which forms a reminiscence of the siege character of a blockade) and to places where she has not a single ship of war; (5) that she uses the right of blockade with no other object than that of hampering intercourse between peoples and building up her own trade and industry on the ruins of the trade and industry of the Continent; (6) that trade in English goods involves complicity in her plans; (7) that her proceedings have benefited her at the expense of everybody else; (8) and, consequently, that retaliation is justifiable. It is further stated, therefore, that the Emperor intends to use her methods against her, and accordingly that the regulations will remain permanently in force until England has acknowledged that the law of war is the same by land and by sea and cannot be extended to private property and unarmed individuals, and that blockade shall be restricted to fortified places guarded by sufficient forces.
The fundamental regulations laid down on this basis fall into four categories. First, the British Isles are formally declared in a state of blockade, and all trade or communication with them is prohibited (Articles 1 and 2). Secondly, the decree turns against all British subjects in territories occupied by the French; they are declared to be prisoners of war, and all property belonging to them to be fair prize (Articles 3 and 4). Thirdly, war is made on all British goods; all trade in them is prohibited and all goods belonging to England or coming from her factories or her colonies are declared to be fair prize, half of their value to be used to indemnify merchants for British captures (Articles 5 and 6). Fourthly and lastly, every vessel coming direct from ports of Great Britain or her colonies, or calling at them after the proclamation of the decree, is refused access to any port on the Continent (Article 7).
What was left undecided was the question of procedure at sea. In later years (1810) Napoleon himself declared on two or three different occasions that the Berlin decree implied only 'continental blockade and not maritime blockade', and that it was not to be applied to the sea, that is, to lead to captures; but this only bears witness to that capacity of forgetfulness of which Napoleon was master on occasion. It is true that his naval minister, Admiral Decrès, in answer to a question from the American envoy, gave it as his opinion that a vessel could not be captured simply and solely because it was on its way to an English port. It is also true that captures or condemnations of captured or stranded vessels on the basis of the Berlin decree did not occur in 1806 or in the first seven months of 1807; and this caused shipping premiums to drop to 4 per cent. and in England formed the basis of the regular standing argument of the opposition against the government's measures of reprisal. But it is equally true that this state of affairs came to an end with a declaration made by Napoleon himself, after his return from Poland, and communicated to the Law Courts in September 1807; in point of fact, the practice had already been altered in August and consequently not, as Napoleon later gave out, by the new Milan decree of December 1807. The Emperor's exposition of the law states that English goods on board neutral vessels should be confiscated; and in practice the decree was interpreted in such a way that an enemy destination was sufficient ground for the condemnation of a vessel. For that matter, this was in full accord both with the principles of blockade and with the practice of the period of the Directory.9
Even after this interpretation, however, the Berlin decree was so much milder than the Nivôse law of 1798 that the occurrence of British goods at least did not occasion the condemnation of the vessel itself and the rest of its cargo.
From a formal point of view there are at the most two novelties in the regulations of the Berlin decree. The one is the declaration of blockade against the British Isles, which could scarcely have occurred to anybody except Napoleon at a time when not a single war-ship held the sea against the British. Its principal object, indeed, was to form an effective and grandiose gesture; and not without reason the famous British lawyer, Lord Erskine, could later (February 15, 1808) say in the House of Lords that Napoleon might just as well have declared the moon in a state of blockade.10 Presumably, however, Napoleon aimed not only at the theatrical effect, but also at reducing the British principle of a paper blockade to an absurdity. The second novelty was the treatment of British subjects and their property on the Continent. Like the former regulation, this came about as a continental parallel to the British system of capture at sea. Its practical effect, as far as one can judge, was restricted to the moment of proclamation, as the law took by surprise many Englishmen and their enterprises, especially in the German territories governed by Napoleon.
The epoch-making character of the Berlin decree, therefore, is scarcely due to either of these formally new regulations. What is important is the wide range which from the time of the Berlin decree was given to a whole series of measures which for a long time had been applied more or less sporadically. It was only now that it had become possible to elaborate the different methods of reprisal into a truly 'continental' system, that is, one embracing the whole, or nearly the whole, of the European mainland. And it was only now, too, that they were made the central point in the entire internal and external policy of France, around which everything else had to turn in an ever-increasing degree. It was only now that the idea was seriously taken up by a ruler and statesman who had the unique capacity and ruthless consistency which were the necessary prerequisites for transforming the plan from a mere visionary programme into a political reality. The interest surrounding the development of the Continental System, therefore, is connected with the fact that its idea now came to be followed up in deadly earnest, and that the entire content of the ideas was thereby given an opportunity to affect the life of Europe for better or for worse.
The content of this system should be sufficiently clear from what has already been said, but it may nevertheless be set forth here, when we are entering upon the further development of external events. As a declaration of blockade against Great Britain was little more than a theatrical gesture, and as Napoleon was almost entirely destitute of means to assert his will on the sea, the blockade had to be applied by land. This means that it was, and aimed at being, a self-blockade on the part of the Continent, just as had already been the case with the Directory's Nivôse law of 1798. With the object of preventing Great Britain from disposing of her goods on the Continent and thereby bringing her to her knees, the Continent itself was to renounce all importation of British goods and colonial wares, so far as the latter came from British colonies and British trade. The whole thing not only was, but was intended to be, a 'self-denying ordinance'. The privations to which the Continent was afterwards subjected were thus a designed effect of Napoleon's measures, and not at all the work of his enemy, who, on the contrary, devoted himself to relieving them, for the most part in principle and almost entirely in practice. Unless this starting-point, which to our way of thinking seems very paradoxical, is firmly grasped at the outset, the following development will appear inexplicable. To what extent Napoleon realized all the consequences of his measure, we have, it is true, no means of knowing; but evidence is not lacking that he was conscious of their main features. Even when he issued the decree concerning the closing of the Hanse Towns (December 3, 1806), he wrote to his brother Louis of Holland that the serious obstacles in the way of intercourse with England would 'undoubtedly injure Holland and France', but that they were necessary; and in a letter11 addressed to the same correspondent a few days later he says that the system would ruin the great commercial towns. Moreover, in connexion with the intensification of the system by the second Milan decree he wrote a year later (December 17, 1807) to the minister of the interior, Cretet, and ordered him to encourage capturing as 'the only means by which the requirements of the country could be supplied'. On the same occasion, also, his minister of finance, Gaudin, in a report written in connexion with the Milan decree, pointed out the injury inflicted by the system on the French industries, which had already found it difficult to obtain colonial raw materials; but he considered that the injury to England was yet greater owing to her greater dependence on industry and foreign trade.12
Admiral Mahan, in his somewhat harsh criticism of Napoleon's policy, condemns the Continental System on the ground that it injuriously affected the neutrals, who were especially indispensable to France because she herself was excluded from the sea. 'The neutral carrier,' he says, 'was the key of the position. He was, while the war lasted, essentially the enemy of Great Britain, who needed him little, and a friend of France, who needed him much.'13 This statement appears to involve the ignoring of all the motives behind this mode of warfare, the object of which was to conquer Great Britain economically; for that object Napoleon could never have attained by allowing neutral trade to continue. That Napoleon had to expect greater injury to Great Britain than to his own countries from the self-blockade of the Continent was a necessary consequence of the views which, as we have already seen, were common to him and his adversary; and from his standpoint, accordingly, the policy was sufficiently justified. Whether he and his opponents conceived the economic connexions aright, is quite another question, which belongs to a later chapter. It is a question, moreover, which can by no means be disposed of by a mere reference to his need of the help of the neutrals for supplies which he thought he could do without or replace from other sources.
Napoleon immediately proceeded to carry the Berlin decree into execution over as large a part of the Continent as possible. With significant openness one article incorporated in the decree itself (Article 10) instructed the French foreign minister to communicate it to the governments of Spain, Naples, Holland, and Etruria—all vassal states—and to the other allies of France; and a letter of the same day from the Emperor to Talleyrand prescribes practically the same course. But the decree was to have its first political effects in the Hanse Towns, where, as we know, the foundation had been laid long beforehand, and where what were really executive measures had been ordered before the publication of the decree.
The Hanse Towns, and especially Hamburg, were perhaps of all places in Europe the most decisive points for the success or failure of the Continental System. During the last years of the ancien régime the flourishing French trade in goods from the French West Indies had chiefly gone to the Hanse Towns, where the French colonial goods had largely squeezed out their competitors, so that the Hanse Towns during these years absolutely came first among all European countries in the export trade of France. But the revolutionary wars put a sudden stop to all this, and that, too, not only for France, but also for Holland, which was occupied by the French. This was undoubtedly due in part to the fact that the policy of the Directory against the neutrals prevented them from maintaining the trade relations now that France could no longer maintain them herself. It was now that Great Britain came to the fore as by far the most important purveyor of colonial goods and industrial products to the Hanse Towns, and through them not only to the whole of Germany, but also to great parts of the rest of the Continent. At the same time Great Britain, on her part, had good use for the corn and other agricultural produce which were foremost among North German exports through Bremen. It is true that the statistics of the period must be used with great caution, and the figures from different sources, even official ones, are often irreconcilable. In this case, however, the general tendency is unmistakable, and some data may therefore be given. In 1789 only 49 vessels of 7,250 tons in all went to England from Hamburg and Bremen; but in 1800 there were 500 vessels of 72,900 tons in all. That is to say, the traffic increased ten times over. The value of British exports there is said to have risen between 1792 and 1800 from £2,200,000 to £13,500,000; in fact, the British minister at Hamburg stated in 1807 that during the twelve preceding years the exports of colonial produce, East India goods, and British manufactures to the Hanse Towns amounted to an average of £10,000,000—a figure the significance of which is shown by the fact that the entire British exports in 1807 were estimated at only a little more than £50,000,000.
Alongside this trade with Great Britain, however, there arose in the 'nineties an extremely lively, sometimes highly speculative, commercial intercourse between the Hanse Towns and the United States, which during that period sold more goods to Germany than to the entire British Empire. So long as the trade could be carried on without any great amount of British interference, it must have been far more favourable for France and her allies than the British trade, inasmuch as the American trade consisted, on the one side, of the importation of the products of the French and Spanish West Indies, and, on the other, in the exportation of German industrial products, which even managed to compete successfully with British goods in the United States. But it was one of Napoleon's deeply-rooted ideas, and one which was soon to assume the solemn form of the decrees, that nearly all textile goods and some sorts of colonial goods were in reality English, howsoever they might be disguised, and that all goods of maritime trade were at least 'suspect'. Consequently, he felt that almost the entire maritime trade of the Hanse Towns was a vital English interest; and this was certainly the case, at least to a large, if not to a predominant, extent.
As early as November 19, 1806, two days before the issue of the Berlin decree, therefore, Marshal Mortier seized Hamburg without further ado; and two days later (November 21) French troops likewise occupied Bremen and the Weser down to its mouth. Meanwhile, Lübeck had been taken by force as early as November 6, after Blücher had thrown himself into the town with his Prussian troops. Acting in accordance with his instructions, Mortier immediately ordered in Hamburg a statement to be made out of all money and goods arising from trade connexions with England. And in a magniloquent diplomatic note to the Senate of Hamburg, Napoleon's notorious ex-secretary and then minister there, Bourrienne, a few days later (November 24) gave as a motive of the measure the Emperor's feeling of obligation 'to seek to safeguard the Continent against the misfortunes with which it is threatened' through the machinations of England, inasmuch as a large number of the inhabitants of Hamburg were notoriously devoted to England; and at the same time he emphasized the regulations of the Berlin decree. By an ordinance of December 2, and by letter after letter, Napoleon laid down, modified and intensified the customs cordon which was to be created along the entire North Sea coast and the river Elbe as far as Travemünde by a large military force operating in conjunction with the customs staff.14
[7.] Correspondence de Napoléon Ier, no. 16,127 (Jan. 10, 1810).
[8.] Sorel, op. cit., vol. VII, pp. 55, 104, 114; memorial printed in Tarle, 'Kontinental'naja blokada (Moscow, 1913), vol. I, p. 706; Correspondance, nos. 11,064, 11,271, 11,267, 11,283 (Berlin decree).
[9.] Correspondance, nos. 16,127, 17,014 (Jan. 10, Oct. 7, 1810); Hansard, vol. XIII, app., pp. xxxiii et seq.; Mahan, Influence of Sea Power, &c., vol. II, pp. 273, 281-2; cf. also p. 245; also, Sea Power in its Relations, &c., vol. I, pp. 143, 189 note 1.
[10.] Hansard, vol. X, p. 473.
[11.] Cited ante, p. 60.
[12.] Correspondance, nos. 11,378, 13,395; Servières, L'Allemagne française, &c., pp. 129-30.
[13.] Mahan, Influence of Sea Power, &c., vol. II, pp. 353 et seq.
[14.] Vogel, op. cit., pp. 4 et seq.; Tarle, Deutsch-französische Wirtschaftsbeziehungen zur napoleonischen Zeit, in Schmollers Jahrbuch für Gesetzgebung (1914), vol. XXXVIII, p. 679; Schäfer, Bremen und die Kontinentalsperre, in Hansische Geschichtsblätter (1914), vol. XX, p. 414 et seq.; Levasseur, Histoire du commerce de la France, vol. II, p. 19; Mahan, Influence of Sea Power, &c., vol. II, p. 251; Johnson and others, History of the Domestic and Foreign Commerce, &c., vol. II, pp. 20 et seq.