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CHAPTER V. - 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 CONTINENTAL SYSTEM IN EUROPE (1808-1812)
THE 'COAST SYSTEM'
DURING the years 1808-10 external political events in Europe were characterized by the steadily-continued extension of the 'coast system'. In the very first of these years occurred the formal incorporation of Etruria with the French Empire; and at the same time Rome was occupied by French troops, to be also incorporated in the following year together with the rest of the Papal States. By this means the Italian peninsula was completely subjected to the power of Napoleon; and of all that we now count as Italy, only Sicily and Sardinia succeeded in preserving their independence, thanks to the direct support of Great Britain. During 1809 the occupation of the coasts was followed up on the Balkan peninsula—a movement which had begun as early as the close of 1805 with the acquisition of Dalmatia and part of Istria. By the Peace of Vienna (Schönbrunn) Austria had now to cede, among other things, the rest of her coast, the remainder of Istria and Croatia; and the acquisitions of 1805 and 1809 were incorporated with France, like all the territories previously mentioned, under the name of the Illyrian Provinces. From the point of view of the Continental System, the most important thing about all this was that Napoleon's power was now extended to Trieste, which with some exaggeration might be called, after the incorporation of Leghorn, the Leipzig of South Europe.
DISAPPEARANCE OF THE FRENCH COLONIAL EMPIRE
As is well known, however, the year 1808 was a red-letter year in the history of the Continental System, and, for that matter, in the history of the great trial of strength as a whole. The change was exactly the reverse of that indicated by these new acquisitions, for the insurrection in Spain gave to events in the most western of the peninsulas of southern Europe exactly the opposite course to that in the two other peninsulas. The effect on the Continental System was brought about partly by military conditions, in that the coastal defence on the North Sea was weakened in respect of the forces required for the war in the Iberian peninsula; but the Spanish insurrection had a much larger bearing on the Continental System, through its consequences for colonial trade and for Napoleon's colonial empire. The German historian of Napoleon's colonial policy, Professor Roloff, has shown how decisively the events in Spain put an end to Napoleon's colonial plans, which had previously been built to a large extent on the Spanish possessions. From having been the basis for privateers against British trade, their passing into the hands of the enemy served as a weapon against the remains of the French colonies, which one after another fell into the hands of the British. In January 1809 French Guiana was taken; in April, Martinique; in July, what was originally the Spanish part of Haiti, Santo Domingo (the French part, St. Domingue, had already for seven years been in the hands of the insurrectionary negroes), and at the same time Senegal in Africa; in 1810 fell first Guadeloupe, the last French possession in America, and then the remaining African colonies, Isle-de-France (Mauritius) and Réunion. In the same year, it is true, Java had nominally passed to France through the annexation of its mother country, Holland; but this large island, too, fell finally into the hands of the British in September 1811. The doctrine that Napoleon had championed ever since the days of the Milan decree—though not, it is true, without some relapses—namely, that there were no neutrals and that all colonial goods were English, he had thus the doubtful pleasure of seeing stern reality confirming ex post facto. But evidently, on the other hand, this in a way increased the chances of the policy of 'conquering England by excess',69 and made him not less, but rather more, zealous to press ruthlessly through the continental self-blockade with all available means.
In Great Britain, however, in the course of 1809 expression was given to the prevailing belief in the relaxation of the pressure by a new Order in Council of April 26, which limited the blockade so as to include Holland as far as the Ems, France, with her colonies and the possessions dependent thereon, and North Italy as far as Pesaro and Orbitello, approximately including Tuscany, the old Etruria.70 The Orders in Council of November 11, 1807, were declared to be cancelled; but in reality their policy was continued without any change by the manner in which licences were granted. But a general optimism diffused itself in England during the course of 1809, thanks to the expansion of the colonial trade.
THE CONVULSIONS OF 1810
The year 1810, on the other hand, was to be a year of heavy ordeals for both the 'mighty opposites', and that, too, both politically and economically. Sweden, which had resisted the Continental System longer than any other mainland state, was compelled as early as January to bind herself by the Treaty of Paris to exclude British vessels and commodities, except salt—a merely verbal profession of no very great importance, it is true, as Admiral Saumarez with his British squadron maintained friendly intercourse with the country without a break, even after Sweden had been compelled, in November, to declare war on Great Britain. Consequently, a far greater change was effected by events on the North Sea coast, in that Napoleon became more and more convinced of the impossibility of compelling obedience to the self-blockade beyond the limits of his own direct authority. For this reason there followed in rapid succession, first, in March, the acquisition of southern Holland as far as the River Waal, then the incorporation of the whole of Holland in July, after Napoleon's brother Louis had abdicated and fled from the country, and finally, in December, the further annexation of the Hanse Towns, the coast of Hanover, which had formerly been assigned to the kingdom of Westphalia, the Ems department of the Grand Duchy of Berg, Lauenburg, and, after some hesitation, Oldenburg. The result of all this was that, at the turn of the year 1810-11, France extended along the whole of the North Sea coast and the Holstein border up to the Baltic at the mouth of the Trave. At the same time measures were being taken along the south coast of the Baltic by constantly more violent menaces against its three owners, that is, Prussia, helpless but bitterly hostile to Napoleon, Mecklenburg, and Sweden, as the possessor of Swedish Pomerania.
It was precisely in the Baltic, however, that there happened before the close of the year an altogether revolutionary event, the strongest possible external blow against the structure that was geographically almost completed, viz., the apostasy of Russia. This occurrence had many causes, but the opposition between the two Emperors became visible when the Emperor Alexander declined Napoleon's request in the autumn of 1810 to confiscate a large flotilla of commercial vessels trading in the Baltic under different neutral flags; and the final emancipation was marked by the famous customs ukase which Alexander issued on the last day of the year (December 19/31). In this document a clause about the destruction of prohibited goods was renewed after an interval of thirteen years, undoubtedly in imitation of Napoleon's own measures, to be mentioned presently. Nothing could have been more welcome to the French Emperor, if this had applied only to British goods; but now the clause worked exactly in the opposite direction. For some important imports, foremost among them wines, had to arrive by sea in order to be legal; and as French produce could come only by land, the blow struck at France herself. True, British goods were excluded, ipso facto, as coming from an enemy country. At the same time, however, American vessels were accorded preferential treatment; and as they were the disguise principally used by British shipping, the whole measure was rightly regarded by Napoleon as an informal manner of opening a door to the navigation of his enemy. To complete the picture, duties on the wines of France and her allies were increased to twice the amount levied upon those of South-eastern Europe.71
The order of Napoleon which received this unwelcome imitation was the Fontainebleau decree of October 1810, which prescribed the destruction of all English goods throughout the Continent. This formed the complement to the Trianon tariff of August of the same year, which, in contrast to this, admitted colonial goods, although only against enormous duties. Precisely at the time of this new turn in the Continental System, moreover, a serious crisis broke out in England and in France, and also in many other places; and the difficulties of Great Britain inspired Napoleon with stronger hopes than ever of attaining the object of his great system, regardless of the fact that the dislocation of French economic life was at least equally deep and far-reaching.
THE FINAL COLLAPSE
By the apostasy of Russia, however, the Continental System had lost one of its retaining walls; and in the course of 1811 the breach was more and more widened by Alexander's constantly more open favourable treatment of British shipping. Napoleon had to try to raise a new barrier along the western frontier of Russia toward Prussia, the Grand Duchy of Warsaw, and Austria, and to have recourse to still more active measures to bar the south coast of the Baltic, now that British ships had points d'appui on its east coast in addition to those they had had all the time among the Swedish skerries. The last step in this direction was taken by the occupation of Swedish Pomerania in January 1812; but the immediate effect of this was to cause Sweden openly to fall away. Meanwhile, the preparations for the great trial of strength with Russia afterwards made heavier and heavier demands on Napoleon's attention; and with the beginning of the Russian campaign the cordon was relaxed everywhere. After the retreat from Moscow, in the beginning of the year 1813, insurrections took place both on the North Sea coast and in the Ruhr district (the Grand Duchy of Berg), which, like the Hanse Towns, had been very badly treated. It is true that they were ruthlessly suppressed, and Napoleon, sometimes at least, adhered to his old idea that the Continental System had shaken the power of England. But in the rush of more pressing claims that now came upon him, it exceeded even Napoleon's ability to devote to the enforcement of the system the superhuman energy which, even under more favourable auspices, would have been necessary to prevent it from falling asunder. Moreover, the falling away of his compulsory allies cost the system its continental extension, so that even his sincere collaborator, Frederick VI of Denmark, took a cautious step backward; and with the advance of the allied armies into France there also followed whole swarms of forbidden goods. Finally, the Continental decrees were formally rescinded, immediately after Napoleon's abdication in April 1814. With that the system passed into the realms of history, not without dragging with it in its fall large parts of the new branches of production which were indebted to it for their existence.
But before that disintegration of the system which was visible from without and which was conditioned by external causes had had time to take effect, forces from within had appeared which made it a thing quite different from what had been originally intended. What has now been described, over and above the contents and significance of the foundational decrees, is merely the external political façade behind which the real machinery worked. It is the latter that is to be the subject of part III.
INTERNAL HISTORY AND WORKING OF THE CONTINENTAL SYSTEM
[69.] See p. 57.
[70.] Martens, Nouveau recueil, &c., vol. I, p. 483.
[71.] I have followed the translation of the ukase in Le Moniteur, Jan. 31, 1811. Vandal, in his Napoléon et Alexandre Ier (vol. II, pp. 529-30), refers to this paper, but I have been unable to bring his account into accord with the text of the decree. The Correspondance is, of course, full of the subject.