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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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RESULTS OF THE SELF-BLOCKADE (1806-1809)
EXECUTION OF THE SELF-BLOCKADE
IN order to form a concrete notion of the manner in which the Continental System worked, one may properly begin by following the general lines of its development, even though the constant efforts and hindrances exhibit a certain monotony, which, however, is broken in 1810 by what constitutes a change in principle. Our account in the first place concerns the coasts of the North Sea and the Baltic and the parts of the mainland that lie behind them, Germany and Holland, which played the principal parts in the policy, and in which, moreover, that policy is best known.
The Continental System, being an almost unbroken continuation of the previous policy, led to the peculiar effect that the seizures of British goods began before the actual issue of the Berlin decree—in Leipzig, Frankfurt-am-Main, Meppen, which was important for trade up the Ems, Holland, Switzerland, &c. But it was in the Hanse Towns that the centre of gravity lay, and the military cordon in particular was during this first phase (the close of 1806) mainly limited to the North Sea coast from Emden, in East Friesland, which was just at that time ceded to Holland, to Hamburg, with the salient along the boundary of Holstein, at that time belonging to Denmark, as far as Travemünde, the outport of Lübeck on the Baltic.
NAPOLEON'S ORDERS IN DECEMBER 1806
The best idea of the apparatus which was set going can be obtained from the letters which Napoleon wrote on December 2 and 3 to Marshal Mortier in Hamburg, to the police and navy ministers, and to his brother, King Louis of Holland, and from the simultaneously issued proclamation (December 2) as to the blockade in the northeast. In the first of the letters Mortier received orders to occupy Vegesack on the Weser, north of Bremen, in order to complete the blockade of that river. King Louis was to place batteries on the left bank of the river, in order to have a cross fire from corresponding batteries at Bremerlehe on the eastern shore. In the mouth of the Elbe a redoubt and a battery were to be erected on an island in the river immediately opposite Stade, so that no vessel could pass without being examined, and no English goods could come in through Altona, Hamburg, or any other place; and in all three Hanse Towns French troops were to be stationed to stop English letters. A brigadier general was to be stationed in Stade, and another in the outport, Cuxhaven; and in addition to this, two cordons—one from Hamburg to Travemünde along the frontier of Holstein, and another along the left bank of the Elbe as far as a point just opposite Hamburg—were to be placed under the command of yet a third brigadier general. As regards troops, the greater part of General Dumonceau's division, two Italian regiments and a third of the Dutch cavalry, were to be used for these purposes; and at the same time the minister of the marine received orders to send a post captain with two ensigns and forty sailors to equip some sloops in Stade. The customs authorities received orders to send five hundred (according to the proclamation, three hundred) customs officials under a director of customs and two inspectors of customs. These were the 'green coats', and in point of fact they arrived before the close of the year and soon drew upon themselves the bitter enmity of the population. Finally, Marshal Moncey was to have at his disposal one hundred gendarmes for distribution along the barrier. On that very same day (December 2) Napoleon wrote a second letter to Mortier with a renewed exhortation to set up a good battery at Stade; and above all things he was to prevent all communication between Hamburg and Altona, to confiscate on the Elbe all vessels with potash, coal, and all other goods coming from England, and to detain all letters from England. In these very first orders, however, the difficulty emerged of obtaining honest executors of the measures. The naval minister received a special reminder to send 'unbribable' officers; and from the very beginning an effort was made to interest the soldiers themselves in the effectivity of the blockade by the regulation that they should have the benefit of all confiscations of goods which should try to pass. But in several of the letters, especially that to Fouché, the minister of police, Napoleon says that he has received complaints—in reality only too well founded—about his consul in Hamburg, Lachevardière, who 'seems to steal with impunity'.6
In Hamburg there still survived the continental establishment of the Merchant Adventurers' Company, the most notable English trading company of an older type (the 'Regulated Company'), though it no longer played any considerable part. In order to save this for the English, the Senate of Hamburg purchased the whole establishment, called 'The Merchant Adventurers' Court', and presented it to the members, who became citizens of Hamburg besides and in this way escaped imprisonment, so far as they did not escape by flight. The main thing, however, was the seizure of the English stocks of goods, which Napoleon, after various negotiations, fixed at the somewhat high figure of 17,000,000 francs for Hamburg and 2,000,000 francs for Lübeck; meanwhile Bremen, by delaying the operation for a whole year, managed to smuggle away the greater part of the goods there and had to account for only 377,000 francs. In Leipzig, whose Fair still constituted by far the most important market in Central Europe, especially for manufactured goods to and from all points of the compass, the stocktaking gave a value of 9,150,000 francs, which was redeemed for 6,000,000 francs. Things went in the same way elsewhere.
In Great Britain the publication of the Berlin decree caused, according to evidence given before a parliamentary committee, a cessation of exports to the Continent during the months of December 1806, and of January and February 1807, with a rise in the marine insurance premiums. But the absence of captures on the basis of the decree, which, as we have seen before, was at first regarded as not applying to the sea, after that put new life into commercial intercourse; and an Order in Council of February 18, with instructions for the commanders of vessels, granted unrestricted traffic for the vessels and goods of the Hanse Towns and the rest of that part of North Germany which was occupied by the French; and this safeguarded intercourse with them.7
During the whole of the first six months of 1807, indeed, the Continental self-blockade may be said to have been practically ineffective, at least in North Germany. The systematic dishonesty of Napoleon's tools gave rise to regular orgies during this time, especially with the help of the new commander-in-chief in Hamburg, Marshal Brune, whom Napoleon, with unusually good reason, branded as an 'undaunted robber'. According to the report of de Tournon, who was sent there especially to investigate, Brune's instructions themselves to the customs staff were calculated to encourage smuggling; but that was the case to a very much greater extent with the application of the instructions. When vessels came up the Elbe, they were allowed, in absolute defiance of the instructions quoted above, to continue their journey past Stade, with only one single person from the barrier control on board, usually an ignorant seaman, while the customs officials themselves were consistently kept at a distance. The bill of lading was examined by a sub-officer of the navy; and the inspection which it was the duty of Consul Lachevardière to carry out, was handed over by him to a Hamburg broker, who had the greatest possible interest in letting everything pass. On the basis of the entirely uncontrolled investigation of this person, the consul afterwards issued a certificate as to the non-English origin of the goods; and fabricated Holstein certificates of origin were always available to bolster up the certificate. At the close of May 1807, Brune went a step farther and removed the always relatively zealous customs officials from the Hamburg-Travemünde frontier line and the Elbe line from Harburg (immediately opposite Hamburg) to Stade, replacing them by gendarmes. Consequently, during the five and a half months down to the beginning of August there arrived in Hamburg, without impediment, 1,475 vessels with cargoes estimated at 590,000 tons, including the most notoriously English goods, such as coal. According to the investigator just mentioned, Hamburg was chock full of English and colonial goods, which were sold as openly as in London, and not a single seizure had occurred. This would also seem to have been the time at which Bourrienne, Napoleon's envoy in Hamburg—according to his own story, which is in this case confirmed from English sources—obtained cloth and leather from England in order to be in a position to supply Napoleon's own army with the uniform coats, vests, caps, and shoes which he had to procure.8
The farce of Brune's conduct in Hamburg, however, was too much for Napoleon, who removed him in the latter half of July and appointed Bernadotte as his successor. This appointment manifestly brought with it a stricter enforcement of the law, although the new and well-meaning despot that the Hamburgers thereby got proved rather costly to the town; nor did he entirely escape more or less unproven accusations of corruptibility, both from Napoleon and also, later on, from the Senate of Hamburg.9 Above all, however, after the removal of Brune, Napoleon regulated the blockade by means of two new decrees of August 6 and November 13, 1807. These placed the right of seizing English goods into the hands of the customs staff, which was strengthened at the same time, while the troops were placed at the disposal of the customs officials and increased guaranties were provided in various ways that unlawful goods should not be permitted to escape examination. In doing this Napoleon fell back on the old and very clumsy expedient of declaring large main groups of goods to be eo ipso British when they did not come from France, that is to say, the majority of textile goods, (except certain ones imported by the Danish East Asiatic Company), cutlery and hardware, glass, pottery, and lump sugar; and for the colonial goods detailed certificates of origin were required from the French commercial agents in the exporting port. As regards the question as to whether a vessel had put in at an English port, a searching examination was prescribed of the captain and the sailors separately, and the arrest of such of them as should give false information, after which they should be set free only after the payment of a heavy fine (6,000 francs for the captain and 500 francs for each sailor). All such vessels were to be confiscated, while the Berlin decree merely prescribed their expulsion. The latter of these two decrees, that concerning certificates of origin, the examination of the crews, and the confiscation of the vessels, was given practically unaltered validity for the whole Empire through what is called the first Milan decree, issued ten days later (November 23). Within barely a month, as we have seen,10 there followed the answer to the Orders in Council, the great second Milan decree, which marks the end of Napoleon's measures bearing on the Continental System in 1807. On the heels of all this, immediately after the beginning of the new year (January 11, 1808) there came the so-called Tuileries decree, which sought to induce the crews and passengers of vessels to reveal any call in an English port by promising one-third of the value of the vessel and cargo as a reward. In September 1807, Napoleon, with his customary ruthlessness, had intervened in Holland and, to the despair of his brother Louis, had calmly caused his gendarmes to convey to France from that nominally independent kingdom a citizen of Breda and a citizen of Bergen-op-Zoom on the suspicion of smuggling.
At the same time, thanks to Canning's almost Napoleonic contempt for the independence of neutrals, Napoleon received valuable assistance in the blockade of the North Sea coast in consequence of the bombardment of Copenhagen in the beginning of September and the breach between Denmark and Great Britain. As a matter of fact, Schleswig-Holstein, during the whole of the preceding period, had been a serious obstacle in the way of Napoleon's measures south of the Elbe. When the Elbe and the Weser were barred, Tönning in particular, but also Husum on the west coast of Schleswig, had largely replaced the Hanse Towns during the years 1803-6 as importers of English and colonial goods; and their trade had flourished like plants in a forcing-house. All attempts to prevent the passing of goods to the south from Holstein territory through the town of Altona, which was practically continuous with Hamburg (all zu nah), met with almost insuperable difficulties, all the more as the local Holstein authorities never failed to certify the neutral origin of the goods. It was, therefore, of very great importance that the ruler of Denmark, the Crown Prince Frederick, embittered through the conduct of Great Britain, placed himself at the service of the Continental System, with almost unique loyalty, and as early as September 1807 ordered the seizure of all forbidden goods in Holstein. Almost alone among the allies of Napoleon, he repudiated the idea of feigning adherence to the system while the real intention was to allow intercourse with Great Britain. His was not the principle suaviter in re, fortiter in modo, to quote a modern historian. It is true that the British, on their side, made a counter-move which was to have far-reaching consequences in the opposite direction, in that, simultaneously with the attack on Copenhagen, they occupied the Danish possession of Heligoland; but the effects of this did not immediately show themselves.11
RESULTS IN 1807
It remains to be seen, accordingly, to what extent Napoleon, at the close of the year 1807, had attained his immediate object, the self-blockade of the Continent, not only in form but also in substance. As regards France herself, this had clearly been the case to a very high degree, as we can see from a very good barometer, namely, that a shortage of raw cotton was already threatening. As early as September the cotton manufacturers were speaking of having to close their mills if a breach with the Portuguese and Americans occurred; and the price of Brazilian cotton (Pernambuco) in Paris rose from 6.80-7.30 francs to 8.10-15 francs per kg., while the price in London of 1s. 10d.-1s. 11d. per pound corresponded to only 5-5½ francs. As the British prohibition on the exports of raw cotton was not issued until the year 1808, and the imports of raw cotton into Great Britain were uncommonly large in the year 1807 (74,900,000 lb. as against only 58,200,000 lb. in the previous year), it is apparent from the very first how the difficulties of importation into the Continent expressed the strength of the self-blockade and not of the British measures of reprisal.
The position in Central Europe can usually be best followed from the great meeting-point for continental trade, the Leipzig Fair, which was sensitive to every change; and the position there is illustrated by the unusually impartial and detailed Saxon 'reports of the fair' (Messrelationes), in the form in which they have been worked up by the German historians Hasse and, more particularly, König. In these reports there appears throughout a lively movement of both British industrial products and colonial goods during the earlier part of 1807, including among other things the parcels confiscated in Hamburg and redeemed. These commanded a ready sale, despite the fact that the manufactured goods included in them were largely out of date. But the autumn measures in the Hanse Towns and Holstein led to a great scarcity of British textiles and an enormous rise in price (over 150 per cent.) on British cotton yarn, so that Napoleon could here be assured of an immediate result from his own measures and those of his new Russian ally. For the Hanse Towns this result extended also to colonial goods, so that the price of coffee, for instance, stood 20 per cent. higher in the old coffee-importing town of Hamburg than in Leipzig; and contrary to anything that had ever before been beheld, it was conveyed to the former place from the latter. Accordingly, the decline of shipping in Bremen stands out very clearly even in the statistics of 1807. A similar transformation occurred in Holstein, but with regard to the rest of Central Europe the effects did not yet extend to the colonial goods. This was chiefly due to the fact that the trade through Holland, in spite of everything, was still comparatively undisturbed, especially with American vessels, as the Embargo Act was not passed until the latter part of December 1807. Moreover, Rotterdam was alleged to have daily communication with England, just as in time of peace. British yarn was also shipped to Leipzig and Holland, and in September, 1807, the Belgian manufacturers complained that The Hague was so crowded with British cottons that a man might fancy himself in Manchester. With regard to colonial goods, it was also stated that the great Amsterdam firm of Hope & Co. had huge stores of sugar and coffee. This firm, which during the whole of this period played a leading part in almost all great international transactions of a commercial and financial nature, and also intervened in matters of public policy, was, incidentally, a living monument of the close commercial relations between the enemies, as it had a French head, Labouchère, who stood in close connexion with the world-famous British commercial house of Baring Brothers. Nor does there appear to have been any great scarcity of raw cotton, especially owing to imports through the Mediterranean ports of Lisbon, Leghorn, and Trieste. The first of these, however, disappeared through the conquest of Portugal in the autumn of 1807, and the second through the occupation of Etruria at the close of the year. But Holland remained as an important gap, which became the more serious from Napoleon's point of view after he had, in the second Milan decree of December 1807, passed to the view that there were no such things as neutrals; and consequently he could no longer tolerate the American shipping in Dutch ports. At the turn of the year 1807-8, it is true, British industrial products did not seem to enter as easily as before; but it was soon to prove that Napoleon had underestimated the strength of two forces which were constantly to rise up against his plans, viz., smuggling and the opening-up of new commercial routes.
Finally, if we regard the process of development from a British standpoint, we have the evidence, already cited,12 of the witnesses before a parliamentary committee that Napoleon's many counter-measures in the late summer and autumn caused a sudden stagnation in trade with the Continent. The marine insurance premiums, which at the time of the issue of the Berlin decree had risen from 6 to 10 per cent., but had then declined to 4 per cent., were stated to have reached such amounts as 15, 20, and 30 per cent. before the middle of October 1807. In sixty-five cases during September and October vessels that had taken in cargo for the Continent had requested permission to discharge them again. If we look at the statistical material available to throw light on the matter, we can establish in a comparatively exact way the effects of the Continental blockade during 1807. It is especially noteworthy that the great exports of cotton goods show almost absolutely unaltered figures (£9,708,000, as against £9,754,000 in 1806 and an average of only £7,340,000 in the years 1801-5, all according to the 'official values', which are based upon unchanged unit prices from year to year); nor do the far less important exports of yarn show any great decline (£602,000 in 1807, as against £736,000 in 1806 and an average of £666,000 in the years 1801-5). The probably less reliable figures for total exports show a somewhat more marked but nevertheless insignificant decline, namely, in relation to the year 1806 (8.1 per cent. according to the 'official values' and only 6.4 per cent. according to 'real values', which are also affected by changes in price). On the other hand, we can see from these statistics that the sales on the Continent were much more limited, namely, by nearly 33 per cent., according to 'real values' in 'the north of Europe, including France'; and probably the exports of manufactured goods to those markets declined more than exports as a whole. This result agrees very well with what might have been expected under the restrictive measures of the last quarter of the year.13
Next we have to consider colonial goods, which were intended to 'conquer England by excess'.14 The trade statistics do not show any decrease of exports at all, but rather a slight increase; and not even the sales to the Continent are notably diminished. But one can see from the tables in Tooke's History of Prices that the price of coffee and sugar declined slightly in the autumn of 1807. Possibly one may point to a slightly greater dislocation in one single department, namely, in the imports of Baltic goods; and the fact is that this applies to the Baltic trade in general, evidently in consequence of the breach with Russia and Prussia, rather than through the Continental System proper. Hemp and more especially tallow, both from Russia, show a rise in prices in the course of the year, and timber from Memel exhibits violent fluctuations from the middle of 1806. But all this is a trifle; and during 1807 there are, broadly speaking, no traces of any substantial result of the policy as regards Great Britain's foreign trade as a whole. In fact, there are considerably less than one would have expected from the diminished importation of British industrial products to the German market.
TRANSMARINE MARKETS (1808)
It was important for Napoleon, accordingly, to attain during 1808 a more effective application of the measures of the preceding year. Great Britain also now encountered various new difficulties; but the peculiar thing about them is that they had no direct connexion with Napoleon's proceedings, but at the most with the British Orders in Council—a fact which the British opposition, as in duty bound, did not fail to point out. The truth is that they were chiefly caused by the American Embargo Act, partly through the diminished importation of American goods, and partly through the great diminution of tonnage, as explained in part II, chapter IV. Accordingly, the result for Great Britain was a diminished importation of, and raised prices on, raw materials, which in reality did not at all correspond to Napoleon's wishes that prices should be low in England and high on the Continent. The imports of raw cotton sank by 42 per cent., of American cotton to Liverpool by no less than 82 per cent., of wool by 80 per cent., of flax by 39 per cent., of hemp by 66 per cent., of tallow by 60 per cent., &c. Naturally enough, under these circumstances, the price of the most important kinds of raw cotton, for instance, increased in the course of the spring and summer 100 per cent. or more. Especially striking, too, was the rise in prices on goods from Scandinavia and from the Baltic countries in general: timber, hemp, flax, tallow, bristles, tar, but above all linseed, the price of which, at least according to Lord Grenville's statement in the House of Lords, rose more than tenfold. The shortage of raw cotton reacted on the spinning industry, which did not fail to complain of its distress by a whole series of petitions to Parliament, wherein special emphasis was laid on the consequences of the breach with America. According to undisputed statements made by the opposition speakers in the beginning of the following year, for instance, the poor-law burdens in Manchester doubled in the course of 1808; only nine mills were running full time, thirty-one had been running half time, and forty-four had entirely suspended operations.15
Many of these complaints, however, referred to the first months of the year. The rise in prices, on the contrary, was partly due to speculation, which began in the latter part of the year and in many respects quite revolutionized the situation. The year 1808, as it went on, came to be dominated in fact by one of the great events in the history of the Continental System—the Spanish uprising. But the direct economic significance of this movement was not primarily what Napoleon once stated, namely, that it gave to England a 'considerable amount of sales on the Iberian peninsula'.16 What a limited part this matter played can be most easily perceived from the following export figures taken from the British trade statistics ('real values').
As appears from this table, the Pyrenean states after 1807 do not figure very largely in the total exports of Great Britain, despite the fact that the increase for Spain is very large in itself; and a good deal, even, of the amount which is included is the direct opposite of new sales, being really supplies for the maintenance of the British troops and the insurgents. Moreover, it is inseparable from the geographical position of the country that the Iberian peninsula could not be suited for what Great Britain chiefly needed on the Continent, namely, an entrance gate for its goods. The smuggling which now began across the Pyrenees into France cannot have weighed very heavily, as is shown by the figures in the tables themselves.17 The establishment of the new relations with Spain in 1808, like the flight of the Portuguese royal family to Brazil in the preceding year, was principally important in quite another way, namely, in that it placed Great Britain in very close connexion with the transmarine markets. The West Indian possessions of Spain, especially Cuba and Porto Rico, thus transferred the trade in colonial goods to England, while the mainland colonies in South America and Mexico created a large new market for British industrial products. It is easy to understand that in British eyes this new position seemed to open up the possibility of circumventing the whole of Napoleon's laboriously constructed rampart against British trade; and this was all the more welcome because at the same time the United States had shut herself off from the rest of the world. The very peculiar British export figures to America for these years show the following fluctuations ('real values'):
The whole of this striking transformation, which caused the exports to Central and South America to become a more than abundant compensation for the very great reduction in exports to the United States, was wont to be cited by the British government speakers as evidence that the Orders in Council had not injured the exports of the country, but had only caused a transition to direct trade with the former markets instead of sales to the North Americans as intermediaries. The mouthpieces of the opposition, however, maintained, and with more reason, that this new trade was really a new conquest brought about by the Spanish uprising and consequently no result of the destruction of trade with the United States by the Orders in Council.
BRITISH SPECULATION IN SOUTH AMERICA
The new outlet for sales which thus seemed to offer itself gave rise to a violent speculation with all the distinctive characteristics of a boom—general optimism, great sales, industrial activity, and rising prices in the articles of speculation. As early as 1806 Sir Home Popham, the second in command of a naval expedition, had made of his own accord an attack on the mouth of the Plata and had taken Buenos Aires, upon which he sent home eight wagon-loads of silver accompanied by a boastful circular addressed to the manufacturing towns of England together with a list of all the goods that could find a ready sale in his conquest; but as ill luck would have it, Buenos Aires had to be evacuated before the goods had yet arrived. Now that access to those markets was secured, merchants were attracted, by the memory of the hope aroused by Popham's circulars and the loads of silver, into incredibly bold ventures in the way of exports. McCulloch, the political economist, describes the frenzy, after a contemporary source, as follows:
We are informed by Mr. Mawe, an intelligent traveller resident at Rio Janeiro, at the period in question, that more Manchester goods were sent out in the course of a few weeks than had been consumed in the twenty years preceding; and the quantity of English goods of all sorts poured into the city was so very great, that warehouses could not be provided sufficient to contain them, and that the most valuable merchandise was actually exposed for whole weeks on the beach to the weather, and to every sort of depredation. But the folly and ignorance of those who had crowded into this speculation was still more strikingly evinced in the selection of the articles sent to South America.... Some speculators actually went so far as to send skates to Rio Janeiro.18
The final consequences of these speculations could not be advantageous, but for the time being the situation seemed flourishing. The total exports during 1808 exhibit approximately unaltered figures, but the exports of cotton goods rose by 29 per cent., irrespective of the change in price. But this did not hold good of Central and Northern Europe, where the British trade statistics indicate a very heavy decline for both British goods (from £5,090,000 to £2,160,000) and colonial goods (from £5,730,000 to £3,270,000). This, however, is largely counterbalanced by a corresponding rise in exports to the Mediterranean countries; and other information points to considerably larger exports to the north of Europe, as shall be shown shortly.19
If we examine the position on the mainland and especially in Germany somewhat more closely, we find the greatest change in 1808 to be a unique rise in the price of raw cotton and a shortage in the supplies, which were obtained mainly from the sale of captured cargoes. At the Michaelmas Fair in Leipzig the price of Brazilian cotton (Pernambuco) rose 223 per cent. above the normal; and, as before, this was especially felt in France, where the textile industry in Nantes was enabled by government loans to go over from cotton to wool. As Great Britain herself suffered from a shortage of raw cotton, this can only in part be ascribed to the Continental self-blockade. With regard to its efficaciousness, Napoleon was able to record an advance in one quarter, namely, in Switzerland, where the smuggling of British goods ceased after 1808; but Holland, which was far more important from this point of view, was still a tender spot. It is true that King Louis, as early as January, did something to bring about an effective barring of the coast; but the smuggling went on so openly that, according to the evidence of Louis himself, the shops of Leyden displayed without disguise quantities of British manufactures. By decree of September 16, 1808, Napoleon, who a little earlier had asserted that there were people who had pocketed 20,000,000 francs through smuggling in Holland, had recourse in violent indignation to the measure of closing the frontier of France to all colonial goods from Holland. This seems to have had a certain effect, as one can see from the fact that the imports of British yarn and British manufactures, which last had already been insignificant, to Leipzig through Holland ceased entirely at this time. A month later (October 23, 1808) there was issued an extremely draconic Dutch decree as to the closing of the ports. This decree was so outré that it bears every mark of applying the principle suaviter in re, fortiter in modo: all exports were prohibited until further notice; no commercial vessels, domestic or foreign, might put in at any Dutch ports, under any pretext, on pain of being fired at; fishing vessels were to return to their port of departure, but were to be confiscated on the least sign of intercourse with the enemy, &c.20
NEW TRADE ROUTES VIA HELIGOLAND AND SWEDEN (1808)
The effect of this, however, was a new change in the channels followed by trade. To begin with, Heligoland now showed its immense importance as an emporium or base for the smuggling of British goods into north Germany. In 1808, according to Rist's dispatches, Great Britain expended £500,000 in building a port, fortifications and warehouses on the little island covering about 150 acres. A number (stated to be 200) of British merchants and representatives of commercial houses settled there and formed a special chamber of commerce; and this peculiar centre of trade was jestingly called 'Little London'. According to the statements of the British merchants themselves, during three and a half months (August-November 1808) nearly 120 vessels discharged their cargoes there, and the yearly imports were estimated—though, to judge by the commercial statistics, this estimate was almost certainly too high—at £8,000,000, or nearly a sixth of the total exports of Great Britain for 1808 (£50,000,000). It is not surprising, therefore, that great quantities of goods had to lie exposed to wind and weather, and that there was scarcely standing room on the island. The difficulty consisted, of course, in smuggling the goods into the mainland afterwards; but the Continental blockade had again been weakened by the fact that in the beginning of the year Napoleon had been obliged to evacuate Oldenburg out of regard to his Russian ally, who was related to the Duke of Oldenburg. It is difficult to determine from accessible sources what routes the goods afterwards followed. From Bremen a certain amount reached Leipzig for the Easter Fair, but after that nothing; and both the shipping of Hamburg and the trade of Bremen had, according to their own sources, almost ceased to exist. But there were many possibilities left, especially through Holstein, where the population and the officials alike did their best to neutralize the loyalty of the Danish government to the system. They succeeded admirably, and it is certain that there are no symptoms at all of decline in the traffic via Heligoland.
During 1808, moreover, Sweden had begun to serve as a storing place for British goods. The Swedish trade statistics had previously shown an excess of exports during the century, especially as regards Great Britain; but during 1808 there was a complete reversal, so much so that the imports from there amounted to 6,650,000 riksdaler, as against exports amounting to 2,610,000 riksdaler. It was colonial goods that went this way, for the most part through Gothenburg, the position of which as one of the foci of the commerce of the world had, to judge by its export statistics, been coming into view even in the previous year. Imports more than doubled in one year. What were for the circumstances of the time very considerable quantities of sugar and coffee (2,900,000 lb. and 1,300,000 lb., respectively) were exported from there in 1808; and when Admiral Saumarez was in the town, in May, he wrote to his son: 'Gothenburg is a place of great trade at this time; at least 1,200 sail of vessels of different nations are in the port.' From there the goods tried to find their way into Germany through the South Baltic ports.21
Thus Napoleon was still far from his goal, and the Spanish rising in particular was to carry him farther and farther away. As early as October 1, 1808, his brother Louis—who was always pessimistic, it is true—wrote to the eldest of the brothers, Joseph Bonaparte, the newly created King of Spain: 'Far from settling down, matters get more and more tangled, and—perhaps I speak too much as a Dutchman, but I find something revolutionary in the way in which war is made on commerce—it seems to me that they never will attain the object that they have set before them'. At the same time as Spain and Portugal, he thinks, South America and Mexico have thrown themselves open to the English; 'and for a chimerical system the whole Continent is losing its trade and shipping, while that of England grows prodigiously'.22
DIMINISHED VIGILANCE DURING THE AUSTRIAN CAMPAIGN (1809)
This line of development was especially marked in 1809 when Napoleon's campaign against Austria and the Spanish uprising also made heavy demands on him and his troops, while trade under a neutral, that is to say, American flag, again became possible through the Non-intercourse Act, bringing it about that the importation of raw materials into Great Britain again became normal and the possibilities of smuggling into the Continent grew greatly. Great Britain could also now rejoice in the highest prosperity in the new trade she acquired through the Spanish uprising, as is most plainly shown by the tables given above.23 The British exports of cotton goods show a unique rise: manufactured goods from £12,500,000 to £18,400,000 and yarn from £470,000 to £1,020,000 ('official values', that is to say, irrespective of changes in prices). The former thus underwent an increase of nearly 50 per cent., and the latter of more than 100 per cent., as compared with the in themselves high figures of 1808.
This was not solely an effect of the possession of new markets. On the contrary, all our sources are agreed in attributing it to the diminished watchfulness on the North Sea, where the self-blockade was alleged—with some exaggeration, it is true—to have in reality ceased; and it was considered that trade was being carried on almost as in time of peace. This is made visible, indeed, by a rise in the figures for British exports to North Europe from £2,160,000 to £5,700,000 for British goods, and from £3,270,000 to no less than £8,870,000 for colonial goods. With a zeal that infallibly reminds us of the saying, 'When the cat's away the mice will play,' all Napoleon's tools on the North Sea coast took advantage of his absence in Austria to relax the bonds and to let in vessels, especially those under the American flag. As early as the middle of March 1809, King Louis of Holland declared to the Emperor that his country was 'physically unable to endure the closing of the ports' in combination with the closing of the Franco-Dutch frontier ordered by Napoleon in the previous September; and accordingly he made certain relaxations in the blockade by sea at the close of the month. When Napoleon, at the beginning of June, rescinded his September decree, his brother embraced the opportunity to rescind the order prohibiting American vessels to put in at Dutch ports. This caused Napoleon to put the barring of the frontier in force again in the middle of July; but not only the showers of abuse which Napoleon poured over his unhappy brother, but also his brother's correspondence with the Dutch ministers, show distinctly enough how smuggling was going on in Holland itself throughout the entire year.
Farther to the north smuggling through Oldenburg continued into the following year. A sudden fall in the price of cotton yarn in northern Germany was caused in February 1809, by the large stocks that the Manchester manufacturers had laid up in Heligoland; and as an example of the scope of the traffic which was carried on from that island, it may be mentioned, on the authority of the statements of the Heligoland merchants, that sixty-six vessels and seventy smaller boats were able, during nineteen days in June 1809, to land on the coast goods to the value of several hundred thousand pounds. According to French reports, the guards along the Elbe and the Weser, too, were now reduced to a few untrustworthy Dutch soldiers and gendarmes under the command of a drunken officer. If we cross to Schleswig-Holstein territory, we find there the same phenomenon, namely, a huge expansion of the colonial trade. What is called the second Tönning period, which is marked by these American visits, began in June 1809, and lasted to the end of the year. The traffic all along the line was formally facilitated by the British government by means of the new Order in Council of April 26, which restricted the declaration of blockade in the north to the River Ems, at least in so far as the German North Sea coast was not reckoned as a dependency of France, which, of course, is just what it actually was. In reality, however, this meant comparatively little, inasmuch as the old regulations were in practice applied by the issue of the British government licences, which shipping was scarcely able to do without.
At the same time English trade was being transferred to Gothenburg and the Baltic ports. In Gothenburg the British set up, in 1809, special warehouses and stores on Fotö immediately opposite the entrance to the harbour. The re-exports of raw sugar almost trebled, while the exports of coffee, like the shipping of the port in general, more than doubled. The Prussian and the Pomeranian ports now became regular gates of entry for the importation of goods; and the Baltic coast came to be the centre of trade to such an extent that the fierante, the Jewish traders of Eastern Europe, went to Königsberg and Riga, instead of Leipzig, in order to cover their requirements of British manufactures. Finally, great quantities of British yarn came to Trieste and Fiume before the Austro-French war, and even after its close, from the repurchased parcels.24
REES-BREMEN BARRIER (SCHÖNBRUNN DECREE OF JULY 18, 1809)
Obviously this development did not escape the notice of Napoleon. On the contrary, he was kept informed by a veritable army of spies as to what was happening both within and without his empire, and it is clear that he did not wish to let it go on without taking steps to stop it. He did not even delay his counter-measures until the close of the Austrian campaign, but limited them in the main to the attempt to isolate Holland, which in his eyes was the most serious breach of all in the system. At the same time as he renewed, as has been mentioned above, the closing of the frontier against France,25 he suddenly ordered, by the decree of Schönbrunn on July 18, 1809, a corresponding closing of the frontier on the side of Germany and caused this to become operative at once without even informing the 'protected' princes in the Confederation of the Rhine who were affected by the blockade, viz., his brother Jerome, King of Westphalia, and the Grand Duke of Berg. The smuggled goods were considered by the French director-general of customs, Collin de Sussy, to go direct up the Rhine and the Ems, and then to go by land through the Grand Duchy of Berg, practically corresponding to the Ruhr district, to the whole Confederation of the Rhine. At the close of July, French customs officers were moved into the country, forming a chain from Bremen through Osnabrück down to the Rhine at Rees close to the Dutch frontier, which was thereby cut off from connexions eastward. This cordon was made threefold, consisting of troops, gendarmes and customs officers. According to one statement, one of the lines went along the Dutch frontier from Varel, near the beach of Jade, to Emmerich on the Rhine immediately north of Rees. The violence with which the whole thing was carried out, however, caused great confusion. The local authorities refused to assist the customs officers and protested against their movements; the gendarmes were at times positively hostile to them; and to crown all, the customs officials were sometimes corrupt, so that the blockade of the non-French part of the Continent still continued to be practically a failure on well-nigh all points. The unbroken severity of the action that Napoleon followed in Holland, especially by the incorporation of the region south of the Waal in March 1810, seems not to have borne any great fruit either. At any rate, as late as May of the same year King Louis wrote sourly to Marshal Oudinot, Duke of Reggio: 'I have received the letter in which you inform me that smuggling is going on to a great extent on the coast of my kingdom. Like you, I believe that it goes on wherever there are coasts, in Germany as in Holland, and even in France.' The complete annexation of Holland in July created a new situation here, but at the same time it made the barrier between Holland and Germany somewhat purposeless.
During the first half of the year 1810, therefore, the situation was not greatly changed. Frankfurt, in particular, could rejoice in an entirely undiminished trade in colonial goods, which came in through the ports of the North Sea and the Baltic, and were conveyed thence to northern Italy, southern France, and even to Holland and eastern France. The then minister of Prussia in this capital of the Confederation of the Rhine actually declared at the beginning of the year that the town had never before played such a part in the trade of Europe nor been so full of colonial goods; and the trade seems further to have increased in the course of the summer. As regards Leipzig, to be sure, it was stated before and during the Easter Fair in 1810 that the imports through the North Sea ports, especially of English yarn, had practically ceased. But to make up for this, the transfer of the trade to the Baltic ports was now definitive, helped with the best of good-will by Prussia, and also by Sweden and Mecklenburg, to circumvent the Continental System in every conceivable way, and, for that matter, with useful help from the corrupt French consuls in the ports. Königsberg above all, but to a great extent the other towns on the south coast of the Baltic—Rostock, Stralsund, Stettin, Memel, and even Riga—now took the place of the Hanse Towns and the Dutch ports; and there began a unique importation of American cotton, which attained its highest level during the summer. The whole of the Confederation of the Rhine, Austria, Switzerland, and even France, were provided from there at a time when spinning mills were springing up on the Continent like mushrooms from the ground. At the Michaelmas Fair in 1810 the value of the supplies of colonial goods in Leipzig was estimated at 65,500,000 francs; and although only a sixth part remained in the town, all cellars, vaults, and storehouses were full to overflowing, chiefly with cotton, but also with coffee, sugar, and indigo.26
Naturally enough, people in England, especially in government circles, took a very optimistic view of the situation. The new Order in Council of April 1809, however modest was its modification of the paper blockade, is an evidence of this fact. Reasons are found for it in 'different events and changes which have occurred in the relations between Great Britain and the territories of other powers', which meant, of course, the Iberian peninsula. In February 1809, Lord Liverpool, formerly Lord Hawkesbury, who was home secretary at the time, spoke in the House of Lords about 'the flourishing state of commerce'; and as late as May 1810, the British budget debate was marked entirely by a feeling of booming trade and prosperity, so that even on the side of the opposition Huskisson considered that the country was in a happy state of development. Especially seductive was the roseate description given by Perceval as chancellor of the exchequer; and Rose, the vice-president of the Board of Trade, said that he was unable, to be sure, to explain how it could be so, 'but somehow it appeared, that from the industry and ingenuity of our merchants every prohibitory measure of Bonaparte's had utterly failed of its object. In fact, our trade, instead of being limited by it, had rather been extended, in spite of the hostile proceedings of the enemy.' The same idea was expressed with a touch of in a contemporary epigram placed on the title-page of a pamphlet by Sir Francis d'Ivernois, a Swiss naturalized in England, entitled Effets du blocus continental:
[6.] Correspondance, nos. 11,355; 11,356; 11,363; 11,378; 11,383; Proclamation of Dec. 2, 1806, printed in König, op. cit., Anlage 2.
[7.] For this and what follows concerning the Hanse Towns, cf. Wohlwill, Neuere Geschichte, &c., pp. 339 et seq.; Servières, L'Allemagne francaise, &c., pp. 98 et seq.; Vogel, Die Hansestädte, &c., loc. cit., pp. 18 et seq.; Schäfer, Bremen und die Kontinentalsperre, loc. cit., pp. 416 et seq. Also König, op. cit., pp. 179 et seq., 355 et seq.; Stephen in the House of Commons, Mar. 6, 1809 (Hansard, vol. XIII, app. pp. xxxiii et seq.); Order in Council of Feb. 18, 1807 (Hansard, vol. x, pp. 129 et seq.).
[8.] Bourrienne, Mémoires sur Napoléon, &c. (Paris, 1829), vol. VII, pp. 291 et seq.
[9.] Lettres inédites de Napoléon Ier (Lecestre ed.), nos. 523 (Sept. 12, 1809), 823 (June 13, 1811), 826 (June 22, 1811); Servières, op. cit., p. 124; Wohlwill, Neuere Geschichte, &c., p. 300.
[10.] See ante, p. 123.
[11.] For the decrees of Aug. 6 and Nov. 13, 1807, cf. König, op. cit., Anlage 2. For the first Milan decree, cf. Bulletin des lois, &c., 4th ser., bull. 172, no. 2 912. For the Tuileries decree, cf. Martens, Nouveau recueil, &c., vol. I, p. 457; Duboscq, op. cit., no. 95 and p. 14; Holm, Danmark-Norges Historie, &c., vol. VII, pt. I, pp. 123-4, 180, 197; Linvald, Bidrag til Oplysning, &c., vol. VI, pp. 448 et seq. The following may also be consulted: France: Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, pp. 409-10, 422 note 4; Ballot, Les prêts, &c., vol. II, pp. 48-9, 54-5; Mollien, op. cit., vol. II, p. 120. Central Europe: König, op. cit., sec. III; Hasse, Geschichte der Leipziger Messen (Leipzig, 1885), pp. 409 et seq.; Tarle, Kontinental'naja blokada, vol. I, p. 397; Schäfer, op. cit., pp. 434 et seq., tables I-III. Great Britain: Hansard, vol. XIII, app., pp. xxxvii et seq., xliii et seq. (House of Commons, Mar. 6, 1809); trade statistics in Hansard, vols. XIV, XX, XXII, app.; Tooke, A History of Prices, &c., vol. II (tables of imports and prices), vol. I, pp. 273 et seq.; Baines, History of the Cotton Manufacture in Great Britain (1835), p. 350 (table); Mahan, Influence of Sea Power, &c., vol. II, pp. 304 et seq.
[12.] See ante, p. 164.
[13.] It should be remarked once for all that the British commercial statistics are not only highly uncertain in themselves, but also show inexplicable variations in different sources. But the relative changes, as a rule, exhibit a considerably better agreement than the absolute numbers, and may therefore be assumed to deserve greater confidence than the latter. For the absolute figures, see post, p. 245.
[14.] See ante, p. 57.
[15.] Petitions and speeches in the House of Commons, Feb. 22 and 23, Mar. 10 and 18, 1808 (Hansard, vol. X, pp. 692-3, 708-9, 1056 et seq., 1182-83); Speeches of Whitbread and Alexander Baring in the House of Commons, Mar. 6, 1809 (Hansard, vol. XII, pp. 1169, 1194); Worm-Müller, Norge gjennem nødsaarene 1807-1810 (Christiania, 1917-18), p. 123.
[16.] Note pour le ministre des relations extérieures, Oct. 7, 1810 (Correspondance, no. 17,014).
[17.] Darmstädter, Studien zur napoleonischen Wirtschaftspolitik, loc. cit. (1904), vol. II, pp. 596-7. The decline in the exports of France to Spain in 1808, which is there given as amounting to 32,400,000 francs (£1,300,000), cannot possibly have been compensated by British exports, if the table given above is reliable. Probably it largely corresponds to the imports of grain from the United States.
[18.] McCulloch, Principles of Political Economy (London, 1830), 2d. ed. p. 330; Smart, Economic Annals, &c., vol. I, pp. 122-3, 184. Cf. speech in the House of Commons, June 16, 1812 (Hansard, vol. XXIII, p. 503); Louis Simond, Journal of a Tour and Residence in Great Britain during the years 1810 and 1811, by a French Traveller (New York, 1815), vol. I, p. 242 (under date of Aug. 1, 1810).
[19.] See post, p. 179.
[20.] De Cérenville, op. cit., p. 309; Duboscq, op. cit., nos. 117, 118, 126, 146, 158, 159, 160, 167, 178, 189, 190; and pp. 47 et seq.;Correspondance, no. 13, 781. Dutch Ordinances: Martens, Nouveau recueil, &c., vol. I, pp. 458-9, 474-5.
[21.] Fisher, Studies in Napoleonic Statesmanship: Germany (Oxford, 1903), pp. 338 et seq.; Rubin, 1807—1814, &c., pp. 383-4; Clason, Sveriges Historia intill tjugonde seklet (Stockholm, 1910), vol. IX: A, pp. 26-7; Bergwall, Historisk underrättelse, &c., p. 48 (table); Memoirs and Correspondence of Admiral Lord de Saumarez (Ross ed., London, 1838), vol. II, p. 105; Ahnfelt, op. cit., vol. v, p. 225; Ramm, När Göteborg var frihamn (Gothenburg, 1900), p. 3.
[22.] Duboscq, op. cit., no. 182.
[23.] See ante, p. 174.
[24.] Lettres inédites, nos. 476, 477, 527, 555; Duboscq, op. cit., nos. 209, 220, 277; Schmidt, Le Grand-duché de Berg, pp. 348 et seq.; Wellesley, Memoirs and Correspondence, vol. III, p. 196; Prytz, Kronologiska anteckningar rörande Göteborg (Gothenburg, 1898), p. 95; Bergwall, op. cit., table 3; Channing, op. cit., vol. XII, p. 253; Tarle, Kontinental'naja blokada, vol. I, p. 486.
[25.] See ante, p. 181.
[26.] Correspondance, nos. 16,476, 16,713; Duboscq, op. cit., no. 290; Schmidt, op. cit., pp. 350-3; König, op. cit., pp. 225 et seq., 230-1, 238 et seq., 241-2; Darmstädter, Das Grossherzogtum Frankfurt (Frankfurt-am-Main, 1901), pp. 311-12.
[27.] Hansard, vol. XII, pp. 801; vol. XVI, p. 1043 et seq; d'Ivernois, Effets du blocus continental sur le commerce, les finances et la prospérité des Isles Britanniques (London, 1809: dated July 24); Servières, op. cit., p. 131 note.