Front Page Titles (by Subject) CHAPTER VI.: SELF-DESTRUCTION OF THE SYSTEM - The Continental System: An Economic Interpretation
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CHAPTER VI.: SELF-DESTRUCTION OF THE SYSTEM - 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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SELF-DESTRUCTION OF THE SYSTEM
NAPOLEON completely misinterpreted the significance of British difficulties; and how much the dislocation of British colonial trade was an effect of the general insecurity of the world, that is to say, not solely of Napoleon's measures, is shown by the fact that the French crisis, too, had its origin in huge speculations with regard to colonial goods.55 It is also doubtful to what extent Napoloen's torrent of words concerning the impending ruin of England fully convinced even himself. At any rate, a remarkable document dating from as far back as the beginning of 1812 shows how far he had come to doubt the expediency of maintaining the Continental System in its original form and purpose. The document referred to, which is printed from an official copy in the great edition of Napoleon I's correspondence which came out under Napoleon III, is there called Note sur le blocus continental. It was dictated in the Council of Merchants and Manufacturers on January 13, and, like many of Napoleon's other dictated utterances, it has the character of a kind of imperial monologue. In the case before us, however, it gives us the unusual impression of half-formed thoughts in the mind of a man who does not see his way clearly before him; and if it did not end in charging the home secretary to work out plans in accordance with the lines laid down, one might easily conceive the whole as a mere experiment in thought. The pre-history and consequences of the plan have never been examined, so far as I know, and consequently much of it is obscure; but, notwithstanding this fact, it is of uncommonly great interest as an indication of the general trend of Napoleon's thoughts.
In his introductory words Napoleon lays it down that there are two alternatives: 'either to remain where we are, or to march with great steps toward a different order of things'. As an illustration of the established order he makes a comparison between the prices of sugar in the different countries under his rule in relation to the customs rates, and on the basis of this comparison he concludes that the laws are enforced loyally in France, the Kingdom of Italy, and Naples, but less diligently in the states of the Confederation of the Rhine; after this a calculation is made of the requirements in those three countries, on the supposition that the consumption has been reduced to a third. So far as one can understand, it is on the basis of this that the second alternative is to be founded, namely, an altogether unimpeded granting of licences for the whole requirements of all transmarine goods, on payment of heavy duties, and also on condition of the export of French goods. The requirements of sugar imports, estimated at 450,000 quintaux, will thus bring into the coffers of the state no less than 70,000,000 francs; and this importation will be allowed against an export of money to the amount of 10,000,000 francs and of goods to the value of 30,000,000 francs. The same system is afterwards to be applied to coffee, hides, indigo, tea, raw cotton, and dyewoods. 'This will produce,' he says, 'a great activity in industry, encouragement for navigation, the navy and the brokerage business, a customs income of 200,000,000 francs a year, and a germ of prosperity and life in all our ports.'
So far there was nothing more than a consistent followingout of the established licensing system, even though the last expression cited hints how heavily the policy had fallen on French economic life. But the reasons alleged and the immediate execution show how far Napoleon had travelled from the original plan of the Continental System. It is true that he does not make the slightest admission of this. 'For France,' he says, 'the result will be a dream '—a dream which could not have been attained without the Continental System. 'His Majesty does not regard this as a change in the system, but as a consequence of it.' He maintains, in fact—in the most palpable conflict with his own decrees, though without the slightest sign of embarrassment—that he has never said that France should not receive sugar, coffee, and indigo, but alleges that he has been content with customs duties thereon. What he now pretends to have said is merely that the goods were not to be received except in exchange for French goods on French vessels and dependent upon the licences. Of all this, needless to say, the Berlin and Milan decrees gave not the slightest hint. 'Accordingly, it is the thus improved system that has achieved this result, which had not been counted upon for several years.'
However, the question arises how such a general granting of licences, with the object of bringing in money to the treasury and forcing up exports, would affect England, the crushing of whom, of course, was the primary object of the original policy. 'This will not benefit England with regard to industry, brokery, or freights;it will profit England solely as a sale for her [colonial] goods, and a part of those goods are really Dutch and French [as originating in their colonies]. Without doubt this is very advantageous for England, but it will cause an upheaval there; and is the profit less or greater for France?' 'That profit,' continues Napoleon, 'is for France like three to one, while the profit of the Treaty of Versailles (the Eden Treaty) was more like one to seven,' and therefore we have now to deal with 'a lasting system that may well be eternal'.
For the present, however, in the opinion of the Emperor, it is unnecessary to discuss whether the system can be introduced, for it should at all events be attempted; if it fails, the whole thing may well remain in the minutes of the Council. The execution is to take the form of a normalization of the licensing system, in that two kinds of licences are to be granted, the one unconditional for the import of foodstuffs, the other for the import of colonial goods on condition of the export of wine and brandy from Nantes and Bordeaux and of textiles from the north of France. For the non-French territories of Napoleon there are to be arranged fourteen'series' of importing places with corresponding export obligations, which will partly include the products of these countries themselves, but should take place through French licences. Of the duties, an amount between one-third and two-thirds shall fall to the princes concerned and the remainder shall fall to the French treasury, provided they follow the routes indicated. Danzig may possibly be allowed to export not only building timber but also corn to England, on condition of sending twice as much to France, and on payment of a special export duty, which should be considered in detail.56
We thus see on what courses Napoleon had now started out. We are here concerned with a balancing of the purely commercial advantages of France against those of Great Britain, that is to say, the points of view of the kind that are usually put forward, for instance, in negotiating a commercial treaty; and in full analogy with this, the system is thought of as a permanent measure, not as a war measure, designed to destroy England. The concession, deliberately shoved aside by Napoleon and treated by him as a trifle in form, that the new order of things would be advantageous for England in respect of the trade in colonial goods, stands in the strongest possible contrast to the proud announcement of 180757 that England sees her vessels laden with superfluous wealth, wandering around the seas and seeking in vain a port to open and receive them. Now Napoleon himself considers opening all his ports for the purpose, if only he can get these vessels to take French goods in exchange. This means that the principle of the Continental System has been abandoned. To use an expression of Professor Hjärne, in his book Revolutionen och Napoleon, in connexion with other sides of the policy of the empire, one may call this the 'self-destruction of the system'.
During the period of barely four months that remained before Napoleon's departure for the Russian campaign we find no traces in his correspondence of any formal measures on the lines of the January memorandum. Even his superhuman powers were more and more completely absorbed by his military preparations; and in the sphere of economics the threatening shortage of corn formed a peril which occupied his thoughts to the exclusion of all plans with more remote objects in view. From what is so far known, therefore, it does not appear that the new order of things was ever formally accepted, even though the actual policy, so far as one can judge, came nearer and nearer thereto. Besides, already during 1812 the economic situation slowly improved in Great Britain, especially after the South American trade had got into a healthy state as early as February, although, it is true, there were still disturbances in the textile districts. The Continental System was deprived of a main pillar quite early in 1812 (March) through the fact that Davout, whom Sorel calls the 'archi-douanier' of the empire, left for the front, which meant the removal of the inflexible determination to prevent smuggling into the country via the North Sea coast. After the retreat from Moscow and the advance of the Russian troops along the Baltic coast in the beginning of 1813, it became manifestly impossible to maintain the barrier. Thus the prefect of the Weser department reports that 'smuggling was raising its head all along the line'; the warehouses were filled with contraband, and smuggling vessels went openly across the seas to the enemy. Rist gives a vigorous description of the rising against the French customs officials in Hamburg at the close of February 1813, when a whole army of trouserless smugglers hurled their hereditary enemies into the dried-up canals and good-humouredly stormed their premises. 'Thus,' he goes on, 'there disappeared within a few hours all those barriers, those dens of imperial avarice, and the forbidden goods streamed unimpeded along the forbidden ways.' In the same way smuggling broke out openly in Switzerland, after having been kept down as much as possible during the preceding period.
This, however, did not mean that Napoleon had abandoned the Continental System. In Hamburg Davout resumed his power and exacted a frightful vengeance; and as late as May and June 1813, the Emperor caused quantities of colonial goods to be confiscated in the Grand Duchy of Berg, Hamburg, &c., even such as had paid the proper dues or had been sold by the French customs officials, and had them conveyed to the usual places for the collection of such goods. On the other hand, this does not settle the question whether, and to what extent, the object pursued was the great aim of the Continental System, or whether Napoleon, after the retreat from Moscow, still believed in the possibility of success in his struggle against the economic fabric of England. At times this last was undoubtedly the case, as is stated by so credible an observer as Mollien, who lays particular stress on the hopes of an impending ruin for the credit of England with which the unfavourable rates of exchange inspired the Emperor at that time. Still, this question must be separated from that of gaining the end in view through the particular means called the Continental System; and on this subject, which concerns us here, it must be said that fiscal considerations had now become so pressing that it was necessary to brush aside the idea of carrying out the war against the trade of Great Britain. Napoleon's utterances at this period become more and more frankly mercenary; and we may regard as the epitaph of the system a new memorandum by the Emperor immediately after his return from Moscow (December 22, 1812), a significant counterpart to the long memorandum of January in the same year that we have summarized at length above. In that document the Emperor charges his minister of finance to inform the ministry of commerce that he needs 150,000,000 francs in ordinary and extraordinary customs revenues during 1813, giving the following reasons:
In order to arrive at this result, you must consider what remains to be received for licences already granted; and for those additional ones which must be granted to obtain this result, which is necessary for the first of all considerations, namely, that of having what is indispensable for the present service of the state. Undoubtedly it is necessary to harm our foes, but above all we must live.58
This necessity to live, that is to say, fiscalism, in combination with the hopelessness of a consistent application of the self-blockade, was what had led to the self-destruction of the Continental System; and we have good reasons to doubt the possibility of its continuance in spirit and in truth, even if the Russian campaign and the wars of liberation had not intervened. As it is, the gigantic experiment had been followed to such a point that the end seemed to be in sight, though it was not obtained. It is therefore inevitable that opinions as to its feasibility must remain divided. Nevertheless, a good deal more light falls on this question if one investigates the effects of the Continental System on the economic life of the different countries. This is to be the subject and the object of part IV.
EFFECTS OF THE CONTINENTAL SYSTEM ON THE ECONOMIC LIFE OF GREAT GRITAIN AND THE MAINLAND
[55.] Darmstädter, Studien zur napoleonischen Wirtschaftspolitik, loc. cit., vol. II, pp. 579-80.
[56.] Correspondance, no. 18,431. There is a kind of germ of all this in the Memorandum of July 25, 1810, which forms the basis of the licence and Trianon decrees, extracts from which are given in Schmidt, op. cit., p. 358.
[57.] See ante, p. 74.
[58.] Correspondance, no. 19,391; Lettres inédites, nos. 1,002, 1,013, 1,018, 1,082; Mollien, op. cit., vol. III, p. 237; Rist, op. cit., vol. II, pp. 142-3, 159-60; Smart, op. cit., vol. I, pp. 335 et seq.; de Cérenville, op. cit., pp. 113, 310; Tarle, Deutsch-französische Wirtschaftsbeziehungen, pp. 686-7; Schmidt, op. cit., pp. 408 et seq.