Napoleon_ A Biography ( PDFDrive )

seemed absurd that England was crammed with surplus products while
France languished through shortage of the selfsame products, especially
raw materials and colonial produce, and could not work out an efficient
method of import substitution. Whereas corn, fruit, wool, wood and wine
had been sold to England before r 8o6, the peasants could not now export
the surplus; this hit them particularly badly after the bumper harvest of
r 8o8.

With industrialists, agriculturalists, shipowners, peasants and consum­
ers all suffering from the blockade, it was not surprising that human
nature asserted itself. Speculation in coffee, sugar and cotton led to high
prices, inflated profits, stock exchange gambling mania and hence
generalized corruption and cynicism. The blockade was evaded even by
Napoleon's most senior lieutenants. Junior aides took bribes and traded
on the black market, while the Bonapartist grandees indulged in
corruption at a flagrant level. Massena sold unofficial licences to trade
with England to Italian merchants, thus swelling his already vast fortune.
Bourrienne, French Minister at Hamburg in r 8o6-o7, was ordered to
find so,ooo greatcoats and cloaks for the Grande Armee for the winter
campaign against Russia. He secretly purchased cloth and leather from
England, claiming that the Army would have died of cold if the
Continental System had been observed. In fact the inflow of British
manufactures continued at such a rate that in the r 8 r z campaign soldiers
in the Grand Army wore boots made in Northampton and greatcoats
made from Lancashire and Yorkshire cloth.

But undoubtedly the great growth industry during the heyday of the
Continental System was contraband, which was made easy by a
combination of local demand, corrupt offici;1ls, lax surveillance and
support from the British. Under Napoleon there were really only three
ways to make a vast fortune if you were not a marshal: by supplying the
Army, by speculation in national property, and by smuggling. With
opportunities in the first two areas rapidly drying up, contraband
beckoned as the future road to El Dorado.

It is hard to overestimate the rich pickings that could be made from
smuggling. The Rothschilds, now coming to prominence after the
pioneering labours of the dynasty's founder Meyer Amschel, made vast
sums by financing illegal trading and made even more after r 8 r o by
manipulating the British and French licensing systems simultaneously.
One lace merchant, a certain M . Gaudoit of Caen, imported illicit British
goods worth 750,ooo francs between r 8o r-o8, using the roundabout
route London-Amsterdam-Frankfurt-Paris-Bordeaux. On the Rhine it
was reckoned that a smuggler could earn r 2-r4 francs a night, when the

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daily wage for an agricultural labourer was I-I:i francs; in the Pyrenees
the respective rates were ten francs and three francs. In Hamburg it was
estimated that 6-I o,ooo people a day smuggled coffee, sugar and other
comestibles, of which an absolute maximum of 5% was confiscated.
Napoleon hit back with occasional exemplary punishments. In the
Rothschilds' native city of Frankfurt, a sanctions-busting centre, French
troops publicly burned £ I ,20o,ooo worth of contraband goods in
November I 8 I o. But such scenes were rare: even when French viceroys
and governors found out about contraband they could usually be bribed
to remain silent or simply go through the motions.

In the light of all this, the surprise is that the Continental Blockade
worried the British as much as it did. The impact of the System on the
British economy has been much disputed, and some indices seem to show
an almost nil effect. Britain's merchant fleet rose from I 3,446 ships in
I 8o2 to I 7,346; the rise in unemployment can be explained as a function
of population growth in the U.K. from I 5,846,ooo in I 8o i to I 8,o44,000
in I 8 r r ; the modest profits of industry can be interpreted as systematic
tax evasion. But there are other figures that tell a different story,
particularly in the early period of the blockade until I 8o8. Exports, which
reached a peak in I 809 (£50.3 million) were only £9 million up on the
peacetime figure for I 8o2. Continental trade, worth £22 . 5 million in I 8o2
fell to half that in I 8o8. The value of Britain's re-export trade in colonial
produce declined from £ I 4,4 I 9,ooo in I 8o2 to £7,862,000 in I 8o8 and
was still only at £8,278,ooo in I 8 I I ; sugar, which sold for 73 shillings per
hundredweight in I 798 fell to 32 shillings by I 807 and did not rise above
50 shillings until I 8 I 3 . The stagnation of colonial produce on the market
was matched by the crisis of British manufacturers; industrialists in
Manchester could not liquidate their stocks of cotton; the price of flax
rose; there was a grave crisis in the wool industry.

Matters were at an acute pass in early I 8o8. There was a serious drop
in exports in the last six months of I 807 and the first six of I 8o8; exports
to Europe sank to £ I 5 million as compared to £ r 9� million in the twelve
months before. The combination of Jefferson's embargo and Napoleon's
blockade began to bite, and there were serious riots in Lancashire and
Yorkshire in May and June I 8o8. Ex-Prime Minister Grenville was one
of those in England who began to panic. It was precisely at that moment
that Napoleon made his disastrous and self-destructive intervention in
Spain. Ostensibly, he moved in to shut a door still open to British
produce, but at a stroke he ruined the prospect of Spain as a market for
French manufacturers and opened the trade of Latin America to the
British. With justifiable irony the economist d'Ivernois remarked that the

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Emperor's blockade would have been more effective if, at the same time
as he was taking violent steps to close European markets to the British, he
was not also taking even more violent ones to open South America to
them.

The Spanish ulcer not only drained France of blood and treasure but
saved the British economy. After 1 809 the ports of Spain and, more
importantly, of Latin America were open to them. When the Grande
Armee was progressively switched from Germany to Spain in r 8o9-1 r ,
making contraband in northern Europe easier, British recovery was rapid.
In r 8o9, at £50.3 million, British exports reached their peak during the
Napoleonic years. Even though they declined again during the years of
'general crisis' from r 8 r o-r2, they never again descended to r 8o7-o8
levels. When the North Sea became extremely difficult for the Royal
Navy in r 8 r o-12, the British switched the main thrust of their
contraband efforts to the Balkans, Adriatic and Illyria; the Danube
replaced the Rhine as the conduit for colonial goods.

If the Continental Blockade was a failure, the Continental System more
widely considered was not an unalloyed disaster. From r 8o6 to r 8 r o
French industry was bursting with confidence, with three industries
particularly to the fore: cotton, chemicals and armaments. The great
captains of industry enjoyed considerable prestige and were second only
to the marshals and the Councillors of State in power and rank. Cotton -
based in Paris, Normandy, Flanders, Picardy, Alsace, Belgium and the
Rhineland - was the great success story and was the one area where
France kept up with Britain technologically; in other spheres, where
Britain had a commanding technical lead, the blockade made it difficult
for her inventions to be copied and then remodelled in France. Silk was
another success, especially in Lyons and St Etienne, as was wool in
Verviers, Rheims, Aachen, Sedan, the Rhineland and Normandy.
Agriculture did not fare so well, with sugar and tobacco on the decline,
but viniculture did well.

It has often been asserted that Napoleon set back European economic
life for a decade, because his troops, living off the land, destroyed a
multitude of subsistence economies. But a strong argument can be
mounted for a contrary point of view, according to which the Emperor
was a vital motor in the promotion of French capitalism, and not just in
the picayune sense that he suppressed the old guilds. Some economic
historians make the case that the Continental System saved Europe from
being swamped by British enterprise and thus that it enabled a European
industrial revolution to take place; some go so far as to say that by r 8oo
Continental Europe was threatened by the fate meted out to India in the

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nineteenth century: forced pastoralization. The workings of the cotton
industry in Catalonia provide an almost textbook example of how the
Continental System worked: booming until 1 808, it was then devastated
by Napoleon's coup, six years of war and the British takeover in Latin
America.

Summing up, then, on the wider impact of Napoleon's Continental
System, it can be said that, although Europe's industrial revolution did
not start under the Emperor, it was his policies, and especially the
elevation of the bourgeoisie, that laid the groundwork. Europe, in a word,
was given a breathing space that secured its future as an industrial
society, the predominance of the nobility was ended, feudal guilds broken
up, and the centre of gravity switched from the ports and seaborne trade
to the heavy industry of the north and east and the coal and iron in north­
east France and Belgium. It must be stressed that these were unintended
effects. Nobody at the time really understood how international trade and
the movement of capital worked, and Napoleon himself had old­
fashioned ideas on economics - deflationary policies, suspicion of paper
money, restrictions on credit, a balanced budget - without understanding
the knock-on effects of such policies.

But it was always the Blockade, not the System, that obsessed him.
Britain's chances of survival looked rosier than ever by the beginning of
I 8I o, for the Royal Navy seized Cape Town and Java, Guadelupe and
Mauritius from the Dutch and, by interposing the Royal Navy, detached
Latin America from Joseph. Napoleon's only response to smuggling was
to impose tighter political and military control on the allies, which meant
annexation: Holland joined a long list that already included Ancona,
Piacenza, Parma, Tuscany, the Papal States, Illyria (including Trieste)
and was soon followed by most of Westphalia, the Tessin and the Valais
in Switzerland and the Hanseatic towns of Hamburg, Lubeck and
Bremen. Unfortunately for the Emperor, this remorseless policy of
annexation simply increased the number of his enemies and critics, some
of whom questioned his sanity and his judgement. All of Europe
especially the Czar, was irritated by the annexations, and within France it
reopened the debate about the desirability of resting content with the
natural frontiers. To disarm his critics Napoleon thought of new
economic devices, which merely exacerbated his problems.

1 8 1 0 was the year when things began to go badly wrong with the
French economy. Realizing that he could not close the coast of Europe to
British products, and that French industrial production was impaired by
the high price of colonial raw materials, Napoleon decided on a new tack.
The decrees of St-Cloud, Trianon and Fontainebleau (3 July, 1 August,

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1 0, 1 8 October 1 8 1 0) introduced a new pattern of blockade which in
many ways contradicted the old System. The July decree allowed France
to trade with England while forbidding the Allies to do so; the first
August decree stipulated that the entire maritime trade of the Empire was
under his personal direction and that no ship could leave the Continent
for a foreign port without a licence signed by him; the second August
decree set out duties on colonial products such that the consumer paid
the same as under the old smuggling regime, but the French Treasury
not the smugglers made the profit; and the October decrees ordered all
trading in colonial products in the Empire outside France to cease as it
competed with French trade.

The St-Cloud, Trianon and Fontainebleau decrees had a threefold
aim: to tighten the noose on the illicit trade in British goods and make
London realize it could nevt:r win the economic war; to strengthen the
privileged position of French manufacturing by raising the imperial and
Italian customs tariff and thus to boost French industry by giving it a
monopoly in industrial production and the distribution of colonial goods;
and to destroy the point of smuggling by issuing licences for the export
and import of necessary raw materials. Faced with a trade he could not
stop, Napoleon in effect turned smuggler himself. French trade with
England was de facto legalized by the imposition of tariffs as high as
4<r-5o% - the equivalent of smugglers' premiums in the past.

The real question was whether allowing colonial goods to enter France
from England while British manufactures were excluded would correct
the kinks in the Continental System. But Napoleon's attempt at
reforming a rickety blockade simply made everything worse. German
traders were ruined at a stroke, creating an underground spirit of hatred
and revenge. To enforce his monopoly Napoleon seized and destroyed
huge stocks of contraband in Germany, Holland and Italy, ruffling
national sensibilities in those lands. Authorizing the sale of prizes seized
by privateers and corsairs together with a huge stockpile of confiscated
goods in Holland weakened the market for French manufactures in the
short term. The licensing system, which among other benefits was
supposed to embroil the U.S.A. in conflict with Britain by accentuating
American anger with the Royal Navy's searches and seizures, actually
helped the United Kingdom by providing badly-needed wheat at a time
of dearth; the war between Britain and the U.S.A. was provoked too late
- in 1 8 12. Meanwhile the 1 8 1 0 decrees triggered a grave economic crisis
in France. As for the efficacy of licences to deal with smuggling, the main
effect of the 1 8 1 0 decrees was to force contraband farther east, with the
Danube taking the place of the Rhine.

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The sustained economic crisis of I 8 1 1-I3 in France was really a
combination of three distinct factors: overproduction because of specula­
tion; overproduction caused by loss of trade outlets; and bad harvests.
The first two facets of the crisis were intimately intertwined and were
direct consequences of Napoleon's decrees. Since many had speculated in
colonial goods, general ruin ensued when French merchants were
undercut by the new imports and foreign merchants deprived of their
stocks. With speculation reaching its limit and stocks in France building
up, a wave of bankruptcies and a credit squeeze ensued severely affecting
industry, banking and trade. Industry was particularly badly hit as, with a
general fall in prices, many manufacturers had to borrow heavily to
surviVe.

Napoleon failed to understand that his decrees undid all the work of
economic integration effected by his original Continental System. Once
the assets of German firms were seized, nobody owed money by them
could get it back. French importers who had made loans to firms in
Amsterdam, Basle and Hamburg could not retrieve their assets; all those
who had played safe by switching from speculation in assignats to colonial
produce were now ruined. In September I 8 1 0 the firm of Rodde in
Lubeck went bankrupt, dragging down with it the Parisian banks of
Laffitte, Fould and Tourton. This in turn triggered further bankruptcies
in Paris and eventually the rest of France.

I 8 1 1 brought recession in the Lyons silk industry; the number of
working looms was halved. Soon Tours, Nimes and Italy were sucked
into the slump and then it was the turn of the great success story, cotton.
Contraction in that industry was dramatic: in Rouen the workshops used
only a third of the raw materials they had used in I 8 10. Wool was the
next to be hit, with a quarter of the nation's drapers ceasing payment.
Although the depression was less serious in manufacturing, the pinch was
felt from the Haut-Rhin to the Pyrenees. In May I 8 I I , zo,ooo out of
so,ooo workers in Paris were unemployed. Napoleon was forced to
respond by undertaking a programme of public works and giving loans to
industry. Towards the end of the summer of I 8 I I the final blow fell as
bad harvests exacerbated the crisis. The South was paralysed by drought
while in the Paris basin violent storms wiped out most of the crops in the
area.

Napoleon was immediately on red alert, for it was one of his axioms
that bread shortages in Paris could lead to general revolution. His view
was well known: 'It is unfair that bread should be maintained at a low
price in Paris when it costs more elsewhere, but then the government is
there, and soldiers do not like to shoot at women with babies on their

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