The Continental System - The continental system undermined

While Napoleon had substantial success in disrupting American-British trade, he found it difficult to achieve the larger objective: excluding British and British-controlled neutral trade from the Continent except on terms disadvantageous to Britain. The continental system continued to spring leaks. Portugal and Spain—particularly following the insurrection in Spain in 1808—served as ports of entry for goods from Britain and its colonies. In addition, Britain used depots along the coast of Europe as smuggling centers. British merchants crowded into these centers in great numbers in order to conduct business. From Helgoland in the North Sea, smuggled British and neutral goods made their way to Leipzig, Basel, Strasbourg, and Frankfurt. In the Baltic, Göteborg became the center for goods forwarded to Prussia, Poland, and Russia. Gibraltar, Sardinia, Sicily, the Dalmatian and Ionian Islands, and Malta most of all served as the depots for British goods in the Mediterranean. After Britain gained a foothold in Turkey in 1809, Belgrade and Hungary received British goods forwarded from Salonika and Constantinople. As late as 1810, Britain bought over 80 percent of its wheat from France or its allies.

Napoleon's need for money likewise under-mined the continental system. Growth of an enormous smuggling trade deprived Napoleon's empire of desperately needed tax revenues. Searching for monies to pursue his campaign against Austria in 1809, Napoleon recognized the necessity to stem this tax loss and accordingly established a system of licensed trade in 1809 and 1810. For a time, Napoleon directly supervised granting these licenses. At first a secret operation, the license system was formalized through the Decree of St. Cloud on 5 July 1810. Licenses were sold for substantial, varying fees but often costing £14. In providing trading licenses, Napoleon virtually negated the rationale of his system. He angered his continental allies and associates by granting licenses in such a way that French economic needs and promotion of the French merchant marine were given first consideration. Needed British goods now flowed freely and legally into French ports. Coupled with the license system came the Trianon Decree of 5 August 1810, which raised tariffs on colonial goods to an exorbitant degree, so high in fact that smugglers saw nothing but good in the measure. Napoleon's need to build his war chest thus led him to abandon the continental self-blockade, but he did so in such a way that he made it appear the French empire had no higher purpose than the enhancement of French interests. He also confused both allies and enemies, for while the license system seemed designed to negate the smuggling trade, the new tariff rates furnished considerable incentive for the smuggling to continue.

Napoleon never formally ended the continental system, but inauguration of the license system in 1809 and adoption of the Trianon tariff rates in 1810 marked its virtual abandonment. The defection of Russia in 1810 proved the single greatest blow to the continental system, one that made further enforcement efforts ludicrous. Following Napoleon's downfall, the restored Bourbon regime quickly swept away the various edicts of the continental system. All that remained were the milder enactments of the commercial legislation passed between 1791 and 1793 and the continuing firm conviction that French trade and industry must be sheltered from foreign competition.

The continental system revealed the scope and some of the limitations of Napoleon's thinking and planning. It was Eurocentric in its focus, was dependent upon the Grand Army for its success, was nationalistic and traditional in its emphasis upon the promotion of French interests, and was parochial in assessing how far sea power could assist England in escaping Napoleon's net. He pursued his plan with method and a certain cunning but had to modify it drastically when resistance grew too great. Unfortunately for Napoleon the continental system proved politically counterproductive in that it fostered increasing hostility to French hegemony within Europe. Napoleon even had to dismiss his own brother, Louis, as king of Holland when he refused to prevent Dutch smuggling with England. Russia's failure to enforce the system after 1810 played a part in turning Napoleon toward his fateful venture to conquer Russia.

In terms of its primary goal, the continental system proved a failure. Britain suffered severely but devised a successful smuggling system to satisfy continental markets, developed new markets in Latin America and East Asia, and traded freely with the colonies of France. The war that Napoleon helped to provoke between Britain and the United States played no part in determining his larger destinies.

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