82 The Continental System
23.2.5: The Continental System
The Continental System was Napoleon’s strategy to weaken Britain’s economy by banning trade between Britain and states occupied by or allied with France, which proved largely ineffective and eventually led to Napoleon’s fall.
Learning Objective
Identify Napoleon’s goals with the Continental System
Key Points
- Great Britain was the central force in encouraging and financing alliances against Napoleonic France. As France lacked the naval strength to invade Britain or decisively defeat the Royal Navy at sea, Napoleon resorted instead to economic warfare. Napoleon believed that embargo on trade with Britain imposed on the European nations under his control would weaken the British economy. The strategy became to be known as the Continental System or Continental Blockade.
- In 1806, having recently conquered or allied with every major power in continental Europe, Napoleon issued the Berlin Decree forbidding his allies and conquests from trading with the British. The British responded with the Orders in Council of 1807 that forbade trade with France, its allies, or neutrals and instructed the Royal Navy to blockade French and allied ports. Napoleon retaliated with the Milan Decree, which declared that all neutral shipping using British ports or paying British tariffs were to be regarded as British and seized.
- The embargo was effective intermittently for about half the time but in terms of economic damage to Great Britain, it largely failed. It encouraged British merchants to engage in smuggling with continental Europe and seek out new markets. Napoleon’s exclusively land-based customs enforcers could not stop British smugglers.
- The British countered the Continental system by threatening to sink any ship that did not come to a British port or chose to comply with France. This double threat created a difficult time for neutral nations like the United States.
- The embargo also had an effect on France. Ship building and its trades declined, as did many other industries that relied on overseas markets. With few exports and a loss of profits, many industries were closed down. Southern France especially suffered from the reduction in trade. Moreover, the prices of staple foods rose for most of continental Europe.
- British allies, including Sweden and Portugal, refused to comply, which resulted in damaging wars. Russia’s withdrawal from the system in 1810 was a motivating factor behind Napoleon’s decision to invade Russia in 1812, which proved the turning point of the war and ultimately led to Napoleon’s fall.
Key Terms
- Continental System
- The foreign policy of Napoleon I of France in his struggle against Great Britain during the Napoleonic Wars that used the economic warfare as a strategy to weaken Britain. As a response to the naval blockade of the French coasts enacted by the British government in 1806, Napoleon issued the Berlin Decree, which brought into effect a large-scale embargo against British trade that banned trade between Britain and states occupied by or allied with France.
- Orders in Council of 1807
- An 1807 series of decrees made by the Privy Council of the United Kingdom in the course of the wars with Napoleonic France, which instituted its policy of commercial warfare. They played an important role in shaping the British war effort against France as well as strained relations—and sometimes military conflicts—between the United Kingdom and neutral countries.
- Milan Decree
- A decree issued in 1807 by Napoleon I of France to enforce the Berlin Decree of 1806, which initiated the Continental System. It authorized French warships and privateers to capture neutral ships sailing from any British port or from any country occupied by British forces. It also declared that any ships submitted to search by the Royal Navy on the high seas were to be considered lawful prizes if captured by the French.
- Berlin Decree
- A decree issued in Berlin by Napoleon in 1806 that forbade the import of British goods into European countries allied with or dependent upon France and installed the Continental System in Europe. All connections were to be cut, even the mail. Any ships discovered trading with Great Britain were liable to French maritime attacks and seizures. The ostensible goal was to weaken the British economy by closing French-controlled territory to its trade.
Great Britain and Napoleon: Economic Warfare
Great Britain was the central force in encouraging and financing alliances against Napoleonic France. As France lacked the naval strength to invade Britain or decisively defeat the Royal Navy at sea, Napoleon resorted instead to economic warfare. Britain was Europe’s manufacturing and business center and Napoleon believed that embargo on trade with Britain imposed on the European nations under his control would cause inflation and debt that would weaken the British economy. In 1806, having recently conquered or allied with every major power in continental Europe, Napoleon issued the Berlin Decree forbidding his allies and conquests from trading with the British. The British responded with the Orders in Council of 1807 that forbade trade with France, its allies, and neutrals and instructed the Royal Navy to blockade French and allied ports. Napoleon retaliated with the Milan Decree, which declared that all neutral shipping using British ports or paying British tariffs were to be regarded as British and seized.
As an island nation, trade was Britain’s most vital lifeline. Napoleon believed that if he could isolate Britain economically, he would be able to invade the nation after its economic collapse. He decreed that all commerce ships wishing to do business in Europe must first stop at a French port in order to ensure that there could be no trade with Britain. He also ordered all European nations and French allies to stop trading with Britain and threatened Russia with an invasion if they did not comply. Napoleon’s strategy became known as the Continental System or Continental Blockade.
The Continental System: Effects
The embargo was effective intermittently for about half the time but in terms of economic damage to Great Britain largely failed. It encouraged British merchants to engage in smuggling with continental Europe and seek out new markets. Napoleon’s exclusively land-based customs enforcers could not stop British smugglers, especially as they operated with the connivance of Napoleon’s chosen rulers of Spain, Westphalia, and other German states. The System had mixed effects on British trade, with British exports to the Continent falling between 25% to 55% compared to pre-1806 levels. However, trade sharply increased with the rest of the world, making up for much of the decline.
The British countered the Continental system by threatening to sink any ship that did not come to a British port or chose to comply with France. This double threat created a difficult time for neutral nations like the United States. In response to this prohibition, the U.S. government adopted the Embargo Act of 1807 (against both Great Britain and France) and eventually Macon’s Bill No. 2. The embargo was designed as an economic counterattack to hurt Britain, but proved even more damaging to American merchants. Macon’s Bill lifted all embargoes against Britain and France for three months. It stated that if either one of the two countries ceased attacks upon American shipping, the United States would end trade with the other, unless that other country agreed to recognize the rights of the neutral American ships as well.
The embargo also had an effect on France. Ship building and its trades declined, as did many other industries that relied on overseas markets. With few exports and a loss of profits, many industries closed entirely. Southern France especially suffered from the reduction in trade. Moreover, the prices of staple foods rose for most of continental Europe. Napoleon’s St. Cloud Decree of 1810 opened the southwest of France and the Spanish frontier to limited British trade and reopened French trade to the United States. It was an admission that his blockade had hurt the French economy more than the British. It also failed to reduce British financial support to its allies.
Britain’s response to the Continental system was to launch a major naval attack on the weakest link in Napoleon’s coalition, Denmark. Although ostensibly neutral, Denmark was under heavy French and Russian pressure to pledge its fleet to Napoleon. In 1807, the British occupied the island Heligoland outside the west coast of Denmark. This base made it easier for Britain to control the trade to the ports of the North sea coast and facilitate smuggling.
Sweden, Britain’s ally in the Third Coalition, first refused to comply with French demands and was attacked by Russia and by Denmark/Norway in 1808. At the same time, a French force threatened to invade southern Sweden but the plan was stopped as the British Navy controlled the Danish straits. The Royal Navy set up a base outside the port of Gothenburg in 1808 to simplify the operations into the Baltic sea. In 1810, France demanded that Sweden should declare war to Great Britain and stop all trade. The result was a war between Sweden and Britain, but the British continued to control smuggling through the Baltic.
Portugal openly refused to join the Continental System. In 1793, Portugal signed a treaty of mutual assistance with Britain. The Portuguese population rose in revolt against the French invaders with the help of the British Army. Napoleon intervened and the Peninsular War began in 1808.
Finally, Russia chafed under the embargo and in 1810 reopened trade with Britain. Russia’s withdrawal from the system was a motivating factor behind Napoleon’s decision to invade Russia in 1812, which proved the turning point of the war and ultimately led to Napoleon’s fall. The Continental System formally ended in 1814 after Napoleon’s first abdication.
Attributions
- The Continental System
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“Orders in Council (1807).” https://en.wikipedia.org/wiki/Orders_in_Council_(1807). Wikipedia CC BY-SA 3.0.
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“Macon’s Bill Number 2.” https://en.wikipedia.org/wiki/Macon%27s_Bill_Number_2. Wikipedia CC BY-SA 3.0.
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“Ograbme.jpg.” https://commons.wikimedia.org/wiki/File:Ograbme.jpg. Wikimedia Commons Public domain.