CONTINENTAL SYSTEMthe system's effectiveness
immediate and wider impact
The term Continental System was used during the Napoleonic Empire to denote the French commercial war on Great Britain (1806–1813), and also more loosely to describe the economic policy of France toward its subject states in mainland Europe. The Continental System (Système continental), or Continental Blockade (Blocus continental) as it was also called, was officially proclaimed by Napoleon's Berlin Decree of 21 November 1806. This declared the British Isles in a state of blockade, forbade all communication with them, and sanctioned the seizure of British ships and goods as lawful prize. Similar measures had been adopted during the French Revolution, most notably the Directory's stiff embargoes of 31 October 1796 and 18 January 1798 on British trade, with their accompanying unfavorable implications for neutral shipping. Other elements of the system had also been anticipated by Napoleon's earlier "coast system," especially as from 1803, and as codified in the comprehensive customs tariff of 30 April 1806. Yet the Berlin Decree was a more immediate reaction to the British order in council of 16 May 1806, which imposed a naval blockade along the coastline of France and its satellites between Brest and the estuary of the Elbe. New orders in council were issued in February and November 1807, extending and strengthening that blockade, and also requiring neutral ships to call at a British port for inspection and to pay duties and seek licenses there for trade with enemy ports. Napoleon responded with the Milan Decrees of 23 November and 17 December 1807, by which all neutral vessels complying with those orders were in effect assimilated to British shipping and so made liable to capture.
From an early stage, the Continental System was thus much more than an economic war on Britain; it soon became enmeshed with Napoleon's foreign and military policies toward other states, whether belligerent or neutral. As from 1807, its enforcement was imposed, officially at least, on his satellite states in Italy, Germany, Holland, Switzerland, Poland, and Spain, and it was also a factor in his later imperial annexations in Italy (1809–1810), in the "Illyrian Provinces" of the Adriatic hinterland (1809), and in Holland and northwestern Germany (1810–1811). Even his Russian campaign of 1812 was partly driven by a determination to stamp out breaches of the system in the Baltic region after the rupture of the Treaties of Tilsit (1807).
How far the Continental System achieved its aims was largely determined by two factors. First, it was most effective during periods of relative peace on the Continent, when imperial troops could be deployed in customs surveillance, and least effective when Napoleon needed his armies on campaign: 1809, in particular, was a bonanza year for smuggling and also the high-water mark of British exports in the period. Second, the system had its maximum impact on the British economy when periods of comparatively tight customs control on the Continent coincided with a rupture in Anglo-American relations, because it was then that British traders most needed alternative markets across the Atlantic. Such conditions applied from July 1807 to July 1808 and again during the years 1811 and 1812, culminating in the American declaration of war on Britain in June 1812.
In crucial respects, however, Napoleon weakened the system by his own inconsistency in applying the embargoes. He was often willing to grant special licenses for trade with Britain—at different times, for instance, to overstocked wine merchants in Bordeaux and grain dealers in the west country of France. Although he intensified the war on British manufactured goods by his Fontainebleau Decree of 18 October 1810, thereby unleashing two years of "customs terror" in the North Sea and Baltic ports, he relaxed the embargoes on other commodities at the same time. The Trianon Tariffs of 5 August and 17 September 1810 allowed the import of many formerly prohibited colonial goods, subject however to exorbitant duties. Indeed, the fiscal motives behind the tariffs had already become clear in the Saint-Cloud Decree of 3 July 1810, which institutionalized a "new system" of licenses on a grander scale, soon matched by similar "permits" for American shipping. During 1813, as Napoleon's need for cash became more pressing, he greatly multiplied issues of the licenses, fatally undermining the system from within several months before the military structures that underpinned it themselves finally collapsed.
As a historical episode, the Continental System was the climax of a much longer commercial conflict between France and Britain in their pursuit of global markets and sources of supply. In the longer term, Britain's naval supremacy and commercial and technological superiority actually increased during the maritime wars of 1793 to 1815. As a short-term instrument of war, the system did not cripple Britain's economy; nor did it force Britain to sue for peace or reduce its capacity to finance military coalitions against France. Moreover, because the French then lacked the naval power to enforce it directly on the seas, following their heavy defeat at Trafalgar (1805), the system was not a blockade properly so called, but rather a self-blockade, or a boycott of British goods. As such, it provided conditions for economic expansion on the Continental mainland, chiefly in the Rhenish and Belgian departments of the empire, especially in the years from 1807 to 1810, as the major trade routes shifted from the beleaguered coastline toward the inland regions. Its wider orbit of protected markets gave a particular boost to the production of cottons, woolens, and silk stuffs, to the war industries, and to secondary metallurgy. Such growth, however, was liable to disruption during recurrent hostilities; and the economic crisis of 1810 to 1811 affected France no less than Britain, embarrassing established merchant houses as well as parvenu speculators. Manufacturers of textiles in those parts of Italy, Germany, and Switzerland that lay beyond the imperial customs frontiers had good cause to complain about their official exclusion from the enlarged French home market, even if the cotton entrepreneurs of Saxony somehow managed to flourish independently of it. The smuggling of contraband goods was more or less ubiquitous, often with the connivance of imperial customs officers, notwithstanding the very harsh penalties. During the "customs terror" of 1810 to 1812 an agricultural depression spread across several of the subject states of France, especially along the Baltic, as surpluses that could not be legally exported through British shipping were also denied outlets in France, and this in turn reduced their capacity to absorb French exports.
On the whole, the Continental System has had a bad press from historians. Most have criticized the naive simplicity of Napoleon's mercantilist reasoning, including not least the self-defeating consequences of his declared priority of "France first." Some have cited it as a prime example of the futility of economic blockades in general. But these critics have not always appreciated that Napoleon had inherited a recent legacy of French colonial losses and maritime disruption, and that his harbor-bound navy could not challenge Britain effectively at sea. His Continental System could thus be seen as a last resort, a function of his essentially landlocked power, an extraordinary contrivance of particular wartime circumstances over which he had only limited control. Although its ultimate failure both as a war machine against Britain and as a French market design to engross the resources of the Continental mainland seems clear, its more positive industrial and commercial results should be recognized. Indeed, its most enduring effect was to reinforce a long-term shift in the center of gravity of the French economy from the Atlantic littoral toward France's northeastern regions during the maritime wars of 1793 to 1815.
Bergeron, Louis. Banquiers, négociants et manufacturiers parisiens du Directoire à l'Empire. Paris, 1978. Magisterial study of the Parisian financial and industrial elite.
Crouzet, François. "Wars, Blockade, and Economic Change in Europe, 1792–1815." Journal of Economic History 24, no. 4 (1964): 567–588. Seminal article offering a global overview.
——. L'économie britannique et le blocus continental. 2nd ed. Paris, 1987. The most authoritative statement on the British aspect of the subject.
Ellis, Geoffrey. Napoleon's Continental Blockade: The Case of Alsace. Oxford, U.K., 1981. Concentrates on the inland aspects of the subject.
Heckscher, Eli F. The Continental System: An Economic Interpretation. Edited by Harald Westergaard. Reprint, Gloucester, Mass., 1964. Classic liberal economic interpretation that was for many years the standard text after its first publication in English in 1922.
Continental System, scheme of action adopted by Napoleon I in his economic warfare with England from 1806 to 1812. Economic warfare had been carried on before 1806, but the system itself was initiated by the Berlin Decree, which claimed that the British blockade of purely commercial ports was contrary to international law. It was extended by the Warsaw Decree (1807), the Milan Decree (1807), and the Fontainebleau Decree (1810), which forbade trade with Great Britain on the part of France, her allies, and neutrals. Napoleon expected that the unfavorable trade balance and loss of precious metals would destroy England's credit, break the Bank of England, and ruin English industry. Great Britain retaliated by the orders in council, which forbade nearly all trade between England and any nation obeying the Berlin Decree. One of the most dramatic results of the commercial warfare was the English bombardment of neutral Copenhagen (1807) and the seizure of the Danish fleet. The trade restrictions of the continental system led to a decline of the significance of Amsterdam; it never regained its former prominence. England had control of the sea, and large-scale smuggling thrived all along the European coast (with U.S. privateers taking a large part in the illegal trade). Napoleon himself issued special licenses for trade bringing in colonial goods on the payment of duties. Napoleon's Russian campaign of 1812 was brought on by Russia's refusal to conform to the decrees, and the war between England and the United States, known as the War of 1812, was to some extent a result of the economic warfare. But so difficult was the enforcement of the system that in his effort to impose it on Russia, Napoleon had to violate it in France. Whether the continental system delayed the introduction of the Industrial Revolution to France is much debated, though it did foster the development of beet sugar manufacture and machine spinning of textiles.
See F. E. Melvin, Napoleon's Navigation System (1919); E. F. Heckscher, The Continental System (1922); G. Ellis, Napoleon's Continental Blockade (1991).