Countries Producing Raw Materials

The account of the development under the Continental System of the countries that provided raw materials must necessarily be very brief, as the sources are strikingly scanty, and as the blockade on the Baltic and in Austria was so intermittent.

In Russia the dislike of the nobility and of persons of political influence for the alliance with Napoleon and the Continental System was extremely strong from the very start, as has been set forth with typical French animation and wealth of colour in Vandal's famous work Napoléon et Alexandre Ier (1891-6); and without doubt economic factors also played their part. But one has nevertheless a kind of impression that their importance has been exaggerated. What especially gives occasion for doubt is the fact that the evidence for the stagnation of trade which is always met with is the great decline of the Russian rate of exchange (a loss of 72 per cent.). This cannot be explained by an 'unfavourable balance of trade', for this cause is never sufficient in any case that occurs in practice to bring about a result of that magnitude. The true cause was and is the depreciation of the currency in Russia and Austria, both then and now caused by an excessive issue of paper money. But this, of course, does not make it impossible that the stagnation in Russian timber exports may have been great, as is indeed stated from French quarters which had some interest in maintaining the opposite; and the fact is partly and quite irrefutably confirmed by the great increase in the price of timber, to which we have already called attention, in both Great Britain and France. This stagnation was brought about, however, not only by the increased difficulty of maritime intercourse, but also by a rather unique consequence of the blockade, which has had analogies during the recent war, namely, the great part that Englishmen played in the economic life of Russia before the Peace of Tilsit. This is illustrated by the vast amount of information from official Russian sources that can be found in Oddy's work. For instance, in 1804, 35 per cent. of the imports and no less than 63 per cent. of the exports of St. Petersburg were in the hands of British merchants; and the three greatest commercial houses, all of them British, taken by themselves, carried on more than one-fourth of the export trade of the Russian capital. French evidence testifies to the same conditions. General Savary, who reached St. Petersburg in July 1807, on behalf of Napoleon, gave a detailed description in his report of the all-dominating position of the British trade, telling how half of all the vessels were British and how Englishmen took over all the timber from the nobility and thereby provided them with their safest source of income; and he also remarked that they themselves founded industrial concerns in Russia when the importation of British manufactures was too much hampered by customs duties. When so important a part of the economic activity of Russia ceased to exist without warning, it was naturally impossible to obtain substitutes either in Russia itself or from France; and the natural consequence was a stagnation in Russian exports. Napoleon was quite conscious of this position, and in November 1807, he ordered his ambassador, Caulaincourt, to lay before Emperor Alexander a proposition whereby the French government should buy several million francs' worth of mast wood and other naval stores for its shipyards. It is uncertain, however, whether this plan was ever carried out.

The Continental System seems to have had a much more marked restraining effect on the exports of raw materials and foodstuffs from Prussia, that is to say, chiefly from the districts east of the Elbe, probably because Napoleon had still greater reason to distrust the loyalty of the Prussian government than that of the Russian government toward the system, and because, moreover, he had considerably greater means of exercising pressure against the former than against the latter. According to an account by Hoeniger, great stocks of timber rotted away at Memel, while the price of corn fell by 60-80 per cent. between 1806 and 1810 owing to the absence of markets. The same phenomena appeared in northwest Germany, which had been wont to dispose of its surplus corn to England via Bremen and now saw its means of export barred, with the consequence that, while the price of colonial goods at Bremen increased many times, the price of wheat there declined by 62 per cent. between 1806 and 1811, and the price of rye correspondingly. On the other hand, the shipping and corn exports of Mecklenburg were allowed to remain practically undisturbed until the latter half of 1810. In fact, according to accessible figures, the year between August 1809 and July 1810 marks the summit-level of development, which, it is true, was largely caused by the trade with Sweden which was resumed after the conclusion of the Finnish war. From Rostock there sailed during that twelvemonth no fewer than 439 vessels, as compared with 55 in the year 1808-9 and 31 in the year 1810-11; and the exports of corn exhibit equal figures. Here, as has been previously mentioned, it was the licence system that put an end to the export of corn.