Colonial Carrying Trade

The central point in the colonial trade at this time was formed by the West Indies, especially in their capacity as sugar producers; and among these the French and Spanish islands, especially Haiti and Cuba, were distinctly superior to the British islands, Jamaica, and the rest. The trade to the West Indian possessions of Napoleon and his Spanish ally, therefore, was regarded almost as the great prize of maritime commerce, which was sought after by the neutrals with the eager support of the European mother countries so long as they were powerless on the sea, while Great Britain wished to make use of her power to win this prize for herself. It is true that the foremost colony of all, Haiti, or, more correctly, its western or French third, St. Domingue, had suffered immensely from the many negro insurrections ever since the first years of the revolutionary wars; but sufficient was left to arouse the desire for gain. Furthermore, the remaining French colonies—Guadeloupe and Martinique in the West Indies, Guiana on the South American continent, Isle-de-France (now known as Mauritius) and Réunion and Senegal in Africa—were somewhat less damaged by the course of events during the war, while the Spanish possessions seem, on the evidence of outside witnesses, not to have suffered seriously. The country which lay handy to seize the trade with all these territories—which trade was jealously guarded in peace time—was clearly the United States. The latter had just begun its independent political existence and was seeking ways which might lead them away from the exclusive economic connexion with Great Britain that had been created and maintained during the colonial period. In this way there arose a triangular trade which was highly important for the Atlantic states of the American Union. Vessels proceeded with corn and timber to the French and Spanish West Indies, took on colonial goods there, especially sugar and coffee, which they conveyed to the European Continent, after which they returned, principally in ballast, but partly also with European industrial products. The balance of assets which the American merchants thus obtained on the Continent was used to liquidate the country's balance of liabilities to Great Britain for its textiles and iron goods, which continued to dominate the American market; but a considerable part of it was also re-exported to the rest of America, chiefly the French and Spanish West Indies themselves.

The whole of this trade was in conflict with the 'rule of 1756', and, therefore, could not be tolerated in principle by Great Britain. But as the rule was interpreted during the revolutionary wars proper by the great legal authority, the British Judge of Admiralty, Sir William Scott, afterwards Lord Stowell—still to-day the great name in the sphere of the law of war at sea—it offered various possibilities to the neutrals, and particularly to Americans. Especially in the famous case of the Immanuel (1799) he elaborated the idea, on the one hand, that the neutrals could make no claim whatever to trade with enemy colonies during war, because those colonies, owing to the Old Colonial System, had been as inaccessible to them before the war as if they had been situated in the moon, and had been thrown open to trade only through the British naval victories. But, on the other hand, he also emphasized the fact that these prohibitions on trade in the products of enemy colonies held good only so long as those products had not formed part of a neutral country's stock of goods; and this he developed further in the case of the Polly in the following year, to the effect that the evidence of such a 'neutralization' should consist in the unloading of the goods in a neutral port and there passing them through the customs. Such a demand for what was called a 'broken voyage' was not difficult to fulfil, so much the less because the geographical position of the West Indies made it possible, with very little loss of time, for a vessel to put in at an American mainland port, especially Charleston, South Carolina, on its way to Europe. It was undoubtedly with full intention that the American government facilitated the matter by granting permission that when the goods were passed through the customs payment should be made by bond, and that practically the whole of the duty, with a very small exception (3½ per cent.), should be paid back on re-export. Consequently, the customs' treatment furnished the smallest possible guaranty that the goods had passed into neutral trade. When the unloading of the goods was required, the vessels had the possibility of going to a ship-building port in New England and using the time for the completion of repairs while the cargo was being discharged and reloaded. The trip thus became a 'circuitous voyage'.

The result of this peculiar manipulation may be illustrated in many ways. During the years of war the foreign trade of the United States underwent an extraordinary increase, while in the short peace interval there was an immediate decline; and the character of the trade is shown by the quite unique excess of re-exports, i.e., the exports of foreign products. It is true that the figures are not in all respects above dispute, but they are sufficiently reliable to merit reproduction.

We see here how the exports of foreign goods jumped from almost nothing to amounts which, at the close of the 'nineties, far exceeded the exports of domestic goods, and then during the peace year 1802-3 fell to little more than one-fourth of the amount for the last war year, but immediately after the outbreak of the new war rose to nearly half as much again as the exports of domestic goods in 1806. The following figures (given by Mahan) showing the exports to Europe of the two most important West Indian products during the few typical war years and peace years are also highly illuminative.

It may also be of interest to form a more graphic picture of this trade than can be given by figures. A sketch by the American historian, Professor McMaster, gives a mere summary of the abundant data, based on proceedings in prize-court cases as found in Stephen's book to which we have so often had occasion to refer:

The merchant flag of every belligerent, save England, disappeared from the sea. France and Holland absolutely ceased to trade under their flags. Spain for a while continued to transport her specie and her bullion in her own ships, protected by her men-of-war. But this, too, she soon gave up, and by 1806 the dollars of Mexico and the ingots of Peru were brought to her shores in American bottoms. It was under our (the American) flag that the gum trade was carried on with Senegal, that the sugar trade was carried on with Cuba, that coffee was exported from Caracas, and hides and indigo from South America. From Vera Cruz, from Cartagena, from La Plata, from the French colonies in the Antilles, from Cayenne, from Dutch Guiana, from the isles of Mauritius and Réunion, from Batavia and Manila, great fleets of American merchantmen sailed to the United States, there to neutralize the voyage and then go on to Europe. They filled the warehouses at Cadiz and Antwerp to overflowing. They glutted the markets of Emden, Lisbon, Hamburg and Copenhagen with the produce of the West Indies and the fabrics of the East, and, bringing back the products of the looms and forges of Germany to the new world, drove out the manufactures of Yorkshire, Manchester and Birmingham.

It was not to be expected that the British would look upon this development with approval. It took from them the trade with the enemy colonies, conveyed the products of these colonies to the enemy mother countries or gave them profitable sales in neutral markets, and consequently subjected the goods of the British colonies to an unwelcome competition on the Continent and at the same time created a market in America for the industrial products of the Continent which competed with those of Great Britain herself. Moreover, the shipping of the neutrals was considered to cause an enviable activity in the enemy ports; and, finally, it was considered to increase Napoleon's military power by relieving him of the necessity of providing convoys, which would have been necessary if the connexions had been provided by the French mercantile marine, and also by freeing him from the cares of supplying his colonies. These last matters implied a situation which the British would certainly have deprecated for their own part and which was also anything but welcome to Napoleon himself; but the other aspects of the situation involved many things which were bound to tempt Great Britain to interfere.

However, the British measures against the colonial trade of the Americans were comparatively mild for several years after the draconic law of November 6, 1793, regarding the confiscation of all vessels carrying products of the French colonies or conveying supplies to them had been revoked within two months. The absence of consistently maintained blockade declarations against the enemy colonies is especially striking. The instructions of 1794, 1798, and 1803, which we have previously mentioned, aimed mainly at preventing only direct intercourse between the enemy mother countries and their colonies, and also, in the case of that of 1798, at drawing the trade through British ports. Beyond that, they wished to tolerate trade only in 'free goods', that is to say, goods which had passed into neutral hands. Thus the instructions of 1794 forbade direct intercourse between the port of an enemy colony and a European port, as well as trade in products which continued to be French property, while the instructions of 1798 allowed even direct intercourse with Europe provided a call was made at a European port belonging to Great Britain or the home country of the vessel. The instructions of 1803 introduced a certain modification of this, in that, curiously enough, a British port is no longer approved but only a port in the vessel's home country; and it is further laid down that the goods must belong to a citizen of the same country. Especially during the first years after the new outbreak of war in 1803 the treatment of the neutrals, both Americans and Danes, was unusually mild and their shipping was little disturbed. The number of captured vessels incorporated with the British merchant fleet was also smaller in the years 1803-6 than it was in the preceding or following years.

The 'neutralization' of enemy property resulting from the trade war itself, as well as from Sir William Scott's exposition of the law, assumed enormous proportions; and Stephen's book is full of characteristic and well-documented examples of the extent to which the regulations were evaded. These evasions, the number of which was legion, aimed at showing both that the trip was really (bona fide) begun in a neutral (American) port and that the goods were neutral property. With the former object new ship's papers were procured in an American port, sometimes, indeed, a new crew; in fact, there were occasions when two vessels exchanged cargoes so that they might both truthfully say that the cargo had been taken aboard in a neutral port. Moreover, separate insurances were taken for each trip, and the import duty was paid in the fictitious manner previously indicated. With regard to the neutral ownership of the cargoes, the most grotesque situations arose. In this connexion an extract from Stephen's account, which is supported by references to the different legal cases, is well worth quoting:

Merchants who, immediately prior to the last war, were scarcely known, even in the obscure seaport towns at which they resided, have suddenly started up as sole owners of great numbers of ships, and sole proprietors of rich cargoes, which it would have alarmed the wealthiest merchants of Europe to hazard at once on the chance of a market, even in peaceable times. A man who, at the breaking out of the war, was a petty shoemaker in a small town of East Friesland, had, at one time, a hundred and fifty vessels navigating as his property, under Prussian colours... The cargoes of no less than five East Indians, all composed of the rich exports of Batavia, together with three of the ships, were contemporary purchases, on speculation, of a single house at Providence in Rhode Island, and were all bound, as asserted, to that American port; where, it is scarcely necessary to add, no demand for their cargoes existed.... Single ships have been found returning with bullion on board, to the value of from a hundred to a hundred and fifty thousand Spanish dollars, besides valuable cargoes of other colonial exports. Yet even these daring adventurers have been eclipsed. One neutral house has boldly contracted for all the merchandize of the Dutch East India Company at Batavia, amounting in value to no less than one million seven hundred thousand pounds sterling.

All this led, in the spring of 1805, to an alteration in the practice of the British law courts, which considerably damaged the possibilities of the American carrying trade. The highest British prize court, the Prize Appeal Court of the Privy Council, in the famous case of the ship Essex with its cargo from Barcelona to Salem, Massachusetts, and thence to Havana, declared both the vessel and the cargo forfeited, despite the fact that the latter had been unloaded and passed through the custom-house in the usual way in the American port (May 22). This precedent was immediately followed by two others in the Admiralty Court, whereby the intention of eluding the regulations was declared to be decisive as against the external criteria. At the same time the British went a more direct way to the end of obtaining control over the American colonies of the enemy, namely, by passing a series of laws which were promulgated in April and June 1805, and in July 1806. These were intended to encourage the importation of the products of those colonies either direct to England by licence or to the British West Indies, either to sixteen free ports established there or, with somewhat less liberty and on the basis of a licence, to other islands, with a somewhat varying right to be forwarded to the British home country. At the same time permission was given to send a return cargo from the British to the foreign colonies. To the sixteen free ports importation might be made in small vessels of any nationality whatsoever, that is to say, even of enemy nationality.

This new application of the law as regards 'circuitous voyages' aroused a great deal of feeling in the United States, and in April 1806, led to an American counter-measure; and at the same time there were issued the British blockade declarations concerning the North Sea coast and the English Channel on which we have previously touched. The most important of these in all respects was the blockade which was proclaimed on May 16, 1806, on the initiative of the then British foreign secretary, the celebrated Whig politician, Charles James Fox. This created a strictly blockaded region between Ostend and the mouth of the Seine—that is to say, practically Havre—and also two less strictly blockaded regions to the north and to the south thereof—from Ostend to the Elbe and from the mouth of the Seine to Brest, respectively. Neutral vessels were conceded the right to call at the ports on the last two stretches, on condition that their goods were not contraband of war and did not belong to enemy subjects, and on the further condition that they had not been loaded in an enemy port and were not, to begin with, bound to such a port.

Like most of the British blockade regulations, this was very obscure; and it is not known to me how it was applied during the remainder of the year. Mahan's view that it liberated neutrals from the obligation laid down in the Essex case, honestly to import the goods of the enemy colonies before they were again exported to Europe, is not very satisfactory as an interpretation of the law; for the condition was absolutely binding by the 'rule of 1756', even irrespective of the question whether any blockade had been ordered, and consequently it could not be regarded as annulled by the fact that the blockade had been made less strict on certain stretches.

Both in Great Britain herself and also in America and on the Continent of Europe, indeed, these different British measures during the years 1805 and 1806, especially the new exposition of the law in the prize courts, were regarded as serious blows against the neutral carrying trade. But the American trade statistics given above do not point to this. On the contrary, they show a higher figure for exports of colonial goods during 1806 than during the year before or after; and the figures relating to captures do not show any considerable rise until the following year. It is possible, therefore, that in reality the application of the measures was such as Mahan has laid down. In any case, it may surely be considered clear that during 1806 Great Britain did not get rid of the neutral trade of which she disapproved or put an end to the advantages which, from a British point of view, this trade afforded to the enemy part of the Continent.

Then, at the close of the year, came Napoleon's Continental decree. Owing to the enormous emphasis with which it was proclaimed, as well as to the measures by which it was followed, this gave a tangible occasion for the discussion of new measures chiefly against the neutrals. The ministry which came to power in Great Britain after Pitt's death in January 1806, was under the leadership of Lord Grenville, who had for many years been Pitt's foreign secretary and fellow worker; and for the reason that it embraced many of the most gifted politicians in the country, it is known in history as the 'Ministry of All the Talents'. The foreign secretary at the start was Fox, the most Francophile of all British statesmen, and, after his death in the middle of September, the future leader of the Whig Party, the then Lord Howick, but better known under his later title of Earl Grey. This government was not inclined toward forcible measures; and the only British statesman after Pitt's death who was to some extent equal to Napoleon, but who did not belong to the Talents Ministry, namely, George Canning, somewhat later said disparagingly that the Grenville measures against the Berlin decree 'partook of all the bad qualities of half-measures'.