The Continental System: An Economic Interpretation
Orders in Council (November 11-December 18, 1807)
20th Century Eli F. Heckscher EnglishThe decisive step, however, was taken by three Orders in Council of November 11, 1807, supplemented by one of November 18, five of November 25, and one of December 18; and to these there were afterwards added further new ones, so that in the end the number of them amounted to no less than twentyfour. It is this system of ordinances, and especially the fundamental ordinance of November 11, that formed the foundation of British policy during the following period—in form, it is true, only until the spring of 1809, but in reality until the collapse of the Continental System. It is also these, and not the January ordinance, that are usually meant when reference is made to the Orders in Council. They were further supplemented in the spring of 1808 by no fewer than six less important statutes governing such points of the system as could not be put into execution without the consent of Parliament.
It is truly anything but easy to explain the purport of this far-reaching complex of regulations. The Orders in Council, in particular, are marvels of obscurity and rambling. We find the same matter scattered over several ordinances, which seemed absolutely to contradict one another, of the same day or with only a few days' interval. This incomprehensibility not only holds good for the people of later generations, but also for the people of that time; and the fogginess of the regulations was a standing butt for the jeers of the opposition. Thus, Lord Grenville declared his belief that the very persons who drafted them had scarcely understood their content; and he also alleged that four points in the same ordinance contained four contradictions, and that he was not a little proud of having been able to understand the connexion at last. The often confused and mutually conflicting explanations of the ministers did not, as a rule, help to clear matters; and owing to the total lack of all special investigations, especially as to their connexion with general legislation regarding shipping and the colonies, certain points at the present time are not easy to interpret. But this does not apply to the general line of thought, which is quite clear; and the pretended object of the measures can be distinguished without any considerable difficulty from their real objects. The fundamental idea is to be found practically in the germ as early as Perceval's speech in February.
Seldom, however, has the contrast between the policy officially proclaimed and the policy actually pursued stood out in a more striking way than in the chief of the three Orders in Council of November 11, the one which can properly be called the blockade ordinance. After a declaration that the January ordinance had not attained its object, either of compelling the enemy to revoke his measure or of inducing the neutrals to take action to the same effect, this ordinance simply proceeds to copy the most important points of the Berlin decree. Thus not only all enemy countries with their colonies, but also all places from which the British flag is excluded (this last point has nothing corresponding to it in the blockade declaration of the Berlin decree), are declared to be subject to the same rule as if they were really blockaded in the strictest manner; and, further, all trade in their products is prohibited. Every vessel trading to those countries shall be fair prize, as well as its cargo and all goods coming from there.
But immediately following these draconic regulations are exceptions which entirely nullify the rule and make possible the very trade so rigorously prohibited. Out of alleged regard for the neutrals, in fact, it is declared that they shall still be allowed to provide themselves with colonial goods for their own consumption and even to carry on 'such trade with His Majesty's enemies as shall be carried on directly with the ports of His Majesty's dominions or of his allies'. And in this the true fundamental principle has found expression. Ignoring details, we may say that the real principal regulations, as distinct from the apparent ones, consists in permitting both direct trade between the home country of a neutral vessel and enemy colonies and also direct trade between the European British port and enemy ports. What is prohibited in the first place, therefore, is direct intercourse between the enemy colonies and their mother countries. But further, in the main, all direct intercourse between the enemy countries and other ports is prohibited, except when the 'other ports' are either European British ports or ports in the vessel's own country. That is to say, intercourse is also prohibited between enemy ports and neutral ports elsewhere than in the home country of the neutral vessels.
Thus the regulations left the intercourse of the neutrals, principally the Americans, with the enemy West Indian colonies so far undisturbed. But by preventing the American vessels from conveying the products of those colonies direct to any port on the European mainland, neutral or enemy, the Orders in Council practically cut them off from almost the whole trade with the enemy colonies, except in so far as they were willing to put in at a British port; for the intercourse which was still allowed between the enemy colonies and the United States itself was of no very great importance, the Union's requirements of West Indian products being quite insignificant. Consequently, we can not deny the existence of a certain amount of consistency in these measures, despite their seeming aimlessness; and this showed itself in a number of details.
The principal thing in all respects was the obligatory call at a British port. The intention of this regulation was presumably, above all, to raise the prices on the products of the enemy colonies and the enemy parts of the European mainland in all ports where they might compete with goods of Great Britain or her colonies. For this purpose it was laid down that both goods of enemy destination and goods of enemy origin, as well as goods which had been loaded in an enemy port, should be discharged on the arrival of the vessel at a British port. The only exceptions were corn, flour, and other unmanufactured natural produce brought direct from the producing country, where there was no competition with British goods, and where it was thought possible, without inconvenience, to show a certain consideration for the exportation by the United States of their own products, as opposed to their re-exportation of colonial goods. The whole of this exception, however, furnishes very significant evidence of the long distance that Great Britain had travelled from the temporary plan of 1793 to starve out the Continent.
When the goods were afterwards to be exported again, the majority of the foreign goods, but not the British colonial goods, nor the actual products of neutral countries just mentioned, were subjected to customs dues; and in complete accordance with the aim of the whole measure these duties attained a considerable height: for instance, for coffee, 28s. per cwt.; for brown sugar, 10s.; and for white sugar, 14s. At the prices then current these rates would seem to have corresponded to at least 20 or 30 per cent. of the value.
What this meant for goods that had been brought under British control only by military pressure, appears from such a detail as the fact that a special provision in the most important of the statutes had to concede to the owner of the goods the right to allow them to be destroyed in port without duty. But besides this there were also certain restrictions in the right to re-export these goods at all, still without the slightest intention of cutting off the enemy's supplies, although it often might seem so, but only in the interests of commercial rivalry. The greatest relaxations, therefore, curious as it may seem, were made in the permission to export to European ports, inasmuch as everything might go there, even enemy property (to be distinguished, of course, from commodities of enemy origin); this was otherwise excluded from all toleration by reason of the British denial of the rule that 'free ships make free goods'. The reason, of course, was that British statesmen, as usual, wished to force upon a reluctant enemy goods via England. All British and East Indian commodities and captured goods were allowed to go to enemy colonies; and foreign goods imported to England might go there by a licence which would always still further increase their price; while, finally, other places, chiefly, of course, the British colonies, might not, without special licence, receive six kinds of goods that played a special part in the colonial trade, namely, sugar, coffee, wine, brandy, snuff, and cotton.
But there were two commodities concerning which there arose a very vehement struggle, namely, raw cotton and cinchona bark, usually called Jesuit's bark. The former was naturally of the greatest importance in the continental industry that competed with the British, while the latter, as is well known, was a pièce de résistance in the older pharmacopoeia in all febrile maladies. After having originally thought of imposing an export duty on these goods too, the British government decided to prohibit their export. Here, at least, where an actual prohibition of export was created, one would expect to meet with an aim at the actual blockade of the Continent, which the opposition indeed often assumed, more or less bona fide, to be the real object of this measure. But, as a matter of fact, nothing was further from the thoughts of the government. Perceval, who in his capacity of chancellor of the exchequer introduced the bills on this subject, justified the prohibition on cinchona bark, it is true, by alleging that the greatest difficulties had already revealed themselves on the Continent, especially in Napoleon's armies, through the scarcity of medicaments, as was indeed shown by the fact that the price had increased sevenfold. But he went on immediately to say: 'The object of the prohibition in this instance was that it might ultimately be the means of introducing other articles into the Continent.' For these reasons the laws themselves authorized licences from the prohibitions, as Perceval again emphasized, in order to prevail on the enemy to receive British goods. 'There would be no difficulty,' he said, 'in obtaining any quantity of this article, the moment the enemy took off his prohibition from the importation of other articles.' Thus the competition point of view was the deciding factor all along the line.
But it remained to regulate the control by seeing that the vessels went as a matter of fact to the British ports; and the regulations on this subject were among those that attracted the greatest attention, although they are not of equal interest in principle. The commanders of British war-ships and privateers were instructed, before the new regulations became known, to warn vessels on the way to enemy or other forbidden ports, and also to order them to make their way to specially named ports. Vessels on their way to an American port which was not in their own country were to go to Halifax in Nova Scotia (which was also used for similar purposes during the recent war) or to a West Indian free port; vessels south of the Equator were to go to Ceylon, to St. Helena or the Cape of Good Hope; and vessels on their way to Europe, either to Gibraltar or to Malta or to any port in the British Isles.
In addition to all this, finally, there were pure measures of reprisal, framed according to their French counterparts. Trading vessels were to remain enemy property and to be confiscated as such, even if they were sold to neutrals; and what was the most unreasonable of all the regulations, the mere possession of a French certificate of origin as to the non-British nationality of the cargo was to involve the confiscation of both ship and cargo. On the other hand, since the lack of such certificates involved capture on the part of the French, a neutral vessel, at least if it did not sail under British convoy, had, according to this last regulation, no alternative between breaking the orders of one power or the other, with the consequent risk of capture from one side or the other, provided, it is well to remark, that they wished to act openly and honestly, which therefore was practically impossible. The only effect of all this was the establishment of a system of double ship's papers, which gradually attained an immense scope; and thus in reality the consequence was that the laws of both sides were broken.
In this multiplicity of regulations—which, however, have not by any means been fully reproduced here—the most prominent thing of all is the obligation to call at a British port, with the possibilities thereby created of controlling and rendering dearer enemy products, especially enemy colonial goods. In the course of time, too, the British ministers managed to find a comparatively clear expression of their ways of thinking in this respect. This was especially the case in almost identical utterances made in the spring of 1812 by three of the ministers. As formulated by Lord Bathurst, the president of the Board of Trade, that is to say, minister of commerce, it ran as follows: 'France by her decrees had resolved to abolish all trade with England: England said, in return, that France should then have no trade but with England.' This, of course, did away with the idea of blockade as such, and the licensing system took its place in the seat of honour, partly through the 'proviso' regulations of the ordinances themselves and partly through the licences expressly permitted in them.
This, however, was far from clear to everybody; nor was it approved by all to whom it was clear. Some of the home critics of the British government, somewhat later including Canning, who was a member of the government when the ordinances were issued but had to leave it in 1809, considered that they ought to be true to their alleged purpose of making the enemy feel the consequences of his own injustice and to that end cut off his supplies. But more numerous were those attacks of the opposition which blamed the government for its advertised intention, doing so under the unfounded assumption that it was sincere. These critics dwelt on the impossibility of starving out the Continent, the small extent to which a shortage of certain articles of luxury was felt, the encouragement to new branches of production and the invention of substitutes which such a blockade might introduce into the Continent, and all the consequent injury to British industry and British colonies. In point of fact, however, all this criticism did not apply to the Orders in Council as they worked and as they were intended to work, but to Napoleon's Continental System. To that extent, therefore, it implied a recognition of the appositeness of that system, which was certainly not the intention of the critics. The real character of the government policy did not, however, escape criticism altogether, as when Lord Grenville in one of his first discussions on the Orders in Council, in the House of Lords on February 15, 1808, declared that: 'This principle of forcing trade into our markets would have disgraced the darkest ages of monopoly.' On the whole, however, it may be said that the criticism, usually very much embittered, missed the true point of the policy of the government.