Transmarine Markets (1808)

It was important for Napoleon, accordingly, to attain during 1808 a more effective application of the measures of the preceding year. Great Britain also now encountered various new difficulties; but the peculiar thing about them is that they had no direct connexion with Napoleon's proceedings, but at the most with the British Orders in Council—a fact which the British opposition, as in duty bound, did not fail to point out. The truth is that they were chiefly caused by the American Embargo Act, partly through the diminished importation of American goods, and partly through the great diminution of tonnage, as explained in part II, chapter IV. Accordingly, the result for Great Britain was a diminished importation of, and raised prices on, raw materials, which in reality did not at all correspond to Napoleon's wishes that prices should be low in England and high on the Continent. The imports of raw cotton sank by 42 per cent., of American cotton to Liverpool by no less than 82 per cent., of wool by 80 per cent., of flax by 39 per cent., of hemp by 66 per cent., of tallow by 60 per cent., &c. Naturally enough, under these circumstances, the price of the most important kinds of raw cotton, for instance, increased in the course of the spring and summer 100 per cent. or more. Especially striking, too, was the rise in prices on goods from Scandinavia and from the Baltic countries in general: timber, hemp, flax, tallow, bristles, tar, but above all linseed, the price of which, at least according to Lord Grenville's statement in the House of Lords, rose more than tenfold. The shortage of raw cotton reacted on the spinning industry, which did not fail to complain of its distress by a whole series of petitions to Parliament, wherein special emphasis was laid on the consequences of the breach with America. According to undisputed statements made by the opposition speakers in the beginning of the following year, for instance, the poor-law burdens in Manchester doubled in the course of 1808; only nine mills were running full time, thirty-one had been running half time, and forty-four had entirely suspended operations.

Many of these complaints, however, referred to the first months of the year. The rise in prices, on the contrary, was partly due to speculation, which began in the latter part of the year and in many respects quite revolutionized the situation. The year 1808, as it went on, came to be dominated in fact by one of the great events in the history of the Continental System—the Spanish uprising. But the direct economic significance of this movement was not primarily what Napoleon once stated, namely, that it gave to England a 'considerable amount of sales on the Iberian peninsula'. What a limited part this matter played can be most easily perceived from the following export figures taken from the British trade statistics ('real values').

As appears from this table, the Pyrenean states after 1807 do not figure very largely in the total exports of Great Britain, despite the fact that the increase for Spain is very large in itself; and a good deal, even, of the amount which is included is the direct opposite of new sales, being really supplies for the maintenance of the British troops and the insurgents. Moreover, it is inseparable from the geographical position of the country that the Iberian peninsula could not be suited for what Great Britain chiefly needed on the Continent, namely, an entrance gate for its goods. The smuggling which now began across the Pyrenees into France cannot have weighed very heavily, as is shown by the figures in the tables themselves. The establishment of the new relations with Spain in 1808, like the flight of the Portuguese royal family to Brazil in the preceding year, was principally important in quite another way, namely, in that it placed Great Britain in very close connexion with the transmarine markets. The West Indian possessions of Spain, especially Cuba and Porto Rico, thus transferred the trade in colonial goods to England, while the mainland colonies in South America and Mexico created a large new market for British industrial products. It is easy to understand that in British eyes this new position seemed to open up the possibility of circumventing the whole of Napoleon's laboriously constructed rampart against British trade; and this was all the more welcome because at the same time the United States had shut herself off from the rest of the world. The very peculiar British export figures to America for these years show the following fluctuations ('real values'):

The whole of this striking transformation, which caused the exports to Central and South America to become a more than abundant compensation for the very great reduction in exports to the United States, was wont to be cited by the British government speakers as evidence that the Orders in Council had not injured the exports of the country, but had only caused a transition to direct trade with the former markets instead of sales to the North Americans as intermediaries. The mouthpieces of the opposition, however, maintained, and with more reason, that this new trade was really a new conquest brought about by the Spanish uprising and consequently no result of the destruction of trade with the United States by the Orders in Council.