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    The Continental System: An Economic Interpretation

    Bacher's Account

    Eli F. Heckscher

    7 min

    The main thing, however, is the changed trade route which Napoleon thus brought about. With unusual insight and openness the course of developments was predicted as early as October 2, 1810, in a report (printed by Schmidt in his work on the Grand Duchy of Berg) by Bacher, Napoleon's minister to the Confederation of the Rhine. This seems to give such an excellent picture of the situation that it may be reproduced, as regards its main part, instead of a special account. If the reader will go to the trouble of placing a map of Central Europe before him, Bacher's reasoning will prove extremely instructive.

    The new direction which colonial goods take, now that the coasts of Holland and the Hanse Towns as far as the Oder are no longer accessible, is stated to have created such activity on all roads leading from different places in Russia to Prussia on one side and through Poland and Moravia to Vienna on the other, as also from the Turkish provinces to the Austrian empire with regard to British goods discharged in the Levantine ports, that the Danube will now take the place of the Rhine as the channel through which the states of the Confederation of the Rhine will in future be able to provide themselves. The German merchants consider that this sweeping change in trade that has reduced Holland and Lower Germany to commercial nonentity will lead to active new connexions between Russia, Austria, and Bavaria, and consequently serve to create secure routes, which will convey not only colonial goods, but also British products, as far as the states of the Confederation of the Rhine, and from there to the Rhine and even to Switzerland, as soon as the price there covers the costs of transport. Even if one should admit that the connexion between the Rhine and the Elbe has been really cut by the threefold cordon created by the measures taken in Lower Saxony and Westphalia, which is far from being the case, still the effect would be nothing but the increase of the supply of colonial goods from Russia through Königsberg and Leipzig.

    Even supposing that the King of Saxony, who has spent very considerable sums in encouraging the muslin, calico, and cotton factories and printing works that are now so flourishing in his territories, might be willing to extend the customs cordon from Wittenberg to the frontier of Bohemia, and at the same time be induced to place a tax on raw cotton, which is in conflict with his interest in procuring the best conditions and qualities for his mills, nevertheless this painful sacrifice, which would reduce the whole of the mountainous part of Saxony [Erzgebirge, the chief seat of the calico industry] to the deepest misery, would be no profit to France. It would only enrich the government and merchants of Austria, who would derive benefit from the customs duties on imports and exports and a substantial profit on the transit of colonial goods, which one could never prevent from penetrating as contraband.

    Through Bohemia into Voigtland, Bayreuth, and the Upper Palatinate, and through Upper Austria and Styria into Salzburg [which at that time belonged to Bavaria] and Berchtesgaden. For these have always been corridors through which French and other prohibited goods have passed into the empire of Austria [that is to say, in the opposite direction], despite all vigilance on the part of the customs officials of that empire.

    The cotton trade workers would be compelled to emigrate from Saxony and Voigtland, and even from Bavaria, Baden, and Switzerland, in order to seek their livelihood in the Austrian factories erected and managed by Englishmen, who by this means would again over-whelm the states of the Confederation of the Rhine with their products. In this way France during and since the Revolution has lost a valuable part of the masters and workmen who in their time contributed to make famous the manufactures of Lyons, St. Étienne, Sedan, and Verviers, and the departments of Ourthe and Roer, but who afterwards enriched Austria, Moravia, and also Saxony.

    In other words, the fact was that trade had moved outside Napoleon's jurisdiction. Vienna, in particular, now obtained a great part of the central position in the trade of the Continent that had previously belonged to Leipzig. At an even earlier stage the Jewish fierante of East Europe had sought on the coast of the Baltic, at Königsberg and Riga, the British goods which they or their customers would not do without, and had not been satisfied with the substitutes in the way of Saxon and Swiss manufactures that Leipzig had to offer. They now found a staple in Vienna. To that place the goods went by two routes, a northern one through the Prussian and Russian Baltic ports round the Grand Duchy of Warsaw to Brody in Galicia (on Austrian territory, quite close to the Russian frontier); and a southern one to the same point (Brody), at first from Odessa, that is to say, across the Black Sea, and after the outbreak of the Franco-Russian war, via Constantinople and Saloniki to Lemberg. But this connexion was by no means limited to supplying Eastern Europe. On the contrary, it also became, just as Bacher had predicted, the starting-point of a transport of goods through Bavaria, which permitted the duty-free transit of colonial goods and even passed British manufactures, to the rest of South Germany and Switzerland, and making possible their smuggling into France.

    But it is obvious that these roundabout routes and licensing fees or smuggling expenses and bribes were bound to increase the cost of transport enormously; and so far this new policy also threw serious obstacles in the way of British trade, although these were relative and not absolute hindrances, as the Continental System in its original form was intended to create. Tooke gives a number of interesting examples of the immense cost of freight during the years 1809-12 in comparison with the year 1837, when his book was written. For instance, wheat freights were 50 shillings per quarter, as against 4s. 6d.; hemp freights were £30 per ton, as against £2 10s.; timber freights were £10 per load, as against £1, &c. Silk had to go round-about ways from Italy, e.g., from Bergamo in one case via Smyrna, and in another case via Archangel (sic), so that the transport took one year and two years, respectively; and when it went through France, the expense was £100 per bale, besides the freight from Havre to England. Tooke particularly states that the freights to and from France were enormous. For a vessel of little more than one hundred tons the freight and the French licence might amount to no less than £50,000 for a trip from Calais to London and back to Calais, which for indigo meant a freight of 4s. 6d. per English pound, as compared with 1d. (that is to say one fifty-fourth) in 1837; and the gross freight for a ship whose total value was £4,000 was £80,000 for a trip from Bordeaux to London and back.