The Continental System

Economic Sanctions Lead to Unintended Consequences

The Continental System (also known as the Berlin Decree, or the Continental Blockade) was the name given to a system of economic sanctions established during the Napoleonic Wars, by France against Britain, her colonies and her allies. These measures were implemented by Napoleon as part of his struggle against Britain and in retaliation for the British blockade of French ports by the British navy.

The Continental System was established by Napoleon's “Berlin decree” of Nov. 21, 1806, which declared the British islands in a state of blockade, and prohibited all commerce or communication with them. British shipping was forbidden from entering any European port and all European ships were forbidden to sail to Britain or any territory she controlled. Violators were subject to the seizure and forfeiture of their ship and cargoes. In addition, any British citizen found in any country occupied by France or her allies was declared to be a prisoner of war, even if that person was not a member of the armed forces. This meant that any merchant or trader could be arrested. The system was to be absolute and prevented even non-commercial communication between Britain and the European mainland, such as the movement of mail.

England retaliated with economic sanctions against Napoleon by imposing a blockade of its own. Britain issued an Order in Council on January 7, 1807 which prohibited all vessels belonging to neutral nations from entering any port belonging to France or her allies, or under her control. Any vessel violating this prohibition would be confiscated together with its cargo. British efforts to prevent American ships from trading with France were one of the factors leading to the War of 1812.

The French responded with even stricter economic sanctions. Any commercial vessel which allowed itself to be searched by a British warship, or which paid any tax or duty to the British was deemed to be denationalized and was treated as if it were treated as if they were British and could therefore be seized. Further decrees ordered the burning of all English imported goods any where that they might be found within the territory of France or its allies.

The primary purpose of the Continental System was to damage the British economy, which was largely export oriented and therefore needed foreign markets, and also needed to import raw materials. As an island nation, Britain depended on seaborne trade to maintain its economy and provide its war effort with resources. Napoleon believed that if he could isolate Britain, he could destroy its ability to continue fighting. This tactic is reminiscent of later efforts by the Germans during World War 1 and 2 to impose a submarine blockade on Britain.

The Continental System had some success in hurting British trade and economic interests. By some estimates, British trade declined by as much as fifty percent. It also benefited the some parts of the French manufacturing sector by acting essentially as a protective tariff, making British imports unavailable or unaffordable in France and its territories. This stimulated the growth of some local manufacturing and many French capitalists and industrialists made large profits as a result of the embargo on British goods. However it also killed off many trade based industries and deeply hurt the economies of major French ports such as Marseilles. Moreover, the Continental System could not be strictly enforced. British control of the sea meant that British goods continued to be smuggled in, and many French allies only paid lip service to the blockade and turned a blind eye to British imports.

The economic blockade also had some unintended negative repercussions. It prevented the importation of goods and so many items became scarce or extremely expensive, leading to inflation. The Continental System in general hurt the economies of the European countries who enforced it. As a result of rising prices and growing scarcities, the measures were very unpopular with ordinary citizens and affected morale and public opinion.

But the Continental System's most significant impact, was its role in Napoleon's downfall; for in order to enforce the sanctions against the British, Napoleon gambled and lost his empire.

The first test of the system came when Portugal refused to enforce the Continental System. In retaliation, Napoleon attempted to seize the Portuguese fleet and the Royal Family. The Portuguese royal family escaped by sea to the Portuguese colony of Brazil. Meanwhile fighting continued in Portugal as Portuguese forces held out against the French with British help; this would lead to a long drawn out war encompassing not only Portugal but also Spain, which became known as the Peninsular Campaign. The fighting drained France of much needed manpower and resources.

Most significantly, by 1810, Russia's Czar Alexander I had had enough of the Continental System and was beginning to reopen trade with Britain. One of Russia's chief exports to Britain at the time was timber for use in ship building, which in turn allowed the British to build and maintain the warships which allowed them to remain masters of the sea and harass the coastal areas of Napoleon's empire. Napoleon sought to bring Russia to heel and force it to comply with the blockade.

Napoleon realized that if Russia broke away from the Continental System other European nations would follow, and this would cause the entire System to collapse. He therefore decided to make an example of Russia and assembled one of the largest armies that the world had ever seen, in order to invade Russia. He had expected that Russia would quickly sue for peace, but instead the French expedition ended in a disastrous defeat for the French from which they would never recover.

Of the 600,000 men who marched with Napoleon into Russia, fewer than ten percent returned. France had lost the cream of its army and it could not replace these losses. Now the territories of the French Empire, which only a few months before had seemed securely within Napoleon's control, all slipped away as his enemies closed in. Paris itself was occupied and Napoleon was forced to abdicated.