The Continental System: An Economic Interpretation

Heckscher, Eli F.
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Harald Westergaard, ed. C. S. Fearenside, trans.
First Pub. Date
Oxford: Clarendon Press
Pub. Date
24 of 30



THE development of the industrial life of France under the influence of the Continental System, like the development of all the industrial countries under that system, took place especially in the sphere of textile industries; and nowhere did the conflicting tendencies appear so marked as there. Nevertheless, a great deal of the development of the French textile industry was not only devoid of connexion with the blockade policy itself, but, on the contrary, an evidence of its restricted range.*3



This applied especially to everything which falls under the heading of luxury industries, including the most brilliant and historic textile industry of France, the manufacture of silk. We, who only recently felt the pressure of a rigorous blockade and shortage of supplies, can best appreciate the fact that in such a situation the production of luxuries would hardly expand and take more and more varied forms, and perhaps still more the fact that governments, however great their lack of intelligence in the sphere of economics, would be foolhardy indeed to go so far as to encourage, not to say enforce, such production. As this was the case during the first French empire, therefore, it is in the very nature of things that the cause can not be sought in the Continental System regarded as a measure of blockade against Great Britain. On the other hand, it is intimately connected with the general protectionist tendency that completely dominated Napoleon and forms the explanation of the peculiar nature of the Continental System as contrasted with the corresponding system of the present day. It was precisely the historic luxury industries of France that the inheritor of the administrative traditions of the Bourbons most unhesitatingly and enthusiastically supported; and it was mainly in the interest of the silk industry that, on the one side, a licensing system was carried out with its obligation to export French industrial products, and, on the other side, the commercial measures against the allies of France, which comprised a monopolization of Italian raw silk for the requirements of the French silk industry and every conceivable measure against the foreign rivals of that industry.


The vaunting luxury in both word and deed, which in Napoleon's view was a principal means of raising the prestige of the empire both internally and externally, also worked particularly well with the tendency to create sales for industries of the kind in which the French had excelled for centuries; and a great deal of the encouragement of industry therefore consisted, quite naturally, in orders of all kinds on behalf of the court and imperial palace. Probably the fact that such a policy diverted productive forces from turning out what was necessary for the support of the people as well as for the prosecution of the war, did not greatly occupy Napoleon's thoughts. To him, in fact, the function of economics presented itself more in the light of the popular notion of the necessity of 'providing employment' than as a need to bring about the greatest possible result from the efforts of limited powers. But in this respect a far more correct perception has forced its way into the minds of the governments of nearly all countries during the recent war—the German Vaterländischer Hilfsdienst (vulgo, Zivildienstpflicht), the British National Service, and various other names, form the best evidence of this—despite almost equally great economic ignorance in the beginning; and this shows how comparatively gentle, after all, was the pressure of the Continental System in comparison with that of the recent war. As the object of our investigation is to determine the actual effects of the blockade policy, therefore, there is no reason to pursue any further the industrial development on its luxury side.



On the other hand, the situation is quite different in the case of the other branches of the textile industry. Of these, the cloth manufacture had quite as deep roots in the history of France as the silk industry; and it had, like that, and in fact like the whole of French industrial life, suffered greatly from the storms of the revolution, both through the general insecurity of life and limb and through the hopeless state of the currency in consequence of the assignat system. It now raised itself out of its decay and had a brilliant period, which,—for instance, in Rheims—surpassed the last years of the ancien régime, which was now justly remembered as having marked the summit level of old French material culture. Undoubtedly, the development of the woollen industry was promoted by Napoleon's policy, especially by careful work in the way of production of wool and the procurement of wool from Spain, and also with regard to the coarser clothing in consequence of the military requirements, which always and everywhere in our climes make special demands on this branch of the textile trade. Remarkably enough, so far as one can judge, the greatest progress was made in one of the incorporated territories, namely, the Roer department, meaning that particular part of the present Rhine province which is situated on the left bank of the Rhine (Nieder-Rhein). In the now world-famous textile centres, Aix-la-Chapelle, Cologne, &c., there were almost the only industrial centres which the old French manufacturers recognized as equal rivals in the finer branches of the clothing trade.*4 It is true that the blockade against Great Britain also played its part here, and still more, perhaps, the blockade against the continental rivals of France. But we cannot speak here of any at all decisive effect of the Continental System itself, as the woollen industry was long established in France and was not brought to any distinctly higher state of prosperity than it had attained before the Revolution, despite the fact that various new specialities were taken up and also various technical advances were made, of which more anon. Thus it was principally for the regions which had previously been outside France, or had been treated by the customs authorities as foreign countries, that the policy became important, inasmuch as it gave them a share of the sales on what was at least intended to be the hermeticallysealed French market. According to Chaptal's calculation, exports had indeed absolutely declined, if one takes into consideration only the old French territory, although internal sales and the total production had increased since 1789. The situation was less favourable as regards the linen industry, where even in the incorporated territories it was only the Belgian district of Ghent that showed any marked development.



Especially with regard to the linen and woollen industries, however, it is true that the comparatively slow development was caused by the expansion of the cotton industry, an expansion which was unique, and, in the eyes of contemporaries, quite phenomenal. Here there is no doubt that we are brought face to face with an effect of the Continental System; for, on one side, the whole of this branch of industry was comparatively undeveloped before the Revolution, while, on the other side, the competition of Great Britain was more overwhelming here than anywhere else in the industrial life of France. The French people had already accustomed themselves to cotton goods to such an extent that the prohibition on imports in 1806 was all that was required to speed up the domestic production amazingly, especially as the foundation had been largely laid by the many prohibitions and embargoes during the whole of the preceding decade.


Here again it was two incorporated territories that exhibited the most violent growth, namely, Mülhausen in Upper Alsace, with old traditions in that line, and Ghent, which under the leadership of one man, Liévin Bauwens, the great captain of industry, stands out as a striking example of one of the two kinds of development due to the Continental System. Ghent, it is true, had old and boasted textile traditions, dating from the Middle Ages; but long before the Revolution almost all manufacture had disappeared there, and as the revolutionary wars put an end to the little that remained, this old manufacturing centre had come to be looked upon as a dead town. In 1801, however, Liévin Bauwens started there a machine cotton-spinning mill and also a hand weaving establishment. To begin with, he was almost alone in the matter, being helped merely by his brothers, but as early as 1803 he had no less than 227 workmen. It was not long before his example began to be followed by a number of other persons, especially relatives, who entered into violent competition with him, particularly for the altogether inadequate supply of labour. An enormous expansion thereupon began; the whole of Flanders and northern France were covered with spinning-mills and home weavers, the new enterprises extending, in fact, as far as Paris and its environs. But Ghent remained the main centre, and for a fairly long time it was the only place in the empire where cotton goods were manufactured on a large scale, especially for military requirements; and it also obtained as markets, not only France and Belgium, but also Holland, Italy, Spain and the larger part of Germany. At the summit level of this prosperity the former 'dead town' was stated to have fifty factories and ten thousand workers in the cotton trade; and the shortage of labour was so great that wages jumped up to what was then the amazing amount of 5-8 francs per diem.


In contrast with this production for sale on a large scale there existed in Mülhausen, and in southern Alsace in general—and had long existed—a flourishing manufacture of the finest qualities of calicoes and printed cotton goods. The real impetus, however, came with the annexation of the town by the French republic in 1798; and the Continental System made it the leading centre for calicoes and prints upon the Continent, at the expense both of Basel and of British sales in Europe. The importance of the development at Mülhausen appears best, perhaps, from the population statistics, which show an increase from 6,628 in the year 1800 to 8,021 in 1805 and 9,353 in 1810, a growth of 41 per cent. in ten years. Alongside this, however, there were also very important and comparatively new centres for the cotton trade within the limits of old France, especially in the old textile districts of northern France and in Paris and its suburbs. One of the most celebrated French leaders of industry, Richard Lenoir, was stated by a German observer who is generally regarded as reliable (Fahnenberg) to have had in his factories such for that time incredible numbers of workmen as 10,600 in 1808 and 14,000 in 1810. According to the statements of Chaptal, who is throughout obviously a partisan of the new industry, it is true, but who in spite of this is in many ways our most reliable source of information, the production of cotton yarn was already sufficient for home requirements almost up to the highest number (finest grades)—in reality, however, up to number 100 only. Even as regards woven cotton goods, in his opinion, the imports had declined to about 6 per cent. of the figure for the last year of the ancien régime; but in this estimate a considerable amount of smuggling, for which an overwhelming evidence exists, was assuredly left out of account. It is also worthy of note that what was at times a very considerable export of piece goods had begun.


Evidently this development was calculated to give Napoleon himself and his helpers a great certainty of victory, both as an evidence of the profitableness of the Continental System to France and as a blow against the economic supremacy of Great Britain. To what a great extent the whole thing was regarded as an important item in the struggle against Great Britain is shown by many facts. When Napoleon visited Oberkampf, the most famous of the leaders of the cotton industry, who as early as 1760 had laid the foundation of calico printing in old France by the establishment of his famous works at Jouy, outside Versailles, he decorated him and added the explanation: 'We are both carrying on war against the British, but your war is the best.' And Liévin Bauwens produced a wonderful judgment on the part of the British Court of King's Bench, by which, on the accusation of Lord Erskine, he had been condemned to death in contumaciam, because, 'not content with having stolen the secrets of England in the art of tanning, he had also robbed her of the most important branch of her trade, the cotton manufacture, which was the apple of her eye.'


In reality, however, there was no point where the two opposing tendencies of the Continental System were so much in conflict with one another as here; and the reason was, of course, that the industry was based on a raw material which was for the most part unobtainable by other means than by the forbidden route across the seas. From the very first moment, therefore, the shortage of raw materials hung like the sword of Damocles over the head of the flourishing new development, causing continual fluctuations and constant changes. During the year 1808, for instance, Liévin Bauwens, according to his own statement, employed 1,269 workmen on May 1, but only 230 on November 1; and the same state of affairs was said to prevail among his competitors. Moreover, according to the same authority, the price of raw cotton rose at the same time from 5.25 to 11 or 12 francs per half a kilo and then sank to 6 or 7. As early as 1807 the shortage of raw cotton had begun to make itself felt in France, and in the course of 1808 it produced a genuine crisis in the cotton industry, which found expression in many forms. Thus, for instance, the prefect of the Aube department declared that the closing of the spinning-mills in Troyes caused by the 'equally sudden and unique rise in the price of raw cotton' had reduced 10,000 people to misery; and on this account he submitted a placard which was apparently insurrectionary.*5 According to another statement, the difficulties of the French weaving mills were further increased by the fact that the weaving mills in Germany and Switzerland, owing to the scarcity of yarn prevailing there, had gotten hold of French cotton yarn and thus rendered that dearer. The difficulty was partly overcome this time, and the state of prosperity continued into the year 1810, which as a rule marks the summit level of the industrial prosperity of France, as also of England and the non-French parts of the Continent. But then, as we know, came the great crisis, of which the shortage of raw cotton formed one of the most obvious causes; and this shortage was made worse by Napoleon's Rambouillet decree, issued in the spring of 1810, which dealt a severe blow at American shipping. During the following years of the empire the shortage became more and more acute, and in 1813 it led to a complete stoppage of operations.


The whole of this position is not in the least degree difficult to explain, but its importance is worthy of illustration with figures. The available statistics especially show how practically impossible any real competition with the British industry—or, to be more explicit, the impossibility of creating an industry that could provide the whole population of the Continent with cotton goods on approximately the same terms as were offered to British and American consumers—must have been made by the mere fact that raw material was scarce or unobtainable. (See next page.)


Table. Click to enlarge in new window.


On examining the columns for North and South American cotton we note the enormous distance between British and continental prices. During the years 1808-13 the prices, even in Leipzig, the centre of the European cotton trade, are almost without exception twice as high as in London, and in certain years (1808-9) they are four times as high. To a far greater extent than one would have expected beforehand, the figures follow one another at similar distances—a fact which appears with particular clearness in the increase of price on Georgia cotton in 1808 (autumn) and in the fall of prices corresponding to both qualities in 1811. This illustrates what has been previously said concerning the almost uniform increase of prices caused by smuggling. It is quite true, indeed, that we have no security here for agreement in quality between the different quotations; but the conclusions here put forward may be said to hold good a fortiori, as at least one factor is excluded which would increase, and not diminish, the distance, namely, the heavy depreciation of British currency, which makes the British prices too high when, as here, they are converted to francs at par. A levelling-down tendency first appeared in 1813, in connexion with the Anglo-American war, which raised the British prices, and the fall of the Continental System on the European mainland, which lowered the continental prices; and the year 1814, owing to the continuance of the former factor and the peace on the Continent, led to a unique situation, in that Georgia cotton was cheaper in Leipzig than in London.


However, the table shows something more, namely, that the French prices without exception stood higher than the Leipzig prices. Nor is this surprising, in view of the stricter customs watch in France; but it is none the less a fact which made still more difficult the position of the French cotton industry. Unfortunately, it is precisely these figures that least bear comparison in the table; but light can be thrown on the matter by other figures, based on French consular reports, for a number of different places at the same two points of time, namely, the two crises of May 1808 and June 1811. If we arrange these places as nearly as possible in accordance with the magnitude of the prices, the figures assume the following shape (francs per kilogram):

City May 1808
City June 1811
Pernambuco Louisiana Smyrna Brazil Levantine

Marseilles 6.50 London 2.30 1.28
Antwerp 10.81 8.40 6.92 Naples 4.38
Paris 12.00 9.50 7.50 Trieste 5.08-7.55
Rouen 12.90 10.00 7.92 Leipzig 8.28 5.78
        Frankfurt 6.55-7.20
        Basel 6.96
        Milan 7.55
        Paris 16.00-16.40 9.00-9.20
        Bremen 9.61


As we see from this table, the French industrial centres come last, with the sole exception, at the later time, of Bremen.


As all this necessarily followed from the nature of the self-blockade, it could not take Napoleon by surprise; and in point of fact he was prepared for it, although his counter-measures were somewhat hesitating. At times the only expedient he saw was to replace the colonial cotton by some other cotton which did not have to be obtained by sea. The most obvious kind was Levantine, but here, too, there were great difficulties, arising partly from its short staple and generally inferior quality and partly from the great delays and inconveniences of transportation, as it could not be conveyed across the Mediterranean and as a very expensive transport in wheeled vehicles had consequently to be arranged through Bosnia via Genoa and Marseilles. The figures given above also show how the French prices for Levantine cotton ran up, even in comparison with the British prices for the far more valuable American cotton. The situation was all the more unsatisfactory because Napoleon would by no means be satisfied with the coarse goods that alone could be produced from Levantine cotton. Thus there arose the idea of starting the cultivation of cotton nearer home, preferably within the borders of the empire; and in this connexion the most obvious choice was Naples. Naples, to use the expression of the French envoy there, was to be 'France's richest colony', or, to borrow a phrase from a French historian,*6 'the tropical element' in the Continental System; it was this fact that caused Neapolitan cotton alone to be excepted from the enormously increased customs duties imposed by the Trianon tariff. But the cotton that could be obtained from Naples (Castellamare), even in combination with that which was admitted in later years from Spain (Motril) and with what could be otherwise scraped together from places nearer home (from Romagna, &c.), supplied but a small fraction of the total requirements; on the basis of Chaptal's figures for the output of [illegible text] the spinning-mills in 1812, one may perhaps calculate this supply at 12 per cent. of the whole.*7


All this was so obvious that Napoleon could never feel unmixed joy at the prodigious development of the cotton industry, but, on the contrary, time after time occupied his thoughts with the idea of rooting out cotton goods and replacing them by other textiles, such as had long been manufactured in France and were based on domestic raw materials. Even as early as 1809 he declared that 'it would be better to use only wool, flax, and silk, the products of our own soil, and to proscribe cotton forever on the Continent, because we have no colonies; but as we cannot control the fashions, of course,...'*8


The same thought lay behind his resolution, effected in the following year, to offer a prize of no less than a million francs for the invention of a flax-spinning machine; but after the outbreak of the crisis of 1810-11, he took such a strong step against what was after all largely his own work as, in January 1811, to banish cotton goods from the imperial palaces. But for the very reason that Napoleon had given two years previously, the extirpation of cotton goods—at which he assuredly did not even aim at this stage—was a hopeless undertaking; and he, like his people, had to take the consequences of a situation from which there was no escape.


The development of the cotton industry is characteristic of the effects of the Continental System, not only through the dualism that existed between the exclusion of raw materials and the forcing of manufacture, but to an equal extent through the violently enforced stimulation of a production that had not grown up out of increasing natural requirements for an article but out of a sudden embargo in combination with state measures of all kinds. There is no doubt that great over-speculation had occurred in the industry and had had its share in the French crisis of 1810-11, just as a similar over-speculation in the colonial trade gave the impulse to the crisis in Great Britain. Mollien, an observer who formed unusually cool judgments, pointed this out in a letter to Napoleon, and especially called his attention to the insufficient supply of capital possessed by the industry and its consequent dependence on loans and bills of exchange. In his memoirs he is, on the whole, very critical not only of the heads of factories, especially Richard Lenoir, whose untenable business position and reckless way of living he says that he explained to the Emperor, but also of the industry itself, where, in his opinion, many millions had been invested in what could have been made equally serviceable at half the expense.*9


When, after some months, the crisis of 1810 reached the cotton industry, it hit it very hard and effectively, especially the spinning-mills, which as a rule seem to have seen their number of workmen decline by a third in the course of 1811. There was a general improvement in the course of 1812 which continued in places during most of the following year, at least if we may credit the deliberately roseate reports of the home secretary to Napoleon in the latter half of 1813. But the Ghent industry declined steadily early in 1813, and later on in the same year, that is to say, before the fall of Napoleon, the decline spread in ever-widening circles. Probably with great exaggeration, but certainly not without grounds, the Executive Committee for Cotton of the Council of Manufactures expressed the view in the following year, immediately after the Restoration, that the whole of this branch of industry was ruined in 1813 to such an extent that 600,000 individuals had to choose between begging or putting an end to their misery on a battlefield. Capital to the amount of 300,000,000 francs was paralysed and working power to the value of 230,000,000 francs was lost. The most comprehensible picture of the decline from the summit year of 1810 to the autumn of 1813 is offered by the official figures for the Ghent industries, reproduced on the next page.*10


Table. Click to enlarge in new window.


We note in these figures the powerful effect of the crisis of 1811 as regards the spinning-mills, but, in contrast with this, no effect at all as regards the weaving-mills or printing works, while the decline in 1813, with a quite different kind of uniformity, extends over all branches of the industry; and, if we judge by the number of spindles, it implies a reduction of almost a half.


The strongest evidence of the enforced stimulation of the industry, however, is shown in the events occurring at the fall of Napoleon. When the frontiers were opened in connexion with the march of the allied armies, and later, in April 1814, formally opened by a series of decrees issued by the Provisional Government, the cotton industry collapsed altogether, and almost all the leading manufacturers were ruined. The majority of them—chiefly Richard Lenoir, but also Liévin Bauwens—had received liberal support in the form of loans from Napoleon during the crisis of 1810-11, which they had not been able to repay; and with the fall of the empire all prospect of their ever repaying them disappeared. Bauwens, who had been lauded in every conceivable fashion as the benefactor of his town and as a pillar of the prosperity of France, saw his property sold by distraint, and he himself had to flee to Paris to escape imprisonment. Chaptal particularly regrets the ruin of the great nankeen manufacture owing to the overwhelming competition of Indian and British goods, which were allowed to enter on payment of duty; and the amount of the duty was in reality, according to circumstances, 45-50 centimes per metre, which can not have been less than 20-25 per cent. of the value of the goods and consequently no mean protection in itself.*11 But, of course, this was a very considerable step from complete embargo, despite the smuggling.


Whatever construction one may put on the matter, the fate of the French cotton industry on the fall of Napoleon shows that it had by no means become capable, during the time of the blockade, of holding its own against foreign competition. Nor is the great prosperity which, after a quite short interval, occurred under the Restoration any real evidence of its competitive efficiency, inasmuch as a prohibition of the imports of foreign textiles was almost immediately re-introduced; and the protection of the industry was thereby even considerably increased, as raw cotton now came in free. Indeed, as will be shown throughout this chapter, the technical advances in French industry were not, on the whole, very great under the Continental System, and they still fell far behind Great Britain in almost every respect. Without the help of Englishmen very little progress could as yet be made in anything which had to do with engineering or metal working industries; and Liévin Bauwens, for instance, started his machine spinning-mills with the help of five foremen whom he had virtually kidnapped from England, and whom he detained half with their consent and half by violence. As has been indicated before, however, it was almost inevitable that the blows of the Continental decrees against everything living or dead which bore the name of English should have a restraining effect on the spread of English ideas and the removal of English mechanics or inventors to the Continent; and, indeed, Mollien said somewhat bitingly, in connexion with his general criticism of the new industry, that the machinery was built by 'roving Englishmen who were not the best mechanics of their country'. Chaptal's complacent account of how, through his far-sightedness, machines were procured which were the best in Europe and were continually being developed by improvements from without and by native invention, must also be taken cum grano salis.


This appears best from what, in the main, is distinctive of the two great branches of industry that were revolutionized by the inventions of the immediately preceding generation (the textile and iron industries), namely, that France and the Continent in general were even at the time of Napoleon's fall far from being in a position to take up the new fundamental processes on which the industrial life of England had been based for quite a long time.



In the sphere of the textile industry this holds good both of the power to spin high numbers of yarn (fine grades), the use of the steam-engine in the spinning industry, and the power-loom. Regarding the first of these, as has already been mentioned, they had not gotten beyond number 100 in cotton yarn in 1815; it was reserved for the Restoration to move forward in a few years to number 200 or (as a rarity) even 291. With regard to the steam-engine, we have already mentioned that one single French spinning-mill had passed, as early as 1787 (the year after the Eden Treaty) to the use of steam power, which was at that date a complete novelty even in England. It would be difficult to find anything more indicative of the technical stagnation which then occurred that the fact that the next time a French steam spinning-mill is mentioned is no less than twenty-five years later. It was not until 1812 that the pioneering firm of Dollfus, Mieg & Cie., which is still famous all over the world, set up such a mill in Mülhausen—that is to say, in an incorporated territory. Power-loom works, which, it is true, came far later than the revolution in spinning in England also, but which nevertheless began to be set up there as early as 1801, are scarcely mentioned on the Continent during the whole of this period. The only examples known to the writer from the territory of the empire—where, for that matter, there is a total lack of detail—belong, like steam spinning-mills, to the incorporated territories, namely, Ghent and Sennheim (in Upper Alsace); and neither of them can have been of any great consequence, as the information about them is so sporadic. In the department of mechanical printing, it is true, greater advances were made on the Continent, in that the great invention in this department, cylinder printing, appears to have come into use at Oberkampf's factory at Jouy, as the first place on the Continent, in 1800, and in Mülhausen and other places in 1805-6; but even this was just twenty years after the institution of similar technical processes in England. In the department of engineering technics it was only outside the cotton industry that the Continent during this period ever took the lead in any decisive respect, namely, as regards both the Jacquard loom, which at first really served the silk industry alone, and Girard's invention of a flax-spinning machine. This last, which was patented in 1810 and thus realized one of Napoleon's hopes, significantly enough, left France before anything had been achieved; the inventor had to flee from his creditors to Austria, and an Englishman got hold of his invention. This gave rise to a flourishing English industry, which did not return to the native country of the inventor until twenty-five years after the invention. The continental textile industry reached the same level as the British textile industry in only one single department, namely, in dyeing and other branches where chemistry could be employed, of which more anon.



Still more striking is the stagnation and backwardness of French economic life in the sphere of the iron industry; and it is highly significant that Chaptal, in his detailed and enthusiastic description of the progress of industry, here confines himself exclusively to the department of manufacturing—especially the making of scythes, pins and needles, files, awls, hammers, and other tools—and says nothing about the production of iron, although it was just that which in England had undergone a complete revolution in all its stages during the preceding period. The explanation must be found in an almost incredible backwardness attributable to the French iron industry, which is all the more remarkable in view of the fact that that branch of industry was manifestly of the greatest importance in the incessant wars, and, to judge by accessible figures, had also undergone a very great quantitative development. Nevertheless, the fact itself seems to be quite evident, as shall now be shown.


Although coking and the making of pig-iron by means of coke—that is to say, the smelting of iron-ore with the help of fossil fuel—date back to about 1735, and at least twenty years later had begun to be widespread in English iron-working, French smelting-furnaces continued to be operated almost entirely with charcoal, even after 1808, in spite of the shortage of wood which made its appearance in that year. The only known example of coke smelting-furnaces was offered by the now world-famous Creusot works, which had started the new methods in 1785; but the entire process went steadily backward during the revolutionary era. In 1796 the iron was so bad that it could be used only for ballast; in 1806 the orders of cannon for the Navy were taken away; and the annual production during the years 1809 to 1812 rose to no more than 2,300 to 3,000 tons. Quite parallel was the case with the revolutionary change in the production of malleable iron—smelting in Cort's reverberatory furnace or the puddling process—which freed this second stage of iron-working from dependence on charcoal. This invention was considerably younger, it is true, as it dates from 1783; but even during the eighties it had come into use in England and was at the time of the Continental System widely employed in English ironworking. During the years 1802 and 1803 it had been searchingly studied by the Swede, Svedenstjerna, and the Frenchman, Bonnard, working together. Here, too, the Creusot works seem to have been the only ones of any importance, inasmuch as a reverberatory furnace was started there in 1810, though it is not clear whether this involved any use of coal fuel; other experiments with puddling were failures from the very start.


As regards the production of steel, that is to say, iron with a large content of carbon, Huntsman—also in England—had found a solution of the problem of producing cast-steel (crucible steel) about 1750,a solution which was rapidly noised abroad and twenty years later was pretty generally adopted in England. On the Continent this method seems to have been introduced in 1808 by the Swiss manufacturer, J. C. Fischer, whose establishment outside Schaffhausen became the object of great attention; and in 1812 the firm of Krupp was founded for the same purpose. But in the territories of the French empire only one isolated example of such manufacture is known, and that was introduced by two Belgians in Liège, incorporated territory. Finally, the level attained was also remarkably low in the engineering trade, which in England was already enormously developed as compared with the preceding period. The real pioneers in this respect within the French empire seem to have been two Scotsmen, father and son, of the afterwards famous name of Cockerill, who—also in Liège, in 1807—laid the foundation of the Belgian engineering trade.*12


Thus France proper and the most important parts of the empire, as regards the iron and iron-working industries, practically remained unaffected by the advances of the preceding generation; this fact stands out in comparison, not only with England, but also with Germany, as well as Sweden, a country which held fast to old processes, but which even with them had attained great eminence. Consequently, the economist Blanqui was quite justified in saying toward the close of the Restoration that the advances in the iron industry in France were made almost entirely after 1814. In consequence of this the French iron industry in 1814 was quite defenceless in face of foreign competitors, who were stated to sell at 30-40 per cent. under French prices; the blockade had had no more stimulating effect than that a 50 per cent. customs duty was necessary to keep the industry going.


The total impression we get in these essential industries, therefore, may be summarized somewhat as follows: The effect of the Continental System was primarily to exclude at least the industry of the French empire from British influences; and under the conditions then prevailing these influences were indispensable for every country desirous of participating in the fruits of the great economic revolution.



There was one department, however, in which the superiority and pioneering work of French industry were plainly to be seen; and that department is at the same time one where we have an opportunity to study the positive side of the Continental System, the side that promoted progress. This is the chemical industry, or, to put it better, all processes where the results of chemical studies could benefit production.*13


The fact that the course of development took this direction in France rather than elsewhere, it is true, was fundamentally due to something quite different from politics, namely, the fact that Lavoisier, through his work during the two decades immediately preceding the French Revolution, had laid the foundation of the whole of modern chemistry and had made it immediately applicable to a number of practical tasks. Moreover, he had had a number of eminent pupils whose work, to a still higher degree, was directly beneficial to industry; their results, too, were to a large extent apparent before or about the outbreak of the Revolution, when the external pressure had not yet begun to make itself felt. In certain cases, also, they had become economically usable before the Continental System and consequently had great importance for industrial development during its sway. In this connexion the first place should be given to Berthollet's theory, based on the discovery of the Swede, Scheele, for the production of chlorine, which became of very great importance for the whole of the weaving industry owing to the fact that as early as 1785 chlorine bleaching took the place of sun bleaching. James Watt almost immediately brought about the transference of the new method to England, which undoubtedly here followed in the wake of French progress instead of taking the lead. Another chemical method of still more central importance—which also had come into use during the years before the outbreak of the Revolution—was the production of sulphuric acid, which became the starting-point for a whole series of other branches of production.


In this connexion, however, it is evidently not the chemical advances of this kind that possess the greatest interest, but rather such as were first helped on their way by the great self-blockade, the importance of which for the process of development was—if the expression may be allowed—maieutic. It may be laid down as a general rule, indeed, that the economic service rendered by a war or by a blockade consists mainly in breaking down the barriers which impede the use of new inventions rather than in evoking those new inventions or discoveries themselves. So far the dictum to the effect that 'necessity is the mother of invention'would hit the point better if it were rephrased 'necessity is the nurse of invention'. In a war situation, indeed, public feeling is so unnerved, as a rule, that there is seldom sufficient calm for profound scientific work; and even if there were calm, time is lacking, for everything has to be done on the spur of the moment, and science seldom allows herself to be commandeered. What is done in war and in case of blockade, therefore, is rather to seize violently upon inventions which have been already or almost completed—that is, in a purely technical sense—but which have previously been devoid of economic importance. When a country is suddenly cut off from the old sources of supply, processes that previously lacked economic importance may become the best or even the only expedient. This is largely the explanation of the 'development of the great industrial marvels', of which Chaptal and others of that period speak. Afterwards, when the exceptional situation disappeared, the marvels also vanished, for they had done their work. They fell back under the threshold of consciousness, so to speak, and became once more potential instead of actual; and this is the only proper thing, if we wish to keep the economic position of the people at its highest level. In this way is explained without difficulty the general débâcle which overwhelmed the industrial creations of the Napoleonic age at the dawn of peace. In certain happy cases, however, the blockade has given rise to a new production that has only needed such a help to strike root; and in those cases it has really carried economic development onward and proved itself a genuine protectress.


In the sphere of chemical industry proper the great example here is the production of soda from sea salt. This discovery had been made by Leblanc as early as some time about 1789—statements as to the year vary somewhat, as is usually, and quite naturally, the case in the matter of inventions and discoveries. The efforts of the great French chemist during the whole of the revolutionary age to make his work bear fruit had come completely to grief, however, and he was ruined several years before his death in 1806. Then came the severance of intercourse with Spain, whence soda had previously been obtained, and this gave a hitherto undreamt of importance to the production of soda, which now proved itself to be, even economically, thoroughly justified, inasmuch as it was developed to such an extent that the price could be reduced from 80-100 francs to 10 francs per 100 kgs. A similar development attended the manufacture of another product, which in the fullness of time was one day to become the basic material for a substitute of Leblanc soda, namely, ammonia; and the production of alum and camphor by chemical methods may perhaps be mentioned here, and possibly, too, the advances made in the important production of nitric acid.


These fundamental discoveries led afterwards to a great many others, as has always been the case in the sphere of chemistry, owing to the many different products that are obtained by a synthesis. But it would fall far beyond the writer's competence to give a detailed account of all this. Yet one might venture the assertion that the French chemical industry during this period, on the basis of the first great advances of modern chemistry, went through, and caused the world to go through, a development of somewhat the same kind as did the chemical industry of Germany after 1870, chiefly on the basis of the derivatives of coal-tar. To mention only one or two more examples, the supply of soda formed the foundation for the manufacture of soap, while the hydrochloric acid obtained as a by-product of sea salt in recovering soda became, in its turn, the basis for the manufacture of chlorine. Of special importance also in the development of the textile industry were the new possibilities in the manufacture of dyes and the printing of them on different kinds of material, which were brought about by the increased knowledge of chemistry. Most famous in the former respect was the manufacture of 'Berlin blue'—also called 'Raymond blue', after its inventor—and the use of 'Adrianople red' in calicoprinting, where a member of the famous textile firm of Koechlin (Mülhausen) made advances in 1810 and 1811 which far exceeded what had been achieved in England.



The question of the dye industry led one naturally to the problem of finding substitutes for the more or less inaccessible, and always condemned, colonial goods. It was quite natural that the work of the French government and its organs, perhaps Chaptal above all, should be directed primarily to this point.


That measures were urgently needed here with regard to dyeing substances can be deduced from the great rise in prices, which, at least at Leipzig, was sometimes more marked than for raw cotton: for indigo the price was ordinarily twice as high, but sometimes even three, four, or five times as high, while for cochineal, dyewood and other dyes the price was usually doubled.*14 By far the most important dyeing substances were the two first-named: indigo and cochineal. As a matter of fact, this was no great novelty in either case, for people had long used two native dyeing plants, woad (Isatis tinctoria) and madder (Rubia tinctorum), for the production of blue and red, respectively, but it was now regarded as a great advance that the chemists had been able to establish the presence of the same dyeing substance, indigo, in woad as existed in Indian and American indigofera. Expectations, particularly as to the domestic production of indigo, were raised extremely high. People expected to be forever independent of the colonial product, and even as late as 1818, that is to say, after the Restoration, Chaptal cherished the hope that France, by means of her domestic production of indigo, would even get an export article that might compensate her for the profitable trade in colonial goods that she had lost when in 1814 and 1815 she had had to sacrifice the greater part of her colonial empire. In reality, however, the results were very small, and they had no importance whatever for the future. The cultivation of 32,000 hectares with woad had been prescribed; Indian indigo had been declared an English product and its importation had consequently been forbidden; three imperial indigo factories had been founded and prizes had been awarded to private individuals; but even as late as 1813 the output came to only 6,000 kgs., apart from 500 kgs, of Indian indigo (called 'anil indigo') from an Italian plantation. Only one single factory survived 1814; and the whole episode vanished without leaving any traces behind. As is well known, it is by synthetic methods that substitutes have been found in our own day for the natural dyeing substances, indigo and alisarin (the dyeing substance contained in madder); and during the recent war the reverse state of things prevailed to such an extent that Great Britain had sometimes to fall back on natural indigo to take the place of the unobtainable synthetic indigo from Germany.


With regard to the other colonial goods, the substitutes for coffee and tobacco offer us no interest other than that which lies in 'looking into one's own windows'. Among coffee substitutes were included chicory, dried carrots, acorns, sunflower seeds, and sugar beets; as substitutes for tobacco were used leaves of gooseberries and chestnuts and milfoil (Achillea millefolium); and the scope of the production of Europe as a whole is illustrated by the fact that Denmark alone had seventeen factories for making coffee substitutes.*15



But the great example indicating the importance of the Continental System for industrial development that is usually cited is the manufacture of beet sugar; and there certainly is a kernel of truth in this, if one only recalls what was said above regarding the character of the effects distinctive of such times.


The fact is that it is far from true that the possibility of obtaining sugar from beets was a novelty dating from the time of the Continental System. As early as the year 1747, the German chemist Marggraf, of Berlin, had discovered that sugar beets contained the same substance as sugar cane; and from the close of the eighteenth century another German chemist, Achard, had worked incessantly on experiments in the production of beet sugar. In a raw-sugar factory located on his Silesian estate, Kunern, Achard had even succeeded in producing sugar and had published his results in 1809; but no manufacture of importance had arisen in consequence of all this. Achard's fate exhibits a great resemblance to that of Leblanc some ten years earlier, in spite of the fact that a domestic production of sugar had also been the subject of investigation in France, through a committee appointed by the Institut de France in 1800. Thus the matter was technically in a fairly advanced state, though it served no economic purpose as long as it was possible to procure colonial sugar under something like the old conditions. When those conditions were changed, therefore, it is not at all surprising that advantage was taken of the theoretical results already attained; on the contrary, there is more reason to be astonished that there was so long a delay before it was determined to replace colonial sugar in this way. Before that the shortage of sugar had had time to make itself very perceptible. At Leipzig the price of sugar rose almost uninterruptedly until 1813, when it was approximately three and one-half times the amount it had been seven years earlier; and in Paris the price rose first (1810) to four francs per livre, and later (1812) to six francs, or approximately eight and twelve francs, respectively, per kg. Meanwhile, the London quotations for even the best qualities of sugar during 1812 corresponded to between 1.35 and 2 francs per kg., that is to say, from one-fourth to one-ninth of the French price.*16


Naturally enough, therefore, people had at a much earlier date begun to search the Continent for a substitute, and there was scarcely any substance containing sugar that was not employed before they came to the beet. Honey, whey, chestnuts, pears, apples, maize, maple, potatoes, figs, cherries, plums, sea-weed, and finally grapes were tried. Grape sugar was the first stage, and as much as 2,000,000 kgs. were manufactured in the years 1810-11 and given a bounty; but this syrup, which was black and did not crystallize, was repulsive and had an unpleasant odour.


At this time, however, the cultivation of sugar beets had already been started, and the manufacture of beet sugar had begun at several places, especially at Passy by the firm of Delessert. It is only natural that enthusiasm was great when the result appeared; and it was alleged, assuredly for that time with great exaggeration, that the product could not be distinguished from cane sugar. There followed a visit (dramatically described by Chaptal in his Memoirs) by Napoleon to Delessert, who was decorated by the Emperor and regarded as a pioneer. The imperial administration took the matter in hand, in accordance with its usual methods, by means of measures which ran exactly parallel with the treatment of the manufacture of indigo, and which followed one another in rapid succession. A prohibition was established on the importation of colonial sugar, and it was ordered that beets should be cultivated first on 32,000 hectares and afterwards on 100,000 hectares, which order, it is true, was never carried out. It was ordered further that there should be four imperial sugar factories, and a special one in Rambouillet. There is no question that this gave rise to a lively development of both the culture of sugar beets and the manufacture of sugar, not least among the German-speaking people residing within and without the borders of the empire, and experimentally as far north as Denmark. And Napoleon's organs made all that could be made of this success in the work of becoming independent of the supply by sea. Thus the home secretary, in his survey of the condition of the empire submitted to the Corps législatif in February 1813, stated how it had seemed an impossibility to find anything to replace sugar, indigo, cochineal, soda, and cotton; but 'we have exercised a strong will, and the impossible has been accomplished through our efforts'. From the year 1813 onward, he held out prospects of a manufacture of 7,000,000 livres (nearly 3,500,000 kgs.) of sugar in 334 factories, which were stated to be 'almost all' at work; and this he considered to correspond to at least half of the demand, which had diminished greatly owing to the rise of price.


As usual, the reality was somewhat less brilliant. According to the home secretary's own report to Napoleon later in the year, it turned out that, owing to ignorance and unfavourable weather, they had only got 1,100,000 kgs. of sugar and that of the 334 licences issued only 158 had been actually used; and if one may believe a statement made by the director-general of manufactures and trades immediately after the Restoration, the quality of the sugar placed on the market was so bad that it had created a prejudice against the home product. As a matter of fact, the retrograde tendency began as early as that same year (1813), and afterwards the fall of the empire drew with it the decline of the industry, so that not a single one of the sugar factories held its own. But after only two years two new factories were started, one of them by Chaptal on his estate at Chanteloup. A high duty on colonial sugar set the manufacture of beet sugar on its feet toward the close of the 'twenties, so that the contribution of the Continental System on this point turned out to bear fruit after the lapse of a decade and a half. Thus the sugar beet industry stands, by the side of the Leblanc soda, as an evidence that a blockade may, in certain cases, remove some of the obstacles that stand in the way of an important economic development.

Notes for this chapter

Chaptal, De l'industrie françoise, vols. I-II; Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, especially bk. II, chs. v-vi, and bk. III, chs. ii-iii; Darmstädter, Studien zur napoleonischen Wirtschaftspolitik, loc. cit., vol. II; Tarle, Kontinental'naja blokada, vol. I (devoted almost exclusively to the trade and industry of France); Ballot, Les prêts aux manufactures, loc. cit., vol. II; Schmidt, Jean-Baptiste Say et le blocus continental, in Revue d'histoire des doctrines économiques et sociales (1911), vol. IV, pp. 148 et seq.; also, Les débuts de l'industrie cotonnière en France, 1760-1806, ibid. (1914-19), vol. VII, pp. 26 et seq.; Ballot, Philippe de Girard et l'invention de la filature mécanique du lin, ibid. (1914-19), vol. VII, pp. 135 et seq.; also, La révolution technique et les débuts de la grande exploitation dans la métallurgie française, ibid. (1912), vol. v, pp. 29 et seq. For the incorporated territories, cf. Varlez, Les salaires dans l'industrie gantoise (Brussels, 1901), vol. I, pp. 9-36, and apps. III and IV; vol. II (1904), pp. 24-32; Herkner, Die oberelsässische Baumwollindustrie und ihre Arbeiter (Strassburg, 1887), pp. 35-93; T. Geering, Die Entwicklung des Zeugdrucks im Abendland seit dem XVII. Jahrhundert, in Vierteljahrschrift für Social- und Wirtschaftsgeschichte (1903), vol. I (founded principally upon the great work of A. Jenny-Trümpy, Handel und Industrie des Kantons Glarus, und in Parallele dazu: Skizze der allgemeinen Geschichte der Textilindustrien mit besonderer Berücksichtigung der schweizerischen Zeugdruckerei; Glarus, 1899-1902); Darmstädter, Die Verwaltung des Unter-Elsass, &c., loc. cit., vol. XIX (1904), pp. 631-72; Zeyss, Die Entstehung der Handelskammern, &c., pp. 62-90, 103-29. For comparison with England, cf. especially Mantoux, La révolution industrielle au XVIII siècle. Essai sur les commencements de la grande industrie moderne en Angleterre (Paris, 1906), and Baines, History of the Cotton Manufacture of Great Britain.
Cf. a pronouncement of the leading man in the clothing industry, Ternaux, sen., in Conseil général des manufactures, immediately after the Restoration; printed in Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, p. 732, app. A.
Report to the home secretary, June 15, 1808, printed in Tarle, Kontinental'-naja blokada, vol. I, 720-1.
Rambaud, Naples sous Joseph Bonaparte, p. 437.
The weight of spun yarn in 1812 was 13,470,000 kgs., which with the addition of one-twelfth for loss of weight corresponds to 14,590,000 kgs. of cotton. In comparison with this the supply of Italian and Spanish cotton was 3,000,000-4,000,000 livres (French pounds), or an average of 1,750,000 kgs. Chaptal. op. cit., vol. II, pp. 7, 15.
Quoted by Tarle, Kontinental'naja blokada, vol. I, p. 513.
Mollien, Mémoires, &c., vol. III, pp. 12, 22 et seq.
Varlez, op. cit., vol. I, app. III. The reports of the home secretary are printed in Tarle, op. cit., vol. I, pp. 735 et seq. The Report of the Committee of the Council of Manufactures in 1814 is printed in Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, pp. 726-7, app. A.
Loi relative aux douanes,Dec. 17,1814. Bulletin des lois,&c.,5th ser., bull. 62, no. 529. Cf. Levasseur, Histoire des classes ouvrières, &c.,de 1789 à 1870, vol. I,pp.562 et seq.
Besides the above-named works, cf. a petition presented by Cort's son in 1812 (Hansard, vol. XXI, pp. 329 et seq.); Beck, Geschichte des Eisens (Braunschweig, 1897), vol. III, pp. 692 et seq., 1089 et seq.; vol. IV (1899), pp. 165 et seq. Cf. also Allgemeine Deutsche Biographie, s.v. J. C. Fischer.
Cf. the brilliant sketch by Professor Arthur Binz, Ursprung und Entwickelung der chemischen Industrie (a lecture delivered at the Berliner Handelshochschule in 1910). His statement as to the development of artificial soda (p. 7 note 2) cannot, however, be brought into accord with the facts; and the use of chlorine bleaching is older than one might infer from his words (p. 10 note 7).
Figures given in König, op. cit., p.224.
Besides the works mentioned at the beginning of this chapter, cf. also de Cérenville, Le système continental, &c., pp. 306 et seq.; Vogel, Die Hansestädte, &c., loc. cit., p. 35; Rubin, 1807-1814, &c., p. 436.
Calculated from figures given in König, op. cit., p. 225. See also Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, p. 475; Tooke, op. cit., vol. II, p. 414.

Part IV, Chapter III

End of Notes

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