The Economic War Begins

The Continental System emerged from Napoleon's recognition that Britain's wealth and naval power made it immune to conventional military defeat. After the British victory at Trafalgar in 1805 ended French hopes of invasion, Napoleon sought alternative means to force British submission. "I will conquer the sea by the power of the land," he declared, envisioning a continent-wide embargo that would strangle British commerce and force peace negotiations.

The Berlin Decree of November 21, 1806, formally established the Continental System by declaring the British Isles in a state of blockade. All commerce and correspondence with Britain was prohibited, British subjects found in French-controlled territory were declared prisoners of war, and any vessel coming from British ports was excluded from continental harbors. This decree transformed Napoleon's military victories into economic weapons, attempting to convert political control into commercial advantage.

Britain's response, the Orders in Council of 1807, declared that neutral vessels trading with France must first obtain licenses from British authorities. This counter-blockade created a complex web of regulations that made legitimate neutral trade nearly impossible. The resulting economic warfare drew in powers throughout Europe and beyond, as both sides sought to enforce their commercial restrictions while accessing essential goods.

The Milan Decree of December 1807 completed the legal framework for the Continental System by declaring that any vessel submitting to British searches or paying British duties would be considered British property and subject to seizure. This decree attempted to close loopholes in the Berlin Decree while demonstrating Napoleon's determination to enforce his economic war regardless of the cost to neutral commerce.