Embargo of 1807

Sources

Tensions. The political and military events of the early national period often had significant economic aspects, as exhibited by the Embargo of 1807. In the aftermath of the French Revolution, Britain, France, and many other European nations were at war almost constantly from 1793 to 1815. As part of this conflict, each side attempted to maintain a naval blockade of the ports of the other side, limiting their opponent’s ability to send out warships and merchant vessels. The United States remained neutral in this conflict for most of this period. Because of this neutrality, American ships were permitted to trade with parties on all sides of the conflict. This was a significant advantage to American trade, still recovering from the disruption of the American Revolution, and it profited substantially from the charges for carrying goods to and from European ports. All this changed after 1805. In that year, in an admiralty case involving the American trader Essex, a British court held that American shipping between the West Indies and France violated a British law and left American ships open to British attacks. France’s Berlin Decree (21 November 1806) and Milan Decree (17 December 1807) and Britain’s Orders in Council (7 January and 11 November 1807) further threatened neutral shipping attempting to enter their enemy’s ports. The British bore the brunt of Americans’ anger over these trade restrictions. President Thomas Jefferson’s first response was the 1806 Nonimportation Act, which barred certain imports but was largely ineffective.

The Chesapeake. Matters came to a head after the humiliation Americans felt in an incident involving the American warship Chesapeake on 22 June 1807. The Leopard, a man-of-war of the Royal Navy, forcibly stopped the Chesapeake off the Virginia coast and boarded it to search for deserters. The British took four sailors from the Chesapeake and impressed them, or drafted them into the navy, on the grounds that they were British citizens. This was just one of many instances of Britain impressing sailors who claimed American citizenship, as Britain refused to recognize the right of extirpation, or changing citizenship. The anger at this action was intense and widespread, but the country was not prepared for a war, and Jefferson had to seek another solution. On 22 December 1807 Congress passed the Embargo Act, banning all American trade with foreign nations.

THOMAS JEFFERSON ON MALTHUS

Thomas Malthus, a British political economist, had a gloomy revelation after a visit to India. The world’s population, Malthus predicted, would soon face a crisis of survival. People were being born faster than new land could be cultivated to feed them all. While the world’s food supply increased steadily, its population had been increasing geometrically since the 1600s and would soon exhaust the food supply. In 1804 President Thomas Jefferson was reading a new edition of Malthus’s “Essay on Population” when French writer Jean-Baptiste Say sent him a copy of his own essay, Traité d’Economie Politique (1803). Jefferson’s response reveals his own more optimistic prediction for the world’s future.

The differences of circumstances between this and the old countries of Europe, furnish differences of fact whereon to reason, in questions of political economy, and will consequently produce sometimes a difference of result. There, for instance, the quantity of food is fixed, or increasing in a slow and only arithmetical ratio, and the proportion is limited by the same ratio. Supernumerary births consequently add only to your mortality. Here the immense extent of uncultivated and fertile lands enables every one who will labor, to marry young, and to raise a family of any size. Our food, then, may increase geometrically with our laborers, and our births, however multiplied, become effective. Again, there the best distribution of labor is supposed to be that which places the manufacturing hands alongside the agricultural; so that the one part shall feed both, and the other part furnish both with clothes and other comforts. Would that be the best here? Egoism and first appearances say yes. Or would it better that all our laborers should be employed in agriculture? In this case a double or a treble portion of fertile lands would be brought into culture; a double or treble creation of food be produced, and its surplus go to nourish the now perishing births of Europe, who in return would manufacture and send us in exchange our clothes and other comforts. Morality listens to this, and so invariably do the laws of nature create our duties and interests, that when they seem to be at variance, we ought to suspect some fallacy in our reasonings. In solving this question, too, we should allow its just weight to the moral and physical preference of the agricultural, over the manufacturing, man. My occupations permit me only to ask questions. They deny me the time, if I had the information, to answer them. Perhaps, as worthy the attention of the author of the Traité d’Economie Politique, I shall find them answered in that work. If they are not, the reason will have been that you wrote for Europe; while I shall have asked them because I think for America.

Source: Thomas Jefferson to J. B. Say, Washington, D.C., 1 February 1804, in The Portable Thomas Jefferson, edited by Merrill Peterson (New York: Penguin, 1975).

Economic Consequences. The Embargo had an immediate effect on American trade; exports declined 75 percent and imports fell by 50 percent. New England merchants suffered the most since they were most directly involved in foreign trade. Southern farmers also suffered since they depended on exports of their staple crops, tobacco and cotton. The middle and western states were relatively unaffected since farming linked to the domestic market was the primary economic activity there. Prices and earnings fell and unemployment rose, bringing on a serious depression lasting until the end of the War of 1812. Over time Americans began to recover

some of their losses as southerners began to sell their cotton to northern textile mills. The mills themselves started to grow to meet the domestic demand for cloth, which previously had been supplied by British imports. Some traders found loopholes in the law or even illegal ways around the Embargo, and violations of its terms were especially common in Maine and Florida.

Political Consequences. Many Americans linked the Embargo with the policies of the Jeffersonian party. Both Jeffersonians and Federalists disliked involvement in European affairs, but Federalists had advocated that military strength was the way to deal with threats from abroad. The Jeffersonians drew on the tradition of nonimportation from the American Revolution to argue that commercial policy was itself a way of affecting other countries. Thus, the Embargo was an assertion of America’s importance to Britain and France, and Jefferson meant to make them reopen their trade by denying them the benefits of it. Jefferson called the Embargo a “candid and liberal experiment” in “peaceful coercion.” However worthy these pacifist ideals, Europe felt the Embargo less than the United States. The act was deeply opposed by a revived Federalist Party, centered at that time in the New England cities which were most affected by the boycott. After 1808 “Mr. Jefferson’s Embargo” became increasingly unpopular, as Josiah Quincy and Thomas Pickering of Massachusetts led a fight against it in Congress. They were aided from within Jefferson’s party by John Randolph of Virginia. Tempers ran so high on the issue that two congressmen, George Campbell of Tennessee and Barent Gardenier of New York, even fought a duel. Most seriously, some New England Federalists threatened to have their states nullify the federal act and withdraw from the Union, making the end of the Embargo inevitable, if the nation was to survive.

Non-Intercourse Act. Congress repealed the Embargo in March 1809, three days before the end of Jefferson’s term, substituting the much less stringent Non-Intercourse Act. The Non-Intercourse Act barred trade only with France and Britain, and it would resume with either or both countries once they stopped violating American neutrality. This policy left no one happy—merchants still disliked any restrictions, and President James Madison felt increasingly pressured by the loss of import duties, a main source of government money in the period. Several adjustments failed to solve the problems, and in March 1811 Madison reimposed non-intercourse, this time against Britain only. This was a tacit acknowledgment that the commercial conflict was so severe that war was unavoidable and a choice that it was better to fight Britain. The result was the War of 1812, declared the following June. The war continued to disrupt trade and put a serious strain on the nation’s finances. The depression that began in 1807 did not fully ease until 1816, although the need to rely on domestic manufactured goods was a spur to American industry that would later display its true significance in the industrialization of the Jacksonian period.

Sources

J. Van Fenstermaker and John E. Filer, “The U.S. Embargo Act of 1807: Its Impact on New England Money, Banking, and Economic Activity,” Economic Inquiry, 28 (1990): 163–185;

Louis M. Sears, Jefferson and the Embargo (New York: Octagon Books, 1966).