Britain Against Napoleon

by Roger Knight

  Much business, therefore, passed between Whitehall and the City. As the war progressed, the mutual dependence of politics and trade was magnified, for the long-term threat of a French invasion drove public and private sectors together into a tighter embrace. Merchants required warships to escort convoys to protect their trade from enemy privateers while the government needed to borrow money from the City, as well as to purchase many of the critical commodities in which City traders specialized, such as wheat and timber. The bonds were further strengthened by a significant number of bankers, insurers, merchants and industrialists holding parliamentary seats.*

  The government’s credit was constantly monitored by bankers and merchants to ensure that the paper money, issued since the financial crisis of 1797, would keep its value. In particular, bankers were always watching to see whether the amount of taxes collected was sufficient to cover the considerable sums required to pay the interest on the City loans. The ‘Governors and Company of the Bank of England’ since its foundation in 1694 had issued bank notes and settled Exchequer bills. It played a key role in engendering confidence, for its knowledge of the creditworthiness in the City was unrivalled: every merchant house of any importance kept an account with the Bank.13 When the government floated a loan, competitive tenders from contractors were managed by the governor and deputy governor. Tenders from bankers or merchants, or usually groups of them, bidding to lend the government money were opened in their presence, in order, as George Rose expressed it, ‘to guard against any partiality on the part of the Chancellor of the Exchequer’.14 From 1805 George Harrison, the assistant secretary at the Treasury, held frequent meetings with the directors of the Bank.15 There was plenty to talk about, apart from government loans: in early 1808 tough negotiations took place between the Treasury and the Bank over charges for managing the government’s money. The Bank was paid £450 for managing every £1 million of unredeemed debt; by 1807 the Bank was being paid £265,000 a year. The Treasury ministers, Spencer Perceval and William Huskisson, persuaded the Bank to reduce charges, saving the taxpayer £65,000 a year. In addition, the Bank agreed to a loan of £3 million, free of interest, in acknowledgement of the excessive profit it had earned from handling the nation’s money.16

  This close relationship of government with powerful capital markets gave Britain a considerable advantage over France. Government and the bankers and international traders inhabited two parallel worlds, with intelligence, trading and credit networks largely independent of national borders. No other city in the world had the power and the reach of London, the centre of many worldwide markets, supplemented by the burgeoning merchant communities of Liverpool, Glasgow and Bristol.17 With large numbers of Continental merchants and bankers coming to London to escape the Napoleonic blockade, the City’s international aspect became more and more pronounced. For instance, when, in 1807, eighty commercial houses in Hamburg failed, many of the firms that survived moved to London, Gothenburg or St Petersburg.18 One recent estimate is that two thirds of all merchants in the City by the end of the wars were of Continental origins.19 Several of these immigrants played crucial roles in raising money for the government for the purpose of prosecuting the war. The most notable was Nathan Meyer Rothschild, who arrived in Manchester from Germany in 1798 when he was twenty-one, to set up in the textiles trade, sending his bales of cloth back to his father in Frankfurt. He moved to London in 1808 and began banking there in July 1811.20 Rothschild established a dynasty in London that still flourishes today.

  The definitions of bankers and merchants were looser then than they are now. The House of Benjamin and Abraham Goldsmid became very rich in the 1790s by acting as bill brokers and dealers in the funds, and also underwrote insurance risks and contracted for public loans – the sort of role undertaken by a merchant bank today.* They also negotiated foreign drafts and remittances – in 1802 they were described as ‘honourably and extensively known on the Continent as merchants particularly in the line of exchange, in which lucrative branch of merchandise the Goldsmids are unrivalled’.21 Their wealth and the confidence that they engendered led them to be the leading intermediary between the City and the government, in effect acting as government brokers. Between 1797 and 1810 the government borrowed some £400 million through Exchequer bills: £70 million of these were issued by the Bank of England; the Goldsmids handled the balance of £330 million.22 They also negotiated navy and Victualling bills for the government, as well as making up syndicates to contract with the government for loans. No City merchants came nearer to the centre of government until Rothschild in the last years of the war.

  These men and their colleagues and rivals in the City needed strong nerves, for the wartime markets were at times very volatile, caused in part by the legislation of 1797 that had ordered the Bank of England to suspend the convertibility of the currency to gold, when the export of gold became illegal. Dealing in bank notes gave merchants flexibility in extending credit, although the conservative ‘bullionist’ critics, then and now, would say that it led to speculation. Despite this danger, more easily acquired credit was a great advantage in unstable wartime conditions, when communications were disrupted and trade delayed by the enemy at sea, and with the French in control of the Continental countries that Napoleon had annexed. Credit enabled merchants to anticipate future shortages and to build up reserves in their warehouses. But the unsatisfied demand that resulted from stockpiling pushed up prices, which then tumbled when the circumstances of the war changed and goods again became plentiful. Britain’s floating exchange rate also increased risk and instability: the fluctuations inevitably led to speculation, a process accentuated by developments in other European countries and in the United States, which had also abandoned convertibility. (The trade outlook was bleak in 1807, for instance, which led brokers to increase their orders for cotton from America, though this did not stop serious shortages.) From 1808 to the early part of 1810 trade prospered; imports and exports rose again. In 1810 Liverpool handled 199,000 bales of cotton, a record for the decade. Boom led straight into bust, however, and from late 1810 to early 1812 the economic situation was again stagnant.23

  However, in general, the British economy and the trade that went with it expanded, even though merchant shipping became the focus of economic warfare when each side imposed commercial blockades. If trade had not prospered, the very large taxes and government loans that were raised would have been beyond the capacity of the country. But between 1792 and 1804 the value of British exports grew by just over 50 per cent, and imports by just under the same figure.24 Cotton textiles led the export drive. By 1815 their value was six times greater than it had been in 1793. The development of domestic iron and steel manufacture began to shake the country free of dependence on imports; by the end of the war Britain was exporting between four and five million pounds of iron and manufactured products a year.25

  Distant markets also played a vital role in maintaining Britain’s economic strength. The ‘Honourable’ East India Company, as it was called, exported great quantities of goods from Britain, sending them out to India and China, after 1800, at an average annual rate of forty-two large ships, full of textiles, copper, iron, muskets, ordnance and general merchandise.26 The help given by the Company to the war effort was immense. First, it acted as a procurement agency. In the frantic early years of the war after 1793, 162,900 ‘India pattern’ muskets, already ordered by the Company, were purchased by the government for the army. Grain and rice were brought back from India to Britain, as were the vital and steadily increasing cargoes of saltpetre for the manufacture of gunpowder. Its ships were chartered to take troops to the West Indies. The Company also funded troops in India: the army that Lord Wellesley as governor-general used to extend British power increased from 192,000 European and native troops in 1805 to the enormous total of 227,000 in 1815.27

  The second contribution of the East India Company was to swell the government’s coffers through payment of high duties on Asian imports. This was a trad
e that employed not much more than 3 per cent of the tonnage of British shipping, yet transported 17 per cent of the total value of imports for home consumption, and yielded as much as 24 per cent of net customs and excise revenues on worldwide imports.28 Customs and tea duties alone paid by the Company from 1806 were never less than £3 million a year, and averaged £3,745,961 between 1811 and 1815. The East India Company and the state had a complicated, many-faceted relationship and, unsurprisingly, the final accounts between the Company and the government for the war years were not settled until 1822. Some contemporaries regarded the Company as ‘an integral part of the state’.29

  In every respect, the functions of the state and private business were driven together by the demands of a prolonged war. In no other area was close cooperation between merchants and the navy more critical than in the defence of trade by the convoy system, for the privateers of France and other hostile countries were a constant menace. Imports into Britain, particularly of strategic goods, underwrote the entire British war machine. Large shipments of vital war materials had to be brought into the country – hemp came from Russia, saltpetre from India and sulphur from Sicily. Iron from Sweden became of less significance as the quality of British iron improved and output expanded. Timber, both hardwoods and pine and fir for masts, was transported from the Baltic, although alternative sources of timber were available, both in the Levant and in Canada.* The latter became an important source of both pine and oak when the supplies from the Baltic became expensive and difficult after the Continental blockade was declared in November and December 1806. In 1806 Danzig oak plank was £12 a load; by 1809 it was double that price, if it could be found at all.30 The shipwright officers in the royal dockyards did not favour Canadian timber, reckoning it inferior to oak and pine from the Baltic. Tom Grenville as first lord of the Admiralty reported to his brother in November 1806: ‘I am today almost forcing the Navy Board to encourage the offers of Quebec oak & masts, for our dependence on Dantzik must be hourly precarious.’31 Very soon, however, Canadian oak was forced upon the shipwrights. In 1809 and 1810 Acts were passed that put prohibitive customs duties on Baltic timber, as part of the economic battle against Napoleon. Timber from the Baltic was priced out of the market. In 1805 four times as many loads of Baltic oak timber and plank had been imported as from Canada, and seven times as many great and middling masts sticks. By 1810 that had been more than reversed: seven times as many loads of Canadian oak were imported and fifteen times as many mast sticks.32

  Nevertheless, the supply of timber and other materials of shipbuilding quality from the Baltic, and the trade more widely, remained critical. In 1805, 6,000 merchant ship passages were made through the Sound to and from British ports.33 In the years following, the value and volume of Baltic trade fluctuated widely, due to hostilities or to Napoleon’s blockade, but in some years it exceeded the 1805 values, while towards the end of the war British exports to the Baltic doubled in value, although this reflected in part the post-1810 duties.34 Free passage through the Sound or the Great Belt was maintained by the intervention of the British Fleet under Admiral Sir James Saumarez between 1808 and 1812.35 Apart from keeping the Russian Fleet in port, the admiral’s main task was to ensure that timber for masts, hemp for rope-making, hardwoods, tar and turpentine were extricated, in addition to the softwoods required for the building trades and the pit props used by the expanding coal and mineral mines. Cargoes of wheat became important during the years of shortage in Britain, though supply from northern Europe could never be relied upon. Shortages occurred after the poor harvest of 1810, at a time when the Continental blockade was at its most effective, exacerbated by the stockpiling of grain by the French in preparation for Napoleon’s invasion of Russia in 1812. In such years imports of wheat from America made up the shortfall.36 Of the naval stores, securing a sufficient supply of good-quality Russian hemp gave ministers the greatest worry, since no other sources around the world could furnish either the quality or the quantity. Eventually, the Navy Board agreed to buy hemp from India, contracting in January 1808 for 5,000 tons in that year, 7,000 in 1809 and 8,000 in 1810, but even these significant amounts were but a small proportion of the total requirement.37

  The urgency and importance of the trade in essential war supplies necessitated close cooperation between London merchants and senior government officials. Isaac Solly provides one example. Solly was a long-established Baltic merchant whose ships had faced difficulties in getting out of the region in 1807. Thereafter he turned directly to the Navy Board for help.38 In late 1808 he purchased hemp from Sweden under a secret contract with the Admiralty and had problems in getting his ships cleared from Gothenburg; so in 1808 and 1810 he successfully petitioned the Admiralty for special convoys specifically to protect his storeships.39 When they were detained in Swedish ports, he wrote directly to the foreign secretary, who issued orders to his minister in Stockholm for the ships to be freed.40 His appeals to higher and higher authority, and the readiness with which his requests were met, reflected the importance of the cargoes of his ships to the government. Without a continual supply of naval stores, the royal dockyards and the shipyards and rope-walks all over the country would have been starved of the means to renew or repair the warships and the merchantmen upon which the whole war effort depended.

  A contemporary calculation reckoned that losses by the British merchant fleet from all causes were about 2 per cent per year between 1793 and 1815. In deep-sea trades, they could be as much as 5 or 6 per cent, half from enemy action and half from marine accidents. Convoys became compulsory by law after 1798, and this provision was more stringently applied after 1803.41 The later years of the Napoleonic War saw less success for French privateers, as profits had dropped significantly from the good times of the 1790s.42 British merchant ship losses peaked in 1810 at over 600, 3 per cent of the total of over 20,000 British registered ships for that year.43 The Channel was the safest area: in 1808 losses represented only 1.5 per cent of all shipping, escorted or not.44 Still, the French luggers came out from Dunkirk and St Malo. The revenue cutter Swan, for instance, was taken off the Needles in a calm in March 1807.45 The French Channel ports also provided useful bases for the privateers of the new French allies, the Dutch and the Danes. In 1809 the master of a British cartel carried by a privateer into Calais observed a dozen privateers, of 12 to 16 guns, fully manned by Danes, Americans, Irishmen and Englishmen, ready to sail with the first fair wind.46 The French corsairs, too, were having significant successes in the West Indies and the Mediterranean.47

  By the middle years of the Napoleonic War, however, the British Navy had been re-equipped with more small warships, fast sloops, cutters and luggers that could be driven hard to chase the privateers, and convoys became regular and increasingly effective.48 Four times a year, for example, the ships laden with fruit from the Ionian Islands and Greece rendezvoused at Malta, and were convoyed along the North African coast, keeping as far away from France as possible. At Gibraltar they were met by warships, to be escorted across the Bay of Biscay and thence to Britain.49 These convoys, organized by Admiral Collingwood, were thus an important factor in the increase of trade between Britain and the Mediterranean from 1807 to the end of the war.50

  Sometimes, modest merchant ships not in convoy were able to defend themselves against privateers. In January 1811 the Cumberland lost her bowsprit and foremast after a rough Atlantic crossing and was apparently crippled; she nonetheless fought off four French luggers just off the coast between Dover and Folkestone, and in sight of a watching crowd. The Cumberland had a crew of twenty-six, while the estimated combined crews of the French luggers came to 270. As the French approached, the resourceful master ordered his crew below and armed them with boarding pikes. Initially twenty Frenchmen boarded the vessel. The master skilfully sheered his vessel away from their boats, and the crew rushed the boarding party with their long pikes, killing most of them while the rest jumped overboard. Three more attempts at boarding were similarly repulsed. In
all, sixty privateersmen were reported to have been killed, and one British crew member was lost. As a reward, the Admiralty Board, ‘as a mark of their satisfaction at the gallantry exhibited on this occasion’, graciously granted the crew immunity from impressment for three years. The incident achieved modest fame, and prints of the action were soon on sale.51

  There was less to celebrate on the occasions when the navy was embarrassed within sight of the British coast. In July 1810 John Barrow, visiting Ramsgate near Dover on Admiralty business, reported twice to the first secretary, John Wilson Croker, about losses off the Kent and Essex coasts ‘at the height of summer and during fine weather’, due to British naval complacency. On 18 July he reported that two colliers had been captured off the North Foreland while the captain of the nearest navy gun-brig had been sleeping ashore. Ten days later an ordnance hoy was taken near the Galloper Light; this time no action had been taken because of the caution of British sea officers, wary of both formidable French seamanship skills and fighting qualities, and deterred by what they regarded as the excessive time and effort required to secure prize money in the event of a capture. As Barrow reported confidentially, ‘in the face of our whole squadron in the Downs, not one of which attempted to move … it is mortifying enough to hear people publicly crying out, “Aye, this is what we get for paying taxes to keep up the navy: a French privateer is not worth capturing, she will not pay the charge of condemnation.”’52 ‘This disgraceful situation,’ pronounced a notice posted at Lloyd’s, ‘is beyond precedent.’ Thus the problems of defending trade, with its successes and failures, led at times to angry exchanges between the navy and the commercial community.53 Social tensions and professional jealousies also existed between naval officers and the masters of merchant ships that they were to convoy. Yet overall it was in the overriding interests of both parties to convoy trade effectively, and the low level of losses of merchant shipping during the wars indicates that they succeeded.54