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Indiana University Bloomington


Trade Disputes

Embargo by Express.
Embargo by Express. (1812.)

Orders-in-Council — Embargo Act of 1807

In 1803, a two-year peace between Britain and France broke down, and the two nations resumed a series of conflicts that originally began in 1793. Control of trade in the Atlantic was of great importance to both sides as they tried to deprive the enemy of material support coming in from neutral sites, such as the United States. Governments of all three nations struggled to protect commercial interests and limit trade with the enemy.

Starting in 1807, British cabinet ministers issued several sets of Orders-in-Council that sought to control neutral trade with the Continent. The orders did not shut down all trade, but caused much difficulty for American merchants with a variety of requirement for special licenses, shipping material through British ports, and outright embargo. Napoleon also issued a number of decrees restricting neutral trade with the continent, but they resulted in few actual consequences.

President Thomas Jefferson, and his successor James Madison, sought to counter these measures with laws based on the Republican belief that denying Britain and the Continent the privilege of trading with the United States would garner concessions. A series of laws, later known as the “restrictive system,” sought to prevent the use of British licenses and restrict imports and exports. Most notable among the laws was the Embargo Act of 1807 which forbade all American exports. The law was extremely unpopular with American merchants and traders, caused serious economic harm throughout the United States, and was regularly defied as evidenced by widespread smuggling activity, especially between New England and British North America.