The sustained economic crisis of I811-I3 in France was really a
combination of three distinct factors: overproduction because of specula
tion; overproduction caused by loss of trade outlets; and bad harvests.
The first two facets of the crisis were intimately intertwined and were
direct consequences of Napoleon's decrees. Since many had speculated in
colonial goods, general ruin ensued when French merchants were
undercut by the new imports and foreign merchants deprived of their
stocks. With speculation reaching its limit and stocks in France building
up, a wave of bankruptcies and a credit squeeze ensued severely affecting
industry, banking and trade. Industry was particularly badly hit as, with a
general fall in prices, many manufacturers had to borrow heavily to
surviVe.
Napoleon failed to understand that his decrees undid all the work of
economic integration effected by his original Continental System. Once
the assets of German firms were seized, nobody owed money by them
could get it back. French importers who had made loans to firms in
Amsterdam, Basle and Hamburg could not retrieve their assets; all those
who had played safe by switching from speculation in assignats to colonial
produce were now ruined. In September I810 the firm of Rodde in
Lubeck went bankrupt, dragging down with it the Parisian banks of
Laffitte, Fould and Tourton. This in turn triggered further bankruptcies
in Paris and eventually the rest of France.
I811 brought recession in the Lyons silk industry; the number of
working looms was halved. Soon Tours, Nimes and Italy were sucked
into the slump and then it was the turn of the great success story, cotton.
Contraction in that industry was dramatic: in Rouen the workshops used
only a third of the raw materials they had used in I810. Wool was the
next to be hit, with a quarter of the nation's drapers ceasing payment.
Although the depression was less serious in manufacturing, the pinch was
felt from the Haut-Rhin to the Pyrenees. In May I8I I, zo,ooo out of
so,ooo workers in Paris were unemployed. Napoleon was forced to
respond by undertaking a programme of public works and giving loans to
industry. Towards the end of the summer of I8I I the final blow fell as
bad harvests exacerbated the crisis. The South was paralysed by drought
while in the Paris basin violent storms wiped out most of the crops in the
area.
Napoleon was immediately on red alert, for it was one of his axioms
that bread shortages in Paris could lead to general revolution. His view
was well known: 'It is unfair that bread should be maintained at a low
price in Paris when it costs more elsewhere, but then the government is
there, and soldiers do not like to shoot at women with babies on their
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