But the economic crisis of I8II did not strike at France alone. The
irony was that as Napoleon wrestled with a sea of internal troubles, he
was probably closer to ultimate victory than at any other time. Britain,
the subsidizer of Bonaparte's European enemies, was in a parlous state. In
I8Io the country plunged into crisis on four different fronts, hit by a
general monetary emergency, acute disappointment in the Latin Ameri
can market, loss of exports because of the Continental System, and a rise
in the cost of cereals. Trade was cut by a third and many speculators in
government bonds were ruined. The causes of the crisis were various: the
enforced participation of Sweden in the Continental System; Napoleon's
determined attempt to break into colonial trade; the tightening of the
U.S. trade embargo; disruption caused by a wave of revolutions in Latin
America; and two bad harvests in I8 09 and I8Io which necessitated
wheat imports and hence inflation.
The most serious crisis in economic confidence began when British
merchants could not get payment in money from their South American
customers. Credit lines had been laxly extended to Latin America
without a proper estimate of the capacity of the area to repay its debts.
Elated by the apparent El Dorado provided by this new market, British
entrepreneurs went overboard and flooded the old Spanish colonies with
exports; the most famous story is of a Lond<?n firm sending iceskates to
Buenos Aires in the belief that it lay in polar latitudes. Then it transpired
that Latin America could pay its debts only in colonial produce, of which
there was already a glut in Europe. The knock-on effect was immediate:
five Manchester houses went bankrupt in I8Io; banks and industry came
under pressure; the uncertainty affected the pound and sterling dropped
zo% on the Hamburg exchange.
In I8I I the downward spiral continued; there were more bank failures
and a general failure of economic confidence. The rate of bankruptcy
doubled. There was a marked drop in the value of exports of metallurgy,
cotton and shipbuilding; wage cuts and unemployment coincided with yet
another harvest failure in I8I r. Wool, hosiery, cotton and iron were the
industries hardest hit, with 9,0 00 out of work in Birmingham, Iz,ooo in
Manchester, hand loom weavers turned into the street, and many
Lancashire mills working a three-day week. Soon the convulsive events in
France were being reproduced across the Channel. Anti-machinery riots
broke out in Nottingham in I8I I and in Lancashire and Yorkshire the
Luddites, with their hatred of modern technology, symbolized popular
discontent. Unemployment and the rising cost of bread seemed to
portend general social breakdown, at the very moment a political crisis
marcin
(Marcin)
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