The Continental System reached its greatest efficiency during the apogée of Napoleon's power in 1809 and 1810. To check forbidden traffic, which continued on an enormous scale, he annexed Holland to his empire, and threw a triple cordon of French troops along Germany's sea frontier. As a result, in the critical year of 1811 goods piled up in British warehouses, factories closed, bankruptcies doubled, and her financial system tottered.[1] But to bar the tide of commerce at every port from Trieste to Riga was like trying to stem the sea. At each leak in the barrier, sugar, coffee, and British manufactures poured in, and were paid for at triple or tenfold prices, not in exports, but in coin. Malta, the Channel Islands, and Heligoland (seized by England from Denmark in 1807) became centers of smuggling. The beginning of the end came when the Czar, tired of French dictation and a policy ruinous to his country, opened his ports, first to colonial products (December, 1810), and a year later to all British wares. Six hundred vessels, brought under British convoy into the Baltic, docked at Libau, and caravans of wagons filled the roads leading east and south.
[Footnote 1: In spite of this crisis, British trade showed progressive increase in each half decade from 1800 to 1815, and did not fall off again until the five years after the war. The figures (in millions of pounds sterling) follow: 1801-05, 61 million; 1806-10, 67 million; 1811-15, 74 million; 1816-20, 60 million.--Day, HISTORY OF COMMERCE, p. 355.]
In June of 1812 Napoleon gathered his "army of twenty nations" for the fatal Russian campaign. Now that they had served their purpose, England on June 23 revoked her Orders in Council. The Continental System had failed.
In the same month, on June 18, the United States declared war on Great Britain. Up to 1807 her commerce and shipping, in the words of President Monroe, had "flourished beyond example," as shown by the single fact that her re-export trade (in West Indies products) was greater in that year than ever again until 1915.[1] Later they had suffered from the coercion of both belligerents, and from her own futile countermeasures of embargo and non-intercourse. Her final declaration came tardily, if not indeed unwisely as a matter of practical policy, however abundantly justified by England's commercial restrictions and her seizure of American as well as British seamen on American ships. An additional motive, which had decisive weight with the dominant western faction in Congress, was the hope of gaining Canada or at least extending the northern frontier.