Annotation: Opportunities for American merchants and shippers to make quick profits in Europe evaporated in 1805 when an English court ruled (in the Essex case) that U.S. ships could not carry cargo from French colonies to France. Britain then began to blockade American ports, intercept American ships, and confiscate cargoes bound for France.
In 1806 and 1807, Napoleon tried to ruin Britain's economy by cutting off its trade with continental Europe. His "Continental System" ordered the seizure of any neutral ship that visited a British port, paid British duties, or allowed itself to be searched by a British vessel.
Britain retaliated by issuing an Order-in-Council forbidding trade with French ports and other ports under French control. U.S. shipping was caught in the crossfire. By 1807, France had seized 500 American ships and Britain a thousand.
The Order-in-Council was the brainchild of British abolitionist James Stephen (1758-1832), whose hidden agenda included an attack on illegal slave ships using the American flag as protection. Stephen understood that American ships supplied Caribbean slave colonies with provisions of all sorts and that ships engaged in the African slave trade were flying the American flag.
The following letters by Secretary of State James Madison condemns the British Order-in-Council as a violation of America's rights as a neutral nation.
In this view of the order, it demands on the part of the United States, the most serious attention, both to its principle, and to its operation.
With respect to its principle, it will not be contested that a retaliation by one nation, on its enemy, which is to operate thro' the interest of a nation not an enemy essentially require not only that the injury inflicted should be limited by the measure of injury sustained, but...should be preceded by an unreasonable failure of the neutral party, in some mode or other, to put an end to the inequality wrongfully produced....
The United States...are bound by justice to their interests, as well as by respect for their rights, to consider the British order as a ground for serious complaint and remonstrance....
The necessity of presenting the subject in its true light, is strengthen by the operation which the British order will have on a vast proportion of the entire commerce of the United States.... It cannot be overlooked that the character and course of nearly the whole of the American Commerce, with the ports of Europe, other than of Great Britain, will fall under the destructive operation of the order. It is well known that the Cargoes exported from the United States frequently require that they be disposed of partly, at one market, and partly at another. The return Cargoes are still more frequently collected at different ports, and not infrequently at ports different from those receiving the outward Cargoes. In this circuitous voyage, generally consisting of several links, the interest of the undertakers materially requires also either a trade or a freightage, between the ports visited in the circuit. To restrain the vessels of the United States therefore from their legitimate and customary mode of trading with the Continent of Europe, as is contemplated by the order, and to compel them, on one hand, to dispose of the whole of their Cargo at a port which may want but a part, and on the other hand to seek the whole of their returns at the same port, which may furnish but a part, or perhaps no part of the articles wanted, would be a proceeding as ruinous to our commerce, as contrary to our essential rights.