American merchants resent Jefferson's economic warfare

Jefferson’s policy of using economic leverage to force France and Great Britain to make concessions to American interests was intended to avert armed conflict. Its failure convinced many Americans that a resort to war would be necessary.

“As to the hope that it may... induce England to treat us better, I think is entirely groundless” Secretary of the Treasury Albert Gallatin, an opponent of the restrictive system

A cartoon depicting a merchant, carrying a barrel, being bitten on the backside by a turtle.
A political cartoon depicting merchants harassed cursing the “Ograbme”—“embargo” spelled backwards.

For more than a decade between 1793 and 1805, the United States had benefited from the struggle between France and Great Britain, becoming one of the world’s largest neutral shippers. That neutral status allowed the U.S. to profit from the European conflict by selling to both sides.

By 1805, however, the Great Powers had fought each other to a standstill in Europe. At that point, France and Great Britain began to wage their struggle via economic means, including restrictions on neutral trade. Those new limitations fell heavily on the United States. Though Thomas Jefferson’s response sought to secure national interests peacefully, the failure of that response ultimately provided fuel for Americans who believed the country’s lone recourse was war. His efforts appeared very different to different groups of Americans.

The Jefferson administration’s response to European economic coercion was to institute the “restrictive system.” The restrictive system comprised a package of trade restrictions that relied on economic rather than military pressure to achieve American aims—principally, the restoration of its neutral shipping rights. As a whole, however, the restrictive system proved a dismal and divisive failure. Part of that failure was due to the way that different groups of Americans viewed the government’s role in economic affairs.

Jefferson’s plan to apply economic power instead of military power faced several obstacles.  First, the restrictive system proved very difficult to enforce. Merchants attempted to defy the restrictions in order to increase their own profits.  The system also proved divisive at home. Some industries and commercial interests suffered crippling setbacks, leading to claims that the federal government was enlarging and abusing its powers. In New England, angry protesters rallied against the new rules. Many objected to the use of government power to interfere in trade and the economy.

Most importantly, the restrictive system proved largely ineffective in its primary goal. The embargoes and restrictions did not compel either Great Britain or France to make concessions to American interests. And Jefferson’s attempt to use economic power rather than military force to ease Europeans’ restraints on trade backfired. In the end, the failure of economic coercion convinced many Americans that only war could restore their shipping rights—a conclusion that helped push the United States closer to outright violence.