At the close of the year 1806 American merchants might, as always before, send cargoes of West Indian produce to any port on the continent not blockaded, provided they could satisfy British cruisers and courts that the cargo was in good faith neutral,—not French or Spanish property disguised. Jan. 7, 1807, Lord Howick issued the Order in Council which, under pretence of retaliation for Napoleon’s Berlin Decree, cut off the coasting rights of neutrals. After that time the American merchant might still send a ship to Bordeaux; but if the ship, finding no market at Bordeaux, should resume her voyage, and make for Amsterdam or the Mediterranean, she became fair prize. Something has been already said[56] upon the character of Lord Howick’s order, and on the subsequent debate in Parliament, when, February 4, Spencer Perceval attacked the Whig ministry for not carrying the principle of retaliation far enough. Two objects were to be gained, said Perceval[57] from the opposition bench: the first and greatest was to counteract the enemy’s measures and protect English trade; the second was to distress France. Howick’s order neither did nor could effect either object; and Perceval called for a measure which should shut out colonial produce from France and Spain altogether, unless it came from England and had paid a duty at a British custom-house to enhance the price. If Lord Howick’s principle of retaliation was good for anything, Perceval contended it was good to this extent; and as for neutrals, there was no necessity for consulting them,—all they could reasonably expect was a notice.

The Whigs naturally replied to Perceval that before further punishing America for the acts of France, America should be allowed time to assert her own rights. This suggestion called out Lord Castlereagh, who frequently spoke the truth in ways inconvenient to his colleagues and amusing to his enemies. In this instance he admitted and even accented a point which became afterward the strongest part of the American argument. He ridiculed the idea of waiting for America to act, because notoriously the Berlin Decree had not been enforced against American commerce:—

“This is one ground why we should look upon America with jealousy. It is an aggravation that she has, by a secret understanding with the French government, contrived to take her shipping out of the operation of the decree, that was at first general, and placed herself in a situation of connivance with the French government.”

A few weeks afterward Perceval and Castlereagh took office. One of their first acts set on foot a parliamentary inquiry into the state of West Indian commerce. The report of this committee, presented to the House July 27, was ordered to be printed August 8. August 10 the House voted to take it into consideration early in the next session; and four days afterward Parliament was prorogued, leaving ministers to deal at their leisure with the “Chesapeake” affair, the Danish fleet, and Napoleon’s attempts to exclude English manufactures and commerce from Europe.

Napoleon’s Berlin Decree of Nov. 21, 1806, had remained till then almost a dead letter. The underwriters at Lloyds, alarmed at first by the seizures made under that decree, recovered courage between April and August, 1807, so far as to insure at low rates neutral vessels bound to Holland and Hamburg. This commerce attracted Napoleon’s notice. August 19 he threatened his brother Louis, King of Holland, to send thirty thousand troops into his kingdom if the ports were not shut;[58] August 24 he sent positive orders[59] that his decree of Berlin should be executed in Holland; and in the last days of August news reached London that a general seizure of neutral vessels had taken place at Amsterdam.[60] From that moment no ship could obtain insurance, and trade with the Continent ceased. Soon afterward the American ship “Horizon” was condemned by the French courts under the Berlin Decree, and no one could longer doubt that the favor hitherto extended to American commerce had also ceased.

These dates were important, because upon them hung the popular defence of Perceval’s subsequent Orders in Council. No argument in favor of these orders carried so much weight in England as the assertion that America had acquiesced in Napoleon’s Berlin Decree. The President had in fact submitted to the announcement of Napoleon’s blockade, as he had submitted to Sir William Scott’s decisions, Lord Howick’s Order in Council, the blockade of New York, and the custom of impressment, without effectual protest; but the Berlin Decree was not enforced against American commerce until about Sept. 1, 1807, and no one in America knew of the enforcement, or could have acted upon it, before the British government took the law into its own hands.

The month of September passed, and the British ministry was sufficiently busy with the bombardment of Copenhagen and the assault on the “Chesapeake,” without touching neutral trade; but October 1 Lord Castlereagh wrote a letter[61] to Perceval, urging retaliation upon France in order to make her feel that Napoleon’s anti-commercial system was useless, and in order to assert for future guidance the general principle that England would reject any peace which did not bring commerce with it. The idea presented by Castlereagh was clear and straightforward,—the double-or-quits of a gambler; and however open to the charge of ignorance or violence, it was not mean or dishonest.

In reply Perceval drew up a paper of suggestions[62] for the use of the Cabinet, dealing first with the justice, next with the policy of retaliation. Of its justice as against France he thought there could be no doubt, while Lord Howick’s order had already asserted the principle as against neutrals, even before it could be known whether neutrals would retaliate on their own account; but apart from this precedent, “the injury which neutrals sustain is consequential; the measure is not adopted with a view to injure the neutrals, but to injure the enemy.” Perhaps Perceval felt that this argument might lead too far, and that on such a doctrine England might appropriate the world on every declaration of war; for in the next paragraph he pleaded the particular war in which England was actually engaged as his warranty:—

“When an enemy arises who declares to all the world that he will trample upon the law of nations, and hold at nought all the privileges of neutral nations when they do not suit his belligerent interests; and when by the great extent of his power he is enabled in great measure to act up to his declaration,—it is evident that if those Powers with which he is at war should continue to hold themselves bound to rules and obligations of which he will not acknowledge the force, they cannot carry on the contest on equal terms. And the neutral who would control their hostility by those rules and laws which their enemy refuses to recognize, and which such neutral does not compel that enemy to observe, ceases to be a neutral by ceasing to observe that impartiality which is the very life and soul of neutrality.”

This allegation differed from the first. Perceval began by maintaining that England possessed a right, if she chose, to suppress the existence of America or of any other neutral, provided the suppression were consequential on an intent to injure France. He next argued that the existence of America might be equally suppressed because she had not yet succeeded in compelling France to observe neutral privileges, which so far as she was concerned had not been violated. If these two propositions were worth making, they should have settled the question. Yet Perceval was not satisfied; he took a third ground:—