Important as was the war in Spain, it was only one phase of his world-wide struggle with the mistress of the seas; and he judged that if she bled to death under his Continental System, the Peninsular War must subside into a guerilla strife, Spain thereafter figuring merely as a greater Vendée. Accordingly, the year 1810 sees the climax of his great commercial experiment.

The first land to be sacrificed to this venture was Holland. For many months the Emperor had been discontented with his brother Louis, who had taken into his head the strange notion that he reigned there by divine right. As Napoleon pathetically said at St. Helena, when reviewing the conduct of his brothers, "If I made one a king, he imagined that he was King by the grace of God. He was no longer my lieutenant: he was one enemy more for me to watch." A singular fate for this king-maker, that he should be forgotten and the holy oil alone remembered! Yet Louis probably used that mediæval notion as a shield against his brother's dictation. The tough Bonaparte nature brooked not the idea of mere lieutenancy. He declined to obey orders from the brother whom he secretly detested. He flatly refused to be transferred from the Hague to Madrid, or to put in force the burdensome decrees of the Continental System.

On his side, Napoleon upbraided him with governing too softly, and with seeking popularity where he should seek control. After the Walcheren expedition, he chid him severely for allowing the English fleet ever to show its face in the Scheldt; for "the fleets of that Power ought to find nothing but rocks of iron" in that river, "which was as important to France as the Thames to England."[226] But the head and front of his offending was that British goods still found their way into Holland. In vain did the Emperor forbid that American ships which had touched at English ports should be debarred from those of Holland. In vain did he threaten to close the Scheldt and Rhine to Dutch barges. Louis held on his way, with kindly patience towards his merchants, and with a Bonapartist obstinacy proof against fraternal advice or threats. At last, early in 1810, Napoleon sent troops to occupy Walcheren and neighbouring Dutch lands. It seemed for a time as though this was but a device to extort favourable terms of peace from England in return for an offer that France would not annex Holland. Negotiations to this effect were set on foot through the medium of Ouvrard and Labouchere, son-in-law of the banker Baring: Fouché also, without the knowledge of his master, ventured to put forth a diplomatic feeler as to a possible Anglo-French alliance against the United States, an action for which he was soon very properly disgraced.[227]

The negotiation failed, as it deserved to do. Our objections were, not merely to the absurd proposal that we should give up our maritime code if Napoleon would abstain from annexing Holland and the Hanseatic towns, but still more against the man himself and his whole policy. We had every reason to distrust the good faith of the man who had betrayed the Turks at Tilsit, Portugal at Fontainebleau, and the Spaniards at Bayonne. To pause in the strife, to relax our hold on our new colonies, and to desert the Spaniards, in order to preserve the merely titular independence of Holland and the Hanse Towns, would have been an act of singular simplicity. Nor does Napoleon seem to have expected it. He wrote to his Foreign Minister, Champagny, on March 20th, 1810: "From not having made peace sooner, England has lost Naples, Spain, Portugal, and the market of Trieste. If she delays much longer, she will lose Holland, the Hanse Towns, and Sicily." And surely this Sibylline conduct of his required that he should annex these lands and all Europe in order to exact a suitable price from the exhausted islanders. Such was the corollary of the Continental System.

Meanwhile Louis, nettled by the inquisitions of the French douaniers, and by the order of his brother to seize all American ships in Dutch ports, was drawing on himself further reproaches and threats: "Louis, you are incorrigible … you do not want to reign for any length of time. States are governed by reason and policy, and not by acrimony and weakness." Twenty thousand French troops were approaching Amsterdam to bring him to reason, when the young ruler decided to be rid of this royal mummery. On the night of July 1st he fled from Haarlem, and travelled swiftly and secretly eastwards until he reached Teplitz, in Bohemia. The ignominy of this flight rested on the brother who had made kingship a mockery. The refugee left behind him the reputation of a man who, lovable by nature but soured by domestic discords, sought to shield his subjects from the ruin into which the rigid application of the Continental System was certain to plunge them. That fate now befell the unhappy little land. On July 9th it was annexed to the French Empire, and all the commercial decrees were carried out as rigidly at Rotterdam as at Havre.

At the close of the year, Napoleon's coast system was extended to the borders of Holstein by the annexation of Oldenburg, the northern parts of Berg, Westphalia, and Hanover, along with Lauenburg and the Hanse Towns, Bremen, Hamburg, and Lübeck. The little Swiss Republic of Valais was also absorbed in the Empire.

This change in North Germany, which carried the French flag to the shores of the Baltic, was his final expedient for assuring England's commercial ruin. As far back as February, 1798, he had recommended the extension of French influence over the Hanse Towns as a means of reducing his most redoubtable foe to surrender, and now there were two special reasons for this annexation. First, the ships of Oldenburg had been largely used for conveying British produce into North Germany;[228] and secondly, the French commercial code was so rigorous that no officials with even the semblance of independence could be trusted with its execution. On August 5th a decree had been promulgated at the Trianon, near Versailles, which imposed enormous duties on every important colonial product. Cotton—especially that from America—sugar, tea, coffee, cocoa, and other articles were subjected to dues, generally of half their value and irrespective of their place of production.

[Illustration: CENTRAL EUROPE AFTER 1810]

Traders were ordered to declare their possession of all colonial wares and to pay the duty, under pain of confiscation. Depôts of such goods within four days' distance from the frontiers of the Empire were held to be clandestine; and troops were sent forthwith into Germany, Switzerland, and Spain to seize such stores, a proceeding which aroused the men of Stuttgart, Frankfurt, and Berne to almost open resistance. It is difficult to see the reason for this decree, except on the supposition that the Continental System did not stop British imports, and that all tropical products were British.

Napoleon's own correspondence shows that he believed this to be so. At that same time he issued orders that all colonial produce found at Stettin should be confiscated because it was evidently English property brought on American ships. He further recommended Murat and Eugène to press hard on such wares in order to replenish their exchequers and raise funds for restoring their commerce. Eugène must, however, be careful to tax American and colonial cotton most heavily, while letting in that of the Levant on favourable terms.