Economic crisis of 1810-1811 — 1810-1811

Speculation on trade licences, the Fontainebleau seizures and the contraction of credit set off a cascade of bankruptcies in Paris as in Lyon or Amsterdam. The state supported manufacturers with orders and advances, but unemployment and the dearth of 1811 fed discontent. The century's first great industrial crisis cracked consent to the Empire.

Too much paper, too many licences

The crisis was born of the war economy itself. The licence system had created a speculative market: merchants bought trading authorisations, committed whole cargoes to goods whose price depended on a decree, and financed themselves on credit through accommodation bills.

The Trianon and Fontainebleau decrees burst the bubble. The tariff abruptly raised the cost of colonial produce, the seizures destroyed entire stocks, and houses that had staked everything on cargoes now unsaleable found themselves insolvent overnight.

The cascade

The failure of a great house at Lübeck at the end of 1810 dragged down its correspondents; the movement spread to Hamburg, Amsterdam, then Paris and Lyon. Credit closed up: banks stopped discounting, manufacturers had no more advances, workshops laid off hands.

Lyon, whose silk industry depended on luxury orders, and the cottons of the north were the worst hit. The state intervened — public orders, advances to manufactures, relief to banks — which was new: it was one of the first interventions by a government to check an industrial crisis.

Dearth and discontent

The bad harvest of 1811 was added to unemployment. The price of bread rose during the winter of 1811-1812; the government imposed a maximum and organised distributions, but disturbances broke out in several towns of the west in the spring of 1812, severely repressed.

This was the first great industrial crisis of the century, and it came at the worst moment: the year the Russian campaign was being prepared. Consent to the Empire rested on prosperity and victory; it had just lost half of that.