Embargo Act

Embargo Act, law that prohibited United States vessels from trading with European nations during the Napoleonic Wars. Passed by Congress in December 1807 over Federalist opposition and at the behest of President Thomas Jefferson, the Embargo Act was a response to restrictive measures imposed on American neutrality by France and Britain, at war with each other. Specifically, Napoleon sought to blockade his foe by forbidding any nation to trade with Britain. The latter retaliated by banning neutral trade with France and its allies. Vessels violating either the French or British blockades would be seized; thus, the neutral U.S. risked the loss of merchant ships to both sides. To pressure the belligerents to respect neutral rights and to demonstrate the value of trade with the U.S., Jefferson responded with the embargo instead of open warfare. A supplemental act in 1808 sought to strengthen the embargo's effects by eliminating commerce over inland waters and, consequently, a booming international trade via Canada.

By confining U.S. ships to their ports, the embargo seriously threatened American livelihood. To circumvent the law, hundreds of ships sailed before enforcement was effective; other ships later exploited legal technicalities to remain in foreign waters and in trade with the warring nations; still others resorted to extensive smuggling. Nevertheless, northern shipping interests declared the act disastrous, and southern planters suffered substantial losses. Governmental efforts to tighten application through the Enforcement Act (1809) only produced more flagrant violations of the law, denunciations of the national government, and outcries of states' rights and near rebellion in New England. The embargo proved as unsuccessful abroad as it was unpopular at home. Because the British navy had already blockaded the Continental coast, France could not feel the embargo's effect and, ironically, confiscated $10 million worth of U.S. shipping in European ports, under the pretext of assisting the embargo's enforcement. Imports to England from new Latin American markets offset losses of American grain and cotton. Similarly, increased British exports to Latin America matched a decrease in British exports to the U.S.

As a diplomatic device, the embargo failed to produce European recognition of neutral rights. It succeeded only in stimulating severe economic disruption in the U.S., in embarrassing and dividing Jefferson's Republican Party, and in increasing the popularity of his Federalist opponents. Consequently, the Embargo Act was repealed by the Non-Intercourse Act of March 1, 1809, which reactivated American commerce with all countries except Britain and France. The U.S. also agreed to resume trade with the first belligerent to cease violating neutral rights; neither nation acceded.

The Embargo Act had been a costly miscalculation. By forfeiting trade the U.S. had experienced only the economic hazards and none of the potential commercial gains of war. At the same time the embargo had been unable to redress U.S. grievances as a neutral power and had divided rather than united Americans. Not surprisingly, the U.S. applied later embargoes to specific goods and not to shipping in general.