At the beginning of the 19th century, the newly independent British colony now called the United States of America was neutral in the struggle between France and England for control of the European continent. However, something had to be done about British humiliations being committed on the high seas.
British seizure of U.S. sailors and ships
While France and Britain were battling each other in the Napoleonic Wars, the British seized several American ships and their crews, reasoning that, since many of the crew were born in their colony, they were British subjects and therefore had to serve in the British Royal Navy. The Royal Navy needed sailors badly, as Britain was trying to blockade French access to international shipping, and they practically considered the U.S. merchant marine fleet to be rightfully theirs to seize.
At this time in the history of the United States, the nation's fleet of 14 warships was not large enough to defend and protect its merchant fleet. After four years of humiliation by the British, a low point came when, on June 22, 1807, the British ship Leopard assaulted the American-flagged vessel Chesapeake, boarded it and shanghaied several so-called deserters.
Americans were infuriated and the citizens called for a declaration of war against England, but President Jefferson wisely avoided what could have been a history-changing defeat.
Economic pressure backfires
Instead of declaring war, President Jefferson and Congress passed a series of laws that attempted to apply economic pressure on the British.
Jefferson introduced to Congress the Embargo Act of 1807, which would forbid all American ships from engaging in international commerce and shipping. The Embargo Act was signed into law on Dec. 22, 1807. It was not exactly a success. Several American-flagged vessels switched colors and registered in Canada, bypassing the United States altogether, while the rest of the nation's merchant fleet sat in ports all along the Atlantic coast, rotting away, with many trading companies going bankrupt and thousands of sailors becoming unemployed.
No ships were allowed to sail to or from foreign ports during the embargo and subsequent Non-Intercourse Act, having the effect of paralyzing all shipping.
There were dual effect to these restrictive laws. One was that American farmers lost a huge market for their products, eventually leading to a wave of losses of family farms in the Midwest and the South, with poverty spreading throughout those sections of the country that heavily depended on exports.
New industry arises
As a secondary consequence, though, the embargo helped accelerate the American Industrial Revolution. Hundreds of products, having previously been imported from Europe, became unavailable, inspiring Yankee ingenuity in response. Cottage industries producing fabrics, pottery and cutlery glass and metal foundries started to spring up along the East Coast. America had an abundant supply of raw materials to create a manufacturing base that was able to produce goods of equal or better quality than what had previously been imported.
The embargo also had a ripple effect, creating great discontent among the citizenry of the country. The embargo was probably more of a financial disaster for Americans than for the British. They continued shipping goods to Canada, from where much of it found its way to their southern neighbor. British as well as French merchant marine traders also benefited greatly from not having any competition.
The end result of all this conflict between the United States and the British would be the War of 1812. The result of that was, as an old saying goes, "Canadians are sure they won the War of 1812, Americans are pretty sure, and the British never heard of it."
This embargo was the first in a series of unsuccessful American embargoes that include those on Cuba, North Korea and Iran.