From the early 1800s through the War of 1812, embargoes and trade restrictions hurt American merchants and caused several years of depressed trade. Even after the war, in 1816 there was a adverse trade balance of approximately $70 million, an amount that would not be exceeded for another 40 years. President James Madison placed the blame of squarely on the actions of the British Cabinet. With the war over, the British had promised to open up trade with it's colonies to the United States, but instead they continued to pass regulations that hurt American merchants. These restrictions were giving British merchants an unfair advantage in many colonies such as the Dutch East Indies where Americans were wanton to carry on trade.
Just two years earlier in 1814, Great Britain and Netherlands signed a treaty at the 'Convention of London' returning the colonial possessions of the Dutch back to what they were before the Napoleonic wars began in 1803. This included all of the seaports that were part of the original Dutch East India Company (Dutch: Vereenigde Oost-Indische Compagnie; VOC), the company once known as the richest private company the world had ever seen. The Dutch East India Company had benefited from a monopoly on the Dutch spice-trade and by 1669 had 150 merchant ships, 40 warships, 50,000 employees, and a private army of 10,000 soldiers. In 1800, because of bankruptcy, the company was nationalized by the Dutch, and during the Napoleonic wars, was captured by the French and then the British. As part of the Convention of London, it was expected that the navigation laws between the Great Britain and the United States would be equalized related to the ports.
When Great Britain negotiated the treaty of Ghent with the United States, they left refused to allow American merchants to trade with British West Indies. In response, American ship-owners began to open up trade with China and the East Indies. But now, the British government was again enforcing regulations that prohibited trade between its colonies and the United States in in American vessels. American merchants were being unfairly targeted. Perhaps this was driven by profit. With the wars over, the profits of the old Dutch trade in the East Indies in luxury items such as spices and coffee were returning. These profits were high because they were cheaply obtained by a system of forced labor in Asia and sold in Europe at high prices maintain by laws that protected the monopoly and restricted cultivation. Besides the high profits from the imports, British merchants had discovered a reciprocal trade in a promising market for goods made in Europe and exported to Asia through the Dutch East Indies. The British were now finding profit on both sides of their navigation, both inward and outward on the return of their cargoes, and the British parliament were trying to protect it.
Thus, President Madison in his final State of the Union address urged Congress to find a way to open up trade for America. Madison had expected that Great Britain would respect the "rule of reciprocity", but instead he found that the British cabinet was declining to even negotiate on the subject. In fact, they were going as far as refusing to admit that any of the regulations could be viewed in an unfriendly light. Madison asked Congress to consider a proper course of action. but added that whatever course of action was taken it must maintain a balance of fairness and friendliness between the two nations.
"The depressed state of our navigation is to be ascribed in a material degree to its exclusion from the colonial ports of the nation most extensively connected with us in commerce, and from the indirect operation of that exclusion.
Previous to the late convention at London between the United States and Great Britain the relative state of the navigation laws of the two countries, growing out of the treaty of 1794, had given to the British navigation a material advantage over the American in the intercourse between the American ports and British ports in Europe. The convention of London equalized the laws of the two countries relating to those ports, leaving the intercourse between our ports and the ports of the British colonies subject, as before, to the respective regulations of the parties. The British Government enforcing now regulations which prohibit a trade between its colonies and the United States in American vessels, whilst they permit a trade in British vessels, the American navigation loses accordingly, and the loss is augmented by the advantage which is given to the British competition over the American in the navigation between our ports and British ports in Europe by the circuitous voyages enjoyed by the one and not enjoyed by the other.
Three years later, in 1819 the United States was still trying to work out an amicable commercial treaty with Great Britain that included the British West indies. President James Monroe outlined in his 1819 State of the Union address that further proposals were made, but were declined in a friendly manner. Monroe was hopeful that future negotiations between the parties would be respected "in the most friendly light." Ultimately Monroe's hopes would be dashed, as negotiations continued through the next decade, and in 1826 by orders in council, American Vessels were definitely excluded from ports of the British West Indies.The reasonableness of the rule of reciprocity applied to one branch of the commercial intercourse has been pressed on our part as equally applicable to both branches; but it is ascertained that the British cabinet declines all negotiation on the subject, with a disavowal, however, of any disposition to view in an unfriendly light whatever countervailing regulations the United States may oppose to the regulations of which they complain. The wisdom of the Legislature will decide on the course which, under these circumstances, is prescribed by a joint regard to the amicable relations between the two nations and to the just interests of the United States."
"At the time of the negotiation for the renewal of the commercial convention between the United States and Great Britain a hope had been entertained that an article might have been agreed upon mutually satisfactory to both countries, regulating upon principles of justice and reciprocity the commercial intercourse between the United States and the British possessions as well in the West Indies as upon the continent of North America. The plenipotentiaries of the two Governments not having been able to come to an agreement on this important interest, those of the United States reserved for the consideration of this Government the proposals which had been presented to them as the ultimate offer on the part of the British Government, and which they were not authorized to accept. On their transmission here they were examined with due deliberation, the result of which was a new effort to meet the views of the British Government. The minister of the United States was instructed to make a further proposal, which has not been accepted. It was, however, declined in an amicable manner. I recommend to the consideration of Congress whether further prohibitory provisions in the laws relating to this intercourse may not be expedient. It is seen with interest that although it has not been practicable as yet to agree in any arrangement of this important branch of their commerce, such is the disposition of the parties that each will view any regulations which the other may make respecting it in the most friendly light."In 1820, Monroe briefly mentioned in his State of the Union address that year that there had been no change.
"The commercial relations between the United States and the British colonies in the West Indies and on this continent have undergone no change, the British Government still preferring to leave that commerce under the restriction heretofore imposed on it on each side. It is satisfactory to recollect that the restraints resorted to by the United States were defensive only, intended to prevent a monopoly under British regulations in favor of Great Britain, as it likewise is to know that the experiment is advancing in a spirit of amity between the parties."
http://www.presidency.ucsb.edu/ws/index.php?pid=29458
http://www.presidency.ucsb.edu/ws/index.php?pid=29461
http://www.presidency.ucsb.edu/ws/index.php?pid=29462
https://en.wikipedia.org/wiki/Dutch_East_India_Company
https://en.wikipedia.org/wiki/French_and_British_interludes_in_the_Dutch_East_Indies
The Aglo-Dutch dispute in the East 1814-1824 by HR.R.C. Right (1950) (http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0289.1950.tb02110.x/abstract)
The United States Balance of Payments (1790) by DOUGLASS C. NORTH pg 576
The American Nation: Rise of the new West, 1819-1829 by Albert Bushnell Hart pgs. 294 - 295
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